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Anti-Bribery and Anti-Corruption Policy

1. Background and purpose

Sandvik Group’s Code of Conduct and the core values Customer Focus, Innovation, Fair Play and Passion to Win form the foundation for conducting our business with honesty, integrity and high ethical standards. This Policy sets forth our commitment to preventing and detecting bribery and corruption wherever it may arise.

2. Definition

2.1 Government Employees

The term “Government Employee” means (a) any officer or employee of a government entity; (b) any person or entity acting for or on behalf of any government or inter-government entity; (c) any official or employee of a political party; (d) any candidate for political office or their employee; or (e) any other person who acts at the suggestion, request, direction, or for the benefit of any of the above-described persons or entities. Government Employees include representatives or employees of any level or seniority at a government-controlled enterprise. Private persons acting for the government (including part-time) are considered Government Employees.

2.2 External Party

The term “External Party” means any person or entity, including but not limited to agents, consultants, customers, business partners or partner companies.

2.3 Bribery and Corruption

The term ‘Bribery’ means the offering, promising, giving, accepting, or soliciting of an advantage as an inducement for an action which is illegal, unethical, or a breach of trust. Inducement can take the form of gifts, loans, fees, rewards or other advantages (taxes, services, donations, etc). Corruption means abuse of entrusted power for private gain, which could include conflicts of interest, embezzlement, kickbacks, extortion, or nepotism/cronyism.

2.4 Employees

The term ‘Employee’ means a person who is hired to provide services to a company on a regular basis in exchange for compensation and who does not provide these services as part of an independent business. This includes full-time and part-time employees as well as interns and trainees.

2.5 Facilitation Payments

The term ‘Facilitation Payment’ means payments which are made to expedite or to secure the performance of a routine governmental action which is ordinarily and commonly performed by a Governmental Employee and to which the payer is legally entitled, without making such payment. In most countries Facilitation Payments are prohibited by law and considered bribes.

2.6 Fair Market Value

Fair market value means the actual or cash value of an item or a service at which a buyer will buy from a seller with the assumption that both buyer and seller are in possession of all pertinent facts, and free from market restraints or pressures.

3. Scope

This policy outlines our standards for interactions with all External Parties, including but not limited to any commercial counterpart, sales agents, distributors, Government Employees and government entities. We take reasonable measures to ensure that all interactions with External Parties, with whom we work, demonstrate respect and compliance with anticorruption laws and regulations, such as those set forth in this policy.

4. Audience

This policy applies to the following entities within the Sandvik Group: a. All entities This policy applies to all Employees, directors, officers of all entities within the Sandvik Group including joint ventures Sandvik controls and anyone acting on behalf of such entities.

5. Policy statements

  • We are committed to doing business with high integrity and complying with applicable laws and regulations, internal policies and procedures and the Code of Conduct.
  • We adhere to the laws and regulations, applicable in the countries where we do business.
  • We conduct business ethically and transparently.
  • We prohibit all forms of Bribery, Corruption and other behavior that could cause or appear to cause improper influence.
  • We prohibit the making of Facilitation Payments.

5.1 Key Elements

5.1.1 No improper Inducements

  • We will not offer, promise or provide any inducements, such as payments or other things of value or perceived value to obtain an improper advantage in any of our business transactions or interactions.
  • We will not select someone to provide services, in order to directly or indirectly, obtain an improper advantage or improperly influence or encourage a decision or action.
  • Neither will we offer indirect inducements, such as those made to family members.

5.1.2 Legitimate Purpose

  • We must have a legitimate business reason and proper motive for everything we do.
  • External Parties may only be engaged to provide services for which we have a legitimate business need that is defined and documented in advance, and for which such persons are appropriately qualified.
  • Meals, drinks, travel, entertainment and accommodation can only be offered, provided or paid for in connection with a legitimate business reason, and only to the actual participants, and never to influence or personally benefit third parties, and always in accordance with local requirements.
  • Donations can only be given in accordance with the Sponsorship and Community Involvement Procedure.

