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Conflict of interest (COI) prevention and anti-corruption policy

1. GENERAL PROVISIONS

1.1                INTRODUCTION AND SCOPE

This policy defines the rules for the implementation and management of preventive measures taken in order to prevent conflict of interests (hereinafter the “COI”) and corruption or bribery across the DPD Group member companies (hereinafter the “DPD) operating in the Central and East Europe region and involved in “CEE cluster” (hereinafter referred to as the “CEE) and to mitigate their adverse effects.

The companies that are part of the CEE (hereinafter referred to as “business units” or “BUs”, and each individually as “BU”) are obliged to put these rules and measures set out below in place and to respect and follow them, as local conditions allow them.

The existence of this policy doesn’t imply that the BUs can’t amend the following rules and add their own local measures, especially where the national legislation requires that the BU adopt such measures which are not expressly specified herein.

Each BU is responsible, through its Compliance Officer, for the full compliance of its practice with the national legislation regulating prevention of COI and its anti-corruption policy.

 

The purpose of this COI Prevention and Anti-corruption Policy is to protect the interests of DPD customers, DPD contractors (including potential) or other persons and the civil society in relation with DPD entrepreneurship and provision of the DPD services.

 

This policy is intended for all employees, tied agents and other individuals cooperating with the respective BU (jointly also referred to as “Workers” or “Employees”). Each BU shall ensure that its Workers are systematically and effectively acquainted with the principles defined in this policy, whether through workshops, training sessions, contractual covenants and/or any other actions and means.

 

2.   COI PREVENTION

2.1.   COI CASES

This policy contains principles of the identification and management of COI:

a) between CEE BU, its managers, tied agents and/or its employees, and

  • BU customers or prospects;
  • contractors and other BU partners, including potential;

b) between customers / suppliers / partners or potential customers / suppliers / partners.

 

Each BU is required to follow these rules of COI prevention, as defined in this document, as well as the DPD Group Code of conduct, the principles of which each BU will also incorporate into its own Code of conduct.

 

2.2.  BASIC PREREQUISITES FOR EFFECTIVE COI MANAGEMENT

As part of the effective COI management, each BU must:

a) put in place and apply a system of recruiting employees that complies with the following rules:

  1.     No direct or indirect relatives may be hired for jobs with direct superior / subordinate relationship

This refers to children, parents and spouses, as well as siblings, nephews, nieces, uncles and aunts, spouses of children (sons-in-law, daughters-in-law), spouse´s children (step- children), spouse´s parents (father-in-law, mother-in-law), parents´ spouses (step-parents);

2.       BU employees may not be in relation to its competitors:

i.  the owners, co-owners or trade licence holders; ii. in an employment or a similar relationship; iii. authorized agents or other advocates of the interests of such competitors.

A competitor means any business entity, the business activity of which is identical with or similar to the following:

  • forwarding or transportation of goods, items or freight;
  • warehousing and logistics;
  • other activities that the BU, given its local circumstances, performs as its main business activity.

In cases where the BU employee doesn’t personally meets the criteria specified hereinabove, but yet his/her direct or indirect relative does, the employee still has the information obligation under Article 2.4 - 1.

b) have an organizational structure that ensures the independence of the staff in the respective departments in such a way which effectively prevents an unwanted flow of information and its potential misuse or distortion. This means, inter alia:    

 1. to have an independent Controlling Function in place to monitor and analyse any revenues and expenses related to the business activity;

 2. to have an independent Internal Audit Function established to verify performance and set up of processes and risk management;

3. to periodically verify the reliability of reporting tools.

c) have an internal control system securing multiple checks before the Company enters into a contractual relationship, in particular by way of

    1. applying the four-eye principle when approving any expenses, particularly order approvals and CAPEX;

    2. approving any cash expenses by superior managers (no self-approvings);

   3. multiple authorization of all bank transfers and payment orders;

   4.  approving any contracts setting out obligations for the BU by at least two persons prior to their signing, and               keeping a complete record of contracts with an unlimited access for internal auditing;

  5.  setting up a transparent process for calling, performing and assessing tenders for any contracts meeting the               value of the investment or binding the BU to order the services/goods repeatedly. It must be ensured that several                 persons, mutually independent within the organization, participate in the selection of contractors. The rules of        the selection and assessment of the BU contractors are to be provided for in the corporate guidelines.

d) apply the following principles when the Company is about to enter into a contractual relationship:

