Anti-Bribery and Anti-Corruption Policy
Guidelines for Compliance with Canada's Corruption of Foreign Public Officials Act, US Foreign Corrupt Practices Act, and UK Bribery Act
Nevsun Resources Ltd. and its subsidiaries (collectively "Nevsun" or the "Company") are committed to conducting business in accordance with all applicable laws, rules and regulations and the highest ethical standards; a commitment is embodied in the Company's Code of Ethics.
The purpose of this Anti-Bribery and Anti-Corruption Policy (the "Policy") is to reiterate Nevsun's commitment to full compliance by the Company and its officers, directors, employees and agents with Canada's Corruption of Foreign Public Officials Act ("CFPOA"), the US Foreign Corrupt Practices Act ("FCPA"), the UK Bribery Act ("UKBA") and any applicable local anti-bribery and anti-corruption laws. This Policy supplements the Code of Ethics and all applicable international and local anti-bribery or anti-corruption laws, and provides guidelines for compliance.
Compliance and Reporting
This Policy applies to every Nevsun employee, including but not limited to senior executive and financial officers, and to members of the Board of Directors (collectively "Nevsun Personnel") and reflects the standards to which Nevsun expects all people and entities providing work or services for Nevsun ("Nevsun Providers") to adhere to.
Nevsun Personnel and Nevsun Providers are required to take all responsible steps to prevent a violation of this Policy, to identify and raise potential issues as soon as reasonably practicable, and to seek additional guidance when necessary. Nevsun Personnel who have any questions about this Policy are asked to contact Nevsun's Chief Financial Officer (the "CFO"), or any of the officers of the Company including the Chief Executive Officer (the "CEO"), Chief Legal Officer (the "CLO") and Chief Operating Officer (the "COO"). Suspected violations of this Policy may be reported to Nevsun's CFO, the Audit Committee Chair, or the Whistleblower Hotline. Information on how to reach Nevsun's CFO, Audit Committee Chair, and the Whistleblower Hotline is posted on Nevsun's website at www.nevsun.com.
OVERVIEW OF THE ANTI-CORRUPTION LAWS
What are Bribery and Corruption?
Corruption is the misuse of public power for private profit, or the misuse of entrusted power for private gain. Bribery is the offer, promise, payment or provision of cash, gifts, excessive entertainment, or other inducement to a person in a position of trust to influence that person's views or conduct, or to obtain an improper advantage, or to expedite routine or non-discretionary decisions. Bribery and corruption can take many forms, including the provision or acceptance of:
- Phony jobs or consulting relationships;
- Political contributions;
- Charitable contributions;
- Social benefits; or
- Gifts, hospitality or reimbursement of expenses.
There are laws throughout the world combating bribery and corruption, particularly with respect to government officials, including laws that apply to Nevsun's international activities. Three such laws are the CFPOA, FCPA and UKBA. Although the CFPOA, FCPA and UKBA are laws of Canada, the United States and the United Kingdom, respectively, such laws can apply to Nevsun anywhere in the world. Additionally, Nevsun's international activities may be subject to local anti-bribery and anti-corruption laws.
Nevsun is committed to compliance with anti-bribery and anti-corruption laws, even if there may be a perception that local authorities do not enforce such standards.
Nevsun Personnel and Nevsun Providers are strictly prohibited from offering, paying, promising or authorizing any bribe, kickback, facilitation payment or other thing of value to any government official or government employee, directly, or indirectly through a Nevsun Provider or other third party, to secure any contract, concession or other improper advantage for Nevsun or to expedite any routine or non-discretionary governmental action or decision like issuance or processing of permits or licenses, visas or work permits, or any other type of public governmental or utility service. Nevsun Personnel and Nevsun Providers who make such payments are subject to appropriate disciplinary action by the Company, including termination of employment and contractual relationships, as well as the legal consequences of applicable laws.
Any payment to a government official, directly or indirectly through a Nevsun Provider or other third party, including extravagant entertainment or gifts, for the purpose of obtaining or retaining business or improperly influencing a matter in favour of Nevsun or to expedite any routine or non-discretionary governmental action or decision, may be considered to be a bribe and may result in violation of this Policy and applicable law. Accordingly, Nevsun Personnel and Nevsun Providers are required to comply with the Company's policies on the provision of and reimbursement for gifts, entertainment, meals, and travel, and with the Company's accounting, recordkeeping and internal control provisions to ensure that such expenses are properly recorded.
