HIGHLIGHTS, FIGURES AND CASES

Our strategic objective for 2011-2015 was to “Increase ethics awareness and improve the ethics management at Group-level”.

ACTIVITIES IN 2015 (BASED ON STRATEGIC OBJECTIVE AND ACTIONS)

• Code of Ethics: The current version of the Code of Ethics took effect as of 1^stsup> February 2012
  
  The CoE is available in 13 languages (English, Bosnian, Croatian, Polish, Hungarian, German, Italian, Russian, Romanian, Serbian, Slovakian, Slovenian and Ukrainian). 100 % of all MOL Group employees sign and receive our Code of Ethics.
  
  The Business Partner Code of Ethics is a component of 98% of supplier contracts.
  
  68% of Joint ventures where MOL Group stakes are below 51% adopted agreed version of the Code of Ethics.
  
  
• Ethics communication: Ethics awareness raising poster campaign against harassment, discrimination and corruption launched in 2014 continued in 2015 at all MOL Group companies.
  
  Ethics Council participated on the MOL Summer Party.
  
  2 articles were published in Panorama magazine.
  
  MOL Group Ethics Management System was presented on a lecture at the Budapest Business School (HBLF training).
  
  
• Ethics training programme: we placed special emphasis on spreading the Code of Ethics values and norms through ethics trainings.
  
  100% of managers and 96% of employees have attended an annual presentation and discussion delivered by direct managers on actual ethics related achievements and ethics cases. 100% of level 1-4 managers have published an ethics statement via the Intranet to make it publicly available and to increase transparency.
  
  Ethics eLearning courses – addressing all topics covered by the Code – were successfully completed by employees with Intranet access at Slovnaft Česká republika, Papoil, MOL Retail, MOL Čerpací stanice, MOL Romania, MOL Slovenija, and partly at MOL Plc. and MOL Ltd.
  
  In order to raise ethical awareness in retail networks, tailor-made trainings were conducted for service station operator partners and attendants in Slovakia and Hungary. Special ethics training was conducted for managers in Croatia.
  
  Based on estimates, eLearning and ethics presentations delivered by managers and filling station training events totalled 14,855 hours.
  
  
• Ethics Council, ethics officers: Significant organizational changes have been made to make the ethics management system more efficient.
  
  The MOL Group Ethics Council`s composition was renewed, and all group level senior managers of business and functional units including the Chief Operating Officers (COOs) of MOL Group companies (MOL Nyrt., Slovnaft a.s.) are members of the Ethics Council. We also continue the good practice of assigning to the Council an independent external Ethics Council chairperson, who is a business ethics expert, and one employee representative.
  
  MOL Group Ethics Council had 17 circular voting in 2014.
  
  Since 2011 INA Group operates an Ethics Council, from 2015 it reports on a quarterly basis to the MOL Group Ethics Council.
  
  Ethics Council operations were reinforced with the establishment of the Group Ethics Officer position at Group Compliance & Ethics organization. The Group Ethics Officer is responsible for managing the ethics grievance and investigation mechanisms and for providing professional compliance activity and decision preparation support for the Council, under the supervision of the external Ethics Council chairperson.
  
  The local ethics operations were further enhanced in 2015 with nomination of local ethics officers at every subsidiary having more than 20 full time employees (previous threshold was 200 FTE). There are 40 ethics officers at the MOL Group companies. Their work was supported by a local ethics officer workshop held for the first time in 2015.
• Ethics risk assessment: Ethics risk assessment has been a key pillar of our ethics management system since 2011
  
  In 2015 we further developed this activity with widely applied probability / impact matrix approach and with external benchmarking of countries where MOL Group operates 33 subsidiaries from 15 countries provided input to the risk assessment process. According to the results the highest ethical risks in MOL Group are fraud, breach of HSE rules, and business partner gifts, while the riskiest countries for MOL Group operations both from corruption and from human rights perspective are Iraq, Pakistan, Russia and the Ukraine.
  
  
  

  

  
  
  In order to decrease risks several programmes have been conducted:
  in-depth discussion about retail related cases, Improvement of Security trainings in Hungary, Ethics awareness-raising including a poster campaign against harassment, discrimination and corruption launched in 2014 continued in 2015 at all MOL Group companies.

ETHICS CASES

The ethics cases show an increasing tendency in the previous 5 years regarding number of ethics reports and ethics investigations. Compared to the 88 ethics-related complaints/reports submitted in 2014, a higher number of 90 were received by MOL Group and the INA Group Ethics Council this year. The continuous increase in the number of reports concerning possible ethical misconducts indicate for us improvement in the ethical awareness of internal and external stakeholders. The proportion of ethics complaints and reports arriving from external (non-MOL Group company employee) stakeholders is increasing (53% in 2015).

External reports were primarily submitted by customers (23%), supplier’s employees (19%), former employees (14%), suppliers (10), and local communities/citizens (6%). Further reports or grievances were filed by tender bidder, shareholder and journalist one by each (6%). In 19% of external reports – due to the option for submitting anonymous reports – connection with MOL Group was not indicated. Ethics reports were received from 8 countries. Among the top 3 countries of complaint origin there is Hungary and Croatia due to the largest MOL Group operations there, but the second highest number of cases originated from and Pakistan which is in connection with the weaker rule of law in the country and the tendency of seeking alternative justice. The most frequent topics of the ethics complaints were harassment/bad communication (25%), fraud and theft (13%), corruption and bribery (10%), discrimination (6%), conflict of interest (6%). Figure 2 shows how the ethics reports are divided based on topics.

Ethics complaint by country, 2015

Ethics complaints by topic, 2015

In 58 cases launching investigation was justified and in 25 cases ethical misconduct was verified. (Ongoing cases: 13 in MOL; 1 in INA).