GRI 102-15

Business risks

Risk matrix


Risk materiality level: low ; medium ; high 
Probability that the risk will materialise: low  ; medium  ; high 
Yoy change in the risk level: increase ; decrease  ; no change 

Operational risks

Scope of changes and impact of material operational risks on the PGNiG Group
Risk description
Resource discoveries and estimates
The main risk inherent in exploration activities is the risk of failure to discover hydrocarbons, i.e. exploration risk. This means that not all identified leads and prospects actually have deposits of hydrocarbons which can qualify as an accumulation. In addition, the actual quantity and quality of accumulated hydrocarbons may differ from estimates. If the results of successful exploration in the form of new reserves do not balance production from existing fields, the recoverable reserves in the PGNiG Group’s fields will gradually decrease as the production continues.
Reserves estimates and production projections may be erroneous due to imperfections inherent in the applied equipment and technology, which affect the quality of the acquired geological information. Irrespective of the methods applied, data on the volume and quality of commercial reserves of crude oil and natural gas is always an estimate. Actual production, income and expenses relating to a given deposit may significantly differ from estimates. The weight of this risk is further increased by the fact that in the full business cycle the period from start of exploration to the launch of production from a developed field takes six to eight years, while the production lasts from 10 to 40 years. Formation characteristics determined at the stage of preparing the relevant documentation are reviewed after production launch. Any downward adjustment of the reserves or production volumes may lead to lower revenue and adversely affect the PGNiG Group’s financial performance.
in the Exploration and Production segment in Poland:
In the Trade and Storage segment
Both in Poland and abroad there is a risk of competition from other companies seeking licences for exploration and appraisal of hydrocarbon deposits, although it should be noted that this risk has significantly diminished in the Polish market over the past year. Certain competitors of PGNiG, especially those active globally, enjoy strong market positions and have greater financial resources than those available to the Group. Thus, it is probable that such companies would submit their bids in tender procedures and be able to acquire promising licences, offering better terms than PGNiG could offer given its financial and human resources. This competitive advantage of oil majors is particularly important on the international market.
Competitors seek to increase gas fuel sales by offering competitive prices of the fuel or dual fuel (gas and electricity) deals. A noteworthy development is also the growing activity of large energy companies on the Polish natural gas market.
Given the prevailing trend in supplier switch numbers (according to URE data), the number of people switching energy supplier should increase in the coming years.
Under the applicable Polish laws and regulations, the process of obtaining a licence for exploration and appraisal of crude oil and natural gas reserves lasts from one to one and a half years. In foreign markets such procedures may even take up to two years from the time the winning bid is awarded until the actual contract is ratified. All these factors create the risk of delays in the start of exploration work. The formal and legal obstacles, beyond PGNiG’s control, include those related to:
  • local governments’ failure to approve local zoning plans or amendments to those already approved;
  • obstacles in having investment projects incorporated into the local zoning plans;
  • requirement to obtain and comply with administrative or other formal and legal decisions, including environmental decisions or building permits;
  • amendments to the current investment project;
  • difficulties in obtaining the landowners’ consent for access to the area.
These factors materially delay investment activities and entering the area to commence construction work. Further, PGNiG’s obligation to comply with the Public Procurement Law frequently protracts tender procedures. A protracting project exacerbates the risk related to estimation of capital expenditure.
Safety, environmental protection and health regulations
The need to ensure compliance with environmental laws in Poland and abroad may significantly increase the PGNiG Group’s operating expenses. Currently, the Group incurs significant capital expenditure and costs to ensure compliance of its operations with the ever more complex and stringent regulations concerning safety and health at work, as well as environmental protection. Offshore upstream operations carry a significant risk of environmental pollution resulting from oil spills. The risk is monitored on an ongoing basis, and field operators have implemented a number of barriers and technical solutions to mitigate the risk.
Cost of exploration
Capital intensity of an exploration project depends on prices of energy and materials. Cost of exploratory work is especially sensitive to steel prices, which are passed onto prices of casing pipes and production tubing used in drilling. An increase in prices of energy and materials translates into higher costs of exploratory work. Profitability of foreign exploration projects also depends to a significant extent on prices of oil derivative products and on exchange rates. To reduce drilling costs, in 2011 PGNiG introduced the daily rate system into its procedure for selecting drilling contractors and paying for their work.
Unforeseen events and emergencies

