Preventing corruption

PPharos currently operates in Vietnam, which is allocated a low score on Transparency International’s most recently published Corruption Perception Index (“CPI”), and is ranked number 77 (87 in 2021) out of 180 countries in the 2021 CPI. Egypt is ranked at 130 on the same CPI (117 in 2021). We recognise that, with both areas of operation having a reputation for a lack of transparency and relatively high risk of corruption, it is vital that the Group’s policies, procedures and working practices are fit for purpose.

Pharos maintains internal control systems to guide and ensure that our ethical business standards for relationships with others are achieved. The Audit and Risk Committee and the Board have carried out a review of the effectiveness the Group’s risk management and internal control systems, see the Audit and Risk report in our Annual Report & Accounts. Bribery is prohibited throughout the organisation, both by our employees and by those performing work on our behalf. The Code of Business Conduct and Ethics supports all businesses that are conducted in an honest and ethical manner across the organisation. Our Anti-Bribery and Corruption (“ABC”) programme is designed to prevent corruption and ensure systems are in place to detect, remediate and learn from any potential violations. This includes due diligence on new vendors, annual training for all personnel, requisite compliance declarations from all associated persons, Gifts and Hospitality declaration and comprehensive ‘whistleblowing’ arrangements.

Our Whistleblowing Policy and Procedure ensures that employees are protected from possible reprisals when raising concerns in good faith. In addition to internal reporting channels, we have a confidential ethics hotlines supported by EthicsPoint with numbers displayed in local offices available 24 hours a day all year round. Zero calls were made to the EthicsPoint hotlines in 2022.

Payments to host governments

Wealth generated by natural resources plays an important part in the growth and development of countries in which we operate. Revenues to governments become payable by the Group due to oil production entitlements, taxes, royalties, licence fees and infrastructure improvements.

During 2022, the total payments to governments for the Group amounted to $245.3m (2021: $198.2m), of which $211.5m or 86% (2021: $151.9m or 77%) was related to the Vietnam producing licence areas, of which $140.7m (2021: $102.6m) was for indirect taxes based on production entitlement. In Egypt payments to government totalled $31.3m (2021: $44.7m), of which $28.8m (2021: $44.1m) related to indirect taxes based on production entitlement.

Our Code prohibits contributions to political parties, candidates or other political organisations.