GUIDANCE ON THE BRIBERY ACT 2010 FOR THE INFRASTRUCTURE SECTOR
Index
■ Foreword ■
Introduction
3 5-6
■ The Scope and Purpose of the Act
5-6
■ Adequate Procedures
6-7
Board Responsibility for the Anti-Corruption Programme
6
The Compliance Function
6
An Ethical Code of Business Conduct
6
Risk Assessment and Due Diligence
6
Decision-Making Processes
6
Financial Controls
6
Supply Chain Management
7
Employment Procedures
7
Gifts and Hospitality Policy
7
Training
7
Reporting and Investigation Procedures
7
Verification
7
■ Specific Situations and Case Studies
Disclaimer
9-33 9
Joint Ventures
11-14
Agents and Distributors
15-19
The Supply Chain
21-24
Clients
25
Facilitation Payments
27-30
Gifts, Hospitality and Sponsorship
31-33
■ Annex A: Anti-Bribery Resources
35
www.anticorruptionforum.org.uk
GUIDANCE ON THE BRIBERY ACT 2010 FOR THE INFRASTRUCTURE SECTOR Foreword The UK Anti-Corruption Forum was founded in 2004. It is an alliance of UK business associations, professional institutions, civil society organisations and companies, mainly but not entirely those with interests in the domestic and international infrastructure sector. The Forum's objective is to help create a business environment that is free from corruption. The Forum has been very much involved in the efforts to reform the law on bribery in recent years that have led to the Bribery Act 2010. The Forum believes that while no law is perfect, the Act will do a great deal to bring the UK into line with international best practice, and will further encourage British companies to avoid corrupt business practices. This guidance document is intended to advise British companies in the infrastructure sector on what the new Bribery Act is intended to do when it comes into force on 1 July 2011; what procedures they will need to consider putting in place to be compliant with the new law; and to offer a series of case studies that we hope will be helpful in illustrating the scope of the law and the potential liability of companies. The UK Ministry of Justice issued formal guidance on this aspect of the Act on 30 March; but as the formal guidance must apply to companies in all sectors, it is very general. What follows, especially the case studies related to specific business situations, is intended to be of direct and practical help to companies involved in the design and construction of infrastructure projects internationally. We believe that it will be of value to companies wishing to do business ethically, and not simply seeking a minimum level of compliance with the law. I should like to thank the sponsors of this document, who have given enormous assistance in its drafting and have funded its production. They are Arup, Balfour Beatty, Halcrow, Mabey Bridge, Mott MacDonald and WSP. There are a number of organisations that can give further assistance. We list these at Annex A. We recommend especially the Global Infrastructure Anti-Corruption Centre (www.giaccentre.org) and Transparency International UK (www.transparency.org.uk).
Graham Hand Co-ordinator of the Forum June 2011
GUIDANCE ON THE BRIBERY ACT 2010 FOR THE INFRASTRUCTURE SECTOR
3
www.anticorruptionforum.org.uk
GUIDANCE ON THE BRIBERY ACT 2010 FOR THE INFRASTRUCTURE SECTOR Foreword The UK Anti-Corruption Forum was founded in 2004. It is an alliance of UK business associations, professional institutions, civil society organisations and companies, mainly but not entirely those with interests in the domestic and international infrastructure sector. The Forum's objective is to help create a business environment that is free from corruption. The Forum has been very much involved in the efforts to reform the law on bribery in recent years that have led to the Bribery Act 2010. The Forum believes that while no law is perfect, the Act will do a great deal to bring the UK into line with international best practice, and will further encourage British companies to avoid corrupt business practices. This guidance document is intended to advise British companies in the infrastructure sector on what the new Bribery Act is intended to do when it comes into force on 1 July 2011; what procedures they will need to consider putting in place to be compliant with the new law; and to offer a series of case studies that we hope will be helpful in illustrating the scope of the law and the potential liability of companies. The UK Ministry of Justice issued formal guidance on this aspect of the Act on 30 March; but as the formal guidance must apply to companies in all sectors, it is very general. What follows, especially the case studies related to specific business situations, is intended to be of direct and practical help to companies involved in the design and construction of infrastructure projects internationally. We believe that it will be of value to companies wishing to do business ethically, and not simply seeking a minimum level of compliance with the law. I should like to thank the sponsors of this document, who have given enormous assistance in its drafting and have funded its production. They are Arup, Balfour Beatty, Halcrow, Mabey Bridge, Mott MacDonald and WSP. There are a number of organisations that can give further assistance. We list these at Annex A. We recommend especially the Global Infrastructure Anti-Corruption Centre (www.giaccentre.org) and Transparency International UK (www.transparency.org.uk).
