2019 Corporate Governance Seal

The Company integrates in its policies and procedures all applicable health, safety, security, and environmental (HSSE) rules and regulations to protect its employees, the environment, and the general public.
For 2019, PNOC EC continuously enhanced the HSSE competency of its front-line employees, through the conduct of HSSE Appreciation Course, First-Aid with Basic Life Support Training in September and November 2019, respectively. The annual General HSSE Orientation program was also conducted for third-party service providers in May 2019. The Company also intensifies employee engagement to communicate best practices and increase employee awareness on timely HSSE issues. These initiatives helped the Company achieve its 2019 goal of maintaining an injury-free performance for the Head Office and field operations.

The Company routinely tested readiness and practiced the response procedures for potential emergencies, such as fire and earthquake. Accordingly, response drills were conducted in the Head Office and field offices. In March 2019, PNOC EC led the conduct of fire safety seminar and unified earthquake and fire evacuation drill within the Energy Center. The unified drill was participated in by the PNOC Mother, Philippine Economic Zone Authority (PEZA), DOE, and PNOC Renewables Corporation (PNOC RC) to test and harmonize each agency’s emergency response plan, and to determine areas for improvement. Mine emergency rescue and evacuation exercises were also conducted in COC 41 operations in Malangas, Zamboanga Sibugay. PNOC EC conducted the required safety audits in the Head Office and field offices to check and review operational compliance. The Company took preventive actions to minimize the occurrence of incidents and employed regular safety audits on operational safety and environmental compliance. The decommissioning of COC 41 Mine 1 was safely and successfully completed without any recordable incidents. Consequently, the Safety and Health Association of the Philippine Energy Sector (SHAPES) recognized PNOC EC for the injury-free operation of the head office and COC 41 Mine 1 equipment rehabilitation and base camp renovation.

In its exploration sites, PNOC EC is steadfast in its commitment towards preservation of ecological balance through the following: 
(1)    Use of environment-friendly and internationally-accepted drilling fluids, equipment, and technology in drilling operations;
(2)    Safe conduct of seismic survey, suspending activities during migration of marine mammals (e.g., whales and dolphins) and other endangered marine species, and by hiring marine mammal observers on board seismic vessels during operation to ensure the safety of these animals;
(3)    Conduct of Information, Education, and Communication (IEC) campaigns as well as Free, Prior and Informed Consent (FPIC) activities, as mandated by law, in the affected host communities prior to exploration work;
(4)    Strict adherence to the terms and conditions of the Environmental Compliance Certificate (ECC) and other permits and clearances; and
(5)    Keeping up with good oil and coal industry practices.

The Company adheres to all environmental commitments by strictly complying with the ECC conditions of the Malangas Coal Operations through the conduct of periodic environmental audits, Multi-Partite Monitoring Team (MMT) meetings, compliance with the Environmental Management and Monitoring Plan (EMMP), and other improvements that include updates on best practices. The EMMP, which includes the continuous monitoring of waste water discharges, ambient air, and noise, is in place to reduce the impacts of the project to the environment. Waste segregation and proper handling of hazardous wastes are also being practiced in the sites. In addition, PNOC EC promotes good environmental practices to the Small-Scale Coal Mine (SSCM) permittees through the formulation of the environmental management guidelines specific for SSCM operations. The Company conducted regular environmental and safety inspections at each of SSCM permittees’ sites. In 2019, Malangas Coal Operation had successfully reconstituted its MMT in compliance with the DENR Administrative Order 9DAO) 2017 – 15 of the “Guidelines on Public Participation under the Philippine Environmental Impact Statement System” and DAO 2018-18 or “Establishing a Centralized Management and Coordinative Mechanism at the Regional Offices of DENR, MGB and EMB, and designating the DENR Regional Director as the Regional Executive Director Providing Overall Command of Regional Operations”. Relatively, the Memorandum of Agreement for the reconstituted MMT has been signed by the new members and submitted to DENR-EMB. 
 

See PNOC EC's Annual Reports.

PNOC EC’s 2019 Annual Report includes a statement which reads: “PNOC EC affirms its full compliance with the provisions of the Code of Corporate Governance (GCG Memorandum Circular No. 2012-07 dated November 2012) and PNOC EC’s Manual of Corporate Governance dated January 2014. As a model GOCC, PNOC EC continuously lives up to such status through practice of good corporate governance towards active promotion and pursuit of corporate governance reforms and conscious observance of the principles of accountability and transparency."

