Contents Letter from the Chief Executive

2 | Code of Conduct | 2013 2013 | Code of Conduct | 3

Dear Colleagues,

We, at ICI Pakistan, have always conducted our business in line with a strong sense of principles. These principles, enshrined in our Code of Conduct, have been part of our phi-losophy and our culture.

This Code is intended to provide you with a clear overview of the obligations that each employee in ICI Pakistan needs to under-stand. In essence, it captures not only the values we live by, but also the company rules and norms already in place. It thereby assists all of us in performing our jobs in accordance with the company’s standards.

As an employee, you have a personal respon-sibility to be aware of the Code of Conduct and to comply with it. You need to know, that should you not live up to its requirements, ICI Pakistan will consider disciplinary action, in-cluding possible dismissal in case of gross negligence. Your manager will also be able to help you answer any questions about inter-preting or applying this Code.

Furthermore, you should bring to the atten-tion of the management any activity which is in violation of ICI Pakistan’s policy or law. To

this end, we already have a Complaint Man-agement System in place which we are all well aware of. We are committed to provid-ing the utmost protection to employees who report a breach or suspected breach of the code. For absolute clarity, we also stress that senior management will not hold manage-ment or employees accountable for any loss of business resulting from compliance with the Code.

Our Code of Conduct is a reflection of who we are and the way we do things. I trust you will support and comply with our Code of Con-duct and I am counting on each employee to fully embrace its content. In doing so, we can ensure that we continue to build a company we can all be proud of.

Regards,

Asif Jooma

Chief Executive

Letter from the Chief Executive Code of Conduct ContentsIntroduction

Our Company

2.1 Business principles

2.2 The environment

2.3 Community support

Business Integrity

3.1 Complying with laws

3.2 Communication and information

3.3 Free enterprise and fair competition

3.4 Fraud, deception or irregular conduct

3.5 Presence in high risk countries

3.6 Child labor

3.7 Forced labor

3.8 Confidential Information

3.9 Conflicts of Interest

Company Responsibilities

4.1 Open communication

4.2 Equal opportunities

4.3 Healthy, safe and secure work environment

4.4 Right to organize

4.5 Collective bargaining

4.6 Participation in political life

4.7 Protection of personal data

4.8 Performance and Management System

Employee Responsibilities

5.1 Media relations and disclosures

5.2 Inside information

5.3 Corporate identity

5.4 Protecting ICI Pakistan’s intellectual property

5.5 Internet use / IT code of conduct

5.6 Business travel

5.7 Substance abuse

Anti-Bribery ContentsIntroduction

Policy

Anti-bribery law in relation to officials

3.1 Essential elements of a bribery offense

3.2 Exceptions to anti-bribery prohibitions

3.2 Penalties for violating anti-bribery laws

3.4 Recognizing red flags

Accounting and record-keeping

Selecting and monitoring agents

Merger and acquisitions process

Gifts and entertainment

Conclusion

Competition Law ContentsIntroduction

Policy

What is competition law?

Contents


This Code of Conduct, which has been approved by the Board of Directors for implementation, contains an overview of key information, including the Business Principles and directives that are relevant to all employees. The Code is a statement of who we are and how we work. Whenever we encounter difficult ethical or legal issues, we need to resolve them in line with our Code of Conduct. This Code is a living document; therefore, it will be updated as required. As an employee, you will be notified of any update(s).

The key sections of this document cover:

• Our Company;

• Business Integrity;

• ICI Pakistan’s Responsibilities; and

• Employee Responsibilities.

Employees should bring any violation of Company policy or law to the management’s attention. To this end, ICI Pakistan has established a Complaints Procedure, which can help you to determine the best way to voice your concerns.

The Company is committed to providing full protection to employees who report a breach or suspected breach of the Code. For clarification, we emphasize that senior management will not hold reporting employees accountable for loss of business resulting from compliance with this Code. Please be aware that in the event of a failure to comply with, or any willful breach of, our Business Principles and Code of Conduct, the Company will consider disciplinary action, up to and including termination of employment.

If you have any questions regarding interpretation or application of the Code, or any other policies or directives of the Company, please consult your manager.

IntroductionThe basics of competition law

4.1 Relations with competitors

4.2 Relations with suppliers, distributors

and customers

4.3 Abuse of a (collective) dominant

position/monopolization

Trade associations

5.1 Matter which should never be discussed

5.2 Matters which may be discussed

5.3 Trade industry statistics

5.4 Trade association meetings

Mergers and joint ventures

Document creation and retention

7.1 Creation

7.2 Retention

Powers of competition authorities

Sanctions

9.1 Public

9.2 Private

9.3 Leniency programmes and whistle blowing

Conclusion

Contact

IT Code ContentsIntroduction

General Principles

Specific requirements

3.1 Information Disclosure and Communication

3.2 Internet / Intranet Use

3.3 Wireless and Remote Access

3.4 Access Rights

3.5 Password use

3.6 Software Use

3.7 Hardware Use

3.8 Mobile Device

3.9 Information Retention

3.10 Responding to security incidents

and malfunctions

3.11 Compliance Process

3.12 Update Process

Competition Law Compliance Policy

Employee acceptance form

As an employee of ICI Pakistan, you are expected to act in accordance with our Company Values and Business Principles, and to comply with company policies, laws and regulations. The Company Values and Business Principles are an expression of our identity and how we want to be perceived by our stakeholders. The Business Principles laid down in this Code of Conduct are intended to be put into practice by all employees on a daily basis.


2.1 Business PrinciplesICI Pakistan aspires to be the first choice of custom-ers, shareholders and employees, by ensuring sus-tained leadership position in the markets where we compete and delivering long-term business value through a high-performance culture of innovation, eth-ics and accountability.

This document sets out the core values that should underlie the conduct of the Company in order to achieve our corporate objectives. The Business Prin-ciples apply equally to all business transactions and to the individual behavior of employees in conducting ICI Pakistan’s business. The Business Principles relate to the overarching behavior of the Company, as well as responsibilities of the Company and its employees for various specific policy areas.

Establishment of these Business Principles leave the Executive Management Team free to specify further policies of business conduct, provided that such policies are consistent with our core values and with safeguarding ICI Pakistan’s reputation. It is the respon-sibility of the Board of Directors and each Business/Functional Head to ensure that ICI Pakistan’s Busi-ness Principles are communicated to and observed by all employees. In addition, ICI Pakistan regards the application of its Business Principles to be of prime importance in making decisions about entering into or continuing relationships with contractors and suppli-ers, and to participate in joint ventures.

The Board of Directors will not hold management accountable for any loss of business resulting from compliance with ICI Pakistan’s Business Principles, and will see to it that no employee suffers as a conse-quence of reporting a breach or suspected breach of these principles.

2.2 CommitmentICI Pakistan is committed to creating long-term value for its customers, shareholders, employees and soci-ety, while recognizing that sustainable profit is essen-tial for the continuity of its business. We will focus our efforts on the success of our customers; therefore, it is our responsibility to provide customers with prod-ucts and services that offer value in terms of price and quality and that meet strong health, safety, and environmental standards. In order to provide competi-tive returns on our shareholders’ investments, it is our responsibility to take due account of the expectations of our investors.

ICI Pakistan protects the environment by preventing or minimizing the environmental impact of its activities and products through appropriate design, manufac-turing, distribution and disposal practices. Likewise, the Company expects all employees to play a role in protecting the environment. If an employee becomes aware of any violation of environmental law by the Company, or any action that may appear to conceal such a violation, the employee should immediately report the matter to his or her manager. If escalation is required, the employee may report the matter to ICI Pakistan’s General Counsel via the Complaints Pro-cedure. ICI Pakistan seeks to spread awareness for health, safety and environmental concerns to its sup-pliers and customers through a product stewardship management system.

As a socially responsible corporate citizen, ICI Paki-stan supports community activities. The Company will provide employees with the opportunity to play an active role in societal matters, such as involvement in community and educational programs, unless partici-pation in these activities creates a conflict of interest. Further, ICI Pakistan and ICI Pakistan Foundation’s community programs provide the means to support such programs provided employees are personally involved. Employees are therefore encouraged to actively participate and propose community develop-ment projects to the Company for support.

Our company3.1 Complying with lawsICI Pakistan’s policy is to comply with all laws and regulations that apply to its business. When conducting Company business, employees may encounter a variety of legal and/or regulatory issues, particularly in the areas described below. If there are questions on specific laws or regulations, please consult the General Counsel.

3.2 Communication and informationICI Pakistan recognizes the impact they have on their stakeholders and the public role they fulfill in view of the Company’s scope of activities, for which proper communication is essential. Subject to any overriding considerations of confidentiality, we endeavor to communicate with others in an open, factual and timely manner.

3.3 Free enterprise and fair competitionICI Pakistan supports the principles of free enterprise and fair competition. The Company aims to meet customers’ needs faster, better and more distinctively than its competitors. To this end, we will compete vigorously but fairly, and within the framework of applicable competition laws.

3.3.1 Competition law compliance

ICI Pakistan will compete for business. The Company expects its employees to compete lawfully and ethically as well. For this reason, we operate a strict policy of ensuring that our operations around the world are in full compliance with all applicable competition laws and the ICI Pakistan Competition Law Compliance Manual.

3.3.2 Dealing with suppliers

ICI Pakistan will endeavor to do business with partners who endorse our ethical values, as well as our social and environmental standards as formulated in our Business Principles. The Company regards the application of its Business Principles to be of prime importance in deciding to enter into or to continue relationships with suppliers and contractors.

3.3.3 Payments

Bribery

Bribery and any other forms of unethical business practice are prohibited. Under no circumstance shall any ICI Pakistan officer, employee, agent or representative make, offer, promise or authorize any payment or gift, in relation to the Company’s operations to gain any business advantage, influence the policy of any government, or that bears the appearance of impropriety.

Please understand that an offer alone, without actual payment, shall also be considered a violation of ICI Pakistan’s policy and the law.

Commission payments

The rule prohibiting bribery in any form may not be circumvented by commission payments. Any commission payment should be justified by a clear and traceable service rendered to ICI Pakistan. The remuneration of agents, distributors and commissioners cannot exceed normal business rates and practices. Government officials shall not be appointed by ICI Pakistan as agents, distributors or commissioners.

Facilitation payments

Facilitation payments are small payments made in money or in kind (for example, ICI Pakistan

Business integrity


products) to officials, in accordance with publicly-known or widely-followed local customs, to expedite performance of routine government actions (for example, processing a required government license).

The Company promotes measures to eliminate such practices and requires compliance with all applicable laws and regulations. For clarification as to whether a particular payment constitutes a facilitation payment, and whether the payment is legally allowed, please consult the General Counsel. In Pakistan, facilitation payments are strictly prohibited.

Recording of payments

All payments must be recorded in the appropriate ledgers in accordance with the Company’s accounting principles and all applicable local laws. Secret accounts and/or book keeping outside Company accounts are strictly forbidden. No payments will be channeled through an agent unless they form part of normal agency fees or reimbursement for incurred costs. Apart from petty cash transactions, cash payments to third parties are not permitted; all payments should be made to a bank account designated in writing. Payments to so-called numbered accounts are not permitted. A request by a contract Partner to divert a payment to an entity or person onshore and offshore must always be rejected.

All business transactions shall be accurately and completely recorded in accordance with our accounting principles and local laws, and may be subject to audit. Any information material to a transaction must be recorded. ICI Pakistan’s records should be designed to prevent off-the-books transactions such as kickbacks and bribes. Accordingly, employees must follow all applicable standards, principles and laws for accounting and financial reporting. No employee should establish an undisclosed or unrecorded account on behalf of the Company for any purpose. In addition, false or artificial entries are not to be made in the books and records of ICI Pakistan for any reason.

3.3.4 Money laundering

ICI Pakistan will neither enter into, nor tolerate, any arrangement which facilitates, or which appears to or is suspected to be used to facilitate, any acquisition, retention, use or control of any property or money intended to disguise the proceeds of crime.

3.3.5 Gifts

No personal gifts or favors of any material commercial value can be made to, or accepted from, a third party. A gift or favor of material value is defined as an object with such a value that it may influence a buying decision and/or may lead to a relation of dependency. In case of any doubt, a superior must be consulted.

