Anti-corruption programme for companies

Companies providing the equipment, materials, works or services for infrastructure projects face serious risk of incurring criminal and civil liability, financial loss and reputational damage for corruption through the activities of their staff, their business partners and other parties. To minimise this risk, companies should take anti-corruption action by implementing a systematic programme to prevent and detect corruption both within their own organisation and in their dealings with their business partners and other parties. An anti-corruption programme will not guarantee that there will be no corruption. However, it could materially assist in its prevention and detection. In addition, in the event of prosecution of the company or its employees, such a programme could provide important evidence that the company had taken reasonable steps to prevent corruption. This may help to avoid or mitigate criminal liability.

An anti-corruption programme should be implemented and monitored with care and attention equal to that given to any other corporate management or audit process. The programme should be modified according to: size of the company, value and nature of business transactions, location of project, and perception of risk. Small or low risk contracts or projects would require a lower level of preventive action than large or high risk contracts or projects. However, it should be remembered that while commercial risk may be reduced according to the size of the contract or project, the criminal risk may remain the same. There is no precise recipe for such modification. This is a value judgment to be made by the company itself.

The following Anti-Corruption Programme may be of use as a template. It is drafted for a company providing the equipment, materials, works or services for an infrastructure project, but could be used, with appropriate changes, for any organisation.

Template: Anti-Corruption Programme

Definitions:

The following definitions apply to this programme:

“Business partners” includes project owners, joint venture partners, consortium partners, contractors, consultants, sub-contractors, suppliers, advisors, agents or other intermediaries.

“Corruption” means bribery, extortion, fraud, deception, collusion, cartels, abuse of power, embezzlement, trading in influence, money-laundering and other similar activities.

Board responsibility for the programme: The board of directors (or equivalent management body) should take responsibility for the effective design, implementation and operation of the anti-corruption programme. The board should ensure that management is aware of and accepts the programme, and that it is embedded in the corporate culture. The chief executive (or equivalent leader) should make a statement of personal support for the anti-corruption programme and this statement should be published on the company's website.
Compliance manager: A senior manager should be made responsible for ensuring that the company has an adequate anti-corruption programme, and complies with the programme. The manager should be provided with sufficient resources and proper authority to implement and monitor all programme activities, and should have direct and prompt access to the chief executive and board of directors.
Anti-corruption code: The company should have an anti-corruption code of conduct (or should have a general code of conduct with an anti-corruption element), and should publicise the code internally and publish the code on its website.
Employment procedures:
1. Employees shoud be vetted before they are employed to ascertain as far as is reasonable that they are the type of person who is likely to comply with the company’s anti-corruption policies.
2. Employment contracts should include contractual obligations and penalties in relation to corruption.
3. New employees should be informed of the company’s anti-corruption code of conduct to ensure that they understand it and the importance of complying with it.
4. Employees should be required to declare any conflict of interest. A register of conflict of interests should be maintained. This should be monitored by the Compliance Manager.
5. Caution should be taken in the provision of performance bonuses and performance targets to ensure that there are adequate safeguards to prevent bonuses and targets resulting in corrupt activity.
6. Disciplinary procedures should be in place which entitle the company to take appropriate disciplinary action against an employee who commits a corrupt act. These procedures should be specified in the employment contract.
Gifts and hospitality policy: The company should develop and implement a gifts and hospitality policy whereby it either prohibits the giving or acceptance of all gifts, hospitality, and donations, or puts in place sufficient guidance and limits. The company should monitor compliance with its policy.
Training: The company should provide appropriate anti-corruption training on a regular basis to all relevant employees to make them aware of the types of corruption, the risks of engaging in corrupt activity, the company's anti-corruption code and policies, and how they may report corruption.
Due diligence: Before entering into any business relationship, transaction or project, the company should carry out due diligence on the country in which the business is to be conducted, on its potential business partners, and on the proposed project or business transaction in order to identify as far as possible the risk of corruption. Due diligence should be continued on an on-going basis during the project so that changes and new information can be properly assessed.
Decision-making process: The company should establish a decision-making process whereby the decision process and the seniority of the decision-maker is appropriate for the value of the transaction and the perceived risk of corruption.
Publication of anti-corruption code to business partners: At the outset of any business dealing, all new business partners should be made aware in writing of the company's anti-corruption code.
Adoption of anti-corruption programme by subsidiaries and business partners:
1. The company should ensure that its subsidiaries, and other organisations over which it has control, adopt an anti-corruption programme that is at least as stringent as its own.
2. The compay should ensure as far as is reasonable that its business partners have implemented an anti-corruption programme that is at least as stringent as its own for the duration of the relevant business dealing. This requirement should be modified as appropriate according to the size and resources of the business partner.
Anti-corruption contract terms: All contracts between the company and its business partners should contain anti-corruption contract terms which provide express contractual obligations and penalties in relation to corruption.
Financial controls: The company should ensure that its financial controls minimise the risk of the company committing a corrupt act against a business partner, individual or organisation, or of any corrupt act being committed against the company by a business partner, individual or organisation.
Commercial controls: The company should ensure that its commercial controls minimise the risk of the company committing a corrupt act against a business partner, individual or organisation, or of any corrupt act being committed against the company by a business partner, individual or organisation. These commercial controls would include appropriate procurement and supply chain management, and the monitoring of contract execution.
Detection procedures: The company should implement internal audit or other processes which check projects, contracts and systems, on an appropriate sample basis, for any indication of corruption. Checks should cover both financial and technical aspects.
Reporting procedures: The company should implement internal procedures for reporting corruption which enable employees to report corruption in a safe and confidential manner to a responsible senior officer of the company.
Investigating and dealing with corruption: The company should implement procedures for investigating and dealing with corruption which is encountered, reported or discovered by the company.
Risk assessment: The company should on a regular basis assess the risk of corruption in its business and assess whether its procedures and controls are adequate to minimise those risks.
Keeping records: The company should keep reasonably detailed records of its anti-corruption programme and any compliance issues which arise. These records would include matters such as the steps taken to implement the anti-corruption programme, training provided, gifts and hospitality given and received, due diligence carried out, the reasons behind a decision to carry out work in a high risk country, whistle-blowing reports, investigations etc.
Internal review: The company should carry out an annual internal review of the anti-corruption programme and should revise the programme as appropriate in the light of this review.
Independent assessment and certification: The company should commission, at least once every three years, an independent assessment and certification of its anti-corruption programme, and should revise the programme as appropriate in the light of this review.
Working with other stakeholders: The company should work with other stakeholders, in the public and private sectors, to help reduce corruption in the infrastructure sector. Preventing corruption requires open collaboration between all parties who are able to influence the agenda.

