MISC Integrated Annual Report 2020

WHISTLEBLOWING PROCESS - MISC BERHAD WHISTLEBLOWER WHISTLEBLOWER SECRETARY (WBS) WHISTLEBLOWER COMMITTEE (WBC) HUMAN RESOURCE MANAGEMENT Process of making disclosure Making the disclosure via one of the reporting channels Administers, classifies and evaluates disclosures and registered under WB Register Deliberates on the disclosure and decides on the next course of action Deliberates on the disclosure and decides on the next course of action Invokes Disciplinary Action Process & Procedures Notified on the outcome of the disclosure TRAINING – EMPLOYEES, THIRD PARTIES AND DIRECTORS E-learning Refresher Compliance Training Programmes i) The Annual CoBE e-Learning refresher courses are mandated for employees and the Board. The refresher course includes guidelines on dealing with improper solicitation, bribery and other corrupt activities as well as issues that may arise in the course of doing business on behalf of MISC. ii) There are six compliance-related modules that have been rolled out to employees in phases namely Human Rights Management, Personal Data Protection and Privacy Compliance, Third-Party Risk Management (TPRM), Sanctions, Anti-Bribery and Corruption Manual and Competition Law. iii) The Compliance unit has attended trainings and online webinars as part of the Compliance resources’ capacity building initiative. The trainings are related to sanctions, anti-bribery management, identifying risk ratings, sanctions on shipping industry, among others. For more information and details on the trainings, please visit www.misc.com.my/ compliance. Third party briefing on CoBE and Sustainability CoBE training for third-party service providers has been conducted annually since 2018. This year’s session registered 70 participants from 47 third parties of MISC Group. The training forms part of MISC’s initiative on enhancing MISC Group’s Supply Chain Management to ensure that our third parties are aware of our CoBE and other requirements and expectations from them and shall comply to similar standards as per our CoBE. OPERATING RESPONSIBLY Annual Conflict of Interest (COI) Declaration to employees and Board members Objective: The intent of the annual COI disclosure is to identify any actual, perceived, or potential COIs amongst employees and Directors of MISC. This is important to ensure that appropriate measures are being taken so that it poses no risks to MISC, Directors and its employees. A total of 100% of MISC Berhad and Eaglestar employees’ have completed the Annual COI Disclosure for 2020. Employees On 18 May 2020, the Annual COI Declaration for the Year 2020 was rolled out as part of the assurance exercise in relation to Avoidance of Conflict of Interest under Part IIA of the MISC CoBE. A similar exercise will be conducted independently by the rest of the subsidiaries. Board of Directors Board of Directors declaration currently managed by Group Secretarial Services (GSS) and the outcome will be reflected in Corporate Governance Overview Statement on page 260. WHISTLEBLOWING The Whistleblowing Policy provides an avenue for all employees to disclose and report any suspected unethical and/or unlawful conduct or non-compliance with the CoBE involving MISC and/or any of our employees. In line with the highest standards of integrity expected of the Company and its employees and the Malaysian Code on Corporate Governance 2017, the BARC shall also review whistleblowing reports submitted to it. BARC as the governing body shall also be updated in respect of compliance and ethics related matters as good governance and to ensure the objectives of the Compliance and Ethics Programme 2020 is effectively implemented. In 2020, there were four cases raised through the whistleblowing channels. All cases were investigated and deliberated by the WBC2, with three cases closed with no delinquency. However, one case is still under investigation as it was reported in December 2020. POLICY REVIEWS AND IMPLEMENTATIONS Corporate Privacy Policy Following the adoption of the Corporate Privacy Policy and its Master Guidelines in 2019, MISC has rolled out new Personal Data and Information Notice to MISC Berhad employees, directors, vendors, clients, business partners and visitors. A new Privacy Notice for MISC’s corporate website was also developed to provide information regarding the processing of personal data of visitors that’s collected from MISC website, social media pages or email messages. Ongoing gap analysis is being conducted with business units and service units to ensure compliance with data privacy laws and