Corporate Governance

We focus on cultivating core values, ethical corporate culture along with our operating performance and have adhered to our governance practices, corporate governance principles, and our corporate governance handbook rules. To provide increased assurance to all stakeholders including the regulatory authorities, the Board of Directors ensure good corporate governance principles and guidelines including our code of conducts are complied with in all levels of our operations by the directors, management and employees in all countries in which we operate, in addition to strict compliance with the laws and regulations by setting up compliance management system and performing self-assessment compliance on existing and new laws and regulations. We believe that all our personnel understand such principles and practices and exercise their discretion in the performance of their duties strictly in accordance the established guidelines. To deal with any act that may be contrary to our code of conduct, or behavior that may raise a suspicion of corruption, we have put in place a whistleblowing process in accordance with international standards and provide protection to informants and whistleblowers. Furthermore, we also have self-assessment process on the operational, control and corruption issues to ensure compliance with the proper internal control and the alignment of anti-corruption policy.

  • Restructuring the Board of Directors to propel the Organization toward Sustainability. The Board of Directors was restructured to ensure that it has an appropriate composition and size, with independent directors accounting for more than half of the total number of directors. The Chairman of the Board of Directors is an independent director who is not the Chief Executive Officer, without regard to gender, nationality, ethnicity, etc.
  • Appointing the Sub-committees to comprise of the Audit and Risk Management Committee, the Nomination and Remuneration Committee, and the Governance and Sustainable Development Committee to reinforce unsustainable operations.
  • Establishing the Charter of the Board of Directors and the Charter of the Sub-committees, Corporate Governance Policies and Practices, which define the scope of duties and responsibilities in accordance with sound corporate governance principles, such as corporate governance structure and mechanism, policies and guidelines for directors and executives, etc. All of which shall be examined annually to ensure compliance with changing regulations and conditions.
Ethics & Compliance

Business Code of Conduct
SCG Chemicals has implemented a long-established and practiced code of conduct known as the "SCG Chemicals Code of Conduct" in accordance with good corporate governance principles to ensure that employees at all levels perform in an appropriate, transparent, and accountable manner.


We utilize ethics tests as part of its proactive and preventive system to assess and develop an understanding of ethical practices among employees at all levels. Administered on a yearly basis, Ethics e-Testing and e-Policy e-Testing are aimed at enabling employees to correctly apply SCG business philosophy, the code of conduct, and the anti-corruption policy and produce tangible outcomes. In 2020, the Ethics e-Testing and e-Policy e-Testing were conducted for the 7 and 5 consecutive year respectively. All SCG employees must give correct responses to pass the tests. In addition, the responses are analyzed and then communicated to employees at all levels to foster correct understanding.


GRC Helpline was developed as a communication channel to provide consultation to employees. SCGC Code of Conduct was included in employee induction training courses. The “SCGC Code of Conduct” was established for supplier to follow as a shared standard.


Conducted a self-assessment annually on corruption risks for executives and operational level employees in the sales, procurement, coordination with government agencies, and community relations departments, as a tool for continual development and improvement.


Compliance
SCGC has established corporate governance policy and practices to ensure that its business operations are fully compliant with relevant laws and regulations and that there are operational standards in place to help control and ensure sustainable compliance, focusing on areas relevant to the law as follows: A compliance management system (CMS) has been introduced to ensure that all business operations both in Thailand and overseas comply with relevant laws in that country. The Company has aimed to expand the system, currently utilized in local businesses, to businesses in Vietnam by 2022 and is now making preparations to introduce the system to Long Son Petrochemicals (LSP). The Company is also developing a CMS handbook to facilitate communication and serve as guidelines for compliance management in the future. The Company has taken initiatives to foster awareness and understanding among the units and assessed compliance with relevant existing and newly-introduced laws and/or amended laws. It has also set targets and performed assessment on compliance with key laws relevant to new projects and normal operations. Preparations have also been made to issue operational standards for relevant units based on these laws to achieve sustainable compliance with such laws.


