7. Gifts, Hospitalities and Expenses

Stora Enso employees may provide or accept GHE in relation to counterparties, only if the following criteria are fulfilled.

The GHE must:

• Have a legitimate business rationale.
• Comply with applicable law and the internal rules of the involved parties.
• Be reasonable in value and infrequent.
• Be made openly and transparently.
• Be reasonable and proportionate in relation to the business content. While a simple lunch or event of some kind can be offered or accepted only to foster business relationships, GHE with more significant value must always be in connection with more substantial business content, for example, a business presentation or workshop.

The GHE must never:

• Intend or might be seen as an attempt to affect the outcome of business decisions or influence the involved parties’ ability to act in the best interest of their employer.
• Be cash or a cash equivalent (such as gift cards, vouchers or similar).
• Be extended to the business counterparty’s family member unless approved by your dedicated Division lawyer or Group Ethics and Compliance.
• Be any kind of unethical activities, such as provision of sexual services, illegal drug use or similar.

GHE that cannot be accepted under any circumstances must be rejected or returned to the provider. You will find a suggestion for a standard letter text for declining an offer on behalf of Stora Enso from HERE.

If you receive a Gift at an event of a ceremonial nature (e.g. a customer outing or a commemoration of a business transaction) that might not be appropriate, but it is offensive to refuse, you may accept it and then promptly report it to your immediate supervisor so that the GHE can be rejected or returned in an appropriate manner.

Please bear in mind that when Stora Enso employees visit their business partner’s facilities, we always pay our own travel and accommodation expenses.

When providing different kinds of GHE to our business partners and other stakeholders, we should always bear the following in mind:

• The purpose of GHE should be to inform about Stora Enso and build better relationships. But never to impact the behaviour of the recipient.
• GHE should be inclusive (everyone should be able to participate), support Stora Enso’s strategy and be in line with our Purpose and Values as defined in the Stora Enso Code.
• GHE should be offered transparently. If possible, the invitation shall be extended to the business counterparty instead of an individual person, so that the counterparty can choose who should participate.
• Do not offer GHE too frequently and avoid repetitive invitations to the same guests. Make sure that as many as possible can get to know Stora Enso.
• Always make sure that the GHE is properly recorded in financial bookkeeping.

7.4.1 Negotiations 

When there is a pending decision involving Stora Enso such as a tender decision or an ongoing contract negotiation, we should avoid providing or receiving GHE. The reason for this is that this is a sensitive situation, where both parties need to keep total objectivity and act only in the best interest of the principal.

It is, however, acceptable to provide or accept simple catering, such as lunch or dinner, in direct connection with the negotiations. If this happens, the parties should strive for paying for the catering every second time.

7.4.2 Public Officials

Public Officials are in many legislations pointed out as having a trusted position and therefore when dealing with Public Officials, you must act with extra care.

A Public Official is:

• A person who exercises a public function.
• A person acting in an official capacity for or on behalf of a government authority.
• Employees of government-owned or government-controlled entities.
• Employees, assistants or advisors of political bodies or politicians.
• A legislative, administrative, or judicial official, or
• An individual who holds a position in, a political party.

Public Officials can however appear in different roles.

A Public Official can also hold a position without having individual decision-making power in relation to Stora Enso, for example, members of parliament, employees of government-owned or government-controlled entities or an individual who holds a position in a political party (“Non-Executive PO”)

However, despite its sensitive nature, it is acceptable to provide ordinary business courtesy of nominal value to a Non-Executive PO, for example, tea and coffee or a lunch. If you are hosting a visit from a very senior Non-Executive PO, such as a government minister, it is acceptable to provide a level of Hospitality that is appropriate to his/her status. You should always follow the reporting and approval requirements in Section 7.3.

Public Officials are frequently subject to their own strict rules. If possible, you should take steps to ascertain what these rules permit or require and ensure that any GHE you offer comply with such rules. You should also check that disclosure and/or registration requirements are complied with to the best of your ability. If the records are not publicly available, you should ask the individual (or his/her office) to confirm that the necessary requirements have been met.

7.4.3 Lobbying

Lobbying is the act of lawfully attempting to influence public decision-making at any level, such as the creation and amendment of legislation, regulation, policy, or any other measures that affect the company's interests or objectives ('Lobbying'). It can take many forms, such as exchanging written documents and reports, participating in formal meetings and panels, engaging in spontaneous discussions, building, and maintaining relationships with stakeholders, or promoting the company's reputation and profile. Lobbying can take place both with and without the exchange of GHE. However, since Lobbying contains an element of influence, it is extra critical that GHE is offered with transparency and integrity.

