• Appointment in Alstom’s Ethics & Compliance

Jean-Daniel Lainé has been replaced by Romain Marie who has taken over a department strengthened under his management.

 

See the announcement with the access below:

Appointment in Alstom’s Ethics & Compliance department

 

• Partenariat d’Alstom avec la Chaire de Droit et Ethique des Affaires de Cergy Pontoise

 

 

Link to ABOUT JDL.ETHICONSULT

ALSTOM Ethics & Compliance Overview

June 2013

Alstom‘s culture and reputation for integrity is a key objective for the Group and this can only be built through a permanent strengthening of its ethical rules and procedures as well as the adhesion of all its employees who must know and rigorously apply the principles of our Code of Ethics and the Alstom Integrity Programme.

Alstom complies with laws, regulations, and international standards that apply to the conduct of business in all countries in which it is present and does business. In particular, Alstom complies with the OECD Anti-Bribery Convention, with French criminal law, with US legislation notably the Foreign Corrupt Practices Act (FCPA), the UK Bribery Act 2010, and follows the voluntary standards of the International Chamber of Commerce (ICC) and the guidance of the “Resource Guide to the US Foreign Corrupt Practices Act”.

Tone at and from the Top

Ethics & Compliance is a top priority for Alstom and the Chairman and CEO regularly confirm this statement with the full support of the Board of Directors.

In September 2010, the Board of Directors created the Ethics, Compliance and Sustainability Committee, composed of three independent Directors. The EC&S Committee regularly reviews and monitors Alstom’s policies on ethics and compliance matters; and it provides the Board of Directors with its views. The Alstom SVP Ethics & Compliance is secretary for the Ethics and Compliance element of the Committee.

The mission of the Ethics & Compliance Department is to prepare the content of the Alstom Integrity Programme and to foster its implementation throughout the Group worldwide. The Group culture embraces all the ethical best standards based on the Alstom values: Trust, Team and Action. This culture must permeate the whole organisation. The tone from the top comes not only from the Board of Directors, but also from the company’s management and is trickled down to all employees.

Alstom supports the “And”

  Performance And Integrity

  Efficiency And Ethical behaviour

    Profitability And Trust from stakeholders

    Growth  And Good Governance

The philosophy is that no performance objectives should be imposed or accepted by any employee of the company if it can only be achieved by compromising our ethical standards.

Organisation

The Ethics & Compliance organisation comprises approximately 30 people. Ethics & Compliance has full authority and independence through a direct reporting link to the Group General Counsel. Moreover, the SVP Ethics & Compliance has a direct access to the Alstom Chairman and CEO and to the Chairman of the EC&S Committee of the Board. The SVP Ethics & Compliance is therefore fully independent and has an unfiltered access to the governing authorities of Alstom.

The Ethics & Compliance Department comprises, in particular, Compliance Officers respectively in charge of the Alstom Integrity Programme Development, of the Due Diligence, of Checking & Control, Sector Compliance Officers responsible for the application of the Ethics & Compliance policy in their Sectors reporting directly to the SVP Ethics & Compliance and finally Country Compliance Officers directly reporting to the SVP Ethics & Compliance are in place in countries or regions where Alstom has significant operations.

Ethics & Compliance liaises regularly with Alstom Group functions in particular Legal, Finance, Internal Audit, Human Resources and Communication to better determine and promote our ethical principles throughout the whole organisation.

A specific relationship exists between the Ethics & Compliance, Legal and Internal Audit departments who meet regularly, especially before and after audit missions.

The Group Ethics & Compliance Council gathers the Group General Counsel, the CFO, the SVP HR and the SVP E&C and meets twice a year.

To ensure good coordination with the Sectors, the SVP E&C regularly meets the Sector Presidents together with the relevant Sector Compliance Officer. At Sector or Country levels, the Compliance Officers organise regular meetings with the top management to ensure the deployment of the Alstom Integrity Programme.

Finally, to promote the Alstom Integrity Programme throughout the Group and to continuously develop its ethical culture, approximately 300 Ethics & Compliance Ambassadors have been appointed.

Scope

 Ethics & Compliance’s scope covers prevention of corruption in our activities, especially with regards to:

• Sales business partners

• Suppliers and contractors

• Joint Ventures and Consortia

• Engineering and Project Management

• Conflicts of interest

• Charitable and Political contributions

• Gifts and Hospitality

• Sponsorship

 The foundations of the Alstom Integrity Programme

• The Alstom Integrity Programme aims to promote a culture of integrity, at preventing and detecting misconducts, infringement of laws, illegal payments and to protect the company and its employees.

