Anti-Corruption Policy and Security of Economic Activities
GRI 2-25, 2-26
Anti-corruption system
In 2024, the Company had an Anti-Corruption Policy of PJSC Roseti South (hereinafter referred to as the Anti-Corruption Policy) in place, which complied with all applicable requirements of Russian legislation in the field of prevention and combating corruption.
Key principles of the Anti-Corruption Policy:
- Compliance of the Anti-Corruption Policy with applicable anti-corruption legislation and generally accepted standards
- Compliance with the legal rights and interests of relevant parties, Company employees, protection of the business reputation of the Company, partners, and other relevant parties, confidentiality of anti-corruption measures
- Personal example of leadership in shaping a culture of intolerance towards corruption and creating an internal system for preventing and combating corruption
- Responsibility and inevitability of punishment for Company employees, regardless of their position, length of service, or other conditions, in the event that they commit corruption offences
- Constant control and regular monitoring of the effectiveness of the anti-corruption procedures in place
In 2024, the following regulatory documents were drawn up and updated:
- An Anti-Corruption Plan for 2024 was developed and approved (Order No. 20 dated 16 January 2024)
- The Regulations on the Settlement of Conflicts of Interest at PJSC Rosseti South and the Regulations on the Commission of PJSC Rosseti South for Compliance with Corporate Ethics Standards and Settlement of Conflicts of Interest (Order No. 729 dated 5 December 2024) were updated
Documents adopted for prevention of and counteraction to corruption are communicated to workers on a mandatory basis.
The Company shall ensure publicity of its anti-corruption measures, post documents and information on anti-corruption issues on the official website, including the Anti-Corruption Policy and the Code of Corporate Ethics and Official Conduct of the Company’s employees at https://rosseti-yug.ru/o-kompanii/protivodeystvie-korruptsii/.
Assessment and monitoring of corruption risks
GRI 205-2
In order to ensure a unified approach to the development and implementation of measures designed to prevent and counteract corruption, the Company organises a corruption risk management process.
The Company has an approved risk assessment and monitoring methodology (Order No. 15 dated 15 January 2024), which provides for the assessment and monitoring of the risk of corruption-related offences committed by Company employees. The profile of risk of committing corruption-related offences by Company employees is updated on a quarterly basis, and work is carried out to monitor risk assessments, update risk profiles and prepare a report on the fulfilment of the Risk Management Action Plan.
Based on the results of 2024, all planned activities were performed in due time. As required by the Anti-Corruption Policy and decisions of the joint meeting of the heads of security, internal control and risk management, and internal audit, financial and business operations at branches of PJSC Rosseti South were reviewed and the following S&As of PJSC Rosseti South were audited such as Interregional Energy Institute of the South, and Autonomous Non-Profit Organisation Southern Interregional Qualification Centre for the Electric Power Industry.
Following the verification process, the identified violations and deficiencies were recorded and communicated to the facilities checked. In order to eliminate the identified violations and deficiencies, the facilities are to develop plans of corrective actions, with assignment of those responsible for monitoring the progress of implementation, as well as responsible persons and deadlines for each plan item.
Indicators | 2022 | 2023 | 2024 |
|---|---|---|---|
Number of audits carried out with the involvement of branch security divisions in the area of financial and economic activities to detect, prevent and recover (repay) damage | 643 | 675 | 785 |
Anti-corruption control of the stages of procurement activities (review of analytical notes, issues submitted to meetings of the Central Procurement Body (Central Tender Commission), anti-corruption expertise of draft agreements, check of procurement participants for possible affiliation with Company employees) | 4,789 | 4,592 | 4,720 |
Calls handled by the hotline about possible corruption and fraud | 3 | 2 | 1 |
Material damage prevented, based on the results of the work done, RUB million | 428.31 | 301.24 | 165.7 |
Percentage of security personnel trained in the Company’s human rights policy or specific security procedures and their application, % | 7 | 6 | 3 |
Consideration and resolution of information on possible instances of corruption
GRI 205-3
In order to establish a unified system for receiving, reviewing and resolving communications from employees of PJSC Rosseti South, contractors and other individuals and legal entities regarding possible instances of corruption within the Company, a procedure was put in place for receiving and reviewing communications from applicants (employees, contractors of PJSC Rosseti South, other individuals and legal entities) regarding possible instances of corruption (hereinafter also referred to as the Procedure).
