Skip to content

Modern Dairy Anti-Bribery and Anti-Corruption Policy

1. Introduction

Modern Dairy (hereinafter referred to as “the Company”) is committed to conducting its business in an honest, ethical and professional manner, and complying with all applicable laws and regulations. The Company has zero tolerance for any form of bribery or corruption, as these practices undermine fair competition, damage our reputation, and expose us to legal risks.

This Anti-Bribery and Anti-Corruption Policy (hereinafter referred to as “the Policy”) sets out the principles and standards that all employees (including part-time), contractors, directors, senior management and third parties acting on behalf of the Company must follow to prevent, detect and report any bribery or corruption issues. The Policy is a supplement to the Company’s Code of Ethics and other relevant policies and procedures.

2. Scope of Application

The Policy applies to all employees (including part-time), contractors, directors, senior management and third parties acting on behalf of the Company, regardless of their location, function, or level. Third parties include agents, consultants, suppliers, distributors, joint venture partners and any other individuals or entities that provide services or act on behalf of the Company.

The Company requires all employees (including part-time), contractors, directors, senior management and third parties acting on behalf of the Company to read, understand and comply with the Policy. Any violation of the Policy may result in disciplinary action, including termination of employment or contract. In addition, any violation of the Policy may also constitute a criminal offense under applicable laws and regulations, which may lead to fines or imprisonment.

3. Definition of Bribery and Corruption

Bribery is the act of offering, promising, giving, accepting, or soliciting anything of value (such as money, gifts, benefits, hospitality, travel) to or from anyone (such as government officials, customers, contractors, suppliers) to induce or reward the improper performance of any function or activity related to our business.

Corruption is the abuse of entrusted power for private gain. Corruption includes bribery as well as other forms of misconduct, such as fraud, extortion, embezzlement, nepotism, conflict of interest, etc.

4. Prohibition of Bribery and Corruption

The Company prohibits any form of bribery or corruption in any business transaction involving the Company or its affiliates. The prohibition applies to both public sector (government) bribery and private sector (commercial) bribery.

No employee (including part-time), contractor, director, senior management or third party acting on behalf of the Company shall directly or indirectly offer, promise, give, demand, accept or receive anything of value to or from anyone to obtain or retain business or advantage for the Company or themselves.

The Company also prohibits any facilitation payments (small amounts paid to low-level government officials to expedite or secure routine administrative actions), kickbacks (payments made in return for business favors or benefits), donations (payments made to charitable organizations or political parties) that are intended or perceived as bribes.

5. Gifts and Surrender

The Company requires all employees (including part-time), contractors, directors, senior management and third parties acting on behalf of the Company to surrender any gifts or benefits they receive from business partners or relevant individuals that may cause or imply an obligation or expectation of favor.

The Company has established the following rules regarding the surrender of gifts or benefits:

  • In principle, no department or individual shall accept any gifts or benefits from business partners or relevant individuals, nor shall they use occasions such as weddings, funerals, etc. to collect cash or gifts from subordinates or business partners.
  • When a department or individual receives a gift or benefit from the other party, they should politely refuse. If the gift or benefit has been accepted for various reasons and cannot be returned, they must report to their peer or superior department in a timely manner and surrender it according to the actual situation.
  • No department or individual shall accept any gifts from business partners (including affiliates) worth more than 100 yuan (including food, tobacco, and alcohol). If they cannot refuse or return them, they must notify their office immediately after receiving the gifts and surrender them to the farm office or the group office within 24 hours for unified disposal.

The Company will record and handle the surrendered gifts and benefits in accordance with relevant laws and regulations and the Company’s internal policies.

6. Conflict of Interest

A conflict of interest is a situation where an individual’s personal interests interfere or may interfere with the interests of the Company. A conflict of interest may create opportunities for bribery or corruption.

