Code of Business Conduct and Ethics

 

Introduction

 

 

CAT

 

Central Azucarera de Tarlac is an integrated sugar manufacturing plant producing both raw and refined sugar, alcohol, liquid carbon dioxide, and yeast.  The factory is located on a 50-hectare lot inside the Luisita Agro-Industrial Complex in San Miguel, Tarlac City.

 

POLICY

 

The Corporation’s Code of Business Conduct and Ethics is a statement of the Corporation’s policies and procedures for conducting its business in a legal and ethical manner. Above all, this embodies the basic core values of Integrity, Honesty, Ethics, and Trust shared by CAT and its employees.

 

CAT, its directors, officers, shareholders and employees partake in the promotion of good corporate governance based on the core value. True to its statement that “Above all, in every action we take, in every decision we make, in our every day dealings with one another and with our customers and our communities, we are bound by a simple rule: we treat each person with dignity and respect; we value fairness and transparency; and we act with integrity.”

 

The policy of the Company is to prevent the possible occurrence of illegal and unethical behavior within the Corporation. This Code intends to serve as a reference in particular instances, but when a director, officer, stockholder or employee is confronted with any issue, it is highly encourage exercising caution and to apply the core values and gear towards the appropriate solution.

 

Directors, officers, shareholders and employees are enjoined to follow this Code, whenever applicable. Breach of any of this Code’s provisions may be subject to a disciplinary action without prejudice to any civil or criminal remedies that may apply.

 

 

 

 

 

 

 

 

 

 

 

Compliance with Laws, Rules and Regulations

 

The Central Azucarera de Tarlac (CAT), a corporation duly organized under the Philippines laws, is bound by laws of the country, as well as the rules and regulations of regulatory agencies. Its directors, officers and employees are also expected to comply with prevailing laws, rules and regulations at all times. In addition thereto, adherence to internal rules shall be strictly observed, which may prescribe more stringent rules of conduct than the prevailing laws.

 

 

 

Confidentiality

 

Any employee whose duties or functions entail knowledge of or accesses to any confidential information and who divulges the same, with or without prompting, to unauthorized persons shall be penalized with termination of employment.

 

Violation of non-disclosure agreement and/or clause, as the case may be, is a ground for termination of employment by reason of loss of trust and confidence.

 

Policy on Conflict of Interest

 

          CAT puts premium in the fair and impartial dealings with third parties. Directors, Officers and Employees are enjoined conduct fair business transactions with the corporation and ensure that his personal interest does not conflict with the interests of the corporation. Further, Directors, Officers and Employees must not use their position of connection to the corporation to profit or gain some benefit or advantage for himself and/or his related interests at the expense of the Corporation.

 

A conflict of interest shall be considered material if the Director’s, Officer’s or Employee’s personal or business interest is antagonistic to that of the corporation or stands to acquire or gain financial advantage at the expense of the corporation.

 

Specifically, the Board of Directors are expected to foster the long-term success of the corporation and to sustain its competitiveness and profitability in a manner consistent with its corporate objectives and the best interests of its stockholders and other stakeholders.

 

A system of check and balance must be present within the Board. A regular review of the effectiveness of such system should be conducted to ensure the integrity of the decisions making and reporting processes at all times. There should be continuing review of the corporation’s internal control system in order to maintain its adequacy and effectiveness

 

A director should act in the best interest of the corporation in a manner characterized by transparency, accountability and fairness.

 

The basic principle to be observed is that a director should not use his position to profit or gain some benefit or advantage for himself and/or his related interests. He should avoid situations that may compromise his impartiality. If an actual or potential conflict of interest may arise on the part of a director, he should fully and immediately disclose it and should not participate in the decision making process. A director who has a continuing material conflict of interest should seriously consider resigning from his position.

 

Employees are prohibited from transacting personal business on company premises whether the employee is on or off-duty is prohibited and subject to disciplinary action ranging from reprimand to dismissal.

