Corporate Governance Seal

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CORPORATE GOVERNANCE SCORECARD

 

QUESTION

LINK SOURCE

 

  • Stakeholder Relationships

 

 

1. Does GOCC disclose a policy that:

 

 

 

a. Stipulates the existence and scope of its effort to address customer’s welfare?

 

 

See PNOC EC Manual for Corporate Governance, 

Section 8.3 (f), CORPORATE SOCIAL RESPONSIBILITY AND RELATIONS WITH STAKEHOLDERS (CUSTOMERS), page 31.

 

 

b. Elaborates its efforts to interact with the communities in which they operate?

 

 

See PNOC EC Manual for Corporate Governance, 

Section 8.3 (e), CORPORATE SOCIAL RESPONSIBILITY AND RELATIONS WITH STAKEHOLDERS (COMMUNITIES), pages 30-31.

 

 

c. Ensure that its value chain is

 environmentally friendly or is 

 consistent with promoting sustainable 

 development?

 

 

See PNOC EC Manual for Corporate Governance,

Sections 8.4, HEALTH AND SAFETY and 8.5, ENVIRONMENT, page 33.

 

2. Does the GOCC disclose the activities that it has undertaken to implement the abovementioned policies?

 

 

 

 

a. Customer health and safety

 

 

The Company ensures compliance of customers and contractors to the Company’s EHS policy through the conduct of safety trainings and awareness programs. In PNOC EC’s port operations in Energy Supply Base, representatives of locators and contractors participated in the supervisor safety training in November 2016 and bomb threat awareness seminar in December 2016. In COC 41 Zamboanga Sibugay, small-scale coal mine (SSCM) permittees were trained in mine emergency rescue in March 2016. See 2016 PNOC EC Annual Report, HSSE, page 16.

 

 

             

b. Interaction with the communities

 

 

PNOC EC conducts regular interaction with communities within its areas of operation. See 2016 PNOC EC Annual Report, Corporate Social Responsibility Section, pages 14 to 15.

 

           

 c. Environmentally-friendly value chain

 

 

In exploration projects, PNOC EC preserves ecological balance by doing the following:

 

  • Using environment-friendly drilling fluids, equipment, and technology in drilling operations which is accepted worldwide;

  • Conducting seismic shooting outside migration period of marine mammals (e.g., whales, dolphins) and other endangered marine species (e.g., pawikans); PNOC EC has marine mammals observers onboard seismic vessels during operations to ensure this;

  • Conducting Information, Education, and Communication campaigns (IECs) in affected host communities for any exploration work; 

  • Ensuring responsible disposal of waste materials and restoration of drill sites to, as much as possible, their original state and condition;

  • Balling and relocating trees in case drill sites are located in forested or wooded areas;

  • Strictly adhering to the terms and conditions of the Environmental Compliance Certificate (ECC), which is regularly monitored by a multi-partite monitoring team; and

  • Following good oil industry practices

 

The Company also complies with relevant environmental legislation and regulations as evidenced by acquisition/renewal of pertinent permits, clearances and accreditation covering the Company’s various activities and the submission of periodic reports to Environmental Management Bureau (EMB).

 

3. Does the GOCC have a separate Corporate Social Responsibility (CSR) report/section or sustainability report/section?

 

 

PNOC EC published a CSR Report covering the years 2013 to 2015. There is also a CSR Section in the 2016 PNOC EC Annual Report on pages 14 to 15.

 

See PNOC EC Manual for Corporate Governance

under Section 8, CORPORATE SOCIAL RESPONSIBILITY AND RELATIONS WITH STAKEHOLDERS, pages 26 – 33. Refer to PNOC EC Website under GCG Requirements.

 

 

4. Where stakeholder interests are protected by law, stakeholders should have the opportunity to obtain effective redress for violation of their rights.

 

 

 

 

           

      Does the GOCC provide contact details

  via the Company's website or Annual Report which stakeholders (e.g. customers, suppliers, general public, etc.) can use to voice their concerns and/or complaints for possible violation of their rights?