The Company requires all employees (including part-time), contractors, directors, senior management and third parties acting on behalf of the Company to avoid any actual or potential conflict of interest in any business transaction involving the Company or its affiliates. The Company has established the following rules for managing conflict of interest:

  • All employees (including part-time), contractors, directors, senior management and third parties acting on behalf of the Company must disclose any personal, financial or family interests that may affect their judgment, objectivity or loyalty to the Company.
  • All employees (including part-time), contractors, directors, senior management and third parties acting on behalf of the Company must obtain written approval from senior management before engaging in any activity that may cause a conflict of interest.
  • All employees (including part-time), contractors, directors, senior management and third parties acting on behalf of the Company must avoid using their position or influence to seek personal benefits or advantages.
  • All employees (including part-time), contractors, directors, senior management and third parties acting on behalf of the Company must report any actual or suspected conflict of interest to senior management or the Ethics and Compliance Department.

7. Due Diligence and Oversight

The Company conducts due diligence on any third party acting on behalf of the Company before establishing a business relationship or signing a contract with them. The due diligence process aims to assess the reputation, qualifications, and integrity of the third party, and identify any red flags or risks of bribery or corruption.

The Company also regularly monitors the performance and behavior of the third parties acting on behalf of the Company and requires them to comply with the Policy and all applicable laws and regulations. The Company reserves the right to terminate any business relationship or contract with any third party that violates the Policy or engages in any bribery or corruption.

The Company encourages all employees (including part-time), contractors, directors, senior management and third parties acting on behalf of the Company to report any actual or suspected violations of the Policy or any applicable laws and regulations. The Company provides various reporting channels, such as:

  • Communicating with direct supervisors or department heads
  • Contacting the Discipline Inspection Office

The Company protects the confidentiality and anonymity of the whistleblowers and prohibits any retaliation or discrimination against them. The Company investigates all reports promptly and thoroughly and takes appropriate measures to address any issues or concerns.

8. Training and Communication

The Company regularly provides training and communication on the Policy and relevant anti-bribery and anti-corruption laws and regulations to all employees (including part-time), contractors, directors, senior management and third parties acting on behalf of the Company. The training and communication aim to raise awareness, enhance understanding, and strengthen compliance.

The Company requires all employees (including part-time), contractors, directors, senior management and third parties acting on behalf of the Company to complete the training and sign the statement of compliance with the Policy every year.

The Company has established the following rules regarding the training plan and objectives:

  • The Company updates the training content and methods every year according to the latest developments and trends of anti-bribery and anti-corruption.
  • The Company updates the training targets and frequency every year according to the position, responsibility, and risk level of the employees (including part-time), contractors, directors, senior management and third parties acting on behalf of the Company. The training targets include all employees (including part-time), contractors, directors, senior management and third parties acting on behalf of the Company, but high-risk departments or individuals may need more or deeper training. The training frequency includes regular training at least once a year, and temporary training when any significant changes or events occur.
  • The Company updates the training objectives and evaluation every year according to the effectiveness and feedback of the training. The training objectives include improving the awareness and compliance level of the employees (including part-time), contractors, directors, senior management and third parties acting on behalf of the Company with the Policy and relevant laws and regulations and reducing the occurrence and impact of bribery or corruption. The training evaluation includes tests, questionnaires, interviews, etc., to measure the effectiveness and improvement of the training.

9. Audit, Review and Update

The Company reviews and updates the Policy regularly to ensure its effectiveness, relevance, and consistency with best practices.

The Company conducts ethical standard audits on all business lines and operations at least every three years to detect the implementation and problems of the Policy. The Company has established the following rules regarding the ethical standard audit:

  • The Company updates the audit plan and scope every three years according to the Policy and relevant laws and regulations. The audit plan includes the purpose, objectives, methods, timetable, responsibility allocation, etc. of the audit. The scope covers all business lines and all operation points such as farms, factories, etc.
  • The Company executes and completes the audit process and results every three years according to the audit plan and scope. The audit process includes collecting and analyzing data, interviewing, and investigating relevant personnel, evaluating, and testing risk control measures, finding and recording problems and non-conformities, etc. The audit results include audit reports, audit opinions, audit recommendations, etc.
  • The Company develops and implements improvement measures and effectiveness every three years according to the audit results. The improvement measures include rectification plans, rectification responsible persons, rectification deadlines, rectification resources, etc. The improvement effectiveness includes rectification acceptance, rectification evaluation, rectification feedback, etc.