PNOC EC released its 2019 Annual Audit Report 22 days
after receipt from COA.

PNOC EC released its 2019 Annual Report 44 days after
release of its Annual Audit Report.

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

See 2019 Annual Audit Report, page 4

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
8. Anti-Sexual Harassment Policy

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

See Board and Committee Meetings Attendance 2019

The Board of Directors held twenty-three (23) Board meetings in 2019.

See Board and Committee Meetings Attendance 2019

All the appointed Members of the Board attended all the duly-called Board meetings for 2019, except for the President and CEO who did not attend one (1) meeting.

See Board and Committee Meetings Attendance 2019

The Board of Directors held a Board meeting on October 8, 2019 without the presence of the President and CEO.

See Board and Committee Meetings Attendance 2019

All PNOC EC Assistant Corporate Secretaries appointed by the Board of Directors as such are members in good standing of the Philippine Bar.

See PNOC EC Assistant Corporate Secretaries in 2019

PNOC EC discloses its internal control procedures/risk management systems in the existing Risk Management Manual that is in place since 1993. Included in the Manual is the Risk Management System/Process which provides for the identification of risks, risk management/analysis, risk selection techniques, implementation of risk management techniques and monitoring and improving the risk management system. Financial Risk and Capital Management is also disclosed in the PNOC EC 2019 Annual Audit Report, pages 94 to 100.

As disclosed in the Company’s Annual Report, the Board of Directors oversee the risk management functions, particularly in the areas of managing credit, market liquidity, operational, legal, reputational, and other risks of PNOC EC.  The Company’s Management regularly reports to the Audit and Risk Management Committee and to the Board of Directors all matters concerning PNOC EC’s material controls and risk management system.

Refer to Corporate Governance section of the 2019 Annual Report, pages 26 to 30.

The annual report contains a statement that the Board of Directors oversee the risk management functions, particularly in the areas of managing credit, market liquidity, operational, legal, reputational, and other risks of PNOC EC.  The Company’s Management regularly reports to the Audit and Risk Management Committee and to the Board of Directors all matters concerning PNOC EC’s material controls and risk management system.

Refer to Corporate Governance section of the 2019 Annual Report, pages 26 to 30.

The Board of Directors conducts an annual assessment of its performance for the year based on an appraisal system developed for the purpose which determines, among others, (a) the adequacy of the Board's structure and composition; (b) whether the Board has fulfilled its responsibilities for PNOC EC's performance; (c) whether the members of the Board work well as a team and communicate properly; and (d) their strengths and weaknesses.

See Board Assessment Questionnaire.

The Board of Directors conducts an annual assessment of its performance for the year based on an appraisal system developed for the purpose which determines, among others, (a) the adequacy of the Board's structure and composition; (b) whether the Board has fulfilled its responsibilities for PNOC EC's performance; (c) whether the members of the Board work well as a team and communicate properly; and (d) their strengths and weaknesses.

See Board Assessment Questionnaire.

The Board of Directors conducts an annual assessment of its performance for the year based on an appraisal system developed for the purpose which determines, among others, (a) the adequacy of the Board's structure and composition; (b) whether the Board has fulfilled its responsibilities for PNOC EC's performance; (c) whether the members of the Board work well as a team and communicate properly; and (d) their strengths and weaknesses.

See Board Assessment Questionnaire.

The Board of Directors Committees conducts an annual assessment of its performance for the year based on an appraisal system developed for the purpose which determines, among others, (a) the adequacy of the Committee's structure and composition; (b) whether the Committee has fulfilled its responsibilities for PNOC EC's performance; (c) whether the members of the Board work well as a team and communicate properly; and (d) their strengths and weaknesses.

See Board Committee Assessment Questionnaire – Audit and Risk Management Committee, Board Committee Assessment Questionnaire – Nomination, Remuneration, Education, and Employee Welfare Committee, and  Board Committee Assessment Questionnaire – Project Development and New Ventures Committee.

PNOC EC released its 2019 Annual Audit Report 22 days
after receipt from COA.