In KGHM we are cognizant of our obligations and responsibilities in terms of sustainable corporate development. For many years we have been developing and implementing Policies and Codes which reflect our commitment and approach to our natural and social surroundings.
The following Policies and Codes have been implemented within the KGHM Group.
The prevention and minimisation of environmental and climate impact as well as the rational management of our natural resources are of fundamental importance for KGHM Polska Miedź S.A. in its efforts to achieve sustainable development, to meet the expectations of our stakeholders and to be responsible towards future generations.
The activities of KGHM Polska Miedź S.A., including those involving exploration, mining, processing and refining, comprise technical and organisational actions based on best available techniques which reduce our environmental and climate impact.
Meeting such high environmental standards is crucial to maintaining the Company’s competitive position amongst the world’s copper producers.
Our strategy places particular emphasis on ecologically-friendly production and on protecting the natural environment and climate, as well as on pursuing a circular economy, including the increased use of recycled materials.
Based on continual improvement under the PN-EN ISO 14001 Environmental Management System, the Company’s senior management is committed to the following:
- the continuous prevention and restriction of the Company’s environmental and climate impact by improving and developing our technological processes, modernising and replacing equipment and preventing pollution and breakdowns,
- the rational utilisation of our environmental resources, such as land, water and forests,
- the rational management of our natural resources,
- restricting the amount of waste generated and the continuous development of waste management methods,
- restricting emissions to the air, water and soil,
- restricting greenhouse gas emissions, while taking into account critical economic aspects,
- restoring terrain adversely impacted by our activities,
- the prudent application of new solutions and innovations, taking into account during their design and implementation their environmental and climate impact,
- meeting the adopted and justified expectations of our stakeholders,
- adherance to legal requirements and respect for ethical principles,
- the active support of efforts to ensure biological diversity and, if that is not possible, to undertake appropriate compensatory actions,
- the responsible management of land and green terrain,
- open and honest dialogue with and respect for local communities and indigenous peoples as well as appropriate governmental authorities, aimed at strengthening protection of the environment and climate,
- the responsible management of chemicals,
- raising the professional qualifications and awareness of employees with respect to protection of the environment and climate,
- shaping the attitudes of employees, contractors, customers and local communities to be more ecologically conscientious.
This Environmental Policy, adopted by the Management Board of KGHM Polska Miedź S.A., shall apply to the Head Office and to all of the Company’s Divisions, and is publically available, known to and applied by all of the employees and other persons working on behalf of the Company.
KGHM Polska Miedź S.A. (hereinafter referred to as “KGHM” or the “Company”), as one of the largest global copper producers, will have a significant impact on the successful transformation into a low-carbon economy. The new role will stem from having to satisfy the growing demand for copper, which is a key component of the green economy of the future. Apart from supporting the transformation directly by providing the key resource, KGHM will also contribute indirectly to the reduction of greenhouse gas emissions. Furthermore, given this perceived reality, KGHM sees the potential for increasing its role in the global economy – generating new, previously unattainable opportunities to improve the competitive potential of the Company.
The above-mentioned vision is expressed by the Climate Policy of KGHM Polska Miedź S.A., which aims to convey the following objectives:
- to define the ambitions of KGHM Polska Miedź S.A. regarding the reduction of its impact on the climate and to adapt the operations of the Company to fulfil these ambitions,
- to describe how the Company’s operating model should be adapted to the existing and predicted climate change.
Code of ethics
The Code of Ethics of the KGHM Polska Miedź S.A. Group is the main tool in our corporate culture which assists in the setting of priorities and establishing a collection of principles which are binding for all of our employees in their daily work. The Code of Ethics is a guide to proper conduct at work and helps us in our daily decision-making. It makes us stronger as a team. It also supports our image as a stable, responsible, and socially-engaged company.
Code of conduct
In June 2018 the Management Board of KGHM Polska Miedź S.A. adopted the Code of Conduct of KGHM Polska Miedź S.A. At the same time the Company declared its commitment to sustainable development, based on respect for ethical principles, transparency and best industry practice, and commitment to being a socially and environmentally responsible enterprise, grounded on the KGHM Group’s Code of Ethics. Both documents regulate behavior standards that the Company is guided by. The Codes are an integral, mutually interconnected whole, based on consistent assumptions and values followed by the Company.
