"Compliance safeguards the enterprise value"

The Carinthian energy service provider KELAG introduced a compliance management system according to ONR 192050. Austrian Standards certified it and issued a Fair Business® Compliance Certificate.

KELAG headquarters
Credit: KELAG photo archives

The provision of energy services is a capital-intensive industry as the construction and operation of power stations and distribution networks continuously require high investments. Carinthian KELAG is one of the leading producers of electricity from renewable energies. In June 2014, the energy supplier issued a corporate bond in the amount of EUR 125 million to finance forthcoming investment projects. As such bonds are frequently subscribed by institutional investors, evidence of regulatory compliance by the entire group is of great importance. Therefore, KELAG operates a compliance management system certified according to ONR 192050.



"The identification and control of legal risks forms part of our risk management system," says Univ.Prof. Dipl.-Ing. Dr. Hermann Egger, KELAG's Chairman of the Board of Directors. For that purpose, the enterprise implemented a group-wide compliance management system (CMS) in co-operation with an international law firm to minimize the likelihood of unlawful acts by employees of the KELAG group. This system was recently certified according to ONR 192050 2050 "Compliance management systems (CMS) – Requirements and guidance for use" by Austrian Standards.

Five risk areas

Dr. Oskar Sobej / Mag. Markus Minarik
Credit: KELAG photo archives

"Our compliance management system protects the group as well as each and every employee and makes a major contribution to permanently safeguarding the enterprise value," believes Dr. Oskar Sobej, Chief Compliance Officer of KELAG. He was significantly involved in the certification process and is responsible for this area within the group – together with the compliance officers Mag. Markus Minarik, Mag. Michael-Diego Schmidt and Dipl.-Ing. Gerald Obernosterer. "The certified compliance management system focuses on the risk areas relevant for us, i.e. anti-corruption law, data protection law, anti-trust law, competition law and procurement law," explains Markus Minarik. The certification process covered Kelag AG and its subsidiaries Kelag Wärme GmbH and KNG-Kärnten Netz GmbH.

"Compliance has been an issue for KELAG for almost five years," says compliance officer Markus Minarik. "In 2009, we started to build an appropriate system, and in the following year the entire group committed to group-wide rules laid down in the KELAG code of conduct and the KELAG compliance manual. The certification and the preceding audits reviewed and demonstrated the practical workability and conformity of our system."

The significant efforts already made by KELAG paved the way to the certificate. The application that defined the scope and the risk areas mentioned before was followed by the two-phase audit process. While the first phase assessed the readiness for certification, the second phase examined the implementation of the requirements specified in ONR 192050 and the effectiveness of the compliance management system.

Review of the status quo

"Our compliance management system had already reached a very high level," reports Mag. Minarik. "Key requirements were already met. Therefore, it was essential for us to have a competent external party assessing the suitability of our compliance efforts so that we know where we stand," he describes the rationale. In the audit, two auditors interviewed more than 60 persons whom they selected in advance on the basis of the organizational chart. Room for improvement was found in the field of risk management and the appointment of key personnel. The field of compliance is highly supported by KELAG's Board of Directors. The certification process started in December 2013 and was successfully completed in May 2014

Fair Business® Compliance Certificate for KELAG

KELAG call centre agent
Credit: KELAG photo archives

KELAG AG and its subsidiaries Kelag Wärme GmbH and KNG-Kärnten Netz GmbH now hold the "Fair Business® Compliance Certificate" evidencing the positive completion of the multi-phase procedure and thus, the conformity of the CMS with the ONR. "The certification audits of Austrian Standards are exclusively performed by experienced specialists in compliance management – e.g. by corporate lawyers and chartered accountants," emphasizes Dr. Peter Jonas, Director Certification at Austrian Standards.

"For us, CMS certification was an important and necessary step towards transparency and building trust among our stakeholders. The professional and highly competent way in which the audits and the entire certification process were performed by the experts of Austrian Standards also provided invaluable support to us," summarizes Oskar Sobej, Chief Compliance Officer of KELAG.

Author: Herbert Hirner

Bibliography

ONR 192050 Compliance management systems (CMS) - Requirements and guidance for use

PR-ID: 0737-2014-06-23 / kelag_compliance

About KELAG

KELAG, one of the leading energy service providers of Austria, is active in the fields of electricity, district heating and natural gas. The group operates the distribution networks for natural gas and electricity in Carinthia, is among the big Austrian hydropower producers and the biggest supplier of district heating based on biomass and industrial waste heat nation-wide. With 1,500 employees, the group achieved a turnover of EUR 1.5 billion in 2013. Its main shareholders are the Land Carinthia and the German energy supplier RWE. In May 2014, the compliance management system of KELAG AG, KELAG Wärme GmbH and KNG-Kärnten Netz GmbH was certified according to ONR 192050.