Anti-corruption programme for project owners

This section applies to both public and private sector project owners.

In infrastructure, corruption takes place primarily on specific projects. It can occur in any project phase, including project identification, financing, design, tendering, execution, maintenance and operation. Project owners play a vital role in corruption prevention, as they control the tender and project management mechanisms. It is, therefore, largely incumbent on the project owner to take the lead in limiting the corruption that takes place on projects. In addition, the project owner organisation and its individual officers are at risk of incurring civil and/or criminal liability, financial loss and reputational damage for involvement in corruption.

To minimise the risk of corruption in their projects, project owners should take anti-corruption action by implementing a systematic programme to prevent and detect corruption both within their organisation and in the projects themselves. 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 project owner or its employees, the programme could provide important evidence that the project owner 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 management or audit process. The programme should be modified according to: size of the project owner, value and nature of its functions, location of projects, 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 organisation itself.

The following Anti-Corruption Programme may be of use as a template.

Template: Anti-Corruption Programme

Definitions

The following definitions apply to this programme:

“Business partners” includes 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.

“Employee” means any officer or employee of the project owner, and "employment contract" should be construed accordingly.

"Related company" means a company which is related to another company because it directly or indirectly wholly or partly owns or controls that company, or is directly or indirectly wholly or partly owned or controlled by that company.

Part 1: Internal actions

Anti-corruption code: The project owner should develop an anti-corruption code and publish this code on its website.
Statement of personal support: The chief executive and board of directors (or equivalent management body) should make a statement of personal support for the anti-corruption code and this statement should be published on the project owner's website.
Board responsibility for the programme: The board of directors (or equivalent management body) should take responsibility for the effective implementation and operation of the anti-corruption programme.
Compliance officer: A senior officer should be made responsible for ensuring that the project owner complies with its anti-corruption programme. He should be provided with proper authority to implement and monitor all programme activities and should have direct and prompt access to the chief executive and other senior officers.
Employment contracts: All employment contracts should include anti-corruption employment terms to ensure that there are express contractual obligations and penalties in relation to corruption.
Gifts policy: The project owner should develop and implement a gifts policy whereby it either prohibits the giving or acceptance of all gifts, hospitality, and donations, or sufficiently limits and monitors this activity.
Training: The project owner should provide 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 project owner's anti-corruption code, and how they may report corruption.
Rules: The project owner should post up anti-corruption rules for employees which serve as a regular reminder to employees of the corrupt activities that are prohibited by the project owner, the project owner's gifts policy, and the project owner's corruption-reporting procedures.
Detection procedures: The project owner's audit processes should check for any indication of corruption. Random checks should also be carried out on projects, contracts, transactions, and accounts.
Reporting procedures: The project owner should set up internal procedures for reporting corruption which enable employees to report corruption in a safe and confidential manner to a responsible senior officer of the project owner.
Dealing with corruption: The project owner should set up procedures for dealing with corruption which may arise where corruption is reported or discovered by the project owner and which may involve employees, business partners, and/or government officials.
Internal review: The project owner 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 project owner should commission regular independent assessment and certification of the anti-corruption programme and should revise the programme as appropriate in the light of this review.

Part 2: Internal actions - branch offices and related companies
Due diligence: Prior to setting up a branch office or related company in a particular country, the project owner should carry out due diligence on the country and on the anti-corruption law and procedures in that country in order to assess the corruption risk.
Anti-corruption programme: Where it has the power to do so, the project owner should require all of its branch offices and related companies to adopt an anti-corruption programme that is at least as stringent as its own, and should develop a procedure for reviewing the implementation and effectiveness of those programmes. Where it does not have power to so require, the project owner should request its related companies to adopt such an anti-corruption programme and should request to be kept informed of reviews of those programmes.
Decision-making process: The project owner should establish a decision-making process in relation to the business of its branch offices and related companies 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.

Part 3: External actions - Projects
Adoption of project anti-corruption measures: The project owner should implement a project anti-corruption system on each of its projects.
Action by central regulatory authority: In many countries, public sector construction procurement is regulated by a central government body. In such case, the regulatory authority should, as part of its general procurement policy, require government project owners to implement a project anti-corruption system on each of its projects.

Part 4: External actions - General
Due diligence: Before entering into any business partnership, transaction or project, the project owner should carry out due diligence on the country in which the business is to be conducted, on the relevant anti-corruption law and procedures, 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.
Publication of anti-corruption code to business partners: At the outset of any business dealing, all relevant existing and potential business partners should be made aware in writing of the project owner’s anti-corruption code.
Procurement procedures: The project owner should use fair and transparent procurement procedures which minimise the opportunity for corruption.
Decision-making process: The project owner 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.
Anti-corruption contract terms: All contracts between the project owner and its business partners should contain anti-corruption contract terms which provide express contractual obligations and penalties in relation to corruption.
Adoption of anti-corruption programme: Where it is within the project owner’s power to do so, it should require each business partner to adopt an anti-corruption programme that is at least as stringent as its own for the duration of the relevant business dealing, and this requirement should be made a term of the relevant contract. Where it does not have the power to impose this requirement, it should request each potential business partner to adopt such a programme.
Transparency: The project owner should, as far as possible, ensure transparency in all its dealings.
Documenting all dealings: All business dealings which are of sufficient value and which could form part of a corrupt transaction should be documented in writing.
Monitoring execution of contracts: The project owner should monitor the execution of all contracts to which it is a party in order to ensure that there is no corruption in their execution.
Debarment: The project owner should develop a fair and transparent debarment policy in relation to organisations which have been convicted of corruption.
Working with other stakeholders: The project owner should work with other stakeholders, in the public and private sectors, to reduce corruption in the infrastructure sector. This work should be publicised both to employees and on the project owner's website. (See Anti-Corruption Forums.)

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.

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:

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 1st May 2008

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