Laws that govern Nevsun's international business activities require that the Company's books and records be complete and accurate. Nevsun's books and records must correctly record both quantitative and qualitative aspects of a transaction. Quantitative aspects refer to the amount of the transaction. Qualitative aspects include the written description of the transaction and the accounts that are credited or debited for the transaction. Nevsun Personnel must ensure that there is a reasonable relationship between the substance of a transaction and how it is described in the Company's books and records.
What are my obligations?
There are two main obligations that apply to all Nevsun Personnel and Nevsun Providers: they must not pay any bribes, and they must accurately reflect transactions in the Company's books and records.
- No Payment of Bribes or Facilitation Payment
Nevsun Personnel must not offer, promise, authorize, or give or acquiesce in giving, to a government official, either directly or indirectly:
- Payments of cash or in kind; or
- Inducements of any kind, including but not limited to excessive entertaining,
if in so doing there might be even an appearance that the payment or inducement would create an obligation on any recipient or improperly influence the recipient to act or refrain from acting in a way that would influence an official exercise or discretionary, routine or non-discretionary authority.
Nevsun Personnel should avoid placing themselves in a position in which a bribe could be requested, if at all possible. Any Nevsun Personnel who believe they may have been solicited for a bribe should contact either the CEO or the CFO, or the Whistleblower Hotline as soon as possible for assistance.
- Maintaining Accurate Books and Records
Nevsun Personnel must ensure that the Company's books are kept complete and accurate, both quantitatively and qualitatively. All expense reports must be complete and accurate. Nevsun Personnel should never accede to requests for false invoices or for payment of expenses that are unusual, excessive, inadequately or improperly described, or otherwise raise questions under this Policy or related Company guidelines on accounts and recordkeeping.
QUESTIONS AND ANSWERS ON HOW TO COMPLY WITH ANTI-BRIBERY AND ANTI-CORRUPTION LAWS
Corruption can arise in a number of situations, including when gifts or social interactions with third parties take place. Sometimes it is difficult to tell whether an individual is a government official for purposes of anti-bribery and anti-corruption laws. The questions and answers below are designed to provide more guidance on how to address such situations. If Nevsun Personnel have a question about bribery or corruption, they can contact the CFO or any of the officers of the Company including the CEO, the CLO, and the COO, who will, as far as possible, treat the contact as confidential.
Who is a government official?
Nevsun Policy prohibits making payments and giving inducements to government officials. Laws prohibiting the bribery or corruption of government officials typically define government official broadly to include any appointed, elected, or honourary official or any career employee of a government, of a government owned or controlled enterprise, or of a public international organization, or an individual or government employee acting in an official capacity for such government, entity, or organization. The definition encompasses officials in all branches of government, executive, legislative, and judicial. The definition often also includes political parties and party officials and candidates for political office. A person does not cease to be a government official by purporting to act in a private capacity or because he or she serves without compensation.
The law does not prohibit all business transactions with government officials, but since those transactions carry special risks, they must be reviewed to determine what additional safeguards may be necessary to protect the Company. For that reason, it is important that Nevsun Personnel be able to identify who is a government official.
Below are just a few examples of government officials who may be relevant to Nevsun's business:
- Government ministers and their staff;
- Military and police personnel;
- Regional officials;
- Employees of government-owned or controlled corporations at all levels, including but not limited to managers and clerks, full-time or part-time;
- Members of legislative bodies and judges;
- Provincial governors;
- Officials of government departments and agencies, including customs, immigration, aboriginal band officials, environment, mines and energy, meteorology, and others; and
- Private persons acting in an "official capacity" with respect to a matter.
Is it permissible for Nevsun to contract with governments and state-owned entities?
Nevsun's business involves contracting with a government or state-owned entity. The CFPOA, FCPA, UKBA, and other anti-bribery and anti-corruption laws do not prohibit companies from entering into a contract with a government, including public works projects; however, payments made under those projects must comply with applicable anti-bribery and anti-corruption laws and often trigger other special legal requirements. Such projects include transactions with entities that are state-owned or state-controlled, including, for example, contractors, fuel suppliers, public universities, hospitals, telephone companies, power companies and others. For these reasons, Nevsun Personnel and Nevsun Providers must consult with the CEO, the CLO, or the CFO before entering into a contract with a government or a state-owned or state-controlled entity.
What is Company policy regarding gifts and entertainment?
