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CHAPTER 5 Our responsible management in 2018 Ethics and compliance


No significant fines or sanctions for breaches of environmental laws and reg- ulations 1 were received in 2018. We are also not aware of any significant breach- es of social and financial laws and regu- lations in 2018 2 and we were not involved in any major lawsuits in the local com- munities where we operate 3.

Turning to fair competition, two appeals were filed by Cepsa against the rulings of Spain s National Commission on Mar- kets and Competition (CNMC) in January and February 2015 imposing fines on our company of 10 million and 2.5 million, both of which have been appealed at the National Court of Appeals. This court is- sued two rulings in May 2015 provision- ally suspending payment of the fines and calling for a bank guarantee to be provid- ed instead. In July 2015, Cepsa submitted the guarantees and therefore, the two cases were suspended. In both cases, the pre-trail phase ended two years ago and we are still awaiting notice of the deliber- ation and verdict.

Cepsa is also subject of an open case be- ing heard by the CNMC concerning com- pliance with a 2013 CNMC ruling in which the Oversight Sub-Directorate proposed to the Competition Court of the CNMC Board that it declare Cepsa had fulfilled the instructions in said December 2013 ruling. However, the Board ruled in Au- gust 2017 that there was proof of compli- ance with the CNMC ruling of July 2009 in the terms proposed by the Competition Directorate. We are continuing to work closely with the Oversight Sub-Directo- rate to try and find a satisfactory solution so that the CNMC Board acknowledges our compliance.

We are taking steps to improve transparen- cy concerning insider information in the gas and electricity markets and have estab- lished a control system to ensure com- pliance with the obligations laid down in Regulation (EU) 1227/2011 (REMIT).

We have a commitment of zero tolerance to corruption, fraud and bribery.

Along with the Code of Ethics and Con- duct, our policies against bribery and cor- ruption in the public and private spheres form the foundations of our internal reg- ulations.

In order to ensure compliance with the law and our regulations, we have proce- dures in place to prevent, monitor, inves- tigate and penalize illicit activities.

In November 2018, Compañía Española de Petróleos, S.A.U. obtained ISO 37001

accreditation for our Anti-Bribery System, becoming the first oil & gas company in Spain and one of the first in the world to receive it.

This certification demonstrates Cepsa s commitment to national and internation- al compliance best practices and puts it at the forefront of the sector.

The certification covers the company s 2,600-strong workforce, with around 600 employees from different business lines and organization-wide functions identi- fied as being exposed to a potential risk of bribery.



1 Significant fines or sanctions for breaches of environmental laws and regulations are any over 2 million. 2 Significant fines or sanctions for breaches of social and financial laws and regulations are any over 2 million . 3 The only lawsuit of note was in June 2011 when 358 fishermen from Songkhla Province (Thailand) filed a claim for damages against NuCoastal (a Cepsa subsidiary) for the impacts of this company s activities and called for the production concession for Block G5/43 in Thailand to be revoked. On 18 March 2015, Songkhla Judicial Review Court ordered compensation of 11,879,828 (approximately 51,078) to be paid to 45 of the claimants residing in the province, although it ruled that no law had been breached or damages caused based on the evidence presented. On 17 April 2015, NuCoastal lodged an appeal against the aforementioned decision with the Songkhla Provincial Court of Appeal. This case is currently being considered by the Appeals Court at the Supreme Court, with no new developments in 2018.

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