KGHM Polska Miedź S.A. has adopted an OHS Policy. The life and health of employees and workplace safety in general is the chief priority in the hierarchy of values of the KGHM Polska Miedź S.A. Group. For several years the Company has advanced its vision of „Zero accidents due to human and technical errors, zero occupational illnesses among our employees and contractors”. As a result of the adoption in December 2018 of a new strategy to the year 2023, in 2019 a conceptualisation of the strategy in the area of occupational safety was prepared through formulation of the Employee Safety Improvement Program „Think About The Consequences” as well as a Program to prevent the most common hazards to workplace safety by utilising innovative technology.
The Company applies high OHS standards, both towards its own employees as well as towards those providing services on the grounds of KGHM Polska Miedź S.A. Each of the Company’s Divisions has implemented a safety management system which is compliant with standards in force to date, and in 2019 preparations commenced to implement a new OHS standard compliant with the ISO 45001:2018 standard. All work stations have identified threats. The Company has assessed occupational risks and updates them continually. Working environments are continually monitored and periodic reviews and potential threat assessments are conducted, as well as reviews of equipment and required technical checks and approvals. Employees undergo systematic training and continually enhance their qualifications.
The KGHM Polska Miedź S.A. Group does not have in place a shared Diversity Policy in written form. Taking into consideration the international nature of our activities, cultural differences and specific natures of the Group’s industries, each company has been performing a number of actions in the area of respect for diversity. In view of the above, the independent Diversity Declaration has been defined at KGHM Polska Miedź S.A.
The Company complies with the prohibitions of discrimination and takes actions in order to ensure respect of diversity in the workplace. It creates an organizational culture based on mutual respect, equality, access to development opportunities and optimal use of employee talent regardless of ethnic origin, age, gender, nationality, citizenship, religious orientation, political convictions or trade union membership, among others. It aims at ensuring reasonable diversity both in the selection of personnel (including in the recruitment process), with special focus on knowledge, technical competence and social skills.
The Parent Entity guarantees the implementation of the diversity principle across the KGHM Polska Miedź S.A. Group, and promotes and popularizes these values among its stakeholders and business partners.
The management of diversity also pertains to members of the Supervisory Board and Management Board of KGHM Polska Miedź S.A. The management and supervisory teams are composed of persons of different gender, age and experience. More information on the approach to diversity in the supervisory bodies is presented in the Statement on Corporate Governance in The Management Board’s Report on the activities of KGHM Polska Miedź S.A. and of the KGHM Polska Miedź S.A. Group in 2020.
Gender Pay Gap Ratio
The Gender Pay Gap Ratio (GPGR) for wages paid to employees of KGHM Polska Miedź S.A., calculated as the percentage difference between the average monthly remuneration of women and men for 2020, amounted to (-)12.3%.
The ratio was calculated as follows: GPGR=|(AMW/AMM)-1|*100%
AMW = average monthly remuneration of women in the company,
AMM = average monthly remuneration of men in the company.
The difference respecting the aforementioned ratio for the company compared to the base value of zero, meaning complete equality (0%) reflects the nature of the operations and the resulting employment structure. The conditions and nature of the work in mining and metallurgy mean that the share of women in total employment amounts to 7%. As a consequence of these conditions, any change in the structure of employment which would result in an alteration of the gender pay gap ratio is not possible.
Structure of diversity amongst management and supervisory staff of the Company as at 31 December 2020
|Structure of gender diversity||Women||Men|
|Structure of age diversity||<40 years||40-50 years||51-60 years||>60 years|
|Length of experience in KGHM Polska Miedź S.A.||<5 years||5-10 years||11-20 years||>20 years|
Declaration on human rights protection
The KGHM Polska Miedź S.A. Group does not have in place a shared Human Rights Protection Policy. Taking into consideration the international nature of our activities, cultural differences and specific natures of the Group’s industries, each company engages in a number of actions to protect human rights. Consequently, an independent Declaration on Human Rights Protection has been defined at KGHM Polska Miedź S.A.
KGHM Polska Miedź S.A. declares that it recognizes, respects and promotes human rights wherever it conducts its business. It does not tolerate any violations of human rights. We undertake to operate in compliance with the United Nations’ Universal Declaration of Human Rights and other norms and standards, including the statutory and executive regulations of the home countries of our business operations.