Nevsun prohibits the giving of inducements, including gifts and entertainment, to government officials, directly or indirectly through a third party, on a scale that might be perceived as creating an obligation on that official. Gifts, entertainment, and covering or reimbursing expenses of officials may fall within the scope of anti-bribery or anti-corruption laws.
To comply with such laws and with this Policy and other applicable Company policy, the cost or expense of a gift, meal or entertainment must be reasonable. It also must be directly connected to a legitimate business promotional activity or the performance of an existing contract, must be permitted under local law, this Policy, and must be otherwise consistent with Company business practices. When considering the reasonableness of the expense, Nevsun Personnel should consider the frequency with which such expenses are incurred for a particular official. Modest costs frequently incurred can, when aggregated, amount to lavish and potentially improper payments.
Even where gifts, meals, or entertainment may be consistent with normal social or business amenities in the official's country, that does not mean that they are permitted under either the laws of that country or the laws of other countries combating the bribery of foreign government officials, including Canadian, US and UK law. The cost of gifts, meals, and entertainment should always remain at or below that permitted by local law and in no event should the amount be greater than the legitimate and customary expenditure for such activities by private businesspersons in the country. In addition to standard approvals for gifts and entertainment, any expenses of this type incurred on behalf of a government official are subject to specific approval as set forth below.
What is a gift?
A gift is anything that is given and received without the giver receiving or expecting to receive anything in return in the future or intending to create a sense of obligation on the part of the recipient.
What about providing very small gifts to a government official?
In most countries, government officials are restricted in the benefits they can accept for performing their duties, including non-cash benefits such as travel, entertainment, or consulting fees. Nevsun Personnel are responsible for knowing these limits and respecting them.
At the same time, modest gifts that are customary can sometimes be appropriately given. The approval of the relevant management representative specified below should be obtained for any gift to a government official:
|Mine or development project site or regional business unit office||CFO, COO|
|Corporate Head Office||CEO, CFO, COO, CLO|
All offers of gifts to officials must be permissible under local law and should be transparent to the official's organization. It may be appropriate to seek confirmation from an official that his or her manager has approved the receipt of hospitality or of a small gift.
Gifts in the form of cash must never be given.
The provision of a gift must be accurately accounted for and described in Company books and records. The description should identify the gift and include the value of the gift, the date the gift was given, and the identity of the recipient.
Great care must be taken when offering any benefit while the official is in the process of making a discretionary decision affecting Nevsun. Nevsun Personnel should consult with either the CEO or the CFO before making any such gift.
What should Nevsun Personnel do if a third party, such as a Nevsun Provider, requests that Nevsun provide entertainment for a government official or other person that appears to be excessive?
Politely turn down the request and make a record of the fact that the request was made as soon as possible after the conversation has taken place. The record should be marked "privileged and confidential" and should be promptly provided to the CEO or the CFO, and to the CLO so that the CLO can advise regarding next steps.
What is Company policy regarding government support such as payment of travel and travel-related expenses and per diems for government officials, and government security support?
Sometimes government departments do not have adequate resources in terms of staff, equipment and materials to undertake required tasks in connection with the regulation or approval of specific activities. As a result, Nevsun may be asked to provide financial or other support for such activities. Such matters raise special issues. Nevsun Personnel should consult with the CEO, CLO or the CFO before agreeing to provide such support. The following are general guidelines relating to such matters:
- Negotiate written support agreements or understandings with the government body;
- Ensure Nevsun support is legitimate, necessary, reasonable and lawful;
- Provide in-kind rather than monetary support where possible;
- Make monetary payments via traceable instrument (such as a cheque or wire transfer) where possible; and
- Make payments to a government entity rather than to individuals where possible.
- Travel and Travel-Related Expenses
In appropriate circumstances, where there is a legitimate business need, Nevsun may pay travel and travel-related expenses for government officials. Examples may include travel:
- in connection with contract negotiation or contract execution, or
- to visit Nevsun's operations in order to demonstrate specific capabilities or practices.
Nevsun Personnel should never agree to pay or reimburse travel expenses that are predominately for recreation or entertainment. Rarely will it be permissible for Nevsun to agree to pay travel expenses for an official's spouse or other family members.
- Per Diems or Allowances
Per diems or cash allowances should not be paid to officials except (i) as required or permitted by local law, and (ii) in modest amounts, to defray legitimate expenses incurred by an official for an approved purpose where those expenses are not paid directly by Nevsun to the vendor.
Nevsun may be asked by a host government to contribute to the cost of providing security for the Company's operations. Nevsun Personnel should consult with the CEO, CLO or the CFO before agreeing to provide such support.