 

Any employee who commits an act of immorality and whose immoral conduct interferes with the proper performance of his duties, or cause actual harm to the interest of the Company or has a reasonable tendency to cause such harm shall be penalized with termination of employment

 

Any employee who by any of the means falsified document to the damage or detriment of the interest of the Company, or with the intention of causing such damage or detriment to Company interests shall be penalized with termination of employment.

 

The Board’s oversight responsibility pursuant to Section 6.1 of the Manual on Corporate Governance includes, conflict of interest situations. The Audit Committee has been created to assist the Board in fulfilling its oversight responsibility of the Company’s corporate governance process relating to the determination and resolution of possible conflict of interest between and the Company and/or its group and their directors, officers and significant shareholders.

 

 

 

Policy on Insider Trading

 

 

The Central Azucarera de Tarlac adopts the restrictions on the trading of securities by an “Insider” or those individuals who have obtained material non-public information in accordance with the prevailing laws.  Material Non-Public Information refers to the information that has not been generally disclosed to the public and would likely affect the market price of the security after being disseminated to the public and the lapse of a reasonable time for the market to absorb the information or would be considered by a reasonable person important under the circumstances in determining his course of action whether to buy, sell or hold a security.

 

Director, Officer or Employee, who by the nature of their office or position, has obtain material non-public information about the Corporation are prohibited from communicating the same to other parties.

 

Covered Individuals

  1. All members of the Board of Directors
  2. All Executive Officers of the Company who are or maybe in possession of material non-public information about the Company due to their position.
  • Consultants and Advisers of the Company
  1. All other employees who are made aware of material non-public information
  2. Immediate family members of the above-mentioned Individuals

 

Restrictions on Trading

The covered individuals are prohibited from trading during the following blackout periods:

  • For Structured Disclosures, the covered individuals are prohibited from trading during ten (10) trading days before and three (3) trading days after the disclosure.
  • For Unstructured Disclosures, the covered individuals are prohibited from trading from the time he acquired of material non-public information until three (3) trading days after the disclosure.

 

Non-Compliance

Violation of this Policy shall be subject to disciplinary action under the Company’s Code of Conduct and Discipline without prejudice to any criminal or civil proceedings, which, any aggrieved party, the Corporation, or government agency may file.

 

 

Policy on Related Party Transactions

 

 

CAT shall comply with the prescribed laws, rules and regulations relative to transactions involving related parties. Policies and procedures are formulated and strictly implemented to ensure the integrity and transparency of related party transactions between and among the corporation and its parent company, joint ventures, subsidiaries, associates, affiliates, major stockholders, officers and directors, including their spouses, children and dependent siblings and parents, and of interlocking director relationships by members of the Board.

 

Parties are considered to be related if one party has the ability, directly and indirectly, to control the other party or exercise significant influence over the other party in making financial and operating decisions.  Parties are also considered to be related if they are subject to common control. The Corporation, in the normal course of business, has transactions with related parties.

 

However, to ensure integrity and transparency, all material information about the related party transaction, which could adversely affect its viability or the interests of the stockholders, shall be publicly and timely disclosed through the appropriate Exchange mechanisms and submissions to the Securities and Exchange Commission.

 

In addition, the Corporation’s operations are not dependent on its related parties and it provides sufficient working capital support to its related parties

 

 

 

 

Whistle Blowing Policy

 

CAT is primarily dedicated in curtailing the illegal and unethical behavior within the Corporation. It is committed to upholding the core values of Integrity Honesty, Ethics, and Trust to foster and encourage an environment which shall not tolerate any illegal or unethical behavior.

 

This Policy provides a formal procedure for a whistle blower, who may be a director, officer, employee, or other third party, who may raise his/her concerns regarding an illicit or unethical event inside the Corporation. The whistle blower is assured that the safeguards are established for protection from reprisals, harassment, or disciplinary action as a result of raising the said concern.