Graham Hand Co-ordinator of the Forum June 2011
GUIDANCE ON THE BRIBERY ACT 2010 FOR THE INFRASTRUCTURE SECTOR
3
Introduction The infrastructure sector internationally is one of the most vulnerable to corrupt practices, for several reasons: ■ The number of different parties and large sums
of money often involved, and the variety of countries and cultures involved. ■ The client may not be well known to you, or
even clearly visible. ■ In some regions it is normal to employ agents,
and it will be difficult to ensure that their activities remain within the law. ■ There is often a complex supply chain, and
possibly, joint venture partners.
These factors all create higher risks. If individuals working for you bribe someone, they face prosecution under the Bribery Act 2010; but they may also expose your company to corporate prosecution under the Act. Even if the bribe is paid by another company to which you are contractually linked, your company may still face prosecution. The guidance contained in this paper is mainly concerned with how you can reduce the risk of corporate prosecution under the new Act. The UK Anti-Corruption Forum believes that the best approach for companies to take is through risk assessment: you assess what risks exist in a given situation, and what is needed to mitigate each of them through due diligence, training and good management. A risk-based approach requires the development of clear procedures and lines of responsibility within the company, as well as a culture of awareness. This guidance suggests what procedures may be developed and followed in different situations that may be encountered in large infrastructure projects. It is not intended to be prescriptive, and what is appropriate will depend on the particular circumstances. While there is no certainty that the procedures recommended will always be effective, we believe that they will afford the best protection against corporate prosecution under the Act.
4
GUIDANCE ON THE BRIBERY ACT 2010 FOR THE INFRASTRUCTURE SECTOR
GUIDANCE ON THE BRIBERY ACT 2010 FOR THE INFRASTRUCTURE SECTOR
The Scope and Purpose of the Act The purpose of the Act is to reform the criminal law to provide for a new scheme of offences to cover bribery, both in the UK and abroad. The Act replaces the common law offence of bribery, and several statutes, with two general offences: ■ Offering, promising or giving an improper
advantage (broadly, bribing another person). ■ Requesting, agreeing to receive or accepting
an improper advantage (broadly, seeking or receiving a bribe).
The formulation of these two offences abandons the agent/principal relationship on which the previous law was based, in favour of a model based on an intention to induce improper conduct. The Act also creates two further specific offences: ■ An offence of bribery of a foreign public
official in order to obtain or retain business. ■ A new offence applicable to a commercial
organisation that fails to prevent a bribe being paid by a person associated with it with the intention of obtaining or retaining business or an advantage in the conduct of business for the organisation. It will be a defence if an organisation has ‘adequate procedures’ in place to prevent bribery. Much of what follows is concerned with what a prosecutor or court might view as ‘adequate procedures’.
The Act provides for a maximum penalty of ten years imprisonment, but an offence committed by a company will carry an unlimited fine and the prospect of debarment from public sector tendering throughout the European Union. The Act introduces extra-territorial jurisdiction to prosecute bribery committed abroad by persons
5
Introduction The infrastructure sector internationally is one of the most vulnerable to corrupt practices, for several reasons: ■ The number of different parties and large sums
of money often involved, and the variety of countries and cultures involved. ■ The client may not be well known to you, or
even clearly visible. ■ In some regions it is normal to employ agents,
and it will be difficult to ensure that their activities remain within the law. ■ There is often a complex supply chain, and
possibly, joint venture partners.
These factors all create higher risks. If individuals working for you bribe someone, they face prosecution under the Bribery Act 2010; but they may also expose your company to corporate prosecution under the Act. Even if the bribe is paid by another company to which you are contractually linked, your company may still face prosecution. The guidance contained in this paper is mainly concerned with how you can reduce the risk of corporate prosecution under the new Act. The UK Anti-Corruption Forum believes that the best approach for companies to take is through risk assessment: you assess what risks exist in a given situation, and what is needed to mitigate each of them through due diligence, training and good management. A risk-based approach requires the development of clear procedures and lines of responsibility within the company, as well as a culture of awareness. This guidance suggests what procedures may be developed and followed in different situations that may be encountered in large infrastructure projects. It is not intended to be prescriptive, and what is appropriate will depend on the particular circumstances. While there is no certainty that the procedures recommended will always be effective, we believe that they will afford the best protection against corporate prosecution under the Act.