What is Company policy regarding political contributions, charitable contributions, and social benefits?
- Political Contributions
The CFPOA, the FCPA, the UKBA and other anti-bribery and anti-corruption laws cover contributions, whether cash or in-kind, to political parties, party officials, and candidates for political office. Political contributions by companies such as Nevsun also often raise issues under local laws where the Company has operations. As a general rule, Nevsun does not make political contributions. If any contribution is made, it must be permissible under local law, must not be made with any promise or expectation or favourable treatment in return, and must be accurately reflected in Nevsun's books and records. Consult with, and obtain the approval of the CFO prior to making any political contribution. This Policy does not restrict employees from making lawful contributions of money or services in their individual capacity.
- Charitable Contributions and Social Benefits
Given the nature of Nevsun's business, Nevsun is often asked by governments to contribute to the development of local infrastructure such as roads, ports, schools, medical facilities, and worker housing. As part of its commitment to corporate social responsibility and sustainable development, as a general matter, the Company does from time to time provide such assistance in appropriate circumstances and in an appropriate manner; however, such requests must be carefully examined for legitimacy. Even requests determined to be legitimate must be carefully structured to ensure that the benefits reach their intended recipients. Consult with, and obtain the approval of the CFO or designate prior to making any payments or providing any such contributions.
What is the policy regarding engagement of third parties?
Under some anti-bribery and anti-corruption laws, including the CFPOA, FCPA, and the UKBA, the Company can, in some circumstances, be held liable for payments made by third parties who may have dealings with government officials.
Liability can arise whether or not the third party is subject to the CFPOA, FCPA, and UKBA, whether a contractual relationship exists with the third party, and whether the Company actually knows of the payment. The law may be violated if Nevsun Personnel are willfully ignorant of the possibility that the third party will make an improper payment or commitment, and particularly if they disregard "red flags' signaling the possibility of a payment or commitment.
The most important steps the Company can take to protect itself from liability for improper payments made by third parties who may have contacts with government officials are: (1) to choose carefully its business partners, Nevsun Providers and other third parties, which means conducting proper due diligence on a third party; and (2) to identify in advance and address any issues that a proposed relationship may raise.
It is important to consult with the CEO, CLO or the CFO, on proposed contractual or investment relationships that may directly or indirectly involve government officials, so that any legal risks can be identified and addressed. Contractual provisions and safeguards will be important, and no third party should be asked to work on the Company's behalf in circumstances that may involve dealing with government officials without there being a written contract in place or other document in which the consultant acknowledges and agrees to abide by the standards set out in this Policy. In addition, Nevsun Personnel must ensure ongoing monitoring of the relationship to ensure Nevsun is not put at risk by the conduct of a third party.
The discussion below highlights some of the key aspects of engaging third parties that may have dealings with government officials, and some of the key questions that may arise, including possible "red flags".
- Who could be considered a third party or Nevsun Provider?
Any of the following:
- Agents, brokers, representatives, or finders;
- Contractors, suppliers, or employees of any contractors or suppliers;
- Government officials or their relatives or associates; or
- What about engaging an agent or consultant who might give bribes?
The fact that an agent or consultant, and not a staff member, ultimately provides an improper benefit to a government official will not insulate Nevsun from damage to its reputation or potential responsibility and legal liability.
It is important to clearly communicate to Nevsun Providers Nevsun's approach to providing benefits to government officials and ensure that consultants comply with that approach. Any unusual charges by Nevsun Providers that could conceal improper benefits to government officials must be queried and addressed.
When engaging a Nevsun Provider that may have dealings with a government official it is important to ensure:
- The Nevsun Provider is engaged for bona fide purposes;
- Adequate due diligence with respect to Nevsun Providers before hiring them;
- Any "red flags" (see below) are addressed;
- The Nevsun Provider is provided with a copy of the Nevsun Code of Ethics and this Policy;
- The Nevsun Provider is aware of and avoids conflicts of interest;
- Any compensation paid to the Nevsun Provider is representing appropriate and justifiable remuneration for the legitimate service rendered; and
- The Nevsun Provider is engaged using a written contract that contains appropriate protections for Nevsun or another document in which the consultant acknowledges and agrees to abide by the standards set out in this Policy.
If there are any concerns about any Nevsun Provider, consult the CFO or designate.
- The Nevsun Provider is engaged for bona fide purposes;
- What are examples of "red flags"?
