Mon, 08 Jun 2015 12:36
Best practise in Ethics and Conduct on the global stage
One of the biggest headaches for companies conducting business overseas is bribery and corruption.
The grey area of what is deemed a fair gift, meal or payment against what might be constituted a bribe is a challenge keeping senior executives up at night.
And with the screws being tightened on enforcement of anti-bribery laws, such as the UK Bribery Act and US Foreign Corrupt Practices Act, this problem looks set to bedevil the industry for years to come.
The multi-jurisdictional reach of anti-corruption laws means companies can now be prosecuted for acts of bribery committed anywhere in the world. And turning a blind eye to corruption is no protection against liability.
The onus is on businesses to protect themselves from criminal prosecution. Corruption charges are not only a reputational issue. Conviction under the UK Bribery Act could lead to multi-million pound fines, and lengthy prison terms as seen by the 13 year term handed down to Directors of Sustainable AgroEnergy Plc, the first such convictions under the Act in 2014.
Develop your culture
How can you actively develop a culture that prevents any violations from occurring in the first place? The role of Compliance Officer is demanding and multi-faceted. Part circus ring-master, part detective they must juggle policy, procedure, regulation, training and compliance whilst demystifying complex supply chains and third party risk.
Third Party and Supply Chain Risk
A major challenge for companies working to eliminate bribery and corruption is third party risk. Growing regulatory and enforcement activity has led companies to plough vast resources into maintaining high ethical standards and establish policies, infrastructure and processes to battle corruption.
GUIDANCE FOR MEETING BRIBERY AND CORRUPTION RISK
- Put in place a robust anti-bribery strategy and appoint a director to take responsibility for executing it.
- Ensure that your tough stance on bribery and compliance message is passed on to all employees and stakeholders, including suppliers and agents.
- Identify the main bribery risks faced by your business, document them in a risk register and make sure the board is in full knowledge of them.
- Have knowledge of the companies you do business with – especially agents, suppliers and other third parties – ensure vigorous due diligence is conducted and keep up to date records on your findings.
- Regularly refresh your company's policies on gifts, entertainment, hospitality, donations and facilitation payments and ensure financial limitations are in place.
- Monitor your anti-bribery strategy to ensure it does not fall foul of anti-bribery legislation and report your findings to the board.
- Assume the UK Bribery Act and other anti-corruption legislation is not relevant to you.
- Bury your head in the sand when concerns about bribery are raised by an employee or third party with whom you have business associations.
- Be afraid to walk away from a business contract if due diligence flags-up concerns about bribery or if you are not comfortable for whatever reason. Always record your findings.
- If you are forced to make facilitation or grease payments because you fear for personal safety, ensure these are recorded and notify the local UK embassy or consulate.
- Accept generous gifts and hospitality. If you do then record what you have received accept and consider donating them to charity.
Jeremy Crame, CEO of Hitec recommends a fit for purpose technology based Policy Management solution that supports the key principles of the UKBA/FCPA and BSI 10500, he said:
"Proving 'adequate procedures' is easier said than done. Communicating policy, procedure, regulation and compliance to a multi-lingual workforce can be a logistical nightmare. Ensuring that they have been received, read and understood across jurisdictions by every employee, supply chain partner, and agent - and a compliance declaration received from each person - is a major challenge for any global company. The only way that companies can demonstrate Best Practice and distance themselves from the actions of a rogue individual is to implement a bespoke technology based Policy Management solution that ensures a clear compliance audit trail for the benefit of the Board, Senior Management, Auditors and Regulators."
This article is an excerpt from a white paper by our partner, Hitec (Laboratories) Limited. Click here to read the full white paper.
DeltaNet partnered with Hitec to provide compliance training material within Hitec's procedure and policy management software, PolicyHub.