Corruption prevention and compliance with the Sapin II Act
As in 2015 and 2016, EDF Group was not the subject of any fine, penalty or conviction for corruption in 2017.
The 9 December 2016 law on transparency, anti-corruption and the modernisation of economic life, known as the Sapin II Act, introduced eight new pillars:
A code of conduct
EDF has had a code of conduct since the summer of 2017. It defines and illustrates behaviour that is prohibited as it could be interpreted as acts of corruption or influence peddling. The Group Ethics and Compliance Code of Conduct was strongly supported by senior management, both in its preparation and its implementation, including distribution in the form of an email from the Chairman in the summer of 2017, with a hard copy distributed in November 2017. It is available in French and English on the EDF’s website.
The Group Ethics and Compliance Code of Conduct covers preventing corruption risk, integrity checks on business relations, rules governing gifts and invitations, preventing conflicts of interest, combating fraud, preventing market abuse, preventing money laundering and terrorism financing, preventing breaches of competition law, compliance with international sanctions and verification of export activity.
In accordance with the recommendations of the French anti-corruption agency (AFA) published in 2017, these subjects will be updated in line with any changes in ethics and compliance standards.
Internal whistle-blowing system
This comprises various measures enabling all stakeholders (suppliers, customers, employees and other stakeholders) to contact EDF Group and report a breach. For breaches relating to the Sapin II Act (employees, external and occasional colleagues), the whistle-blowing system managed by the GECD enables people to report a breach to the Group Code of Ethics, Group Ethics and Compliance Policy or the Code of Ethics and Compliance, in good faith and in a confidential and secure manner. Whistle-blowers may, if they wish, remain anonymous. People who reported breaches in 2017 were sent an acknowledgement of receipt in an average of two working days. It took an average of 48 days to process a report through to its closure. In all, 81% of reports received during the year were closed in the same year. Of the reports, 23% were submitted by women and 77 % by men, which is in line with the company’s social indicators published in the 2017 Reference Document. When the individual submitting the report meets the requirements of the Sapin II Act, he or she benefits from special protection. The line management of the entity concerned implemented an action plan to address each of the proven breaches. This could include corrective measures (change in process, reorganisation, etc.) or a disciplinary sanction (ranging from an official warning to dismissal of the employee). Any complaints are lodged with the legal authorities. An overview of alert processing is presented annually to the EDF Group’s Executive Committee and Governance and Social Responsibility Committee (previously known as the Ethics Committee of the Board of Directors).
The GECD runs an internal control self-assessment procedure every year (led by the Group Risk Department) for mapping the ethics and compliance risks of Group entities associated with their business activities. The entities define a risk prevention and mitigation action plan suited to their operating environment. In addition to that mapping, the GECD defined a special corruption risk map in order to comply with the Sapin II Act. This map identifies and ranks the risks of exposure to corruption by business sector and by country. The division also maps country risk (corruption, money laundering and terrorism financing) on a quarterly basis.
Third-party assessment procedures
Verification of the integrity of business relations is the subject of a corruption risk memorandum of instructions, which has been approved by the Group Executive Committee. Applicable since 1 January 2017, the memorandum defines several levels of verification depending on the type of business relation. Entities are required to check the integrity of partners using an assessment of their intrinsic quality and the integrity of the business relations based on legal, economic and material conditions. Entities must also check that compliance requirements are met throughout the duration of business relations. A video tutorial was put online for all employees at the end of 2017.
The Group Accounting and Taxation Department carries out numerous controls to remain compliant. The control procedures are described in the anti-fraud guide, developed by the GECD in 2017, and distributed with the anti-fraud memorandum of instructions in April 2017. The control procedures defined for the various processes (purchasing, sales, treasury, inventory assets, accounting, etc.) meet the objectives of the Sapin II Act.
The Group Ethics & Compliance Division has introduced a “Corruption Risk Prevention” training programme, which is recognised by the UN and meets the requirements of the Sapin II Act. Initially for senior managers, it was rolled out to all potentially exposed managers and employees in 2017. EDF certification is provided for participants that successfully complete the programme. At the end of February 2018, 55 % of senior management had been certified. Complementing that programme, the Group Legal Department and Group HR Department offer a Corruption Prevention e-learning course available to all employees. This programme addresses, in an operational context, the right behaviour in situations related to business relations, conflicts of interest and gifts. At 31 December 2017, 2,268 employees had completed the programme.
In accordance with the Sapin II Act, a section on disciplinary sanctions has been included in the code of conduct to inform employees that sanctions will be applied if they breach the rules set out in Chapter 3 of the Group Ethics and Compliance Code of Conduct. The sanctions are defined in article 6 of the Statut des Industries Electriques et Gazières (Statutes for Electricity and Gas Industry employees) and the French Labour Code.
Un dispositif de contrôle et d’évaluation interne des mesures
To ensure that the measures implemented to prevent or detect any breach of ethics or compliance are both appropriate and effective, the GECD set up a dashboard in 2016 used to assess, at Group level, the degree to which each key requirement of the GECP has been rolled out and the level of expertise in that requirement. In addition to this second-level control, third-level controls (internal audits) are carried out, creating a continuous improvement loop.
EDF was included in the Transparency International France ranking in 2016 following an independent assessment. Inclusion is renewable every 18 months. The Group is a member of TI’s Forum des Entreprises Engagées (FEE), which brings together companies seeking to achieve the best standards in terms of transparency and integrity. The Group is also a member of several professional institutions, including the Cercle d’Éthique des Affaires and Cercle de la Compliance, as well as the International Chamber of Commerce (ICC) where, in the France section, it co-sponsored the “e-Resist” e-learning course, and in the International section, it is a member of the Corporate Responsibility & Corruption sub-committee.