 

The term “whistleblowing” refers to a report of a suspected or actual illegal or unethical behavior inside the Corporation. Whistleblowing concerns include, but not limited to:

  • Violation of Laws, whether civil or criminal;
  • Violation of Rules and Regulations of Regulatory Agencies;
  • Violation of Internal Rules, such as Code of Business Conduct and Ethics, Policies, Manual on Corporate Governance, Employees Manual on Company Rules and Regulation;
  • Acts of Corruption and/or Bribery;
  • Behavior that will negatively affect the Corporation’s reputation
  • Conduct prejudicial to the health and safety of the workplace
  • Deliberate obstruction or concealment of any illegal or unethical behavior

 

The whistleblower may send a report through any available means of communication to the Human Resources Department. The report shall be treated in utmost confidence and the identity of the whistleblower shall not be disclosed, except when the whistle blower may be put to testify in court. The corporation shall not be responsible in confidentiality issues when the whistle blower has communicated his report to a third party.

 

Anonymous reports, though not prohibited, are highly discouraged as the veracity of the information may be put in issue.

 

Intentionally submitting a false report/allegation or fabricating any material evidence shall be dealt with severely. Proper disciplinary action may be sanctioned against the employee, without prejudice to the right of the Corporation or the aggrieved party to initiate any civil or criminal suit.

 

 

 

 

Gifts and Entertainment

 

 

CAT does not prohibit the receipt of gifts from third parties, unless such receipt will violate any provision of law, rules and regulations and company rules.

 

 

Recordkeeping, Reporting, and Financial Integrity

 

CAT Maintain an effective system of internal control that will ensure the protection of the assets of the Company

 

The Board of Directors shall provide the stockholders with a balanced and comprehensible assessment of the corporation’s performance, position and prospects on a quarterly basis, including interim and other reports that could adversely affect its business, as well as reports to regulators that are required by law.

 

The Management shall formulate, under the supervision of the Audit Committee, the rules and procedures on financial reporting and the internal control in accordance with the following guidelines

 

(a) The extent of its responsibility in the preparation of the financial statements of the corporation, with the corresponding delineation of the responsibilities that pertain to the external auditor, should be clearly explained;

 

(b) An affective system of internal control that will ensure the integrity of the financial reports and protection of the assets of the corporation for the benefit of the stockholders and stakeholders.

 

(c) On the basis of the approved audit plans, internal audit examinations should cover, at the minimum, the evaluation of the adequacy and effectiveness of controls that cover the corporation’s governance, operations and information systems, including the reliability and integrity of financial and operational information, effectiveness and efficiency of operations, protection of assets and compliance with contracts, laws, rules and regulations;

 

(d) The corporation should consistently comply with the financial reporting requirements of the Commission;

 

(e) The external auditor should be rotated or changed every five (5) years of earlier, or the signing partner of the external auditing firm assigned to the corporation, should be changed with the same frequency. The Internal Auditor shall submit to the Audit Committee and Management an annual report on the internal audit department’s activities, responsibilities and performance relative to the audit plans and strategies as approved by the Audit Committee. The annual report should include significant risk exposures, control issues and such other matters as may be needed or requested by the Board and Management. The Internal Auditor should certify that he conducts his activities in accordance with the International Standards on the Professional Practice of Internal Auditing. If he does not, he shall disclose to the Board and Management the reasons why he has not fully complied with the said standards.

 

Adopt a system of check and balance within the Board. A regular review of the effectiveness of such system should be conducted to ensure the integrity of the decision making and reporting processes at all times. There should be a continuing review of the corporation’s internal control system in order to maintain its adequacy and effectiveness.

 

 

Payment to Government Officials – Bribes and Kickbacks

 

CAT does not tolerate any act of corruption or bribery

 

Bribery or Corruption, for purposes of this Policy, shall be defined as making any offer, promise, or giving of gift, either personally or through the mediation of another, to a government official, in exchange for the performance or non-performance of his/her official duties.

 

Violation of this provision would be subject to disciplinary measures, which may include dismissal, without prejudice from the Corporation’s right to initiate a criminal or civil action.