    1. persons participating in the selection and evaluation of the contractors must not have any personal relationship and interests in the cooperation with such contractors, the volume of orders placed with these contractors, the remuneration arrangements or the duration of the cooperation. The BU must establish a system to exclude such persons from the decision-making process in cases where the BU interests may be affected;

   2. If any contract (except working contract) is to be made between DPD and a person/entity who is:

i.  in an employment or similar relationship to the BU or another DPDgroup entity;

ii. a Managing Director or a member of the Board of Directors of the BU or another DPDgroup entity;

iii. owned, co-owned or controlled by the person specified in letters (i.) and (ii.) above;

iv. a direct or indirect relative (see point 2.2 - a.) to any person specified in letters (I.) and (ii.) above, or such other person or entity that is controlled or managed by such person;

then such a contractual relationship may only be entered into with an express consent of the BU CEO and after an explicit previous notification to the BU CEO of the nature of such relationship that may be perceived as a COI.

  • Where the potentially conflicted person is the Managing director (CEO) / member of the Board of Directors or CEE Lead then CEE Regional Manager shall approve such contractual relationship under the same conditions.
  • Where the potentially conflicted person is the CEE Regional Manager, his DPD superior manager or board shall approve such contractual relationship under the same conditions.

 

3. the system of approval and periodic review of pricing and contractual terms towards individual customers of the company is established in order to avoid any unreasonable prices, discounts or unfair advantages in the business relationship between the BU and the customer.

     i. unreasonable prices or unfair advantages shall mean such contractual arrangements that do         not correspond to the current pricing and business conditions of the customer, given by the             customer´s significance for the BU, unless such advantages are apparently balanced by other         specific benefits for the BU/DPD or by other legitimate interests;

    ii. such review must be applied to all customers, without exception.

 

2.3  IDENTIFICATION OF COI AND IT’S MANAGEMENT

The principles of the identification of COI:

a)  In identifying and assessing COI, it is always considered whether a BU, DPD or a person perceived to be in COI:

1. may obtain financial advantage or avoid financial loss to the detriment of BU or DPD;

2.  may have other interests in the outcome, course or terms of the service provided to the customer, or in the outcome, course or terms of the performance to be provided than the interests of DPD;

3.  may be otherwise motivated to prefer the interests of the customer or the contractor

over the interests of the BU or DPD;

4.  carries out a business activity or represents business interests of entities different from the BU/DPD in the same or a similar branch of business activity (see Section 2.2 - a.);

All BU organizational units and employees are required to participate in the identification and management of COI, and in the case of the risk or actual occurrence of the occurring COI, they must inform their superior of this fact immediately thereafter.

Where it is not entirely clear whether a particular person is in COI, then the rule “stricter where in doubts”, i.e. as if such person were in actual COI, must apply.

In cases of COI, the senior manager shall adopt (or where he/she is not competent to make such decision, initiate adoption of) measures to secure that the conflicted person is excluded from the decision-making and administrative processes.

 

2.4  PROCEDURES FOR MANAGEMENT OF MATERIAL COI

The BU must establish and apply such internal control system that can, in relation to particular BU activities, identify, in a timely manner, any circumstances that may result in a COI posing a material risk of damage to the BU/DPD interests (hereinafter the “Material COI”).

Such Material COI means, inter alia, situations described in:

1.  Section 2.2 - a. - 2. of this Policy (relationship to competitors or the business activity);

BU shall take the following measures:

a.    Prevention of a Material COI

  • All persons who enter into an employment relationship with the BU or are empowered under a power-of-attorney to act on behalf of the BU, shall represent, before such relationship or empowerment is created, that they are not in relationships defined in Section 2.2 - a. - 2. of this Policy;
  • Employees in Top and Senior Management of the BU shall periodically represent, at the beginning of each calendar year and not later than until the end of January, that they do not qualify in relationships defined in Section 2.2- a. - 2. of this Policy.

b.    Information obligation of employees with regard to Material COI

  • The above-mentioned persons shall be obliged to provide information on any circumstances that may have arisen in the course of the employment relationship / empowerment and that may, no matter how interpreted, constitute situations described in Section 2.2, a.- 2. of this Policy, and shall be obliged to obtain the respective consent of the BU. Where the information obligation is not fulfilled, or the consent is not granted, and the employee/agent thereby knowingly becomes involved in a COI, the BU reserves the right, in line with the local laws, to protect the rights of the BU/DPD and to terminate the employment relationship or to revoke the empowerment of the conflicted person.