We have developed a digital system solution for storing and updating a database of laws relevant to the Company, processing and reporting compliance performance, and managing all relevant permits to enhance the efficiency of compliance management. The program has been adopted by domestic businesses in 2021; the goal is to introduce it to businesses in Vietnam in 2023.


Anti-corruption
SCGC places great emphasis on compliance with the principle of good corporate governance as well as anti-corruption efforts. The Board of Directors has approved the Anti-corruption Policy, which has been reviewed for suitability and included as part of SCG Chemicals Code of Conduct, which forms the behavioral foundation of all employees and has been integrated into the corporate culture. The Company also communicates the policy to employees as well as provides training to foster an understanding of the policy and enable them to extend relevant practices to subsidiaries. The Company also analyzes risk indicators and assesses risks of corruptions. This year, the Company initiated a program in support of the Anti-corruption Policy, in which it issued a control self-assessment form for the assessment of the internal control system and risks of corruption that included operations where such risks were present, such as sales, procurement, coordination with government agencies, and community relations. Employees were also required to take part in self-learning, which was in line with the guidelines of the Anti-corruption Policy and integrated into the Ethics e-Testing.


Furthermore, as part of the proactive and preventive system, SCGC has established methods for risk mitigation and control that employees can use as guidelines to prevent corruption. The Internal Audit Office is responsible for assessing policy compliance and reporting to the Management Team of Chemicals Business, the Audit Committee, and the Board of Directors for improvement. In addition, SCG Chemicals Supplier Code of Conduct has also been developed to communicate and foster an understanding of the Company’s corporate governance practices as well as establish standards for conducting business together.


We have also provided whistleblowing channels and instituted a whistleblower protection policy to give its personnel and stakeholders opportunities to submit information or tips related to violations or irregularities in the business operations of Chemicals Business. Guidelines for complaint investigation have also been established and publicly disclosed in the Company’s annual report (Form 56-1 One Report).

Risk Management

To enhance its ability to accomplish the defined objectives and manage risks in an efficient, effective, and timely manner, Chemicals Business has introduced SCG’s Enterprise Risk Management (ERM) Framework to the organization for organization-wide risk management.


Our employs a sustainable development structure in the supervision of risk management through a committee in the economic, environmental, social, and governance dimensions, which oversees and supports the management plans for major risks on the business unit level to ensure that such risks can be managed and subsequently reports the business unit-level risk management status on a quarterly basis to the Risk Management Committee for acknowledgment.


Furthermore, to accommodate potential fluctuations in business operations, the Company has integrated risk management and business continuity management (BCM) and prepared prepared business continuity plans (BCPs) for responding to emergencies and crises so as to minimize impacts that may impact the business and the stakeholders.

Sensitivity Analysis and Stress testing for Water and Climate
Water Management for Water Availability Drought-Prone Area

At SCGC, we prioritize drought as a key water-related risk as areas where operation could be affected by changing weather pattern resulted from climate change. In addition,


Water related risks management
To ensure SCGC timely manages water related risks, by setting risk management process to monitors water situation, including rainfalls, potential flood, or drought. SCGC representatives attended Government Water Management Taskforces such Water Basin Committee, Keyman Water War room in Eastern to strengthen competitive advantage, supply ability, and sustainability, In addition, we have been participating government weekly meeting regarding water situation trend analysis with the government sector by attending “Water Situation Monitoring and Analytic” at the Smart Water Operation Center (SWOC), Royal Irrigation Department to ensure disaster-risk preparedness in our operation areas.

  • Subsequently, we have summarized the situation simulate potential scenarios incorporated with AQUEDUCT Water Risk Atlas data to assess risks related to water scarcity and stress area
  • Sharing to related committees in Sustainable Development Structure to assess water related risks
  • Preparing Risk Mitigation Plan to manage those risk which the risk dashboard escalation process will be reported to Risk Management Committee (RMC) as quarterly basis. While in case of emergency and Crisis Management Team BMT SCGC will be triggered to support and strategic direction when necessary.

