Compliance officer Message
Dear colleagues,
POSCO INTERNATIONAL Corporation has laid down the Compliance Controlling Standards in keeping with
relevant laws and has continued to carry out compliance controlling activities accordingly. We also
adopted the Fair Trade Compliance Program (or CP) to create a culture of fair trade that is based on
free will so we can prevent unfair practices.
The Department of Legal Affairs updated the Guidebook on Fair Trade Compliance 2022 and introduced the
Fair Trade Compliance Program. It also explains important fair trade laws, along with violation cases,
and provides a checklist of things that we must take note of in future business as a reference.
The Fair Trade Act, in particular, was completely revised and toughened to oversee business activities
more closely than before. Therefore, we must take careful attention for the changing business
environment and potential risks.
I would like to ask you all to take an active part in engaging in more fair and transparent business
activities by embracing these fair trade practices and complying with applicable laws.
Compliance Program(CP)
The Fair Trade Compliance Program is an internal compliance system that is established and operated by
the Fair Trade Commission guide in accordance with the Fair Trade Commission to prevent violations in
advance. It is introduced and implemented on the Dec. 13th 2011
8 Key Factors to Fair Trade
Preparation and practice of CP criteria and process
Provision of CP operation criteria and employees' guidance
Willingness and support of CEO for compliance
Demonstration of interest and willingness by the CEO and all
employees to practice voluntary compliance
Official announcement, both internal and external, of strong
determination of the Voluntary Compliance Manager
Appointment of Compliance officer in Charge of the CP
Appointment of a Compliance Manager with practical
responsibility and authority for Compliance Program
Development and Use of a CP Manual
Preparation of a business-specific manual as an enterprise
guidelines for voluntary compliance with fair competition rules
Upload and distribution of an Manual on internal network
accessible by employees anytime
Education Programs
Provide specific training considering the different positions
and departments
Special sessions provided to departments that are highly likely
to violate laws
Increase effectiveness by special Compliance Trainers
Internal Monitoring System
Form a system that prevents and handles unfair acts
Periodic reporting of supervision activities to the CEO and the
board of directors
Sanctions on executives and staff members who breach the law
related to fair trade
Take disciplinary actions on anyone who violates fair trade laws
according to the company policy depending on the importance of the issue.
Effectiveness Evaluation and Improvement Measures
Awarding to departments and individuals with excellent voluntary
compliance
Implement effectiveness evaluation of overall CP operation
through various methods
CP Operation Results
Anti-Corruption Prevention
Anti-Corruption Compliance Guidelines
Anti-Corruption Compliance Pledge Statement
POSCO INTERNATIONAL Anti-Bribery Compliance Training
Modern Slavery and Human Trafficking Statement of 2023-2024
- POSCO International declares that slavery and human trafficking are strictly
prohibited, and that such acts of human rights violations are never
permitted. The Company will make continuous efforts to respect and protect
human rights in all business activities, and will cooperate with all
suppliers and partners to this end.
- POSCO International will actively work to identify and eliminate the risks
of slavery and human trafficking throughout the Company's value chain. We
will also provide education and training to protect human rights so that all
employees can share and practice their understanding and responsibility for
human rights. These efforts will ensure that the Company's business operates
in a sustainable and ethical manner and will play an important role in
fulfilling the Company's social responsibilities.
- As part of the expression of this will, the CEO of POSCO International
announced the following in the company-wide CEO Message in April 2024.
"The Company complies with the global Modern Slavery Act (MSA) in
the UK and Australia, and is strengthening its management system to ensure
that any form of modern slavery and human rights violations does not exist
in the Company's premises as well as in the supply chain. If we find any
related infringements, we will respond promptly and transparently."
- In accordance with the Modern Slavery Act 2015 of the UK and the Modern
Slavery Act 2018 of Australia, POSCO International publishes 2023-2024
Modern Slavery and Human Trafficking Prevention Declaration. This
Declaration contains the actions and future plans that we have undertaken to
mitigate the risk of human rights violations related to modern slavery and
human trafficking, across our own or managed premises and supply chain.
- As of March 2024, POSCO International's consolidated subsidiaries are 7
domestic companies and 40 overseas companies, a total of 47 companies.
ⅢCorporate Structure, Business and
Supply Chain
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1. Corporate Structure
- POSCO International is an affiliate of POSCO Group, and POSCO
Holdings is the parent company that is the largest shareholder of
POSCO International.
- POSCO International has a total of 47 subsidiaries, including 7
domestic companies and 40 overseas companies as consolidated
subsidiaries.
