sou · GYB338 · 2010-06-08 00:00:00 — NOTES the obligation of Member countries to co-operate closely in this follow-up programme, pursuant to Article 3 of the Convention on operation and Development of , and Article 12 of the Anti-Bribery Convention. Co-operation with non Members APPEALS to non-Member countries that are major exporters and foreign investors to adhere to and implement the Anti-Bribery Convention and this Recom- mendation and participate in any institutional follow-up or implementation mechanism. INSTRUCTS the on Bribery in Inter- national Business Transactions to provide a forum for consultations with countries which have not yet adhered, in order to promote wider participation in the Anti- Bribery Convention and this Recommendation, and their follow-up. Relations with international governmental and non- governmental organisations INVITES the on Bribery in International Business Transactions, to consult and co-operate with the international organisations and international financial institutions in the fight against bribery of foreign public officials in international business transactions, and consult regularly with the non-governmental organisations and representatives of the business community in this field. Good Practice Guidance on Implementing Specific Articles of the Convention on Combating Bribery of Foreign Public Officials in International Business Transactions Having regard to the findings and recommendations of the on Bribery in International Business Transactions in its programme of systematic follow-up to monitor and promote the full implementation of the Convention on Combating Bribery in International Business Transactions (the ), as required by Article 12 of the Convention, good practice on fully implementing specific articles of the Convention has evolved as follows: A) Article 1 of the : The Offence of Bribery of Foreign Public Officials Article 1 of the Anti-Bribery Convention should be implemented in such a way that it does not provide a defence or exception where the foreign public official solicits a bribe. Member countries should undertake public awareness-raising actions and provide specific written guidance to the public on their laws implementing the Anti-Bribery Convention and the Commentaries to the Convention. Member countries should provide information and training as appropriate to their public officials posted abroad on their laws implementing the Anti-Bribery Convention, so that such personnel can provide basic information to their companies in foreign countries and appropriate assistance when such companies are confronted with bribe solicitations. B) Article 2 of the : Responsibility of Legal Persons Member countries systems for the liability of legal persons for the bribery of foreign public officials in international business transactions should not restrict the liability to cases where the natural person or persons who perpetrated the offence are prosecuted or convicted. Member countries systems for the liability of legal persons for the bribery of foreign public officials in international business transactions should take one of the following approaches: a)the level of authority of the person whose conduct triggers the liability of the legal person is flexible and reflects the wide variety of decision-making systems in legal persons; or b)the approach is functionally equivalent to the foregoing even though it is only triggered by acts of persons with the highest level managerial authority, because the following cases are covered: -A person with the highest level managerial authority offers, promises or gives a bribe to a foreign public official; -A person with the highest level managerial authority directs or authorises a lower level person to offer, promise or give a bribe to a foreign public official; and -A person with the highest level managerial authority fails to prevent a lower level person from bribing a foreign public official, including through a failure to supervise him or her or through a failure to implement adequate internal controls, ethics and compliance programmes or measures. C) Responsibility for Bribery through Intermediaries Member countries should ensure that, in accordance with Article 1 of the , and the principle of functional equivalence in Commentary 2 to the Anti- Bribery Convention, a legal person cannot avoid responsibility by using intermediaries, including related legal persons, to offer, promise or give a bribe to a foreign public official on its behalf. D) Article 5: Enforcement Member countries should be vigilant in ensuring that investigations and prosecutions of the bribery of foreign public officials in international business transactions are not influenced by considerations of national economic interest, the potential effect upon relations with another State or the identity of the natural or legal persons involved, in compliance with Article 5 of the . Complaints of bribery of foreign public officials should be seriously investigated and credible allegations assessed by competent authorities. Member countries should provide adequate resources to law enforcement authorities so as to permit effective investigation and prosecution of bribery of foreign public officials in international business transactions, taking into consideration Commentary 27 to the . Good practice guidance on internal controls, ethics, and compliance This Good Practice Guidance acknowledges the relevant findings and recommendations of the on Bribery in International Business Transactions in its programme of systematic follow-up to monitor and promote the full implementation of the Convention on Combating Bribery of Foreign Public Officials in International Business Transactions (hereinafter Anti- Bribery Convention); contributions from the private sector and civil society through the on Briberys consultations on its review of the anti-bribery instruments; and previous