71 ANNUAL REPORT 2022 STRATEGY & OUTLOOK CORPORATE COMPLIANCE REVIEW CORPORATE COMPLIANCE LANDSCAPE ESG programmes and disclosures have become increasingly important in 2021, with investors and consumers alike pushing for disclosures related to topics like diversity, gender, fair wages, environmental responsibility and corporate governance. Many organisations have been examining their performance to global standards in relation to ESG practices and are striving to demonstrate consistent and good corporate citizenship. Each aspect of an ESG programme i.e. robust ESG policies and frameworks, can be undermined by incidents of bribery and corruption. Hence, bribery and corruption remains one of the key issues impacting society at large. Transparency International’s 2021 report relating to the Corruption Perception Index (“CPI”) indicated that the results and ratings have remained relatively static. It is noted that the transparency of the Covid-19 relief spending is among one of the key factors that contributed to countries’ latest CPI ratings for the year under review. Companies from high-scoring CPI countries are not immune to allegations of bribery and corruption practices. Often, reports on implicated companies highlight their failure to prevent their employees from engaging in corrupt behaviours to win contracts, bribery of government or public officials and lack of guidelines when managing agents who represent the companies in foreign markets. Like any other industry, the oil & gas industry is susceptible to these bribery and corruption risks. The risk is even greater for companies that do not enforce proper internal controls, whether financial or non-financial, and neglect to set clear expectations on how its employees, third parties and agents conduct themselves to refrain from any form of bribery or corruption. As an indicator of the financial impact of bribery and corruption, there were estimated 67 corruption, bribery and fraud fines issued amounting to USD6.8 billion globally in 2021 alone. The shift to working from home is one of the causes attributing to a massive increase in cyberattacks seen globally in 2021. The 2022 Cyber Threat Report reported that almost all categories of cyberattacks increased in volume over 2021, with encrypted threats spiking by 167%, ransomware by 105%, cryptojacking by 19%, intrusion attempts by 11% and IoT malware by 6%. The report also revealed that business leaders considered targeting phishing attacks as the number one concern, followed closely by ransomware, customer data breaches, business email compromise and data breaches. In relation to offshore businesses, the International Maritime Organization’s Resolution MSC.428(98) (IMO 2020) came into force on 1 January 2021, making it mandatory for organisations to ensure that cyber risks are appropriately addressed in existing safety management systems by their 2021 annual verification. Heightened awareness around data privacy laws continued strongly in 2021, and we believe will continue to be a central focus in the area of compliance worldwide. Since the General Data Protection Regulations (“GDPR”) came into force in 2018, this has set the tone for the wave of change and better awareness around the need to protect personal and sensitive data. Countries have likewise stepped up on enforcing regulations in this area, such as through China’s Personal Information Protection Law (“PIPL”), Brazil’s Lei Geral de Proteção de Dados (“LGPD”), and Malaysia’s and Singapore’s respective Personal Data Protection Acts. The pandemic, together with the growing emphasis on ESG, is bringing risk issues relating to supply chain and third parties into sharper focus. In addition to contending with supply chain issues such as inability to obtain raw materials, procure critical products and soaring commodity prices; there is a growing awareness that an organisation can suffer reputational damage and business instability if their vendors’ ESG performance profile is of a questionable nature. A key ESG issue in this area relates to Human and Labour Rights (“HLR”), where we see companies continuing to make news headlines for the wrong reasons. The US Customs and Border Patrol has imposed sanctions on companies which are alleged to have used forced labour, which may lead to the abovementioned supply chain disruption. Additionally, companies facing scrutiny for forced labour are less likely to be engaged by clients, resulting in negative impact from the company’s reputational and financial standpoint. Emerging developments in national security and global financial architecture have brought about new sanctions, with the most significant one by far being the extensive Sanctions and Export Controls in relation to the Ukraine invasion. YEAR IN REVIEW Anti-Bribery & Anti-Corruption As a global company, Yinson navigates responsibly on this ethical front through the adoption of good corporate governance and protecting its reputation in the markets Yinson participates in. Yinson’s laser-focus on ABAC risk began in earnest in early 2018 with the establishment of Yinson’s ABAC Policy and Procedure. This is part of Yinson’s endeavour to adopt the highest standards of governance to fulfil international standards in relation to applicable anti-corruption legislations such as the UK Bribery Act 2010, Foreign Corrupt Practices Act and Malaysian Anti-Corruption Commission Act 2009. To further enhance the ABAC framework in place, Yinson has embarked on obtaining the ISO 37001:2016 ABMS as the gold standard to which Yinson can benchmark its ABAC processes and internal controls. With this, Yinson has streamlined and enhanced its practices and controls to be aligned with the requirements of the ISO 37001 standard.
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