The Company accepts, registers and records incoming applications, ensures confidentiality and safety of data received from the applicant, and envisages personal liability in accordance with the legislation of the Russian Federation for disclosure of received information.
Prevention and management of conflicts of interest
GRI 2-15
In order to limit the influence of private interests and personal biases of employees on their work duties and business decisions, the Company implements measures to identify, prevent and resolve conflicts of interest.
In accordance with the Regulations on the Settlement of Conflicts of Interest at PJSC Rosseti South, the Company maintains a three-tier system for disclosing information about conflicts of interest:
- Initial disclosure of conflicts of interest upon hiring / transfer to another position
- Annual disclosure of conflicts of interest as of 31 December of the relevant year
- Notifications from employees on the emergence of personal interest in the performance of official duties, which leads or may lead to a conflict of interest
Initial disclosure of information about conflicts of interest ensures that the declared information is verified and that an appropriate conclusion is drawn regarding the verification of incoming candidates, thereby preventing the emergence of new, previously unidentified pre-conflict situations within the Company.
In 2024, the materials submitted by candidates were reviewed, and 738 conclusions were prepared on the presence/absence of conflicts of interest among candidates for vacant positions (upon hiring/transfer) in the Company. Based on facts of possible conflicts of interest and pre-conflict situations involving Company employees, 37 additional reviews were conducted in preparation of conclusions on the presence/absence of conflicts of interest among candidates for vacant positions, and additional information was requested regarding candidates and persons closely related to them. There are no situations requiring settlement.
Annual disclosure of information as of 31 December of the reporting year allows for the identification of pre-conflict situations or incidents. Incidents mean anything that shows someone might be hiding information or has a personal interest in a situation.
In accordance with the Anti-Corruption Policy and Regulations, the Company has made sure that employees of PJSC Rosseti South and subsidiaries of PJSC Rosseti South declare any conflicts of interest every year using the electronic declaration subsystem of the automated system for analysing and collecting information about beneficiaries.
The number of persons subject to annual declaration as of 31 December 2023 was 2,166 in PJSC Rosseti South and its subsidiaries and affiliates.
The results of the annual disclosure were reviewed and approved at a meeting of the Commission of PJSC Rosseti South on compliance with corporate ethics standards and settlement of conflicts of interest (Minutes No. 16 dated 11 April 2024), as well as at a meeting of the Central Commission of PJSC Rosseti on compliance with corporate ethics standards and settlement of conflicts of interest (Minutes No. 2024/1 dated 21 May 2024), with no comments made.
In 2024, there were four reports from employees about any personal agenda during the conduct of official duties, which leads or may lead to a conflict of interest. Personal interest is related to the conclusion of grid connection contracts.
Combating and preventing corruption in interaction with partners and counterparties
The main checks are to make sure the Company’s money is being spent wisely and effectively (when setting the initial (maximum) purchase price) during the technical specifications stage, as well as checking that the assessment reports are prepared and that the participants and their commercial offers meet the technical specifications and tender (procurement) documentation requirements.
In order to reduce reputational risks and the number of complaints and reports from prospective contractors submitted to the Federal Antimonopoly Service, the legitimacy of rejecting procurement participants is controlled.
Special attention is paid to unscheduled purchases, purchases from a single supplier, and checks are carried out to ensure that the goods (works, services) purchased are not the only option available.
During procurement procedures based on the results of 2024, 646 technical specifications were reviewed and approved.