Corporate gifts, including gifts on social occasions, may be acceptable. Any gift, given or received, with a value of Rs 10,000 or more must be reported to the General Manager Human Resources.

In every unit/department of the Company, there must be complete transparency between subordinates and superiors with respect to business gifts.

3.4 Fraud, deception or irregular conductAnyone who detects or suspects a case of fraud, deception or irregular conduct shall immediately inform the superior of the directly responsible manager. The mandatory action for this superior is to contact the Company’s Internal Auditor and Corporate Legal Department to determine the action required.

Definitions:

Fraud – the deliberate misappropriation, falsification, omission, or removal of data, money and/or goods whereby resources or assets are unlawfully diverted to or from the Company.

Deception or irregular conduct – the deliberate provision of incorrect, incomplete and/or unclear information, or the violation of the contract of

employment, the corporate directives or other rules in ways not included under fraud, with the result that financial information and/or decision-making is improperly influenced or affected.

These are not intended to be exhaustive definitions and all offences constituting fraud and/or deception under the applicable laws will also be included.

3.5 Presence in other countriesICI Pakistan believes that our activities provide the opportunity to improve the living standards and welfare of a broad cross-section of the communities in which we operate.

Among our Business Principles is the belief that we will support fundamental human rights in line with the legitimate role of business. Therefore, no one other than the Board of Directors may decide upon the creation of a company (new legal entity), including direct entry into countries where ICI Pakistan has no presence. Further, ICI Pakistan’s business units must comply with economic sanctions imposed by the UN. The conditions and timeframe for withdrawal from such a country have to be decided by the Board of Directors. In exceptional cases, typically after dialogue with stakeholders, the Board of Directors may decide that our presence in a high risk country remains justified for the good of the population.

3.6 Child laborChild labor refers to a type and intensity of work that hampers children’s access to education, damages their physical and/or psychological health and their development within their families, and deprives them of their childhood or their self-respect. Therefore, ICI Pakistan employees must adhere to the following:

• The legal minimum age requirements must be followed in all countries in which the Company is active.

• In accordance with the International Labor Organization’s (ILO) Convention 138 on “Minimum Age,” and Convention 182 on the “Ban of Worst Forms of Child Labor,” ICI Pakistan does not employ children under the age of 16.

• If children between age 16 and 18 are employed, the company ensures that this work does not affect or preclude schooling.

• Business unit management is responsible for ensuring disbursement of ICI Pakistan standards with regard to child labor to key suppliers and contractors.

3.7 Forced laborICI Pakistan will under no circumstances make use of forced labor. The Company will only employ individuals who are working of their own free will. No employee is required to lodge deposits and no individual will be deprived of identity papers upon commencing employment with the Company. Business unit management is responsible for ensuring disbursement of ICI Pakistan standards with regard to forced labor to key suppliers and contractors.

3.8 Confidential InformationAll information obtained at work should be considered confidential and should not to be divulged, unless it is freely and publicly available. With this definition in mind, it is clear that ICI Pakistan employees at all levels are regularly exposed to confidential information, i.e. information about our business, our customers and the products we produce and sell.

3.9 Conflicts of InterestICI Pakistan’s employees must at all times act in the Company’s best interest and avoid putting themselves in a position where their personal interest conflicts with that of the Company. Conflicts of interest may


4.1 Open communicationOpenness, integrity, and reliability are essential to foster bilateral communication between employee and superior in all aspects of the working environment. In principle, all employees are encouraged to discuss issues with their immediate supervisor, or when communication with the immediate supervisor is constrained, with the immediate supervisor’s manager.

Where communication through the employee’s hierarchical reporting line may not be a viable option, any employee may use the Company Complaints Procedure to highlight the issue to senior management.

CompanyResponsibilities

4.2 Equal opportunitiesICI Pakistan is committed to creating an attractive working environment for our employees. The Company will recruit, hire and promote employees solely on the basis of merit and suitability for the job. Suitability will be determined utilizing only objective and non-discriminatory criteria. The Company is committed to facilitating employees’ individual and professional development through training/learning opportunities, as well as mentorship from departmental management.

ICI Pakistan’s managers are expected to possess the flexibility to act with due regard for existing differences in individual quality, personal ambition, national culture and organizational interest. They should feel challenged to manage such differences.

4.3 Healthy, safe and secure work environmentThe Company shall provide a safe and healthy work environment, in order to prevent harm to and promote the health and wellbeing of all employees and other stakeholders. In order to do so, Health, Safety and Environment (‘HSE’) programs, rules and regulations apply at all sites. It is the responsibility of each employee to comply with HSE regulations. The Company shall endeavor to reduce and prevent injuries in the workplace.

The Company seeks to adapt work to the capabilities of all employees in relation to their physical and mental health. Care and support should be integral to the response to employees with disability or chronic illness. All employees should have access to affordable health services. In areas with a high prevalence of HIV/AIDS, access to locally available voluntary and anonymous counseling and testing should be encouraged and supported.

No harassment or discrimination of any kind will be tolerated, including discrimination based on race, color, sex or religion. In case of disability or chronic illness, including HIV/AIDS, employees should be able

be based on several factors and can arise in various ways; however, the following are some clear conflicts of interest that must be avoided in all circumstances:

• Making personal gains, other than authorized salary and benefits, at the Company’s expense.

• Participating/assisting in activities that compete with the Company’s business activities.

• Simultaneously working for a customer or supplier of the Company.

• Holding any ownership interest, directly or indirectly, in a customer, supplier, distributor or competitor of ICI Pakistan.

If at any time an employee finds himself/herself in a position that involves, or appears to involve, a conflict of interest, he/she must immediately inform his/her manager.

to work for as long as medically advisable, provided the employee is fit for appropriate work. Disability and chronic illness are not cause for termination of employment. In all circumstances, employees should be allowed to retain their employment in so far as they are able to fulfill the requirements of available and appropriate work.

4.3.1 Disclosure of medical information

Asking job applicants or employees to disclose personal medical information (e.g. pre-employment HIV testing) beyond the medical data required to ensure suitability for the job is not encouraged. Job applicants may be asked to disclose medical information as per Company policy. All personal medical information is treated as confidential.

4.4 Right to organizeICI Pakistan recognizes the freedom of employees, in accordance with applicable law, to establish or join an organization of their choice, including trade unions, and will respect this right. The Company will not make the employment of a worker subject to a condition that he/she shall not join a union or shall relinquish trade union membership. The Company will not dismiss or otherwise prejudice a worker for the mere reason of trade union membership.

4.5 Collective bargainingICI Pakistan respects, within the framework of applicable laws, regulations, prevailing labor relations and employment practices, the right to be represented by trade unions and other employee organizations. The Company will engage in the negotiation/consultation process, either on its own behalf or through employers’ associations, whenever applicable. Local rights and co-determination will be fully respected with a view to reaching agreement on employment terms and conditions.

4.6 Participation in political lifeICI Pakistan will not make any financial contributions or donations in kind to political parties or their institutions, agencies or representatives. The Company will not facilitate political donations by employee action committees.

4.7 Protection of personal dataICI Pakistan recognizes the importance of protecting personal data and has committed itself to maintaining our employees’ privacy. Personal data includes employee names, home addresses, performance appraisal data, etc., and ICI Pakistan shall only process personal data for specified purposes in accordance with our principles.

4.8 Performance and Management SystemThe Performance & Management system is ICI Pakistan’s performance appraisal program. It supports a common process, terminology, and tools, and focuses all employees and managers on an ongoing dialog on performance and development. The use of this program is part of our culture and a responsibility of all employees that are in supervisory and/or management positions.


a listed company’s results of operations or other affairs that would, if generally known, be expected to have an impact on such company’s share price. This informa-tion is illustrated by, but not limited to, the following examples:

• Information on earnings

• Merger and acquisition deals

• New products with a potentially important corporate/financial impact

• Letters received from government agencies with a po-tential/qualified impact

• Changes in control or management

• Changes in auditors or their opinion

• Events regarding securities

• Bankruptcies

• Dispute resolution or litigation

ICI Pakistan employees becoming aware of informa-tion which might be price sensitive with respect to the Company’s stock must make sure that such informa-tion is treated strictly confidentially and not disclosed to any colleagues or to third parties other than on a strict need-to-know basis.

In case of disclosure to third parties, such as advisors to ICI Pakistan, disclosure is only permitted, other than under applicable law, provided that such third parties, by law or contract, are bound by appropriate non-dis-closure and non-use restrictions. In addition, potentially price sensitive information pertaining to the Company’s stock must be brought promptly to the attention of the CFO or Company Secretary, who will deliberate on the need for public disclosure. Only the Board of Directors will decide on such disclosure. In case of doubt, seek contact with the CFO or the Company Secretary.

For practical purposes, it is noted that the same obliga-tions apply to the securities of a third party with respect to which ICI Pakistan employees have inside informa-tion.

Any violations or unintended deviations from this direc-tive must be reported to the CFO or the Company Sec-retary.

5.3 Corporate identityTo ensure a consistent and effective corporate identity approach worldwide, the rules published in the Corpo-rate Identity Manual should be strictly adhered to. Any deviation from the corporate identity rules must be sub-mitted to the ICI Pakistan Corporate Communications and Public Affairs Department for approval before be-ing implemented.

5.4 Protecting ICI Pakistan’s intellectual propertyICI Pakistan has acquired and developed valuable intel-lectual property, including patents, trademarks, copy-righted works, and trade secrets, including confiden-tial, technical or business information. Employees have a responsibility to protect these assets. The Company may choose to protect inventions or creative expres-sions through patents, trademark registrations or copy-right. The transfer of patents, trademarks or copyright-ed works is subject to approval by the General Counsel and contractual safeguards.

Employees should only disclose confidential informa-tion on a need-to-know basis and take measures to avoid unauthorized disclosure, such as by securing access to confidential company records. Disclosing confidential information to third parties, other than dis-closure required under the law (i.e., to auditors, etc.) is subject to management approval and a non-disclosure agreement. Ideas or confidential information from third parties should not be received or used unless the ap-propriate safeguards are in place. The General Counsel must be involved in any transfer or dispute related to intellectual property. In any event, no statement regard-ing the validity, scope, or enforceability of intellectual property rights should be made without consultation with the General Counsel.

5.5 Internet use / IT code of conductAs a general rule, all IT related resources and facilities are provided only for internal use and/or business-related matters, and not for personal use. IT facilities which have been provided to employees should never be used for personal gain or profit, should not be mis-used during work time, and remain the property of ICI Pakistan. Disclosure or dissemination of confidential or proprietary information regarding ICI Pakistan, its prod-ucts, or its customers outside the official communica-tion structures is strictly prohibited.

IT related resources and facilities should not be used in any way that is unethical or illegal, or that could em-barrass, defame, misrepresent, or convey an unjust or unfavorable impression of ICI Pakistan or its business affairs, employees, suppliers, customers, competitors, or stakeholders. Unauthorized access to information and information systems is prohibited; access must be authorized by the owners of the information and in line with the user’s job description.

Information systems can be secured by personal pass-words and/or additional authentication means like hardware tokens; users must use these in a responsible way, keeping them personal and securing them against misuse. Any installation, change, removal, or personal use of software provided by ICI Pakistan or available on the Company’s Information Systems must be autho-rized and managed by the Corporate IT Department.

In order to prevent theft, loss or unauthorized use of information and systems, a user has to take measures to ensure the physical security of hardware provided such as laptops, phones, tokens, USB sticks, etc. To protect the availability of company data, users have to secure relevant business information in a timely man-ner, by making back-ups or storing data on network drives. Information Security related incidents or viola-tion of Information Security principles must be reported to the Head of IT or Information Security contact. Pos-sible evidence should not be tampered with. Every em-ployee is required to be familiar, and to comply, with the Information Security policies and procedures. The Company reserves the right to review the activities per-formed by the user using company-provided IT facili-

EmployeeResponsibilities5.1 Media relations and disclosuresTo ensure a uniform level of information and to protect commercially sensitive information, financial details re-leased to the media should never exceed the level of detail provided in ICI Pakistan’s quarterly and annual reports or official statements issued at the presentation of these figures.

As regards topics such as financial performance, ac-quisitions, divestments, joint ventures and major in-vestments, no information should be released to the press without prior consultation with the Corporate Communications and Public Affairs Department.