- Payments to shell companies or to companies whose ownership is not transparent;
- Payments to offshore bank accounts;
- Payments to entities owned or controlled by government officials, their close relatives, or business associates;
- "Donations" to individuals;
- Cash transactions;
- Doing business with people or entities that are known to engage in bribery or who are suspected of engaging in bribery; and
- Requests for or provision of false or misleading documentation.
Red flags do not necessarily mean that improper conduct is underway; however, they cannot be ignored. The existence of a red flag requires further inquiry, and the entering into or continuing of a relationship with a third party where a red flag has been identified must be carefully considered. In case of doubt, consult with the CFO or designate.
What are the consequences of bribery and corruption?
Giving a bribe or making an improper offer can subject Nevsun and Nevsun Personnel to fines, even imprisonment, in the country where the government official works, in the US or Canada, or sometimes in the home country of the Nevsun Personnel. Consequences can also include the confiscation of corporate profits that have arisen as a result of the bribe being made, loss of contracts, and other penalties.
In addition, in some countries, the government official in question can be punished by anything up to the death sentence.
Giving a bribe or making an improper payment is a serious violation of this Policy and Nevsun's Code of Ethics, which can lead to discipline up to and including termination of employment.
Are there any Policy exceptions?
Exceptions will generally apply only in very narrow circumstances. Nevsun Personnel must consult with the CEO, the CLO or the CFO before making a payment that might fall into a Policy exception, except only as provided below.
Nevsun Policy prohibits the making of payments in cash or in kind to government officials except in exigent circumstances, that is, when life, safety, or health is at risk. For example, where local government officials require individuals to take medical tests before entering the country but do not provide hygienic testing equipment, that might present an exigent circumstance under which Nevsun Personnel would generally be permitted to make a payment to avoid a health and safety risk. Such payments should generally be modest in amount. Protection of property is generally not an exigent circumstance.
The making of such a payment in exigent circumstances should be reported to the relevant local management representative and the CFO and CLO as soon as possible after the payment has been made. Such payments should be accurately recorded and identified in expense reports and other Company books and records.
What do I really need to know?
The Ground Rules to Remember:
The CFPOA, the FCPA, the UKBA and other anti-bribery and anti-corruption laws have wide scope and hidden complexities. These complexities do not, however, relieve any Nevsun Personnel of individual responsibility to comply with the law and to enforce this Policy and any applicable Nevsun policy of full compliance. Correct on-the-spot reactions of individual employees to requests for payments and red flags are critically important to Nevsun's ability to prevent improper payments, and to protect the Company and individuals from liability.
- Report rumours of improper payments or red flags in the course of carrying out the Company's business, to the CEO, the CFO, COO or the CLO, or the Whistleblower Hotline immediately.
- In case of a request for payment that may be improper:
- Refuse to make the payment and explain that Nevsun does not make such payments.
- Instruct the party that they are not authorized to make improper payment on Nevsun's behalf, and explain that Nevsun cannot continue to do business with them if they make improper payments.
- Make clear that the refusal is absolute; and do not come with a "wink and a nod".
- Consult with the CEO, the CFO or the CLO regarding next steps.
Nevsun Personnel may encounter particular pressure to make improper payments in countries where extraordinary competition exists for mining opportunities. Nevsun Personnel must be vigilant not be tempted by assertions that such practices are common or condoned in that country. Even if true, this will not shield Nevsun or the individual employee from liability.
Besides the need to comply with the laws and Company policy, there is the practical consideration that Nevsun and Nevsun Personnel should endeavor to avoid even the appearance of impropriety, even if a particular payment or donation can be deemed lawful. All possible payments, including prospective contracts, joint ventures, donations, and gifts and entertainment of government officials, should be assessed beforehand in this light. Suspicious patterns of payments or gifts can trigger the potential for serious reputational damage, investigation by enforcement authorities, and penalties. This is all the more reason why successful compliance is more than satisfying a formula on paper. All of these issues involve judgment calls that should be made with the advice of the CEO, the CFO, the COO or the CLO. At the same time, common sense plays an important role. Nevsun Personnel should apply their common sense, informed by the guidance contained in this Policy.
Commitment to compliance with this Policy is essential to Nevsun's efforts to conduct its business with honesty and integrity. For further information about Nevsun policies, read the Nevsun Code of Ethics. The Code of Ethics is located on the Nevsun website (www.nevsun.com) under Corporate Governance.
This updated Anti-Bribery and Anti-Corruption Policy was revised and adopted by the Board of Directors on December 8, 2017.