Corporate Governance (CG) policy and Corporate Governance Handbook was developed for Board of Directors, executives, and employees of IRPC’s, subsidiaries’, associates’, and joint ventures within.
IRPC’s control to observe as practical guidelines. This policy is to promote IRPC as an efficient company marked by good CG and operational excellence, business righteousness, free of fraud, transparent, and open to scrutiny.
In addition to CG Policy and CG Handbook, IRPC launched policies, which are Anti-Corruption Policy and Compliance Policy, outlining a company’s commitment on demonstrating business ethics and integrity in its management practices.
2. Responsible Organization
Corporate Governance Committee monitors the work of the management in compliance with corporate governance principles. Moreover, Corporate Governance Committee also monitors the efficiency and implementation of Anti-Corruption Policy and other policies in relevant to Good Governance, Risk Management, and Compliance Management (GRC). IRPC has effective implementation of code of conduct by office of corporate affairs as defined responsible function.
The Audit Committee is responsible for monitoring of business operations to ensure its internal control system, as well as its compliance with IRPC’s CG handbook and the relevant laws and regulations. In addition, IRPC engages independency audit committee to conduct careful and cautious investigation under the scope and authority set by the Boards
3. Management System/Process
Believing that business ethics brings public confidence and trust, IRPC adheres to the Code of Conduct. Achievement of business objectives transparency, auditability, and stakeholders’ stewardship are all balanced, enabling sustainability.
Code of Conduct
A company’s values, principles and guidelines on business code of conduct are outlined in our Corporate Governance Handbook. IRPC realizes the importance of ethics in business and has ethical business as one of the main issue in its corporate governance policy with definitions and how to apply in daily working life. The main aspect in business ethics are such as:
- responsibility to shareholders;
- relationship with customers and public;
- relationship with suppliers, business competitors and creditors;
- responsibility to employees; and
- responsibility to social and environment.
IRPC requires that all employees to complete an acknowledgement and conformity form and submit this to the Office of Corporate Affairs. Moreover, IRPC also disseminates the concept and provides training for its employees on corporate governance and business ethics via new employee orientation, CG Day, training course and periodic review via e-learning system.
In addition our CG Handbook principles and guidelines are distributed to business partners, joint ventures, entities in which IRPC holds shares of less than 51%, as well as, other business associates. For Joint Venture, IRPC requires Joint Ventures (JVs) to maintain their own Code of Conduct which are at minimum equivalent to IRPC’s Corporate Governance handbook. In the absence of JV’s own Code of Conduct, IRPC requires our JVs to adopt IRPC CG handbook.
Reporting on Breaches
IRPC has effective implementation of code of conduct by office of corporate affairs as defined responsible function. There are help desks and channels for complaints and grievances for filing complaints for all stakeholders that come from within and outside and has, in place, investigation and resolution processes that are clearly defined, unbiased, and transparent. The whistleblowing policy declared to protect the identity of blowers and witnesses. Both internal and external stakeholders can directly communicate with the chairman of the audit committee and corporate governance committee through various channels. The whistleblowing channels are, for example, telephone, company website, email, and PO Box.
In 2019, IRPC received a total of 43 cases through Whistleblower system, which separated into 21 cases of recommendations and 22 cases of non-compliance with company’s codes of conduct. These cases are separated into 11 misconduct cases and 11 non-compliance to company’s work practice cases with zero of fraud/corruption case. As a consequence, disciplinary action was taken fairly and transparently against each violation case, however, there was no complaint found relate to anti-corruption policy or fraudulent and no significant damage found. Currently all cases are already closed with appropriate preventive mitigation for the responsible functions.
Details of 4-Years historical data for cases that were not compliance with company’s corporate governance is shown in the figure below:
The cases were assigned to Office of Corporate Internal Audit and relevant business units for verification and the reports were made to the Audit Committee and the Board of Directors as well as the related party in a sequence specified in Complaint Management Procedure. The Audit Committee is responsible for monitoring of business operations to ensure its internal control system, as well as its compliance with IRPC’s CG handbook and the relevant laws and regulations. In addition, IRPC engages independency audit committee to conduct careful and cautious investigation under the scope and authority set by the Boards to ensure its compliance with the guidance from Stock Exchange of Thailand, Code of conduct, and international practices. IRPC provides a notification and complaint channels for internal and external whistleblowers to notify clues and evidence on illegal and unethical conducts.
Consequence of Breaches
As a consequence, disciplinary action was taken fairly and transparently against each violation case. The cases were assigned to Internal Audit and relevant business units for verification and the reports were made to the Audit Committee and the Board as well as the related party in a sequence specified in Complaint Management Procedure.
In 2019, following the verification, there were all cases of verbal warnings, 0 case of written warnings and 0 case of Contract terminations. The responsible functions have been notified to provide preventive measures.
Risk of changes in regulatory regime has often significant implications for IRPC’s current operations and future direction. Accordingly, IRPC considers engaging and collaborating with regulators to advance the principles of sustainable development, protect our rights, and strengthen our position as a leading integrated petrochemical complex in Asia. As prescribed, Sustainability Management Sub-Element 6.3, Regulatory Advocacy Independence and Transparency shall be exercised at all times and in all communications and other interactions with regulators and policy makers.
