Organisational culture

GRI:[ ]

In the KGHM Group, the KGHM Polska Miedź Code of Ethics is in force, the amended and extended version of which was introduced by a Resolution adopted by the Management Board of KGHM Polska Miedź S.A. in June 2018. It defines adopted ethical standards on which rules of conduct are based and which apply to all employees, regardless of occupied positions as well as our collaborators, counterparties and clients. It is the basis for actions and conduct in the Group, hence the frequent reference to the Code in this Report.

The KGHM Group’s Code of Ethics is based on the aforementioned values and constitutes a guidepost for all the decisions and actions taken in the Parent Entity and the KGHM Group. There are supporting acts regulating the areas of: prevention of corruption, prevention of conflict of interests, security and transparency of procurement processes, verification of external counterparties and prevention of employee rights violations, including discrimination and abuse as well as respect for human rights. The KGHM Group’s Code of Ethics is a collection of rules applicable to the employees of the Parent Entity, the KGHM Group and cooperating entities. It is one of the pillars of KGHM’s organizational culture, which is deeply rooted in the mining and metallurgical traditions. They constitute the genetic code of our community, building its professional identity.

The KGHM Group’s Code of Ethics aims to ensure that the employees follow the highest standards based on the adopted values. The status of a global leader and international corporation obligates the Company to keep the highest business ethics standards. It is also related to the challenges resulting from the richness of national cultures within which KGHM Polska Miedź S.A. operates.

In keeping with current business practice, including in the mineral resource industry, our business partners, suppliers, customers and Stakeholders expect companies to have clearly declared ethical regulations.

In June 2018, the Management Board of KGHM Polska Miedź S.A. adopted the KGHM Polska Miedź S.A. Code of Conduct. By doing this, the Company declared its commitment to sustainable development and respect for principles of ethics and transparency and best industry practices of socially and environmentally responsible enterprises. The Code of Conduct is based on the KGHM Group Code of Ethics. Both documents regulate standards of conduct observed by the Company. The Codes are an integral, mutually interconnected whole, based on consistent assumptions and values followed by the Company.

The Code of Conduct is a practical document. Its purpose is to be a guide and support for the employees, showing where to look for answers and who to approach if in doubt about decisions taken in everyday situations. The Code of Conduct provides an easy to understand presentation of the Company’s values for all employees, regardless of their position.

The idea of adopting and pursuing the Code of Conduct and the Code of Ethics was presented in 2018 and is continuously repeated to KGHM Polska Miedź S.A. employees via the company’s internal portal (Intranet: “KGHM to My” at The Codes are distributed in the printed version during training sessions held by the Ethics and Anticorruption Representatives in all Divisions and Companies of the KGHM Polska Miedź S.A. Group. The Code of Conduct and the Code of Ethics are published for the general audience on, in the Investors/ Corporate Governance/Code of Ethics and ESG Code of Conduct tab

Every KGHM Group Entity appoints an Ethics Committee. The primary task of the Committee is to conduct investigations in response to Whistleblowers’ reports on irregularities consisting in violation of the ethical standards defined in the Code of Ethics, and to recommend corrective and disciplinary actions to the workplace manager.

A report can be filed by:

  • any employee who has been harmed by actions described in the list of issues reportable to the Ethics Committee,
  • anyone who has witnessed actions described in the list of issues reportable to the Ethics Committee.

The investigation conducted by the Committee covers issues that require determination of the actual facts of the matter, in other words disputable issues or those having unclear causes. The investigation is not in conflict with, nor does it replace, the right to pursue claims in accordance with generally applicable laws. Members of the Committee are obliged to resolve the breaches of ethical principles given in the KGHM Group Code of Ethics in an impartial and efficient manner, giving equal treatment to all parties to the proceedings. The Committee operates pursuant to its Regulations, and observing the generally applicable laws and internal regulations of a given KGHM Group Entity.

The list of issues reportable to the Ethics Committee is as follows:

  • actions displaying features of abuse, discrimination, harassment or other type of unequal treatment of a Company employee or group of employees,
  • breaches of employee duties arising from the Labour Code as well as internal regulations of a given KGHM Group Entity, regardless of the position held,
  • breaches of the rules of community life,
  • improper performance of professional duties,
  • unethical behaviour towards other employees and third persons in the workplace and outside of the working hours (including violation of personal interests and human rights),
  • exposing the good name of the Company to harm.