regulations prioritising on Human Resource and Group Health, Safety, Security and Environment (GHSSE) divisions as these two divisions handle the most personal data within MISC. Competition Protocols MISC has Competition Law Guidelines in place which outline the main competition laws applicable in most jurisdictions around the world as well as providing guidelines in ensuring that MISC strictly complies with these rules in its day-to-day business. MISC has subsequently adopted two Competition Law Compliance Protocols in 2020 to support the Competition Law Guidelines as below: i) MISC’s Competition Law Compliance Protocol on Meetings and Information Sharing ii) MISC’s Competition Law Compliance Protocol on Merger and Acquisition Transactions WBC 1 - Allegations on Senior Management (President/CEO, members of the Board, members of the Management Committee) WBC 2 - Allegations on Non-Senior Management Third Party Compliance Due Diligence Operational Guidelines (TPCDDOG) MISC’s TPCDDOG sets out the basic guidelines and procedures relating to Compliance Due Diligence to be conducted across all business units within MISC (including subsidiaries). It is good practice to assess the third parties to ensure that the business relationship with MISC does not pose significant Associated Compliance Risk, which refers to corruption and bribery risk, risk of COI, economic sanctions and export control risk, Anti-competition, credit risk (for clients), human rights and modern slavery risk and other relevant compliance and regulatory risk. Business units and subsidiaries are required to ensure that the Compliance Due Diligence are performed on third parties by the completion of the Know Your Counterparty (KYC) Questionnaire, internal screening of third parties via KYC online checks, and to assess the potential Associated Compliance Risk using the Due Diligence Risk Assessment Checklist. In instances where the level of Associated Compliance Risk is indicated as medium or high, an Enhanced Compliance Due Diligence (ECDD) shall be undertaken. The ECDD shall nevertheless be undertaken for all proposed transactions involving mergers and acquisitions and business joint- ventures. Where ‘red flags’ are identified, the appropriate mitigation plans are then initiated and executed. HUMAN RIGHTS COMMITMENT AND MODERN SLAVERY POLICY AND STATEMENT In 2018, MISC established a cross-functional Human Rights Working Group (HRWG) to consider the way MISC implements its human rights commitments across the business and determine any adjustments or enhancement opportunities to improve our human rights performance. The HRWG is tasked, amongst others, to develop policies and procedures which included the adoption of a Modern Slavery Policy, to conduct risk assessments and due diligence and propose improvement actions to mitigate risks identified. The HRWG consists of representatives from all business units and subsidiaries and chaired by the Vice President (VP) of Legal, Corporate Secretarial and Compliance (LCSC). MISC Group’s Human Rights management is guided by the United Nations Guiding Principles on Business and Human Rights. In 2019, MISC Group established its Human Rights commitment and Modern Slavery policy and statement. Since then, MISC Group has conducted Social Risk Assessment (SRA) for two of our business segments. The assessment was done according to PETRONAS SRA Guideline PTG 19.90.05. The SRA focuses on the assessment of social risk variables under the Human Rights elements in accordance to MISC Group’s Human Rights commitment: INVESTIGATION TEAM Conduct investigation and issue report • Land management (right of way, compensation, access to natural resources) • Indigenous peoples • Cultural heritage • Community health and safety • In-migration • Grievance mechanism • Forced labour • Child labour and young workers • Non-discrimination • Freedom of association • Workplace / accommodation health and safety • Conditions of employment and work Labour and working condition Responsible security Community well-being Supply chain management • Conduct of third-party security • Human rights training • Mechanism to report on security personnel • Contractor/Supplier performance related to labour and working conditions, responsible security and community well-being • Corruption and bribery ///// Sustainability / Financial Review / Business Review / Leadership / Governance /// MISC Berhad / Integrated Annual Report 2020 7 234 MISC Berhad / Integrated Annual Report 2020 7 235 /// Governance / Leadership / Business Review / Financial Review / Sustainability ///// Section Section