Anti-corruption

six principles of Anti-Bribery Management for commercial organizations to practice

1. Proportionality - The action taken should be proportionate to the risk and the size of the organisation.
2. Top level commitment - Those in senior positions are best placed to ensure the organisation conducts business without bribery.
3. Risk Assessment - Many organisations will have little or no risk of bribery but a risk assessment will show the nature or extent of exposure to bribery.
4. Due Diligence - This is about having a risk based approach to business relationships - with those you deal with or who provide services for you.
5. Communication - Employers will need to communicate their policies and procedures to staff and others who perform services, additional training may help raise awareness, and this would be proportionate to the size and type of organisation.
6. Monitoring and Review - Risks to your organisation may change, over time you may want to carry out regular reviews and re-assessments.

ISO 37001 : 2016 Anti-bribery management systems

What is an anti-bribery management system?

An anti-bribery management system is designed to instil an anti-bribery culture within an organization and implement appropriate controls, which will in turn
increase the chance of detecting bribery and reduce its incidence in the first place.
ISO 37001, Anti-bribery management systems – Requirements with guidance for use, gives the requirements and guidance for establishing, implementing, maintaining and improving an anti-bribery management system. The system can be independent of, or integrated into, an overall management system.
It covers bribery in the public, private and not-for-profit sectors, including bribery by and against an organization or its staff, and bribes paid or received through or by a third party. The bribery can take place anywhere, be of any value and can involve financial or non-financial advantages or benefits

The main benefits of implementing that system are :

• the establishment of company image as a professionally managed one,
• the increase in customer confidence,
• transparency in company-client relations,
• the boost in team spirit and satisfaction, and higher employee loyalty rate; feeling of pride,
• minimizing the risk of corruption related losses,

Section 9 in The Prevention of Corruption Act, 1988, GOI

THE PREVENTION OF CORRUPTION ACT, 1988  covers several OFFENCES AND PENALTIES

The following are notable ones

Section 7. Public servant taking gratification other than legal remuneration in respect of an official act. 

Section 8. Taking gratification, in order, by corrupt or illegal means, to influence public servant. 

Section 9. Taking gratification, for exercise of personal influence with public servant

Here is an example of such offence:

Principle 5: Governance and anti-corruption (Sample Code of Conduct was commissioned by the United Nations Development Programme (UNDP))

The Company has zero tolerance for corruption. All employees must never offer to provide anything of value directly or indirectly to government officials and business partners to secure an undue advantage. 

The company prohibits payment, offers of payment as well as anything of value directly or indirectly with the purpose of influencing or obtaining undue business or personal advantage.

Third parties will only be contracted to perform tasks which aid business interests provided: 

• fees to be paid are reasonable; 
• all arrangements are clearly documented; 
• arrangements are in compliance with company's policies.

Sample Code of Conduct for .Small and Medium Enterprises - United Nations Development Programme (UNDP)

Establishment of strong corporate governance within companies is the first key step in addressing corruption problem.  Internal measures is not only a tool that raises efficiency, improves access to capital, and  ensures sustainability — it is also emerging as an effective anti-corruption tool

Corporations must assess risks and opportunities in these areas to establish a strong anti-corruption culture in their organization as well as supply chain

1. Countries of incorporation of the promoters and any subsidiaries. Their related sourcing.
2. Industry corruption level and related current controls the company may have
3. Relations of promotors and contacts with foreign officials and state-owned entities.
4. Investigating about their third party agents, and their contracts.
5. Existence of an anticorruption compliance code, training, enforcement, and auditing of the same.
6. Accuracy of books and records. Tax notices pending, disposed and nature
7. Existence of internal controls in appointment, Purchase and other financial transactions
8. Charitable contribution policies.
9. Political donation policy
10. Gifts, travel, and entertainment budgets.
11. Marketing and sales operations and related expense reimbursements.

Anti-bribery risk assessment

Typical heightened transactions having risk of bribery:

• Sales to government customers, particularly in higher risk countries 
• Gifts, hospitality and travel expenditure, especially for government officials 
• Use of company assets for the benefit of third parties for non-business purposes 
• Charitable and political donations and other corporate relations activities 
• Sponsorships f. Giving employment to persons connected with government officials 
• Obtaining licences, permits and regulatory clearances of any kind 
• Movement of goods across borders and related activities 
• Lobbying governments on policy, legislation and/or regulation

• Sales and marketing: Bribes made to win orders or to gain insider information such as specification of tender specifications before they are released for tendering.
• Procurement and contracting: Contracts awarded to a supplier who then pays a kickback to reward the buyer who made the decision.
• Project management: On projects, the majority of the funds for paying a kickback have to be generated through the implementation of the project in ways such as rush orders, changes of specification, substitution of inferior materials.
• Supply chain management: Acceptance of bribes from suppliers and intermediaries, payment of bribes in logistics, obtaining regulatory approvals, port and canals clearances.
• Human resources::
  • Bribes paid to human resources employees or outsourcing contractors to influence recruitment, appointments, promotions and disciplinary actions.
  • Bribery of public officials to circumvent regulations related to human resources practices or quotas for local nationals or members of certain local tribes or communities.
  • Human resources is complicit with sales and marketing to favour employment of customers’ relatives.
  • Bribery of or by union officials.
• Corporate affairs: Undue political engagement, donations to politicians and political parties. 
• Facilities and assets management:
  • Bribes received by employees for awarding contracts or providing access to facilities and assets.
  • Bribes paid to officials to obtain planning permission or supply of utilities.
  • Assets used to influence public officials.
• Financial functions: Bribes received for providing personnel and other information, or enable criminality such as data theft, fraud or robbery.
• Financial trading and services: Bribes received to steer recommendations for products and suppliers, insider trading.
• Mergers and acquisitions: Bribery to obtain insider information, provide favourable terms.
• Safety and quality management: Acceptance of bribes to falsify records or overlook non-compliance.
• Research and development: Bribery of researchers to falsify results or of officials to obtain regulatory approvals.
• Security: Bribery to circumvent the company’s security controls, or to provide information such as data on customers or research and technology information.
• Goods inwards: Bribes to falsify documentation such as falsely certifying goods received or to allow deliveries at the goods inward gate to jump the queue.
• Functions where regulatory licenses or critical services are required: Bribery of officials to obtain approvals or other services. Examples include research and development (testing and approval of drugs), telecommunications, casinos and lotteries, facilities management (water, power, building and plant planning approvals).

GRI G4  has Anti-corruption as one of the many Social Aspects requiring Disclosure:

Following Indicators are comparable

G4-SO3 Total number and percentage of operations assessed for risks related to corruption and the significant risks identified

G4-SO4 Communication and training on anti-corruption policies and procedures

G4-SO5 Confirmed incidents of corruption and actions taken

Resources

FCPA Check list

THE BRIBERY ACT2010 (UK) Guidance about procedures which relevant commercial organisations can put into place to prevent persons associated with them from bribing

Resource guide for USFCPA

Practical Guidance on How to Conduct FCPA Due Diligence

OECD Anti-Bribery Convention;

United Nations (UN) Convention against Corruption;

World Economic Forum’s Partnering Against Corruption Initiative;

Transparency International’s Business Principles for Countering Bribery;

International Chamber of Commerce Rules of Conduct to Combat Extortion and Bribery;

UN Global Compact’s 10th Principle

 ANTI-CORRUPTION GLOSSARY

Corruption comes in many forms, and there are many ways to challenge it.  

This easy-to-un derstand, animated definitions will have you speaking the language of anti-corruption in no time.