Hydrocarbon deposits developed by the PGNiG Group are usually located at great depths, which involves extremely high pressures and, in many cases, the presence of hydrogen sulfide. Consequently, the risk of hydrocarbon blowout or leakage is very high, which in turn may pose a threat to people (employees and local population), the natural environment and production equipment.
In Norway, PGNiG UN keeps records of all risks related to upstream operations as they arise. All risks are reviewed every three months by an interdisciplinary team of experts. A set of preventive measures is assigned to each risk, designed to reduce the probability and impact of potential accidents.
Changes in legal regulation

In some countries, exploration and production activities may be hindered by frequent and unexpected changes in legislation, which may give rise to particularly serious risks in countries with authoritarian regimes. The risk is low in Norway, given the country’s stable legal regime governing the oil industry operations.
Political and economic situation
PGNiG Group
Some countries where the PGNiG Group is conducting exploration and production activities are threatened by conflicts and terrorist attacks, which may lead to limitation, suspension or even discontinuation of such activities.
The PGNiG Group’s operations are also exposed to the risk of social or political unrest in some regions. Changes of governments may result in withholding issuance of petroleum licences. Those countries are also at risk of internal conflicts and civil unrest due to poverty and demographic issues. If these risks materialise, the Company’s operations may be limited, suspended or discontinued.
In certain countries, operations of exploration companies may be hindered by the absence of adequate infrastructure, which may be an obstacle in transporting equipment, personnel and materials to the sites. Problems may also arise in providing supplies and ensuring appropriate health care. These risks may lead to limitation or suspension of the Company’s exploration activities.
Opposition from local communities
In 2019, there were protests from residents of the areas where drilling work was being conducted. The reasons for the local communities’ complaints included noise emitted by the drilling equipment, increased vehicle traffic and road destruction, as well as concerns about pollution of the natural environment (water, soil). Protests result in delays or suspension of drilling work, prolongation of administrative procedures and damage to the Company’s image. In order to minimise the risk, the locations of wells are reviewed in terms of potential conflicts and dedicated information campaigns are conducted. It is increasingly more common that local communities expect to receive direct benefits.
Administrative regulation of natural gas prices and deregulation of the Polish gas market
Gas trading on the exchange market has been excluded from the tariff regime. Prices of gas paid by end users have also been gradually liberalised as the process of deregulation advances. The first customer groups in respect of which the tariff requirement will be disapplied are wholesale and business customers. As regards gas trading on the Polish Power Exchange or direct sales to customers at prices similar to those quoted on the exchange, there is a risk that revenues from such sales will be lower than gas procurement costs due to the growing disconnect between the market prices of gas and of petroleum products, to which gas prices under the long-term import contracts continue to be linked. As a consequence, revenue is subject to forecasting risk. Inaccurate estimates of costs (particularly the cost of gas purchase) may result in a risk of miscalculation of selling prices and charges, which may adversely affect financial results.
Dependence of PGNiG OD’s revenue on tariffs approved by the President of URE is the key factor affecting the company’s regulated business. Tariffs are crucial to the company’s ability to generate revenue that would cover its reasonable costs and deliver a return on the capital employed. Currently, a significant portion of that revenue depends on the selling prices of gas fuel and is regulated. Inaccurate estimates of demand for gas (affecting the accuracy of projected purchase volumes) and changes in prices of gas purchased on the Polish Power Exchange, which cannot be accurately projected, may have an adverse effect on the financial performance of PGNiG OD.
Disruptions in gas supplies from countries east of Poland
In 2019, there were no disruptions in gas supplies from across Poland’s eastern border. However, due to the continuing fragile situation in Ukraine and the nearing expiry of the transit agreement between PAO Gazprom and NAK Naftogaz Ukraine at the end of 2019, there was a risk of limitations or suspension of natural gas supplies. PGNIG made preparations in case of suspension of gas supplies as of January 1st 2020. Eventually the transit agreement between Russia and Ukraine was signed and the continuity of gas supplies was maintained.
Take-or-pay gas supply contracts
PGNiG is a party to long-term take-or-pay contracts for gas supply to Poland, and takes care to duly discharge its obligations under those contracts. Assuming that PGNiG’s customer portfolio remains unchanged, the volume of gas imports specified in the take-or-pay contracts will allow the Company to optimise its gas purchases under long-term and spot contracts, including for LNG. If PGNiG loses its market share, there is a risk that the Company would be forced to look for new ways to utilise the surplus volumes of gas in its portfolio.
