The Ministry of Economy has on 19^th of May 2022 issued a new code of conduct to govern the behavior and internal policies of companies and branches present in Libya. The Resolution No. 494 of 2022 regarding the adoption of the Code of Conduct for Companies (thereafter referred to as ‘Code’) should be praised in its attempt to advance corporate governance. This can be inferred from articles that seek to combat corruption, advance social responsibility as well as strengthen companies’ policies with regards to internal control.[1]

The Rules are Split into Twofold:

1. Regulations placed on commercial entities 
2. Obligations bestowed upon all employees of commercial entities. 

• Regulations on Commercial entities 

As for the former, all commercial entities that are governed by Law No.23 of 2010 Regarding Commercial Activities will be subject to the regulations placed on them by Resolution No.494/2022. These regulations can be outlined as follows:

1. Providing services indiscriminately to foreign citizens;
2. Transparency of information; websites must be regularly updated, contact details must be easily accessed and information on obtaining services must be published;

• All documents must be archived in a good manner;

1. The need to openly receive and handle complaints;
2. The adoption of scientific methods in the training of employees;
3. A compliance regime;

• Providing free services that help achieve social welfare;
• Allocating 3% of the workforce to people with special needs;

1. Signing confidentiality agreements lasting for 5 years from the date of obtaining information with all actual and potential contractors; said contracts must include provisions on conflict of interest;
2. The company must familiarise the worker with its internal policies and legislations in force;
3. Transparency in contracting, training and promoting employees;

• Commitment to equity in wages and non-discrimination in salary;
• Publishing of the administrative structure amongst employees; containing the defined powers and tasks of employees;
• The company must develop a system of receiving and handling complaints and is ought to review them;

1. The company is under obligation to allocate a department, office or an employee to receive reports of violations on this Code.

• Must facilitate the right of the worker to appeal against any decision taken against him.
• Responsibilities on Employees

1. Workmanship 

• Employees ought not to prioritize personal interest over those of the company.
• The prohibition against the exploitation of confidential information for personal interests.
• Priority ought to be given to customers with special needs; this includes but is not limited to the elderly, sick and pregnant women.
• Providing disclosing procedural information to clients with regards to the process of obtaining the services provided.

1. Prohibition against Conflict of interest 

• Refraining from performing any activity which may inhibit impartial discharge of his duties or a more privileged treatment of legal or natural persons.
• Immediate obligation of informing the line manager in writing of an actual or potential risk of conflict of interest.
• Not to use the position directly or indirectly for obtaining personal financial gain nor anything of value.
• Employee obligated to submit a report to his direct supervisor upon noticing suspicious financial transactions.
• Prohibition from working under the direct supervision of one of the employee’s relatives to the fourth degree in the same unit.
• Employee must refrain from accepting anything of value; combating bribery. Exemptions to this are the following: non-precious gifts such as merchandise and other stationary items printed with a trademark, gifts and discounts which are offered to a wide range of company employees as part of an agreement between the company and the offeree. Lastly, meals related to business meetings which are reasonable in cost and frequency.
• Social Media
• Prohibition against publishing business secrets.
• Not to publish information relating to the company’s work except following the prior permission of the employer.
• Strict prohibition against uploading texts and images that contain immoral, racists, indictments to violence and hatred.
• To not use social media during work times.

1. Dealings within the Company 

• Adhering to the official dress code specified by the employer.
• Rationalizing the use of electricity and water as well as ensuring the use of company’s devices in an optimal and responsible manner.
• To not violate the regulations relating to tenders, auctions, stores purchases and other financial regulations placed by virtue of legislation or company policy.
• Prohibition against all forms of unethical behavior including, but not limited to, sexual harassment, indecent words, actions and insinuations.
• Implementing the directives of the superiors according to the functional hierarchy.
• Transferring the knowledge and experiences gained by the superior to his subordinates and playing a role in raising colleagues’ efficiency and capabilities.

1. Confidentiality of Information 

• Company’s information is considered the private property of the company. As such, any necessary disclosure of information must be in the narrowest scope.
• Confidential information is considered all that is written, visual and audio-verbal information relating the company across the entire spectrum from correspondence to administrative.

The Emphasis on Social Responsibility

Even a superficial read of the Code can highlight the overarching focus the Code takes on social responsibility. This is not only evident from the numerous features, and therefore emphasis, on the special treatment to be given to people of special needs, but also in the following obligations placed by the Code:

1. Each company is ought to adopt a clear vision towards the role it seeks to play when archiving the goals of social responsibility.
2. Each company must allocate funds to achieve its visions of social responsibility. For state-owned companies this must not exceed 2% from the percentage of the company’s net profit of the previous fiscal year. As for joint companies, the allocated fund for social responsibility must be no less than 1%, whilst for branches of foreign company it is set to be no less than 2%.

• The company must allocate at least one executive official, to implement and observe the compliance of the company’s social responsibility activities with this Code.

1. The company must disclose the allocations, expenses, plans and the objectives of social responsibility by any means of disclosure.
2. Companies may bypass the approved plan for social responsibility only in cases of force majeure.

The Code of Conduct might appear extensive in nature, you can contact Tumi Law Firm, therefore, to learn what this new Code means for you and your company. Our team of specialist lawyers in all corporate and employment matters can guide your company and assist it in implementing efficient law-complying policies.

[1] All of the polices emphasised within this Code are of significance, the highlighted provisions are, however, deemed by Tumi Law Form to be of unique significance due to their novelty.