4
GUIDANCE ON THE BRIBERY ACT 2010 FOR THE INFRASTRUCTURE SECTOR
GUIDANCE ON THE BRIBERY ACT 2010 FOR THE INFRASTRUCTURE SECTOR
The Scope and Purpose of the Act The purpose of the Act is to reform the criminal law to provide for a new scheme of offences to cover bribery, both in the UK and abroad. The Act replaces the common law offence of bribery, and several statutes, with two general offences: ■ Offering, promising or giving an improper
advantage (broadly, bribing another person). ■ Requesting, agreeing to receive or accepting
an improper advantage (broadly, seeking or receiving a bribe).
The formulation of these two offences abandons the agent/principal relationship on which the previous law was based, in favour of a model based on an intention to induce improper conduct. The Act also creates two further specific offences: ■ An offence of bribery of a foreign public
official in order to obtain or retain business. ■ A new offence applicable to a commercial
organisation that fails to prevent a bribe being paid by a person associated with it with the intention of obtaining or retaining business or an advantage in the conduct of business for the organisation. It will be a defence if an organisation has ‘adequate procedures’ in place to prevent bribery. Much of what follows is concerned with what a prosecutor or court might view as ‘adequate procedures’.
The Act provides for a maximum penalty of ten years imprisonment, but an offence committed by a company will carry an unlimited fine and the prospect of debarment from public sector tendering throughout the European Union. The Act introduces extra-territorial jurisdiction to prosecute bribery committed abroad by persons
5
ordinarily resident in the UK as well as UK nationals and UK corporate bodies, and it is important to note that bribery by any third party associated with an organisation can lead to a conviction of that organisation, as well as the offender.
Adequate Procedures As noted above, the guidance in this paper is not intended to be prescriptive. It is intended to highlight the key areas which are likely to be considered important by a court seeking to establish whether ‘adequate procedures’ were in place at the time of an offence. These will vary with the particular circumstances, including the size and nature of the organisation, its business activities and relationships, and the country in which business is transacted. In particular, a large company will need and will have greater capacity to apply more elaborate procedures than will an SME. What follows should be interpreted in the light of all these considerations. 1 Board Responsibility for the Anti-Corruption Programme The Board of Directors should take responsibility for establishing a culture within a company in which corruption is outlawed, and for the effective design and implementation of the company’s anti-corruption programme. The Board should take steps to ensure that there is a thorough understanding of its policy in respect of corruption, and that the programme is understood and accepted. The chief executive, owner or managing partner should make a clear statement about the culture he or she expects, and the consequences for any employee who breaks the rules laid down to support company policy in this area. We see a strong analogy with the development of a health and safety culture in UK business in recent years; the same effort will be needed to create and maintain an anti-corruption culture. Without the right culture, led from the top, procedures will not be effective. 2 The Compliance Function It is important that someone should take responsibility for oversight of the anti-corruption programme.
6
Nominating a senior company officer may be an appropriate step, and providing him or her with proper authority to implement and monitor all programme activities. Regular briefings could be provided to the Board on implementation, as well as developments in the law and practice. 3 An Ethical Code of Business Conduct Commercial organisations should have a code of conduct which includes a clear and unambiguous anti-corruption element. They should give this code wide publicity internally and ideally externally through the company’s publications and website. 4 Risk Management and Due Diligence A clear understanding of the corruption risks a company is running or is likely to run is key to implementing a successful policy to combat corruption. Procedures should be established to assess the likely risks of corruption arising in an organisation’s business. This assessment will vary according to the geographical location in which work is to be carried out, and the business relationships that are needed. Before entering into any new business relationship, project or country, the organisation should carry out a risk assessment. This assessment will guide the due diligence that is then needed. 5 Decision-Making Processes An organisation should consider formalising its decision-making processes, so that where an enhanced risk of corruption is perceived to exist, the decision to proceed is taken by a suitably trained or experienced senior individual or committee within the organisation. 6 Financial Controls An organisation should consider carefully the financial controls it may need to minimise the risk of becoming involved in a corrupt act. Either in relation to another individual or organisation (eg employees, clients, business partners, sub-contractors or suppliers), or in relation to the company by another individual or organisation. These controls can be verified and assisted by the organisation’s internal audit arrangements, where these exist.
GUIDANCE ON THE BRIBERY ACT 2010 FOR THE INFRASTRUCTURE SECTOR
7 Supply Chain Management An organisation should use procurement and contract management procedures which minimise the opportunity for corruption by sub-contractors and suppliers against the company, clients, or other members of the supply chain. An organisation should consider what steps might be appropriate to ensure that its partners, suppliers, contractors, agents and other third parties with which it does business, will not make corrupt payments. A certain level of verification of this requirement will usually be advisable. Wherever possible, partners and others should be asked to enforce the same requirement on their supply chains, and confirm in writing that this has been done. 8 Employment Procedures While it may not be appropriate for all organisations, wherever possible: ■ Employees should be vetted before they are
employed to ascertain as far as is reasonable that they are likely to comply with the company’s ethical policies. ■ Employment contracts should include express
contractual obligations and penalties in relation to corruption. ■ Disciplinary procedures should be in place
that entitle the company to take appropriate disciplinary action against an employee who commits a corrupt act.