Other Resources

Several organisations provide services and/or have developed tools to assist in the implementation of anti-corruption measures. These organisations are listed below in alphabetical order. If the following details are inaccurate or incomplete, or if you wish your organisation to be listed below, please send details to GIACC. Only services and tools which are available free of charge will be listed.

Business Anti-Corruption Portal has produced the following anti-corruption resources and tools:

About Corruption: Definitions, interpretations and references to international and national legislation and initiatives.
Integrity System: Model code of conduct; Model risk assessment tool.
Due Diligence Tools: Tools related to seeking and vetting an agent or consultant, setting up a joint venture and implementing a project.
Country Profiles: Information on various countries.
Information Networks: Contact information to turn to for local help.
Links to relevant documents and websites for further reference.

Centre of Anti-Corruption Studies provides resources for the study and analysis of issues pertaining to the fight against corruption in Hong Kong and internationally. It is a research institute established in 2009 under the auspices of the Hong Kong Independent Commission Against Corruption.

Control Risks/Simmons and Simmons have published Facing up to Corruption 2007 – A Practical Business Guide. This provides practical advice on the nature and risks of corruption, international legal initiatives, corporate anti-corruption policies, and dealing with corrupt situations.

FIDIC - International Federation of Consulting Engineers has published its Business Integrity Management System (BIMS), which is designed to help businesses deal with integrity risks.

Global Transport Knowledge Partnership (GTKP) is developing a data base of reports and actions in relation to good governance and corruption prevention on road projects.

International Chamber of Commerce (ICC) has published Combating Extortion and Bribery: ICC Rules of Conduct and Recommendations (2005)

Organisation for Economic Co-operation and Development (OECD) has produced the following two tools:

Transparency International has produced, in conjunction with several leading international organisations, the Business Principles for Countering Bribery suite of documents designed to assist organisations to implement and manage an effective anti-bribery system.

Business Principles for Countering Bribery is an anti-bribery code that organisations can either adopt or use to benchmark against their own systems.
Business Principles for Countering Bribery - Small and Medium Enterprises Edition is an edition of the Business Principles tailored to the needs of small and medium enterprises.
The Six Step Implementation Process guides organisations through the various stages of developing, implementing and monitoring their own anti-bribery systems.
The Guidance Document provides background and clarification to the Business Principles, and assists organisations in implementing or reviewing their anti-bribery programme.
A Self-Evaluation Module is in development.

UK Anti-Corruption Forum has published an Anti-Corruption Action Statement recommending anti-corruption actions for business associations and professional institutions, companies, project owners, funders and governments. It has also published the following papers:

The Woolf Committee has published the Woolf Committee Report (May 2008) which advises on an ethical compliance programme for BAE Systems plc.

World Economic Forum – Partnering against Corruption Initiative (PACI) has adopted the PACI Principles for Countering Bribery which are closely modeled on TI’s “Business Principles for Countering Bribery”.

Page updated on 8th May 2010

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