Independence compliance

Report on the compliance of the distribution system operator Sadales tīkls AS with the independence requirements and the implementation of the compliance programme in 2020

Sadales tīkls AS has developed and implemented Compliance Programme (hereinafter referred to the Compliance Programme), the updated version of which has been approved by decision No.251/48 of the Management Board of Sadales tīkls AS of 2 December 2020 “On Approval of a New Version of the Compliance Programme”. The compliance programme sets out the measures to be taken and the persons responsible for ensuring compliance. The measures included in the compliance programme to ensure and control the independence and equal treatment of the electricity distribution system operator are divided into three main groups: independence of the management (Management Board), non-discriminatory treatment of the electricity system and market participants, ensuring confidentiality and data protection. When evaluating the review of management documents (Sadales tīkls AS compliance programme, policies, agreements), evaluating ensuring of non-discriminatory treatment of electricity system participants, received customer information requests and claims, Sadales tīkls AS concludes that in its previous period of operation in 2020 it has observed equal treatment of electricity system participants, has been independent in making decisions and has ensured the protection of customers’ confidential data.

 

The Report on compliance

The report on the compliance of the distribution system operator Sadales tīkls AS with the independence requirements and the implementation of the compliance programme in 2020 (hereinafter referred to the Report) has been prepared in accordance with the “Regulations on Independence Requirements of the Electricity Distribution System Operator” approved by decision No.1/4 of the Public Utilities Commission of 22 February 2012 (hereinafter referred the Regulations). The report has been prepared by Compliance Supervisor of Sadales tīkls AS Liene Lauceniece-Ivaninoka in accordance with Paragraph 4 of the Regulations. The report is reviewed and approved by the Management Board of Sadales tīkls AS.

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Sadales tīkls AS hereby attests:

  • none of the members of the Management Board of Sadales tīkls AS work in the organisational units of the companies belonging to Latvenergo Group, which are directly or indirectly responsible for electricity generation, transmission or trade, as well as in the organisational units of other electricity supply undertaking dealing with electricity transmission, generation or marketing. The duties, responsibilities and areas of activity of the members of the Management Board are defined in their employment contracts and authorisation agreements, as well as in decisions of the Management Board and the Regulations of the Management Board of Sadales tīkls AS;

 

  • The amount of remuneration of the members of the Management Board of Sadales tīkls AS does not depend on the amount of annual net turnover or profit of the companies belonging to Latvenergo Group. The amount of remuneration of the members of the Management Board is specified in the employment contracts and authorisation agreements, it does not change depending on the economic indicators of the Group;

 

  • rights, obligations and restrictions on combining positions, earning income and conducting commercial activities of members of the Management Board of Sadales tīkls AS are determined by their employment contracts and authorisation agreements, the Law On Prevention of Conflict of Interest in Activities of Public Officials;

 

  •  members of the Management Board of Sadales tīkls AS are provided with the right to take decisions regarding the assets necessary for the operation, maintenance or development of the distribution system without reference to the vertically integrated electricity undertaking and the dominant undertaking as provided for in Section 19(2)(2) of the Electricity Market Law;

 

  • until the submission of the Report, no restrictions have been stated for the alienation and use of property in relation to the fixed assets owned or leased by Sadales tīkls AS to the extent that would prevent Sadales tīkls AS to comply with the independence requirements specified in the Electricity Market Law;

 

  • during the reporting period, no circumstances were stated that would significantly restrict the right of Sadales tīkls AS to use the leased distribution system assets, as well as to make decisions on its own and independently of the lessor – Latvenergo AS.

During the reporting period, together with the assessment of significant risks, the compliance risk assessment of the distribution system operator Sadales tīkls AS was performed. The compliance risks of the distribution system operator Sadales tīkls AS are not significant and do not affect the independence requirements.

 

The following policies were approved during the report period (9):

1) Document Management Policy of Sadales tīkls AS

2) Crisis Management Policy of Latvenergo Group

3) Corporate Governance Policy of Latvenergo Group

4) Communication Policy of Latvenergo Group

5) Accounting Policy of Latvenergo Group

6) Latvenergo Group’s Policy of Compliance with International and National Sanctions and Prevention of Money Laundering

7) Remuneration Policy of Sadales tīkls AS

8) Fraud and Corruption Risk Management Policy of Sadales tīkls AS

9) Transport Policy of Sadales tīkls AS