10 Training It is important for commercial organisations to ensure that their codes of conduct and other policies are properly embedded throughout the business. Anti-corruption training should therefore be provided, with reminders on a regular basis to all relevant employees, to make them aware of the types of corruption they may encounter, the risks of engaging in corrupt activity, the organisation’s anti-corruption code, and how they may report corruption. The most effective training will usually be in person, but a range of online and other tools are also available. 11 Reporting and Investigation Procedures An organisation should put in place appropriate channels and procedures (‘whistle blowing’ procedures) that enable employees to report corruption in a safe and confidential manner to a responsible senior officer of the organisation. There are different ways of providing this facility: by telephone, web-based facility, or in person. Measures may need to be put in place to ensure the safety and security of any employee using these procedures. Similarly, organisations should ensure that all allegations of corruption are properly investigated by properly qualified individuals. Where appropriate, the results of the investigation should be reported back to the individual who made the original report. 12 Verification
9 Gifts and Hospitality Policy A commercial organisation should develop and implement an appropriate gifts and hospitality policy. The policy will give guidance to employees regarding the giving and receiving of gifts, hospitality and entertainment related to the organisation’s business, and put in place measures to monitor this activity. The Bribery Act does not outlaw gifts and hospitality; but care is needed to ensure that wrongful motives for their use cannot reasonably be imputed or perceived, externally or internally. Different policies are likely to be appropriate in different types of business, depending on the risks involved.
GUIDANCE ON THE BRIBERY ACT 2010 FOR THE INFRASTRUCTURE SECTOR
Anti-corruption procedures will require regular review, and consideration should be given as to how best to audit the effectiveness of the programmes. This is to ensure that they remain effective and up to date; but it is also important because if something goes wrong, the company must be able to demonstrate to the appropriate authorities, and potentially to a Court, that adequate procedures were in place. If an offence is committed, it implies that the procedures were in some way less than adequate, and a robust audit trail will be needed to refute this.
7
ordinarily resident in the UK as well as UK nationals and UK corporate bodies, and it is important to note that bribery by any third party associated with an organisation can lead to a conviction of that organisation, as well as the offender.
Adequate Procedures As noted above, the guidance in this paper is not intended to be prescriptive. It is intended to highlight the key areas which are likely to be considered important by a court seeking to establish whether ‘adequate procedures’ were in place at the time of an offence. These will vary with the particular circumstances, including the size and nature of the organisation, its business activities and relationships, and the country in which business is transacted. In particular, a large company will need and will have greater capacity to apply more elaborate procedures than will an SME. What follows should be interpreted in the light of all these considerations. 1 Board Responsibility for the Anti-Corruption Programme The Board of Directors should take responsibility for establishing a culture within a company in which corruption is outlawed, and for the effective design and implementation of the company’s anti-corruption programme. The Board should take steps to ensure that there is a thorough understanding of its policy in respect of corruption, and that the programme is understood and accepted. The chief executive, owner or managing partner should make a clear statement about the culture he or she expects, and the consequences for any employee who breaks the rules laid down to support company policy in this area. We see a strong analogy with the development of a health and safety culture in UK business in recent years; the same effort will be needed to create and maintain an anti-corruption culture. Without the right culture, led from the top, procedures will not be effective. 2 The Compliance Function It is important that someone should take responsibility for oversight of the anti-corruption programme.
6
Nominating a senior company officer may be an appropriate step, and providing him or her with proper authority to implement and monitor all programme activities. Regular briefings could be provided to the Board on implementation, as well as developments in the law and practice. 3 An Ethical Code of Business Conduct Commercial organisations should have a code of conduct which includes a clear and unambiguous anti-corruption element. They should give this code wide publicity internally and ideally externally through the company’s publications and website. 4 Risk Management and Due Diligence A clear understanding of the corruption risks a company is running or is likely to run is key to implementing a successful policy to combat corruption. Procedures should be established to assess the likely risks of corruption arising in an organisation’s business. This assessment will vary according to the geographical location in which work is to be carried out, and the business relationships that are needed. Before entering into any new business relationship, project or country, the organisation should carry out a risk assessment. This assessment will guide the due diligence that is then needed. 5 Decision-Making Processes An organisation should consider formalising its decision-making processes, so that where an enhanced risk of corruption is perceived to exist, the decision to proceed is taken by a suitably trained or experienced senior individual or committee within the organisation. 6 Financial Controls An organisation should consider carefully the financial controls it may need to minimise the risk of becoming involved in a corrupt act. Either in relation to another individual or organisation (eg employees, clients, business partners, sub-contractors or suppliers), or in relation to the company by another individual or organisation. These controls can be verified and assisted by the organisation’s internal audit arrangements, where these exist.
