Our corporate governance model is based on the Norwegian Code of Practice for Corporate Governance. We operate on a regular basis in countries with an elevated risk of corruption. We recognize that our future success depends on maintaining the highest standards of corporate governance for the way we conduct our business, deliver our services, and create value for our shareholders.
PGS has built a value set that provides the foundation for all our goals, policies, and actions. These offer clear guidelines on how we expect everyone at PGS to interact with their colleagues, suppliers, customers, and the people we encounter in our day-to-day work. We are committed to living our core values and to conducting our business with the utmost integrity. We hold ourselves to high ethical standards in all our business dealings around the world.
The PGS Board of Directors is responsible for establishing appropriate guidelines, monitoring, and ensuring that internal risk management systems are in place. We regularly review and update our governing documents to reflect changes in best practices and the evolving risks we face.
Anti-Corruption
Compliance with laws, rules, and regulations, including anti-corruption laws applicable to the conduct of our business activities, is a fundamental part of the PGS Code of Conduct. Our anti-corruption program reflects the Company’s promise to its shareholders, customers, and other stakeholders to operate legally and ethically. It is based on best practice and standards, including but not limited to Norwegian law and practice, the UK Bribery Act, the US Foreign Corrupt Practices Act (FCPA), and the ISO Standard for Anti-bribery Management Systems 37001. The program addresses the corruption risks in relation to PGS’ business, and monitors compliance. It is established on the following key principles:
- Tone from the top
- Policies and procedures
- Risk assessments
- Due diligence
- Communication and training
- Monitoring and review
The program includes a clear, practical, accessible, effectively implemented and enforced system of controls to prevent, detect, and respond to corruption and bribery.
Anti-Corruption Risk Assessments
We perform stakeholder analysis, context analyses, and a group risk assessment that addresses all PGS locations and activities on an annual basis. In addition, each year we do a global likelihood-of-corruption-exposure assessment, by country. In this assessment, the starting point is Transparency International’s CPI, which is adjusted for the likelihood of PGS business, activities, and presence in the respective countries. As such, all our operations are assessed for risks related to corruption. We are currently upgrading our measuring system to become even more effective.
At the activity or transaction level, we use several processes to conduct risks assessments in advance of conducting an activity. Corruption risks are an integrated part of these. In 2020, through our group corruption risk assessment, we identified four inherently significant or high risks to PGS linked to Interacting with government officials (two risks), use of agents (one risk) and joint ventures (one risk).
We perform risk assessments or pre-qualification assessments of our suppliers. Integrity due diligence is performed on business partners, to provide pre-defined ‘exposing services’ and where the assessed inherent risk is greater than Low. Due diligence on existing business partners is repeated at a frequency defined by the assessed risk level.
Communication and Training on Anti-Corruption
We have a well-established system for communicating and training our stakeholders on our anti-corruption program. The PGS Audit Committee receives regular information, updates, and training regarding the anti-corruption program. In addition, each year the full Board of Directors and all members of our executive management respond to questions about critical governance requirements, including anti-corruption.
All PGS employees are also reminded of our policies and procedures and regularly informed of any changes to our anti-corruption program through intranet articles, e-learning, in-person training, emails from the CEO and their line managers. We also provide anti-corruption onboarding, to train all new employees. In 2020, 97 % of PGS onshore employees and maritime officers received e-learning0. In addition, vessel crew receive onboard training, and office-based employees in exposed roles receive in-person training.
Our key business partners are required to provide annual confirmations of compliance, which include elements about our anti-corruption program. This applies to business partners with an inherent exposure level. Failure to file this confirmation means PGS will not use the supplier. PGS makes these requirements clear in contractual clauses and repeats them during audits and management meetings.
Tax
PGS operates with a range of legal entities across several tax jurisdictions and regulatory schemes, in countries with varying regulatory schemes. The main objective of our tax strategy is to ensure PGS is a responsible corporate citizen by paying taxes when legally due and to minimize tax expense based on strong professional integrity and in compliance with tax laws and regulations. We ensure timely and accurate reporting and filings of tax returns. All tax risks are carefully evaluated for tax planning and tax advisory. We ensure all tax planning has commercial and economic substance, and we have a proactive approach to tax audits.