work on preventing and detecting bribery in business by the as well as international private sector and civil society bodies. This Good Practice Guidance (hereinafter Guidance) is addressed to companies for establishing and ensuring the effectiveness of internal controls, ethics, and compliance program- mes or measures for preventing and detecting the bribery of foreign public officials in their international business transactions (hereinafter foreign bribery), and to business organisations and professional associations, which play an essential role in assisting companies in these efforts. It recognises that to be effective, such programmes or measures should be interconnected with a companys overall compliance framework. It is intended to serve as non-legally binding guidance to companies in establishing effective internal controls, ethics, and compliance programmes or measures for preventing and detecting foreign bribery. This Guidance is flexible, and intended to be adapted by companies, in particular small and medium sized enterprises (hereinafter SMEs), according to their individual circumstances, including their size, type, legal structure and geographical and industrial sector of operation, as well as the jurisdictional and other basic legal principles under which they operate. A) Good Practice Guidance for Companies Effective internal controls, ethics, and compliance programmes or measures for preventing and detecting foreign bribery should be developed on the basis of a risk assessment addressing the individual circumstances of a company, in particular the foreign bribery risks facing the company (such as its geographical and industrial sector of operation). Such circumstances and risks should be regularly monitored, re-assessed, and adapted as necessary to ensure the continued effectiveness of the companys internal controls, ethics, and compliance programme or measures. Companies should consider, inter alia, the following good practices for ensuring effective internal controls, ethics, and compliance programmes or measures for the purpose of preventing and detecting foreign bribery: 1.strong, explicit and visible support and commitment from senior management to the company's internal controls, ethics and compliance programmes or measures for preventing and detecting foreign bribery; 2.a clearly articulated and visible corporate policy prohibiting foreign bribery; 3.compliance with this prohibition and the related internal controls, ethics, and compliance programmes or measures is the duty of individuals at all levels of the company; 4.oversight of ethics and compliance programmes or measures regarding foreign bribery, including the authority to report matters directly to independent monitoring bodies such as internal audit committees of boards of directors or of supervisory boards, is the duty of one or more senior corporate officers, with an adequate level of autonomy from management, resources, and authority; 5.ethics and compliance programmes or measures designed to prevent and detect foreign bribery, applicable to all directors, officers, and employees, and applicable to all entities over which a company has effective control, including subsidiaries, on, inter alia, the following areas: i. gifts; ii.hospitality, entertainment and expenses; v.charitable donations and sponsorships; vi.facilitation payments; and vii.solicitation and extortion; 6.ethics and compliance programmes or measures designed to prevent and detect foreign bribery applicable, where appropriate and subject to contractual arrangements, to third parties such as agents and other intermediaries, consultants, representatives, distributors, contractors and suppliers, consortia, and joint venture partners (hereinafter business partners), including, inter alia, the following essential elements: i.properly documented risk-based due diligence pertaining to the hiring, as well as the appropriate and regular oversight of business partners; ii.informing business partners of the companys commitment to abiding by laws on the prohibitions against foreign bribery, and of the companys ethics and compliance programme or measures for preventing and detecting such bribery; and iii.seeking a reciprocal commitment from business partners. 7.a system of financial and accounting procedures, including a system of internal controls, reasonably designed to ensure the maintenance of fair and accurate books, records, and accounts, to ensure that they cannot be used for the purpose of foreign bribery or hiding such bribery; 8.measures designed to ensure periodic communication, and documented training for all levels of the company, on the companys ethics and compliance programme or measures regarding foreign bribery, as well as, where appropriate, for subsidiaries; 9.appropriate measures to encourage and provide positive support for the observance of ethics and compliance programmes or measures against foreign bribery, at all levels of the company; 10.appropriate disciplinary procedures to address, among other things, violations, at all levels of the company, of laws against foreign bribery, and the companys ethics and compliance programme or measures regarding foreign bribery; 11.effective measures for: i.providing guidance and advice to directors, officers, employees, and, where appropriate, business partners, on complying with the company's ethics and compliance programme or measures, including when they need urgent advice on difficult situations in foreign jurisdictions; ii.internal and where possible confidential reporting by, and protection of, directors, officers, employees, and, where appropriate, business partners, not willing to violate professional standards or ethics under instructions or pressure from hierarchical superiors, as well as for directors, officers, employees, and, where appropriate, business partners, willing to report breaches of the law or professional