GUIDANCE ON THE BRIBERY ACT 2010 FOR THE INFRASTRUCTURE SECTOR
7 Supply Chain Management An organisation should use procurement and contract management procedures which minimise the opportunity for corruption by sub-contractors and suppliers against the company, clients, or other members of the supply chain. An organisation should consider what steps might be appropriate to ensure that its partners, suppliers, contractors, agents and other third parties with which it does business, will not make corrupt payments. A certain level of verification of this requirement will usually be advisable. Wherever possible, partners and others should be asked to enforce the same requirement on their supply chains, and confirm in writing that this has been done. 8 Employment Procedures While it may not be appropriate for all organisations, wherever possible: ■ Employees should be vetted before they are
employed to ascertain as far as is reasonable that they are likely to comply with the company’s ethical policies. ■ Employment contracts should include express
contractual obligations and penalties in relation to corruption. ■ Disciplinary procedures should be in place
that entitle the company to take appropriate disciplinary action against an employee who commits a corrupt act.
10 Training It is important for commercial organisations to ensure that their codes of conduct and other policies are properly embedded throughout the business. Anti-corruption training should therefore be provided, with reminders on a regular basis to all relevant employees, to make them aware of the types of corruption they may encounter, the risks of engaging in corrupt activity, the organisation’s anti-corruption code, and how they may report corruption. The most effective training will usually be in person, but a range of online and other tools are also available. 11 Reporting and Investigation Procedures An organisation should put in place appropriate channels and procedures (‘whistle blowing’ procedures) that enable employees to report corruption in a safe and confidential manner to a responsible senior officer of the organisation. There are different ways of providing this facility: by telephone, web-based facility, or in person. Measures may need to be put in place to ensure the safety and security of any employee using these procedures. Similarly, organisations should ensure that all allegations of corruption are properly investigated by properly qualified individuals. Where appropriate, the results of the investigation should be reported back to the individual who made the original report. 12 Verification
9 Gifts and Hospitality Policy A commercial organisation should develop and implement an appropriate gifts and hospitality policy. The policy will give guidance to employees regarding the giving and receiving of gifts, hospitality and entertainment related to the organisation’s business, and put in place measures to monitor this activity. The Bribery Act does not outlaw gifts and hospitality; but care is needed to ensure that wrongful motives for their use cannot reasonably be imputed or perceived, externally or internally. Different policies are likely to be appropriate in different types of business, depending on the risks involved.
GUIDANCE ON THE BRIBERY ACT 2010 FOR THE INFRASTRUCTURE SECTOR
Anti-corruption procedures will require regular review, and consideration should be given as to how best to audit the effectiveness of the programmes. This is to ensure that they remain effective and up to date; but it is also important because if something goes wrong, the company must be able to demonstrate to the appropriate authorities, and potentially to a Court, that adequate procedures were in place. If an offence is committed, it implies that the procedures were in some way less than adequate, and a robust audit trail will be needed to refute this.
7
Specific Situations and Case Studies There are many situations in which corruption may occur in the context of an infrastructure project. The case studies that follow have been assembled by industry practitioners, often based on real situations. They are illustrative and not all-inclusive. They are grouped under the following headings: ■ Joint Ventures ■ Agents and Distributors ■ The Supply Chain ■ Clients ■ Facilitation Payments ■ Gifts, Hospitality and Sponsorship
In each case the context is explained, case studies are given and summary guidance is offered. In many cases, guidance provided in relation to one scenario will also apply to many of the other scenarios.
Disclaimer Please note that the Forum and its members, including the contributors to this document, do not intend to represent, warrant or in any way imply that compliance with the procedures described herein will prevent any person from committing any offence or act as a defence in any prosecution. The scenarios are illustrative and non-exhaustive, and every case is different. We believe that the procedures outlined above are consistent with best practice, but UK and international best practice is constantly evolving. The Forum and its members hereby disclaim any and all liability or responsibility for any loss, damage or injury that any person may suffer or incur as a result of anything in this document, or any use of or reliance upon it, including any inaccuracy or omission.
