Business Ethics and Human Rights

The Company views respect for human rights as a fundamental part of its business practices in interactions with all stakeholders, including employees, contractors, and local communities.

The Company regularly carries out its human rights due diligence process in engagement with all stakeholders at every stage, from planning and risk assessment to ensuring respect for human rights and developing corrective actions.

NOVATEK places a heightened emphasis on respecting human rights in its relations with employees, local communities, and contractors and strictly prohibits the use of child and forced labor.

NOVATEK seeks to eliminate any potential negative impacts of its operations on human rights through due diligence procedures.

NOVATEK considers conflicts of interest to be the main driver of corrupt behavior and requires its employees to avoid such situations. This and other requirements are outlined in the Code of Business Conduct and Ethics, Regulations on the Management of Conflicts of Interest, and Anti-Corruption Policy, which also defines the principles of managing conflicts of interest.

To control risks associated with conflicts of interest, the Company has implemented a routine of regular employee disclosure of such information in relevant declarations. Job applicants are also required to fill out a conflict of interest questionnaire.

The Company’s anti-corruption system in place combines strict compliance with Russian and international laws and high ethical standards. NOVATEK has zero tolerance to dishonest and illegal business practices and voluntarily implements additional measures to prevent corruption.

The Audit Committee of the Board of Directors annually reviews the Anti-Corruption Policy implementation roadmap for the coming year and the results of the measures implemented in the previous reporting period. The director of the responsible unit, who reports to the Deputy Chairman of PAO NOVATEK’s Management Board in charge of economic security and anti-corruption, is responsible for implementing a range of measures to avoid corruption offenses and prevent corruption.

NOVATEK regularly identifies, analyzes, and assesses potential external risks, both on a Company-wide level and for individual areas of activity — across specific projects and business processes. The Company has a Corruption Risk Management Procedure in place. The corruption risk assessment methodology is based on the requirements of Russian laws, recommendations of the Russian Ministry of Labor and Social Protection, and the Company’s internal regulations.

NOVATEK offers various training formats to inform employees and contractors about its Anti-Corruption Policy, Code of Business Conduct and Ethics, Human Rights Policy, and corporate practices. In addition, all new employees are required to have an in-person briefing on the Anti-Corruption Policy, business ethics, and human rights. For management, the Company provides consulting on corruption prevention.

The online course Basics of the Company’s Anti-Corruption Policy and Employee Anti-Corruption Conduct is mandatory for all new Company hires. This course is also available to all employees through the intranet portal. Regular advanced trainings are provided to Company officials and employees responsible for anti-corruption management, with relevant supporting certificates issued upon completion.

The Company has multiple feedback mechanisms in place, available 24/7, for stakeholders to submit complaints and reports in both Russian and English. PAO NOVATEK’s Ethics and Human Rights Hotline is available for reports related to violations of business conduct and human rights. PAO NOVATEK and its subsidiaries maintain security hotlines for reporting concerns regarding conflicts of interest and corruption. In addition, local complaint and grievance channels have been set up in the Company’s regions of operation.

Updates on reports to the Ethics and Human Rights Hotline and security hotlines, identified violations, and response measures taken are regularly reviewed by the Audit Committee of the Board of Directors. The effectiveness and reliability of the Ethics and Human Rights Hotline are confirmed through external or internal audits as necessary.

On top of that, the Company’s large-scale LNG projects have established additional channels for diverse stakeholders, including indigenous peoples of the Far North, to submit complaints, reports, requests, and suggestions on a range of issues, including feedback regarding the operation of the grievance mechanisms. The procedures for receiving and processing reports and complaints, including turnaround times and the sequence of actions, are established in applicable internal regulations. Reports can be made in person, by phone, or via e-mail.

NOVATEK is committed to sustainable supply chain management and building long-term and mutually beneficial relationships with its partners.

The Company supports contractors to adopt a responsible approach to conducting business. The Company adopted the Supplier Code of Conduct, which contains recommendations and principles related to business ethics and human rights that NOVATEK expects its suppliers to follow.

As one of the largest taxpayers in its regions of operation, NOVATEK strictly complies with Russian tax legislation and does not engage in tax base erosion practices or use offshore entities for tax minimization. The Company views tax payments to local budgets as an important factor contributing to the sustainable social and economic development of its regions of operation. NOVATEK’s approach to taxation is outlined in its Code of Business Conduct and Ethics.

As part of tax monitoring, the Company provided the Russian Federal Tax Service with remote access to the accounting systems and tax reporting of 18 subsidiaries and affiliates of PAO NOVATEK. By cooperating with the Federal Tax Service, NOVATEK can ensure a high level of transparency and minimize the risks of disagreements and disputes with tax authorities.

Compliance with tax obligations, in particular tax payments, is overseen by the Audit Committee of the Board of Directors through regular monitoring of the Company’s financial performance. NOVATEK regularly discloses its tax expenses in its consolidated financial statement disclosures.

The reliability of information about the Company’s taxation is verified by an independent auditor as part of audits of financial statements.

NOVATEK assesses its tax risks to ensure compliance with the Company’s tax obligations as part of its risk management. NOVATEK’s internal audit function evaluates results of the Company’s activities in this area as part of its audit engagements.

Anyone with relevant information can report suspected violations of the Company’s tax obligations to the 24/7 Ethics and Human Rights Hotline in a convenient form, including anonymously.

The Company’s transfer pricing activities are fully compliant with OECD BEPS Project.¹ NOVATEK does not engage in tax evasion through transfer pricing, does not use tax incentives in tax havens, and strictly complies with the local laws of all jurisdictions in which it operates.