In case of any exchange of GHE in connection with Lobbying, the following rules must be observed:

• GHE can only be provided to Non-Executive PO;
• The provided GHE shall not intend or appear to create any obligation to act in our favour or even such perception;
• The GHE shall be provided infrequent and on a reasonable level;
• Take steps to ascertain if the invitees are subject to internal rules and ensure that any GHE you offer comply with such rules; and
• Check if there are disclosure and/or registration requirements and comply with them, including but not limited to the Finnish Transparency Register. Please note that Lobbying without the exchange of GHE might also be subject to mandatory registration obligations.

When providing GHE to any Non-Executive PO during Lobbying, you should always follow the reporting and approval requirements in Section 7.3.

7.4.4 Business Partner Events

A Business Partner Event is a more extensive GHE activity, for example, a business facility inauguration, that often includes costs of travelling, accommodation, and other hospitality. GHE with a total value above 500 EUR per guest is always considered a Business Partner Event. The following rules must be observed when arranging a Business Partner Event:

1. Business Partner Events must always be approved in advance by the Division Head and by your Division lawyer;
2. The total cost for Business Partner Events must never exceed 2,000 EUR per guest.
3. There must be a clear business objective for the event, e.g., to visit and demonstrate a new mill or to launch a new product type etc. The event must never be an excuse to arrange extensive travelling and Hospitality.
4. Keep the cost under review and ensure that excessive or lavish Hospitality is avoided.
5. Public Officials shall only be invited when there is a clear connection between the purpose of the event and his/her role. An invitation to a Non-Executive PO must be approved by your immediate supervisor and by your Division lawyer or Group Ethics and Compliance in advance;
6. Ensure that the guest or the supervisor confirms that the participation in the Business Event is in accordance with applicable internal regulations.
7. It is very important that business-related content (e.g. product demonstrations, workshops, business presentations, business discussions etc.) is emphasized and the agenda is described in detail in the invitation. As a rule of thumb, business-related content shall time-wise account for the majority of the total time the guests spend at the event.
8. The ratio of Stora Enso staff to external guests must be high, at a minimum of 1:2. Such a ratio will indicate that there will be very good opportunities to network and improve business relations;
9. Gifts shall be limited to the Stora Enso giveaways, e.g., a company calendar, pen, or notebook.

7.4.5 GHE with Competitors

The purpose of exchanging reasonable GHE is to build goodwill and business relationships. Therefore, there is no legitimate business reason for accepting GHE from, or providing GHE to, Competitors except for very modest GHE when there are reasonable social expectations, for example, a trade association meeting at the competitor’s premises.

However, reasonable GHE can be exchanged in the context of the competitor also being a customer or supplier, and when there are restrictions setups (so-called “Chinese walls”) within Stora Enso so that information about the sales and purchasing of the same product is not managed by the same person(s) or exchanged between the teams. Please read “Section 3.3 Buying from and selling to competitors” for more guidance in these situations.

When meeting competitors, it is of utmost importance that no competitively sensitive information is discussed.

7.4.6 Forest-related activities and hunting

7.4.6.1 Invitation

Stora Enso organizes sometimes hunting activities with representatives of business partners, and these are divided into two categories: 

• A “Type A Hunting Activity” is a hunt where Stora Enso carries costs related to the organization of the hunt such as hunting consultants and drivers (Sw: drevkarlar, Fi: ajomiehiä) and where Stora Enso also provides food and refreshments during the activity. At a typical Type A Hunting Activity, the guests arrive in the afternoon of day one followed by an activity with business-related content and a light dinner. The following day includes breakfast, hunting, a modest lunch in the forest and a business activity in connection with the dinner in the evening. The guests leave after breakfast on day three; and
• A “Type B Hunting Activity” is a one-day hunt, where Stora Enso does not carry any costs related to the organization of the hunt except for land lease costs or the like. At a Type B Hunting Activity, the guests arrive in the morning and the day is spent hunting and includes a modest lunch in the forest. In connection with the lunch, a business presentation is made. The Guests leave when the hunt is concluded in the afternoon.

When arranging hunting activities, you must:

• Keep in mind that hunting activities are a form of GHE and therefore must follow the rules in this section, e.g., the rules about reporting and approval, Public Officials and GHE with Competitors, to name a few.
• Hunting activities should be inclusive. Alternative activities should be arranged for guests who are not participating in the hunting.
• In the case of a Type A Hunting Activity, ensure that the guest or the supervisor confirms that the participation in the Hunting Activities is in accordance with applicable internal regulations.