 

 

Stakeholders may contact MS. MYRANNOR B. HANDIG, OIC, External Relations Department, at

mbhandig@pnoc-ec.com.ph, or at 497-9400 Local 444. Stakeholders may also use the Contact Us page on the PNOC EC Website.

 

5. Performance-enhancing mechanisms for employee participation should be permitted to develop.

 

 

 

a. Does  the GOCC explicitly mention the     

    health, safety and welfare policy for its 

    employees?

 

 

See EHS Policy Manual. 

 

 

b. Does the GOCC publish data relating to  

    health, safety and welfare of its 

    employees?

 

 

See 2016 PNOC EC Annual Report on Safety Performance, page 17.

 

c. Does the GOCC have training and 

    development programmes for its 

    employees

 

 

See Competency Development Framework.

    

  d. Does the GOCC publish data on training

       and development programmes for its 

       employees?

 

 

See Training and Development Programs for 2015.

 

6. Stakeholders including individual employee and their representative bodies, should be able to freely communicate their concerns about illegal or unethical practices to the board and their rights should not be compromised for doing this.

 

 

 

a. Does the GOCC have procedures for

 complaints  by employees concerning

 illegal (including corruption) and unethical behavior?

 

 

PNOC EC has a Whistle Blowing Policy in accordance with GCG Memorandum Circular No. 2014-04, or the Whistle Blowing Policy on the GOCC Sector, among other relevant regulations, and approved by GCG.

 

See PNOC EC Whistle Blowing Policy.

 

 

b. Does the GOCC have procedures to 

    protect an employee/person who 

    reveals illegal/unethical behavior from 

    retaliation?

 

 

PNOC EC will develop a Whistle Blowing Policy, taking into consideration GCG Memorandum Circular No. 2014-04, or the Whistle Blowing Policy on the GOCC Sector, among other relevant regulations.

 

See GCG's Whistle Blowing Web Portal.

 

 

  • Disclosure and Transparency

 

 

7. Quality of Annual Report. 

     Does the GOCC’s annual report disclose the following items:

 

 

 

a. Corporate objectives

 

 

PNOC EC has disclosed its Corporate Objectives. See 2016 PNOC EC Annual Report, Strategic Objectives and Measures, page 25.

 

 

b. Financial performance indicators

 

 

PNOC EC has disclosed its Financial Performance Indicators. See 2016 PNOC EC Annual Report, Financial Highlights, pages 18 to 19.

 

 

c. Non-financial performance indicators

 

 

PNOC EC has disclosed its Non-Financial Performance Indicators. 2016 PNOC EC Annual Report, PNOC EC’s Strategic Objectives and Measures, page 25.

 

             

d. Details of whistle blowing policy

 

 

PNOC EC adopted its internal whistle blowing policy in May 2017 in compliance with GCG MC 2016-02. See 2016 PNOC EC Annual Report Corporate Governance, Conflicts of Interest, page 23, and 2013-2015 CSR Report, Committing to Good Governance, page 19.

 

             

e. Biographical details of directors

 

 

PNOC EC included the biographical details of its Board of Directors. 2016 PNOC EC Annual Report, BOD Profile, pages 30 to 32.

 

           

  f. Training and/or continuing education    programme attended by each

      director

 

 

PNOC EC will include in its 2017 Annual Report the training programs attended by its Directors.

 

 

8. Are the Annual Reports downloadable from the GOCC’s website?

 

 

See PNOC EC Annual Reports.

 

9. Corporate Governance Confirmation Statement

 

 

 

 

   Does the Annual Report contain a 

    statement confirming the company's 

    full compliance with the code of 

    corporate governance and where there 

    is non-compliance, identify and explain 

    reasons for each such issue?

 

 

 

Refer to the 2016 PNOC EC Annual Report, Corporate Governance, opening paragraph, page 20.

 

 

10. Timely filing/release of annual/financial reports

 

 

 

 

a. Are the audited annual financial 

   report/statement released within 60  

   days upon receipt from COA?

 

 

PNOC EC released its 2016 Annual Audit Report 7 days after receipt from COA.

 

AUDIT REPORT

Year

of the Report

Date Published

Date of Receipt from COA

2016

June 9, 2017

June 2, 2017

 

 

 

 

 

b. Is the annual report released within 90

   days from release of audited financial report?

