Anti-Corruption and Anti-Bribery

Introduction

This policy sets out the steps all of us must take to prevent bribery and corruption in our business and to comply with relevant legislation and our Company requirements.

Who is responsible for this policy

The CEO and the board of Directors have overall responsibility for ensuring this policy complies with our legal and ethical obligations, and that all those under our control comply with it.

The Compliance Officer has primary and day to day responsibility for implementing this policy and for monitoring its use and effectiveness. Management at all levels are responsible for ensuring those reporting to them are made aware of and understand this policy and are given adequate and regular training on it.

What are bribery and corruption?

Corruption is the misuse of office or power for private gain. Bribery is a form of corruption. It means:

• giving or receiving money, gifts, meals, entertainment or anything else of value
• as an inducement to a person to do something which is dishonest or illegal
• in the course of doing business.

In other words, bribery is designed to make a person act wrongly to secure an advantage for the giver.

We include a list of possible scenarios which could indicate a concern or ‘red flag’ at Appendix 1 and we would recommend that you speak to your line manager or the Compliance Officer should you see any such scenarios.

We have also included an Appendix 2 which lists how to deal with gifts or hospitality that occur during the course of your work.

Who is covered by this policy?

This policy applies to all individuals working at all levels, including senior managers, officers, directors, employees (whether permanent, fixed term or temporary), consultants, contractors, suppliers, trainees, seconded staff, homeworkers, casual workers, agency staff, volunteers, interns, agents, sponsors or any other person associated with the Company or their employees, wherever located (collectively known as workers in this policy).

The legal position on bribery

Bribery and corruption are criminal offences in most countries where we do business. UK-incorporated companies, including ourselves, are subject to the Bribery Act 2010. Under the Act, it is illegal:

• to pay or offer to pay a bribe
• to receive or agree to receive a bribe
• to bribe a foreign public official
• for a commercial organisation, to fail to have adequate procedures in place to prevent bribery.

Our position on bribery

Our position is simple. We conduct our business to the highest legal and ethical standards. We will not be party to corruption or bribery in any form. Such acts damage our reputation and expose us, and our employees, to the risk of fines and imprisonment. We take a zero tolerance approach to bribery and corruption by our people and our third party representatives.

We therefore want to be clear that it is not acceptable for you (or someone on your behalf) to:

• give, promise to give, or offer, a payment, gift or hospitality with the expectation or hope that a business advantage will be received, or to reward a business advantage already given;
• give or accept a gift or hospitality during any commercial negotiations or tender process, if this could be perceived as intended or likely to influence the outcome;
• accept a payment, gift or hospitality from a third party that you know or suspect is offered with the expectation that it will provide a business advantage for them or anyone else in return;
• accept hospitality from a third party that is unduly lavish or extravagant under the circumstances;
• offer or accept a gift to or from government officials or representatives, or politicians or political parties;
• threaten or retaliate against another individual who has refused to commit a bribery offence or who has raised concerns under this policy; or
• engage in any other activity that might lead to a breach of this policy. Please see Appendix 1 for the list of potential red flags.

Risks of not acting with integrity

Involvement in bribery or corruption carries many risks. Among them are:

• a company which pays — or accepts — bribes is not in control of its business and is at risk of blackmail
• the UK Bribery Act is one of the widest-ranging pieces of legislation in the field.It covers any corrupt act by a UK company (or by a foreign company trading here) wherever it occurs
• if the Company is found guilty of bribery — or even of failing to have adequate procedures in place to prevent bribery — it may be subject to large fines
• any person guilty of bribery may be subject to fines and/or imprisonment (up to 10 years under the Bribery Act)
• a public exposure, or even allegation, of bribery would entail severe reputational damage
• the cost of our insurance cover could increase very significantly, and
• good people will not want to work for us.