Market development limitations in terms of supplying the distribution network
Limitations at the entry points to the distribution system result from the limitations of the supply network and the insufficient capacity of gas stations. Consequently, the possibility of connecting new customers and gas network roll-out may be limited. In addition, end users may switch to direct or substitute competitors.
Absence of a long-term regulatory policy
The risk is related to the lack of URE’s approval for freezing the tariff prices. If the risk materialises, it may bring about reductions in tariff rates and difficulties in having each subsequent tariff approved. A protection against materialisation of this risk is the development of a regulatory and econometric model, subsequently agreed with URE.
Claims raised by property owners
The risk arises from failure to secure a permanent legal title to property at the stage of project execution and property owners’ higher awareness of the related legal aspects. The consequences of materialisation of the risk include excessive (above market prices) claims made by property owners, increase in litigation, litigation costs, claims for removal or alteration of infrastructure, as well as provisions and claims related to extra-contractual use of property.
The substitution risk is associated with a potential lower cost of using alternative fuels and with unavailability or insufficient capacity of the gas network. The risk may arise from the inability to use a wide range of marketing tools due to the nature of the business (separation of distribution and sales operations), from the direction of changes in the national energy policy, and from fuel prices on commodity exchanges. Materialisation of the substitution risk may result in constraints for the roll-out of the programme to connect new areas to the gas network or may affect revenue and volume growth. It may also impair the efficiency of the networks built.
Lower amount of EU funds allocated for financing gas distribution projects
This risk may result from fund allocation priorities set by the institutions responsible for distribution of EU funding. Unfavourable fund allocation may result in unavailability of financing for submitted projects or in low efficiency of such projects.
Limitations on the contractors market
This risk may result from an insufficient number of qualified contractors, deteriorated competitiveness in the contractors market, and increase in the cost of labour, materials and services. Should this risk materialise, implementation of planned investment processes may be slower than expected.
Electricity price
The volatility of electricity prices is one of the key risks affecting the Company’s financial performance. Towards the end of 2019, there was a strong decline in electricity prices on the wholesale market. Sales of electricity are conducted by the Company in accordance with certain rules limiting exposure to periodic price volatility. In 2019, the adverse impact of lower prices on the results was mitigated by forward sales.
Acquired CO2 emission allowances
The Company purchases CO2 emission allowances in quantities representing the difference between actual emissions and the emissions covered by free allowances it receives. In 2019, the prices of emission allowances were less volatile, after a significant increase in 2018. Purchases of CO2 emission allowances are made subject to specific rules, in particular with respect to the time horizon of the purchase transactions and focus on performance.
Fuel prices
In 2019, the main feedstock used for generation purposes by PGNiG TERMIKA was coal, followed by biomass. The volatility of coal prices on the Polish market was not high in 2019, and in addition the Company used coal purchased under contracts executed in previous periods. Matching the timing of sales of electricity and certificates of origin with the timing of fuel purchases makes it possible to partly to mitigate the adverse impact of rising fuel prices on the Company’s financial performance.
Coal procurement and supply
Coal is purchased by the Company mostly under contracts executed in advance to ensure that strategic coal stocks are maintained above the level required by the Regulation of the Minister of Economy. Coal transport services are purchased in accordance with the Public Procurement Law.
The Company monitors and forecasts the performance of its contracts and the mandatory stock volumes.
Adapting to BAT requirements
With installations adapted to meet the requirements expressly stated in the Industrial Emissions Directive (IED), the next step will be to ensure compliance with emission limits imposed under the decision establishing the BAT Conclusions for large combustion plants. The deadline for compliance is August 17th 2021 or, where an IED derogation applies to an installation, the end date of the relevant derogation period. An investment plan has been developed for the Company to ensure that the emission and technology requirements defined in the BAT Conclusions are duly met. The process of obtaining amendments to integrated permits in connection with the adaptation to the BAT requirements is in the final stage. Also, the implementation of the BAT Conclusions is monitored on an ongoing basis and any doubts as to their interpretation are clarified.