Contacts with media about social, environmental or fi-nancial issues that may affect the image of the compa-ny should be brought to the attention of, or discussed with, the Corporate Communications and Public Affairs Department beforehand in order to avoid conflicting messages on behalf of the Company.

Employees should not make statements that might make third parties capable of “insider trading” on the stock market (see below).

5.2 Inside informationICI Pakistan employees may become aware of informa-tion about ICI Pakistan that has not been made pub-lic. The use of such non-public or “inside” information about ICI Pakistan or another company other than in the normal performance of one’s work, profession or posi-tion is unethical and may also be a violation of law. In most jurisdictions, it is unlawful for any person who has “material”, non-public information about a company to trade the stock or other securities of such company, including options, puts, calls, and any derivatives, or to disclose such information to others who may trade. Violation of such laws may result in civil and criminal penalties and other sanctions.

ICI Pakistan will not tolerate the improper use of inside information regardless of whether or not it is unlawful. Inside information may also be share price sensitive. Share price sensitive information is information about


ties. In such cases, the Chief Executive will be asked for authorization and applicable local law will be observed at all times.

5.6 Business travel5.6.1 Safety while traveling

The safety of employees while on a business trip is of vital importance to ICI Pakistan. The Company pub-lishes an updated list of those countries where travel may be hazardous for health or security reasons, and encourages the traveler and his/her supervisor to exer-cise good judgment when determining whether travel to a high-risk area is necessary.

5.6.2 Combining business trips with personal mat-ters

It is not permitted to combine business trips with a va-cation or to take along spouse, relative or friend without the prior written authorization from the general manag-er of the business or function.

5.6.3 Air travel

Domestic flights

Domestic flights are generally to be made in the lowest available class except as provided in the ICI Pakistan policies and procedures.

International flights

Business class or equivalent is the highest class al-lowed. Exceptions to this rule require prior approval from the Chief Executive. For further details, please re-fer to the relevant ICI Pakistan policies available from Human Resources.

5.6.4 Hotels

ICI Pakistan has contracted a number of preferred ho-tel chains in major cities where the Company regularly conducts business. Travelers must generally use these preferred hotels when available as per the Company’s policies.

5.6.5 Travel by own car

A private car can only be used for a business trip if the owner’s car insurance is adequate. The maximum dis-tance for a business trip with a private car is 500 km one way and the costs will not exceed the lowest pos-sible airfare and /or high-speed train fare, depending on the destination. Moreover, personal safety must be taken into account at all times.

5.6.6 Train

For travel by train, tickets can be booked first class.

5.6.7 Security

The Company shall decide upon restrictions in business travel for all employees and/or measures to be taken to safeguard the safety of expatriates and their families in situations of political instability or other threats to public security (e.g. acts of terrorism).

The Security Manager shall communicate such restric-tions and/or measures to business managers, function-al managers and corporate staff. These managers shall be responsible for disseminating information in their organizations and for the implementation of security measures.

5.7 Substance abuseSubstance abuse can have devastating consequenc-es at any work place, especially at a production site. Therefore, the use of any illegal drugs on Company premises is strictly forbidden. Illegal drugs include all drugs except prescribed and over-the-counter drugs that have been legally obtained and used only for the purpose for which they were intended.

Employees who violate this policy may be subject to disciplinary action.

The purpose of this manual is to:

• set out ICI Pakistan’s policy against making improper payments or inducements; and

• provide basic guidance to all ICI Pakistan employees with regard to anti-bribery laws and practices.

At ICI Pakistan, our Code of Conduct applies equally to all of our business transactions throughout the world and to the individual behavior of employees and agents in conducting the Company’s business. ICI Pakistan insists that each of its business operations transact business fairly and with integrity.

Accordingly, bribery and any other form of unethical business practice are prohibited. Bribery not only violates our code of conduct, it violates the law. Throughout the world, the laws of various countries prohibit bribery of government officials, bribery of foreign government officials and bribery of customers or other business relations.

Bribery of customers or business partners, even where the actual payments are carried out by a third party such as an agent or distributor, are prohibited. Over the last thirty years, governments around the world have taken great strides to reduce official corruption. Now, most countries have adopted domestic laws prohibiting improper inducements to foreign officials. In recent years, national authorities have increased their enforcement activity regarding foreign corrupt practices. The number of actions taken against companies and individuals for bribing foreign officials has risen. Further, several countries, like the United States and most EU countries have criminal or other sanctions for entities and individuals that violate anti-bribery laws.

Introduction

Anti-Bribery Compliance Manual

All ICI Pakistan personnel are expected to conduct company business in a legal and ethical manner. ICI Pakistan should not use illegal payments, bribes, kick-backs or other questionable inducements to influence government policy or any business transaction. The use of Company funds or assets for any unlawful, improper or unethical purpose is prohibited. In the conduct of business, all employees must avoid making payments that are, or may be perceived to be, improper. Specifi-cally, ICI Pakistan prohibits bribery by any of its em-ployees or agents.

This policy extends to all of the Company’s domestic and foreign operations, without exception, including operations conducted by any of ICI Pakistan’s depart-ments, subsidiaries, affiliates, agents, distributors, con-sultants or other representatives, and to the operations of any joint venture in which the Company is a partici-pant.

Neither this manual nor local compliance training will provide definitive answers to all questions regarding anti-bribery legislation. The aim of this manual is to pro-vide employees with the basic knowledge they need to identify potential bribery issues. Accordingly, if you have any doubts as to the scope of applicable laws or if you need more specific information, you should contact the Corporate Legal Department immediately.

Anti-bribery law in relation to officialsIn recent years, over thirty countries have enacted an-ti-bribery laws to combat public corruption. Although subtle differences exist among the various anti-bribery laws around the world, the similarities allow companies to guide their actions and establish policies prohibit-ing the bribery of officials. This section of the manual will outline the specific aspects of ICI Pakistan’s policy against making improper payments or inducements to officials, and explain the various intricacies of anti-brib-ery legislation worldwide.

Policy


ICI Pakistan employees frequently come into contact with foreign and local officials. Often, Company per-sonnel must communicate with officials regarding a government contract, proposed legislation, or licens-ing and other required government approvals, e.g. cus-toms clearance, business licenses, safety/environmen-tal permits, tax-related matters, etc. In some countries, government officials may explicitly request improper payment in connection with, or in furtherance of, these communications. Compliance with anti-bribery laws and practices in these situations is paramount.

3.1 Essential elements of a briberyoffenseStated simply, anti-bribery laws prohibit a person or a company from making an improper payment to an offi-cial to obtain or retain business. Most anti-bribery laws, however, are quite broad and are designed to prohibit any type of inducement intended to circumvent their terms. The essential elements of anti-bribery laws relat-ing to officials are:

• a payment, offer, or promise of;

• anything of value;

• to any:

- official;

- political party or party official;

- candidate for political office;

- official at a public organization; or

- immediate family members of the foregoing or any person while knowing that all or part of such payment will be passed on to any of the people described above;

• for the purpose of:

- influencing an official act or decision of that person;

- inducing such person to do or omit to do any act, in

violation of his or her lawful duty;

- inducing such person to use his influence with a gov-ernment to affect or influence any government act or decision; or

- securing any improper purpose.

• In each case, to assist in obtaining or retaining busi-ness for or with, or directing any contract or business to, any person.

The following parts of this section will describe in more detail the elements listed above. It is important to note that the terms above are intended to be inclusive and, accordingly, governments will interpret these provi-sions widely.

Payment, offer or promise

Most international anti-bribery laws including Pakistani laws, prohibit an individual from making, offering or promising an improper payment to an official. Accord-ingly, in most cases it does not matter whether the im-proper inducement is actually transferred to the intend-ed recipient. Further, the public official need not accept the improper payment or even communicate that he or she intends to accept it. Rather, the mere offer or promise of an improper payment to a public official falls within the category of prohibited conduct.

Anything of value

Enforcement authorities have placed few, if any, limita-tions on what can be construed as “anything of value.” In addition to cash or some other form of monetary con-sideration, almost any form of direct or indirect benefit can constitute something of value. Examples of consid-eration that may violate bribery laws include inter alia:

• travel arrangements;

• meals;

• Company promotional items;

• contributions to charity at the direction of a public of-ficial;

• providing employment to a family member of a public official, where such employment is not provided on the basis of merit, qualification and through the Company’s hiring process;

• granting a scholarship to the family member of a pub-lic official; or

• tickets to sporting events

Please note that the list above only constitutes exam-ples of potentially improper inducements and in no way limits the scope of anti-bribery prohibitions.

Further, “value” may depend on the circumstances that exist in the country in which the official resides. In a country of limited means and resources, a seemingly minor offer, gesture or gift may be rather significant and violate the law. Most laws do not contain a de mini-mis exception that would exempt small payments from their prohibitions, so attention must be paid to any of-fers made to an official, no matter how small.

Official

As with most provisions of anti-bribery laws, the defini-tion of the term “official” is broad and includes officials (and prospective officials) from all branches, depart-ments, agencies, units and instrumentalities of govern-ment, including state-owned or controlled companies. For purposes of this policy, an “official” includes any person acting in an official capacity for or on behalf of a government or government entity, any public organi-zation, any political party or party official, or any can-didate for public office. The prohibitions also include all levels of government official, from Presidents and Prime Ministers to low-level government employees and the immediate families of all such persons, without regard for whether the official or family member has the capacity or ability to influence an official decision. This would include, for example, a clerk in the customers of-fice or any other agency approving permits of any kind. Furthermore, it does not matter whether the public of-ficial is paid or unpaid.

In certain regions of the world, it will of course be dif-ficult to determine whether an individual is or is not a public official, particularly in countries that have expan-sive royal families. To remain in compliance with anti-bribery laws, you should always assume that any indi-vidual with any connection to a government or ruling family is an official subject to anti-bribery prohibitions.

As stated above, the anti-bribery laws also apply to state-owned enterprises or private companies predom-inantly used by governments. Accordingly, the term “of-ficial” can often mean an individual who does not per-form a traditional governmental role. Frequently, these officials are employed by a commercial enterprise that is either government-owned, controlled or operated. Anti-bribery laws also cover improper payments to em-ployees of “public organizations.” Examples of such organizations include, but are not limited to, the World Bank, the International Monetary Fund, the Organiza-tion of American States, the European Space Agency and the Hong Kong Economic and Trade Offices. Over time, the number of organizations that will qualify as public international organizations will increase In addi-tion, the anti-bribery laws prohibit both direct and in-direct payments to officials. Thus, ICI Pakistan can be liable for improper payments made (i) by its agents, dis-tributors or other business partners, or (ii) to advisors, consultants or others acting for the foreign government, who pass on all or part of a payment to a foreign offi-cial. Accordingly, no ICI Pakistan employee may make, promise or authorize a payment to a third party, such as an agent, distributor or a consultant, who, in turn, is likely to pass all or a portion of that payment improperly onto an official, or where one of the “red flags”, dis-cussed below, is present.

Due to the breadth of the term “official”, please consult ICI Pakistan’s Corporate Legal Department if you have any question or doubt as to whether an individual quali-fies as an official.

Influencing an official act

The quid pro quo element of most anti-bribery laws requires that the improper payment occur in exchange for some sort of official action or inaction. Accordingly,


through an improper inducement, no ICI Pakistan em-ployee may seek to:

• influence an official to perform some act in his official capacity;

• influence an official to refrain from acting in his official capacity;

• incentivize the official to affect an act or decision of his or her government; or

• secure any improper advantage.

It is critical to note that the action being induced through the improper payment need not relate to the official’s own government. As long as the action being influenced relates to the official capacity of the official, the ultimate purpose need not relate to that official government or to any government at all. For example, if the President of a country, upon receiving a bribe, telephones that country’s largest corporation and asks that corporation to buy products from ICI Pakistan, we could be in violation of anti-bribery laws.

Obtain or retain business

Anti-bribery laws prohibit an individual or entity from making or offering inducements to an official where such inducements will assist the individual or entity to obtain or retain business. This provision is very broad and is not limited to business that an entity may receive from a government.

