CODE OF BUSINESS ETHICS
NAPIER ENVIRONMENTAL TECHNOLOGIES INC. is a leading supplier to
the coating removal and wood restoration industry. It is committed to increasing
shareholder value through growth and product development of superior, cost-
effective products that are environmentally friendly.
This Code of Business Ethics defines the ethical behaviour of Napier
Environmental Technologies Inc. in dealing with stakeholders. It was developed
to help employees make the right business decisions, consistent with Napier
values of integrity, involvement and improvement, and to behave in a manner that
reflects high ethical standards.
Application of the principles outlined in this policy is essential to achieving our
corporate goals. Every employee, officer and director is responsible for knowing
the contents of the policy and applying its principles in day-to-day business
activities. The alternative of ignoring the policy or making unethical business
decisions could have serious consequences for Napier and its employees.
Principles of Business Ethics:
• Doing what is right
• Respecting the rights of others
• Obeying the law
• Maintaining the integrity and confidentiality of information
• Avoiding conflicts of interest
• Conducting ourselves appropriately
This Code of Business Ethics applies equally to all directors, officers and
employees regardless of their position within the organization.
Throughout this document the term employees refers to individuals employed
with Napier, including officers and management personnel. Officers are senior
management personnel holding such titles as President, Executive Vice President,
Vice President, and Corporate Secretary. A listing of officers and directors can be
found in the Napier Annual Report.
The Board of Directors of Napier Environmental Technologies Inc has approved
this Code of Business Ethics.
Employees must not only consider whether they are in compliance with this
policy but also how their decisions and actions will appear to an outside party.
The perception of wrongdoing is potentially as damaging as an actual breach of
ethics. Therefore, it is essential that employees not only conduct Napier business
according to high ethical standards but also be seen to do so.
PRINCIPLES OF BUSINESS ETHICS
Doing What is Right
To be ethical is to know the difference between right and wrong, and to do what is
right. Before taking any action employees must always ask the following
• is it legal?
• is it fair?
• is it right?
Asking these questions and applying this Code of Business Ethics ensures that
actions are ethical and consistent with Napier values. Where an employee is
uncertain about the ethics or legality of any planned action, it is his or her
responsibility to consult with a supervisor, manager or business leader or seek
advice from any of the sources listed in this Code of Business Ethics.
Respecting the Rights of Others
Management makes decisions regarding hiring and promotion of employees on
the basis of merit and in accordance with applicable provisions contained in
human rights legislation.
Employees have the right to pursue their careers at Napier free from
discrimination and harassment based on any ground prohibited by law, including
age, sex, race, colour, religion, creed, national origin, citizenship, language,
marital status, family status, pregnancy or childbirth, sexual orientation, disability
or political belief.
No personal or family relationship between an employee and any other employee
shall compromise, or appear to compromise, the principles defined by this policy.
Company assets may, subject to the exceptions outlined below, only be used for
business purposes. Employees of the company have responsibility to ensure that
Napier assets are put to good use in enhancing shareholder value. All persons
entrusted with managerial or supervisory responsibility are responsible for
ensuring that appropriate policies, procedures and controls are put in place to
safeguard these assets. Everyone is responsible for following these policies and
There may be situations where limited use of Napier assets for personal purposes
by employees has traditionally been permitted and such practice may continue
where the following conditions are met:
• the extent of personal use is not a significant portion of the total use of the
• personal use does not compromise or impair the value or utility of the
asset to Napier;
• such use does not confer a significant financial benefit to the employee
outside of normal compensation arrangements; and,
• such use is consistent with common business practice and would not be
considered unethical or unusual by an objective third party who was aware
of the relevant facts; or,
• personal use is specifically permitted by Napier policy (e.g. company
owned or leased vehicles).
Customer relationships are critical to the continuing success of Napier. In dealing
with customers, employees will conduct themselves with fairness, courtesy and
good faith. Employees will respect and ensure the confidentiality of customer
information unless disclosure is required by law.
Relationships with suppliers must always be arms length, consistent with
accepted business practices, Napier policies and in accordance with applicable
laws. In dealing with suppliers, employees will conduct themselves with fairness,
courtesy and good faith. All interactions with suppliers must conform to the
requirements of the section of this policy addressing conflict of interest.
Napier is committed to environmental responsibility and stewardship and intends
to be an industry leader in protecting the environment. We will meet or exceed all
applicable regulatory requirements. Each Director, Officer and employee of
Napier will perform their duties with respect for the environment and promptly
report any failure to do so to the President and CEO, Chairman of Board,
Chairman of Audit Committee of Board or any Napier Director.