Benefits of integrity

Equally, there are very clear benefits to acting with propriety:

• we remain in good standing with our banks and our own suppliers and they will want to keep doing business with us
• business with high ethical standards is a good place to work.It promotes clear communication and lets us act with confidence.

Conflicts of Interest

The best way to ensure that you will not find yourself in a position that you are perceived to have taken a bribe is to look at the areas where you may have conflicts of interest. For example, you may have a sister who works for a supplier of ours.

It is your responsibility as a worker to put the interests of South East Water before your own personal interests. Therefore if you believe there may be a conflict of interest, you should consider declaring that and not putting yourself in a position whereby you have to choose, if it is not possible for example to be objective.

For example, you may receive a complaint from a customer or supplier who is also a friend. In such a case you should declare this to your line manager and due to the nature of the complaint it may be more appropriate for someone else to deal with it.

When you determine that you have a conflict of interest you should consider the consequences and disclose the conflict to your line manager or the compliance officer. Depending on the consequences it may be appropriate to remove yourself from the situation.

What are indicators of bribery?

Common indicators of corruption include those listed below.There may well be others. For example:

• Payments are for abnormal amounts (e.g. commission), or made in an unusual way, e.g. what would normally be a single payments is made in stages, through a bank account never previously used, or in a currency or via a country which has no connection with the transaction
• Process is bypassed for approval or sign-off of terms or submission of tender documents, payments, or other commercial matters; those whose job it is to monitor commercial processes may be prevented from or hindered in doing so
• Individuals are secretive about certain matters or relationships and/or insist on dealing with them personally.They may make trips at short notice without explanation, or have a more lavish lifestyle than expected
• Decisions are taken for which there is no clear rationale
• Records are incomplete or missing

Who is responsible for this policy

The Managing Director and the board of Directors have overall responsibility for ensuring this policy complies with our legal and ethical obligations, and that all those under our control comply with it.

The compliance officer has primary and day to day responsibility for implementing this policy and for monitoring its use and effectiveness. Management at all levels are responsible for ensuring those reporting to them are made aware of and understand this policy and are given adequate and regular training on it.

Areas of specific risk

Certain areas of business are often at higher risk than others. These include:

• Gifts and hospitality. In general, SEW does not believe that it is appropriate for employees to accepts gifts from customers, suppliers, or any other person or organisation with which SEW has (or might) have business connections. This is because it is important to ensure that no employee acts in any way which is inconsistent with SEW’s objectives or with the integrity of the business by accepting or giving a gift in circumstances which could influence or be seen to influence a business action or decision. Gifts and hospitality must not give rise to any appearance of impropriety. Whilst modest hospitality can be permitted in the course of a business relationship, employees should not allow a position to be reached whereby they might be, or might be perceived by others to be, induced into a business decision as a consequence of accepting the hospitality. All employees or those working on behalf of SEW, shall be mindful never to give the impression that a gift, hospitality or other inducement may influence them to show favour to any individual, organisation, supplier or customer.
• If you are unsure as to what counts as acceptable hospitality the offer should be declined or advice sought from your Head of Department or their Human Resources Department. For more information, see below. Third parties. We use external parties to help us achieve our business objectives.Whilst that use is important, and in some cases essential, it can involve significant risks. This is also dealt with in the above mentioned Hospitality, Gratuities and Gifts policy.
• Political contributions. You should be aware that such contributions can be (or be seen as) bribes in disguise.No worker is to make a donation stated to be, or which could be taken to be, on our behalf without the prior approval of the Board.You may, of course, make political donations in a personal capacity.
• Charitable donations/Sponsorship. Bribes may even be disguised as charitable donations or sponsorship.Whilst individuals may of course make personal donations to charity or sponsor a cause, they should not do so on behalf of the Company without prior approval from the Board.

Exceptional circumstances

There may of course be exceptional circumstances, for example if a worker is faced with a threat to his or her personal safety or that of another person if a payment is not made.In such cases, the compliance officer must be contacted immediately.