• The Alstom Integrity Programme is based on a risk assessment. It is continuously enhanced through meetings with peers, anti-corruption experts, and specialised law firms to exchange views, good practices and benchmarking and legal opinions. Finally, to ensure it is best in class a regular certification process has started in 2008.

• The E&C Risk assessment is part of the Group risk management policy and is a section of the Group yearly Risk Assessment review and of the Risk Mapping. The E&C Risk assessment is a tool designed to identify and set the key priorities, to create the best ethics and compliance programme fit for the Group and develop new actions to mitigate risks.

• The E&C Risk assessment is based on an analysis and a ranking of the potential risks linked to the Group activities and it identifies the mitigation factors currently in place and those to be implemented. To have the best analysis, the E&C Risk assessment is complemented by external sources of information such as the US Federal Sentencing Guidelines, the UK Bribery Act 2010 Guidance, the OECD Guidelines for Multinational Enterprises, the ICC Guidelines, the Transparency International Business Principles for Countering Bribery and the Transparency International corruption perception index.

• Code of Ethics

The Code of Ethics applies to every employee within the Group. Published in 2001, it was reviewed, updated and issued in March 2010. It has been translated in 22 languages, English, French, Arabic, Chinese, Croatian, Czech, Dutch, Finnish, German, Greek, Hindi, Hungarian, Indonesian, Italian, Japanese, Polish, Portuguese (Portugal and Brazil), Romanian, Russian, Spanish, Turkish. Additional languages can be added upon request.

The Code of Ethics provides official and mandatory guidelines on key principles and commitments that must be met by managers, by employees and by the Group as a whole every day. Every employee within the Group must respect the principles and rules of the Code of Ethics, and as such is accountable for his or her actions.

The Code of Ethics prescribes fundamental rules of conduct, relating in particular to:

• Full compliance with laws, regulations and requirements in all countries where the Group operates;

• Prevention of corruption and prohibition of all unlawful payments and practices;

• Fair and open competition and prohibition of agreements with competitors;

• Internal control and disclosure of information, to ensure the quality and reliability of financial information.

The Code of Ethics prescribes essential rules of conduct with regard to the Group’s relationships with business partners; its commitments as a socially responsible company; human resources policies and commitment in protecting the Group’s assets.

Topics addressed include the way Alstom deals with customers, suppliers, sales business partners, governments, export and trade controls, money laundering, conflicts of interest, gifts and hospitality, political contributions, charitable contributions, sponsorship, protection of the environment, health and safety, security of employees, social relations, equal opportunity and diversity, career management of employees, data privacy, confidential information, intellectual property, use of communication resources, insider dealing and communication with the media and investors.

In addition, the Code of Ethics details the Alert Procedure which allows any employee to report violations of prevention of corruption, competition and securities and accounting laws and regulations.

With regard to sourcing, procurement and supply chain, all Alstom suppliers and contractors are requested to sign the Alstom Charter for Sustainable Development, which includes a reference to the Code of Ethics and a section on Ethics and the prevention of corruption. This Charter, which may be considered as a Code of Ethics for Suppliers, exists in 12 languages, English, French, Chinese, German, Indonesian, Italian, Polish, Portuguese (Brazil), Russian, Spanish, Swedish, Turkish. As of March 2013, more than 10,000 suppliers and-contractors have already expressed their commitment by signing this Charter. Compliance with the Charter is also integrated in Alstom’s general purchasing conditions.

 

Instruction for Sales Business Partners

Such a large and diversified company like Alstom, serving complex worldwide markets, cannot only rely on its own sales resources. Depending on the circumstances, the operational Sectors may need to complement their knowledge, their expertise and/or their sales resources by hiring reputed sales business partners who are committed to act with integrity and to comply with Alstom rules as well as the international and local laws. These requirements are essential as risks exist for the Group, should Sales business partners behave unethically and engage in illegal practices.

To be in a position to control the relationship between a Sales business partner and a Sector, Group Instructions have been established and are controlled at key milestones by Ethics and Compliance. Alstom has deployed all its efforts to strengthen its internal procedures, by increasing centralisation of controls pertaining to these agreements. In this respect the Ethics & Compliance Department introduced and implemented clear and transparent procedures, to make sure they are strictly applied by the operational Sectors and businesses and to make use of external investigation tools and means to check the integrity and competence of those Sales business partners. The procedures are regularly strengthened to take into account past experience or proactive initiatives to eliminate possible risks.