Sensitivity Analysis and Stress testing
In addition, SCGC monitors water level of the 3 major reservoirs Dokkrai, Nongplalai, and Klongyai) in Rayong Province, which mainly supply water to manufacturing base in Map Ta Phut, by drawing up a water situation scenario to forecast water quantity in the reservoirs. SCG BCM team used ENSO forecast model, Royal Irrigation Department, Keyman Water War Room and In-house modeling to analyze the precipitation and estimate water inflow pattern in various scenarios.


Scenario Planning & Sensitivity Analysis
The scenario planning of 3 major reservoirs (Nongplalai, Dokkrai, and Klongyai) have been analyzed water-related risks based on the 2-year forward looking assumption by simulating water inflow situations to these reservoirs in various scenarios, in terms of frequency & consequence, up to the worst-case level.

  • Average inflow to reservoirs (Average)
  • The lowest inflow in single year during the past 20 years (Lowest)
  • The lowest inflow in 2 consecutive years (Last Drought in Y2004 – 2005)

Worst Case Scenario & Business Continuity Plan
We assess the worst-case scenario up to water scarcity, insufficient for all stakeholders during drought crisis.The scenario includes “what if” the water shortage causes SCGC to reduce its production capacities to the minimum level of service for certain periods in which keys factors including customer prioritization, dependency, utility arrangement, manufacturing condition and inventory management along supply chain are considered the outage scenario to develop risk treatment options and mitigation plans to minimize water usage and related cost.


BCM Contingency plan for water crisis
Owing to severe drought in the Eastern area could potentially disrupt in business operations, we have developed Business Continuity Plan (BCP) & Trigger Point by considering both supply and demand of water. Moreover, we conducted the sensitivity analysis to allocate an alternative supply quantity to each plant by considering demand against EBITDA basis according to the Minimum Business Continuity Objective (MBCO) of SCG Chemicals.


Sustainability water supply for all stakeholders in EEC
Moreover, we collaborate with National Water Resources Office and Royal Irrigation Department to expedite water management projects to increase and construct reservoirs new capacity to ensure water security for all stakeholders in the Eastern River Basin by next 10-15 years.

Emerging Risk: Biodiversity


Marine
The SCGC's petrochemical operations are primarily concentrated in industrial estates adjacent to the coastline. Although operations are conducted in conformity with the law, the business will continue to expand in the future, posing a risk of accumulation that could impact the marine environment, particularly aquatic life and biodiversity. This could eventually have an impact on the quality of life for employees and the communities surrounding the plants. SCGC carries out research on marine environment restoration and introduces CSR initiatives such as Fish Home.


Over the past decade, We have installed 2,180 fish homes along the eastern coastline, spanning an area of approximately 50 square kilometers in Chonburi, Rayong, Chanthaburi, and Trat provinces. Additionally, research studies have been conducted to continuously assess the environmental quality and abundance of areas where fish homes are installed. The area surveyed is found to be home to up to 174 species of diverse organisms.

Forest
The rise of bio-based plastics increases the risk of deforestation, as the area is used to cultivate crops for bioplastic production. SCGC has recognized the risks in this area and mitigated them by developing a list of agricultural goods that are not sourced from deforestation and are certified internationally, such as BONSUCRO (Sustainable Sugarcane and Sugar Production Standards)

Customer Experience

SCGC places considerable emphasis on building strong relationships with business customers (B2B) to better understand their needs and respond constructively with products, services, and solutions and foster collaborations in the development of new products and services and solutions. We have conducted customer satisfaction surveys and tracked repurchases from strategic customers, in addition to monitoring product and service quality concerns through the analysis of customer complaints and the implementation of preventative and corrective actions.


Product and Service Delivery

  • Convenience and speed of trading were enhanced by real-time monitoring of ship sales quotas and available space, as well as the verification of online trade documentation.
  • Standards were maintained through quality control of plastic resin and end products, in addition to supporting manufacturing practices and precursor attribute improvement.
  • Customer service was enhanced to be more responsive, and a digital documentation system was used to minimize human errors.