Regulatory risks

Scope of changes and impact of significant regulatory risks on the PGNiG Group
Risk description
Obligation to diversify gas imports
The Council of Ministers’ Regulation of April 24th 2017 on the minimum level of diversification of foreign sources of gas supplies prescribes the maximum share of gas imported from a single country in total gas imports in a given year. In 2017–2022, the share may not exceed 70%. In view of the solutions adopted in the Regulation, the regulatory risk of its breach is low, as is the probability of its materialisation.
European Green Deal
At the time of the issue of the Communication on the European Green Deal, a very ambitious climate agenda of the new European Commission was presented. The Communication explicitly states that the European Commission will seek to phase out financing of fossil fuel infrastructure and to reduce the use of fossil fuels in the long term, in line with the climate neutrality objective.
New EU legislative package for the natural gas market
The European Commission is currently carrying out analyses to identify regulatory gaps for the natural gas sector. The potential new gas package is to consist of regulations on the operation of the natural gas market in the European Union, and rules designed to accelerate the decarbonisation of the EU’s natural gas sector. In this respect, a proposal of regulations is expected which will probably provide for preferential treatment of decarbonised/renewable gases.

Non-compliance risk

Scope of changes and impact of non-compliance risk on the PGNiG Group
Risk description
Non-compliance risk
PGNiG has an organisationally and functionally separated Compliance unit. In line with the compliance risk management model, each area at risk of non-compliance was assigned a dedicated compliance risk area manager (leader), who is in charge of ensuring that compliance standards are met.
Compliance risks (risks of breaching compliance standards) may arise in various areas and may materialise:
  • Immediately as fines, damages, compensation or other liabilities the Company may be required to pay,
  • as damage to the Company’s image, which could also have its financial implications;
  • In the Company’s operations and as a factor affecting the value for stakeholders, including shareholders.

As part of anti-corruption measures, the Company put in place the Anti-Corruption and Gift Policy of the PGNiG Group. In addition, the Ethics and Compliance Management System of the PGNiG Group was adopted, as a result of which the ethics and compliance areas were integrated in the Compliance Department. The Transparency Policy for Managers was introduced, with the principal objective of eliminating the risk of conflicts of interest and lack of transparency in decision-making processes within the Group. In 2019, the PGNiG Group revised and implemented the PGNiG Group’s Code of Ethics, which is based on four values of the PGNiG Group: quality, reliability, responsibility and partnership. The Procedure for Reporting Cases of Misconduct and Handling the Reports at PGNIG was also adopted, setting out the rules for reporting violations of laws, procedures and ethical standards by employees, as well as the procedure for handling such reports.
In 2019, the Company’s compliance risk mapping process was carried out. The risk was assessed for individual areas of the compliance risk, while globally it was found to be low and medium.

Financial risks

PGNiG and the PGNiG Group are exposed to financial risks, including in particular:

  • Credit risk For more information, see Note 7.3.1 to The consolidated financial statements of the PGNiG Group,
  • Market risk For more information, see Note 7.3.2 to The consolidated financial statements of the PGNiG Group,
  • Liquidity risk For more information, see Note 7.3.3 to The consolidated financial statements of the PGNiG Group.