The term “assist” is broad as well. An action by an of-ficial can “assist” a company by simply making the eventual realization of one of the company’s goals more likely. For example, a payment that permits a compa-ny to circumvent a quota, bypass a licensing require-ment or receive lower taxes may violate the anti-bribery laws. Further, the official need not be directly involved in awarding or directing business. Any action or inac-tion by an official that would benefit the inducer’s busi-ness interests would typically fall under the prohibitions of various anti-bribery laws. For example, an improper payment that influenced an official to help pass a law that helped a company may constitute an illegal bribe.

The expanse of the phrase “obtain or retain business” is meant to cover almost any business advantage a company could receive improperly. Accordingly, all ICI Pakistan employees should assume that any improper payment to an official will trigger this provision and ex-pose the Company to potential liability.

3.2 Exceptions to anti-bribery prohibi-tionsRelief from the prohibitions of various anti-bribery laws is limited. If any ICI Pakistan employee believes that his or her conduct would meet one of the exceptions dis-cussed below, that employee should consult with the Company’s Corporate Legal Department immediately and certainly before taking any action.

Routine government payments

Most, if not all, governments require fees, taxes or pay-ments for various government services. Payment of these fees is permissible and should occur in the ordi-nary course of dealing with a government. Be careful, however, to avoid making such payments to officials in their individual capacity, or paying amounts in excess of the amount required by law.

Bona fide business expenditures

Most anti-bribery laws permit payments to officials that constitute bona fide, reasonable business expenditures. The expenditures must relate directly to the promotion, demonstration, or explanation of products or services or to the execution or performance of a contract with a government or agency. Despite appearances, this exception to anti-bribery laws is not straightforward and, often times, the line between what is a bona fide expenditure and what is an improper inducement can become blurred.

For example, it may not be out of the ordinary for ICI Pakistan to provide a business class ticket to a non-

government customer to visit a manufacturing facil-ity and, accordingly, an ICI Pakistan employee may consider such business expenditure typical. It is not a defense to anti-bribery laws, however, that all custom-ers, whether from the private or the public sector are treated in the same manner. The analysis must focus on whether the expenditure in each situation is necessary and, if so, whether the payment is reasonable under the circumstances. Any travel expenses for a government employee, in many circumstances, are likely to fall un-der the category of being an improper inducement.

Again, with the radical differences in living standards in various regions of the world, there may be situations where relatively modest expenditures can be viewed as improper inducements. What might be viewed as a customary practice in certain parts of the world may be viewed as a once-in-a-lifetime opportunity in other re-gions. Accordingly, the definition of a bona fide expen-diture can and will be subject to change. ICI Pakistan employees must be aware of these different living stan-dards and seek the assistance of the Corporate Legal Department if questions exist.

Local law

Most anti-bribery laws do not prohibit payments that are lawful under the written laws and regulations of the foreign official’s country. It is, however, rare that a coun-try would officially permit payments or offers that are intended to cause that official to violate a lawful duty.

Facilitation payments are small payments made to foreign officials in accordance with publicly known or widely-followed local custom to expedite or secure performance of routine government action, such as obtaining official documents, processing governmen-tal papers, or providing postal or utility services. ICI Pakistan discourages employees from making facilita-tion payments in countries where the local law permits them. In countries where facilitation payments are pro-hibited, ICI Pakistan also prohibits them. For clarifica-tion as to whether a particular payment is a prohibited facilitation payment, please consult the Company’s Corporate Legal Department. In Pakistan, facilitation payments constitute bribery and are prohibited.

3.3 Penalties for violating anti-bribery lawsPenalties for violating international anti-bribery laws vary from country to country. Civil and criminal fines, prison sentences and suspension from conducting business with governments are all possible punish-ments. In the United States, for example, corporations and other business entities are subject to a fine of up to $2 million per violation or twice the gain or loss attribut-able to the offense.

In addition, individuals can serve up to five years in prison. Further, under U.S. law, a person or company found guilty of or indicted for violating the U.S. anti-bribery law, the Foreign Corrupt Practices Act, (the “FCPA”) may be barred from doing business with the U.S. government. Similarly, countries that have imple-mented the OECD Convention may also impose fines and prison sentences.

3.4 Recognizing red flagsTo help ICI Pakistan employees recognize situations in which payments may be suspect or corrupt, this manual will provide the following “red flags” that should warn employees that their dealings may be in violation of anti-bribery laws.

• Avoid unusual payment patterns or financial arrange-ments. Improper payments made to officials are fre-quently accompanied by unusual payment arrange-ments. Employees should use increased vigilance when asked, for example, to make payments in a bank account not located in either the country where the ser-vices were rendered or the country where the recipient of funds is located.

• Be cautious when conducting business in a coun-try with a history of corruption. To find out whether a country has a history of corruption, please contact ICI Pakistan’s Corporate Legal Department. • Avoid pay-ing unusually high commissions. Commissions have historically been a vehicle through which bribes have been funneled to government officials. Accordingly, a


request to pay unusually high commissions is a warn-ing sign of possible corruption.

• Beware of a lack of transparency in expenses and ac-counting records. A reluctance to share expense state-ments and accounting records of joint activity by a busi-ness partner is a possible indicator of corrupt activity.

• Be careful when a government official recommends hiring a consultant. Be cautious when a government of-ficial suggests, in any way, that ICI Pakistan pay or hire a third party.

• Do not make facilitation payments in countries where they are illegal. For clarification as to whether a particu-lar payment is a prohibited facilitation payment, please consult ICI Pakistan’s Corporate Legal Department.

Accounting andrecord-keepingIt is the policy of ICI Pakistan that all financial transac-tions must be recorded in a timely and accurate man-ner. Any information material to a transition must be recorded. The Company’s records should reflect trans-actions in conformity with accepted accounting stan-dards and should be designed to prevent offthe books transactions such as kickbacks and bribes.

Accordingly, Company employees must follow all ap-plicable standards, principles and laws for accounting and financial reporting. No employee should establish an undisclosed or unrecorded account on behalf of the company for any purpose. In addition, false or artificial entries are not to be made in the books and records of the Company for any reason.

Further, ICI Pakistan must devise and maintain a sys-tem of internal accounting controls sufficient to provide reasonable assurances that:

• transactions are executed in accordance with man-

agement’s general or specific authorization;

• transactions are recorded as necessary to permit preparation of financial statements in conformity with generally accepted accounting principles or any other criteria applicable to such statements and to maintain accountability for assets;

• access to assets is permitted only in accordance with management’s general or specific authorization; and

• recorded accountability for assets is compared with the existing assets at reasonable intervals and appro-priate action is taken with respect to any differences.

Selecting andmonitoring agentsIn many countries, ICI Pakistan business units may re-tain local individuals or firms as an agent, distributor, representative or consultant (collectively referred to as “agents”) to conduct their business. The Company can be held liable for improper payments an agent makes on ICI Pakistan’s behalf, with or without ICI Pakistan’s knowledge.

Accordingly, ICI Pakistan requires that all agents com-ply with anti-bribery laws at all times. In addition to the normal due diligence process that focuses on the agent’s relevant expertise, experience and qualifica-tions, all ICI Pakistan employees must take additional steps to secure compliance with anti-bribery laws.

First, the Company must determine the competence and reputation of the current and the prospective agent, as well as the agent’s contacts with any officials. It is very important to identify any relationship an agent has with any officials. These relationships include not only family relationships, but business relationships as well. Particularly, we must ascertain whether the agent has engaged in past government or military service and whether that service may compromise his ability to re-

main in compliance with anti-bribery laws.

Second, any business unit that secures an agent abroad must keep a detailed file of the due diligence efforts made in conjunction with obtaining the agent. At a minimum, this file should document the reasons why the agent was selected, the examination the busi-ness unit conducted to ascertain whether the agent may have previously violated anti-bribery laws, and the checks made regarding the agent’s integrity in conduct-ing business. Agents that have been approved by the business must also be reviewed periodically to ensure that the agent still complies with anti-bribery laws.

If any ICI Pakistan business unit utilizes the services of an agent, a detailed written contract should govern the arrangement. In addition to the arrangement’s commer-cial terms, the contract should also contain appropriate representations and warranties from the agent concern-ing past and future compliance with anti-bribery laws, including periodic certification that the agent remains in compliance with those laws. The agent must represent and warrant that he or she:

• is not an official, affiliated with any official, or a can-didate for public office, and will advise ICI Pakistan if any of these conditions change during the course of the agency relationship;

• Understands international anti-bribery legislation such as U.S. Foreign Corrupt Practices Act and the OECD Convention if applicable;

• will not, in the future, engage in conduct on behalf of ICI Pakistan or related to work for ICI Pakistan that would violate anti-bribery laws; and

• has read, understands, and agrees to comply with the ICI Pakistan Code of Conduct and the principles and procedures of the ICI Pakistan Anti-Bribery Compliance policy.

Furthermore, the contract should contain at least the following provisions:

• All payments to the agent shall be by cheque or wire transfer.

• Travel and entertainment expenses will be reimbursed

only when approved in advance and supported by de-tailed records.

• The agent shall not assign or sub-contract work under the contract without the prior approval of ICI Pakistan.

• The agent will indemnify ICI Pakistan for any damages that result from the breach of any of the agent’s repre-sentations.

• The agent shall maintain accurate books and records.

• ICI Pakistan shall have reasonable access to the agent’s books and records and the right to audit them on a periodic basis.

Finally, when examining the agency relationship, ICI Pakistan employees should evaluate whether the pro-posed compensation to be paid in exchange for the services rendered or the products delivered is reason-able in light of the circumstances. “Success” fees de-serve heightened attention.

Please seek assistance from ICI Pakistan’s Corporate Legal Department for further information on the due diligence required before hiring an agent and the con-tractual provisions that must appear in any contract documenting the agency relationship.

Merger and acquisi-tions processICI Pakistan may be held liable for past anti-bribery vio-lations by any company acquired by ICI Pakistan. Ac-cordingly, we must review, as part of the acquisition due diligence process, the activities of the target company.

This process will allow ICI Pakistan to assess not only the risks that the target’s operations will present go-ing forward with respect to compliance with anti-brib-ery laws, but also potential exposure stemming from the target’s past activities. The due diligence process should also address whether the target has any weak-nesses in accounting and record keeping requirements and internal controls procedures.


This due diligence should be tailored to the country and business of the target company and conducted at the same time as the due diligence so that ICI Pakistan may act upon any information it receives before the deal is finalized. Particular attention should be paid to the fol-lowing types of information, which ICI Pakistan typically obtains during the due diligence process:

• percentage of the target’s business derived from gov-ernment contracts;

• types and identities of agents and consultants the tar-get uses and their compensation arrangements;

• target’s countries of operations;

• involvement of government officials in the target’s business (either as owners, directors or employees);

• condition of the target’s internal controls and books and records; and

• whether the target has ever been accused of violating antibribery laws.

Please contact ICI Pakistan’s Corporate Legal Depart-ment for further questions regarding acquisition due diligence.

Gifts and entertain-mentGiving and receiving gifts, as well as entertaining and being entertained, are accepted practices in many countries when negotiating or conducting business with third parties.

However, if the value of the gift or entertainment be-comes too large, it can affect, or appear to affect, business judgment. It can also create expectations of special treatment. All gifts and entertainment given or received must be of a reasonable value and appropriate to the business relationship in question. If you are not sure whether a gift or entertainment is of a reasonable value, you should discuss it with your line manager.

This manual contains ICI Pakistan’s Anti-Bribery Com-pliance Policy and requires that all ICI Pakistan employ-ees strictly comply with it and with anti-bribery laws around the world.

As discussed above, this policy does not address the specific provisions of each anti-bribery law with which ICI Pakistan must comply and, accordingly, situations will arise where further advice and counsel are neces-sary and appropriate. Although many of the basic legal principles are similar, critical distinctions exist among anti-bribery laws in different jurisdictions. Thus, if you have any questions regarding any of the information in this policy or transactions with any official, either direct-ly or through an agent, contact ICI Pakistan’s Corporate Legal Department immediately.

ICI Pakistan Corporate Complaints Pro-cedureIf you need to report an incident, the first step is to con-tact your manager or business unit head and discuss the incident with him/her. If for any reason this is not possible, you should report the incident to the General Counsel.

ConclusionThe purpose of this manual is to:

• set out ICI Pakistan’s policy of compliance with com-petition law; and

• provide basic guidance to all ICI Pakistan employees with regard to competition laws and practices for com-pliance.

