NNPCL GRC_76-91.pdf

NNPC Limited ERM Processes and Procedures Appendix B – Risk Reporting Framework To enable RM fulfill its mandate, some of the risk reports to be prepared and issued by RM are itemized in the table below: S/ Report Descriptio N Generator n RM Team Risk 1 Recipient  assessmen t report Re...

NNPC Limited ERM Processes and Procedures Appendix B – Risk Reporting Framework To enable RM fulfill its mandate, some of the risk reports to be prepared and issued by RM are itemized in the table below: S/ Report Descriptio N Generator n RM Team Risk 1 Recipient  assessmen t report Relevant Frequen Purpose cy  Risk  At least Chief prioritisati annuall Compliance on y Officer  Relevant MD/GCEO  Relevant BAC 2 RM Team Key risk  indicator report  Relevant  Risk  Monthl Chief monitorin Compliance g Officer mitigatio Relevant n y and MD/GCEO 3 RM Team Status of  mitigation plan  Relevant  Risk  Monthl Chief monitorin Compliance g Officer mitigatio Relevant n y and MD/GCEO Page 75 of 347 NNPC Limited ERM Processes and Procedures 4 RM Team Market  outlook and emerging risks  Relevant  Risk  Monthl Chief monitorin Compliance g Officer mitigatio Relevant n y and MD/GCEO 4 RM Team Risk event  reports and internal control exceptions  Relevant  Risk  Monthl Chief monitorin Compliance g Officer mitigatio Relevant n y and MD/GCEO 3 RM Team RCSA  Relevant  Risk Heads report of  Quarter monitorin Department g within assurance the ly and Business Units  Relevant Chief Compliance Officer  Relevant MD/GCEO  Relevant BAC Page 76 of 347 NNPC Limited ERM Processes and Procedures 4 RM Team Company-  Risk  ent report comprising  rs   Risk incident s identificat NNPC ion Limited prioritisati Head of RM on and Relevant of Relevant Internal Audit of on plans  Risk Division  Status mitigati  Quarter ly Officer Heads  Key risk indicato e Compliance Divisional :  Assuranc Chief wide or managem Relevant Function  Relevant MD/GCEO  Relevant BAC  Internal control exceptio ns  Internal followup results on Page 77 of 347 NNPC Limited ERM Processes and Procedures implem entation of recomm endatio ns by other assuran ce provider s  Market outlook and emergin g risks 6 NNPC Consolidat Limited’s ed report Risk on risk  Manageme reviews nt Team  NNPC  Quarte Limited  Consolidat rly Chief ed Risk Compliance reporting NNPC Limited Limited GCEO its subsidiarie s  Assurance Officer across and NNPC  NNPC Limited BAC Page 78 of 347 NNPC Limited ERM Processes and Procedures  NNPC Limited Head of Internal Audit Appendix C – Sample Risk Appetite Statements COSO’s Sub- Classificatio Classification Objectives Risk Appetite n Objectives Strategic  We shall seek Production and Restoration of reserve growth energy production to sustain long to peak levels, and term growing the by production mix and an energy mix portfolio of oil and growth achieving that gas reserves. meets current and future needs of our stakeholders  We shall seek to deliver over XX% of domestic energy requirements. Page 79 of 347 NNPC Limited ERM Processes and Procedures COSO’s Sub- Objectives Classificatio Classification Risk Appetite n Objectives Alliance Partnership and Implementation of  We shall not IJVs across board for engage in any alliances and strategic partnerships. alliance on any project or investment that does not meet PSAP requirements.  We shall not partner with any entity that fails to meet our minimum due diligence requirements.  We shall seek to meet all our responsibilities as detailed in our partnership agreements and shall not tolerate any unresolved Page 80 of 347 NNPC Limited ERM Processes and Procedures COSO’s Sub- Classificatio Classification Objectives Risk Appetite n Objectives default from our partners. People Sufficient staff  We shall attract, capacity of excellent develop professionalism and retain capability. skilled and highly employees.  We shall seek to ensure that each Senior Management Staff has at least one (1) subordinate not lower than two (2) from ranks the incumbent’s position.  We shall seek to ensure smooth job by transitions notifying Page 81 of 347 NNPC Limited ERM Processes and Procedures COSO’s Sub- Classificatio Classification Objectives Risk Appetite n Objectives potential successors at least (6) six months prior to the exit planned of any Senior Management Staff.  