Anti-corruption policy

1. Purpose

Corruption prevents economic development, distorts competition and undermines the rule of law. All Jotun companies and employees are committed to work actively against corruption and bribery.

This policy outlines Jotun’s strong commitment to anti-corruption and details the essential guidelines that employees must adhere to in order to prevent corruption in their work. Jotun shall act in an open, ethical and lawful manner towards all potential or existing customers, suppliers, and public officials.

This policy is based on the Norwegian Penal Code and other national anti-corruption legislations, including US Foreign Corruption Practices Act and UK Bribery act, as well as EU legislation, such as Corporate Sustainability Reporting Directive (CSRD). This policy applies to all countries and/or jurisdictions in which Jotun operates. 

It is important to be aware that the Norwegian Penal Code and other national anti-corruption legislation applies irrespective of the country where the actions take place and regardless of whether corruption is legal under the local laws of that country. In practice, individuals and companies subject to these laws may be prosecuted for acts committed anywhere in the world.

This policy is not exhaustive, meaning that it will not cover all the unethical situations that Jotun should refrain from.

2. Roles and responsibility

This anti-corruption policy is anchored with the Group Management and the Board of Directors of Jotun A/S.

Company Manager

The Company Manager is the ultimate responsible for implementing and enforcing this policy in their organisation. The Company Manager is responsible for understanding the consequences of engagement in corrupt actions, as well as understanding specific anti-corruption laws and guidelines applicable to its operations, including adopting additional anti-corruption policies, as necessary, to comply with those laws.

Managers

Managers are responsible for making this policy known in their department and promoting a culture of ethical business conduct.

All Jotun employees

All Jotun employees are accountable and responsible for their own actions and shall not engage in any activity in violation with this policy.

Group and Regional Compliance

Group Compliance is the process owner of this policy. Group and Regional Compliance are responsible for initiating programs, actions, trainings and reviews in order for each Jotun company to be aware of their obligations and to comply with the requirements. Group and Regional Compliance give advice in all anti-corruption issues.

3. Definitions

Anti-corruption

Anti-corruption law may vary in different parts of the world, but most anti-corruption laws share a common core definition of corruption. For the purpose of Jotun's anti-corruption policy, corruption will include any attempt to directly or indirectly, i.e. through middlemen:

• give or offer someone an improper advantage based on position, assignment or duty (active corruption), or
• demand, receive or accept an offer to receive an improper advantage based on position, assignment or duty (passive corruption).

Improper Advantage

Any benefit provided in return for the misuse of the receiver’s position, task or assignment will generally be considered an improper advantage. An improper advantage will usually be a benefit in the form of cash or objects with economic value, but may also include benefits without economic value. Personal benefits provided in relation to the recipient's position, task or assignment, such as services carried out for free or with a discount, invitations to otherwise private organisations or clubs may easily be regarded as improper.

The most evident examples of corruptive improper advantage are:

• paying to obtain a contract
• receiving payment (cash, gifts or services) personally

Bribery or "trading in influence"

Bribery or trading in influence is an offer (or acceptance) of an improper advantage to someone who has the ability to influence a decision.

A benefit is recognised as bribery where a company or a private person receives a benefit that may influence important decisions that it/he/she would not receive in free competition. Bribery is corruption by definition.

Facilitation payments

Facilitation payments are payments to secure the performance of routine governmental actions ordinarily performed by lower level officials. Facilitation is corruption by definition.

Public and private sector payments

Most national regimes prohibit corrupt payments to any person, both in the public and private sector. Any kind of corrupt activity, whether this activity is related to a position, assignment or duty within the public or private sector, falls within Jotun’s anti-corruption policy.

Liability for corrupt acts of agents and other representatives

Corruption may also include payments made by agents, subsidiaries, affiliates or others acting on behalf of the parent company or as part of the parent company.

4. Requirements

4.1 Monitoring

An anti-corruption risk assessment must be conducted in selected companies based on an overall risk classification of the country (Transparency International Corruption Perception Index). Selected companies will be notified by Group Compliance. The risk assessment must be done in line with the Anti-Corruption Risk Assessment Procedure and Anti-Corruption Risk Matrix.