Collaboration on Innovation

  • Collaborated with customers on projects with the goal of creating and developing new prototypes into marketable products.
  • Incorporated customer demands and global trends to develop new products and solutions that signify business prospects. Among the examples were the development of an IBC tank in conjunction with Dow Chemical, PCR bottles in collaboration with Unilever, and food packaging in collaboration with Betagro.


Strengthening Customer Relationship

  • Organizing seminars to provide knowledge and direction on economic and market trends. The goal was for customers to stay informed of current situations and be prepared to plan for the future.
  • Business Development Training. The goal was to foster customer business growth through new knowledge, such as business model creation.
  • Customer Support in Times of Crisis. The goal was to support customers during the COVID-19 pandemic by providing testing kits, field hospital, etc.

Sustainable Supplier

SCG Chemicals has selected suppliers that demonstrate a capability of sustainable business operations in the areas of environment, social, and governance (ESG). SCG Chemicals has an effective supplier opt-in system in place that consistently evaluates and reviews suppliers' performance in terms of product and service quality, as well as ESG guidelines. The goal is to develop and improve suppliers toward sustainability together. Since 2019, SCG Chemicals has been certified ISO 20400 for sustainable procurement, making it the first company in Thailand’s chemical sector to obtain such certification.


Developing Automated Business Matching System.
Developed the Arch system powered by artificial intelligence (AI)/machine learning technology to match procurement requirements with the most suitable supplier. The approach expands opportunities for potential suppliers to engage in fair tendering while significantly lowering the time required to connect suppliers by more than 20%. The system integrates with the AVL Searching system, which leverages machine learning technology to collect data and search for suppliers based on their qualifications and capabilities.


Developing Supplier Capability for Environmental Partnership

  • Promoted green procurement by selecting manufacturers or service providers with the potential to create processes that reduce environmental impacts.
  • Promoted suppliers with plants registered to adhere to green industry standards for environmental impact reduction policies and processes.
  • Established a partnership project targeted at decreasing greenhouse gas emissions in the suppliers’ manufacturing and transportation processes by using SCG's approach of cooperatively developing and improving the processes.

Information Security and Cybersecurity

SCGC is committed to information security and cybersecurity by establishing an e-Policy in accordance with ISO 27001 and process control in accordance with the National Institute of Standards and Technology (NIST), which includes the use of IT infrastructure services provided by 27001 certified companies. In addition, the Company adopts an Industrial Control System Policy in accordance with IEC 62443 to maintain information security and cybersecurity and ensure "no incidents of cyber threats" affecting the Company's business operations.


SCGC has transparent approaches and procedures for managing information security and cybersecurity, overseen by the IT Governance Committee and the Cybersecurity Governance Committee. These approaches and procedures apply to three levels of management:

Information Security and Cybersecurity Process and Infrastructure
SCGC designates Vulnerability Assessment (VA) to monitor network architecture and improve system security in accordance with the National Institute of Standards and Technology (NIST) standards by annually assessing computer system vulnerabilities reported by internal and external staff.


In terms of IT internal Audit, the Company has been able to conduct audits in the following areas: Information Technology System Monitoring, Information Technology Activity Management Monitoring, Information Technology System Security Monitoring, and Penetration Testing


Technology Used by the Company to Improve Information Security and Cybersecurity

  • Implementation of Multi-factor Authentication (MFA) to verify identity to ensure high security
  • Endpoint Detection and Response
  • Development of IoT Security Architecture
  • ICS Cybersecurity Incident Response Plan
  • Establishment of Cloud Security Operation Center
  • Data Classification and Trade Secret
  • Improvement of Industrial Control Systems, including Network Security, Physical Security, Remote Access Management, Back up Management, Active Directory, Patch & Anti-virus Management, and educational training for employees on the ICS Policy


Information Security and Cybersecurity Training and Testing for Employees

  • All employees are required to attend six hours of training per year.
  • All employees must acknowledge and pass the e-Policy


SCGC strengthens the knowledge, understanding, and awareness of employees at all levels through e-learning training with content covering the e-Policy and a requirement for e-Policy Testing to be undertaken at all levels of employees throughout the organization. Over the last year, all employees acknowledged and passed the Phishing Simulation Test.