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2. Business Operation
- POSCO International is a member of the POSCO Group, which has
developed into a global steel company based on constant efforts
toward innovation and technological development. The Company
operates in various fields such as steel, energy, and food, and is
rapidly reborn as a global general business company operating in
various business groups beyond the traditional trading company. We
are expanding our new business-linked investments, including the
various areas mentioned above, and working with domestic and global
suppliers. As of March 2024, POSCO International employs a total of
10,016 employees with 1,698 at the headquarters and 8,318 at
overseas operations, and has more than 100 corporate/branch offices
and networks in 45 countries.
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3. Supply Chain
- POSCO International's main industrial ranges in its supply chain are
steel, steel materials (coal, slag, iron ore, etc.) and secondary
battery minerals (lithium, nickel, etc.), agricultural products
(rice, wheat, corn, etc.), vegetable oil (palm oil), biomaterials
(bioplastics, synthetic rubber, etc.), automobile parts (motor core,
etc.), energy (natural gas, LNG, hydrogen, etc.), and renewable
energy (wind power, solar power, hydrogen, etc.).
- As of 2023, there are a total of 49 countries with approximately
1,700 suppliers (suppliers) providing goods and services to POSCO
International.
ⅣRisk of Modern Slavery Practices
- POSCO International's main business is investment, international trade, and
manufacturing, and it operates manufacturing facilities including natural
gas fields in Myanmar, palm oil farms in Indonesia, and cotton factories in
Uzbekistan. Special attention and protection are needed in our business
areas, especially in overseas manufacturing facilities.
ⅤRelevant Policies and Operational
Guidelines
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1. Company Regulations, etc. Related to the Obligation to Respect Human Rights
- POSCO International has established human rights-related
international standards, such as the UN Guiding Principles on
Business and Human Rights, the UN Global Compact, the Universal
Declaration of Human Rights, and the OECD Guidelines for
Multinational Enterprises and human rights management policies based
on labor principles, as recommended by the International Labor
Organization and ratified by the country.
- The Human Rights Management Policy sets forth the Company's
principle of not only not forcing workers to work against their free
will by means of violence, intimidation, confinement, and other
means of unjustly restraining their mental or physical freedom,
including human trafficking, but also prohibiting the estimation of
compensation for non-performance of labor contracts, not restricting
the status of workers by money lending, and prohibiting additional
compulsory contracts incidental to labor contracts. In addition,
POSCO International prohibits child labor in principle, and underage
labor conditions and minimum working age standards comply with
national labor laws and international standards.
- POSCO International has established a human rights management
process to supplement and improve the weak areas in the mid- to
long-term by regularly checking the status of the company's human
rights management based on the OECD Business Due Diligence
Guidelines, and operates a field-oriented human rights management
process that puts the protection of human rights of all members at
home and abroad as the top priority. Along with external
professional organizations, we have developed a human rights due
diligence checklist based on international human rights norms such
as UN companies and human rights implementation guidelines, and are
conducting human rights impact assessments centered on major
overseas investment sites.
- To emphasize the importance of human rights across the enterprise,
POSCO International has established rules that respect and comply
with internationally recognized global human rights principles and
standards, including the Modern Slavery Prevention Act, in its Code
of Ethics Practice Guidelines, personnel regulations, and local
employment management guidelines.
- POSCO International manages long-term work through supply chain
management, which prioritizes observance of statutory working hours,
guarantee of sufficient leave, fair employment and compensation
without gender discrimination, and protection of human rights and
safety in accordance with the International Labor Organization (ILO)
major conventions and personnel regulations based on domestic labor
laws. The head office introduced the working hours management system
in 2019 to prevent employees from working long hours by restricting
the use of PCs when they exceed the statutory working hours. In
addition, we conducted a survey on overseas investment corporations
equipped with manufacturing and production facilities on the
exploitation of child labor, the performance of harmful tasks for
the vulnerable, including female workers, and the hygiene management
status of employees' accommodations. POSCO International respects
basic human rights and creates a healthy working environment through
these efforts. In 2023, by amending the safety and health
regulations, we are providing a safe and vibrant work environment by
blocking factors that threaten our business activities and the
health and safety of supply chains.
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2. Regulations or Guidelines for the Prevention of Labor Exploitation at the level of Supply Chain
- POSCO International clearly recognizes that environmental and social
issues arising from partners, including human rights violations, may
affect our sustainability. In order to create a robust industrial
ecosystem, we manage supply chain risks based on the POSCO Group's
Supplier Code of Conduct and support the development of capabilities
and the protection of human rights in the supply chain.