standards or ethics occurring within the company, in good faith and on reasonable grounds; and iii.undertaking appropriate action in response to such reports; 12.periodic reviews of the ethics and compliance programmes or measures, designed to evaluate and improve their effectiveness in preventing and detecting foreign bribery, taking into account relevant developments in the field, and evolving international and industry standards. B)Actions by and Business organisations and professional associations may play an essential role in assisting companies, in particular SMEs, in the development of effective internal control, ethics, and compliance programmes or measures for the purpose of preventing and detecting foreign bribery. Such support may include, inter alia: 1.dissemination of information on foreign bribery issues, including regarding relevant developments in international and regional forums, and access to relevant databases; 2.making training, prevention, due diligence, and other compliance tools available; 3.general advice on carrying out due diligence; and 4.general advice and support on resisting extortion and solicitation. Business Principles for Countering Bribery The risks from bribery are a growing concern for both large and small companies which can be confronted with demands for bribes, faced with competitors acting corruptly or undermined by employees violating their codes of conduct. The increasing enforcement of foreign bribery laws, the imposition of record fines and the threat of criminal penalties for company directors and employees are giving enterprises pause for thought. New pressures are coming from socially responsible investment funds and which are adding anti-bribery criteria to their screening procedures. In addition, development banks and export credit agencies are stepping up their due diligence and introducing debarment sanctions for companies engaging in corrupt behaviour. As a result, responsible companies understand the need to guard and promote their reputation for integrity and responsibility as stakeholders become less tolerant of lapses. Companies can respond positively to these growing risks and mitigate these threats with the help of robust policies that are implemented effectively and supported by transparent processes. To assist companies in the design and implementation of effective anti-bribery policies, () and joined forces to launch the Business Principles for Countering Bribery in 2003. The development of the Business Principles was carried out through a multi-stakeholder exercise undertaken with the co-operation and support of a drawn from international business, academia, trade unions and other non-governmental bodies. Since their introduction, the Business Principles have encouraged the development of other anti-bribery codes. Companies and researchers now look to them as a benchmark. The Business Principles have been translated into more than ten languages and introduced through seminars and workshops to corporate and governmental audiences in countries around the world. This revised edition reflects developments in anti-bribery practice and incorporates improvements to the original text based on the experience gained in the past five years. , which has remained since the inception of the Business Principles, has contributed its knowledge and expertise to this process. Current surveys indicate that whilst companies are adopting anti- bribery policies their full implementation is a process that remains incomplete and a challenge for many. With this in mind, TI is developing tools to help companies with implementation. In addition to a comprehensive Guidance Document for the Business Principles, TI has created the TI Six Step Implementation Process, which provides a roadmap for the development and implement- tation of a programme, as well as a Self- Evaluation Tool11, which aims at helping companies evaluate the comprehensiveness and robustness of their anti-bribery programmes. To address the needs and particular circumstances of smaller enterprises, TI has published an SME Edition of the Business Principles. TI has also been working with the accounting profession to develop an process that will help companies to assess and enhance the strength and credibility of their antibribery programmes. Consultations, field testing and workshops have enriched the Business Principles and the supporting suite of tools, and have proven their value. It is our hope that companies will increasingly 1 Available at: use the Business Principles, resulting in a higher and more uniform standard of anti-bribery practice worldwide. We also hope that stakeholders, as part of their relationship with companies, will look for evidence of adequate anti-bribery programmes. Jermyn P. , Director, February 2009 The Business Principles for Countering Bribery were originally developed through an extensive multi-stakeholder process invol- ving companies, non-governmental organisations and trade unions as a tool to assist enterprises to develop effective approaches to countering bribery in all of their activities. Enterprises should implement anti-bribery programmes both as an expression of core values of integrity and responsibility, but also to counter the risk of bribery. Risk will vary across different industries and specific companies, but no enterprise can be sure that that it will be free of risk. An effective anti-bribery programme strengthens reputation, builds the respect of employees, raises credibility with key stakeholders and supports an enterprises commitment to corporate responsibility. The Business Principles represent a good practice model for corporate anti-bribery policies and programmes. They apply both to bribery of public officials and to private-to-private transactions. The purpose of the Business Principles is to provide practical anti- bribery guidelines for all enterprises to help create a