KGHM Polska Miedź S.A. is a global organization, aware of the importance of respect for human rights in the modern world. The Company accepts responsibility for protection and respect for fundamental human rights and implements such standards across the KGHM Polska Miedź S.A. Group. It also assumes that respect for human rights by other entities is a vital element of mutual relationships.
In compliance with the adopted principles, each employee and collaborator of the KGHM Polska Miedź S.A. Group is responsible for ensuring that in his/her closest environment human rights are respected, and any infringements are reported according to the agreed procedure. This Declaration is the basis of our approach to human rights. It supplements and consolidates the human rights issues contemplated in other policies and guidelines of the Company, such as the Code of Ethics, the Diversity Declaration, HR and the Responsible Supply Chain Policy.
The Declaration is implemented in the following manner:
- Each employee provided with access to a computer receives the adopted declaration electronically, via the Company Document Circulation System, while employees with no access to a computer for work purposes are informed of the declaration implementation via extranet (accessible to all employees) and by their direct superior.
Infringements are reported as follows:
- Employees have the right and obligation to report an infringement of the Declaration on Human Rights Protection to their direct superiors;
- Employees may report infringement to the trade unions operating in the Company (in KGHM Polska Miedź S.A. there are 15 trade unions, which have established 48 company trade organizations; the trade union membership percentage ratio in the Company is 88.6%). KGHM Polska Miedź S.A. acts in compliance with the Collective Bargaining Agreement;
- Infringements may be reported to the Occupational Safety and Health Committee;
- Employee Council Institutions are present in the Company, and in the case of Whistleblowers (Ethics Hotline) report to the State Labour Inspection Service (PIP).
Responsible supply chain policy
The KGHM Group is fully cognizant of the fact that the selection of responsible suppliers, especially as regards the sourcing of conflict minerals (such as gold, tin, tungsten and tantalum), is of key importance for conducting activity oriented on sustainable development.
Consequently, in December 2015, KGHM launched an internal system of responsible supply chain management by formally adopting the KGHM Polska Miedź S.A. Group Responsible Supply Chain policy and the Responsible Gold Supply Chain Audit Procedure in KGHM Polska Miedź S.A. In 2019, the Company updated the Supply Chain Audit Procedure with respect to gold and silver with a view to ensuring compliance with LBMA Responsible Gold Guidance V8 and LBMA Responsible Silver Guidance V1. The system is subject to regular independent external audits.
It is important to underline the fact that the KGHM Group does not tolerate, support, contribute to or benefit from:
- Violating the principles of occupational health and safety,
- Child labour or any form of forced labour,
- Violating the right of association,
- Violations of international humanitarian law,
- War crimes, genocide or any crimes against humanity, including indigenous peoples,
- Money laundering and terrorist financing.
Management System – ISO Standards
Management systems according to ISO standards are internationally recognised standards that indicate to companies the optimal way to operate. Implementing and improving systems is therefore not a fad, but an essential tool for ensuring competitiveness. ISO certification proves that the company meets certain requirements and standards, and because they are international standards, the organization gains recognition around the world. The current state of implementation and certification of standardised management systems in the Head Office and Divisions of KGHM Polska Miedź S.A. is presented at Management System site.
Efficient and effective energy management is of fundamental importance for sustainable development, the Company’s values and occupational safety. KGHM Polska Miedź S.A.'s primary goal in terms of energy management is to pursue a rational energy management policy while ensuring the highest quality of the products and services provided, safe working conditions and the highest standards of environmental protection and at the same time guaranteeing the security of power supply to the facilities and installations. Our ambition is to continuously increase the share of renewable sources of energy and internal generation to cover our energy needs - by 2030 we want 50% of the power consumed by the company to be supplied from our own generating sources, including renewable energy.
The basic principles of energy management at the Company, the aspirations and the management staff's commitment are included in the Energy Policy of KGHM Polska Miedź S.A. (translation in progress)
The Remuneration Policy for the Members of the Management and Supervisory Boards of KGHM Polska Miedź S.A. is aimed at achieving the business strategy of KGHM, as well as the long-term interests and stability of the Company.
There is a Competition Law Policy in the KGHM Polska Miedź S.A. Group. Its purpose is to establish the operational framework for the system to ensure compliance with the competition laws prevailing in all the countries in which the KGHM Polska Miedź S.A. Group operates.