Competition laws (also known as “antitrust laws” and sometimes as anti-monopoly or fair trade practices laws) can apply wherever ICI Pakistan does business in the world. National competition authorities are proac-tive in enforcing competition laws. Penalties for breach-ing competition law are increasingly severe.

Although similar in their approach, there is no single global competition statute. Thus, all employees should realise that wherever they do business in the world, they need to comply with relevant national competition laws. It is important to recognize that actions taken in one country may have an impact in others; therefore, certain actions can be subject to laws of various coun-tries.

A number of countries including the USA, the UK, the Netherlands, Germany, Japan, Ireland and Sweden have criminal or other sanctions for individuals infring-ing competition laws. In addition, acts that constitute such infringements, such as creating false invoices within the context of bid rigging, may also amount to fraud, bribery or other similar crimes. Finally, it is im-portant to note that antitrust/ competition law infringe-ments more and more frequently result in civil damages claims by customers or other interested parties.

The aim of this guide is to provide employees with es-sential knowledge to identify potential competition law issues. It does not attempt to provide a detailed de-scription of the national competition laws in all coun-tries; rather, it summarizes the general principles that underlie most competition laws around the world and provides a practical overview of the rules likely to apply in relation to:

• interactions with suppliers, distributors and/or cus-tomers;

• contacts with competitors, including in the context of

a trade association;

• mergers and joint ventures; and

• companies having dominant market position, known as SMP status in Pakistan.

Guidance is also given on the dos and don’ts of docu-ment creation, the powers of the competition authorities and the sanctions which can be imposed for breaches of the rules.

This guide does not purport to provide definitive an-swers to all competition law questions. If you have any concerns or questions about competition law matters, please contact the Corporate Legal Department with-out delay. Any contact with any competition authority should always be handled in conjunction with the Cor-porate Legal Department, and no statement whatsoev-er should be made without approval from the General Counsel.

The competition rules work as a shield as well as a sword. Unacceptable restrictions imposed by others (for example, by a supplier of raw materials) can often be effectively counteracted by invoking these rules, such as the rules that apply to companies in a domi-nant market position. Where a supplier or a competitor is suspected of seeking to impose unfair terms or oth-erwise preventing competition on the merits, the Cor-porate Legal Department should be contacted.

Introduction

Competition Law Compliance Manual


All ICI Pakistan personnel are expected to conduct company business in a legal and ethical manner. Compliance with competition law falls within the frame-work of our Code of Conduct, which applies equally to all of our business transactions throughout the world and to the individual behavior of employees in conducting the Company’s business. ICI Pakistan has a policy of strict com-pliance with competition law wherever it operates. All employees are required to adhere to this policy and breaches of competition law will not be tolerated.

This policy extends to all of the Company’s operations, without exception.

Each ICI Pakistan employee who has contact with customers, suppliers or competitors or who attends trade association meetings or trade fairs in the course of his or her employment, or who has management responsibilities in respect of any such employee (a “relevant employee”), is responsible for ensuring that he or she:

• is familiar with the fundamental principles of competition law;

• can identify situations where competition law issues may arise;

• appreciates the personal and corporate consequences of non-compliance with competition law; and

• is personally committed to achieving full compliance with ICI Pakistan’s competition law compliance policy.

At least once every two years and, in the case of any person recruited or promoted to be a relevant employee,

within three months of taking on his or her new role, each such employee must undertake competition law compliance training. All relevant ICI Pakistan employees will be required to sign the Competition Law Compliance Declaration.

Employees must seek timely advice from the Corporate Legal Department if they have any questions or concerns relating to competition law or if they are in any doubt about whether or not it may apply. The best way to avoid problems is by understanding the basic rules and seeking advice where appropriate. Claims of ignorance, good intentions or failure to seek timely legal advice will not be regarded as an excuse. Disciplinary action will be taken against any employee who is found to have violated competition law. Such disciplinary action may include dismissal.

It is ICI Pakistan’s policy to foster a climate where employees know that they will be supported if they report suspicious or questionable activity to their line managers or to the Corporate Legal Department. Employees are encouraged to immediately report illegal, unethical or improper conduct in their workplace.

What is competition law?“Competition” means two or more par-ties acting independently to secure the business of a third party. Competition provides the best incentive for business efficiency; it encourages innovation and guarantees consumers the best choice. Competition laws prohibit agreements, practices and conduct which have a damaging effect on competition, such as collusion between competitors or abuse of market power, both of which

Policycan lead to higher prices or lower output and restrict innovation and technical de-velopment. There are also mechanisms for blocking concentrations of compa-nies by which competition would be distorted to an unacceptable degree.

Competition law generally is based on three underlying concepts:

• the prohibition of anti-competitive agreements and concerted practices;

• the prohibition of abuse of a dominant position or of significant market power; and

• the assessment of acquisitions and joint ventures to prevent the creation of dominant positions or the reduction of competition (so-called “merger control”), known as oligopoly or cartel.

An essential competition law concept is the so-called “relevant market”, i.e., the market for a product or service and the geographic market in which the product or service is sold. When making a competition law assessment of a certain arrangement, the relevant market and the position of a company thereon should first be established.

For the competition rules of a particular country to be applicable, it is irrelevant where the companies involved are located. What matters is whether the agreements and practices may affect the economy of that country. Furthermore, the form of the agreement is irrelevant. Competition laws prohibit any arrangement restricting competition and the concept of “arrangements” extends beyond formal written agreements. It also covers oral agreements and understandings, “gentlemen’s agreements”, non-binding agreements and even actions which are taken with an unspoken “common understanding” in mind (so-called “concerted practices”).

Note that it is not necessarily relevant whether there

was an intention to breach competition rules. It may be enough if the agreement or concerted practice has as its effect the prevention, restriction or distortion of competition.

The basics ofcompetition lawThis chapter explains the basic competition law principles which have to be taken into account:

• when dealing with competitors: “horizontal” relations;

• when dealing with suppliers, distributors and customers: “vertical” relations;

• when a company has a (collective) dominant position or significant market power in a market; and

• when granting or obtaining intellectual property rights.

4.1 Relations with competitorsIllegal ‘per se’ are arrangements that are so clearly illegal that no circumstance or explanation can justify such conduct. Examples include competitors agreeing to fix prices, dividing territories, allocating customers, jointly boycotting customers or suppliers, limiting production or engaging in bid rigging.

Price fixing

It is illegal for competitors to agree, whether directly or indirectly, the price level at which their products will be sold to third parties. Agreements or understandings that affect prices indirectly, such as on rebates or discounts, pricing methods, costs and terms of payment, are also illegal.


Division of territories/Market Sharing

It is illegal for competitors to allocate territories to each other and/or to agree not to compete in such territories.

Allocation of customers

Competitors are not allowed to agree to divide customers between them in the markets in which they compete, or where they could be expected to compete.

Group boycott

It is generally illegal for competitors to agree to boycott a particular customer or supplier or class of customers or suppliers. “Boycott” means any concerted action or agreement between two or more competitors not to sell to or buy from a particular customer or supplier, or class thereof.

Limitation of production

It is illegal for competing companies to agree to stop production, or to limit this to a certain level, rather than allowing normal competitive forces to determine their independent production decisions.

Bid rigging

Agreements or understandings between competitors regarding prices or terms and conditions to be submitted in response to a bid request are generally prohibited. This includes agreeing not to bid.

Joint purchasing

Joint purchasing agreements between individual competitors may restrict competition; therefore, such agreements/arrangements may be prohibited when they limit the parties’ freedom and/or prevent other

suppliers from supplying them to a substantial extent. Moreover, collective purchasing agreements may lead to a substantial purchasing power, which may be interpreted as a collective dominant position of the joint buyers (see “Abuse of a dominant position” below).

Joint commercialization

Agreements between competitors to jointly sell, distribute or promote their products may raise competition law concerns where such agreements limit the individual participants in their freedom to determine their own commercial policy and to advertise individually.

Exchange of information

In general, it is illegal for competing companies to exchange information which may influence the independent determination of their individual commercial policy, such as information regarding sales quantities, prices, cost structure, discounts and other trading conditions, or information relating to their individual customers and/or suppliers. However, an exchange of publicly available and/or general statistical information (for example provided by an independent third party) will in general not cause any problems under the competition rules. There should be no exchange of commercially sensitive information with a competitor without first seeking the advice of the Corporate Legal Department.

Standardisation

While companies can legitimately work together in order to secure the standardisation of specific products or technologies through competent public or private bodies, such co-operation may not prohibit individual companies from developing and marketing other products and/or technologies independently, nor should it lead to agreements, in writing or tacitly agreed, to raise barriers in the market for those companies that do not participate in the standardisation process.

4.2 Relations with suppliers, distribu-tors and customersCare should be taken with regard to the following situations.

Resale price maintenance

Just as it is illegal for competitors to conclude price fixing arrangements, competition rules prohibit resale price maintenance between a supplier and its independent customers or distributors. In other words, a supplier is not permitted under law to impose on its distributor a minimum resale price.

A supplier may recommend resale prices, but no coercion can be applied under law to a reseller who chooses to set its own prices. Similarly, it is illegal to reward resellers on the basis of their conformity with suggested resale prices. In some countries like the USA and Germany, agreements on maximum resale prices can also be illegal. In many countries, however, if a company acts strictly as an agent (passing orders to its principal or entering into agreements on its principal’s behalf, without incurring any financial or commercial risks), the principal is permitted under law to give price instructions to such company. The Corporate Legal Department should be consulted if an employee is uncertain regarding the legality of such an agreement.

Price discrimination

Except as indicated below, and as long as it does not have market power in a specific market (see the section on abuse of a (collective) dominant position/monopolisation ahead), it is generally permissible for a company to charge the prices it wants as long as it does so unilaterally and not pursuant to any agreement with its competitors. However, price discrimination should not be used as an indirect method to coerce resellers into reselling at a certain price.

In some countries, such as the USA, Canada, Germany and France specific rules exist which prevent suppliers from discriminating between customers regardless of whether the supplier has market power. Again,

any uncertainty in the laws of other countries should be discussed with the Company’s Corporate Legal Department.

Restrictions on resale or use

As a general rule, ICI Pakistan may not prohibit its customers from reselling its products to whomever they wish, or otherwise impose restrictions on the use of its products. For example, it normally cannot insist that the customer will not resell but only incorporate its products.

ICI Pakistan cannot as a rule totally prevent or otherwise hinder resellers located in countries in the European Union from exporting to or importing ICI Pakistan products from other EU countries. This includes indirect methods of preventing exports/imports. Examples of this would be limiting the validity of a warranty to end-users in the country to which the products were originally supplied or giving lower discounts in respect of exported goods. In the EU, absolute geographical resale restrictions are usually considered hardcore violations.

Whatever the country, whether inside or outside the EU, it may be possible to:

• appoint an exclusive reseller in a defined geographical area or for a defined class of customers;

• require the reseller not to sell competing products for a certain period of time; and

• require the reseller to purchase all its requirements of the contract product from ICI Pakistan.

Before entering into an agreement imposing restrictions on resellers or customers, the agreement should be reviewed by the Corporate Legal Department to ensure that restrictions are permissible in the countries concerned or the required exemptions are obtained.


Long-term supply

Long-term supply agreements effectively blocking other suppliers from offering and selling to a customer are prohibited in a number of countries, but are allowed in exceptional cases, such as those requiring the supplier to make considerable investments.

Apart from the long term, other critical features are: automatic prolongation (so-called “evergreen” contracts), long notice periods and a stipulation enabling the supplier to match competitive offers and thereby retain the business (so-called “English” or “meet-or-release” clause).

Bundling

In a number of countries, like Australia, bundling goods or services with another supplier’s goods or services may be illegal.

4.3 Abuse of a (collective) dominant po-sition/monopolisationAn illegal restriction of competition may also occur when a company or group of companies abuses a dominant position or its significant market power in a way that is detrimental to competition.

