(Adopted by the Board of Directors on March 22, 2013)
It is the policy of Cardero Resource Corporation and its direct and indirectly owned subsidiaries throughout the world (hereinafter individually and collectively referred to as "the Company") to comply with any applicable laws and regulations, including any applicable anti-bribery laws, and with the Company's internal accounting controls to maintain the highest ethical standards in the conduct of its international business. In general, such applicable anti-bribery laws prohibit companies seeking business from Public Officials to make, directly or indirectly, improper cash payments or gifts of Things of Value to such Public Officials (as those terms are defined below).
ARTICLE 1 - PURPOSE
1.1 The purpose of this Policy is to assist all Company Personnel and Agents in their responsibility to comply with any applicable anti-bribery laws, including, for example, Canada's Corruption of Foreign Public Officials Act, the U.S. Foreign Corrupt Practices Act and other applicable anti-bribery laws, and to alert them to any potential violations of such applicable anti-bribery laws by any Company Personnel or Agents that could potentially constitute a violation of such laws attributable to the Company.
ARTICLE 2 - SCOPE
2.1 This Policy applies to all Company Personnel and Agents of the Company, including those of any subsidiary, division, or business unit thereof. The foregoing also includes any joint ventures where the Company maintains management control through Company Personnel or Agents.
ARTICLE 3 - DEFINITIONS
3.1 For purposes of this Policy, the following terms are defined as noted:
- "Agent" means a person, a corporation or other entity retained by the Company to supply materials, labour or services to the Company or to represent its business interests or act on its behalf;
- "Company Personnel" means any director, officer or employee of the Company and also includes contract staff;
- "Compliance Officer" means the individual responsible for this corporate compliance Policy, appointed pursuant to Section 4.1;
- "Facilitating Payment" means an occasional small payment to a Public Official to secure or expedite routine governmental action, for example, to expedite customs clearances or utility connections; to obtain permits, licenses, or other official documents to qualify a person to do business in a foreign country; or to process routine governmental papers such as visas or work orders;
- "Public Official" means
- a person who holds a legislative, administrative or judicial position of a state,
- a person who performs public duties or functions for a state, including a person employed by a board, commission, corporation or other body or authority that is established to perform a duty or function on behalf of the state, or is performing such a duty or function,
- an official or agent of a public international organization, or
- elected officials, candidates for public office, political parties, and officers, employees, representatives and agents of political parties; and
- "Thing of Value" means any item, gift, favour or benefit (tangible or intangible) that has more than nominal value.
ARTICLE 4 - COMPLIANCE
4.1 The Company's Board of Directors shall appoint a person to the position of Compliance Officer.
4.2 The Corporation's Board of Directors shall review compliance with this Policy on an annual basis.
4.3 The Compliance Officer shall oversee this Policy and shall report directly to the Company's Board of Directors.
ARTICLE 5 - PAYMENT OR TRANSFERS OF THINGS OF VALUE TO PUBLIC OFFICIALS
5.1 Company Personnel and Agents shall not:
- promise, offer, authorize the giving of, or give cash or any other Thing of Value (whether directly or through intermediaries) to any Public Official to obtain, retain, or direct business or to secure any improper advantage;
- pay any cash to a third party unless such payment is clearly, completely, and accurately documented as a cash disbursement with an appropriate explanation;
- write any check to "cash" or "bearer";
- pay anyone who does not have a written contract with the Company or who does not have some other documented business relationship with the Company; or
- make any payment outside the country of the principal place of business of the recipient without the prior written approval of the Company's Compliance Officer.
5.2 If any Company Personnel or Agent propose to reimburse the expenses of any Public Official, such Company Personnel or Agent shall document such proposed reimbursement and shall consult with the Company's Compliance Officer to determine the propriety of any such proposed reimbursement before making any offer to such Public Official. In any such case, the amount and purpose of such reimbursement must be reasonable and must relate directly to the promotion, demonstration, or explanation of the Company's products or services with a government, government agency, or government-owned or government-controlled enterprise.
5.3 As a general rule, Company Personnel and Agents shall not make any political contribution or loan to any foreign government or Public Official, whether from Company funds or from personal funds. If any Company Personnel or Agent proposes to make such a political contribution or loan, the purpose, amount, timing, and source and method of such contribution or loan shall be documented and then approved in advance by the Company's Compliance Officer.
