Other required disclosures

Ethics operating model

1. The Board

Setting the tone at the top.

2. Executive management and top 100 senior managers

Providing critical Group support as compliance sponsors.

3. Compliance officers

Supporting the Group and providing legal advice.

4. Linde compliance officers

Working with the Group to support the core compliance team.

5. Internal audit, HR, legal, fraud and forensics, and other assurance functions

Our valued partners are considered in our combined assurance model.

6. Every Afrox employee

Ensuring we conduct our operations with integrity.

The model also allows for proper and complete disclosure of ethical breaches which is assessed and monitored by the necessary independent assurance functions. Ethics in Afrox is the responsibility of every employee. All of our employees have access to a dedicated compliance manager, the legal department and the Integrity Line. Employees are empowered to seek independent guidance on ethical matters and to report potential violations or threats.

All ethics related incidents are investigated in detail and reported to the relevant committee. A root-cause analysis is conducted and recommendations to avoid re-occurrence of the incident are considered. The Afrox Forensics, Internal Controls and Security Manager provides the SET Committee with external ethical risks statistics. Year-on-year, reported cases such as burglary, robbery, theft, fraud, illicit trading, damage to property, and trespassing, decreased by 12% overall, while external threats decreased by 45%.

The Company also tracks leading ethics indicators through the relevant wellness service providers such as employee financial distress, employee personal pressure and so forth, which are brought about by the external environment. Appropriate measures and controls are put in place to pro-actively mitigate the root causes and impact of potential ethical exposures.

Focus areas in the year

The focal areas for 2017 were:

  • enhancing the roll-out of focused compliance training and awareness;
  • strengthening of governance and controls around the Company’s purchasing and procurement processes; and
  • increasing the level of governance and security at all operational sites in response to both internal and external ethical risks.
Pertinent activity to report on

During the year:

  • The Head of Procurement presented the governance arrangements and controls in place to address potential ethical risks around suppliers to the Board. The Company has centralised procurement practices that improve the transaction and strategy procurement risk. In addition, an executive management sub-committee called the Afrox Tender Board was established to objectively adjudicate on tender awards and to ensure that the Company’s BBBEE strategy around suppliers was adhered to.
  • The Company has installed and uses the Inoxico electronic conflict of interest tool. The tool was effective in tracking any conflict of interest between Afrox employees and directors of supplier companies. All supplier contracts and conditions of purchase stipulate that suppliers are bound to comply with the Company’s Supplier Code of Conduct.
  • The SET Committee received and assessed the trends of all dismissals, disciplinary hearings and grievances related to ethical breaches.

Future focus areas

  • Roll-out of an integrated ethics management framework with detailed plans for employee relations, procurement, operational site security and fraud prevention.
  • The Security and Governance Council was established. This council is a sub-committee of the executive management structure and will receive reports and closely monitor the implementation of security and combined assurance plan.
  • The SET Committee will regularly conduct intensive investigations into areas of ethical exposure.