A dominant position exists when a company has the power to behave to an appreciable extent independently of its customers, competitors and suppliers. For example, this is the case when other firms have no real alternative but to deal with this company. Although market power may be determined in different ways, most competition regulators use market shares as a starting point. Even though market share and market power do not mean the same thing, a significant market share in the relevant market (which is the market for a product or service and the geographic market in which the product or service is sold) is a good indication that the company may have significant market power. Generally speaking, companies with a market share of over 40 percent in a relevant market may be considered to have significant market power, although certain countries may have more than one definition of significant market

power. However, in certain circumstances, significant market power may exist where a company has a lower market share. Alternatively, other factors (for example, relating to the structure of the market) may mean that a company with a higher market share is not deemed to be dominant.

Having such a position is not prohibited in itself. It is the abusive behaviour of a company in that position that constitutes the violation. Therefore, where ICI Pakistan has significant market power, special care is required to ensure its behaviour in the market is not aimed at, and does not result in, the elimination of its competitors or exploitation of its customers.

Examples of abuse of a dominant position are given below.

Tying

Often it is illegal for a seller, having market power or a dominant position in the market for a product, to make the sale of that product conditional upon the purchase by the customer of other products or services that the customer might well obtain from other suppliers at similar or better terms or conditions. It may also be illegal for a dominant seller to employ a rebate system rewarding the customer for favouring the seller with orders for both product categories together.

Discrimination in prices or other trading conditions

It is illegal for a company having a dominant position in the relevant market to enforce different prices or other trading conditions upon different customers in similar situations, or discriminatory licensing conditions under intellectual property rights, without objective justification.

Differentiation may be permissible if it is justified on objective grounds. For example, a lower price may be warranted where a distributor performs additional services not provided by other distributors or where larger volumes are purchased.

Fidelity rebates and discounts

Rebates and discounts applied by a company in a market where it has a dominant position should be the same for all customers, transparent and based on objective criteria. It is acceptable to offer a discount or rebate to a customer where the reduction is justifiable on the basis of genuine cost savings. Quantity rebates, which reflect cost savings in economies of scale, which are made available to all buyers and do not restrict the buyer’s choice of supplier, are permitted.

On the other hand, a dominant company may not grant fidelity (or loyalty) rebates or discounts that have the effect of tying that customer to the supplier. Such rebates are not based upon quantities, but on the percentage of its requirements purchased by the customer.

Refusal to supply

In general, there is no absolute obligation to supply, particularly where it concerns a potential customer with whom there has been no previous trading relationship. However, in many jurisdictions a dominant company is required to have some reasonable and fair commercial reason for cutting off or reducing supplies to an existing customer. Objective justifications might include real concerns about the customer’s creditworthiness or a shortage of the relevant product.

Unilateral decisions not to deal are generally not prohibited under competition laws in most jurisdictions, but as previously noted, agreements to refuse to deal based on discussions or agreements with others can often raise competition law concerns.

Forcing competitors out of the market (predatory behaviour)

Under most competition law regimes including Pakistan, a company that has a dominant position is not allowed to force competitors out of the market by means of predatory pricing: selling below average cost in order to drive a competitor out of the market, with the intent of charging higher prices and gaining larger

profits once the competitor has left the market.

In a situation where purchasers are dependent on a dominant supplier and where the supplier wants to extend the scope of its activities to an area where its customers are active, the supplier is not permitted to force them out of business by cutting off supplies or by raising its prices.

Excessive pricing

Under the competition rules of a number of jurisdictions, including the European Union, a company with market power in a specific market may not charge excessively high prices. Whether a price is “excessively high” is difficult to establish. It can be determined by comparing the economic value of the product or service with that of competitors in the market.

Other forms of abuse

In certain countries, other commercial practices may constitute abuse of market power. These include restrictions on customers preventing them from using competitors’ products (so-called “non-compete”) and exclusive dealing obligations, where customers are only permitted to deal with the company concerned (“total requirement” obligations).

Intellectual property rights

Rights to intellectual property, such as patents, know-how, registered designs, trademarks and copyright, can be highly valuable assets. Owners may seek to impose territorial or other restrictions on their licensees, and parties may desire licenses to be on an exclusive basis. Any such limitation may be subject to the applicable competition rules. Therefore, advice should be sought from the Corporate Legal Department if one intends to enter into a license agreement containing such restrictions.

These guidelines also apply when considering entering into a research and development agreement.


ICI Pakistan is a member of many trade associations. Trade associations can be effective in gathering and disseminat-ing appropriate information as well as in representing the industry to the public, government officials and agencies. Fur-thermore, such organizations are often responsible for enabling their members to produce better and safer products. ICI Pakistan, therefore, favours the ac-tivities of such groups.Although it is perfectly legitimate for companies to participate in trade associations, such activities are not allowed to go beyond such legitimate purpose and notably should not be used as a forum for illegal collusion between competitors, for example by facilitating price fixing, market and customer allocation arrangements. It should be emphasised that competition authorities have a natural suspicion of trade association meetings, not least because they have, in a number of cartel cases in the past, provided the context for anti-competitive discussions to take place. It is ICI Pakistan’s strict policy that its employees do not engage in such anti-competitive activities and remain vigilant to such discussions when attending trade association meetings.

The Corporate Legal Department should be informed of all trade association memberships, including the conditions of such memberships. Furthermore, the advice of the Corporate Legal Department should be sought before joining any new trade association.

When an ICI Pakistan employee participates in a trade association, the following guidelines should be observed:

5.1 Matters which should never be dis-cussed with competitors, at any official meeting or social gathering

Do not have formal or informal discussions relating to:

• territorial restrictions, allocation of customers, restrictions on types of products, or any other kind of market division;

• individual company prices, price changes, conditions of sale (including payment terms and periods of guarantee), price differentials, discounts;

• general market conditions and general industry problems, including industry pricing policies or patterns, price levels, or industry production; capacity, or inventories (including planned or anticipated changes regarding those matters), except to the extent necessary to achieve legitimate objectives of the trade association as stated above;

• individual production or distribution costs, cost accounting formulas, methods of computing costs;

• individual company figures on market shares, sources of supply, production;

• information as to future plans of individual companies concerning technology, production, marketing and sales; and

• matters relating to individual suppliers, distributors or customers.

5.2 Matters which may be discussedIt is allowed to exchange information on non-confidential technical and promotional issues relevant to the industry, including issues relating to technology in general, health, safety and environmental matters, technical standards, transportation hazards and regulations, quality control issues and new and proposed legislation.

5.3 Trade industry statisticsTo be certain that it is legal to exchange industry statistics through the medium of a trade association, the Corporate Legal Department should be contacted

to ensure that:

• an independent company, or at the very least a team of trade association staff unconnected with any of its members, collects and disseminates the information without identification of the company who submitted it;

• the participants submitting their data do not disclose that information to other participants, in order to maintain complete confidentiality of the individual data submitted;

• the data collated and disseminated is aggregated data which does not allow the identification of an individual participant; and

• the information relates to historic data only and does not include future data.

5.4 Trade association meetingsThe following rules apply in connection with trade association meetings:

• an agenda must be circulated for review in advance of the meeting and the Corporate Legal Department should be contacted if any doubts exist;

• the meeting must be attended only by the appropriate ICI Pakistan employees;

• a commercial employee should not attend a technical meeting;

• informal commercial discussions of any kind before or after meetings must be avoided as much as possible. Unless absolutely necessary, do not stay in the same hotel as the other participants and do not attend social gatherings like dinners;

• accurate, detailed notes of the meeting must be taken and, in case of doubt, a copy of the draft notes should be provided to the Corporate Legal Department;

• objections should be made against any deviation from the agenda during the meeting which strays into prohibited areas. Every employee must be vigilant as to

what is discussed;

• if a competitor seeks to initiate a discussion on an improper subject, objections should be made, notably by saying that it is ICI Pakistan’s strict policy not to discuss such topics and by asking the individual to stop the discussion immediately. If such a person persists, withdraw from the meeting. Make sure that the reason for leaving and at what juncture you left are recorded in the minutes. In addition, the incident should immediately be reported to a superior and to the Corporate Legal Department.

Mergers and joint venturesThe merger of companies, the acquisition and sale of businesses and the establishment of joint ventures may be subject to control and approval by competition authorities. This is the case if certain thresholds, set under the national merger control rules, are met. Often, these thresholds are based upon sales, the monetary value of the transaction and/or the market share of the companies involved.

The main criteria applied by the authorities in reviewing mergers, acquisitions and the formation of joint ventures is that their operation must not lead to the creation or reinforcement of a dominant position or that the transaction under review should not have the potential to substantially lessen competition. In the event a dominant position is created, or if competition is significantly reduced, the transaction may be prohibited. Alternatively, the authorities may clear the transaction subject to certain conditions (also called commitments or remedies) being fulfilled, such as the divestment of certain assets.

If the parties fail to report a qualifying transaction to the authorities, they run the risk of being fined and also of having the transaction declared null and void. In light of the above, the Corporate Legal Department must be contacted as soon as the sale or purchase of a business or the setting up of a joint venture is considered.

Trade Associations


In assessing the effects of mergers, acquisitions or the establishment of joint ventures on the existing competitive landscape, the authorities question not only the parties directly involved but also third parties. This means that ICI Pakistan may receive questionnaires related to transactions that involve our competitors, suppliers and/or customers. ICI Pakistan’s response to such questionnaires may influence the way in which it wishes to conduct business or have serious implications on the transaction contemplated by the parties directly involved. It is therefore very important that the Corporate Legal Department be informed immediately when such a questionnaire has been received. Any further contact with the competition authorities should be established only through the office of the Corporate Legal Department.

Document creation and retention7.1 CreationCareful language will not avoid liability where anti-competitive conduct is involved, but it will prevent lawful conduct being treated as suspect due to a poor choice of words.

Care should be used in drafting internal documents (e-mails, letters, faxes, memos, reports and evaluations, minutes, briefing papers, meeting notes, business plans, etc.) and in any formal or informal contacts or communications with third parties, such as competitors (including at trade association meetings), press releases, advertisements and promotional material, to avoid language which exaggerates market share positions or which could be misconstrued as suggesting an improper purpose. Again, a poor choice of words can make a perfectly legal activity look suspect.

E-mail, specifically, is a very important part of employees’ day-to-day work. The convenience of e-mail, however, creates many unnecessary communications. Employees, on occasion, send spontaneous e-mails with little regard to what they say, how they say it, or what

type of impression it could leave. Accordingly, please exercise caution when sending e-mails. Pay particular attention to the identity and number of individuals “cc’ed” on your e-mail and to whether you hit the “reply to all” button when responding to an e-mail. Please also refrain from using “groups” of addressees as the recipients may have moved to a different function or even have left the company.

Remember that any written evidence may be required to be shown to the competition authorities or in litigation with another company and so may be subject to future outside scrutiny. Under modern discovery procedures (see chapter “Sanctions” ahead), all kinds of documents, both electronic and hard copies, formal and informal (for example private notes and diaries or e-mails) may have to be submitted to competition authorities.

Communications with outside legal counsel are usually “legally privileged”, which means that they need not be submitted to competition officials. For this reason, all correspondence with outside legal counsel should be kept in a separate file marked “privileged correspondence”.

It is important to keep concise and accurate records of all legitimate contacts with competitors (such as at trade association meetings), so as to minimise the risk of allegations being made (for instance by customers, competitors, the press or the authorities) that the parties have some anticompetitive motive or agenda.

When communicating, the following rules should be observed in order to avoid a perfectly legal activity looking suspect due to a poor choice of words:

• Do not use vocabulary which could be misconstrued as suggesting guilty purpose, such as “please destroy/delete after reading” or “no copies”. Such phrases suggest the possibility of wrongdoing even though the objective being pursued in using such words is simply to preserve the confidential nature of a document. Wording such as “strictly confidential” or “company secret – restricted circulation” is preferable.

• Avoid power or domination vocabulary. Examples are “we will dominate the market”, “we have virtually

eliminated competition” and words like destroy, kill, squeeze, damage, price control, prevention of parallel trade. Such words may be interpreted as implying the use of market power to drive out competitors. Instead, refer to ICI Pakistan as having a “significant” position or being one of the “leading” companies.

• Because the term “market” has legal significance (in both determining if a company has a dominant position and in merger analysis), it is better to avoid references to “market” where possible. It is better to say that ICI Pakistan has a 20 percent share of sales of a particular product or that ICI Pakistan is one of the leading producers of a product, without saying or implying that the market is necessarily limited to that product.

