Ethics, conduct and transparency

Jaboticaba. Myrciaria cauliflora

Ethics, conduct and transparency

(102-16) Grupo Argos manages its businesses within a framework of ethics, conduct and transparency, where business activities have integrity as a principle of corporate action, these elements being fundamental in the decision making in compliance of its business strategy.

(103-1) (102-16) Grupo Argos has zero tolerance for fraud, bribery and corruption, which is why the Code of Conduct is the behavioral guide, whose main focus is the principle of integrity understood as responsible, honest, upright, serious, transparent behavior and in accordance with the law and internal policies.

(206-1) This code applies to all the companies in the business group and encourages companies that enter into a Joint Venture with Grupo Argos to adopt codes of conduct with equivalent standards.
In terms of competition, the company defines the framework of performance of its affiliates and ensures that they have antitrust policies that govern their participation in the market they operate in.
These policies cover the following aspects: restrictive trade practices (agreements and acts), abuse of dominant position, unfair competition and business integrations without compliance with the law. During 2016, Grupo Argos, as parent company, had
no investigations related to competition matters.

(103-2) In developing the principles contained in the Code of Conduct, Grupo Argos implemented a Risk Management System for Fraud, Bribery and Corruption – known in Spanish as SARFC, based on national and international best practices, whose purpose is to establish various measures to minimize the occurrence of situations that relate to these risks.

The following describes the Risk Management System for Fraud, Bribery and Corruption

  • Adopted by Senior Management and the Board of Directors.
  • Based on risk assessment: risk matrices tailored to the organization’s activities.
  • Promotion of “culture of compliance” at all levels to promote ethical conduct and commitment to compliance.
  • Stages: identification, measurement, adoption of controls and preventive measures, disclosure, documentation and follow-up.
(102-17) Major guidelines:
  • Code of Conduct
  • SARFC Policy
  • Investigation Manual
  • Transparency Line
  • Gifts and Entertainment Policy
(102-25) (102-17) Main mechanisms:
  • Contractual Clauses.
  • Penalties for non-compliance.
  • Annual training and required assessment.
  • Central Conduct Committee, consisting of Grupo Argos personnel and representatives of its affiliates.
  • Committees of Conduct, Business Conduct Officers and Investigation Officers in Grupo Argos and Argos, Celsia and Odinsa.
  • Transparency Line, free channel that allows anonymous reports, administered by an independent third party.
  • Statement of Potential Sources of Conflicts of Interest and Statement of Property and Income.
  • Training and communication plan with long-term approach directed to members of the Board of Directors, employees and
    suppliers.

(205-3) During the year, Grupo Argos continued to strengthen ethical and transparent behavior within the organization and towards its stakeholders, by conducting internal and external training for employees and vendors:

  • In-Class Training in behavior, LAFT and in the Risk Management System for Fraud, Bribery and Corruption to all employees of the company at all levels.
  • Workshop “Ethical deliberation in the corporate environment” with the support of the University of los Andes, directed to employees of the companies of the Business Group.
  • Workshop “Decision making with an ethical sense” with the collaboration of the NGO Transparencia por Colombia (Nongovernmental organization transparency for Colombia), directed to suppliers.

(205-2) In 2016, 100% of Grupo Argos employees and its Energy, Concessions and Coal affiliates were informed and trained in anti-corruption issues. In the Cement business a total of 3,532 employees of all the categories including the executive level were trained, equivalent to 30%. The Port business updated the Code of Conduct according to the highest standards and will train its employees in 2017.

(103-3) To ensure that the management carried out in this matter is effective, the Internal Audit Area is responsible for permanently assessing the internal organizational control system through a work plan approved by the Audit Committee, which is defined based on different risk scenarios that the company is exposed to.
(205-3) During 2016, Grupo Argos had no-confirmed incidents of corruption.
(205-1) Grupo Argos and all its controlled businesses received training and were evaluated in the risk of fraud, bribery and corruption system.

In the short term, a technological tool will be implemented. This tool seeks that all companies of the Business Group have a unified mechanism for monitoring the internal organizational control system and whose fundamental basis is an approved model for Enterprise Risk Management.

The coverage of the Property and Income Statement will be expanded, which should be filled out for all critical positions and levels of the organization, in addition to Senior Management, as a mechanism of prevention of fraud and corruption. Grupo Argos will continue promoting practices to maintain high standards of Ethics, Conduct and Transparency.