 

The Corporation does not tolerate corrupt practices and considers the following conduct, contrary to its Policy and rules and regulations: (1) giving or accepting anything of value where the nature or value of the advantage is unreasonable or inappropriate to the occasion or the position and circumstances of the recipient (employee, supplier, contractor, customer, government agency); (2) giving or accepting anything of value with the intent or expectation of receiving or giving anything of value in return; (3) giving or accepting of value that may unduly influence the recipient’s objectivity, judgment or discretion;  (4) giving or accepting anything of value without proper documentation; and (5) violation of the Anti-Graft and Corrupt Practices Act. 

 

 

 

 

 

Policy on Health, Safety and Welfare of Employees

 

 

Safety Management System

Central Azucarera de Tarlac (CAT), an integrated sugar manufacturing plant producing raw and refined sugar, molasses, alcohol, carbon dioxide and yeast is committed to manage and continuously improve its Safety Management System (SMS) that shall provide a safe and healthy workplace. It aims to prevent and/or minimize accidents, injuries, and occupational health hazards relevant to the activities, products, and services of the organization.

 

The company commits itself to comply with the current applicable Occupational Health and Safety (OHS) legislations and with the other requirements to which it subscribes. All the required governmental permits, licenses, registrations and clearances are lawfully obtained and the subsequent reportorial requirements are strictly observed.

 

This SMS Policy shall be periodically reviewed to ensure that it remains relevant and appropriate to the organization.

 

Environment Management System

CAT is committed to implement and continuously improve a consistent Environmental Management System (EMS) that shall help minimize the negative impacts of the above operations to land, air, and water; and to provide a clean, safe, and healthy environment for the reciprocal benefit of its employees, stakeholders, and the community where we operate.

 

CAT strives for continuous improvement of sustainable development by developing, placing and continuously improving effective controls and procedures to conserve energy, water and other raw materials. Implementation of reduce water consumption and other supporting programs has been spearheaded to prevent depletion of water resources. CAT encourages the implementation of re-using and recycling materials to reduce environmental impact down to a minimum.

 

CAT seeks to prevent pollution at its source reduce solid-liquid waste generated at our facilities and to establish and support pollution-prevention procedures/programs that shall prevent, if not minimize, adverse effects of activities and/or conditions to its employees and to the environment. All chemical wastes are ensured to be treated before disposal to prevent harsh impact to the environment and to the employees.

 

Further, CAT is committed to complying with all relevant national and local environmental laws, rules and regulations. It shall aim to regularly monitor and improve means to control air emissions, land and water discharges to assure compliance.

 

 

 

 

Welfare and Trainings of the Employees

CAT encourages employees from all levels to actively participate and support all programs of protection of human health, occupational safety, and protection of the environment that shall improve productivity and reduce incidence of work accidents. CAT shall provide appropriate environmental training and awareness to encourage its employees to practice this awareness and to actively promote a sense of responsibility among themselves and to other interested parties.

 

CAT shall provide the employees are with the required trainings and protective clothing and gears used in the handling of machineries inside the sugar mill. Further, they are educated to assess and be prepared for emergency situations within the workplace to minimize, if not to eliminate, disastrous accidents

 

Training and Development

CAT believes in the creation of learning opportunity to its employees to achieve their full potential and development. The Corporation views development as an on-going partnership between the company and its employees, with the latter having the responsibility to grow in knowledge, skills and values or attitudes in areas that match the needs of the company.

 

Training shall focus on the development of the alignment of purpose and performance across the company, with particular emphasis on individual employee; team; and the total organization.

 

Trainings are provided in order to develop and maintain a competitive workforce through formal training and/or informal training, which shall equally provide the trainee. Formal training events includes formal training courses (both in-house and external), on-the-job-training, study tour, temporary work assignments. Informal training events includes projects and task force assignments, readings, fora, seminars, video and audio presentations.