• Avoid loose or “macho” language with regard to intentions, such as, when contemplating a merger “the main purpose of this acquisition is to take an important competitor out of the market”. Such statements are usually exaggerated and fail to focus on the legitimate competitive benefits of the transaction. Where possible, try to show that the merger will lead to efficiencies or have other consumer benefits, such as new products or technologies, or lower prices.

• Exercise caution when talking about competition and prices. Examples are phrases that suggest that competitors or distributors will certainly follow a price rise or stick to an agreed price, such as “status quo”, “orderly marketing”, “managing the brand”, “gentlemen’s agreement”, “similar prices”, and “this transaction will enable us to improve pricing”.

• Do not speculate as to the legal nature or consequences of conduct. For example: “These arrangements may well breach competition law so discretion is required”. This is not to condone efforts to cover-up potentially illegal conduct, but rather to recognise that such language implies a legal conclusion about the legality of certain arrangements, which is best determined by the Corporate Legal Department.

• State clearly the source of any price information (so it does not give a false impression that it came from discussions with competitors).

• Avoid any suggestion that an industry view has been

reached on a particular issue (such as price levels).

7.2 RetentionAs regards the retention of documents, it is essential they are kept in accordance with statutory requirements applicable in the relevant country. The Corporate Legal Department should be consulted as to the document retention requirements of particular jurisdictions. Destroying, altering or falsifying documents and records may be illegal and have serious consequences, such as personal criminal sanctions. Legal advice from the Corporate Legal Department should be sought in this regard.

This is particularly relevant when an investigation or litigation has commenced or is anticipated, as this will be regarded as obstruction of justice.

Powers of competi-tion authoritiesIn many countries including Pakistan, the competition authorities have powers to conduct on-the-spot investigations at company premises, sometimes called “dawn raids”. Under the competition rules of the European Union, the European Commission is entitled to carry out searches at the homes of company employees. In certain countries (for example, in the USA, the UK, Ireland, The Netherlands and Norway), national competition authorities also have this right. Such investigations can be prompted by complaints from competitors or disgruntled customers or employees, from the authorities’ own economic analysis of the practices in a particular industry, or from a competitor who has admitted to a violation and is seeking amnesty or leniency in return for co-operation.

Officials may arrive unannounced to search and copy digital or hard-copy files and to question company


representatives. Companies are required by law to give investigators full access to everything on the premises, including confidential (computer) files and records. Legally privileged and private (not related to business activities) documents do not have to be submitted to the competition authorities.

In the event of a dawn raid, officials should be treated courteously but firmly. It should be explained to them that the company has every intention of co-operating with the investigation. Please consult your Corporate Legal Department for more information.

The authorities can also send formal letters requiring companies to provide information on particular agreements or markets. In some jurisdictions, ICI Pakistan may receive a request for information from a government investigator by telephone. If ever such a request for information is received, the Corporate Legal Department must be informed without delay. Any further contact with competition authorities should be established through ICI Pakistan Corporate Legal Office.

Sanctions9.1 PublicIn most countries, enforcement of the competition rules is a matter of administrative law. Heavy fines (in Pakistan for instance, a fine of up to PKR 75 million or up to 10% of a company’s annual turnover) may be imposed on companies involved in infringing the competition laws. In Pakistan, the fine may extend upto 15% of the company’s annual turnover.

In certain jurisdictions, however, infringing companies and individuals may also be prosecuted under criminal law. In Pakistan, like other countries such as the USA, the UK, the Netherlands, Ireland, Sweden, Canada, Australia, Japan, Brazil, the Russian Federation and Germany, (national and foreign) employees of companies violating antitrust law can be prosecuted

and fined and/or imprisoned, in addition to the often severe sanctions imposed upon their companies. There are other potential consequences for individuals too: in the UK, for example, a company director may be liable to disqualification where the company of which he or she was a director at the time has infringed competition law.

Increasingly, there is multilateral cooperation amongst competition authorities around the world, who share information about anti-competitive activities in each other’s territory. In certain circumstances, they can ask the other authority to take enforcement action in that other country. Furthermore, if the breach of competition laws of a country is a criminal offence in that country, the extradition of a person either suspected or convicted of that offence may be sought by another country.

Companies may be faced with so-called “debarment”: semi-governmental and governmental organisations “blacklisting” or refusing to do business with companies, which in their view do not act as good corporate citizens, for example because they participated in a price cartel.

An investigation may involve high costs of outside legal counsel and will require significant management input, even if ultimately ICI Pakistan is found not guilty.

It is important to note that a company which has taken adequate steps to achieve compliance, but has nonetheless committed an infringement of competition law, may have the fine reduced.

9.2 PrivateApart from the above, in many countries, the number of claims by private parties under the rules of civil law, for damages suffered as a result of antitrust/competition law violations such as a price cartel, is growing. In the USA, a successful antitrust plaintiff is entitled to treble damages (three times the amount of the overcharge or other damage suffered as a result of an antitrust violation), plus an award of attorneys’ fees. The competition authorities in many countries are actively encouraging private actions for damages by people affected by anti-competitive agreements and

behaviour.

A company may be faced with the so-called discovery procedure, which means that it may be subject to the mandatory production of all documents (including those electronically stored, such as e-mails), wherever located, relating to the claim (including internal and even personal files). Such production of documents poses a very severe administrative burden upon a company having to comply with such an order.

Another aspect of litigation procedures in a number of countries is the deposition of witnesses, in which employees can be ordered to give evidence and to answer questions put by the lawyers of the other party.

A third aspect involves interrogatories, which are generally highly detailed written questions requiring mandatory responses.

In addition, an agreement which infringes competition rules may become unenforceable, leaving a business relationship without a legal basis.

Finally, the standing, reputation and stock price of ICI Pakistan may be severely damaged as a result of antitrust/competition law related investigations and litigation.

9.3 Leniency programmes and whistle blowingMany competition authorities encourage companies to tell them of competition law infringements by means of leniency programs. A company that has participated in a cartel may receive a reduction in a fine, or no fine at all, if it tells the competition authorities about the cartel, stops participating in it, co-operates fully with the authorities and gives them incriminating evidence against the other participants.

This can generally only benefit a company if it gives the authorities in that country information that the authorities do not already have and which is instrumental in enabling them to stop the cartel’s activities.

This manual describes the general principles which underlie most competition laws around the world, including Pakistan. As mentioned earlier, it does not purport to cover comprehensively the competition laws of any particular country. Although many of the basic legal principles are similar, there are important differences between the competition laws of various jurisdictions. It should therefore be regarded as a tool which raises awareness among ICI Pakistan employees.

If doubts exist, or if more specific information is needed concerning the precise legislation applicable to any particular action, the Corporate Legal Department must be contacted. Every employee should be aware that it is ICI Pakistan’s strict policy to ensure that its practices throughout all its operations are in full compliance with all applicable competition laws.

ICI Pakistan corporate complaints pro-cedureIf you need to report an incident, the first step is to contact your manager or business unit head and discuss the incident with him/her. If for any reason this is not possible, you should report the incident to the Corporate Legal Department and/or General Counsel.

Conclusion


“Effective Information Technology be-havior is a state of mind that is adopted and accepted at all levels of the organi-zation”

In recent years, the use of Information Technology (IT) in every facet of our business has grown extensively and it would be difficult to function without it. However, the emergence of electronic mail, and tools, such as personal computers and the Internet, creates a number of potential concerns.

If IT is not properly used, it can expose both ICI Paki-stan and individual users to liability and antitrust/com-petition and/or copyright violations for improper usage, receipt, downloading or dissemination of information.

The IT Code of Conduct comprises requirements that are applicable to all users (i.e., employees and non-employees including temporary staff, consultants, con-tractors, vendor support personnel, clients) of ICI Paki-stan’s IT related resources.

In case of doubt of the application of this document, please seek advice from your Line Manager, or Head of IT.

• As a general rule, all IT related resources and facilities are provided only for internal use and/or business-related matters. A certain amount of limited and responsible personal use by users is also permitted provided that such use is legal, insignificant and does not interfere with the operation of information systems and technologies. Similarly, personal use must not burden ICI Pakistan with incremental costs, or interfere with the user’s employment or other obligations to ICI Pakistan. IT facilities should never be used for personal gain or profit.

• Disclosure or dissemination of confidential or proprietary information regarding ICI Pakistan or its associated or holding companies, its products or its customers outside the official communication structures is strictly prohibited.

• IT related resources and facilities should not be used in any way that is unethical or illegal, or that could embarrass, defame, misrepresent or convey an unjust or unfavorable impression of ICI Pakistan or its business affairs, employees, suppliers, customers, competitors, or stakeholders.

• Unauthorized access to information and information systems is prohibited; access must be authorized by the owners of the information and in line with the user’s job description.

• Information systems can be secured by personal passwords and/or additional authentication means like hardware tokens; users must use these in a responsible way by keeping them personal and securing them against misuse.

• Any installation, change, removal or personal use of software provided by ICI Pakistan or available on ICI Pakistan Information Systems must be authorized and managed by the Information Management organization or a delegated party.

• In order to prevent theft, loss or unauthorized use of information and systems, a user has to take care for the physical security of provided hardware, such as laptops, phones, tokens, USB sticks, etc.

• To protect the availability of company data, users

Introduction

IT Code of Conduct

have to secure relevant business information timely, by making back-ups or storing data on network drives.

• Information Security related incidents or violation of Information Security principles must be reported to the local IT Helpdesk or Head of IT. Possible evidence should not be tampered with.

• Every employee of ICI Pakistan is required to be familiar and to comply with the Information Security Policy, rules and procedures applicable to his or her specific department and site.

• ICI Pakistan reserves the right to review the activities performed by the user using company-provided IT facilities. However, when doing so, responsible line management might be asked to authorize such activity and will be informed on the objectives and the results of the review. All applicable national laws will be followed.

Specificrequirements3.1 Information Disclosure and Com-munication• Employees may disclose or disseminate electronic communication or information contained in, and/or received by electronic communication, only to authorized and/or need-to-know personnel.

• Electronic messages that may be intimidating, disparaging, discriminating, harassing, hostile or offensive on the basis of, for example, gender, race, age, color, religion, national origin, sexual orientation or disability, must not be communicated. Usage and storage of these messages is also prohibited. Receipt of such unsolicited messages should be deleted.

• All electronic communication containing, for instance, technical or proprietary information must be marked

according to ICl’s information classification rules, including an appropriate disclaimer message.

• Every employee should be aware that electronic communication can be used as official documents in legal proceedings and can be placed in the possession of people outside the company.

• In light of the security risks inherent in Internet-based e-mail accounts, such as Yahoo and Hotmail, you must not e-mail business documents to your personal web-based accounts. You may send documents to an external party’s web-based account if you have the external parties express written permission to do so. However, under no circumstances should you send price sensitive or highly confidential documents to an external parties personal web-based e-mail account, even if the external party asks you to do so. In exceptional cases where there is a specific requirement to use your personal web based account, permission must be requested from CFO.

• All personal e-mail you send must be marked PERSONAL in the subject heading, and all personal e-mail sent or received must be filed in a folder marked “Personal” in your mailbox. Contact IT Support if you need guidance on how to set up and use a personal folder. All e-mail contained in other folders, including your inbox and your sent items box are deemed to be business communications for the purposes of monitoring (see section 7.4).

• You must ensure that your personal e-mail use is insignificant and does not interfere with the performance of your duties; does not take priority over your work responsibilities; does not cause unwarranted expense or liability to be incurred by ICI Pakistan; does not have a negative impact on ICI Pakistan in any way; and is lawful and complies with this standard.

• By making personal use of ICI Pakistan’s facilities for sending and receiving e-mail you indicate your agreement to abide by the conditions imposed for their use, and signify your consent to ICI Pakistan monitoring your personal e-mail

• Sometimes it is necessary for ICI Pakistan to access your business communications during your absence,

General Principles


such as when you are away because you are ill or while you are on holiday. Unless your mailbox settings are such that the individuals who need to do this already have permission to view your inbox, access will be granted only with the written permission of the Chief Executive.

• Any e-mail which are not stored in your “Personal” folder in your mailbox and which are not marked PERSONAL in the subject heading will be treated, for the purpose of availability for monitoring, as business communications since we will have no way of knowing that they were intended to be personal. It is up to you to prevent the inadvertent disclosure of the content of personal e-mail by filing your personal email in accordance with this standard. In particular, you are responsible to anybody outside ICI Pakistan who sends to you, or receives from you, a personal e-mail, for the consequences of any breach of their privacy which may be caused by your failure to file your personal e-mail.