Non-financial risks

Environmental issues

Identified non-financial risk
Method to prevent risk materialisation
Risk of non-compliance with environmental protection regulations
Identify and update applicable legal requirements
Risk of contamination of green areas and transport routes
Designate specific transport routes and supervise transport service providers and vehicles used; supervise hazardous materials.
Risk of incorrect waste sorting
Supervise waste sorting practices, permits held by collectors and operations of waste collection companies; keep day-to-day records; provide and designate waste storage locations; ensure proper marking of containers.
Risk of exceeding the wastewater limits defined in the water permit
Monitor water consumption and wastewater volumes; draw up reports in line with applicable reporting requirements.  
Risk of failure to meet new BAT requirements for the LCP business (Best Available Techniques for Large Combustion Plants) with regard to emission limit values
In order to meet the obligation to adapt installations to the requirements set forth in BAT Conclusions, the Company’s capex plan has been developed to ensure that the emission and technology requirements defined in the BAT Conclusions are duly met.   Timely completion of investments is essential. The process of securing approvals for proposed amendments to integrated permits in connection with adapting installations to the BAT Conclusions has reached the final stage. Also, the implementation of the BAT Conclusions is monitored on an ongoing basis and any doubts as to their interpretation are clarified.
Risk of negative environmental impacts, especially in terms of drilling noise emission
Locate drilling sites at least 250 metres from any buildings; provide noise protection screens; reduce noise emitted by drilling rig equipment.
Risk of invalid permits (or failure to secure permits) required to engage in a business having environmental impacts
Ensure ongoing monitoring of permits by environmental protection services.                                                                                                                           
Risk of failure to supervise the environmental monitoring equipment
Ensure ongoing monitoring of the environmental monitoring equipment.
Risk of delayed verification of the annual CO2 emissions report for EU ETS installations
Adhere to the “Procedure for reporting greenhouse gas emissions covered by the EU Emissions Trading Scheme (EU ETS) and for keeping accounts and acquiring CO2 emission allowances for PGNiG SA’s installations in the Union Registry”.
Risk of delayed reporting or failure to pay environmental fees
Ensure ongoing supervision of timely payment of environmental fees and compliance with environmental reporting requirements.
Risk of an environmental emergency resulting from non-compliance with environmental regulations, equipment and apparatus failures, human errors, errors of judgement, or gas infrastructure breakdowns.
The implementation of the environmental management system in accordance with current external and internal regulations:  Instructions for sozological tests and environmental remediation; Instructions for OHS, fire protection and environmental protection inspections; procedure for environmental aspects identification and assessment; PSG waste management manual; PSG safety manual for handling hazardous substances and mixtures; gas condensate spill procedure; environmental monitoring and measurement manual; procedure in case of emergency, failure, accidents; insurance.
Risk of exceeding emission limits set for fuel combustion pollutants.
Flue gas emissions from the emitters are continuously measured. The Management Board President’s order concerning monitoring of the systems for continuous measurement of particulate and gaseous emissions in accordance with environmental protection regulations regarding responsibility for supervising, inspecting and ensuring reliability of systems for continuous measurement of particulate and gaseous emissions was implemented. In addition, in accordance with the requirements of the Environmental Protection Law, periodic measurements of particulate and gaseous emissions are carried out for equipment (boilers and engines) not covered by the continuous measurement obligation.
Risk of failure to meet the conditions set for industrial noise emissions
Risk identification, periodic noise measurements in the environment.
Risk of incorrect waste management
Environmental inspections and internal audits (including waste management) are carried out, during which areas for adaptation are identified. Procedure ZOŚ-02 was implemented: waste recording and monitoring, waste management instructions and ongoing quantitative and qualitative inspections of generated waste (quantitative waste inspections are carried out to check, among others, compliance with waste volume limits defined in environmental decisions – integrated permits, sectoral permits).
Risk of leakages of substances/oils from tanks and containers as well as from machinery and equipment, potentially causing environmental damage
Risk identification (implementation of procedure ZOŚ-05: identification and investigation of near misses), identification of areas for adaptation.
Risk of non-compliance with legal requirements in managing chemicals used for production purposes
Risk identification; safety instructions for handling chemicals, conditions of chemicals purchase, control of chemicals consumption, and for on-site acceptance/unloading of chemicals have been implemented; environmental inspections to verify if chemicals management is correct are carried out.

Social risks
Risk management and prevention measures
Risk of poor relations with local communities and their impact on the progress of work performed on site
  • Implementation of the CSR strategy
  • Cooperation with local authorities
  • Education and information initiatives intended to provide project updates
  • Interviews with local communities, open/one-on-one meetings, negotiations and mediation
  • Cooperation with non-governmental organisations
  • Addressing real problems of local communities (programmes, projects, support for local initiatives)
  • Contacts with local media
Risk of poor relations with customers
  • Review of agreements in terms of legal compliance
  • Provision of customer service training to employees
  • Compliance with the Code of Ethics
  • Rules and regulations applicable to customer relations
  • Development of modern channels of communication with customers
  • Regular customer satisfaction surveys (PGNiG OD, PSG, PST)
  • Fair communication of information through direct and indirect channels, including the media
Reputational risk – negative publicity in traditional and social media,
  • Internal rules governing contacts with the media and use of social media by employees
  • Building lasting media relations
  • Ongoing monitoring and contact with key journalists
  • Quick analysis and response to negative publicity
  • Ongoing social media monitoring
  • Internal regulations on crisis communication
Risk of exploration work causing inconvenience to local communities
  • Use of new technology solutions. Implementing growth-oriented projects (the innovative nodal seismic data acquisition system, etc.) Given their small size and weight, nodal sensors allow surveys to be conducted in an environmentally-friendly fashion. They help to simplify the logistics of exploration activities, making them less onerous to the environment and local communities
  • Education and information initiatives intended to provide project updates
Risk of conflicts with local communities causing obstacles to mining activities 
  • Fostering cooperation through sponsorship, image-building and CSR projects and events
  • Cooperation with local authorities
  • Education and information initiatives intended to provide project updates
  • Interviews with local communities, open/one-on-one meetings, negotiations and mediation
Risk of misunderstanding the nature of mining activities and their environmental impact
  • Inviting visitors or allowing tours around gas extraction facilities, gas storage facilities, etc.
  • Information meetings with local authorities and local communities.