Each Jotun company must annually self-assess its anti-corruption activities in the Jotun Internal Control Checklist (JICC). Group Internal Audit performs internal audits regularly to verify compliance with this policy.

All employees are encouraged to raise concern of serious wrongdoings related to Jotun’s activity either along business line or through the Corporate Whistleblowing Channel.

4.2 Training

All employees with exposure to corruption risks such as sales, purchasing, maintenance, finance and management, are required to complete anti-corruption training once a year. The training must be documented and reported in HRMS (Workday).

Each company is responsible for reporting the completion rate on annual training to Regional Compliance by year-end. In regions without dedicated regional compliance resources, regional HR acts as representative.

4.3 Reporting of incidents

Each Jotun company is required to report the following in JICC:

• Number of convictions and amount of fines for violation of bribery and facilitation legislation
• Number of cases where employees were dismissed or disciplined for violation of bribery and facilitation legislation
• Number of cases where Jotun has terminated or not renewed contracts with Business Partners due to their violations of bribery and facilitation legislation.

4.4 Accurate accounting

Jotun shall maintain effective internal accounting controls and ensure that all financial records accurately reflect transactions in compliance with anti-corruption laws.

All Jotun entities shall:

• Ensure transactions are properly registered and supported by appropriate documentation in accordance with local and international accounting standards.
• Approve all expenses in line with standard company procedures and record them in accordance with applicable accounting principles.
• Accurately account for income and expenditures, ensuring that payments are correctly recorded and not misrepresented in company books.
  
  

4.5 Public officials

Special care needs to be taken in relation to officials and especially in situations where the recipient at the time is in a particular position to make a discretionary decision or act that could be beneficial to Jotun. Bribing an official to obtain a service, contract, approval or certificate is clearly corruption. Under no circumstances may any Jotun employee receive cash or any kind of improper benefit from business partners, including personal rebates, kickbacks, undocumented discounts etc.

Similar activities may include situations like:

• paying for illegitimate or unlawful travel or entertainment expenses for officials or their family members;
• agreeing to purchase goods or services from officials or their friends or family members in return for favours;
• donating to a charity linked to an official in expectation of a benefit from that official.

4.6 Travel and Entertainment Expenses

Payment for reasonable expenditures for seminars, travel, meals, lodging and entertainment for potential or existing customers may be permissible if those expenditures are directly related to the promotion, launch, training, etc. of Jotun or Jotun’s products or services.

If Jotun pays for the participants' expenses, such payments:

• must be directly related to marketing, business development or contract performance expenses;
• must be provided in an open and transparent manner;
• may not be provided, or appear to be provided, in expectation of or return for any benefit;
• must be reasonable in amount, and appropriate under the circumstances;
• must be verified through reasonably detailed documentation of actual expenses;

Payment of travel, meal, lodging or entertainment expenses for family members/friends of business partners is not permitted, unless approved specifically by line manager.

Any invitation for individuals to participate in events or activities fully or partly paid by Jotun shall be approved by the relevant line management.

Jotun employees may accept coverage for reasonable expenditures from suppliers or others in line with the principles in this section, and only after the prior approval of the immediate superior.

Business invitations or arrangements involving visits to prostitutes or adult entertainment venues, such as strip clubs, are not permitted.

4.7 Gifts

Exchanging gifts with customers, suppliers and business partners is a customary part of international business, and is fully legal, as long as the gifts are kept within the confines of what is recognised as "customary".

Gifts will normally be customary if they are:

• of minimal economic value (USD 100),
• marked with a company logo,
• clearly appropriate under the circumstances in the relevant country.
  