In practice, if a business Sector wishes to rely on services provided by a Sales business partner, it has to generate a formal application, stipulating the reasons for such a need, the required services and the proposed corresponding remuneration. The application document produced by the Sales department of the Sector is discussed during a Pre-Appraisal meeting organized by the Sector Compliance Officer. Sector approval must be signed at the highest level in the business organisation. In parallel Due Diligence is undertaken by Ethics & Compliance. A meeting of the Due Diligence Review Committee makes the decision on a unanimity basis to authorize or not such cooperation with a Sales business partner. Ethics & Compliance acts as a quality control department and at key milestones gives either a no objection or an objection to enter into an agreement between the Sales business partner and a Sector legal entity. Sectors give a mandate to pay another group company they do not control directly. The introduction of ad-hoc “control and payment” entities allows for closer control by the effective centralisation of payments as Sales business partner are paid by the “control and payment” companies based in France, where the Group has its headquarters, on behalf of the Sectors after a careful check of the relevant proofs of service by the Sector representatives and of the legitimacy of the payment. Provided specific criteria are met, some payments can be made locally.

In addition, the Sales business partner Integrity Kit aims at ensuring that Sales business partner are properly trained on prevention of corruption and on our process. Compliance Officers visit business advisors and provide them with a comprehensive face-to-face training session. The Sales business partner is given a booklet containing the Code of Ethics in the country language (when available), the training presentation, the Alstom Principles for Dealing with Sales business partner (as published on the Alstom internet website), the E&C Guidelines for Dealing with Sales business partner. At the end of the meeting the Sales business partner signs the Sales business partner Integrity Kit Acknowledgment. This document is kept in our files. In addition, for internal use, Compliance Officers fill in a Feedback form to document how the training underwent.

The Group Instruction is applicable worldwide in all sectors and all countries and is regularly controlled by Internal Audit. The rules and procedure to manage the relationship with business advisors have been granted a certification for 2 years by the company ETHIC Intelligence International after an audit conducted by the Swiss company SGS in March 2009. The Certification was successfully renewed in April 2011.

Other E&C Instructions

All Alstom employees must apply E&C Group Instructions relating to:

• Gifts & Hospitality

• Political Contributions

• Charitable Contributions

• Sponsorship

In addition to those 4 Group Instructions, the related Delegation of Authority rules have been harmonised and deployed throughout the Group.

• Consulting companies

• Management of Conflict of Interest

• Joint Ventures and Consortiums

• Suppliers and Contractors

 Training and e-learning

The e-Ethics module developed with Alstom University focuses on the Code of Ethics. Launched in March 2010, it is available in 9 languages. The module, which is based on practical business scenarios, is completed after the final quiz is correctly answered. The trainee is then awarded a Certificate of Completion. Managers & Professionals are required to complete it within 3 months after they join the Group. Since its deployment, more than 50,000 employees have completed it.

Two e-learning modules dedicated to the Prevention of Corruption and Competition Law are available and employees who are exposed to these risks are formally requested to participate to the e-learning exercises.

For employees working with suppliers and sub-contractors, 2 e-learning modules focusing on the prevention of corruption, of breaches of competition law and of conflicts of interest in sourcing, procurement and supply chain employees were launched in November 2011. The 1^st module focuses on knowledge and awareness and provides background on the risks of non-compliance. The 2^nd module trains through real life cases based on true Alstom examples. The module is available in 6 languages. Since its deployment, more than 2,500 Sourcing and Procurement employees completed the modules.

Face to face training sessions and e-learning programmes are essential to explain our policy in terms of Ethics & Compliance. Since January 2006, more than 10,000 persons have participated in a compliance session.

In addition, Integrity Culture Cafezinhos have been introduced to favour a bottom-up approach. The Integrity Culture Cafezinhos hosted by the SVP E&C and the Compliance Officers are small groups of people invited to discuss the ethical challenges they face, share ideas to solve dilemmas and propose initiatives to improve the integrity culture of Alstom.

Ethics & Compliance Ambassadors

To reinforce the resources of Ethics & Compliance, approximately 300 Ethics & Compliance Ambassadors, all volunteers willing to promote the integrity culture of the Group, have been appointed in the Group.