KGHM Polska Miedź S.A. is guided by high ethical standards across the procurement process. The Code’s main message is to guarantee the professionalism and honesty of the persons responsible for the procurement process. The document also contemplates issues such as preventing conflicts of interest as well as equal treatment of suppliers to ensure compliance with the principles of fair competition.
The procurement procedures in effect in KGHM are precisely defined in the Procurement Policy and business partners are selected in accordance with the principle of equal treatment.
In tender documentation, the Company reserves the right to audit its suppliers and to assess their activities in terms of compliance with human rights and regulations governing the hiring of minors. External entities are also checked in order to secure the interests of KGHM, in the context of money laundering, breaches of fair competition rules, prevention of conflict of interests, etc.
Procedure for counteracting money laudering and the prevention of fraud and extortion…
...in trading transactions regarding the sale of products and the procurement of ore and copper-bearing materials of KGHM Polska Miedź S.A.
KGHM uses a diverse range of external counterparty verification in the procurement, sales and investment processes, which are regulated by a number of consistent and uniform internal policies and procedures. This procedure covers verification methods used for the purposes of trading transactions. To protect its image and the Company’s security, KGHM takes measures to prevent the Company from being used by third parties for unlawful purposes, such as money laundering, financing of terrorism or VAT extortion.
The security measures undertaken in this respect consist of:
- Client identification and verification of its identity based on the data provided by the Client, publicly available information and/or reports of credit bureaus,
- Undertaking, with due diligence, actions to determine the ownership as well as organizational structures or the Client’s links to other entities, in order to identify the Beneficial Owner of the transaction and verify its identity, using publicly available information and/or reports of credit bureaus,
- Obtaining information on the Client’s objective and intended character of the business relationship, using publicly available information,
- Monitoring of the business relationship with the Client, including completed transactions, in order to check if they are consistent with the Company’s knowledge of the Client and its business profile, and - if possible - examining the source of funds.
The Anti-Corruption Policy in effect in the KGHM Polska Miedź S.A. Group was adopted in July 2018, pursuant to the Resolution of the Management Board of KGHM Polska Miedź S.A. The Policy establishes detailed standards of conduct in corruption-prone situations and identifies the criminal liability in case of abuse. The KGHM Polska Miedź S.A. Group underscores its commitment to fighting corruption in business, by the way of adopting and uncompromising observance of the “zero tolerance for corruption and bribery” rule. Employees are prohibited from offering or accepting material benefits in relation to the performance of professional duties.
The only exception is giving and accepting business gifts in line with the local norms and cultural customs, provided that the giving and accepting of gifts cannot lead to a situation in which such behavior could be considered as an attempt to exert pressure or persuade the recipient to act against their duties. Detailed rules pertaining to giving and accepting of customary business gifts have been defined as an instruction under the Corruption Threat Prevention Procedure. Employees are required to avoid any actions or decisions in a situation of a conflict of interests. Particular control under the Policy is over business procurement transactions, including an option of a third party audit, in order to ensure that such transactions meet the highest standards of ethical and transparent business operations. The KGHM Polska Miedź S.A. Group Entities and their Employees may be held accountable for actions of persons or entities acting on their behalf or for them.
The Policy also states that the Group Entities and their representatives are obliged to observe all statutory provisions, guidelines of administration bodies and other state authorities, as well as domestic and international legal acts designed to fight corruption. The Policy also states that KGHM Polska Miedź S.A. and the Group Entities and cooperating entities are obliged to follow international legal acts designed to fight corruption, e.g. the U.K. Bribery Act of 2010, the U.S. Foreign Corrupt Practices Act, Canadian Corruption of Foreign Public Officials Act of 1999 and guidelines contained in international agreements, e.g. the OECD Convention or the guidelines of UN Global Compact as regards responsible business and fight with corruption.
The document stipulates that Employees of the Group and external partners are obliged to report any suspicion of breaches to the Policy and the Corruption Threat Prevention Procedure, directly to the Security Department of KGHM Polska Miedź S.A. or via the dedicated channels of abuse reporting.
Every report is confidential and followed up with due diligence. The KGHM Polska Miedź S.A. Group uses a range of tools to effectively implement the Policy’s objectives, including first of all procedures, instructions, remedies and control mechanisms, which specify in detail the standards of conduct in corruption-prone situations.