ARTICLE 6 - KNOWLEDGE OF LIKELY IMPROPER PAYMENT AND RED FLAGS
6.1 Even if no payment or gift is made directly to a Public Official, payments made by Company Personnel to a third party or Agent of the Company may nonetheless constitute a violation of certain anti-bribery laws if the Company Personnel are aware that there is a likelihood that the third party or agent will engage in an improper action to influence a Public Official by passing on all or a portion of such payment or gift to a Public Official. Knowledge may be presumed if there is a high probability of a violation. Therefore, Company Personnel and Agents should be alert for certain potential "red flags" indicating a potential violation, including the following:
- The country in question is known for bribery or there have been regular media reports of bribery in such country;
- The reputation of the local agent and the agent's relationships with Public Officials;
- Unusually large or small or unexplained commissions, bonuses, or rebates;
- Requests for checks payable to "cash" or "bearer";
- Requests for payments made to third country bank accounts;
- Establishment of unusual or unexplained bank accounts or funds;
- The absence or incompleteness of documentation to justify expenses or charges; or
- Other similar suspicious conduct.
ARTICLE 7 - RETENTION OR ENGAGEMENT OF AGENTS
7.1 Company Personnel shall not retain or engage any Agent unless:
- Adequate due diligence, checks and research are carried out, either by the Company or by a reputable third party, and the reputation, background and past performance of the prospective Agent are clearly documented in the following areas as appropriate given the nature and degree of risk posed by the specific circumstances: management information, ownership information, affiliations, qualifications, financial information, reputation, references, local law, compensation and payment history;
- Such Agent has first been provided with a copy of this Policy (in English or another appropriate language) and has acknowledged in writing that such Agent understands and shall comply with this Policy at all times; and
- Such Agent executes a standard form of written agreement that documents the means and amount of such Agent's compensation and that has been approved by the Company's Compliance Officer.
ARTICLE 8 - FACILITATING PAYMENTS
8.1 Certain national anti-bribery laws do not extend to or prohibit Facilitating Payments. However, other national anti-bribery laws do prohibit even such Facilitating Payments. For consistency and uniformity, Company Personnel and Agents shall not make any Facilitating Payment to any Public Official, even if such payments may be allowed by some national laws.
ARTICLE 9 - GIFTS AND ENTERTAINMENT
9.1 The offer and acceptance of entertainment, gifts and favours must at all times be in compliance with the policies of the recipient's employer, with the Company's Code of Conduct, this Policy and any Company specific procedures. Gifts and hospitality given to Public Officials must comply at all times with Canadian, local and other applicable anti-corruption laws and must be reasonable, infrequent and appropriate such that they cannot be interpreted as an attempt to influence a decision or act by the Public Official.
9.2 Company Personnel may only reimburse Public Officials for reasonable and bona fide travel and lodging expenses with the prior written approval of the Company's Compliance Officer and only for such expenses which are directly related to the:
- promotion, demonstration, or explanation of products or services; or
- execution or performance of a contract with a foreign state or related organization.
9.3 The Company will pay these travel and lodging expenses directly, if possible, rather than reimburse the Public Official, and it is advisable to notify the Public Official's employer that such expenses will be paid by the Company.
9.4 Any gift, hospitality and/or reimbursement of travel or other expenses ultimately provided to a Public Official must be reported to the Compliance Officer so that it can be fully and accurately recorded in the Corporation's accounting records.
ARTICLE 10 - CHARITABLE DONATIONS AND SOCIAL DEVELOPMENT PROJECTS
10.1 The Company believes in contributing to the communities in which it does business and permits reasonable donations to foreign charities and to other recipients either ad hoc or under a social investment program. However, the Company needs to be certain that donations to foreign-based charities and other recipients are not disguised illegal payments to foreign officials in violation of the CFPOA or other applicable anti-bribery laws. Therefore, before making a donation to a charitable entity or a donation under its social development program(s), the following guidelines must be followed:
- A written request describing the charity, including the name of persons contacted and attaching any supporting documentation, should be submitted to and kept by the Compliance Officer. The donation should generate publicity or goodwill for the Company, demonstrate the Company's commitment to the community, whether local, regional or national, and also be approved under the Company's other guidelines on charitable giving and social investment;
- Before authorizing any payment to a foreign charity, the Company should confirm that the relevant charity is in fact a bona fide organization and not an entity controlled by or for the benefit of a Public Official. The verification of a charity's authenticity may include:
- obtaining from the charity its articles of incorporation, statements from independent accountants, and information reflecting the charity's purpose and key management personnel,
- requesting receipts, reports and other documents that demonstrate how the charity will use the Company's funds,
- obtaining related information from the local embassy or consular office, and/or
- obtaining a written opinion from local counsel;
- Prior to the Company's donation to any foreign charity or social project, the Compliance Officer should authorize, in writing, the donation and affirm that it does not violate local laws, rules or regulations; and
- Documentation that substantiates the Company's donation (e.g., receipts) should be retained and recorded properly in the Company's books and records. Supporting documentation relating to the donation and all specific recipients must also be forwarded to the Accounting Department so that the payment or expense is accurately described and reflected in the Company's books and records.