- POSCO International's supplier code of conduct ensures that all
companies dealing with us are committed to sustainability and human
rights protection. The Supplier code of conduct consists of 21 items
in a total of 7 categories related to the basic norms in the fields
of human rights, labor, environment and anti-corruption, as set out
in the UN Global Compact. In June 2021, we revised the basic human
rights respect items of our employees among our suppliers' code of
conduct to comply with modern slavery laws in the United Kingdom and
Australia.
- POSCO International has established a supply chain policy,
establishing supplier code of conduct on basic matters concerning
labor rights, environment, safety and health, ethics, and management
systems that suppliers and subcontractors who supply products and
services to companies and their affiliates, joint ventures, etc.
should comply with. In particular, through the Labor Rights section,
we are stating that all suppliers of the Company shall not tolerate
illegal minor labor, human trafficking, forced labor, etc. in
accordance with the UN Guiding Principles On Business and Human
Rights, the Universal Declaration of Human Rights, and the ILO
(International Labor Organization) International Labor Standards,
and shall do their best to respect and protect the human rights,
working hours, and freedom of association and collective bargaining
of all workers, and shall not discriminate against workers on the
grounds of race, nationality, gender, age, academic background,
religion, region, disability, marital status, gender identity, etc..
- POSCO International recognizes the importance of responsible
minerals as a global corporate citizen and intends to join the
international community's efforts to create responsible procurement
practices for companies, such as cooperation in the policy of
responsible minerals from customers and support for responsible
mineral management of suppliers. In principle, we restrict
transactions with suppliers that have a negative social impact, and
we try to avoid using mining minerals in disputed areas. In 2021,
based on the POSCO Responsible Mineral Management Guidelines, a
separate POSCO International Responsible Mineral Management
Guidelines reflecting the characteristics of the industry as a
general business company was established, and through this, a more
effective responsible mineral management system is operated.
ⅥHuman Rights Protection Due
Diligence and Risk Management
-
1. Human Rights Impact Assessment
- POSCO International, along with external professional institutions,
conducts human rights due diligence focusing on overseas workplaces
with production/manufacturing processes, and discloses the results
of human rights due diligence and the status of implementation of
improvement tasks through its annual sustainable management report.
- In 2023, a written human rights survey was conducted at five
overseas workplaces (the gas field, the rice processing centers
(RPC) and the hotel in Myanmar, and the palm farm and the by-product
gas power plants in Indonesia), and details will be disclosed in a
sustainable management report scheduled to be published in July
2024.
-
2. Risk Management at the Supply Chain Level
- Supply Chain Management Process:
POSCO International is building
a company-wide supply chain management system that reflects the
industrial characteristics of global general business companies in
order to proactively respond to the EU's Corporate Sustainability
Due Diligence Directive (CSDDD) and systematically manage the
negative human rights/environment that may occur in the Company's
entire supply chain.
As stated in the 2022 MSA Declaration,
after the merger of POSCO Energy on January 1, 2023, the company
promoted a task that further reflected the supply chain analysis
results of the energy business in its supply chain management
system. Through this, we are reorganizing our policies related to
the supply chain, our criteria for classifying the importance of the
supply chain, and our checklists and guidelines for supply chain due
diligence, and we are establishing a unified supply chain management
system at the enterprise level.
In particular, in the
checklist for written due diligence on the supply chain, a question
was added to confirm whether regular risk assessments were conducted
and there is any case of modern slavery practices and violations of
laws and regulations related to modern slavery to prevent any forced
labor, illegal child labor, or human trafficking in the company's
supply chain.
As of 2023, POSCO International is developing a
cloud-based supply chain management solution to promote practical
prevention and improvement activities against negative human
rights/environmental impacts for approximately 1,700 suppliers with
whom POSCO International is transacting, and is scheduled to
complete it in the fourth quarter of 2024.
- Responsible Mineral Management Process:
POSCO International has
established a responsible mineral policy to express the company's
willingness to use only the mined minerals in a way that respects
human rights and protects the environment by prohibiting the use of
conflict minerals such as 3TGs [Tin, Tantalum, Tungsten, and Gold],
which have served as funds for warlords and anti-government
organizations in African countries such as the Democratic Republic
of the Congo, and minerals such as cobalt, which pose human rights
and environmental issues during the mining process. Based on this,
we cooperate with customers' policies on responsible minerals and
support suppliers' management of responsible minerals.