In order to allow for effective detection of abuses, confidential channels for reporting of irregularities by so called Whistleblowers have been created, both within the company, as well as from outside of its organization. Persons who report irregularities, and who do so in good faith and non-anonymously (Whistleblowers) are protected under the KGHM Group Procedure for Disclosing Improprieties and Protecting Whistleblowers. Anonymous reports are also accepted and followed up. The channels allow reporting without disclosing one’s personal details. Reports are made both centrally, to the Ethics and Anticorruption Procedures Unit, and locally, in each of the entities from the KGHM Group, to Ethics and Anticorruption Representatives. All the reports are subject to central registration at KGHM Polska Miedź S.A., where they are verified and sent to relevant units dealing with substantive issues to be reviewed there. The process is monitored by an Ethics and Anticorruption Representative in the KGHM Group.

In 2019, the Procedure for Disclosing Improprieties and Protecting Whistleblowers in the KGHM Group was updated and adapted to the requirements of the amended Act on public offerings and conditions governing the introduction of financial instruments to organised trading, and on public companies. This procedure is aimed at enhancing the effectiveness of uncovering and resolving situations related to the occurrence of irregularities representing an abuse of regulations applied in the Group, in particular the Code of Ethics of the KGHM Group, the Security Policy and the Anticorruption Policy and the Corruption Threat Prevention Procedure. In 2019, an additional channel for whistleblowers was launched – the “KGHM Ethics Line” platform available on the corporate website for both employees and third parties, including counterparties and customers. The platform is available in four languages – Polish, English, Spanish and Russian. It enables the anonymous disclosure of improprieties and is an alternative channel for other forms of contact – telephone lines, email addresses and addresses for correspondence.

At present, an investment project is realized concerning the development of an IT tool to support handling and reviewing reports from Whistleblowers, planned to be completed at the end of 2022. The development of the tool is the next step in perfecting the process and a response to the changing legal requirements, related to the entry into force of Directive (EU) 2019/1937 of the European Parliament and of the European Council of 23 October 2019, on the protection of persons who report breaches of Union law. Work is also underway on updating internal normative acts regarding the receipt of reports from Whistleblowers and their protection in order to ensure compliance with the EU directive and national regulations regarding the protection of persons reporting breaches of the law (currently a draft act).

The charts below show the increase in Whistleblower reports registered centrally in the 2018-2021 period, as well as the procedure which is followed in the event of a breach of ethical principles in the KGHM Group:

Number of reports of breaches of ethical principles in the KGHM Polska Miedź S.A. Group in the period 2018-2021

Procedure followed in the event of a breach of ethical principles in the KGHM Polska Miedź S.A. Group

Anticorruption Management System Compliant with the PN-ISO 37001 Standard

As a result of a resolution adopted by the Management Board of KGHM Polska Miedź S.A. in 2020 to implement the Anticorruption Management System (AMS) in the Divisions and Head Office of KGHM Polska Miedź S.A. and in the Subsidiaries in accordance with the PN-ISO 37001:2017 standard, work started in 2021 aimed at implementing the standard in the KGHM Polska Miedź S.A. Group. As part of this implementation work, the following regulations were prepared in 2021:

The aim of the procedure is to ensure that the performance of all the business processes in the KGHM Group complies with the adopted Anticorruption Policy and to ensure that Corruption Risk Management is a continuous process which guarantees an adequate level of monitoring and improvement of the efficacy of the adopted and applied means of supervision. The Procedure defines the framework for Corruption Risk Management.

Significant elements of the procedure:

  • responsibility and entitlements in the entire scope of the Corruption Risk Management,
  • connection between the AMS and Corruption Risk Management,
  • context of the organization,
  • corruption risk assessment,
  • introduction of due diligence,
  • rules for introducing the regulations,
  • awareness and training.

The aim of the procedure is to ensure compliance of activities and processes performed by persons working for or on behalf of entities from the KGHM Group with the adopted Anticorruption Policy. The regulations are applicable to all employees and representatives of the entities from the KGHM Group.