8
GUIDANCE ON THE BRIBERY ACT 2010 FOR THE INFRASTRUCTURE SECTOR
GUIDANCE ON THE BRIBERY ACT 2010 FOR THE INFRASTRUCTURE SECTOR
9
Specific Situations and Case Studies There are many situations in which corruption may occur in the context of an infrastructure project. The case studies that follow have been assembled by industry practitioners, often based on real situations. They are illustrative and not all-inclusive. They are grouped under the following headings: ■ Joint Ventures ■ Agents and Distributors ■ The Supply Chain ■ Clients ■ Facilitation Payments ■ Gifts, Hospitality and Sponsorship
In each case the context is explained, case studies are given and summary guidance is offered. In many cases, guidance provided in relation to one scenario will also apply to many of the other scenarios.
Disclaimer Please note that the Forum and its members, including the contributors to this document, do not intend to represent, warrant or in any way imply that compliance with the procedures described herein will prevent any person from committing any offence or act as a defence in any prosecution. The scenarios are illustrative and non-exhaustive, and every case is different. We believe that the procedures outlined above are consistent with best practice, but UK and international best practice is constantly evolving. The Forum and its members hereby disclaim any and all liability or responsibility for any loss, damage or injury that any person may suffer or incur as a result of anything in this document, or any use of or reliance upon it, including any inaccuracy or omission.
8
GUIDANCE ON THE BRIBERY ACT 2010 FOR THE INFRASTRUCTURE SECTOR
GUIDANCE ON THE BRIBERY ACT 2010 FOR THE INFRASTRUCTURE SECTOR
9
Joint Ventures A joint venture (JV) is an alliance in which two or more persons or organisations contribute services and/or capital to a common commercial enterprise. There are inherent risks in forming JVs, particularly in unfamiliar or high-risk territories. One JV partner can incur legal liability or reputational damage as a result of the corrupt actions of the other, and lack of knowledge of what the partner may do is no defence. The JV partner stands to share in the profits from work won by the JV through the other’s corruption. The Guidance issued by the Ministry of Justice in March 2011 suggests that a partner in a JV may not be liable for the corrupt acts on the other partner, simply by virtue of sharing in the benefits conferred on the JV as a result of those corrupt acts. However in our view, prudence still demands that you should go to reasonable lengths to identify and mitigate such risks. A Typical Situation ■ Your company is interested in undertaking a
construction project in country X. You perceive that corruption risks in country X may be high. Given that you are not familiar with the market, your company has decided it needs a local partner in country X. The project team has visited X and identified a few potential local JV partners. The process is not altogether straightforward though, as there are some language difficulties and a lack of clarity in relation to the regulations dealing with employment, tax, company registration, permits and visas, and exporting foreign exchange revenues out of the country.
risks associated with a JV in this country, with this partner, on this project and similar projects that may subsequently arise. This requires making sure that the selected partner can and will operate to acceptable standards. The following should be considered regardless of how the two companies agree to structure the JV. However, for each of the scenarios described below, the nature and extent to which these core principles apply may differ. In every case, you should take an informed, risk-based approach and consider the opportunity and incentive for corruption to occur and the likelihood of it occurring, with or without appropriate controls. Risk-based Due Diligence Depending on the circumstances, due diligence in the following areas may be appropriate. Most of these principles should in fact be considered for any project in a high corruption risk country, even when no JV is contemplated: a Due diligence on country X The Transparency International Corruption Perceptions Index is a good starting point, but more detail and context are probably required: ■
■
- Is the public sector more corrupt, and does the level of risk depend on whether the client/project owner is the federal, state or municipal government, a quasi-government organisation or private?
This guidance considers several scenarios in which an organisation wishes to form a JV relationship with another. We set out what procedures should be considered before going ahead with the JV.
10
GUIDANCE ON THE BRIBERY ACT 2010 FOR THE INFRASTRUCTURE SECTOR
GUIDANCE ON THE BRIBERY ACT 2010 FOR THE INFRASTRUCTURE SECTOR
How do those risks manifest themselves? - Is corruption rife from top to bottom?
The project team is receiving different messages from the short-listed possible business partners as to how easily those regulations may be complied with.
Your company needs to be satisfied that it understands, and can manage, the corruption
Are corruption and other associated risks (eg political risks) high in this country?
- Are certain sectors more corrupt, and are certain activities (such as importing goods) more exposed to corruption risks? - Are facilitation payments common? ■
Do the courts uphold the law?