Obeying the Law
Napier operates within a complex framework of federal, provincial and municipal
laws. In addition to Canadian laws, Napier is also subject to the laws and
regulations of foreign countries in which it does business.
Directors and employees are expected to comply with applicable laws and
regulations of Canada and any other country where Napier carries on business. No
employee, no matter what position or title he or she holds, is ever expected to
commit or condone an illegal act, or to instruct other employees to do so on
behalf of Napier.
Maintaining Integrity and Confidentiality of Information
Company Records and Accounting Practices
The integrity of Napier records and financial reporting is critical to its on-going
success. All assets, liabilities and transactions must be accurately and completely
reported in the books and supported by necessary documentation. No asset,
liability or transaction is to be concealed from management or the Napier external
Use of Napier funds for unlawful or improper purposes is prohibited.
All transactions must be authorized and executed in accordance with Napier
policy and the instructions of management. Appropriate accounting and financial
policies, procedures, controls and audit processes must be maintained.
Employees, regardless of their position in the organization, are expected to follow
internal policies and procedures designed to protect the integrity of corporate
data. This includes adherence to procedures related to security of computer
Financial reports which are made available to the shareholders and the public are
prepared in accordance with generally accepted accounting principles as well as
applicable laws and regulations.
All employees are encouraged to question and report transactions that appear to
be contrary to established policies and procedures.
Confidentiality of Information
Many employees have access to corporate information that is sensitive or
confidential. Information such as personnel records, payroll records, customer
information, company strategies, financial and competitive information is all
confidential. Release of such information is potentially harmful to Napier
employees and customers. In some cases it is illegal. Employees must use
extreme care when dealing with confidential or sensitive information. As a
general rule, such information shall not be released to anyone inside or outside of
the company who is not authorized or legally entitled to receive it.
Care must be taken not to discuss confidential information in social or public
Employees are responsible for ensuring confidential information is not released to
outside parties. Where an employee is uncertain as to whether certain information
can or should be released he or she shall consult with his or her supervisor,
manager, or business leader or make other necessary inquiries prior to complying
with requests for such information.
Napier will not disclose personal information about an employee to third parties
without the employee's permission, unless required by law.
Avoiding Conflicts of Interest
A conflict of interest arises when an employee must choose between Napier’s best
interests or their own. Any situation where an employee's judgment may be
compromised, where he or she shows undue favouritism to any party or where he
or she receives a benefit of some kind is potentially a conflict of interest. All
employees must strive to avoid situations that create a conflict, create the
appearance of a conflict, or have the potential to create a conflict. If any of these
situations occur, employees are responsible for disclosing and, where appropriate,
taking action to remedy the conflict of interest. In most instances, an employee
should make such disclosures to their immediate supervisor.
Situations that can potentially give rise to a conflict of interest are numerous.
Some of the more significant areas causing conflicts of interest are discussed
below. All of the comments in this section are applicable to employees, spouses
(including common law partners) and family members.
Personal Interest in Transactions
• No employee shall have any direct personal interest in a transaction to
which Napier is a party, unless fully disclosed and approved by an
independent manager. For example it is inappropriate for an employee's
spouse to set up a business that sells goods or services to Napier where the
employee either directly makes or approves the decision to purchase such
goods or services.
• No employee shall use his or her position to solicit or conduct business for
personal benefit or gain.
• A potential conflict of interest exists where an employee, his or her spouse
or immediate family owns a share or has an interest in any business which
competes with Napier. This does not prohibit small holdings of shares in
public companies that compete with Napier.
Use of Insider Information
Trading of publicly listed securities on the basis of insider information is against
the law and can result in significant fines and even jail sentences. Insider
information is generally considered to be any corporate information that has not
been made public which, if known to the market, will likely cause share prices to
either rise or fall. In the course of performing their duties, employees may become
aware of or have direct access to such information. Sharing this information with
anyone inside or outside the company or using it for personal gain by buying or
selling shares of Napier or any other publicly traded company is a serious breach
of company policy and Canadian law. Supplying information to other people
("tipping") is an offence, even if there is no personal gain to the employee.
Gifts and Benefits
Receiving and giving gifts and benefits in a business context is a sensitive area
which requires judgment and common sense. Employees should not accept gifts
or benefits from customers, suppliers, business associates or companies who wish
to do business with Napier, if such gifts might be perceived as a bribe or appear to
influence business decisions. The same principle applies to giving gifts or benefits
on behalf of Napier and to gifts given to, or received by, family members and
Generally, gifts or other benefits may be given and accepted by employees when
• are consistent with local business practice and custom,
• are not excessive in value,
• are not in contravention of applicable laws and ethical standards, and,
• are able to withstand public scrutiny.