 

 

PNOC EC released its 2016 Annual Report 28 days after release of its Annual Audit Report.

 

ANNUAL REPORT

Year

of the Report

Date 

Published

Date of Receipt from COA

2016

June 30, 2017

June 2, 2017

 

 

 

 

 

c. Is the true and fairness/fair 

    representation of the annual financial 

    statement/reports affirmed by the 

    board of directors and/or the relevant 

    officers of the company?

    

 

 

The true and fair representation of the annual financial statements/reports is affirmed in the Statement of Management Responsibility signed by the President and CEO and the VP for Management Services/CFO. 

 

See page 36 of the Annual Report 2016.

 

 

  • Responsibilities of the Board

 

 

11. Corporate Vision and Mission/ Strategy

 

 

 

a. Has the Board of Directors reviewed   

    the vision and mission/ strategy in the 

    last financial year?

 

 

The Board reviewed the Company’s Strategy Map and Performance Scorecard during the Board meeting held on January 12, 2016. Further, the Board likewise oversaw implementation of the corporate strategy through Management reports presented during the Strategic Planning Sessions held on February 2, 2016, March 29, 2016, April 12 and 26, 2016, May 12, 2016, and June 14, 2016.

 

 

b. Does the Board of Directors 

    monitor/oversee the implementation 

    of the corporate strategy?

 

 

PNOC EC holds an annual strategic planning workshop attended by members of the Board and Management, where the Company’s corporate vision and mission/strategy are deliberated on.

 

 

12.  Did the GOCC achieve 90% in the PES?

 

 

PNOC EC achieved 90.93% in its 2016 Performance Scorecard subject to final validation by the GCG.

 

See PNOC EC's 2016 Performance Scorecard.

 

 

13. Code of ethics or conduct

 

 

 

 

a. Are the details of the code of ethics or 

    conduct disclosed?

 

 

The PNOC EC Board of Directors, Management, and employees are covered by and are required to comply with the following: 

 

1. Republic Act No. 6713 

2. Republic Act No. 6713 IRR

3. Company Policy on Discipline

4. Table of Penalties

5. Rules and Regulations on Discipline of Corporate Officers and Secretary Certificate on Board Resolution No. 7-7, S’2012.

6. Republic Act No. 10149

7. GCG Memorandum Circular No. 2012-05

 

 

b. Does the GOCC disclose that all

    Directors, senior management

    and employees are required to comply

    with the code?

 

 

c. Does the company disclose how it

    implements  and monitors compliance

    with the code of  ethics or conduct?

 

 

14.  Does the Board appoint a Nomination and

     Compensation / Remuneration Committee?  

 

 

PNOC EC Board of Directors created a Nomination and Remunerations Committee, whose functions were merged with the existing Compensation, Education and Employee Welfare Committee, and renamed to Nomination, Remuneration, Education, and Employee Welfare Committee. 

 

In 2016, said Committee was composed of the following:

 

Chairman:  Ralph Pastor A. Salazar

Members:  Rufino B. Bomasang 

                Fernando V. Barreiro                         Joseph L. Emnas

                Rafael M. Iriarte

                Emmanuel K. Veloso

 

See Secretary’s Certificate for PNOC EC Board Resolution No. 5-9, Series of 2016 and Secretary’s Certificate for PNOC EC Board Resolution No. 4-2, Series of 2016.

 

 

15.  Did the Nomination and

      Compensation/Remuneration Committee meet at least twice during the year?

 

 

The Nomination, Remuneration, Education and Employee Welfare Committee did not meet in 2016.

 

 

16.  If yes, is the report of the Nomination and

      Compensation/Remuneration Committee publicly disclosed?

 

 

Not applicable

 

 

17.  Does the Board appoint an Audit Committee?

 

      

 

PNOC EC formally combined the Audit Committee and Risk Management Committee into the Audit and Risk Management Committee pursuant to Section 16.6 of the GCG Code of Corporate Governance, as well as Section 3.15(f) of the PNOC EC Manual of Corporate Governance. 