  

Gifts that potentially can influence the recipient and the decision-making are not permitted. Such gifts include:

• Cash or cash equivalents.
• Expensive gifts
• Frequent gifts, repeated gifts to or from the same third party
• Inappropriate timing, gifts given in bidding process, contract negotiations or regulatory inspections

Gifts must not be given in a context where there are reasons to suspect that the recipient will keep such gift or benefit hidden from his or her superiors, e.g. gifts should be addressed to the recipient’s working address, i.e. company or public entity office address. Gifts must not be provided or accepted in return for any benefit.

4.8 Facilitation Payments

In accordance with applicable anti-corruption legislation, Jotun has a general policy against facilitation payments.

Facilitation payments should be distinguished from situations of true extortion, e.g. a direct threat of an unlawful damaging act vis-à-vis Jotun's propertyIn certain extortion-like situations facilitation payments may be necessary and justifiable in order to avoid significant harm to Jotun's values or legitimate business interests. Further, necessary payments to ensure personal health or safety are generally legitimate as an act of necessity.

4.9 Dealing with business partners

Each Jotun entity shall take reasonable steps to ensure that Jotun’s business partners, including suppliers, customers, agents, distributors, consultants and joint venture partners do not engage in corruption or other illegal or unethical activities in relation to business involving Jotun.

The requirement of due care will vary depending on the circumstances, but will always include the following steps:

1. conducting integrity due diligence screening of potential agents/representatives before engagement, meaning that it should be a real company with real business purposes, under which the relevant services fall under;
2. formalising the engagement by a written contract, including a clear description of the performance of work and provisions, including the possibility to leave a contractual obligation in case of corruption or bribery;
3. ensuring that the payment for the services rendered is reasonable in relation to the services to be performed;
4. the methods of payment shall be transparent and in accordance with applicable law and good business standards;
5. payments in cash are generally not permissible, and if unavoidable such payments should be supported by proper documentation;
6. any payments to foreign accounts must be treated with utmost caution and appropriate verification must be obtained to ensure that Jotun does not contribute to money laundering, tax evasion, corruption, fraud or other illegitimate business practices.
   
   

4.10 Political contributions

Political contributions, such as contributions to the political campaign or fund-raising efforts of public officials in support of their ability to run for office, may be considered as trading in influence, which is contrary to Jotun Business Principles.

4.11 Consequences of Non-Compliance

The potential consequences of non-compliance with applicable anti-corruption laws are substantial:

• Corruption distorts free competition and undermines the rule of law.
• Exposed corruption results in negative publicity, which can do serious damage to a company’s reputation and business relationships.
• The decision by authorities to initiate investigation of a suspected anti-corruption infringement may cause serious harm to the involved party's reputation and business interests and trigger substantial costs.
• Individuals involved in corrupt activities may be subject to criminal sanctions, including fines, imprisonment, and in certain jurisdictions, even corporal punishment. Often, the individuals' superior will also be subject to criminal sanctions if he/she knew or should have known that the corruptive act was conducted.
• Both the local company and Jotun head-office can be prosecuted and punished. This is called Corporate liability.
• Companies have been subjected to tens of millions of USD of fines, penalties and government-ordered compliance costs as a result of corruption allegations.
• Companies may be prohibited from doing business in certain countries or industries, with certain governments or from participating in public tenders.
• Companies may be liable for damages claims by third parties disadvantaged by the corrupt activity, such as competitors who may have lost business.
• Risk of criminal prosecution, dismissal or other disciplinary action for the individual.
  
  

4.12 Whistle-blowing

Jotun encourages all employees to report intolerable malpractices and wrongdoings, including bribery and facilitation, (“concerns”). All concerns should be made and solved along business line. However, there are different ways for raising concerns:

1. Contact the superior or another manager within the local organization.
2. Contact the local or regional company’s whistleblowing team, if it exists, or another person you trust, e.g. HR manager, finance manager, unions if it exists.
3. If you feel you cannot be open with your information, you can raise your concern by using our formal whistleblowing channel. Send the concern with signature or anonymous through the Jotun’s formal whistleblowing channel: https://report.whistleb.com/jotun

By using the formal whistleblowing communication channel, the anonymity of the whistleblower is ensured.