[GRI 3-3] [Own indicator 2] [GRI 206-1]
The Budimex Group does not tolerate corruption, always operates transparently and in compliance with the law, does not breach ethical standards and employs ways to establish relationships with business partners which are fair and consistent with the Group’s internal regulations.
The major areas of legal risks which the compliance system in the Budimex Group prevents include:
- corruption,
- conflicts of interest,
- fraud,
- failure to meet payment deadlines.
The fundamental document of the system is the Compliance Policy, defining general directions and principles of activity which should be followed by all employees and associates while discharging on-the-job and contractual obligations.
In addition, the Group has the following binding documents: Code of Conduct, Anti-Corruption Policy and a set of operating instructions, including Rules of conduct in the event of a proposal to accept a financial benefit or Rules of conduct in the event of a suspected breach of the Compliance Policy and preventing such breaches.
The compliance function was separated in Budimex SA. Mostostal Kraków SA and the FBSerwis Group. The companies adopted the Compliance Policy and also draw up their own internal rules in this area. The regulations in force in the remaining companies of the Budimex Group are coherent with provisions of the Compliance Policy.
In 2023, with regard to any of the companies of the Budimex Group, no legal steps were taken because of violations of free competition principles or anti-trust proceedings.
In the reporting period, an administrative procedure was conducted against Budimex SA by the President of the Office of Competition and Consumer Protection (UOKiK) pursuant to the provisions of the Act on Preventing Excessive delays in Commercial Transactions. The proceeding ended with a decision in which no grounds were stated to impose an administrative fine on Budimex SA.
Mostostal Kraków SA reported in 2023 to the President of UOKiK an intention of concentration involving the acquisition of exclusive control of PPUH Konstalex. As a result of the report, anti-trust proceeding was conducted, which terminated with a favorable decision of the President of UOKiK.
Ensuring compliance in foreign markets
In connection with the expansion of the Budimex Group in 2023, actions were taken to implement compliance principles in foreign markets. Solutions in this area were verified in the Group companies operating abroad with regard to the maintenance of coherence with the compliance system binding in Budimex SA. Special compliance training was also organized, taking into account local legal requirements.
Internal audit
Budimex SA, as a public company, is subject to a number of regulations and best practices imposing high requirements regarding the operation of corporate governance (International Standards of Professional Practice of Internal Audit [1], Best Practices of WSE Listed Companies 2021 [2],Best Practices of Public Interest Entities regarding the Rules for Appointment, Composition and Operation of Audit Committees [3]). The company’s activity also complies with the requirements of the ISO Standards, the Company Production Control and Technical Supervision Office (more information on the topic can be found in Chapter 2.2.). To guarantee compliance with all the above requirements, Budimex SA appointed the function of internal audit.
Internal audit is an independent and objective function designed to help the company achieve its business objectives by introducing a systematic approach to assessing and improving the risk management process, the system of control mechanisms and corporate governance, and by providing assurance on the effectiveness of these processes and advice. The function is performed by the business unit appointed for this purpose – the Internal Audit Department.
To ensure objectivity and independence of the Internal Audit Department, it reports in organizational terms directly to the President of the Management Board of Budimex SA. The Department Director reports to the Audit Committee of the company’s Supervisory Board.
The Department performs tasks through two reporting business units: the Corporate Audit Department, concentrating on providing assurance and advisory services in accordance with requirements of financial markets, and the Governance Systems Audit Department, verifying compliance with the requirements:
- Construction Projects Assessment System,
- Integrated Governance System,
- Company Production Control.
The greatest emphasis in the work of the Governance Systems Audit Department is placed on the Construction Projects Assessment System, developed during long-term practice at the level of the entire Ferrovial Group. With reference to the system, the audit supervision subsumes first of all compliance of construction projects with the standards of Budimex SA with regard to Occupational Health and Safety and environmental protection.
Internal auditors are obligated to perform tasks in accordance with the company’s internal regulations, in particular the Code of Conduct of Internal Auditors in compliance with the wording of the Code of Conduct of the Internal Auditors Institute [4], based on the highest ethical standards.