Our tax department is responsible for planning, compliance, and controversies/requests from tax authorities. Our tax strategy includes corporate income tax, withholding taxes, employee taxes including for crew and ex-pats, indirect taxes such as VAT/GST, duties, and import taxes. Explicit standards in our management system set requirements for proactive tax planning, compliance, accounting, and audit handling.
Anti-Competitive Behavior and Economic Performance
There is considerable focus on fair competition in the seismic industry, both from industry organizations such as IAGC, governments, and clients. PGS engages from time to time in joint-ventures and collaboration projects with other companies within the seismic industry. PGS has developed policies and guidelines to ensure that these projects are conducted well within the boundaries of applicable antitrust/competition law. The nature of such projects may differ. One example is joint seismic data production projects, which typically will yield more seismic data to the market at a lower cost to our customers.
No legal actions against PGS have been pending or completed during 2020 regarding anti-competitive behavior, nor any violations of anti-trust and monopoly legislation in which PGS has been identified as a participant.
The economic value created for our stakeholders is communicated in our Annual Report, which also details the financial assistance received from the Norwegian government.
Human Rights and Supplier Conduct
Everywhere it operates, PGS complies with applicable laws and regulations within the fields of human and workers’ rights. In addition, we also adhere to Principles 1-6 of the UN Global Compact, the OECD Guidelines for Multinational Enterprises, the International Bill of Rights, UN Universal Declaration of Human Rights (1948), the UN Guiding Principles on Business and Human Rights, and the ILO core conventions. PGS also adheres in its worldwide operations to the standards in the UK Modern Slavery Act (2015).
We are determined that our suppliers also should adhere to these standards. To ensure this, we regularly do perform diligence assessments and conduct audits on our supply chain. We ensure that our procurement and contracting processes adhere to PGS’ requirements in respect of ethics, anti-corruption, HSEQ, export control, and sanctions. We are currently developing a PGS Supplier Code of Conduct, which we plan to roll out in 2021. Our ambition is to reduce supply-chain risk, ensure the supply of goods at the right quality, quantity, time and place, capture economies of scale, and ensure the best possible terms and conditions for PGS.
Public Policy Making and Lobbying
PGS does not support any political party, organization, or candidate, nor use corporate funds to such ends. PGS is a member of business and employer associations that work to promote the interests of our industry and business. The Company also works directly to promote PGS’ interests. Generally, we do not seek to influence political decisions by engaging Lobbyists. The key figures section includes a list of organizations where PGS is a member and amounts paid.
Research, Analysis and Consulting Practices
PGS does not deliver research or development services. However, the Company employs a team of researchers to develop technology and capabilities that increase efficiency, improve the resource-utilization and reduce the environmental footprint of its operations. This work supports our commitment to the UN Sustainable Development Goals. Evidence of the results is available as scientific abstracts in our Technical Publications Library. PGS also supports academic research by sharing oceanographic data that is routinely collected during our activities. This is done under a Wikimedia Commons license agreement with full transparency on data collection methods and data accuracy. Our in-house research and development are governed by a stage-gate model for product development, ensuring clear responsibilities, accountability and transparency. For our digitalization efforts, we have adopted the agile methodology.
Customer and Product Responsibility
PGS collects high-quality data of the subsurface beneath the seafloor through the operation of a fleet of modern and highly advanced seismic vessels. Operational safety is of the utmost importance and a robust safety- and security management system certified to OHSAS 18001 (ISO 45001 from 2021) is implemented and routinely audited. PGS’ safety statistics are among the best in the industry, and we have strict protocols for emergency response and contingency to be applied if an undesirable event occurs.
PGS operates its fleet of seismic vessels globally and at times in areas where there are risks of both piracy and hijacking. To mitigate these risks, PGS has implemented a robust security management system based on ISO 28000 and the Voluntary Principles on Security and Human Rights. Thorough security risk assessments followed by identification and implementation of adequate measures of mitigation are always carried out prior to entering such areas. Mitigating measures are based on industry-recognized standards, including the best management practices to deter piracy. Mitigating measures may include the use of private maritime security companies, which are assessed and vetted in accordance with recognized industry standards and requirements.
By mid-October 2021, there have not been any incidents of non-compliance concerning the health and safety impacts of PGS products and services.