The Ethics & Compliance Ambassadors are:

• if they agree, the Country Presidents in charge of the governance in their country,

• volunteers coming exclusively from the Legal, Finance and Human Resources functions at all levels of the organisation.

The mission of the Ethics & Compliance Ambassadors consists of:

• being a key contact on all the Ethics & Compliance topics in their organisation,

• helping to disseminate the key Ethics & Compliance messages, instructions and procedures,

• being able to direct persons towards the appropriate experts,

• supporting people to behave ethically and in taking ethical decisions,

• participating in the risk assessment in terms of Ethics & Compliance,

• promoting Ethics & Compliance e-learning modules,

• organising information-awareness sessions,

• providing feedback to the Ethics & Compliance team on issues and concerns.

The Ethics & Compliance Ambassadors have direct contact to Ethics & Compliance through the Compliance Officer for the Alstom Integrity Programme Development, who provides them with support for their mission. At country level, co-ordination by the Country President is necessary to properly manage this initiative.

Communication

To ensure that all our stakeholders are well informed about the Alstom Integrity Programme, the E&C Department works in close relationship with the Communications Department and a variety of communication methods are employed.

For employees:

• a dedicated , visible and regularly updated section on Altair, Alstom’s intranet, called ‘Ethics’, containing not only the E&C Instructions but also information on Prevention of Corruption and a monthly Newsletter.

• regular news in Alstom’s weekly newspaper, Newsflash and articles in local internal newspaper, whether at country or site levels,

• posters displayed on sites.

For external stakeholders:

• a dedicated section, entitled ‘Ethics’ on Alstom’s internet web site, alstom.com. In this section, all the versions of the Code of Ethics and E&C policies are available and can be downloaded.

Monitoring

To monitor the performance of the Alstom Integrity Programme, the E&C Department works closely with the Group Internal Control Department to design the appropriate controls and with Internal Audit to include Ethics in audit processes.

In 2012 and in 2013, the first Test exercises of the Yearly Integrity Review was launched in order to gather feedback on the performance of the Alstom Integrity Programme and on the ethical incidents which may have occurred during the year.

The 600 Top Managers in the Sectors complete a questionnaire and send it back to their respective Sector President together with a signed cover letter.

• The E&C Department then consolidates the Sector reports, provides the Chairman & CEO and the EC&S Committee members with a summary and prepares and follows up on agreed action plans.

• To get the external feedback on the Alstom Anti-corruption policy, a certification process was launched in November 2008 with the company ETHIC Intelligence. The audit methodology is designed by ETHIC Intelligence and was validated by the Basel Institute on Governance. The audit is carried out by SGS, Swiss company. The audit report is evaluated by the ETHIC Intelligence Certification Committee comprising internationally-recognised experts.

• The 1^st certificate was awarded on March 12^th, 2009 for a period of 2 years.

• In 2011, 3 certifications have been undertaken in 2011 by ETHIC Intelligence:

• the renewal of the certification of the procedure for business advisors for Thermal Power, Renewable Power and Transport. The certificate was awarded on April, 8^th 2011;

• the certification of the “sales intermediaries” policy for Grid; The certificate was awarded on  May,17^th, 2011 ;

• the certification of the Alstom Integrity Programme as a whole, started in June 2011; The certificate was awarded on September,12^th 2011.

• This certification process provides strong benefits for Alstom.

• It is a clear message to all employees that Alstom is fully committed to strict application of the certified procedures corresponding to the highest international standards in terms of anti-corruption laws and regulations.

• It gives the assurance that Alstom has implemented the appropriate rules to prevent corruption in its relationships with business advisors.

• It enables continuous improvement and strengthening of the culture of integrity, among other things thanks to the recommendations of the Certification Committee.

Partnerships

In order to continuously enhance the Alstom Integrity Programme and learn from ethics and compliance professionals, the SVP Ethics & Compliance actively participate in the:

• Global Compact – Working Group on the 10^th Principle (Fight against corruption).

• ECOA (Ethics & Compliance Officer Association – US): sponsored by Alstom

• ICC (International Chamber of Commerce): France and International

• IBE (Institute of Business Ethics – UK) and EuroBEN

  (European Business Ethics Network): trainings and meetings

• CEA (Cercle d’Ethique des Affaires – France)

• MEDEF (Mouvement des Entreprises de France): International Ethics Committee

In addition, Alstom is fully committed to collective initiatives for the promotion of prevention of corruption:

• The UN Global Compact Working Group on the 10^th Principle

• Sponsorship of the Ethos Institute in Brazil, of the Center for Business Ethics and Corporate Governance in Russia and of the Chair of Law and Business Ethics in France

• Participation to the Principle based initiative for Argentina’s Electrical Energy Transportation Industry.