 

In 2016, the PNOC EC Audit and Risk Management Committee was composed of the following:

 

     Chairman:  Leopoldo E. Petilla 

     Members:  Ralph Pastor A. Salazar

                     Rafael M. Iriarte

                     Fernando V. Barreiro

                     Joseph L. Emnas

                     Emmanuel K. Veloso

 

See Secretary’s Certificate for PNOC EC Board Resolution No. 4-2, Series of 2016.

 

 

 

18.  If yes, is the report of the Audit Committee

      publicly disclosed?

 

 

See 2016 Audit and Risk Management Committee Report.

 

 

19.  Does at least one member of the Audit 

      Committee have an audit, accounting or 

      finance background (qualification or 

      experience)?

 

 

See Resumé of Director Fernando V. Barreiro, Resumé of Director Joseph L. Emnas, and Resumé of Director Emmanuel K. Veloso.

 

 

20.  Did the Audit Committee meet at least four times during the year?

 

 

The Audit and Risk Management Committee held thirteen (13) meetings in 2016.

See Attendance in the Joint Committee Meetings 2016.

 

 

21.  Does the Board appoint a Risk Management

        Committee?

 

 

PNOC EC formally combined the Audit Committee and Risk Management Committee into the Audit and Risk Management Committee pursuant to Section 16.6 of the GCG Code of Corporate Governance, as well as Section 3.15(f) of the PNOC EC Manual of Corporate Governance. 

 

In 2016, the PNOC EC Audit and Risk Management Committee was composed of the following:

 

     Chairman:  Leopoldo E. Petilla 

     Members:  Ralph Pastor A. Salazar

                     Rafael M. Iriarte

                     Fernando V. Barreiro

                     Joseph L. Emnas

                     Emmanuel K. Veloso

See Secretary’s Certificate for PNOC EC Board Resolution No. 4-2, Series of 2016.

 

 

22.  If yes, is the report on Risk Management 

      Committee publicly disclosed?

 

 

See 2016 Audit and Risk Management Committee Report.

 

23.  Does at least one member of the Risk

      Management Committee have a background in finance and investments?

 

 

See Resumé of Director Fernando V. Barreiro, Resumé of Director Joseph L. Emnas, and Resumé of Director Emmanuel K. Veloso.

 

 

24. Board meetings and attendance

 

 

 

a. Are the Board of Directors meetings 

    scheduled at the beginning of the year?  

    (end of Q1)

 

 

As its practice, PNOC EC Board holds its Regular Board Meeting every second Tuesday of the Month and its Special Board Meeting on the last 

Tuesday of the month.

 

 

b. Does the Board of Directors meet at    

     least monthly?

 

 

The Board of Directors hold at least one (1) meeting every month. 

See Attendance in Board Meetings 2016.

 

c. Did the Board of Directors meet on at 

    least 75% on their scheduled meetings?

 

 

The Board of Directors held thirteen (13) meetings in 2016.

See Attendance in Board Meetings 2016.

 

 

d. Has each of the 

    directors attended at least 90% of all

    the board meetings held during the

    year?

 

 

 

See Attendance in Board Meetings 2016.

 

 

e. Did the Board of Directors meet 

     separately least once during the year 

     without the President/CEO present?

 

 

The PNOC EC Board of Directors held a meeting on July 13, 2016 without the President/CEO present.

 

25. Access to information

 

 

 

a. Does the GOCC have a policy that 

    stipulates board papers for Board of 

    Directors  meetings be provided to the Board at least three (3) working days in advance of the board meeting?

 

 

As a practice, materials for Board Meetings are provided to the Board at least three (3) working days in advance of all Board Meetings.

 

b. Is the Board Secretary trained in legal, accountancy or company secretarial practices?

 

 

 

See Curriculum vitae of Atty. Michael A. Medado.

 

 

 

26. Internal Audit

 

 

 

a. Does the company have a separate internal audit function?

 

 

PNOC EC has a separate internal audit function

and has appointed an Internal Audit Manager.

See Management Team Section.

 

 

b. Does the appointment and removal of the internal auditor require the approval of the Audit Committee?

 

 

See PNOC EC Manual for Corporate Governance, 

Section 3.15 (b) (vi).