As a result of the checks, 56 technical specifications, or 8.67% of the total, were sent back to the initiator for improvement because there was no justification for the procurement procedures, the pricing rules were broken, or there were issues with the approved standard forms.
By the end of 2024, 1,347 assessment reports and analytical notes were reviewed and approved.
As a result of the checks, 156 assessment reports and analytical notes, or 11.6% of the total number of purchases, were not approved and were sent back to the initiator for improvement.
Non-compliant assessment reports and analytical notes shall be returned for further improvement, and the initiator shall eliminate the identified issues or refer the matter to the Procurement Commission for consideration of the need to declare the procurement procedure invalid and repeat it. After the issues are resolved, all materials undergo a second round of approval.
As a result of the work done in 2024, the initial (maximum) price for procurement procedures was reduced by RUB 99.6 million, including rebidding and pre-contract negotiations.
In 2024, the Company reviewed and approved at least 2,730 contracts and additional agreements for the inclusion of an anti-corruption clause, correct disclosure of information about the counterparty’s chain of ownership (including ultimate beneficial owners), identification of conflicts of interest, pre-conflict situations and other abuses related to positions held in the Company.
If there are any comments on the contract or additional agreements, they shall be returned for further revision to eliminate any discrepancies. After the issues are resolved, all contracts shall undergo a second round of approval.
In order to ensure transparency of financial and economic activities, including the prevention of conflicts of interest and other abuses related to the position held, as part of the verification of the Company’s procurement participants/contractors, work is being carried out to disclose the structure of the contractors’ owners, including beneficiaries, in particular ultimate ones.
In 2024, a total of 25,221 income and expense contracts were checked (including the reliability and completeness of information about owners of counterparties) and loaded into the automated
Corporate efforts to prevent and combat corruption
In 2024, the Company participated in the organisation of a unified approach to the disclosure of information on the ownership structure of counterparties, the prevention and identification of conflicts of interest and other abuses related to positions held at PJSC Rosseti, subsidiaries of PJSC Rosseti and their subsidiaries and affiliates.
The Company regularly updates its regulatory framework, provides consulting services and training to its employees.
The Company holds an annual survey. Employees were asked questions about ethics, awareness of personal responsibility and the overall contribution of each employee to combating corruption, as well as identifying shortcomings in corruption prevention efforts.
The survey results show that most of the Company’s employees are familiar with anti-corruption legislation, follow the Anti-Corruption Policy, the Code of Corporate Ethics and Professional Conduct, and believe that the Company’s anti-corruption procedures and measures are effective.
Goals for 2025 and the medium term
In 2025, the Company scheduled the following key tasks related to the execution of the Anti-Corruption Policy:
- To organise events under the Anti-Corruption Policy in accordance with the Anti-Corruption Plan
- To organise annual declaration of conflicts of interest by Company employees. Preparing a report on the performance of conflict of interest disclosure measures and submitting it to the Corporate Ethics and Conflict of Interest Settlement Committee for review
- To organise self-assessment of the effectiveness of anti-corruption measures in the Company in cooperation with representatives of the Chamber of Commerce and Industry of the Russian Federation on issues related to participation in the Anti-Corruption Charter of Russian Business by submitting a declaration of compliance with the requirements of the Anti-Corruption Charter of Russian Business to the Chamber of Commerce and Industry of the Russian Federation
- To strengthen control over compliance by employees with anti-corruption legislation and the requirements of the Anti-Corruption Policy of PJSC Rosseti South
- To arrange for monthly collection, analysis and verification of information regarding the entire chain of ownership of counterparties, including beneficiaries (including ultimate beneficiaries), as well as information on the composition of executive bodies, and send consolidated reports to PJSC Rosseti
- To improve efforts to foster a culture of zero tolerance for corruption within the Company and in interactions with partners and contractors
The main objective of the anti-corruption measures implemented by the Company is to create an environment that would minimise corrupt practices. The success of this task directly affects the Company’s business reputation, its perception by partners and, consequently, the results of its financial and economic activities.