Significant elements of the procedure include:

  • basic principles for corruption prevention – prohibition of corruptive behaviours,
  • rules of conduct in contacts with public officers, counterparties and other stakeholders,
  • procedure in the event of conflict of interest,
  • handing business gifts,
  • rules of conduct when corruption occurs (attempts to give undue benefits),
  • consequences of non-compliance with principles of anticorruption procedure.

The aim of the procedure is to ensure that within the Corruption Risk Management with reference to obtained risk assessment results means of supervision will be applied to give an effective response to threats facing the Supervised Organizations and Business Partners.

The procedure defines how to ensure performance of the Anticorruption Policy in the Supervised Organizations and which regulations must be implemented and applied by these organizations. It also defines Rules of Risk Management connected with Business Partners.

Significant elements of the procedure include:

  • assessment of corruption risk to which the Supervised Organizations are exposed,
  • supervisory measures referring to corruption risk pertaining to the Supervised KGHM Organizations,
  • verification of compliance and effectiveness of supervisory measures applied by the Supervised KGHM Organizations,
  • internal audits of AMS in the Supervised Organizations,
  • internal audits of implemented and applied systems and/or solutions regarding corruption risk management in the Supervised KGHM Organizations performed by KGHM Polska Miedź S.A.,
  • review of compliance and effectiveness of Corruption Risk Management / AMS,
  • due diligence analysis with reference to business partners,
  • standard supervisory measures with reference to business partners,
  • procedure in the event of donations and sponsorship.

The AMS is implemented in an integrated manner, in connection with which the system documentation of the Integrated Management System has been also updated.

The implementation work for the procedure will be continued in 2022. The deadline for their completion is planned for March 2022. In the first quarter of 2022, workshops will be conducted aiming to ensure the appropriate transfer of knowledge in the organization, internal audits and review of the top management.






Anticorruption Policy in the KGHM Polska Miedź S.A. Group

Considering the implementation of the Anticorruption Management System (SZDA) in the KGHM Polska Miedź S.A. Group in compliance with the PN-ISO37001 standard, a new Anticorruption Policy was adopted in December 2021 by a resolution of the Management Board of KGHM Polska Miedź S.A.

Pursuant to the Policy, the KGHM Polska Miedź S.A. Group underscores its commitment to fighting corruption in business, by the way of adopting and uncompromising observance of the “zero tolerance for corruption” principle while ensuring compliance with legal regulations and voluntary commitments for fighting corruption.

The adopted Policy applies to all employees and collaborators of entities from the KGHM Group as well as business partners, including suppliers and clients. Pursuant to the content of the Policy, it is prohibited to participate in any activities having features of corruption involving offering, promising, giving, accepting, demanding or soliciting undue benefits, both financial and non-financial, especially in connection with performing official duties. The policy also prohibits any retaliation against persons who refused to hand in or receive undue benefits.

Pursuant to the adopted Policy, any person who takes part in an event bearing features of corruption or is a witness to or having information on such an event is obligated to report it immediately, while the top management undertakes to ensure to the reporters dedicated confidential communication channels and protection against retaliation.

Pursuant to the Policy, disciplinary proceedings are started against those who are guilty of breaching anticorruption regulations.

In each entity from the KGHM Group, persons have been appointed whose duties are to ensure anticorruption compliance and who are granted appropriate authorizations, while remaining independent and impartial.

The Policy has been communicated and is generally available to employees, counterparties, persons working for the Group or on its behalf.

Following the principle “prevention is better than cure”, the KGHM Group manages corruption risk, identifying and eliminating factors which increase it by implementing adequate supervisory measures. Within the implemented AMS, a resolution adopted by the KGHM Polska Miedź S.A. Management Board introduced new procedures in the area of corruption risk management, ensuring compliance of activities performed by the entities from the KGHM Group with the adopted Anticorruption Policy. The procedures regulate, among others, rules for handling business gifts, situations having features of corruption or a conflict of interest.

Employees are prohibited from offering or accepting any material benefits in relation to the performance of professional duties. The only exception is giving and accepting business gifts in line with the local norms and cultural customs, provided that the giving and accepting of gifts cannot lead to a situation in which such behaviour could be considered as an attempt to exert pressure or persuade the recipient to act against their duties. Detailed rules pertaining to giving and accepting customary business gifts have been defined in the Procedure of Handling Actions of Corruptive Nature.

