Fight against corruption
[G4-So3a] Corruption is widely recognised as one of the main factors threatening socio-economic growth and the well- being of the population. Preventing corruption has always been an important part of the Telecom Italia internal control system in all its companies. Over time, oversight and control systems have evolved and the scope of its companies has changed. Here we shall concentrate on the Group’s existing scope, which consists of the following Business Units: Domestic (which includes all the commercial and technical activities related to telephony, Telecom Italia Sparkle, INWIT and Olivetti), Brazil and Media (see Telecom Italia Group/Group profile).
[G4-Dma anti-corruption] The Group’s system for identifying, preventing and controlling corruption risks is the “231 Organisational Model”, pursuant to Legislative Decree 231/2001, a compliance programme for preventing offences pursuant to Legislative Decree 231/2001 which can result in administrative responsibilities being placed on the Company. The Group Organisational Model and the Brazilian Organisational Model identify the processes that are at risk of corruption offences, in particular relating to the management of relations with public entities (e.g. management of inspections and procedures, representing the Company’s position in respect of the Authorities, requesting authorisations, managing subsidised loans, tender notices), negotiations with customers (commercial negotiations, calls for tenders), identification and management of counterparts in commercial relations, partnerships, joint ventures, purchase of shareholdings, purchase of goods and services, consulting and professional services. During 2015, due diligence was adopted for the assessment of counterparts (donations, business partnerships, M&A1) with the scope of the Italian companies. As regards Brazil due diligence was adopted in 2015 as part of the procurement process (suppliers of goods and services/consultancy and professional services).
231 Organisational Model consists of:
- the Code of Ethics and Conduct of the Telecom Italia Group, where the general principles (transparency, fairness, loyalty) that guide the Company in the organization and conduct of business are indicated;
- the “general principles of internal control”, as a blueprint for achieving the objectives of operational efficiency and effectiveness, reliability of financial and management reporting, compliance with laws and regulations, safeguarding of company assets against possible fraud;
- the “principles of conduct”, which consist of specific rules for relations with third parties and for all fulfilments and activities of a corporate nature;
- the “internal control check-lists” that describe business processes at risk of crime, any predicate offences relating to them, the preventive control activities and the behavioural indications aimed at avoiding the related risks
The Internal control check-lists have been developed according to the following principles: (i) the separation of roles in undertaking the principal activities involved in business processes; (ii) the traceability of decisions, to allow for identification of the points of responsibility and the motivations for the decisions themselves; and (iii) the objectification of the decision- making processes, so that decisions are not made on the basis of purely subjective considerations, but based on pre- established criteria.
In August 2015, a version of the “231 Organisational Model” was adopted which covers all the new types of offence (false accounting, self-laundering, environmental crime). This version, like the previous one (2013), also complies with the relevant compliance programme for the application of international anti-corruption laws, such as the FCPA and the UK Bribery Act. In particular, in 2015, in support of the Organisational Model and to complete the work done in previous periods (gifts policy, entertainment expenses, events, sponsorships), the donations management procedure was adopted and the M&A procedure was updated. A procedure for membership fees is currently being finalised.
- gifts and entertainment expenses
- events and sponsorships
- donations/membership fees/contributions to non-profit organisations
- consulting, intermediation, relations with business partners and suppliers
- joint ventures, acquisitions and transfers
- sale of goods and services
- relations with Institutions/Authorities
- authorisations and concessions
- subsidised financing
- legal and arbitration proceedings
- health and safety at work obligations
- environmental protection obligations
- staff selection and recruitment
- operations carried out by the Executive Directors
- operazioni svolte dal Vertice Aziendale
[G4-Dma Anti-corruption] It is specifically prohibited to directly or indirectly receive, demand, give or offer compensation of any kind, gifts, benefits of an economic or other useful nature to or from a public or private subject and/or the body such subject directly or indirectly represents that: (a) exceed a modest value and the reasonable practical limits of courtesy and, in any event, (b) are capable of being interpreted as designed to unduly influence the relations between the Group Companies and the aforementioned subject and/or body it directly or indirectly represents, irrespective of the aims pursued, including exclusive aims, in the interests or to the benefit of the individual Company or Group.
Nor are “facilitation payments” permitted. These are unofficial modest payments made to speed up, favour or secure the execution of a routine or otherwise expected activity that is part of the duties of the public or private subject with which the Group companies has relations.