more level playing field. TI has prepared a Guidance Document2, which provides the rationale for the provisions of the Business Principles, some advice for implementation and detailed discussion and information on key topics. The Business Principles were originally published in 2003. The 2009 edition is a light revision intended to accommodate develop- ments in good practice in a few key areas and where appropriate, to align the Business Principles to other leading anti-bribery codes, 2 Available at: such as the ICC Rules of Conduct and the for Countering Bribery. The most substantive changes are in the expanded on joint and consortia. Growing expectations for reporting and greater credibility are reflected in this new edition through greater emphasis on public reporting on anti-bribery systems and the introduction of a section on external of anti-bribery programmes. Bribery: the offering, promising, giving, accepting or soliciting of an advantage as an inducement for an action which is illegal or a breach of trust. The enterprise shall prohibit bribery in any form whether direct or indirect The enterprise shall commit to implementing a Programme3 to counter bribery These Business Principles are based on a Board commitment to fundamental values of integrity, transparency and accountability. Enterprises should aim to create and maintain a trust-based and inclusive internal culture in which bribery is not tolerated. DEVELOPMENT OF A PROGRAMME FOR COUNTERING BRIBERY 3.1An enterprise should develop a Programme that clearly and in reasonable detail, articulates values, policies and procedures to be used to prevent bribery from occurring in all activities under its effective control. 3.2The Programme should be tailored to reflect an enterprises particular business circumstances and culture, taking into 3 The whole of an enterprises anti-bribery efforts including values, code of conduct, detailed policies and procedures, risk management, internal and external communication, training and guidance, internal controls, oversight, monitoring and . account such potential risk factors as size, business sector, nature of the business and locations of operation. 3.3The Programme should be consistent with all laws relevant to countering bribery in all the jurisdictions in which the enterprise transacts its business. 3.4The enterprise should develop the Programme in consultation with employees, trade unions or other employee representative bodies. 3.5The enterprise should ensure that it is informed of all internal and external matters material to the effective development and implementation of the Programme, and, in particular, emerging best practices including engagement with relevant interested parties. SCOPE OF THE PROGRAMME The enterprise should analyse which specific areas pose the greatest risks from bribery and design and implement its Programme accordingly. The Programme should address the most prevalent forms of bribery relevant to the enterprise but at a minimum should cover the following areas: 4.1.1The enterprise should prohibit all forms of bribery whether they take place directly or through third parties. 4.1.2The enterprise should also prohibit its employees from soliciting, arranging or accepting bribes intended for the employees benefit or that of the employees family, friends, associates or acquaintances. 4.2.1The enterprise, its employees or agents should not make direct or indirect contributions to political parties, organisations or individuals engaged in politics, as a way of obtaining advantage in business transactions. 4.2.2The enterprise should publicly disclose all its political contributions. 4.3Charitable contributions and sponsorships 4.3.1The enterprise should ensure that charitable contri- butions and sponsorships are not used as a subterfuge for bribery. 4.3.2The enterprise should publicly disclose all its charitable contributions and sponsorships. 4.4.1Recognising that facilitation payments3 are bribes the enterprise should work to identify and eliminate them. 4.5Gifts, hospitality and expenses 4.5.1The enterprise should prohibit the offer or receipt of gifts, hospitality or expenses whenever they could affect or be perceived to affect the outcome of business transactions and are not reasonable and bona fide. 3 Facilitation payments: Also called facilitating, speed or grease payments, these are small unofficial payments made to secure or expedite the performance of a routine or necessary action to which the payer of the facilitation payment has legal or other entitlement. The following section sets out the requirements that enterprises should meet at a minimum when implementing the Programme. 5.1.1The or equivalent body should commit to an antibribery policy and Programme based on the Business Principles and provide leadership, resources and support for managements implementation of the Programme. 5.1.2The Chief Executive Officer is responsible for ensuring that the Programme is carried out consistently with clear lines of authority. 5.1.3The or equivalent body, Chief Executive Officer and senior management should demonstrate visible and commitment to the implementation of the enterprises Programme. 5.1.4The enterprise should make compliance with the Programme mandatory for directors and apply approp- riate sanctions for violations of its Programme. 5.2.1Subsidiaries and other entities The enterprise should implement its Programme in all business entities over which it has effective control and use its influence to encourage an equivalent Programme in other business entities in which it has a significant investment or with which it has significant business relationships. 5.2.2.1The enterprise should conduct due diligence before entering into a joint venture or consortium. 5.2.2.2The enterprise should ensure that joint and consortia over which it maintains effective control have Programmes consistent with its own.