2.  Section 2.2 - d. - 2. of this Policy (relationship to close persons)

BU shall take the following measures:

a.    Prevention of Material COI

  • As part of the tender documentation, potential contractors shall represent that they are not aware that the contractor itself or any persons who may influence the potential contractual relationship are in any COI with the BU/DPD. Such representation may be replaced by a signed Supplier’s Code of conduct or a similar document, should it be part of the BU practice;

b.    Future obligations of the contractors

  • Where the BU enters into a contract of a value exceeding EUR 35,000 or for a repeated regular performance for a period exceeding 6 months, the relevant contractor shall accept the DPD Supplier’s Code of conduct as part of the contract, or present its own similar document regulating ethical and anti-corruption aspects of business that is in line with the DPD requirements.

 

2.5  PRIMARY POTENTIAL CASES OF COI

COI may arise primarily in the following cases, and therefore, the BU should pay particular attention to these areas when proposing, implementing and considering preventive measures, and should focus its internal audit activities thereon:

  1. selection of contractors, in particular for repeated supplies, ancillary services or lease of premises;
  2. provision of handling services and provision of agency workers;
  3. remuneration of contractual carriers, defining contractual carriers´ routes;
  4. assessment of contractors and contractual carriers;
  5. customer pricing, granting discounts, decision-making on “business solutions”;
  6. granting exceptions from the General Terms and Conditions.

 

3.  ANTI-CORRUPTION POLICY

3.1  INCENTIVES

The BU and its employees, agents or other representatives must not, when performing their activities, accept, offer or provide fee, remuneration or unreasonable non-monetary benefit which may lead to a breach of the BU’s duty to act in a qualified, honest and fair manner and to exercise the maximum possible effort to prevent acts which are inconsistent with the said values.

However, this definition doesn’t mean that in justified cases, where such conduct is in the best interests of the BU/DPD and, at the same time, there is no doubt about the honesty and fairness of such conduct, it is not allowed to accept any incentives.

In assessing whether the incentives are made in compliance with the principle of honesty and fairness, it is necessary to consider such conduct as it may appear from the point of view of an independent third party.

 

Examples of acceptable incentives:

a.Incentives (special rewards) for the occupation of vacant positions or the recommendation of job applicants, where the situation on the labour market so requires. The criteria for granting such incentives must be equal for all persons that meet them, and the capability to obtain this incentive must not be restricted. The amount of the incentive may not be apparently disproportionate to the significance of the position and the situation on the labour market.

b. Bonuses for employees beyond the standard remuneration system for extraordinary work efforts, benefits for business activity of the BU/DPD, or for extraordinary contributions to improving the quality of services or internal processes. Bonuses may be provided based on approved motivation programmes available under the same conditions to all employees in those organizational positions or on such levels, for which the program is designed. Individual incentive programmes are permissible in justified cases only and after their approval by a direct manager of the remunerated employee and the person responsible for the human resources budget in the respective BU.

 c.  Operational incentives, such as special offers or remuneration in support of the cooperation of contracting carriers with the BU, are allowed if they are part of approved programmes aimed at promoting business and developing supplier-customer relationships in the BU and are available to all entities that meet such criteria.

d.  Sales incentives, such as special offers to specific groups of customers, are allowed if they are part of approved programmes aimed at promoting business and developing supplier-customer relationships in the BU and are available to all entities that meet such criteria.

 

3.2  ANTI-CORRUPTION MEASURES

Each BU is required, both internally (towards employees) and externally (towards customers, contractors and other external stakeholders), to clearly and transparently declare its commitment not to provide or accept any form of improper advantage and/or bribes that might be considered as a manifestation of corruption conduct.

Such declaration may be made, for example, by incorporating such commitment into the BU Code of conduct (in accordance with the DPDgroup Code of conduct) or by any other demonstrable declaration of commitment to anti-corruption policy.

