MMK Develops Anti-Corruption Practices
PJSC Magnitogorsk Iron & Steel Works (MMK) is implementing an anti-corruption compliance system. In corporate management, compliance refers to the part of the management and supervisory system related to compliance risks, including risks associated with non-compliance and breaches of legislation, rules and regulations, as well as with norms and standards of supervisory bodies, industry associations, self-regulatory organisations, codes of conduct, etc. The compliance being implemented at MMK takes the form of an anti-corruption management system in line with the ISO 37001:2016 international standard, as well as with the Methodological Recommendations on the Development and Implementation of Measures to Prevent and Combat Corruption developed by the Russian Ministry of Labour.
MMK has a longstanding successful story in this area. Back in 2013, the company's Board of Directors adopted a corporate Anti-Corruption Policy. This confirmed the commitment of MMK and its management to high ethical standards and to the principles of open and honest business, as well as to zero tolerance for any violations in this area. In 2021, MMK also joined the Anti-Corruption Charter of Russian Business, the participants of which share the view that corruption poses a dangerous threat to the normal development of society. Therefore, corrupt practices, regardless of their forms and methods, should not only be punished by law, but should also be accompanied by wide public condemnation and be seen as a threat to society.
MMK’s achievements in anti-corruption practices were awarded last year the A2 rating for Anti-Corruption in Russian Business by the Russian Union of Industrialists and Entrepreneurs, confirming the company’s position as an organisation following anti-corruption practices at a high level. Pavel Shilyaev, MMK CEO, commented that, "transparency in business operations and the prevention of any corrupt practices is one of the key principles of Magnitogorsk Iron and Steel Works, which strives to improve its corporate culture, adhere to the best corporate governance practices and maintain a strong business reputation." That is why the implemented anti-corruption compliance project will cover all of MMK's subsidiaries in a single system.
Compliance will reduce the company's regulatory risks as the Federal Anti-Corruption Law requires organisations to develop and implement measures to prevent corruption. In addition, as Pavel Kravchenko, MMK's director of security, said, "introducing compliance is important because it will reduce the risks, not only of corruption offences and material damage to the company, but also of reputational damage, which may be even more important."
The introduction of compliance at MMK has required many internal regulations, policies, and procedures to be modified. A total of 43 documents are to be amended, 19 of which were developed from scratch. To improve anti-corruption compliance procedures, officials responsible for preventing corruption and other violations were identified. Procedures were also established to ensure the integrity of the organisation by updating and implementing the relevant standards. The next stage is to ensure maximum involvement of all personnel in anti-corruption compliance procedures and to carry out activities to inform and train the relevant supervisory bodies and employees. MMK is paying particular attention to ethical issues. The company has consolidated these standards in the corporate Code of Business Ethics, which is one of the foundations of anti-corruption compliance. Its implementation brings MMK’s anti-corruption measures to the level of the international best practice.