Furthermore, we have increased the knowledge, comprehension, and awareness of 7,070 employees and business partners who use the Company's information technology systems about cyberattack patterns and phishing schemes such as email, SMS, giving away personal information, and ransomware. Additionally, the Company underlines the importance of practicing and observing various points for future applications when confronted with real-world scenarios through the use of email scam simulation tests. According to the year test results, 98.49% of employees and business partners passed the test.

Data Privacy

SCGC respects the privacy rights of all individuals associated with the Company, including customers, employees, business partners, shareholders, and anyone who conducts business with the Company. We always consider that protecting the privacy and security of your personal data is our responsibility. To reassure you when conducting business with the Company, SCGC establishes the SCG Chemicals Privacy Policy based on the compliance with Thailand's Personal Data Protection Act to serve as a guideline of mechanism, supervision, and management of personal data with the emphasis on privacy, transparency, and security of personal data. In addition to collecting and using personal information, the Company will collect and use personal information as needed and for the purposes of use to protect the privacy and security of personal data of those associated with the Company with "no incident of personal data leakage that causes damage."


Personal Data Protection Governance Structure
To ensure compliance with the policy, we have the Chemicals Business Risk Management Committee, the Chemicals Business Compliance Committee, and the Chemicals Business Cybersecurity Governance Committee. In this regard, roles, duties, and responsibilities are enacted to protect personal data in line with SCG Chemicals Privacy Policy and the linkage to personal data management.


Privacy Control Process of Personal Data
SCGC appointed SCG Chemical Data Protection Officer (SCG Chemical DPO) with the roles, duties, and responsibilities required by law to report on personal data protection to the Personal Data Protection Committee on a regular basis and to prepare recommendations to keep SCG Chemicals' personal data protection current and in compliance with the law. Additionally, they advise SCG Chemicals employees on how to comply with the law and the SCG Chemicals Privacy Policy and monitor the operations of SCG Chemicals units to ensure compliance with the law and the SCG Chemicals Privacy Policy.


Furthermore, we employ standards, guidelines, procedures, and other pertinent documentation to ensure that the SCG Chemicals Privacy Policy is implemented throughout the company, including associated companies and subsidiaries.


In 2021, SCGC developed a self-assessment checklist for personal data protection practices in the event of a violation of the law. Assessors shall develop plans to correct and prevent risks associated with non-compliance with legal requirements to mitigate such risks and achieve sustainability in accordance with the SCG Chemicals Privacy Policy. To ensure that employees are aware of SCG Chemicals Privacy Policy, we communicate with and train employees and stakeholders on personal data protection and compliance with the SCG Chemicals Privacy Policy. Training is mandatory for new employees and is provided via e-learning on a continuous basis. Additionally, as part of the yearly e-Ethics Testing, the Company conducts a knowledge test on the SCG Chemicals Privacy Policy.


SCGC puts in place adequate measures to maintain the security of personal data and imposes measures to prevent data leakage and its unauthorized use, such as the deployment of technology for Data Loss Prevention (DLP), log data history, Vulnerability Assessment (VA), and Privileged Access Management (PAM), etc.


On an annual basis, we build an incident management system and practice emergency drills in the event of personal data leakage. The process, rules, and activities' performance outcomes demonstrate that the Company can effectively safeguard data privacy and security.


Additionally, we have prepared processes and systems to facilitate the exercise of personal data rights, such as consent withdrawal, request for access and copy, submission or transfer, objection to data collection, use, or disclosure, deletion or destruction, suspension of data use, correction, and complaints. If the Company violates or fails to comply with the Personal Data Protection Law, data subjects can monitor the status of their requests and complaints online.