In addition, IRPC contributes to national and international associations and organizations in order to advocating public policies and regulations and assist policymakers by experience and information sharing from either internal information or world megatrend regarding to sustainability for the country and its industry. However, IRPC established an Anti-corruption Policy to clear its position to be politically neutral, which means no direct or indirect support any political parties or politicians, but fully supports compliance with the law and democratic rule. Even though the Board, executives, and employees have legal rights and political freedom, harming harm IRPC’s reputation and businesses is strictly prohibited. For more information, please visit CG Handbook, Section 3 Anti-corruption Policy, page 20-21.
In FY 2019, IRPC have made contribution to organizations that related to trade associations or tax-exempt groups as follows:
- World Economic Forum– to participate and advocate in order to drive the global economic for the benefits of the country and group of companies.
- Oil Industry Environmental Safety Group Association – to participate and supporting related authorities in adopting new regulations, participate in education and training to promote safety and the best environmental practices amongst members and collaborating with the government and organizations on oil spill response activities.
- Foundation for the Global Compact – to establish UNGC Local Network Thailand aiming to report the progress to UNGC and conduct knowledge sharing toward the human rights, corporate governance, and anti-corruption aspects
- Petroleum Institute of Thailand – to have dialogue with PTIT and peers in petroleum and petrochemical industries for the promotion of sound and practical policies and regulations
- Plastics Industry Pipe Association – to promote the correct use and installation of safe and environmentally responsible plastics pipe systems.
- Thailand Business Council for Sustainable Development – to guide and advocate on national environmental policies based on expertise, facts and field experiences; to build Business Competitiveness and Good Practices; and to raise public awareness on Sustainability Issues.
- The Federal of Thai Industries – to conduct study and seek to find the solution to the problems arising from the operation of industrial of industrial businesses and related business
- Energy Institute – to grow network with insight spanning the world of energy, from conventional oil and gas to the most innovative renewable and energy efficient technologies, gather and share essential knowledge about energy, the skills that articulate the voice of energy experts and know how that are helping to use it more wisely, and the good practice needed to keep it safe and secure.
Historical 4 years data ranking of IRPC’s contribution to organizations that related to trade associations or tax-exempt groups as follows:
|Name of Organization||Type of Organization||Amount Paid (THB)||Total Amount (THB)|
|World Economic Forum||Trade Association||2,116,542||2,023,326||1,896,303||1,993,188||8,029,359|
|Oil Industry Environmental Safety Group Association||Trade Association||1,026,000||1,133,000||1,095,000||1,284,000||4,538,000|
|Foundation for the Global Compact||Trade Association||1,085,999||542,180||501,663||458,715||2,588,556|
|Petroleum Institute of Thailand||Tax-exempt group||470,800||470,800||440,000||470,800||1,852,400|
|Thailand Business Council for Sustainable Development||Trade Association||250,000||250,000||250,000||250,000||1,000,000|
|The Federal of Thai Industries||Trade Association||19,200||252,520||236,000||241,820||749,540|
|Energy Institute||Trade Association||62,190||55,144||68,393||67,966||253,693|
Largest Contributions and Expenditures
To demonstrate our transparency in political contribution, IRPC discloses our information about contributions that create or influence public policy on our corporate website. Two key issues that IRPC consistently supports are below:
|Key Issue||Description of Position/Engagement||Total spending in FY 2019 (THB)|
|Support a development of sustainable petroleum and petrochemical industries||IRPC continuously contributes and supports guidance for setting regulations in petroleum and petrochemical industries, in which those regulations will generate benefits to all industries. The purpose of this contribution is to operate our business in accordance with the regulations, comparable to international practices. IRPC takes position to be neutralized and makes sure that any contributions may not damage our reputations and create risks of corruption. For FY 2019, IRPC has supported industry associations as follows: Thailand Business Council for Sustainable Development, The Federal of Thai Industries, Petroleum Institute of Thailand, Energy Institute, and Oil Industry Environmental Safety Group Association, and Plastics Industry Pipe Association.||2,314,586|
|Responsible business operation for long term business success||IRPC values the importance of sustainable practice in business operation as it is a key driver of our business to achieve company’s vision in becoming a leader in integrated petrochemical complex industry. Thus, IRPC is a pioneer supporter of organizations that advocate sustainable practices such as a founding member of the Global Compact foundation in Thailand. For this issue, in FY 2019, IRPC supported Foundation for the Global Compact and World Economic Forum. All forms of contribution is paid through membership fees which transparently paid.||2,451,903|
IRPC remains politically neutral and contribute zero financial support to any political party, political group or any political candidates neither in any local, regional nor national levels or person with political influence. In addition, IRPC is well aware that contributions and charitable donations may impact company’s reputation through any bribery or corruption cases. Hence, the company strictly follows our anti–corruption policy and never makes any contributions and charitable donations related to bribery or corruption.