- Responsible Minerals Management Process of POSCO Group
In
accordance with the POSCO Group's Guidelines for Responsible
Minerals Management, POSCO International restricts transactions with
suppliers that have a negative impact on the environment and
society, and prohibits the trade of minerals mined in conflict
zones. Based on the CAHRA (Conflict Affected and High Risk Area)
criteria, CAHRA targets are selected by investigating relevant
countries and territories, including Africa conflict zones. The
Company conducts investigations on the supplier's management
information and whether or not it has a policy on responsible
minerals to identify possible risk of responsible minerals from the
supplier registration stage. It also determines whether the smelter
associated with the supplier is CAHRA, and verifies that the company
is certified by third-party due diligence from Responsible Minerals
Initiatives (RMI). If the company is judged to be ineligible through
this screening process, it may be excluded from the supplier
registration. The Company obtains consent from registered suppliers
to comply with the Company's Responsible Mineral Policy and confirms
the status of Conflict Mineral Report Template/Cobalt Report
Template (CMRT/CRT) requests and smelter certification.
Furthermore, responsible mineral risk assessments are conducted for
suppliers in transactions, and the results are divided into three
classes: "high-risk suppliers", "controlled suppliers", and "general
suppliers." In the case of high-risk suppliers, we request
professional due diligence from third-party independent
organizations to conduct risk inspection and improvement activities.
If necessary, we actively support suppliers' improvement activities,
such as providing educational contents for responsible minerals, and
confirm that improvement activities are completed within 120 days of
the notification of the results of the due diligence. If improvement
activities are not completed, the supplier may be removed from the
registration pool.
As of 2023, POSCO International does not
engage in any business related to conflict minerals (tin, tungsten,
tantalum, gold) and responsible minerals (cobalt), which are highly
likely to cause modern slavery practices.
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3. Other Due Diligence and Risk Management Measures
- Conducting a Survey on the Labor Environment of Overseas Investment
Corporations:
POSCO International is conducting a survey on
overseas investment corporations equipped with manufacturing and
production facilities on the exploitation of child labor, the
performance of harmful tasks for the vulnerable, including female
workers, and the hygiene management status of employees'
accommodation.
- International Key Organizations Compliance Legal Due Diligence:
In
order to inspect the compliance and legal system of major overseas
business sites, POSCO International has been conducting on-site due
diligence by the Compliance Department of the Legal Office from the
first quarter of 2024. The Compliance due diligence examines the
violation of local mandatory laws by major overseas workplaces, the
status of legal compulsory education under local laws, and the
status of responses related to corruption risks. In particular, we
check the personnel labor system at each workplace to see if illegal
forced labor is being carried out, and we provide awareness-raising
education to prevent it.
- Conducting Integrity Due Diligence and Receiving Compliance
Covenants from Third Parties, including Agent:
POSCO
International is conducting an Integrity due diligence for third
party representatives such as Agent, who interact with public
officials in the process of acting on behalf of the Company or
performing services for the Company. All third parties who wish to
do business with the Company will be subject to Integrity Due
Diligence and will undergo an integrity reputation survey through
external professional institutions. The Company intends to eradicate
bribery, money laundering and other corrupt practices through a
thorough integrity due diligence. In addition, all third party
representatives who do business with the Company must submit a
compliance pledge promising compliance with the Company's Code of
Ethics, Anti-Corruption Compliance Guidelines, and the Company
requires it to be renewed least once every three years.
- Enhanced Investment Risk Management from ESG Perspective:
From
the initial stage of the investment review, it was specified in the
investment management regulations that the proposal department
should consult with the in-house specialized departments on whether
to fulfill the corporate social responsibility to the local
community and reflect it in the investment plan. In the investment
review stage, ESG risk was set as a major investment management
item, the attendance of the in-house ESG department was mandated,
and even if the investment was already in progress, it was possible
to start determining whether the business would continue in the
event of an ESG-related issue.
ⅦGrievance Handling and Employee
Training
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1. Grievance Handling System
- One-Voice Process for Response to ESG Issues:
POSCO
International has established an ESG issue response process for
questions frequently received from various stakeholders to promote
One-Voice response to issues. Received ESG issues are reported to
management and the board of directors through the ESG Council after
the analysis and status check, and One-Voice responses are conducted
according to the response direction established based on the
discussions.
- Operation of Stakeholder Communication Channels:
POSCO
International operates various communication channels for each
stakeholder. (1) In the case of the supply chain, opinions can be
received through the website and e-mail; and (2) In relation to
community members, the local community-level grievance settlement
system is operated, while opinions can also be received through the
website and e-mail.
- Establishment of a New Department to Establish a Corporate Culture
of Respect for People:
In 2023, POSCO International established
the Ethics Management Bureau consisting of five employees in the
Righteousness Management Office, to revitalize the in-house
grievance handling channel.