Records

It is essential that we keep full and accurate records of all our financial dealings. Transparency is vital; false or misleading records could be very damaging to us. Under money laundering regulations our lawyers and accountants are obliged to report anything which appears to be irregular. There is a Gift and Hospitality record book in Gillian White’s office in the Swan Building in Snodland in which all gifts and hospitality given or received should be recorded (save for those of nominal value).

Monitoring

All workers must observe this policy. It will count for nothing unless we do. The compliance officer and Human Resources will monitor it regularly to make sure it is being adhered to. In doing this they act in the interest of our business as a whole, and it is therefore the responsibility of all of us to help them in this.

Your responsibility

Everyone in the Company is responsible:

• for reading and knowing the contents of this policy
• for keeping full and accurate records of all cases where bribery is suspected
• for reporting cases where you know, or have a reasonable suspicion, that bribery has occurred or is likely to occur in our business.

What to do if you think something is wrong

Each of us has a responsibility to speak out if we discover anything corrupt or otherwise improper occurring in relation to our business. We cannot maintain our integrity unless we do that. If you discover or suspect corruption, whether:

• by another worker
• by a third party who represents us
• by one of our suppliers or competitors
• or by anyone else – perhaps even a customer seeking to get better terms from us, please report it to your line manager and the compliance officer as soon as possible. If for any reason you cannot do this, please follow the instructions in the Whistle Blowing Policy for disclosure. We will investigate all allegations of corruption immediately.

Disciplinary Action

Any employee who is thought to be in breach of this policy shall be investigated in accordance with SEW’s Disciplinary Procedure and if evidence of bribery or corruption is found this shall be viewed as gross misconduct and SEW reserves the right to terminate your contract of employment. We reserve the right to terminate our contractual relationships with other workers if they breach this policy.

Potential Risk Scenarios: “red flags”

The following is a list of possible red flags that may arise during the course of your work which may raise concerns under anti-bribery and corruption laws. The list is my no means exhaustive and is for illustrative purposes only.

If you encounter any of these red flags, please report it to your line manager and the Anti – Bribery compliance officer as soon as possible or follow the instructions in the Speaking Up Policy for anonymous disclosure:

• You think someone you have encountered on work business is (or has been accused of) improper business practices;
• You learn that someone you have encountered on work business has a reputation for paying bribes, or requiring bribes are paid to them, or has a reputation for having a “special relationship” with foreign government officials;
• A third party insists on receiving a commission or a fee payment before committing to sign a contract with us;
• A third party requests payment in cash and/or refuses to sign a formal commission or fee agreement, or to provide an invoice or receipt for a payment made;
• A third party requests that payment is made to a country or geographical location different from where they conduct business;
• A third party requests an unexpected additional fee or commission to ‘facilitate’ a service;
• A third party demands lavish entertainment or gifts before commencing or continuing contractual negotiations or provision of services;
• A third party requests that a payment is made to ‘overlook’ potential legal violations;
• A third party requests that you provide employment or some other advantage to a friend or relative;
• You receive an invoice from a third party that appears to be non-standard or customised;
• A third party insists on the use of side letters or refuses to put terms agreed in writing;
• You notice that we have been invoiced for a commission or fee payment that appears large given the service stated to have been provided;
• A third party requests or requires the use of an agent, intermediary, consultant, distributor or supplier that is not typically used by or known to us;
• You are offered an unusually generous gift or offered lavish hospitality by a third party.

Quick Guide to Hospitality and Gifts

Giving Gifts/Hospitality:

SEW employees must not offer gifts or money to any third party in the course of their role in order to influence that party.

SEW employees must not offer non-business related meals. The value of business related meals must not be more than the value of an ordinary working meal.

SEW employees must not offer large value entertainments gifts or social invitations.

SEW employees must not offer to pay the travel and accommodation of third parties which are not directly related to SEW’s services.

Reciving Gifts/Hospitality: