COMPETITION LAW & POLICYEXTERNAL ENGAGEMENTSTRATEGY FOR 2015

CONFIDENTIAL TO UNILEVER FOR INTERNAL REFERENCE ONLY

January 2015

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WHAT WE’VE DONE TO DATE:FOCUS ON COMPLIANCE

• Multiple private, bilateral meetings with regulators to present Unilever’s compliance programme (common template slides)

• Attendance at selected events / bespoke fora to meet peers as well as senior regulator and opinion formers

• Speaking at a few competition conferences and other events about aspects of in-house legal and compliance work

• Leading role in ICC (International Chamber of Commerce) Task Force on Compliance & Advocacy and ICC UK Competition Group

• Presentation at ICN annual meeting 2014

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CORE OBJECTIVES

For Legal Group, external engagement helps us:

Achieve business targets

Navigate complex issues

Protect our assets

and reputation

Anticipate risks

Drive leadership

on sustainabilit

y

Low credibility on commitment to compliance (given history of cases) would affect reputation with regulators, have a potential impact on fines and foster a greater tendency to probe

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BUSINESS CASE FOR ADVOCACY ON COMPETITION LAWStakeholders must believe in our commitment to responsible growth:• Impact on investor relations• Impact on customer and consumer perception• Impact on employee engagement and recruitment• Impact on reputation with governments and authorities

Potential benefits for Unilever include:• Increased clarity on industry initiatives with the aim to increase

sustainability opportunities• Recognition of credible compliance programmes could reduce

potential sanctions• Credible advocacy plans can help secure positive outcome of

cases, investigations and M&A clearances, and can have an impact on cases/investigations/M&A involving other companies

• A clear effects-based approach from authorities can increase flexibility on trade terms and rebates

OUR PRIORITIES

• Champion compliance globally, including with respect to TAs, to avoid exposure, reinforce and build credibility with antitrust authorities worldwide,

• Work together with relevant Unilever functions (e.g. Comms/Advocacy team) to ensure coherence and get projects supported and done

• Educate regulators world-wide on market and commercial realities

• Call for constructive dialogue with authorities on the scope for legitimate industry initiatives to promote sustainability

• Open dialogue with authorities on reflecting compliance efforts in sanctioning / fining policies

• Advocacy activities to address M&A / cases / investigation concerns on a case-by-case basis

• Consider scope for Unilever as third party to influence sector inquiries, individual investigations, review of supplier and competitor mergers

• Call for clarity and guidance from authorities on effects-based approach to assess unilateral conduct (e.g. trade terms)

APPROACHING ADVOCACY

UNDERSTAND

POSITION

ENGAGE

If issues are new to Unilever as a whole, or new to specific geographies or markets, familiarise yourself with the issue in question, both at a global and local levels

Build on the understanding gained to identify and map key decision-makers and opinion-formers on the issue in question.

Make clear what our view is and what change we want, so Unilever becomes a more visible and credible player in this space. Tailor key messages to your country to make sure they are relevant and powerful BUT be cautious not to expose us to risks Liaise with Competition Team and Comms.

Deeper and more effective engagement in policy formulation and decisions.

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1. Unilever is fully committed to competition law compliance (see also template slides)

• Our Code of Business Principles bans all forms of cartel activity globally and prescribes compliance with all applicable competition laws

• We champion compliance in all markets where we operate as well as with TAs

• There is no “one size fits all” or “zero risk” in compliance

• It is our policy to cooperate fully with competition authorities

2. There is a need of constructive dialogue on legitimate industry initiatives

• Legitimate collaboration is necessary to achieve certain objectives e.g. sustainability benefits

• Competition law should not have a chilling effect on legitimate initiatives

3. Competition law compliance efforts and programmes may be a mitigating factor in sanctioning/fining policies

• Position of authorities still quite polarized but some changes are ongoing (see recently Italy)

• Reflecting compliance efforts in the setting of sanctions would incentivise compliance

4. Unilateral conduct should be assessed on the basis of its effects

• Avoid that agencies go the “per se” prohibition road

SOME KEY MESSAGES

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OUR ADVOCATES

• Our CEO and Cluster Chairpersons• Senior business leaders• Our Chief Legal Officer• Other LMT members• Our General Counsel, Competition and Competition

team• Members of the global Competition Network• Our Comms / Advocacy team• All colleagues when faced with an opportunity to stress

Unilever’s commitment to compliance• Third parties: the power of “amplification” (when other

key opinion formers say good things about us)

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KEY ACTIONS• Plan & allocate deliverables and timeline• Understand comms strategies of other UL functions;

participate in developing upcoming comms strategies• List events in which UL was represented in 2014 and

learnings• Identify success stories and gaps • Map priority fora – ICN, ECN, OECD, ICC, AIM, ICLA, TAs & local

fora• Map priority countries and stakeholders for 2015• Liaise with Comms/Advocay team• Define means for getting messages across

Internally

• Finalise ICC UK and ICC global work-plans for 2015• Determine where Unilever will actively contribute e.g.

• ICN Annual Conference in Australia in April 2015• Identified priority fora and events

• Work with Comms/Advocay team and business to interface with authorities

Externally

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EVALUATE SUCCESS

• Process workstream in the agreed timeline• Sufficient assurance that collaboration initiatives

where Unilever is involved are compliant• List of success stories including on effect of

compliance programme and evidence of where competition law helped overcome issues

• List of examples and evidence of competition law having had a chilling effect to show why we need a change

Internally

• Recognition of Unilever commitment to compliance

• Established dialogue with “more supportive” regulators on potential mitigating impact of compliance programmes

• Public statement from agencies on need for a constructive dialogue on industry initiatives e.g. on TAs, on sustainability and on self regulation

• Confirmation by authorities of effects-based assessment of unilateral conducts

Externally

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THINK

GLOBAL! UNILEVER IS GLOBAL AND THE AUTHORITIES ARE GETTING GLOBAL,,,

… in international Networks/organisations e.g.:

… in the context of bilateral agreements e.g.:

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REMEMBER

• Be proactive in identifying opportunities and objectives• Understand bigger picture – know when to wait• Prepare and think carefully before sharing internal materials• Define priority stakeholders• Focus on Unilever’s key interests• No silos: put competition policy in business and global

context• Liaise with Global Competition Network members• Have “best case” and “red line” positions in mind, with

“fall-back” ready• Champion Unilever’s long term, global reputation – not

just short term or local victories at expense of bigger picture; consider authorities around the world talk to each other (see below)

• Build capability so others can contribute / amplify • Decide what success looks like • Liaise with other relevant colleagues

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KEY RULES

• Legal leads competition law & policy external engagement Relevant legal team to attend external meetings/events or carefully prepare with business and comms colleagues

• Update and liaise with central Competition Team

• Tailor message to speaker and audience: they are not all specialists!

• Track and communicate progress e.g. via a “Plan for my country”:

• What do we want to achieve?• Where are we in the external engagement process?• Next steps and how will you help?

DO MORE DO NOT RETHINK / DEVELOP