The aforesaid principles are stated in a specific Group Policy on the fight against corruption, which focus in particular on donations, gifts and/or participation in charitable organisations, foundations, non-profit organisations, providing for contributions to be made exclusively to organisations with a proven reliability and recognised reputation, subject to due diligence, and in accordance with the budget prepared on the basis of cost-effectiveness and reasonableness criteria.
The Organisational Model is complemented by the Supervisory Body, which is responsible for supervising the operation of the Model, ensuring it is complied with and updating it. Pursuant to Legislative Decree 231/01 article 6 (4bis), the functions of Supervisory Body are assigned to the Board of Statutory Auditors appointed by the Shareholders’ Meeting of May 15, 2012. Amendments to the Model are drafted by a Group managerial committee called Steering Committee 231, briefed by the Supervisory Body and approved by the Board of Directors when of a significant nature.
In order to support the Supervisory bodies of the Companies belonging to the Group, the Compliance Department of Telecom Italia includes a specific structure (Compliance 231) in charge of managing violations of the Organisational Model and carrying out specific compliance interventions also according to the evidence received via the information flows established inside the Group.
[G4-So3a] The 231 Organisational Model currently covers all the Group’s Business Units and [G4-So4] has been approved by Telecom Italia’s Board of Directors since 2003 (successive amendments have been approved since then), while in December 2012 a specific Anti-Corruption Policy was adopted, which is referred to in the Organisational Model itself. Furthermore, in August 2014, the Board of Directors of TIM Partecipações approved the Organisational Model in accordance with the recent local anti-corruption law (Ley 12846/13) and the relevant provisions required at Group level. Previously, Brazil had adopted corruption prevention procedures, including the Anti-Corruption Policy of May 2013. [G4-So4] In the case of Italian companies, 231 Organisational Model and the anti-corruption policy are communicated to all employees while commercial partners are required to confirm their adherence to the principles contained therein3. In Italy, in 2015, e-learning training on the 231 Organisational Model and anti-corruption aspects was completed4. Note also that the on-boarding training provided to new recruits at Telecom Italia S.p.A. included specific anti-corruption sessions.
E-learning training campaigns run in Italy*
*Unit of measurement: people
In Brazil, communication on anti-corruption matters, with employees and partners, was launched in 2014 and new classroom training activities were delivered during 2015 aimed at the departmental focal points, the people who manage relations with public bodies and legal advisors5. As part of the awareness-building activities focused on combating corruption, the Code of Ethics was signed by over 13,000 employees 99.7% of the employee and collaborator (such as the people working in the stores) target.
[G4-Dma anti-corruption] Employees are trained every time the Organisational Model undergoes substantial changes Telecom Italia has made the e-learning training module on the 231 Organisational Model and anti-corruption aspects available to corporate bodies of all national subsidiaries.
[G4-So5] No incident of corruption has taken place in the Group companies in the past 3 years, nor have any legal proceedings been started on grounds of corruption against Group companies in the same period. With regard to suppliers, in the past 3 years Telecom Italia has never terminated a contract for reasons related to corruption. Only on one occasion, in 2014, has Telecom Italia suspended new activities with a supplier because it was charged with corruption.
[G4-Dma anti-corruption] Telecom Italia is a member of the “231 and Legality” working group set up as part of the initiatives taken by Confindustria. During 2015, the Compliance 231 department participated in the working groups set up at Business 20 (B20) to implement the recommendations made at the G20/B20 on anti-corruption matters and, in particular, to develop an international training toolkit intended for small to medium companies (SMEs), presented at the G20 Summit in Antalya in November 2015. In this context, the company has become involved in Confindustria’s “Legality and 231” working group for subsequent implementation of the plan in respect of SMEs.
2 Furthermore, Telecom Italia’s procedures for transactions with related parties specify all the measures to be adopted in order to mitigate the risk associated with these transactions (the procedures are approved by the Board of Directors and are published at http://www.telecomitalia.com/tit/en/about-us/governance-system/procedures.html).
3 Commercial partners include suppliers of orders worth over 3,000 euros, joint ventures, consultants.
4 The training campaigns are not necessarily annual but depend on changes made to the Model or other organisational requirements.
5 In December 2015 the e-learning course on the Organisational Model and anti-corruption aspects was launched. The Group will shortly consider the possibility of representing the above data in comparable terms.