I. Stakeholder Relationships
1. Does GOCC disclose a policy that:
|
|
---|---|
a. Stipulates the existence and scope of its effort to address customer’s welfare? |
Yes See PNOC EC Manual for Corporate Governance, Section 8.3 (f), CORPORATE SOCIAL RESPONSIBILITY AND RELATIONS WITH STAKEHOLDERS (CUSTOMERS), page 35. |
b. Elaborates its efforts to interact with the communities in which they operate? |
The Manual of Corporate Governance provided for the Corporate Social Responsibility and Relations with Stakeholders (Communities), Section 8.3 (e) page 34 of the GOCC (PNOC EC). It is guided by the following key principles:
|
c. Ensure that its value chain is environmentally friendly or is consistent with promoting sustainable development? |
Yes PNOC EC issue a Memorandum dated 19 June 2007 regarding EHS Policy and Revised HSSE Policy Statement dated 06 September 2018. For 2023, PNOC EC strictly follows all environmental commitments, regular monitoring of wastewater discharges, ambient air, and noise to reduce the environmental impacts of the Company’s project. Waste segregation, proper handling and disposal of hazardous wastes are continuously practiced in field sites. Recyclable materials were sorted in Material Recovery Facilities (MRF) to promote waste reduction and recycling. See 2023 Health, Safety, Security and Environment (HSSE) Annual Report |
2. Does the GOCC disclose the activities that it has undertaken to implement the abovementioned policies?
|
|
---|---|
a. Customer health and safety |
Yes For 2023, PNOC EC, upon lifting of the State of Public Health Emergency throughout the Philippines due to COVID-19 on 19 July 2023, approved a workflow for employees with symptoms as part of PNOC EC's New Normal Health Guidelines . And consequently, updated the Guidelines on the New Normal Work Arrangement based on the latest Inter-Agency Task Force (IATF) Resolution No.8-C on the Nationwide Implementation of Alert Level System for COVID-19 Response. The Company also coordinated with the local government unit for the administration of bivalent COVID-19 vaccines. It also maintained its support systems to employees to assist in their general health care such as provision of health supplements and flu vaccines.
See 2023 Health, Safety, Security and Environment (HSSE) Annual Report
|
b. Interaction with the communities |
Yes For 2023, PNOC EC adheres to all environmental commitments by strictly complying with the ECC conditions of the Malangas Coal Operations through the conduct of periodic environmental inspections or 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. PNOC EC’s environmental performance is regularly check and discuss by the project stakeholders during MMT meetings. Throughout the year, the Company supplies basic medicines and medical supplies to employees and conducts periodic laboratory analyses of drinking water supply. Evaluation of pre-employment medical and annual physical examinations are constantly performed. In 2023, eye check-up was included to ensure the employees’ clear vision and good eye health. Monthly articles, information campaign and quarterly lectures are provided to enhance their awareness of health management.
See 2023 Health, Safety, Security and Environment (HSSE) Annual Report |
c. Environmentally-friendly value chain |
Yes For 2023, PNOC EC affirms its compliance with relevant environmental, economic, and social rules and regulations as evidenced by the acquisition and renewal of pertinent permits, clearances, and accreditations covering the Company’s various activities, and the submission of periodic reports to the Department of Environmental and Natural Resources - Environmental Management Bureau (DENR-EMB). In exploration sites, PNOC EC is steadfast in its commitment towards preservation of ecological balance through the following:
See 2023 Health, Safety, Security and Environment (HSSE) Annual Report |
3. Does the GOCC have a separate Corporate Social Responsibility (CSR) report/section or sustainability report/section?
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? |
The Annual Report and website provides for the contact information where stakeholders can send or voice out their concerns and/or complaints. During the conduct of Information, Education and Communication (IEC) campaigns in the project host communities, the contact details are likewise provided in the presentation materials. See 2023 PNOC EC Annual Report, page 3 and back page. See PNOC EC Website under Contact Us.
|
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? |
Yes, PNOC EC issue a Memorandum dated 19 June 2007 regarding EHS Policy and Revised HSSE Policy Statement dated 06 September 2018.
See 2023 Health, Safety, Security and Environment (HSSE) Annual Report |
b. Does the GOCC publish data relating to health, safety and welfare of its employees? |
Yes, PNOC EC's HSSE Department is submitting a monthly and annual safety performance report to the Management which includes data on occupational injury or illnesses. For 2023, PNOC EC and its contractors recorded 777,038 and 226,750 safe manhours, respectively.