It is prohibited to receive or give a gift in cash or cash equivalent.
Gifts of more than nominal value are to be refused. Where an employee feels such
a gift must be accepted to avoid damaging business relationships, the employee
must consult with his or her immediate supervisor as to the appropriate course of
Abuse of Position
Employees must not inappropriately use their position and authority for personal
benefit or to the detriment of other employees. None should take unfair advantage
of anyone through manipulation, concealment, abuse of privileged information or
misrepresentation of material facts.
Taking a Second Job
It is acceptable for employees to have a second job, provided it does not interfere
with the employee's ability to adequately perform his or her duties at Napier. The
second job must not create, or appear to create, a conflict of interest. For example,
it is not acceptable for employees to work for a direct competitor of Napier.
Where an employee currently has a second job or is considering taking a second
job, potential conflicts must be discussed with the employee's immediate
Running a Business
Employees may have other business interests outside of Napier. While there is
nothing ethically wrong in principle with employees running or managing other
businesses, such situations can give rise to significant conflicts of interest. For
example, it would be a conflict for an employee to set up a business that is in
direct competition with Napier or that sells goods and services to Napier.
As with taking a second job, running or managing a business should not interfere
with the employee's ability to adequately perform his or her duties at Napier.
Where an employee is currently managing a business or is considering doing so,
potential conflicts must be discussed with the employee's immediate supervisor.
Serving as a Director of Another Organization
Directors and employees may serve as a director of another organization, such as
a limited company, a non-profit or a religious organization, provided that it does
not interfere with their ability to perform their duties at Napier and is in
accordance with existing company policies. Where serving as a director creates a
conflict of interest, it must be disclosed and, where appropriate, remedied.
Conducting Ourselves Appropriately
Community and Public Relations
Napier’s standing in the communities in which it does business and the
perceptions of the general public, shareholders and the investment communities
are critical to its success. All employees are ambassadors of Napier and need to be
aware of how their actions, conduct and public statements can impact the public
perception of the company.
Employees and officers may not speak publicly for the company, unless
specifically authorized by senior management. Employees may not use company
stationary or titles in communications which do not directly involve Napier.
Employees expressing personal opinions when speaking or writing should not
imply company endorsement or in fact associate Napier in any way with personal
Napier strongly believes in the importance of honest and open communication.
Communication regarding business and work related issues should normally
follow established organizational channels. E-mails and other internal
communication must respect the feelings and attitudes of all employees who may
encounter the written material. For issues involving possible violations of this
Code of Business Ethics, employees should refer to the section on Reporting
Violations for guidance.
Employees holding professional credentials such as lawyers, accountants and
engineers are required to comply with all relevant professional standards and
rules of conduct when practicing their vocation in the service of Napier.
COMPLIANCE WITH THIS POLICY
It is critical to Napier’s success that employees conduct themselves ethically and
legally in every aspect of their business activities. Every employee of Napier is
required to comply with this Code of Business Ethics.
Employees in leadership positions must assume a responsibility for the actions
and conduct of other employees who report to them. Supervisors, managers and
business leaders can fulfill this responsibility through prudent management
practices such as:
• ensuring this Code of Business Ethics is clearly communicated to all
reporting employees on a regular basis;
• establishing and maintaining internal and management controls designed
to prevent or detect breaches in corporate policies;
• leading by example and exhibiting high standards of ethical behaviour;
• appropriately investigating situations which may indicate a breach of this
• dealing with known breaches of this policy in an appropriate manner.
Compliance, both personal and by reporting employees, will be a factor in
periodic performance reviews. Violations of this policy will result in the company
taking appropriate action, including possible discharge from employment.
Employees should also be aware that potential personal liability does not end with
the company. Depending on the circumstances, an individual may also face civil
or criminal charges and penalties (including imprisonment).
Any employee who reasonably believes a violation of this policy has occurred has
an obligation to report the violation to an appropriate Napier official. Possible
violations should be reported to an appropriate supervisor in the employee's work
area. However, where an employee is uncertain as to how a violation of this
policy should be reported, or is not comfortable going to his or her supervisor, the
employee should consult with the President and CEO, Chairman of Board,
Chairman of Audit Committee of Board or any other Napier Director. These
officers and Directors are signatory to this code and their signatures can be found
on the last page. At the request of an employee reporting a violation their identity
will remain confidential insofar as it is possible to do so.
Napier will not take or allow any reprisal against an employee for, in good faith,
reporting a suspected violation of this policy. Any such reprisal will in itself be
considered a very serious breach of this policy and subject to disciplinary action.
All reported violations will be investigated. Where an investigation determines
that a violation has occurred, appropriate action will be taken.