5.1.3 Transparency & Documentation

  • We ensure that all interactions with External Parties are transparent and accurately documented.
  • The purpose and appropriateness of any payment, gift, hospitality, entertainment and similar arrangement must be clear.
  • Books, records and accounts must accurately and fairly reflect all transactions and dispositions in reasonable detail.

5.1.4 Reasonableness of Value, Amount and Frequency

  • Anything we pay or provide must be reasonable and permissible under applicable laws and regulations.
  • Payments (incl. discounts or commission) must be reasonable and in line with prevailing market rates in accordance with internal control requirements. The “Fair Market Value” is objectively determined according to the standards of the relevant country.
  • Things of value, including gifts, hospitality, accommodation, entertainment and travel must be permissible under applicable requirements and reasonable and not lavish or excessive in value, amount or frequency

5.1.5 Compliance Programs

Sandvik has established a program to ensure compliance with the key elements and principles for anti-bribery and anti-corruption outlined in this policy. The program is based on principles drawn from the United States Foreign Corrupt Practices Act, the United Kingdom Bribery Act and other major pieces of national legislation. The program contains six core elements, which are:

  • Risk identification and assessment.
  • Control elements, including policies, procedures and guidelines; record keeping, advice, support and other control activities.
  • Training.
  • Enabling and enforcing elements, including communication and commitment from top management.
  • Follow-up, reporting and improvement, including proactive follow-up - Monitoring and Review; reactive follow-up - Investigations and deviation management; Reporting; Internal Audit; and Evaluation and Improvement.
  • Organization.

6. Roles and responsibilities

6.1 Group Function Legal shall be responsible for:

  1. Ensuring that this policy and related procedures are communicated and kept up-to-date.
  2. Providing advice to the BAs in respect of training and implementation
  3. Developing materials for the purpose of training and guidance
  4. Monitoring implementation of the policy through the BAs and reporting through the Group General Counsel on anti-bribery and anti-corruption compliance adequacy and effectiveness to the Group Executive Management and the Board Audit CommitteePreparing relevant Guidelines.
  5. Ensuring that training is made available to relevant categories of persons.

6.2 Business Area shall be responsible for:

  1. Appointing a manager who is responsible for implementing the policy (this would normally be the BA Compliance Officer);
  2. Ensuring that all employees complete the required training in anti-bribery and anticorruption;
  3. Communicating the policy and all associated procedures to relevant employees;
  4. Implementing relevant procedures, including the Commercial Intermediary Procedure;
  5. Monitoring the implementation of the policy and procedures throughout the BA and reporting to BA management and Group Compliance;
  6. Reporting any deviations or breaches in the policy or procedures to Group Compliance;
  7. Investigating alleged or suspected breaches of policy or law under the oversight of the BA General Counsel and with assistance from Group Business Integrity;
  8. Demonstrating leadership and setting tone from the top and tone at every level that Sandvik does not tolerate corrupt behaviour and will exercise consequential management in the event of breach.

6.3 Sandvik Employees

Sandvik Employees are responsible for understanding how this policy relates to their daily work and complying with it.

7. Enforcement

Failure to follow the principles and steps set out in this Policy may result in disciplinary action, up to and including termination. In addition, breaches of antibribery or anticorruption laws can have severe financial and reputational consequences for Sandvik. Employees, who are involved and implicated in the breach, risk imprisonment and personal fines.

8. Monitoring of compliance

Compliance with this policy will be monitored through:

  • The Compliance House
  • Internal control, as a minimum through the control IDs: HRE.12, O2C.03, O2C.14, P2P.01, P2P.06, P2P.09, P2P.13, P2P.14, P2P.15
  • Through annual target setting and follow-up in the Compliance Functional Council
  • Internal Audit

Compliance status will be reported to the Audit Committee every quarter.

9. References to associated policies and procedures

  • Commercial Intermediary procedure
  • Administrative Intermediary procedure

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