ARTICLE 11 - ACCOUNTING STANDARDS AND RECORD KEEPING
11.1 Company Personnel and Agents shall record each transaction or payment in the books and records of the Company or the Agent (as applicable) in a clear, complete, and accurate manner as to its amount, date, purpose, accounting period, and classification, including any other information required to convey a clear, complete, and accurate explanation for auditing purposes. Company Personnel and Agents shall not make any false or misleading statements or entries in such books and records. Company Personnel and Agents certifying the correctness of any books and records, including any receipts, vouchers or bills, shall have reasonable knowledge that such certified information is clear, complete and accurate.
11.2 Company Personnel and Agents shall have the proper authorizations for each business transaction or payment by the Company. Company Personnel and Agents shall not create, have, or keep any secret, private, or unreported account or fund for the Company. Company Personnel and Agents shall not create, have or keep any third-party account for the Company except in the name of the Company. Company Personnel and Agents shall not make any cash disbursements to any third party except for nominal amounts drawn from established and properly recorded petty cash accounts.
11.3 Company Personnel and Agents shall respond promptly, clearly, completely, and accurately to any inquiry from the Company's internal or independent auditors or legal counsel and shall not withhold or conceal any information that may be material for a clear, complete, and accurate response to such an inquiry.
ARTICLE 12 - REPORTING AND ASSISTANCE
12.1 If any Company Personnel or Agents are approached by a Public Official, customer or supplier representative, or any other person and is asked, directly or indirectly, to make a questionable payment or gift, such approach shall be promptly and fully reported to the Company's Compliance Officer. FOR AVOIDANCE OF DOUBT, COMPANY PERSONNEL AND AGENTS SHALL NOT MAKE ANY SUCH QUESTIONABLE PAYMENT OR GIFT WITHOUT PRIOR APPROVAL BY APPROPRIATE COMPANY OFFICERS AFTER CONSULTATION WITH THE COMPANY'S COMPLIANCE OFFICER.
12.2 Any Company Personnel or Agent who becomes aware of or suspects a violation of this Policy must promptly report the matter to his or her supervisor, an officer of the Company, the Compliance Officer or to the head of the Company's Audit Committee. If any Company Personnel or Agents has a question about this Policy or wishes to report or discuss any request, activity or conduct that appears to conflict with this Policy, such questions, reports or discussions should be directed to the Company's Compliance Officer.
12.3 Retaliation by anyone as a consequence of any Company Personnel or Agent making a good faith report of a possible violation of the law or this Policy is strictly prohibited and will result in disciplinary action, including termination.
ARTICLE 13 - PENALTIES AND CONSEQUENCES
13.1 IF ANY COMPANY PERSONNEL OR AGENTS FAIL MATERIALLY TO COMPLY WITH THIS POLICY, SUCH COMPANY PERSONNEL OR AGENTS MAY BE SUBJECT TO DISCIPLINARY ACTION, INCLUDING, WHERE APPROPRIATE, IMMEDIATE TERMINATION.
13.2 IN ADDITION, WHERE APPLICABLE, SUCH COMPANY PERSONNEL OR AGENTS MAY ALSO BE SUBJECT TO INDIVIDUAL CIVIL OR CRIMINAL LEGAL PENALTIES. IN SUCH CASES, THE COMPANY RESERVES THE RIGHT TO WITHHOLD OR DENY INDEMNIFICATION OR OTHER RESPONSIBILITY FOR SUCH INDIVIDUAL PENALTIES IN ACCORDANCE WITH APPLICABLE LAW.