Employee issues – material risks
Identified non-financial risk
Method to prevent risk materialisation
Risk of employees failing to meet working time limits, undermining their motivation.
  • Employees are rarely required to work overtime. Frequent overtime work may undermine employees’ motivation or their willingness to work, which may lead to employee departures.
  • Thus, the strict rules for regular and overtime hours laid down in the Labour Code, Work Rules and the Collective Bargaining Agreement are applied.
  • Monitoring of overtime work by designated Employees.
Risk of failure to provide appropriate occupational health and safety conditions in a workplace.
  • Implementation of the QHSE, IMS and HSE systems
  • Regular OHS training for employees 
  • Identification of near misses
  • Ongoing supervision during the performance of high-risk work
  • Selection of specific safeguards against hazards
  • Active and proactive measures to improve working conditions
Risk of inadequate working conditions.
  • Implementing and updating procedures and regulations to ensure that adequate working conditions are maintained.
Risk of tampering with reported data in order to avoid disciplinary action or to obtain a bonus.
  • Compliance with the rules laid down in the PGNIG S.A. Code of Ethics
  • Organisational rules of individual PGNiG Group companies
Risk of difficulties in recruiting qualified workforce, especially highly specialised personnel.
  • This risk is mitigated through:
    • the Company’s recognition on the local market
    • a broad range of non-pay benefits
    • the Company’s participation in job fairs
    • recruiting candidates using alternative channels, including: Career Office, OLX website, pracuj.pl and 
    • the internally implemented employee recruitment procedure defining the rules and stages of recruitment process.
Risk of frequent legislative changes and lack of up-to-date knowledge of the applicable regulations and operational procedures.
  • Employee training
  • Employees’ participation in conferences allowing them to learn about legislative changes.
Risk of employees with valuable skills leaving the Company or losing a sense of commitment.
  • To enhance employee competence and commitment, the Company promotes their professional development (by financing studies, training, conferences and foreign language and other courses). In addition, the PGNiG Group offers a broad range of employee benefits and places emphasis on communicating issues that are of key importance to the Company, helping employees identify with their employer. At the same time, a training project for managers is under way to promote tools for increasing employee commitment.
Risk of a limited transfer of knowledge and competencies due to a high retirement rate.
  • Planning employee recruitment, using incentives to encourage employees to announce planned retirement in advance.
Risk of high employee churn driven by labour market conditions, namely higher pay offered outside the PGNiG Group.
  • Monitoring pay rates offered on the market. Motivating employees, including by improving their skills
Risk of different interpretations of labour, tax and social security regulations (e.g. court rulings, audit follow-up decisions, recommendations, opinions/interpretations).
  • Requesting competent authorities and institutions to issue opinions and interpretations 
  • Obtaining legal opinions from the Legal and Compliance Departments
  • Following uniform rules of conduct across the Organisation and communicating them during training sessions for employees and managers, to trade unions, at periodic meetings, and making appropriate changes in internal regulations.
Risk of incorrect estimation of personnel-related needs, both in terms of quality and quantity.
  • Applying solutions that improve the effectiveness of recruitment processes.
Risk of accidents at work occurring due to non-compliance with occupational health and safety regulations and procedures.
  • Workplace inspection
  • OHS training for employees
  • Conducting position training before prior an employee starts work in a given position
Risk of conflicts with trade unions.
  • Regular meetings with social partners.
  • Providing periodic information on the condition and plans of a given company.