Employees are required to avoid any actions or decisions in a situation of a conflict of interests. If a conflict of interest occurs or is possible, employees are obligated to disclose it. Particular scrutiny is exercised with respect to business transactions in the procurement, sales and investment processes, including an option of a third party audit, in order to ensure that such transactions meet the highest standards of ethical and transparent business operations (due diligence of business partners).






Procurement Policy of the KGHM Polska Miedź S.A. Group

KGHM Polska Miedź S.A. is guided by high ethical standards across the procurement process. The Code’s main message is to guarantee the professionalism and honesty of the persons responsible for the procurement processes. The document also contemplates issues such as preventing conflicts of interest as well as equal treatment of suppliers to ensure compliance with the principles of fair competition.

The procurement procedures in force in KGHM Polska Miedź S.A. are precisely defined in the „Procurement Policy of the KGHM Polska Miedź S.A. Group”, while the selection of suppliers is carried out in compliance with the principle of transparency and the equal treatment of economic entities.

The goals set forth in the Procurement Policy are:

  • ensure transparency in the process of making decisions,
  • monitoring of all purchases by introducing a joint system for managing the procurement process, and
  • ensure the efficient optimisation of costs, mainly by standardising the assortment, optimising technical specifications and market diversification.

This joint Procurement Policy applies to all of the Divisions of KGHM Polska Miedź S.A. and to all of the companies of the Group which are critical elements of the production process. The basic tenets set forth in the aforementioned document are carried out with the aid of IT tools.

In 2021, in the area covered by the Procurement Policy of the KGHM Polska Miedź S.A. Group, 3248 suppliers (being the number of bidders taking active part in procurement proceedings) cooperated with the KGHM Polska Miedź S.A. Group, out of which 2203 suppliers were selected.

The share of suppliers outside of Poland is relatively low. The number of non-Polish suppliers in 2021, in respect of the aforementioned information, amounted respectively to 168 and 104, or around 5% of all suppliers to the Company.

KGHM works with all types of suppliers: contractors, intermediaries, wholesalers. These include suppliers of raw materials, components, end producers and distributors. Additionally, within the Group, KGHM Polska Miedź S.A. utilises the services of a Logistics Operator – specialised companies providing supplyrelated functions (Mercus Logistyka, KGHM Metraco, Energetyka).

In 2021 there were no significant changes in the sources of supply of materials, goods and services to KGHM Polska Miedź S.A. There was no recorded dependence on a single or multiple customers or suppliers.

KGHM Polska Miedź S.A. is strengthening its position as an honest and ethical business partner, which cares about the Company’s image as well as social matters. In terms of procurement subject to the aforementioned Policy, the Company strives to ensure that those with whom the Company cooperates meet ethical business standards and operate in a socially responsible manner.

The copper smelters and refineries of KGHM Polska Miedź S.A. produce electrolytic copper from their own concentrates as well as from purchased copperbearing material (concentrates, copper scrap and blister copper). In 2021, the production of electrolytic copper from purchased copper-bearing material amounted to 196.2 thousand tonnes, and represented 34% of total electrolytic copper production.

For the most part, this production came from copper scrap (135.4 thousand tonnes of copper; 23% of total electrolytic copper production), which is supplied to KGHM’s metallurgical plants by KGHM Metraco S.A. – a 100%-owned subsidiary of KGHM Polska Miedź S.A.

KGHM uses a diverse range of external counterparty verification in the procurement, sales and investment processes, which are regulated by a number of consistent and uniform internal policies and procedures. The procedure of counteracting money laundering and prevention of fraud and extortion in trading transactions regarding the sale of products and the procurement of ore and copper-bearing materials in KGHM Polska Miedź S.A. addresses the verification measures taken by the Company when it enters into trading transactions.

To protect its image and the Company’s security, KGHM takes measures to prevent the Company from being used by third parties for unlawful purposes, such as money laundering, financing of terrorism, or VAT extortion.

The security measures undertaken in this respect consist of:

  • Client identification and verification of its identity based on the data provided by the Client, publicly available information and/or reports of credit bureaus;
  • undertaking, with due diligence, actions to determine the ownership as well as organizational structures or the Client’s links to other entities, in order to identify the Beneficial Owner of the transaction and verify its identity, using publicly available information and/or reports of credit bureaus;
  • obtaining information on the Client’s objective and intended character of the business relationship, using publicly available information;
  • monitoring of the business relationship with the Client, including completed transactions, in order to check if they are consistent with the Company’s knowledge of the Client and its business profile, and – if possible – examining the source of funds.

