On August 28, 2017, Petróleos Mexicanos ("Pemex") published in the Federal Official Gazette the release of the Code of Ethics of Pemex, its subsidiaries and affiliates, in the Institutional Regulation Control System and on Pemex's website.
The Code of Ethics outlines the corporate ethics principles and guidelines mandatory for all employees of Pemex, its subsidiaries and affiliates, and the core ethical principles of respect, equity and non-discrimination, effectiveness, honesty, loyalty, responsibility, legality, impartiality and integrity, governing the behavior and everyday professional conduct of all those who belong to Pemex.
To better illustrate the expected standards of conduct stemming from the Code of Ethics, Pemex also published in the Federal Official Gazette the Code of Conduct of Petróleos Mexicanos, its subsidiaries and affiliates, if applicable ("Pemex and Subsidiary Entities"), replacing the Code of Conduct in force as of February 9, 2015.
This new Code of Conduct is mandatory for all employees of Pemex and Subsidiary Entities, as well as for any individual or entity acting on its behalf. In this regard, Pemex's affiliates may either adopt Pemex's Code of Conduct, or issue its own code as long as it is aligned with Pemex's corporate ethical principles.
The Code of Conduct sets forth the expected and forbidden standards of conduct of Pemex and its Subsidiary Entities' employees, as follows: personal relationships; assets; information; gifts and invitations; conflict of interest; bribery and corruption; transparency; drugs and alcohol; relationships with communities; personal efficiency; harassment and sexual harassment; and mobbing or work harassment. These standards of conduct are defined and illustrated throughout this document to ensure that the everyday professional conduct of Pemex and Subsidiary Entities' personnel is ethical and in compliance with established rules and regulations, at all moments.
A remarkable difference from the former Code of Conduct is the addition of the section entitled Bribery and Corruption, aimed to tackle corrupt practices. In this section, the term corruption is defined as "the use and abuse of any public position to obtain a personal benefit." Additionally, this section explicitly states that Pemex does not tolerate bribery and corruption in any of its forms, and acts such as fraud, money laundering, facilitating payments, to obtain or attempt to obtain a personal benefit from Pemex and Subsidiary Entities' operations. Participation, either directly or indirectly in any of these acts will be sanctioned and reported to the competent authorities. Nevertheless, it does not clearly address the exchange of communications between Pemex and its Subsidiary Entities' personnel, on one hand, and suppliers and third-parties, on the other hand. These communications are frequently highlighted on corruption reports issued by the US Department of Justice, among others.
Another remarkable element is the establishment of an Ethical Line (Línea de Ayuda), a coordination and communication mechanism with the aim to provide advice, support and guidance on ethical or compliance issues within Pemex and Subsidiary Entities (not for external use, such as suppliers), and to report misconduct related to ethical behaviors and possible violations to the Code of Conduct. Furthermore, the Code adopts a Non-Retaliation Policy, which prohibits and sanctions retaliation against those individuals who inform or report misconduct or possible breaches to the Code of Conduct, ensuring his/her confidentiality.
Lastly, the Code includes a section entitled Offenses and Disciplinary Measures that may be imposed to employees of Pemex and Subsidiary Entities as a result of an employee found in violation of the Code of Conduct, which include employment disciplinary sanctions, from a written warning to the termination of the employment relationship, as well as administrative, civil, commercial and even criminal sanctions, depending on the seriousness of the violation.