Anti-corruption
[GRI 3-3] [GRI 205-1] [GRI 205-3]
Implementing the guidelines of the OECD for multinational enterprises, the Budimex Group adopted regulations aiming to prevent corruption which include:
- commitment to prevent the phenomenon of corruption,
- regulation of internal control to prevent corruption, including the establishment of a whistleblowing system,
- commitment to prevent and detect potential corruption events, also through training.
Anti-corruption regulations provide employees of the Budimex Group with clearly defined rules of conduct aiming to avoid events of corruptive nature. The fundamental assumption for the Group’s activity in the area is a zero-tolerance policy regarding corruption.
Additional internal regulations making up an anti-corruption system in the Budimex Group include: Compliance Policy, Code of Conduct, a set of operating instructions, ethical clauses in binding model agreements and Set of rules of conduct for business partners.
In connection with risk analyses performed in the Budimex Group, the following areas potentially exposed to the occurrence of corruption phenomena are identified:
- acquisition of contracts,
- procurement,
- selection of business partners,
- settlements with business partners.
Threats related to corruption are identified during the process of ongoing identification of threats as described in section 6.2. The following threats were identified:
- the risk of adverse consequences for the company resulting from actions which satisfy statutory elements of offenses or infractions related to corruption,
- responsibility of a collective entity,
- reputational and financial losses,
- giving/accepting gifts and presents out of compliance with binding internal regulations,
- conflict of interest which affects decisions being made,
- negligent performance and recording of acceptances of services provided by the company or for the company,
- unjustified expenses following from fictitious invoices,
- falsifying documentation,
- unjustified reimbursements of costs associated with fictitious or overstated business expenditures,
- using the company’s resources for private purposes.
In 2023, through one of the communication channels used in Budimex SA, 1 event of a corruptive nature was recorded. In accordance with regulations in force at the company, an internal investigation was carried out and recommendations were issued and implemented to mitigate the risk of occurrence of similar cases in the future. At the same time, the steps taken by the company clearly confirmed that it applies the zero-tolerance principle to such events, with persons committing breaches to suffer full consequences, including those which follow from labor laws.
At the beginning of February 2023, information appeared at the website of the National Public Prosecution Service about detentions and pretrial proceedings concerning the case of participation in an organized criminal group, money laundering, granting and accepting financial benefits while claiming to have influences in a local government institution and issuing and using fictitious VAT invoices. Among the detained persons, there three (now former) employees of the FBSerwis Group, including the President of the Management Board of FBSerwis SA who was at the same time Management Board member of Budimex SA. Here, we would like to explain that we refer to generally available information in the media because neither Budimex SA nor any of the companies from the FBSerwis Group is a party or a participant to the proceeding and does not have knowledge on a detailed course of the case and its present status.
To the employees of the FBSerwis Group, a preventive measure was applied in the form of pretrial detention for 2 and 3 months (then repealed), as a result of which the FBSerwis SA Supervisory Board decided to suspend the President of the Management Board for 2 months and the Vice President of the Management Board for 3 months. A similar decision was made by the Budimex SA Supervisory Board about the President of the Management Board of FBSerwis SA as a Management Board member of Budimex SA. Then both persons were dismissed from the FBSerwis SA Management Board composition, and the President of FBSerwis SA also from the Budimex SA Management Board composition. All of their employment contracts were also terminated. As at the publication date of this report, the persons no longer remain in an employment relationship with any of the companies of the FBSerwis Group nor in any corporate relationship within the Budimex Group.
What should be emphasized is the fact that the case about which the proceeding is being conducted is not connected with at all nor related to the operating activity of Budimex SA because the company does not do any business activity associated with waste management (including waste collection or processing).
In connection with the pending proceeding, an audit of the companies from the FBSerwis Group was initiated, as a result of which organizational changes were introduced there with regard to decision making and changes in the compliance structure.
The issue of preventing corruption is an important element of compliance training organized by the managerial staff and employees of the Budimex Group – more information on the topic is available in section 6.3.
Management of conflicts of interest
[GRI 2-15]
One of the most important areas of the Budimex Group’s operation is management of conflicts of interest, which is carried out by applying relevant policies. This area is also a material topic from the G area of the company’s ESG strategy.