- Guidance and Promotion of the Internal Grievance Settlement
Reporting System:
POSCO International always guides the
reporting center through an ethical campaign held once a month under
the theme of ethical management/human respect, and has improved
accessibility by attaching QR stickers to work spaces such as office
walls and conference rooms. Regular and class-specific training
always includes relevant content such as regulations and reporting
channels.
- Active Performance of Preliminary Diagnosis and Monitoring of Human
Respect:
POSCO International conducts a monthly survey of all
executives and employees on witnessing/experiencing unethical/human
respect violations through a mobile work app. In addition, for
domestic and overseas officials and executives, the Company conducts
a regular anonymous ethical level diagnosis survey once a year for
subordinated employees.
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2. Improvement of In-house Culture and Training of Executives and Employees
- Translation of Five Major Compliance and Ethics Codes into 10 Local
Languages and Distribution of Educational Videos in Local Languages:
In 2023, POSCO International translated and distributed the code
of ethics, anti-corruption compliance guidelines, conflict of
interest prevention guidelines, workplace sexual harassment
prevention guidelines, and supplier code of conduct out of the rules
of the Company into 10 languages (English, Myanmar, Chinese,
Indonesian, Vietnamese, Uzbek, Portuguese, Spanish, Turkish, and
Ukrainian) in consideration of the location of major workplaces of
the company and compliance risks by country so that domestic and
foreign executives and employees can understand major compliance
codes. In addition, lawyers in each jurisdiction produced 10
local-language educational videos that described five compliance
ethics norms in each local language and distributed them through
e-learning tools to help local executives and employees better
understand and comply with POSCO International's major compliance
ethics norms. The code of ethics includes compliance with the Modern
Slavery Prevention Act.
- Implementation of English Translation of Company Rules and
E-learning Explanation of the Company Rules in English:
The
Company produces online English explanation videos through external
experts on compliance control regulations, ethical norms, and
compensation guidelines for reporting unethical acts and provides
them to all executives and employees.
- Requiring All Employees to Sign an Ethics Pledge:
At the
beginning of each year, the Company seeks a pledge of ethics to all
employees to comply with the Company's code of ethics, to comply
with domestic and foreign anti-corruption and fair trade laws, to
avoid any act that undermines human respect, such as violation of
sexual ethics or harassment, and to prioritize ethics if the
Company's interests and ethics conflict. In 2024, we are extending
the target to G.Staff.
- Procedures for Consultation with the Relevant Departments
The ESG
Strategy Section of the Legal Affairs Office, the Ethics Management Bureau
in Righteousness Management Office and the Corporate Citizenship Bureau,
which are departments related to POSCO International's compliance with the
MSA, held several consultations from 2023 to the first half of 2024 to
collect MSA compliance measures, related all enactments and revisions and
implementation details, shared opinions on preparing measures to comply with
the MSA and writing a declaration, and discussed future human rights
protection due diligence and risk management plans.
ⅨEffectiveness Evaluation and Future
Plans
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1. Effectiveness Evaluation
- Annual Evaluation of the Corporate Ethics Index of POSCO Group
Companies:
In conducting the annual evaluation of the POSCO
Group's corporate ethics index at the level of POSCO, the evaluation
items include the operation of ethical norms and systems, human
respect surveys, and measures to prevent recurrence, and are being
submitted to POSCO for evaluation.
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2. Future Plan
- In the next fiscal year, if there are organizations that need
improvement after conducting an ethics diagnosis of overseas
organizations as before, the relevant organizations and related
departments will be notified of the improvement so that measures can
be taken.
- With regard to the supply chain ESG management structure, the
Company selected a supplier of high business importance in 2023
based on five factors: sales contribution, supplier size, supplier
industry, downstream, and transaction type. The Company plans to
conduct a request for a consent form for the Supply Chain Code of
Conduct and an ESG checklist survey to selected major suppliers
within the supply chain ESG management system.
- We plan to conduct regular due diligence on trading
corporations/branches and investment corporations. When visiting due
diligence, we plan to use a checklist to inspect and report on the
risk of violating modern slavery regulations on the employment
status of trading corporations/branch offices and the institutional
processes of investment corporations.
- We operate external counseling/investigation channels to enhance the
expertise and fairness of ethics counseling/investigation. We would
like to promote ethical counseling for executives and employees by
operating in a way that guarantees more professionality and
confidentiality through linkage with external specialized
institutions.
- We will conduct on-site inspections to check compliance, including
compliance with modern anti-slavery laws, at major overseas
workplaces, and if we find anything to supplement, such as
compliance education or counseling support, we will actively support
it.
This report was approved by the Board of Directors of POSCO
International and signed by the CEO.
June 26, 2024
POSCO INTERNATIONAL Corporation
CEO Gye-in Lee
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