Compliance Standards
PG&E is responsible for complying with thousands of compliance requirements issued by nearly 200 governmental bodies. Each of us is responsible for knowing and complying with the laws and regulations applicable to our work. Promptly report any violations of legal or regulatory requirements or PG&E policies, standards, or procedures to your supervisor, any other involved department, or the Compliance and Ethics Helpline. PG&E will not allow retaliation for any such reports made in good faith.
Following are descriptions of just a few of the compliance requirements that have widespread applicability at PG&E.
Federal Securities Laws
As companies with publicly traded securities1, PG&E Corporation and Pacific Gas and Electric Company must comply with federal laws and regulations that require the disclosure of certain information in periodic financial and other reports that are filed with the Securities and Exchange Commission (SEC). If you are asked to review a draft SEC report, you are expected to respond promptly to help ensure that the SEC reports are accurate and complete.
The securities laws also impose requirements about recordkeeping and the establishment, maintenance, and evaluation of "disclosure controls and procedures" as well as "internal control over financial reporting", as those terms are defined in the Sarbanes-Oxley Act of 2002. These laws require the Chief Executive Officer and the Chief Financial Officer to certify, among other things, the accuracy and completeness of information in the SEC reports and the effectiveness of disclosure controls and procedures, and that they have disclosed any fraud that involves management or other employees who have a significant role in internal controls over financial reporting.
PG&E Corporation's and Pacific Gas and Electric Company's internal controls over financial reporting are regularly tested, and if any deficiencies are identified, the controls are corrected and re-tested until they are effective. While the Chief Executive Officer and Chief Financial Officer are ultimately responsible for establishing and maintaining internal controls, the primary burden of complying with and testing controls falls on all of us. As such, you are expected to perform and test controls with due care.
If you have a concern about questionable accounting or auditing matters or internal controls (collectively, "accounting complaints"), contact the Compliance and Ethics Helpline. For more information, see the "How to Raise Concerns" section of this Code.
Insider Trading
Never make investment decisions about any equity or debt securities based on material nonpublic information obtained in the course of your employment. Information is nonpublic if it has not been publicly disseminated, and it is material if there is a substantial likelihood that a reasonable investor would consider it important in making an investment decision. It can also be illegal to disclose (or "tip") this information to others who then buy or sell securities on the basis of the tip. Examples of such information include expansion plans, major management changes, dividend rates, earnings, mergers, and significant new contracts or projects. Using this information is against PG&E's "Insider Trading Policy" and may violate laws or regulations.
Affiliate Interactions
The California Public Utilities Commission (CPUC) and the Federal Energy Regulatory Commission (FERC) have implemented affiliate rules to ensure that resources and assets of the regulated members of the corporate family are not used to subsidize or give an unfair advantage to our affiliates and subsidiaries. Failure to comply fully with the rules can result in sanctions, fines, or other serious measures.
For more information, please refer to:
Antitrust Laws
Antitrust laws were established to promote economic competition among businesses. Activities that limit competition, restrict trade, or otherwise dominate a market may violate federal or state antitrust laws. Such violations can expose PG&E and individual employees to criminal penalties, large fines, and civil lawsuits.
To avoid potential problems, follow these rules:
- Don't fix prices or divide markets with competitors unless the agreement will be actively supervised and approved by the appropriate regulatory body.
- When attending meetings or social events with competitors or potential competitors, avoid discussing any of the following information if it's not publicly available:
- Prices, pricing policy, contract terms or conditions;
- Costs, inventories, marketing and service plans, market surveys and studies;
- Capacity plans and capabilities, territorial agreements; or
- Any other proprietary or confidential information.
- Don't suggest or imply to any vendor that it must purchase services from PG&E in order to sell products or services to PG&E.
- Be careful that any negative or critical comments you make about a competitor are accurate.
- Don't use PG&E's size or resources to intimidate or threaten any individual or organization.
Environmental Laws and Regulations
PG&E is a recognized environmental leader and is committed to conducting its business in an environmentally sensitive manner. This commitment is consistent with our values and our "Environmental Policy". It also makes good business sense. Make sure that the decisions you make on behalf of PG&E reflect this commitment.
For PG&E to be an environmental leader, we must first comply fully with all environmental laws and regulations that govern our business. When appropriate, we seek ways to go beyond what's required in how we deliver energy, serve our customers, and manage our operations.
To learn more about PG&E's environmental leadership, visit http://www.pge.com/environment/
Political Contributions and Gifting
Local, state, federal, and foreign government officials shape the legal and regulatory environment in which PG&E operates. If you interact with public officials or candidates for public office, or if you provide gifts or contributions to such individuals, you must understand the laws that control PG&E's participation in the political process.
Corporate Affairs and the Law Department coordinate all contributions and gifts made to public officials on behalf of PG&E. "Public officials" include any elected official, candidate, non-elected official, employee, or consultant of a state or local government agency. Don't make commitments for contributions or provide gifts, including food and drinks, without consulting Corporate Affairs.
Even buying a cup of coffee for an elected official, giving out squeeze lights or hard hats, allowing public officials to use a PG&E meeting room, or hanging a banner with a bucket truck can constitute making a gift, subject to reporting requirements.
See the Foreign Corrupt Practices Act section below if you work with foreign government officials or foreign companies that may be wholly or partially owned or controlled by foreign governments.
Foreign Corrupt Practices Act
United States companies and their employees and agents doing business outside the United States must comply with the provisions of the Foreign Corrupt Practices Act (FCPA). The FCPA prohibits giving or offering anything of value to a foreign official, inside or outside the United States, to induce the recipient to misuse his or her official position to obtain or retain business or secure some improper advantage. "Anything of value" is defined broadly and includes gifts, money, services, entertainment, and meals above certain limits. A "foreign official" includes any officer, employee, candidate, agent, representative, official, or de facto official of any non-U.S. government, military, government-owned or affiliated company, or political party, or any public international organization. The prohibition extends to the official's friends and family members.
The FCPA also requires accurate records of foreign transactions and related expenses, as well as reasonable accounting controls so that FCPA issues can't be disguised or hidden.
Therefore, contact the Law Department before providing any gift, money, entertainment, service, or other item of value to a foreign official. Also, keep in mind that simple business courtesies such as meals, entertainment, or travel may be illegal under the FCPA or the laws of the host country. When doing business in a foreign country or with a representative of a foreign country, always maintain detailed records of transactions involving PG&E.
Government Contracts
Government contracts may have special provisions and reporting requirements. Be aware of those special provisions and immediately contact the Law Department if any questions arise. Fraudulent or dishonest acts in fulfilling a government contract can trigger severe penalties under the False Claims Act, including fines and jail time.
Copyright Laws
Copyrighted works include, but are not limited to, newsletters, magazine articles, newspapers, books, videotapes, drawings, musical recordings, and software. Copyright law protects such works even if they do not include a copyright notice. If you would like to copy material for distribution at work, make sure that you have permission from the copyright holder before making copies. Check PG&E's Compliance and Ethics Intranet site for more information.
Computer software is covered by licensing agreements that typically prohibit unauthorized use or copying. Never make unauthorized copies of software that is licensed to PG&E. Also, never load unlicensed software onto PG&E computer equipment or download unauthorized software from the Internet. You may, however, install personal software on your company-assigned computer if two conditions are met: (1) you must hold a software license that permits such an installation, and (2) you must have the approval of your supervisor and the local computer system administrator.
1PG&E Corporation's common stock is listed on the New York Stock Exchange (NYSE) and Pacific Gas and Electric Company's preferred stock is listed on the NYSE Alternext US.
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Code OF CONDUCT FOR EMPLOYEES