• In certain very limited circumstances we may, subject to compliance with any legal requirements, access e-mail marked PERSONAL. Examples are when we have reasonable suspicion that they may reveal evidence of unlawful activity, including instances where there may be a breach of ICI Pakistan Code of Conduct. Permission to access your personal e-mail will be given only with the written permission of the Chief Executive.

• It is only allowed to auto-forward e-mails within the ICI Pakistan infrastructure.

• Every employee must comply with the governing legal and company policies regarding personal privacy and personnel data.

• Every employee should be aware that he/she can be held liable on infringing company copyright and trademarks.

• All actions where it can be foreseen that they will lead to information system malfunctioning are prohibited.

3.2 Internet / Intranet Use• We expect you to use the Internet sensibly. Bear in mind at all times that, when visiting an Internet site, information identifying your computer may be monitored / logged. Therefore, any activity you engage in via the Internet may affect ICI.

• Whenever you access a web site, you should always comply with the terms and conditions governing its use.

• Personal usage must be insignificant and is only permitted subject to the same rules as are set out for personal e-mail use in section 3. 4 of this standard.

• You are strongly discouraged from providing your ICI e-mail address when using public web sites for non-business purposes. This must be kept to a minimum and done only where absolutely necessary, as it may result in you and ICI receiving substantial amounts of unwanted e-mail.

• Access to certain web sites are blocked, restricted or limited by ICl; if you have a particular business need to access such sites, please contact your local IT support staff.

You must not:

• use any images, text or material which are copyright protected, other than in accordance with the terms of the license under which you were permitted to down load them;

• introduce packet-sniffing or password-detecting software;

• seek to gain access to restricted areas of ICI’s network;

• access or try to access data which you know or ought to know is confidential;

• use any software or service to inhibit your web browsing being monitored;

• introduce any form of computer virus, or disable or modify any protection software.

• carry out any hacking activities.

3.3 Wireless and Remote Access• All the policies applicable on Internet and Intranet are applicable on wireless and remote networks

• Employees can also get access to ICI network through wireless access points in some locations e.g. conference rooms

• Visitors to ICI premises will also be able to get wireless access to internet for limited time. However this must be approved by the user which is accompanying those visitors and respective department’s HOD

• Employees working remotely can get access to company network through VPN or emails through internet. This also needs to be approved from user’s department HOD

• Employees working remotely need to make sure their surrounding and equipment are secure for working on company data

3.4 Access Rights• Mechanisms to identify oneself (e.g., User ID and password) are strictly personal. Users are responsible for keeping these mechanisms confidential and to make sure to select passwords that follow the rules for the information system being accessed.

• Users are responsible for ensuring that the access authorization granted is understood and no attempt is made to exceed it.

• Every employee must be aware that unauthorized access to and modification of company data is prohibited.

3.5 Password useUsers shall follow good security practices in the

selection and use of passwords. All users must:

• keep passwords confidential;

• avoid keeping a paper record of passwords, unless this can be stored securely;

• select passwords that follow the rules for the information system being accessed;

Additionally:

• Do not include passwords in any automated log-on process, e.g. stored in a macro, function key or the Operating System.

• Do not share individual user passwords.

Even if some systems give the possibility to have shorter passwords than 8 characters, a password that is at least 8 characters shall be used.

3.6 Software Use• Users should only use authorized copies of software and should never remove any ICI Pakistan standard software installed on PCs. The terms and conditions of software licenses are embedded in the software description and the agreements between ICI Pakistan and software suppliers should be followed.

• Users may not download, use or distribute software or executable programs from computer networks without proper (1) authorization from the IT function, (2) payment of fees (where applicable), and (3) prior verification of the operational integrity.

• All data and software received on whatever medium from internal and external sources as well as data and software to be run on ICI Pakistan’s IT facilities must be scanned for viruses prior to use. The most up to date version virus check program, disseminated by ICI Pakistan, is to be used.

• Peer-2-Peer applications, such as KaZaa, Direct Connect and other file sharing applications are prohibited to use.


• Use of streaming media is not allowed (streaming audio, radio and video, etc.).

3.7 Hardware UseUsers shall ensure that unattended equipment has appropriate protection by:

• logging-off computers when the session is finished (i.e. not just switch off the workstation);

• securing workstations from unauthorized use by screensavers with passwords, keyboard locks or equivalent controls;

• only using portable PC’s outside the office location when approved by line management ;

• ensuring that portable PC’s are subjected to proper measures (e.g. not unattended, encryption with power-on passwords, screen savers with password, locked in cabinet when no proper supervision) to prevent theft, loss, and unauthorized use of data, programs and network/hardware; and

• following good security practices when using smart cards/tokens.

All users shall:

• keep smart cards/tokens safely to prevent theft;

• not keep a paper record of their PIN; and

• not share smart cards/tokens or PIN numbers.

3.8 Mobile Device• Mobile Devices can be used to remain connected with ICI Pakistan’s IT environment.

• ICI Pakistan’s IT supports Blackberry devices, which have been officially issued to users.

• Users can connect their Android, Blackberry, iOS, Symbian and Windows Mobile devices after approvals. IT will not be able to support users in use of their

personal devices.

• Users have the responsibility to keep the company data safe and inform IT HelpDesk of any potential threat.

• IT have the rights under certain conditions to remotely wipe off mobile device.

• Users should try to protect information on mobile devices by securing these physically and through PIN or password.

3.9 Information Retention• Data, which is not stored on network file servers, must be regularly backed up. This is the responsibility of the user of the data. All data storage media must be physically secured when not in use.

• It is not allowed to store any music or video files not directly work-related. The same applies to pictures in any format.

• Secret data should not be kept on a portable media, unless adequate measures have been taken (e.g., encryption or password protection) and approved by the Business/Function Head.

• The recipient of electronic messages preserves those items that are important for business operations, accountability, and/or documentary evidence on behalf of ICI in accordance with legal requirements.

3.10 Responding to security incidents and malfunctionsUsers are responsible to report security incidents, security weaknesses and software malfunctions to their local IT Helpdesk or Head of IT. Examples of incidents that are to be reported in case:

• antivirus software has detected a virus;

• the server/workstation is rebooted without any

interaction from the user;

• unexplainable loss of files occurs;

• programs that the user has not started are running on the workstation/server;

• login attempts that are not accounted for or unexplainable blocking or disabling of user accounts on workstations/servers; and

• loss of IT equipment.

3.11 Compliance Process• Any employee discovering use of IT related resources or IT facilities inconsistent with this IT Code of Conduct should immediately notify his/her departmental manager.

• Failure to comply with these guidelines or any of its provisions may result in disciplinary action, which in serious cases could involve dismissal. In case of contract or agency staff, failure to comply will be considered a serious breach of the contract under which their services are provided to ICI Pakistan.

3.12 Update Process• The IT function is responsible for initiating employee education and training programs regarding IT for all users so that each user will be able to perform his or her job in an effective and reliable manner. Every user has the obligation to participate in such education and training programs.

• Any implemented means of security (technical and organizational) must be subject to regular reviews (at least yearly) and updates (if technical, at least monthly).


Competition Law Compliance PolicyICI Pakistan will not tolerate any breach of competition law

Do:

• Compete strongly

• Discuss general industry-wide matters provided that no commercially or company-sensitive information is disclosed

• Research your competitors through public sources and information volunteered to you (but make a note of the source).

CompetitorsBe very careful in contacts with competitors. If in doubt, take legal advice. Refuse, report and document any approach from a competitor which gives grounds for concern. Leave any trade association meeting immediately if prohibited matters are discussed and insist that your departure is recorded in the meeting minutes. Inform the Corporate Legal Department of the incident without delay.

Seek legal advice before you:

• Participate in or provide information

to a trade association

• Accept invitations outside normal business contact

• Enter into any purchase or supply agreements

• Enter into any distribution or licensing agreements

• Enter into joint ventures (production,

marketing, R&D)

• Enter into any arrangements or

discussions on technical standards

• Participate in any form of information exchange, benchmarking or standard setting.

• Agree not to compete

• Fix prices

• Limit, control or share markets

• Agree to limit production or supply

• Agree not to supply certain customers

• Agree to rig bids

• Fix any other commercial terms

and conditions

• Discuss any aspect of pricing - discounts, margins, rebates, credit

terms, customer quotes

• Exchange commercially sensitive

information other than through a legally approved scheme

• Reach any “understanding” in relation to any of the above

• Meet with more than one competitor except for lawful purposes within a legitimate, approved trade association

Permitted ProhibitedSeek Legal Advice

Do:

• Actively promote your products

• Treat all customers and suppliers even-handedly

• Recommend, but not impose, a resale price

• Require customers to sell a product under the appropriate trademark

and apply appropriate quality standards

Customers and/or SuppliersIf in doubt, seek advice from General Counsel straight away.

Seek legal advice before you:

• Enter into an exclusive supply or purchase agreement

• Enter into a product swap agreement

• Apply different terms and conditions to different customers without a legitimate, objective commercial

justification

• Make any public announcement about prices or costs

• Link the supply of one product to the supply of a different product

• Agree “meet or release” clauses with customers

• Require customers to take a minimum quantity or percentage of their requirements from you

• Enter into an agreement with a term longer than 5 years

• Prevent customers from stocking competitive products

• If you are in a powerful market position, refuse to supply a customer, terminate an agreement or offer non-volume based discounts or rebates.

Do not:

• Fix the price at or above which your customer can sell

• Prevent distributors from accepting orders from outside their territory/ customer group



Do:

• Use standard forms and contracts whenever

you can

• Seek legal advice for any important document to or from the competition authority or an enforcement agency

• Make a file note explaining anything which might be viewed as suspicious (e.g. source of information

on a competitor)

• Keep written communications with lawyers in a separate file marked “privileged legal advice”

• Make sure you and those reporting to you are up-to-date with their competition law compliance training in accordance with the ICI Competition Law Compliance Policy

Communications:Poor use of language can cause regulators and enforcement agencies to think you are in breach of competition law even when you are not.

Any written communication, including email, constitutes a permanent record and may be read by others. In all communications, you must take care to avoid creating an incorrect impression or suspicion that you are breaching competition law.

N/A Do not:

• Use language which could give a misleading

impression of improper or unlawful behaviour

(eg. “destroy after read-ing”)

• Exaggerate or use hy-perbole when discussing your market shares

• Refer to competition or parallel trade as a prob-lem to prevent

• Use ambiguous lan-guage

• Disclose legally privi-leged documents to third parties

• Write anything in an email that you could not later justify to your line manager or a competition authority.


“Competition” means two or more people or companies acting independently to secure the business of a third party. Competition laws promote free markets by preventing restrictions on competition, whether by a single business or between a group of businesses.

The consequences of breaching competition law are severe and include heavy fines, civil liability for damages and damages to reputation. For individuals,

they can also include disciplinary action and legal sanctions including dismissal and prison. You must be familiar with the basic competition rules and be able to identify situations where competition law issues could arise. If in doubt, seek advice from your line manager or the General Counsel without delay. You should report actual or potential breaches of the ICI Pakistan Competition Law Compliance Policy to your line manager, business head, or to the Corporate Legal Department and/or General Counsel.

To:- _________________________________________

I hereby confirm that I have fully understood the contents of theICI Pakistan Code of Conduct.I undertake to comply at all times with the ICI Pakistan Code of Conduct and understand that failure to do so will constitute a serious breach of my obligations to my employer.I also confirm that I understand that all information and documents obtained in the course of my employment shall be kept strictly confidential and not be disclosed to any third parties without prior authorization from my employer.Please return this signed acknowledgement to the Human Resources Department.

_____________________Signature

Name:-Staff No.:-Designation:-Business/Function:-Date:-

Acknowledgement

ICI Pakistan Code of Conduct

46 | Code of Conduct | 2013

A publication of the Corporate Communications& Public Affairs Department at ICI Pakistan Limited

T: +92 21 111 100 200E: [email protected]

Contents Letter from the Chief Executive

Documents

Transcript of Contents Letter from the Chief Executive