See 2023 Health, Safety, Security and Environment (HSSE) Annual Report |
c. Does the GOCC have training and development programmes for its employees |
The PNOC EC has its Manpower Development Program and Competency Development Framework aimed at maintaining and upgrading the quality of its personnel by enhancing their core and technical expertise needed for the efficient and successful delivery of operational activities and strategic programs aimed at achieving business targets and corporate objectives.
|
d. Does the GOCC publish data on training and development programmes for its employees? | See Training and Development Programs Participated by Employees 2023. |
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 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. |
II. Disclosure and Transparency
7. Quality of Annual Report. Does the GOCC’s annual report disclose the following items:
|
|
---|---|
a. Corporate objectives |
The PNOC EC has disclosed its Corporate Objectives. |
b. Financial performance indicators |
The PNOC EC has disclosed its Financial Performance Indicators.
|
c. Non-financial performance indicators |
The PNOC EC has disclosed its Non-Financial Performance Indicators. |
d. Details of whistle blowing policy |
Consistent with the GCG Memorandum Circular No. 2016-02 "Revised Whistleblowing Policy for the GOCC Sector", the PNOC EC Whistleblowing Policy Guidelines includes, among others, procedures of its whistle-blowing policy for its stakeholders. |
e. Biographical details of directors |
Yes. See Board of Directors included in PNOC EC's 2023 Annual Report, pages 40-44 |
f. Training and/or continuing education programme attended by each director | Yes. Please see PNOC EC website, GCG Requirements, Title III. Responsibilities of the Board, No. 29c |
8. Are the Annual Reports downloadable from the GOCC’s website?
|
---|
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? |
PNOC EC’s 2023 Annual Report (pages 33-34) 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, revised and approved by GCG on August 2021 in compliance with SEC Memorandum Circular (MC) No. 24, Series of 2019 and SEC MC No. 19, Series of 2020. 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." |
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 2023 Annual Audit Report 56 days after receipt from COA.
|
|||||||||
b. Is the annual report released within 90 days from release of audited financial report? |
PNOC EC released its 2023 Annual Report 58 days after release of its Annual Audit Report.
|
|||||||||
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's Responsibility signed by the Chairman of the Board, the President and CEO and the Acting Treasurer
|
III. 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 of Directors reviewed the Company's Strategy Map and Performance Scorecard, among others, during PNOC EC's 2023 Strategic Planning Session held from December 14-15, 2022. |
b. Does the Board of Directors monitor/oversee the implementation of the corporate strategy? |
PNOC EC regularly holds an Annual Planning Session attended by members of the Board of Directors and Management, where the Company’s Vision and Mission are deliberated on. The Board of Directors and Management also discuss the implementation of the Company’s plans and programs aligned with its corporate strategies. |
12. Did the GOCC achieve 90% in the PES?
|
---|
PNOC EC obtained an overall score of 91.85% as evidenced in the GCG validation for its 2023 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
|
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?
|
---|
In 2023, said Committee was composed of the following: Chairman: Franz E. Alvarez See Secretary’s Certificate for PNOC EC Board Resolution No. 7-6, Series of 2023 |
15. Did the Nomination and Compensation/Remuneration Committee meet at least twice during the year?
|
---|
The Nomination, Remuneration, Education and Employee Welfare Committee had six (6) meetings in 2023. The Committee met on January 31, March 23, May 30, July 05, September 15 and 26, 2023.
|
16. If yes, is the report of the Nomination and Compensation/Remuneration Committee publicly disclosed?
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 2023, the PNOC EC Audit and Risk Management Committee was composed of the following: Chairman: Edgar Benedict C. Cutiongco Members: Zenaida Y. Monsada See Secretary’s Certificate for PNOC EC Board Resolution No. 7-6, Series of 2023 |
18. If yes, is the report of the Audit Committee publicly disclosed?
|
---|
See 2023 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 Profile of Director Edgar Benedict C. Cutiongco. |
20. Did the Audit Committee meet at least four times during the year?
|
---|
The Audit and Risk Management Committee had ten (10) meetings in 2023. The Committee met on January 31, April 19, May 16, July 13, August 04, August 24, September 15, September 26, October 23 and November 16, 2023. |
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 2023, the PNOC EC Audit and Risk Management Committee was composed of the following: Chairman: Edgar Benedict C. Cutiongco Members: Zenaida Y. Monsada See Secretary’s Certificate for PNOC EC Board Resolution No. 7-6, Series of 2023 |