11
Joint Ventures A joint venture (JV) is an alliance in which two or more persons or organisations contribute services and/or capital to a common commercial enterprise. There are inherent risks in forming JVs, particularly in unfamiliar or high-risk territories. One JV partner can incur legal liability or reputational damage as a result of the corrupt actions of the other, and lack of knowledge of what the partner may do is no defence. The JV partner stands to share in the profits from work won by the JV through the other’s corruption. The Guidance issued by the Ministry of Justice in March 2011 suggests that a partner in a JV may not be liable for the corrupt acts on the other partner, simply by virtue of sharing in the benefits conferred on the JV as a result of those corrupt acts. However in our view, prudence still demands that you should go to reasonable lengths to identify and mitigate such risks. A Typical Situation ■ Your company is interested in undertaking a
construction project in country X. You perceive that corruption risks in country X may be high. Given that you are not familiar with the market, your company has decided it needs a local partner in country X. The project team has visited X and identified a few potential local JV partners. The process is not altogether straightforward though, as there are some language difficulties and a lack of clarity in relation to the regulations dealing with employment, tax, company registration, permits and visas, and exporting foreign exchange revenues out of the country.
risks associated with a JV in this country, with this partner, on this project and similar projects that may subsequently arise. This requires making sure that the selected partner can and will operate to acceptable standards. The following should be considered regardless of how the two companies agree to structure the JV. However, for each of the scenarios described below, the nature and extent to which these core principles apply may differ. In every case, you should take an informed, risk-based approach and consider the opportunity and incentive for corruption to occur and the likelihood of it occurring, with or without appropriate controls. Risk-based Due Diligence Depending on the circumstances, due diligence in the following areas may be appropriate. Most of these principles should in fact be considered for any project in a high corruption risk country, even when no JV is contemplated: a Due diligence on country X The Transparency International Corruption Perceptions Index is a good starting point, but more detail and context are probably required: ■
■
- Is the public sector more corrupt, and does the level of risk depend on whether the client/project owner is the federal, state or municipal government, a quasi-government organisation or private?
This guidance considers several scenarios in which an organisation wishes to form a JV relationship with another. We set out what procedures should be considered before going ahead with the JV.
10
GUIDANCE ON THE BRIBERY ACT 2010 FOR THE INFRASTRUCTURE SECTOR
GUIDANCE ON THE BRIBERY ACT 2010 FOR THE INFRASTRUCTURE SECTOR
How do those risks manifest themselves? - Is corruption rife from top to bottom?
The project team is receiving different messages from the short-listed possible business partners as to how easily those regulations may be complied with.
Your company needs to be satisfied that it understands, and can manage, the corruption
Are corruption and other associated risks (eg political risks) high in this country?
- Are certain sectors more corrupt, and are certain activities (such as importing goods) more exposed to corruption risks? - Are facilitation payments common? ■
Do the courts uphold the law?
11
b Due diligence on the law Your company should ensure it understands the anti-corruption laws in country X as well as those of your home jurisdiction. This may provide comfort as to how clear, strict and strongly enforced relevant laws are. In practice, however, you should assume that local law prohibits bribery, and aim to set a standard that meets or exceeds internationally recognised anti-corruption standards, including the UK Bribery Act, the US Foreign Corrupt Practices Act and OECD principles. Your company’s policies and contractual controls should prohibit bribery and corruption in all forms, rather than seeking to focus, for example, only on bribery of public officials. c Due diligence on the project owner/client (see also separate section on Clients) ■ ■
■
■
Who is the client, and who owns it? Is it governmental, quasi-governmental, local private or private multinational? Is the client linked to any governmental or quasi-governmental organisation? Is there any information to suggest that the client or any public officials or other individuals known to be connected with it have been involved in corruption?
d Due diligence on the project ■
■
■
■
Has there been any publicity or rumour about corruption in connection with this project? How is the project funded? Does it have the backing and related scrutiny of the World Bank or other International Funding Institutions? Have you done this type of work before? In this market? For this client? Is the work inherently high-risk, such as construction or construction management?
e Due diligence on your JV partner(s) ■ ■
■
12
Have you contracted with this company before? Is it a ‘blue chip’ company or otherwise subject to significant regulatory scrutiny? Who owns it?
■
■
■
■
f
Is it connected with public officials or other individuals associated with the project owner? Is it in any way connected to the client or project owner? Is there any information to suggest that the partner or any public officials or other individuals connected with it have been involved in corruption? Does it appear to operate to high ethical standards, and does it have an anti-corruption compliance programme, as described below?