We shall seek to achieve seamless successions through a minimum XX% of positive job evaluations following succession Investment Investment in  We shall not profitable businesses approve that create value or project support without a clear efficient management of business any case and Page 82 of 347 NNPC Limited ERM Processes and Procedures COSO’s Sub- Classificatio Classification Objectives Risk Appetite n Objectives NNPC Limited’s commercial resources Operating Model viability. Operation lean of a Our staff strength at Corporate the NNPC Limited Headquarters and shall not be more autonomous than XX% of total business units that staff capacity. are core to NNPC Limited's operations. Reputation Strengthen our  We shall seek to reputation and avoid brand amongst all businesses, stakeholders. situations, actions could or that have a negative impact on our reputation and brand. that have Actions would negative impact on our Page 83 of 347 NNPC Limited ERM Processes and Procedures COSO’s Sub- Classificatio Classification Objectives Risk Appetite n Objectives reputation shall not be more than XX instance(s) in a year.  We will not tolerate negative media exposure beyond XX days. Community  relations  Maintain cordial our relationship with cordial Corporate a and sensitive to our Social responsibility core in manner that is communities. Make business activities host  We shall conduct part communities. of business strategy implementation and performance scorecard host a  We shall tolerate not more than 1 week of disruption annum per arising Page 84 of 347 NNPC Limited ERM Processes and Procedures COSO’s Sub- Classificatio Classification Objectives Risk Appetite n Objectives from Communal Issues  We shall seek to achieve all financial and non-financial obligations to stakeholders in any financial year. Operational Security Security of our core We shall put in place asset and people. measures to security exposure and limit asset destruction to less than XX instances in a year. HSE  Health and safety  of lives and our We shall not tolerate any loss environment of life arising from our operations.  We shall also not tolerate any Page 85 of 347 NNPC Limited ERM Processes and Procedures COSO’s Sub- Classificatio Classification Objectives Risk Appetite n Objectives occupational incidence or rate accident frequency rate (AFR) exceeding XX%.  We shall not tolerate environmental damage or wastage that leads to costs for stakeholders excess of in $xx annually  We shall limit asset destruction and vandalization to $XX per year  We shall not take on any activity for which we have determined that our staff or Page 86 of 347 NNPC Limited ERM Processes and Procedures COSO’s Sub- Classificatio Classification Objectives Risk Appetite n Objectives facilities are exposed to security threats of our  Our assets shall Capacity Operation optimisation assets at optimum not capacity to achieve below profitability. capacity operate XX% utilization.  We shall seek to achieve a minimal return of XX% on our assets Staff Welfare Build staff capability We shall not score of commercial- below xx % oriented with mindset internal from staff promotion satisfaction surveys based on that performance. shall be deployed from time to time. Product Quality Delivery of products We shall not in accordance to accept beyond XX specification. instances of Page 87 of 347 NNPC Limited ERM Processes and Procedures COSO’s Sub- Objectives Classificatio Classification Risk Appetite n Objectives negative deviation from specified requirements any in given operation or project per year. Reporting Financial and Transparent  We shall not Operational reporting of financial accept Information and operational significant information. misstatement of any financial or operational information i.e. beyond XX audit adjustments at any given period or audit adjustments beyond XX% on any balance sheet or P&L account.  We shall also Page 88 of 347 NNPC Limited ERM Processes and Procedures COSO’s Sub- Classificatio Classification Objectives Risk Appetite n Objectives not tolerate the finalization of audited financial statements later than months xx after the end of each financial year. Compliance Regulatory, Compliance with Legal and internal policies, tolerate internal Policy laws and or Compliance regulation. audits  We shall not regulatory with compliance ratings below XX%.  We shall have xx tolerance for financial crime and non- compliance to regulatory standards Page 89 of 347 NNPC Limited ERM Processes and Procedures COSO’s Sub- Classificatio Classification Objectives Risk Appetite n Objectives  We shall not tolerate exposure to fines due to late submission of regulatory reports  We shall ensure required approvals from regulatory bodies are received before commenceme nt of projects  We shall not tolerate unethical behaviors by staff Page 90 of 347