 

BU shall take the following measures:

i. to inform any third parties of its commitment not to offer or accept any form of inappropriate benefits or bribes (e.g. by publishing the respective BU Code of conduct or its relevant part on the website etc.);

ii. to include the commitment not to offer or accept any form of inappropriate benefits or bribes in the contract with contractors or the contractor´s Code of conduct, and have it confirmed in this manner by all long-term BU contractors (see point 2.4 - 2.), i. a. contracting carriers;

iii. to bind all BU employees by the above obligations, e.g. expressly declaring that they have been acquainted with the Code of conduct and that they will adhere thereto in a employment contract or separately;

iv. to systematically and periodically raise the awareness of the employees of the above obligations, e.g. through inhouse information campaigns, trainings, e-learnings etc. The BU shall, when planning, targeting and implementing such activities, consider which groups of employees are most exposed to the risk of breaching the above obligations;

v. to establish a reliable and trustworthy method of reporting of any alleged corruption incidents, to ensure that this system be discrete and that it hide the identity of the reporting person;

vi. to put in place a discrete method of investigation of the alleged corruption incidents and of sanctions or punishments, if needed, imposed on the persons or entities involved in the corruption incidents, and to keep confidential records of the investigation;

vii. to ensure that no corruption conduct is tolerated, and where the perpetrator is identified, to take such measures to ensure that such conduct be discontinued, or relapse thereof be prevented. Such measures may, as appropriate and proportionate, include:

  • termination of the employment relationship, revocation of empowerment, or termination of the cooperation;
  • transfer of the respective employee to another job where such conduct is impossible;
  • any other measures permitted under the applicable laws, provided that they are sufficient to prevent the continuation or relapse of the corruption conduct.

viii.  to report any serious cases of corruption conduct, including attempted cases, to the competent investigating authorities or administrative authorities, and to keep any records of these incidents, including their resolution.

 

3.3  GIFTS AND HOSPITALITY POLICY

Each BU is required, within its internal procedures, to clearly and comprehensibly acquaint its employees and agents with the applicable rules of acceptance of gifts and invitations in business relationships, and to ensure, to the extent appropriate to the respective position, that they abide by these rules.

  • The DPDgroup doesn’t tolerate acceptance of any form of personal benefits provided in order to obtain or be provided an inappropriate business advantage.
  • This principle, however, does not apply to acceptance of hospitalities of a reasonable value, where it is an ordinary part of a usual business practices and development business relationships with partners.

 

Definition of a gift / hospitality

For the purposes of this Gifts and Hospitality Policy, gifts or hospitalities (hereinafter the “Gift”) means any items or services that doesn’t constitute the subject of the business relationship between the contractor and the BU/DPD and are offered to the BU employee by any person, entity or company, that has started or wishes to start a business relationship with the BU. These include e.g. marketing and promotional items, special services, or invitations to diverse social events.

 

Principles of gift acceptance

A BU employee may accept a gift provided that:

  • its acceptance is in line with the business practice and can’t be regarded as a bribe, reward, support, or significant income for such employee, and at the same time it means no breach of applicable legal regulations and/or internal regulations of the BU / DPD, and the reputation of the company will not be compromised in the event of disclosing such information;
  • the gift is of a minor value (approximately up to a nominal value of EUR 50) and it is a one-off gift. Where the value of the offered gift apparently exceeds EUR 50, or where its value can’t be estimated in advance, and there is an assumption that such limit may be exceeded, the employee must notify the responsible Compliance Officer or the CEO / Managing Director of such offered gift and ask for their consent, prior to acceptance of the gift. Where the CEO or the Managing Director of the company or an employee on a CEE position are involved, they must ask for the consent of the CEE Regional Manager.

Where the total amount of gifts offered or provided by a single business partner or personally linked entities exceeds EUR 500 in one calendar year, the company Compliance Officer and the CEO / Managing Director of the company (or the CEE Regional Manager in cases referred to above) must be notified, and any further gifts exceeding the said limit may be accepted only with their consent.

These rules are not meant to hinder regular business activities such as workshops, business meetings and presentations (business lunches, dinners and other activities carried out to build on the business relationship).

However, in no case may such invitations be sought to an unreasonable extent or be rewarded by means of any counter-offers promised or provided in the form of unjustified business advantages.

In case of any doubts regarding the appropriateness of a gift or conduct, or regarding the price, it is necessary to refuse them as inconsistent with the company’s principles. When making such a decision, employees must not only consider whether such gift or activity may affect their decision-making, but also whether it may be considered questionable if viewed by a third party, as an independent observer.

The acceptance of any gift (including those permitted under these rules) is a personal decision and an act of the particular person and under no circumstances may the BU/DPD be held responsible for any (even negative) consequences of such acceptance.

 

4.  ANNEXES

Annex 1 – Employee´s commitment to COI Prevention