The reputation of Massmart and the value of our brand is based on our constant drive to achieving the highest standards of ethical behaviour and our commitment to being a responsible and ethical company. At Massmart we remain focussed on promoting awareness of, and compliance with, Massmart’s Code of Ethical Conduct. Massmart continues to ensure that our ethics programme is well known through employee induction programs, booklets and training and continuous communication programs to all employees.
Massmart Ethics Line
The Massmart Ethics Line is independently managed by Deloitte Tip-Offs Anonymous. Deloitte Tip-Offs Anonymous has been certified by the External Whistle-blowing Hotline Services Provider Standard E01.1.1. Callers have the option of reporting openly, confidentially or anonymously, concerns that compromise or violate Massmart Code of Ethical Conduct. We foster a culture of ensuring that callers who contact the ethics lines in good faith are protected and not retaliated against or victimised.
Ethics structure and system
Calls are overseen by Ethics Case Managers and, where necessary, are investigated by Massmart’s Forensic Services Department and external Service Providers. Ethics is led by the Group Ethics Officer who reports to the Chief Ethics and Compliance Officer. The Chief Ethics and Compliance Officer is a member of the Massmart Executive Committee and reports functionally to the Massmart CEO, Massmart Risk Committee, the Social and Ethics Committee and Walmart International Ethics and Compliance.
The Massmart Ethics Office continues to see an increase in overall contacts year over year likely attributable to ongoing training and communication efforts. As a potential indicator of increased knowledge and confidence in the ethics process, we continue to see a gradual decrease in reporter anonymity as more reporters are willing to disclose their contact details which signals increasing confidence levels in the line and our Protocols.
During the first quarter of 2019, Massmart Ethics will administer an integrity index survey to management employees. The results of the survey are a valuable contributor to the betterment and success of Massmart.
Suppliers and service providers
Massmart regularly communicates its ethical and responsible sourcing standards to suppliers and service providers, and attempts to ensure that they comply with these standards as well as all legal requirements in all the countries where we operate including laws and regulations relating to corrupt activities. Suppliers and service providers are invited to make use of the Massmart Ethics Line. Massmart’s formal trading agreements detail ethical practices that suppliers are expected to uphold, and supplier ethics messages are distributed in supplier communications and training.
Legal and regulatory compliance
Monitoring and managing legal and regulatory risks is a fundamental tenet of our business model. King IV requires that an effective compliance framework should include, among other features, formalized control processes with clear responsibilities and reporting channels. To ensure compliance with King IV in an increasingly regulated market, the Group maintains functional legal and regulatory areas. A central ethics and compliance function exists which in itself mirrors the Walmart global ethics and compliance programme as there are also certain legal obligations that apply to a subsidiary of a United States Company.
The Ethics and Compliance team comprises of employees that are independent experts and are mostly professionally qualified and /or experienced in each of the subject matter areas below. Additionally, through close alignment with Walmart Global and International Ethics and Compliance, our teams are able to access experts and advise in any subject matter area.
The Ethics and Compliance program is made up of the following areas.
|Anti-Corruption/The USA FCPA||Labour & Employment|
|Anti-Money Laundering||Licenses & Permits|
|Consumer Protection||Product Safety|
|Environmental Compliance||Trade (Imports/Exports)|
|Health & Safety||Responsible Sourcing|
Massmart follows the generally accepted practices of risk management in its legal and compliance endeavours. This encompasses a multi-pronged approach where:
- The compliance and regulatory teams monitor and scan the Regulatory landscape to understand and respond to trends and legislation that may impact the business;
- Dependent upon the subject the legal or compliance team recommends and prepares policies, guidelines, standards and procedures to comply with legislation and to manage or mitigate risks;
- The compliance function monitors and improves on the effectiveness of compliance programmes through a rigorous risk identification process which forms the basis of the Compliance strategy and informs the key compliance objectives requiring attention throughout the year;
- The Massmart internal audit function independently assesses whether assurance can be placed on the functions developing, implementing, managing, controlling and monitoring these processes; and lastly
- Massmart Divisions manage the implementation of the above mentioned practices as they are embedded within each of the Divisions.
The mentioned practices align key resources on the dual objectives of (i) providing legal/regulatory subject matter expertise to the Massmart Divisions; and (ii) ensuring that each division assesses and manages those legal/regulatory risks identified through the Compliance Programme.
With support from Massmart, the Finance Directors in each Division and resources allocated specifically to those functions, continue to ensure that legal/regulatory risks are appropriately assessed and managed. This function is overseen at a Subsidiary Board level and ultimately through the Massmart Risk Committee and Board.
Ethics and Compliance across the Group is exercised as follows under the direction of the Chief Ethics and Compliance Officer:
- Formal risk assessments are completed and responded to;
- Adoption of global ethics and compliance practices of Walmart;
- A team of 66+ African based compliance experts are employed across anti-corruption and the 13 different compliance areas;
- The compliance functions make use of external expert service providers, and regularly engage with key subject matter experts within government bodies, supplier bodies and consumer groups; and
- The compliance functions, through the Chief Ethics and Compliance Officer (who oversees the compliance function) reports functionally to the CEO, the Massmart Risk Committee, the Massmart Social and Ethics Committee and Walmart International Ethics and Compliance.
Legislation or recently enacted laws that may have a potential material impact on the Group continue to include:
- Labour and Employment legislation;
- Data Protection legislation;
- Consumer Protection legislation which requires the revision of many of our product labels as well as those of our suppliers; and
- Various regulations relating to food safety.
Extraterritorial laws and other requirements relevant to Massmart via its subsidiary association with Walmart that may have a material impact on the Group include:
- The U.S. Foreign Corrupt Practices Act (FCPA);
- Sarbanes Oxley;
- Dodd-Frank; and
- Various trade sanctions relevant to subsidiaries of US companies.