The Instruction has been issued as an Appendix to the Internal Control Procedure of the Security and Loss Prevention Section of the KGHM Polska Miedź S.A. Group. Pursuant to the Organizational Regulations of KGHM Polska Miedź S.A., tasks of the Supply Chain Security Department include: control of the transparency of procurement processes, monitoring of procurement processes with increased risk of abuse and control of completed procurement processes – if abuse is suspected – to verify the correctness of those processes and detect corruption threats.

The document regulates a detailed scope of activities of the Supply Chain Security Department, resulting from the aforelisted tasks, and incorporating the stipulations of the KGHM Polska Miedź S.A. Procurement Policy. The Instruction also applies to procurement excluded from the Procurement Policy which has not been regulated in other internal Company acts – to the extent allowed by the unique specificity of individual procurement processes. For procurement excluded from the Procurement Policy which is regulated by other internal Company acts, the control activities proceed in accordance with those acts.

Anti-Abuse Procedure of the KGHM Polska Miedź S.A. Group

The procedure was adopted by Resolution of the KGHM Polska Miedź S.A. Management Board in September 2018. The objective of the Procedure is to prevent abuse at work, by way of implementation of a prevention system and definition of a procedure to be followed if abuse does occur. The procedure is designed to build and enhance an organizational culture based on good interpersonal relations between and among employees.

The procedure describes a catalogue of actions designed to prevent abuse, actions to be taken if abuse does occur, and defines obligations of the employer and employees in this respect. The Procedure applies to all employees of the KGHM Polska Miedź S.A. Group, regardless of the type of contract or position held. Every employee who believes they have experienced or have witnessed behaviour displaying features of abuse, has the right to lodge a Report. Such a report is lodged in a process defined in the Procedure for Disclosing Improprieties and Protecting Whistleblowers, using dedicated channels, subject to the stipulation that in this case it is necessary to disclose personal details of the reporting employee, the employee(s) who may been subjected to abuse and the employee(s) committing actions or behaviour displaying the features of abuse. The case is examined by the Ethics Committee of the relevant entity of the KGHM Group. Employees are familiarized with the content of the procedure at the time of hiring and periodically, as part of classroom and e-learning training courses.

Compliance with the Procedure is supervised by the work place manager, who is also responsible for the appointment of the Ethics Committee members. The Committee carries out the proceedings related to abuse initiated in connection with receipt of a report. The Ethics and Anticorruption Representative plays an important role in counteracting abuse. The Ethics and Anticorruption Representative conducts preventive actions, including organization of training for Employees, participates in investigation of the abuse reports, is responsible for receiving the reports and initiating further proceedings in accordance with the Procedure of Disclosing Irregularities and Protection of Whistleblowers. A number of abuse reports that are examined by the Ethics Committee pertain mostly to conflicts at the work place. Early detection of such cases, possible thanks to the solutions implemented by KGHM, allows for de-escalation and prevents occurrence of abuse.






Personal Data Protection Policy in KGHM Polska Miedź S.A.

In 2018, the Management Board of KGHM Polska Miedź S.A. adopted by resolution a Personal Data Protection Policy. The Policy lays down the rules of processing and securing personal data in KGHM Polska Miedź S.A., pursuant to Regulation (EU) 2016/679 of the European Parliament and of the Council of 27 April 2016 on the protection of natural persons with regard to the processing of personal data and on the free movement of such data, and repealing Directive 95/46/EC (General Data Protection Regulation, hereinafter: GDPR). The Policy has been adopted to ensure that data processing in KGHM proceeds in compliance with the GDPR and other personal data protection regulations, and to be able to demonstrate this compliance. The Policy is subject to reviews and updates, in keeping with the rules laid down therein. The Policy applies to all the personal data processed in KGHM Polska Miedź S.A. for the purposes of the Company’s activities. Under the Policy, the object of protection is personal data, processed in IT systems, as well as recorded otherwise on media, including paper form and electronic media. The places where personal data is so processed must be secured in a manner defined by the Policy. The duty to protect personal data processed by KGHM and to apply the Policy covers all persons with access to personal data, regardless of their position, place of work and type of employment relationship. Every person about to have access to personal data may process the data exclusively based on an authorization (delegation). All persons having access to personal data are obliged to familiarize themselves with the Policy and other related documents, and to apply the provisions thereof.