 

27. Risk Oversight

 

 

 

a. Does the company disclose the internal control procedures/risk management systems it has in place?

 

 

PNOC EC ensures the integrity of the accounting and financial reporting system. The PNOC EC Board is responsible in assuring that the financial and operational controls are in place and working throughout the organization. Refer to PNOC EC 2015 Annual Report, page 53, Financial Risk and Capital Management.

 

 

b. Does the Annual Report disclose that the Board of Directors has overseen a review of the company's material controls (including operational, financial and compliance controls) and risk management systems?

 

 

PNOC EC included in its 2015 Annual Report a statement that its Board has reviewed the Company’s material controls and risk management systems. Refer to Paragraph 12, Corporate Governance section, page 22.

 

c. Does the company disclose how key risks are managed?

 

 

PNOC EC manages key risks affecting the Company. See Risks and Strategies.

 

d. Does the Annual Report contain a statement from the Board of Directors or Audit Committee commenting on the adequacy of the GOCC's internal controls/risk management systems?

 

 

PNOC EC included a statement in its 2015 Annual Report commenting on the adequacy of PNOC EC’s internal controls/risk management systems. Refer to Paragraph 12, Corporate Governance section, page 22. 

 

28. Board Chairman 

 

 

 

    Do different persons assume the roles of Chairman and CEO?

 

 

For 2016, PNOC EC’s Chairman of the Board was the late Gemiliano C. Lopez, Jr.; while the President and CEO has been Pedro A. Aquino, Jr.

 

 

29. Board of Directors Development

 

 

 

a. Does the GOCC have orientation programs for new Directors?

 

 

The Office of the Corporate Secretary holds an orientation session for new directors, covering the following topics: (1) Company overview; (2) Role of PNOC EC Board of Directors; and (3) PNOC EC Operations.

 

 

b. Does the GOCC have a policy that encourages Directors to attend on-going or continuous professional education programmes?

 

 

See PNOC EC Manual for Corporate Governance, 

Section 3.5 (i), page 10.

 

c. Did all Appointive Directors attend at least 1 training for the calendar year?

 

 

 

 

30. Board Appraisal

 

 

 

a. Is an annual performance assessment conducted of the Board of Directors?

 

See PNOC EC Manual for Corporate Governance, Section 3.16.

 

b. Does the GOCC disclose the process followed in conducting the Board assessment?

 

See PNOC EC Manual for Corporate Governance, Section 3.16.

 

c. Does the GOCC disclose the criteria used in the Board assessment?

 

See PNOC EC Manual for Corporate Governance, Section 3.16.

 

31. Committee Appraisal

 

 

 

 

     Is an annual performance assessment conducted of the Board of Directors Committees?

 

 

See PNOC EC Manual for Corporate Governance, Section 3.15.

 

BONUS

 

 

 

Stakeholder Relationships  

 

 

 

  • Does the GOCC practice Global Reporting Initiative (GRI) on its annual reports?

 

 

PNOC EC’s 2016 Annual Report’s Corporate Governance Section is referenced to the Global Reporting Initiative (GRI) standards.

 

 PNOC EC has also published a GRI-referenced Corporate Social Responsibility Report covering the years 2013 to 2015.

 

                                                            

Disclosure Transparency

                                      

 

 

  • Quality of Annual Report

 

 

 

Are the audited annual financial report/statement released within 30 days upon receipt from COA?

 

 

PNOC EC released its 2016 Annual Audit Report 7 days after receipt from COA.

 

AUDIT REPORT

Year

of the Report

Date Published

Date of Receipt from COA

2016

June 9, 2017

June 2, 2017

 

 

 

 

 

PENALTY

 

 

 

Responsibilities of the Board

 

 

 

  • Are there members of the Board of Directors who hold more than five (5) positions in GOCCs and PLCs?

 

 

No PNOC EC Board Member holds more than  five (5) positions in GOCCs and PLCs.

 

  •  Is there non-compliance with Good Governance Conditions?

 

 

PNOC EC is fully compliant with all Good Governance Conditions.

 

 

(page update November 17, 2017)