Ethical issues – human rights

Identified non-financial risk
Method to prevent risk materialisation
Risk of violation of human rights by employees
  • Ongoing monitoring of the situation and acting in accordance with the PGNiG Group’s Code of Ethics and the anti-mobbing and anti-discriminatory procedure.
Risk of violation of human rights by managers and directors
The Rules of Remuneration strictly defining the principles of remuneration as well as job grading and respective payroll level.
Risk of violation of human rights by external stakeholders
  • Internal and external training provided to managers and directors as well as ongoing awareness and refreshment initiatives in the area of ethics.
  • Acting in accordance with the adopted anti-mobbing and anti-discriminatory procedure.
Reputational risk due to alleged violations of human rights
  • All employees are obliged to act in accordance with applicable labour laws and the Work Rules.
  • Ethical conduct of Management Board members – tone from the top. Use of legal advice in employee-related matters.
Risk of discriminatory behaviour and actions in the workplace.
Guidance and principles adopted under the PGNiG Group's Code of Ethics and Work Rules.
Risk of mobbing.
  • Actions taken by the Ethics and Compliance Coordinator to mitigate the risk of mobbing.
  • Acting in accordance with PGNiG Group's Code of Ethics and the Ethics and Compliance Management System implemented across the PGNiG Group.
Risk of unequal treatment in job promotion.
Acting in accordance with the anti-mobbing and anti-discrimination procedure, the rules for updating job descriptions and job grading, and the procedure for changing the terms and conditions of employment.
Risk of violating employee personal rights, e.g. confidentiality of their personal data.
Implementing, updating and applying personal data protection procedures and policies, IT security measures, and training.
Risk of infringement on the principle of fair competition in contacts with business partners.
Implementing and applying the anti-trust policy and the procurement procedure including the relevant procurement guidelines.
Risk of infringement on the right to freedom of association.
Refraining from any actions which would infringe on the freedom of association in the form of trade unions; an agreement in place regarding the use of employer’s assets by company trade unions.

Ethical issues – counteracting corruption and bribery

Identified non-financial risk
Method to prevent risk materialisation
Risk of employees taking advantage of their position or connections for undue financial or non-financial gain,
Adherence to the adopted anti-corruption procedure, mandatory employee training – especially for sales and procurement staff.
Risk of irregularities in the course of public procurement processes and non-compliance with the principles of ethics and anti-corruption regulations.
  • Employee training.
  • Monitoring compliance with the anti-corruption policy.
  • Standardisation and transparency of procurement procedures.
Risk of employee actions leading to a breach of law by the Company.
Ongoing monitoring of employee activities as part of the Company’s process and procedures; due diligence check regarding subcontractors and business partners providing the Company with services as well as their respective contracts.
Risk of offering or accepting a gift without reporting it in the register of benefits.
  • Increasing employee awareness by communicating the applicable anti-corruption regulations adopted under the PGNiG Group’s Anti-Corruption and Gift Policy.
  • Regular reminders communicated to employees, for instance by electronic mail, of the need to comply with anti-corruption regulations. Employees are required, among other things, to report any gifts accepted or offered.
Risk of offering or accepting any financial or personal gains;         
Compliance with the PGNiG Group’s Anti-Corruption and Gift Policy, in particular by reporting identified incidents of corruption and filing declarations to the effect that no incidents of corruption have been identified. 
Risk of bid rigging.
Compliance with the PGNiG Group’s Anti-Corruption and Gift Policy and conducting contract award procedures through the eB2B Procurement Platform.
Risk of conflicts of interest
Compliance with the principles set out in the Manager Transparency Policy and informing managers of the situations which may lead to a potential conflict of interest.
Risk of unlawful disclosure of any information constituting business secrets, commercially sensitive information, personal data or classified information in the course of procurement processes
Compliance with the PGNiG Group’s Anti-Corruption and Gift Policy in terms of communications with bidders in the course of procurement procedures.
Risk of corruption allegations
Conducting regular internal audits.
Reputational risks in the event of actual or alleged corruption or bribery
Limited powers of attorney to incur financial liabilities in order to minimise the risk of unwanted practices.
Risk of a corrupt employee using the Company’s assets to the Company’s detriment
Implementation of and adherence to the PGNiG Group’s Anti-Corruption and Gift Policy.

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