Ethical Conduct

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Approach

Demonstrating ethical behavior and complying with all laws, rules and regulations are essential to earning the trust of our stakeholders and creating and sustaining value. Strong governance, in combination with everyone who works on our behalf speaking up and taking accountability for their behavior, is crucial for preventing corruption, conflict, penalties, fines and reputational damage.

Integrity – behaving ethically and respecting each other and the customs, cultures and laws wherever we operate – and responsibility – delivering on our commitments, demonstrating leadership, speaking up and challenging the status quo – are two of our core values.

Our Code of Conduct (the “Code”) states our commitment to high ethical standards, corporate responsibility and integrity. Our Board of Directors updates, reviews and ratifies the Code and re-evaluates it at least every three years.

For all employees, officers and Directors, partners, vendors and contractors, our Code defines applicable standards of behavior and details our expectations that they act ethically and adhere to the social, environmental and economic principles of sustainable development.

Code of Conduct
Code of Conduct
Policies
Standards
Guidelines
Procedures

Six global policies state our intentions, aspirations and commitments across key aspects of our business.

These policies are supported by standards, guidelines and procedures, which define minimum requirements, recommended approaches and how work should be done and who should do it. Our Code and policies are published on our website.

Our Business Integrity Policy requires all those engaged in activities on our behalf to work honestly and in the best interests of the Company, to avoid corruption and bribery of any kind, and to ensure compliance with various relevant legal requirements. Supporting this policy are a number of standards including our Conflicts of Interest Standard, Gifts and Entertainment Standard, and our Anti-Corruption Standard, which addresses ethical conduct requirements and Partnering Against Corruption Initiative (PACI) principles not otherwise covered in our Code or other policies or standards.

When we receive information or credible allegations regarding unlawful conduct, our policy is to conduct a thorough investigation, take remedial steps if warranted and, when appropriate, communicate with authorities about the investigation and findings.

Our internal audit function conducts annual fraud risk assessments, which include assessing risks of commercial and government corruption throughout our operations. Along with regular in-person training sessions customized to the particular region, site or function, we also conduct annual online training that targets a larger percentage of employees.

While anyone can file an ethics report using our anonymous online Ethics Solutions Tool, we actively encourage employees to speak up and report any incidents where a possible Code of Conduct violation has occurred. We also input into the Tool cases that may have originated through other channels, such as human resources or security, if they have a component related to the Code. Cases are rated red, yellow or green, depending on the type of allegation and the roles of those implicated. Reports on cases are provided regularly to the Executive Vice President and General Counsel and quarterly to the Board of Directors’ Audit Committee.

We engage with governments and other stakeholders on a variety of issues, including worker health and safety, environmental protection, trade, economic development, infrastructure, transparency, rule of law, and other areas of public policy that are important for our operations. This engagement is in strict accordance with all applicable laws, the Extractive Industries Transparency Initiative (EITI), and Newmont’s Code of Conduct, Business Integrity Policy and standards on ethical conduct, referred to above.

Our Political Contributions Standard details the rules and processes for making political contributions or otherwise engaging in the legislative or political process. This standard states our commitment to report our political contributions to our Board of Directors on a semi-annual basis and annually on our website. We do not make political contributions outside the United States.

2016 Performance

Our internal audit group updated the fraud risk assessments for each of our four operating regions, and identified the following risks related to corruption as significant or greater in terms of impact, with a probability of "likely" or greater:

  • Employee receives payments (kickbacks or bribes) from a vendor in order to make or influence a decision in the vendor’s favor; and
  • Misappropriation of social responsibility funds used for community relations/compensation (e.g., foundations, land access, crop compensation, traditional authorities).

In April 2016, we publicly disclosed our investigation into certain business activities associated with the requirements of the U.S. Foreign Corrupt Practices Act and other applicable laws and regulations. As part of the investigation, we entered into agreements with the U.S. Securities and Exchange Committee and the U.S. Department of Justice tolling the statute of limitations related to the investigation, which means that the running of the statute of limitations is effectively paused for the period covered by the tolling agreements. As of December 31, 2016, the investigation was ongoing. Disclosures and updates on this matter are available on our SEC filings site on newmont.com.

To prevent future issues and mitigate these and other risks associated with potential unethical conduct, the Company has implemented a number of improvements and control measures in 2016 including:

  • Hired experienced and qualified site-based ethics and compliance managers in every region considered to be a higher risk of corruption;
  • Conducted anti-corruption training in Peru, Ghana, Indonesia and Suriname during the year, as well as numerous in-person training sessions with various teams, including our Board of Directors, and at corporate events, including our annual global leadership team meeting where ethics and compliance was a significant discussion topic;
  • Expanded our 2016 annual ethics training program to all employees with a work-issued email and computer, growing the percentage of employees required to undergo training from around 22 percent in 2015 to 39 percent in 2016. This year’s training focused on preventing corruption. Of the employee population eligible for training, participation remained steady compared to the previous year, with 99 percent of managers at operating sites completing the training;
  • Initiated a third-party assessment of our global ethics program to evaluate the effectiveness of our Code, policies, standards and Ethics Solutions Tool, and identify gaps and other opportunities for improvement; and
  • Implemented a Supplier Code of Conduct, which commits our suppliers to ethical, safe, and socially and environmentally responsible conduct and to managing their own supply chain accordingly.

Including issues raised at our Batu Hijau operation in Indonesia prior to its divestiture in November, a total of 357 new issues were raised through the Ethics Solutions Tool throughout 2016, and 65 cases were open at the beginning of the year. By year end, 402 of those matters were closed and 20 remained open. Of the cases closed in 2016, 59 percent (237) were not substantiated. Of the 41 percent (165) that were substantiated, 24 percent (40) resulted in a recommended change of business process, and 76 percent (125) resulted in human resource or management actions. These actions ranged from counseling to termination of the employees involved, including the termination of individuals from the senior management category. Beginning in 2016, Code violations were formally factored into performance review considerations of those disciplined. Cases were closed on average in 54 days.

Of the substantiated cases investigated by our ethics group, the vast majority (63 percent) arose from allegations of misconduct or inappropriate behavior that often involve issues between employees and their managers, followed next by allegations related to commercial issues, including conflicts of interest, misuse of company assets or services, and improper supplier or contractor activity. More than 40 individuals are no longer employed by the Company as the result of matters that were closed in our Ethics Solutions Tool in 2016.

Newmont’s U.S. political contributions totaled $182,500 in 2016, a significant increase from 2015 reflecting the fact that 2016 was a presidential election year.

Ethics matters addressed/substantiated
Total substantiated cases
Total matters addressed
2012 2013 2014 2015 2016
Total substantiated cases 74 105 114 102 165
Total matters addressed 199 224 237 246 402

Future Focus

To further integrate integrity into the business, in 2017 we plan to take the findings from the assessment of our global ethics program and associated elements and develop action plans that address gaps and opportunities for improvement. Another key program for 2017 is continuing the work that site-based ethics managers are doing with the supply chain group related to the management of commercial and government corruption risk throughout the lifecycle of our supplier relationships.