 

Trainings are particularly provided for the following individuals:

  • New hired employees
  • Employees who assume new responsibilities or positions
  • Employees who needs improvement in job performance and
  • Employees who must acquire changes in technology, services, practices, procedures, and governmental requirements

 

Scope of the Trainings shall focus on the following various contents:

  • Managerial/Supervisory – related to leadership and management roles and fuinctions
  • Technical
    • Functional – job related function
    • Environmental, Health, and Safety – related to compliance with company policies, objectives, and procedures; and governmental laws.
    • Computer – related to software applications

 

The Organization Manpower and Resource Development Department (OMRDD) shall:

  1. Identify the training needs of the employees, including the general awareness for environmental aspects and impacts, and other specialized jobs.
  2. Prepare and submit to the Resident Manager for approval the training plan including budget, and other resources needed.
  3. Implement, conduct, or monitor the training, seminar, or workshop programs. Resource person/trainor must have the competency requirements based on education, training and/or experience as evidenced by his/her training certificates.

 

Discrimination and Harassment

 

The Company provides a work environment free from any form of discrimination, including verbal or physical harassment or intimidation from supervisors or co-employees.

 

The Anti-Sexual Harassment Policy of the Company is in place, and an Anti-Sexual Harassment Committee has been constituted to handle complaints related to sexual harassment.  Each manager and supervisor has the responsibility to promote, create and maintain a workplace free from sexual harassment. This duty includes discussing this Policy with all supervised employees and assuring them that they will not have to endure insulting, degrading or exploitative sexual treatment or intimidating or harassing behavior.

 

It is against Company policy to harass or retaliate against an employee who reports a violation or suspected violation of the Company’s Code of Conduct, Rules and Regulations and policies.  Employees are encouraged to report to the Human Resources Department for appropriate action, any suspected form of harassment or retaliatory behavior.  All employees have a responsibility to promote safe work environment by co-operating in the investigation of the harassment or retaliatory behavior reported by an employee.

 

 

 

 

Use of Company Assets

 

Any employee, who steals, pilfers or misappropriates Company funds or its equivalent, materials, property or asset for personal gain or the gain of another shall be penalized with termination of employment

 

Any employee who while operating, using, utilizing, manipulating, or while in custody of any vehicle, equipment, machine, or instrument of the Company, by negligence causes physical injury to, or the death of any person shall be subjected to disciplinary action ranging from suspension to dismissal, depending on the amount of damage and frequency of the offense.

 

 

Implementation

 

This Code shall adapt the existing implementation prescribed by the CAT Employees Manual on Company Rules and Regulations.

 

Compliance officer

The administration and the implementation of this Code shall be the primary responsibility of the Unit Head who may, for this purpose, issue such implementing rules and regulations within their respective units that are consistent with this Code.

 

Report of violations

Directors, Officers and Employees are expected to strictly comply with this Code and to report to the non-compliance or violation thereof.

 

Investigation

Upon complaint or report, or on his own initiative, a Unit Head shall investigate or cause to be investigated, and decide all disciplinary offenses involving employees within his/her Unit.

 

  1. Offenses involving employees belonging to two or more Units shall be jointly investigated and decided by the Unit Heads concerned.
  2. Offenses for which the prescribed penalty is dismissal shall be investigated and decided in accordance with applicable laws, presidential decrees and republic acts. The Unit Head shall,  in the discharge of this responsibility,  be assisted by the Legal Office.

 

The decision shall be in writing and shall state i) the proofs submitted during the investigation; ii) the offense proven to have been committed, and iii) the reason in support of the decision.

 

Evaluation of Cases

The objectives sought to be attained by this Code shall be the guiding principles in evaluating all disciplinary cases.  Unit Heads shall, in the discharge of their responsibilities under this Policy, see to it that the interests of the company are protected.

 

Discipline

Any employee who commits any of the offenses in the Company Policies and Rules and Regulations may be disciplined in accordance with the following Penalties:

 

  1. Written Warning – notice or advice given to an employee for having committed an offense, reminding or calling his/her attention of sterner penalties which may be imposed in case of repetition of the same offense.

 

  1. Suspension – this place an employee under suspension without pay for the specified period of day(s), and all fringe benefits may also be considered suspended during the period of suspension.
  2. Dismissal – this is termination of An employee for commission of an extremely serious violation or any repeated offenses.

 

Conflict Resolution

In resolving conflicts, certain mechanisms are adapted such as the Grievance procedure, mediation and conciliation, arbitration and administrative investigation, as the case may be.