Internal Control System
The Transneft internal control policy is stipulated in the Regulations on Internal Control Procedures. As per the Regulations, internal control is exercised by authorised units of Transneft to execute the following tasks:
- To ensure investors trust Transneft and its management bodies, to protect capital investments of shareholders and Transneft’s assets
- To maintain the high level of Transneft’s business reputation
- To ensure fullness and accuracy of Transneft’s financial and managerial reports
- To ensure compliance with Russian regulatory acts, decisions of management bodies and local regulatory acts of Transneft
- To ensure safety of Transneft’s assets and efficient use of its resources
- To ensure execution of Transneft’s financial and business plans
The Company does not have a special business unit for internal control.
Transneft’s activities to prevent and combat corruption in 2018 were performed in accordance with Federal Law No. 273-FZ On Combating Corruption dated 25 December 2008, the National Anti-Corruption Plan for 2018-2020 and Transneft’s Action Plan for Preventing and Countering Corruption for 2018 approved by a resolution of the Board of Directors of Transneft. The 2018 Action Plan included continuous measures to prevent and combat corruption, activities to ensure execution of instructions issued by the Russian Government and additional measures to enhance the efficiency of combating corruption at Transneft in line with the guidelines resulting from the comprehensive assessment of the efficiency of anti-corruption activities performed in 2017.
Coordination of measures to prevent and combat corruption at Transneft is the responsibility of Transneft’s Commission for Countering Corruption established in 2017. The functions of the Commission include reviewing notifications concerning conflicts of interest received from employees and deciding on the method of resolving such conflicts of interest.
Continuous work is conducted at Transneft to identify and resolve employees’ conflicts of interest.
In 2018, additional anti-corruption measures were introduced as part of the efforts to enhance the efficiency of preventing and resolving conflicts of interest in the activities of Transneft’s and Transneft subsidiaries’ employees. These measures included submitting annual declarations on conflicts of interest.
The procedure for submitting the declarations on conflicts of interest and the list of positions subject thereto are determined by a Transneft order. The list includes positions implying a higher corruption risk due to organisational, administrative, audit and control duties as well as positions within the key business units involved in contractual arrangements.
In 2018, prioritisation of corruption risks was carried out and the sufficiency of the applied internal control procedures in the field of combating corruption in view of preventing the realisation of corruption risks was assessed in order to determine which of Transneft’s areas of activity have a higher corruption risk.
Pursuant to the Action Plan, the Code of Ethics and Conduct for Employees of Transneft and Transneft Subsidiaries, outlining the general principles of professional ethics and the basic rules of conduct for employees of Transneft and Transneft subsidiaries, was updated in 2018.
The Regulations on Travel and Representation Expenses Associated with Hosting and Servicing Representatives of Other Organisations and Individuals were updated to ensure proper execution and submittal of documents proving the arrangement of business entertainment events by Transneft and the expenses related thereto.
The Procedure for Handling Incoming Anti-Corruption Hotline Calls at Transneft was developed and approved in order to promptly respond to messages containing information on possible corruption violations in the activities of employees of Transneft and its subsidiaries.
In 2018, Transneft ensured that the employees holding the positions of the President, the First Vice President and Vice Presidents of Transneft, as well as candidates to fill these positions submitted information on their income, expenses, assets, and liabilities to the Government of the Russian Federation.
In pursuance of the National Anti-Corruption Plan for 2018-2020, the Group organised advanced training for employees involved in implementation of anti-corruption measures. Development of a standard programme for training employees of the Group holding the positions included in the corruption risk prevention lists was launched.
To keep the staff informed, a Memo on the Basics of Anti-Corruption Behaviour was developed. It contains information on the requirements of Transneft’s local regulations governing the issues of preventing and combating corruption, including prohibitions, duties and guarantees established for employees. The Memo was communicated to all the personnel and is currently available on the internal corporate portal. Transneft’s employees are familiarised with the Memo on an annual basis.
As part of the transparency policy, the information on anticorruption measures taken by Transneft is posted on Transneft’s official website in a specialised section dedicated to combating corruption.
In order to study the international experience in the field of combating corruption, representatives of Transneft took part in the seventh Eurasian anti-corruption forum “Conflict of Interests: Law and Ethics”, an international research-to-practice conference held by the Institute of Legislation and Comparative Law under the Government of the Russian Federation.
In 2018, Transneft passed the procedure for confirming (declaring) compliance with the provisions of the Anti-Corruption Charter of the Russian Business. Registration of Transneft’s participation in the Anti-Corruption Charter is extended until 2020.