Issues connected with the management of conflicts of interest are regulated in the Code of Conduct. In addition, operating instructions are applicable in this area, laying down the rules for:
- participating in sponsored events and other events which may be the source of a conflict of interest,
- giving and receiving gifts,
- providing information about employing persons related to an employee.
To manage the risk of conflicts of interest effectively, in 2023, the ESG Strategy adopted by the Management Board provides for expansion of the relevant internal regulations and broadening employees’ knowledge, in particular by preparing a handbook about how to act when a conflict of interest takes or may take place.
Reporting potential irregularities
The whistleblowing system operating in the Budimex Group to report actual or potential breaches of the law and internal regulations is described in the following documents:
- Compliance Policy,
- Code of Conduct,
- instruction Rules of conduct in the event of a suspected breach of the Compliance Policy and preventing such breaches,
- instruction Anti-Bullying and Discrimination.
A whistleblower can remain anonymous and no retaliation measures will be taken against someone who reports irregularities in good faith. In accordance with the Compliance Policy, the management board of a given company from the Budimex Group is notified of all received reports.
At Budimex SA, the following channels are provided for compliance communications:
- compliance emergency telephone number,
- email address for compliance matters,
- electronic platform provided by an external supplier and making it possible to submit reports anonymously,
- direct meetings with the Chief Legal Officer for the Compliance area.
The platform for receiving anonymous reports from whistleblowers ensures secure two-way communication. A whistleblower receives confirmation that the report has been received and its number, and is notified of the outcome of the internal investigation once it has been completed. A detailed analysis of each case, while maintaining confidentiality, is carried out by the Chief Legal Officer for the Compliance area in cooperation with organizational units of Budimex SA.
Reports are not used to undermine the role of legitimate trade unions and other equivalent employee organizations in resolving disputes with the employer. Nor do they prevent or impede access to the courts and out-of-court mechanisms for reporting breaches and reviewing complaints.
Each report is entered in the compliance register, which records the course of the internal investigation and the recommendations issued for further actions.
Employees of Budimex SA are informed about the above communication channels during compliance training. These channels are also indicated in the intranet.
In Mostostal Kraków SA, any breaches should be reported to the compliance policy coordinator through a special email box, in person or through an employee’s supervisor. The coordinator registers and reviews reports and archives them.
The FBSerwis Group, making efforts to maintain the highest operating standards, established diverse opportunities for reporting any breaches.
Reports may be submitted:
- through a special external platform making it possible to remain anonymous,
- to a direct supervisor who is obligated to notify the manager of the compliance department,
- to the manager of the compliance department,
- by sending a letter by post to the address of FBSerwis SA with an annotation “Compliance”,
- by email to special addresses assigned to each company from the FBSerwis Group.
The rules of submitting reports, reviewing and registering them are similar to those in force at Budimex SA.
In all the companies from the Budimex Group, in accordance with the Compliance Policy, the management board of a given company is notified of all received reports.
Grievance mechanisms for third parties
External stakeholders may consult any issues related to the Compliance Policy through general channels used by them to communicate with the Budimex Group. The Group treats with due care any information obtained in that way and provides such information each time to relevant persons responsible for compliance.
Management of negative impacts
Where Budimex Group causes or contributes to a negative impact, e.g. with local communities, it cooperates with the affected parties in remediation measures, whose aim is to prevent similar negative impacts in the future.
[1] Prepared by the Institute of Internal Auditors (IIA) and available at: https://www.iia.org.pl/o-nas/standardy.
[2] Best Practices of WSE Listed Companies 2021 are available at: https://www.gpw.pl/dobre-praktyki2021.
[3] The practices prepared by the Office of the Polish Financial Supervision Authority and are available at: https://www.knf.gov.pl/knf/pl/komponenty/img/Dobre_praktyki_dot_zasad_powolania_skladu_i_funkcjonowania_
komitetu_audytu_konsultacje_24-12-2019_68378.pdf.
[4] The Code is available at: https://www.iia.org.pl/o-nas/kodeks-etyki.