The Policy is consistent with other internal regulations regarding security of information and IT systems applicable in KGHM.

Updates to the Policy are supervised by the Data Protection Officer of KGHM Polska Miedź S.A. (DPO). The DPO and the DPO Team have been appointed to support KGHM Polska Miedź S.A. as a personal data controller in fulfilment of duties imposed in the area of personal data protection. The DPO Team holds regular meetings every week at which the status of works is updated and issues are discussed connected with personal data protection at the Head Office and in the Divisions of KGHM Polska Miedź S.A.

The following documentation remains in direct relation with the Policy:

  • Record of personal data processing activities,
  • Record of categories of personal data processing activities (Processor’s Record),
  • Form of authorization to process personal data and record of authorizations issued,
  • Form of agreement to entrust the processing of personal data and record of executed entrustment agreements,
  • Procedure for verification of an entity processing personal data,
  • Procedure for handling breaches of personal data protection with a record of such breaches,
  • Balance tests for data processing based on a PDC’s legitimate interest,
  • Instruction for a data protection impact assessment (DPIA),
  • Procedure for reviewing requests of a data subject with a record of such requests,
  • Form of consent to personal data processing,
  • Principles of security by design and privacy by default.

The above records as a whole aim to ensure appropriate personal data processing at KGHM Polska Miedź S.A. and make it possible to show fulfilment of the duties imposed on KGHM as personal data controller or processor.

Procedure for verification of compliance with the ethical principles of KGHM Polska Miedź S.A.

As a socially responsible company, KGHM Polska Miedź S.A. applies due diligence procedures. In doing so, it attaches importance not only to respect for human rights, lawful terms of employment, environmental norms, freedom of establishing trade unions, compliance of operations with generally applicable laws, no child labour and no extraction of production raw materials from conflict sources (the so-called “conflict minerals”) but also wants to cooperate with business partners who share these values. For this reason, KGHM’s customers and suppliers are obligated to declare in writing their compliance with the aforementioned principles, by signing the so-called Customer Card and Supplier Card, which is an important factor of the business decisions on undertaking cooperation with the given partner.

Internal audit rules (for ethics) in KGHM Polska Miedź S.A.

The Internal Audit Department follows the international internal audit standards. The standards cover 14 areas, with ethics being one of them. When performing internal audit tasks, the risks of potential fraud, conflict of interests or other activities which are not compliant with the Code of Ethics and other internal regulations are analysed. Any areas with increased risk of unethical behaviour are consistently identified and taken into account in the development of the annual audit plan.






Internal control procedure of the security and loss prevention section of KGHM Polska Miedź S.A.

The purpose of the Procedure is to define consistent and uniform rules for conducting Internal Control by the Security and Loss Prevention Section.

The Procedure defines how the Control Process is performed by the Section’s units, defines and assigns roles in the Control Process, delineates the framework of cooperation of its participants, as well as lists the scope of activities to be performed in the Process. The scope of audits conducted by the Security and Loss Prevention Section covers: identification and detection of fraud, irregularities, abuse, corruption, personal abuse and violations of the Group’s Code of Ethics and facilitates the monitoring of transparency of and control over procurement processes.

Selected GRI Standards indicators illustrating activities relating to ethical issues in the KGHM Polska Miedź S.A. Group and in KGHM Polska Miedź S.A. in 2021

  • 205-3

Confirmed incidents of corruption and actions taken

Recorded corruption cases ended in: 2021 2020
KGHM Polska Miedź S.A. Group KGHM Polska Miedź S.A. KGHM Polska Miedź S.A. Group KGHM Polska Miedź S.A.
disciplinary dismissal or punishment of employees 0 0 7 0
refusal to renew contracts with business partners due to breach of corruption rules 1 1 0 0
legal actions pertaining to corruption practices taken against the reporting organization or its employees in the reporting period 0 0 0 0
Total 1 1 7 0

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