Sustainability in Kazakhstan
Maintaining high standards for Sustainability
Since 2010, Tele2 has been an operator in Kazakhstan, a market that is rapidly developing. Tele2 entered the Kazakh market by acquiring a majority stake in an already existing mobile network operator and we have been contributing to this growing market with great results.
In 2016, we further expanded our position in Kazakhstan by buying out the remaining stake of the initial operation and by entering into a merger with ALTEL, Kazakhstan's fourth largest operator and the only one operating a 4G network.
From the start in 2010, Tele2 has worked hard to apply the same high level of standards in Kazakhstan as it does in all its operations. This applies to the day-to-day operations, as well as to exceptional incidental business transactions, such as the acquisition of the majority stake in the initial operation that formed Tele2 Kazakhstan and the subsequent merger with ALTEL. To safeguard our commitment to sustainability, we assess performance, risks and opportunities at regular intervals.
For the Kazakh market, particular emphasis is put on areas that are, generally speaking, still in a developing phase in the country, such as ethics and compliance. Tele2's main instruments to ensure we do business ethically are the Tele2 Code of Conduct and our Business Partner Code of Conduct, which are based on the UN Global Compact. Hence, Tele2 Kazakhstan employees are required to sign the Tele2 Code of Conduct in writing when they join the company, and also on an annual basis, just like their colleagues in all countries where Tele2 operates. Furthermore, employees have the obligation to require all contractors, business partners and third parties to sign the Business Partner Code of Conduct, if the annual contract value is above one million SEK.
To promote transparency of our sustainability efforts in Kazakhstan, Tele2 issued a whitepaper in December 2014. The paper is made to inform stakeholders on the state of sustainability within Tele2 Kazakhstan. The paper described the political environment in Kazakhstan, the legal structure of the Tele2 Kazakhstan entity, historical ownership and persons of interest that are involved in transactions, and it discloses information on how Tele2 obtained its stake in the initial operation.
Before buying out the remaining stake in the initial operation, and entering into an agreement to merge with ALTEL, Tele2 issued another report on sustainability in November 2015. The report looks at five focus areas that are deemed material for ensuring sustainability within the Tele2 Kazakhstan operation: corruption, ownership structure, code of conduct enforcement, transparency, and privacy and integrity.
At the time of the merger with ALTEL, Tele2 committed to issuing annual status update reports on the relevant areas for sustainability in Kazakhstan. The reports provide information on the development of the focus areas mentioned in the previous paragraph and additionally on labor rights and environment, and set out actions for the following year.
In December 2018, Tele2 announced its decision to exercise its put option in the joint venture in Kazakhstan. The transaction is expected to close at the end of June 2019. Following the sale of our share in the joint venture and exit from the Kazakhstan market, we believe it is important to inform our stakeholders once more about our work on sustainability in Kazakhstan. Therefore, Tele2 has created an Kazakhstan Exit Report. The scope of this report is from the start of the current joint venture until the agreement for the sale of the operation.