22. If yes, is the report on Risk Management Committee publicly disclosed?
|
---|
See 2023 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 Profile of Director Edgar Benedict C. Cutiongco |
24. Board meetings and attendance
|
|
---|---|
a. Are the Board of Directors meetings scheduled at the beginning of the year?(end of Q1) |
As a practice, the PNOC EC Board of Directors schedules a Board meeting at least once every month, the date of which is subject to the availability of the Secretary of the Department of Energy – PNOC EC’s Ex Officio Chairman of the Board. Although the By-Laws and existing rules mandate that the Board must be provided the materials two (2 days) before a 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. Does the Board of Directors meet at least monthly? |
The Board of Directors hold at least one (1) meeting every month. |
c. Did the Board of Directors meet on at least 75% on their scheduled meetings? |
The Board of Directors held eighteen (18) meetings in 2023. |
d. Has each of the directors attended at least 90% of all the board meetings held during the year? |
At least 90% of the Board Meetings were attended by all appointive Member of the Board. |
e. Did the Board of Directors meet separately at least once during the year 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? |
Although the By-Laws and existing rules mandate that the Board must be provided the materials two (2 days) before a 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? |
PNOC EC's Corporate Secretary and Assistant Corporate Secretaries, appointed by the Board of Directors as such, are members in good standing of the Philippine Bar.
|
26. Internal Audit
|
|
---|---|
a. Does the company have a separate internal audit function? | PNOC EC has a separate internal audit function. See PNOC EC Table of Organization. |
b. Does the appointment and removal of the internal auditor require the approval of the Audit Committee? | See PNOC EC Manual for Corporate Governance, pages 17-22 |
27. Risk Oversight
|
|
---|---|
a. Does the company disclose the internal control procedures/risk management systems it has in place? |
PNOC EC has an existing Guidelines on Risk Management. The Company intends to employ an organization-wide strategy to identify and prepare for uncertainties in its finances, operations, and objectives by establishing an Enterprise Risk Management System. |
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? |
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. It is in the policy that PNOC EC’s Board of Directors perform risk management function as mandated and guided in its Manual Corporate Governance series of 2019. Refer to Corporate Governance section, of the 2023 Annual Report, pages 33 to 38 Refer to Manual of Corporate Governance, page 21, 3.1e (i)
|
c. Does the company disclose how key risks are managed? | Management of key risks affecting PNOC EC are disclosed in the existing Risk Management Manual that is in place since 1993. PNOC EC also has an existing Guidelines on Risk Assessment. See also 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? |
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 2023 Annual Report, pages 33 to 38 Refer to Manual of Corporate Governance, page 21, 3.1e (i)
|
28. Board Chairman
|
|
---|---|
Do different persons assume the roles of Chairman and CEO? |
For 2023, PNOC EC’s Ex-Officio Chairperson is Raphael Perpetuo M. Lotilla (Secretary, Department of Energy), while its President and CEO is Franz Josef George E. Alvarez.
|
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? |
One of the functions of the Governance Committee is to recommend to the Board the continuing education of Directors.
|
c. Did all Appointive Directors attend at least 1 training for the calendar year? |
Yes. |
30. Board Appraisal
|
|
---|---|
a. Is an annual performance assessment conducted of the Board of Directors? |
The Board of Directors conducts an annual assessment of its performance for the year based on an appraisal system developed for the purpose. For its performance for the year 2023, the appraisal of the Board of Directors will be conducted in the first quarter of 2024. |
b. Does the GOCC disclose the process followed in conducting the Board assessment? |
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 Boards 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. For the year 2023, the appraisal of the Board of Directors will be conducted in the first quarter of 2024. The Office of the Corporate Secretary, as the repository of Board Assessment Questionnaire, individually sends and collects the Performance Appraisal Form of each Member of the Board to assure the integrity and confidentiality of such. |
c. Does the GOCC disclose the criteria used in the Board assessment? |
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 Boards 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. For the year 2023, the appraisal of the Board of Directors will be conducted in the first quarter of 2024. |
31. Committee Appraisal
|
|
---|---|
Is an annual performance assessment conducted of the Board of Directors Committees? |
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. For the performance of each Board Committees in the year 2023, the respective members of each Board Committee conducted the assessment of their respective Committees during the first quarter of 2024. 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. |
BONUS
Stakeholder Relationships
|
|
---|---|
1. Does the GOCC practice Global Reporting Initiative (GRI) on its annual reports? |
For the 2023 PNOC EC Annual Report, the following sections are referenced to the Global Reporting Initiative (GRI) standards: About the Report, About PNOC EC, Report from the President and CEO, Operational Highlights, Corporate Social Responsibility, HSSE, People Development, and Corporate Governance Section. |
Disclosure Transparency
|
|
||||||
---|---|---|---|---|---|---|---|
2. Quality of Annual Report | |||||||
Are the audited annual financial report/statement released within 30 days upon receipt from COA? |
PNOC EC released its 2023 Annual Audit Report 56 days
|
PENALTY
Responsibilities of the Board
|
|
---|---|
1. 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.
|
2. Is there non-compliance with Good Governance Conditions? |
As of this Report's date, PNOC EC's 2023 compliance with good governance conditions is still under evaluation by the GCG. |