• Signature of the Alstom of the Malaysian Anti-Corruption Commission (MACC) Corporate Integrity Pledge.

 

MAKING ETHICS A PRIORITY

Alstom Annual Report 2012/2013

 

Alstom’s growth is underpinned by a culture of integrity and scrupulous respect for ethical rules with regard to the Group’s stakeholders. Keith Darcy, Executive Director of the Ethics & Compliance Officer Association, and Jean-Daniel Lainé, Senior Vice President for Ethics & Compliance at Alstom, review the progress made by countries and companies in integrating these values.

 Keith Darcy, you are the head of the Ethics & Compliance Officer Association. What is the purpose of your organisation?

Keith Darcy: Our organisation comprises 1,400 members worldwide. Our mission over the last 21 years has been to provide our members with the tools and resources to manage reputational risks and fight corruption and fraud.

What has been the impact of the anti-bribery convention signed by OECD member states in 1997?

Keith Darcy :The OECD Convention passed in 1997 set the stage for significant public and private sector initiatives. They include the United Nations Convention against Corruption, which came into effect in 2005, the addition of a tenth principle against corruption to the UN Global Compact in 2004 and the African Union’s anti-corruption convention adopted in 2003. In addition, Transparency International, which has grown into a highly committed NGO, along with the World Economic Forum’s Partnering against Corruption Initiative (PACI) have made significant contributions to the fight against corruption.

What has changed over the last five years?

 Keith Darcy: We live in the age of information where there are no secrets and there is no place to hide. Henceforth, everyone is subject to new standards of transparency. Even ordinary citizens have the power to fight corruption through public and in-house hotlines, micro blogging and social media channels. The worldwide community now has vastly superior means to monitor issues concerning corruption.

Jean-Daniel Lainé, you run the Ethics & Compliance department at Alstom. Why have you included an ethical aspect in the fight against corruption?

Jean-Daniel Lainé: It goes without saying that a company such as ours must strictly respect national laws and international regulations. We decided to go a step further and include an ethical aspect in our policy. For a multinational, an ethical underpinning promotes sustainable growth and performance improvement. A company which acts ethically in its business transactions gains respect from its competitors and customers… and will often attract better ratings from investors. Moreover, values related to personal integrity are the lifeblood of corporate culture. A company such as ours encourages employees to use their judgment to make appropriate decisions. In so doing, we can learn from any mistakes that may have been made in the past and prevent future misconduct.

In other words, you are explaining that ethics have an impact on performance?

Jean-Daniel Lainé: Yes, we are absolutely convinced that integrity is a major factor in determining performance. An ethical stance drives our teams to focus solely on excellence in terms of technology, production, resources and the competitiveness of our projects, since we have no alternative but to rely upon our own fundamental assets. For our Group, clean business is great business, and an ethical company attracts and retains talented people. Alstom is, and will always strive to be, this kind of company.

Keith Darcy, we know that not all countries are subject to the convention. Doesn’t that create an unlevel playing field?

Keith Darcy: I would have replied ‘yes’ to that question five years ago. But differences are steadily diminishing. Companies are increasingly recognising the risks of not having implemented robust anti-corruption policies within their organisations. A growing number of countries are working closely together to tackle this very difficult issue of corruption. In years to come, as more weight is given to transparency, global cooperation and zero tolerance in the private sector will be major drivers of the fight against corruption.

To conclude, how do you ensure that ethical rules are applied within Alstom?

 Jean-Daniel Lainé: What is most important is to foster a shared culture of integrity among all Alstom employees. Next, there must be a totally independent structure with full authority to deal with ethics and compliance, in addition to having an appropriate position in the hierarchy. Moreover, a structured and highly detailed integrity programme must be implemented to cover the entire spectrum of risk and in particular, corruption. The core team of the Ethics and Compliance department can also count on a large community of approximately 800 Alstom people with specific responsibilities in this field, including company lawyers, internal audit and control teams, risk managers and the Ethics & Compliance ambassadors appointed worldwide, bearing in mind that integrity is the responsibility of every single person in the Group.