7.4.6.2 Extent of GHE

• Travel to and from the Hunting Activities and accommodation must be paid for by the guest, but Stora Enso may assist with bookings and reservations if required. Stora Enso may pay reasonable costs for shorter transportation during the Hunting Activities.
• Meals (breakfast, lunch, and dinner) during the Hunting Activities may be paid for by Stora Enso, provided that the expenses are reasonable.
• Type A Hunting Activity must always include an activity with business related content (e.g., a business-related presentation in connection with the dinner) and allow the Stora Enso personnel to interact with the guests for informal business discussions. A Type B Hunting Activity must include a business presentation in connection with the lunch;
• Gifts to the guests shall be limited to the Company Giveaways and shall be of modest value.

7.4.7 Responsible Alcohol Consumption

Stora Enso promotes a safe and professional environment at all business events. In case alcohol is served, consumption shall be moderate and responsible. Non-alcoholic alternatives shall always be available.

As a leader, you have an extra strong responsibility to show moderation, and intervene if necessary.

Below, you can find examples of what can be seen as acceptable practices when providing GHE. Remember however that the evaluation might differ depending on the situation and you must therefore follow the above-mentioned rules in this section, e.g., the rules about ongoing negotiations, Public Officials and GHE with Competitors, to name a few.

As a rule of thumb, the following cost levels are acceptable if you follow the rules in Section 7:

• Providing a company giveaway with nominal value.
• Providing a gift of up to 100 euros in connection with a celebration or anniversary.
• Providing a lunch worth 30 – 50 euros.
• Providing a dinner worth 50 - 100 euros.

The following cases represent good practices when offering or accepting GHE and could be used as a benchmark.

1. A Stora Enso employee receives an invitation from a consultant (supplier to Stora Enso) to a seminar in an area interesting to her and Stora Enso. The invitation is to a 3-hour seminar on a professional subject. After the seminar, the consultant offers a normal dinner with wine.
   
   Since the hospitality is in connection with a professional event where the business content is high, the employee can accept the invitation.
   
   
2. A Stora Enso employee invites a new customer representative to a local sport or cultural event at a low cost to get to know him. Even though the business content is limited, apart from the socializing, this is fine since the hospitality is modest.
   
   
3. You are representing Stora Enso and are part of a negotiating team. The negotiations continue for several days, and in direct connection with the negotiations, the companies take turns in arranging simple lunches or dinners for the company representatives.
   
   
4. A supplier based in a foreign country is arranging a customer event to demonstrate its new production facility. A purchasing manager at a Stora Enso mill is invited to the event. During the event, dinner will be served together with cultural exhibitions and music entertainment. The invitation includes airfare and hotel during the stay.
   
   Since the event is business-oriented with a clear interest for Stora Enso to join, the purchasing manager can accept the invitation. However, since Stora Enso employees always pay for their own transportation and accommodation costs, he rejects that part of the invitation.
   
   
5. A Stora Enso mill in Europe is organizing an overseas trip for three customer representatives together with some Stora Enso employees. The purpose of the trip is to show the customers a new product type produced at this mill. It will be a 5-day trip including two travel days. One day will be spent at the mill and the remaining two days will be spent on business seminars with some business entertainment of a reasonable nature. Guests pay for their own flights. For every guest, the fixed total cost of this event is around 500 EUR which includes 300 EUR for three dinners, 100 EUR for three lunches and another 100 EUR for a local city tour and a music concert. Stora Enso also offers to cover the guests’ hotel cost which is around 300 EUR for 2 nights.
   
   Since this is a Business Partner Event with high costs, the SVP Sales requires that the business content in the program be extensive. She also requires that the customer representatives participating in the trip provide certificates from their respective employers that they are aware of the customer event and that attending this event is not in breach of their internal guidelines.
   
   
6. A Stora Enso’s competitor is also a customer and a supplier to Stora Enso. In fact, this company started as a supplier to Stora Enso but expanded its business areas over the years. Now, they are a competitor, customer, and supplier to Stora Enso at the same time. This company celebrates 150 years anniversary this year and invited Stora Enso since we are one of their earliest customers. The celebration includes a visit to their latest production facility, several speeches from the company and a three-course dinner. The company is offering to pay for travel and accommodation costs as well.
   
   Since this company is a competitor to Stora Enso, our team has asked and ensured that no competitively sensitive information will be discussed during the event and informed that we will not join the production facility visit to avoid competition law risks. To foster a good relationship between this company and Stora Enso, as they are also our supplier and customer, we agreed to participate in the speeches part and the dinner but paid for travel and accommodations ourselves.