Employee training programs on ethical conduct and regular audits of ethical standards and anti-corruption practices
Since 2017, regular security and loss prevention training has been organised, which included the topics of corruption prevention and conflict of interest, for employees of all KGHM entities. The training covers all employees newly employed in KGHM entities. Topical training is also organised. In 2018, a specialised training course was carried out, addressed to senior management and their representatives (40 people). All materials and instructions are readily available to Employees on the corporate Intranet site via a dedicated tab devoted to ethics and corruption prevention.
In 2019, on-site training on anticorruption was conducted by an expert from the Central Anticorruption Bureau for persons in managerial and executive positions as well as persons responsible for the procurement processes in companies in the KGHM Group. 5 training courses were held in total, attended by 143 persons.
Regular meetings and training sessions are also organised for the Ethics and Anticorruption Representatives (40 persons). In 2020, 5 such training sessions were held. The objective was to improve the abilities of the Representatives and to share knowledge. The Representatives are responsible for the organisation and performance of training sessions on ethics and anticorruption in KGHM’s companies.
In 2020, KGHM Polska Miedź S.A. launched two e-learning training modules on ethics, prevention of irregularities (in particular, corruption, abuse, and discrimination) and receiving whistleblower reports in its Head Office and Divisions:
1. for senior management, the Ethics and Anticorruption Representatives and Members of the Ethics Committee – 636 people completed the training and 98 are currently undergoing the training (as at 31 December 2020).
2. for remaining employees with access to the e-learning platform – the training was completed by 4,452 people and 1,207 are currently in training (as at 31 December 2020).
As a result of the decision of the Management Board to implement the Anticorruption Management System in the Divisions and Head Office of KGHM Polska Miedź S.A. and in the Subsidiaries in accordance with the PN-ISO 37001:2017 standard, online training workshops were conducted in the last quarter of 2020 on the requirements of this standard for Ethics and Anticorruption Representatives and Management System Representatives in KGHM Polska Miedź S.A.
1. Practical interpretation of the requirements of the Anticorruption Management System standard according to ISO 37001: 3 one-day training sessions, number of participants: 71;
2. Internal Auditor of the Ethics and Anticorruption Management System based on the international standard ISO 37001, the KGHM Polska Miedź S.A. Code of Ethics and the draft standard ISO/DIS 37002:2020: 2 two-day training sessions, number of participants: 34;
3. Anticorruption Management System Representative according to ISO 37001: 1 two-day training session, number of participants: 17;
In 2019-2020, a number of communication activities were also carried out, addressed to the employees of the KGHM Group, promoting ethical standards and contributing to the culture of the organization:
- 6 educational films were published on the topic of the Code of Ethics, abuse prevention, the Whistleblower Platform and protection of Whistleblowers, rules of acceptance and giving of business gifts, as well as prevention of corruption and conflicts of interest,
- several articles on related topics were published in the company magazine Curier and in the Group’s Intranet,
- a special supplement focusing on Whistleblowers was published in Curier,
- the updated Anticorruption Manual was published in an electronic version,
- the “ABCs of Conflict of Interest. Corporate ethical handbook of KGHM” was developed, published and distributed; the publication presents a concise description of conflicts of interest and the company’s regulations for preventing this phenomenon.
- a questionnaire was developed allowing employees to carry out on their own a voluntary, individual assessment of the risk of conflict of interest,
- an information campaign on the handing of business gifts was conducted.
Information on the execution of the tax strategy for 2020
Information on the amount of taxation paid by the KGHM Group as well as accounting policies and important estimates, assumptions and judgments may be found in the Company’s annual and half-year financial statements, which are prepared in compliance with International Accounting Standards and International Financial Reporting Standards. The Tax Policy currently being prepared by the Company will serve the purpose not only of continuing and strengthening the Company’s reputation as concerns its obligations towards compliance with the aforementioned IAS and IFRS Standards, but will also be a response to the market’s ever-greater demands for transparency in the form, among others, of the GRI guidelines.
In the meantime the Company hereby presents „Information on the execution of the tax strategy of PGK KGHM II”, as required by art. 27c of the act dated 15 February 1992 on corporate income tax. The Strategy contains specific information required by law regarding taxation of the Group (in respect of which KGHM Polska Miedź S.A. is the Parent Entity) and of each of the companies included therein.
Information on the execution of the tax strategy for 2020 [PDF] (original version in Polish).