Due diligence on other third parties If it becomes necessary to form a JV company with separate staff and the JV company needs to engage agents, consultants or sub-contractors, similar due diligence should be conducted on these third parties.
g Due diligence on key employees At some point, it may be advisable to conduct due diligence on key employees, for example senior managers appointed to the JV by the partner company. It may be that much or all of the due diligence can be conducted by your company using the internet, corporate and court filings and other publicly available information. Due diligence by specialist external firms may be expensive, but if it is focussed on key questions, it may be more efficient and reliable, and it should be considered when the risks are high. Such firms can use proprietary or subscription databases and search engines to which your organisation may not have access; they know what to look for and where to look for it; they generally have local sources; and they are experienced in sifting through the plethora of information that, for example, an internet search may throw up. An Anti-Corruption Compliance Programme Depending on the risks, the circumstances and structure of the JV, you should consider requiring that it adopts an anti-corruption compliance programme that contains the elements described in paragraphs 1 to 12 on pages 6 and 7.
GUIDANCE ON THE BRIBERY ACT 2010 FOR THE INFRASTRUCTURE SECTOR
Satisfy yourself that, as a minimum, your partner company has also adopted an appropriate anti-corruption compliance programme. Management Control In principle, the more management control or oversight you can exert over the joint venture, the better. For example your senior management appointees may have oversight and control of the appointment and payment of key third parties. However, such control can create a false sense of security, as it does not necessarily mean that you can detect, let alone control, what the next levels of management within the JV, or anyone within your JV partner’s organisation, may be doing. Contractual Undertakings from your JV Partner The stronger and more credible your partner’s anti-corruption compliance programme, the more confident you can be that they will not engage in corrupt activities outside your control to benefit the joint venture. Equally the more likely it is that they will agree to strong procedures and controls within the joint venture itself, and that their staff will comply with these and enforce them. The elements of a compliance programme that you should look for in your partner are the same as described above. The absence of some or all of those elements is a red flag, but it may not be fatal to the partnership or indeed altogether surprising. Depending on the results of your due diligence on the partner, and if the joint venture adopts the controls described above, you may conclude that you can manage the risks of your partner engaging in corrupt activity to benefit the joint venture company through contractual provisions. For all joint ventures, you should require that both parties give reciprocal representations, warranties and undertakings about compliance with laws and, specifically about not making or accepting any corrupt or improper payments, gifts or hospitality. There should also be an express right of termination for breach of any such provisions.
GUIDANCE ON THE BRIBERY ACT 2010 FOR THE INFRASTRUCTURE SECTOR
Case Studies ■
Scenario 1 How does the situation change if A decides to form a joint venture company with company B, but with A taking only a minority interest?
■ It is implicit in this scenario that A will not retain
management control of the JV company and will not be able to insist that the JV company adopt the policies, procedures and controls described in A Typical Situation, on page 11. This is not necessarily the case: it depends on the parties’ respective bargaining positions. If A’s policies are not to be adopted, A needs to satisfy itself that similar policies are in place to govern the joint venture, and in any case, if A cannot be satisfied that the corruption risks are being adequately managed without those joint venture company controls, it may have to refuse to go ahead with a minority stake. As a minimum, A should ensure that there is total transparency of the projects accounts, including the activities of sub-contractors, the way they are selected and their costs. All of the considerations and procedures discussed above remain just as important, or arguably more so, if A has less control over the joint venture company. However, the manner in which they are implemented and how compliance is ensured may differ. In addition to the due diligence described above, A will ideally want to ensure that all the compliance programme elements discussed above are in place. If this is not possible, then A must decide whether it is safe to proceed on the basis only of the knowledge gained from its due diligence into B, B’s own compliance programme, and the contractual protections described above. A’s minority interest may make it less logical (or acceptable) for the joint venture company to adopt A’s Code of Conduct and the rest of A’s compliance programme; but it is doubtful whether A could then safely proceed without the joint venture company adopting B’s or its own equivalent compliance programme.
13
b Due diligence on the law Your company should ensure it understands the anti-corruption laws in country X as well as those of your home jurisdiction. This may provide comfort as to how clear, strict and strongly enforced relevant laws are. In practice, however, you should assume that local law prohibits bribery, and aim to set a standard that meets or exceeds internationally recognised anti-corruption standards, including the UK Bribery Act, the US Foreign Corrupt Practices Act and OECD principles. Your company’s policies and contractual controls should prohibit bribery and corruption in all forms, rather than seeking to focus, for example, only on bribery of public officials. c Due diligence on the project owner/client (see also separate section on Clients) ■ ■
■
■
Who is the client, and who owns it? Is it governmental, quasi-governmental, local private or private multinational? Is the client linked to any governmental or quasi-governmental organisation? Is there any information to suggest that the client or any public officials or other individuals known to be connected with it have been involved in corruption?
d Due diligence on the project ■
■
■
■
Has there been any publicity or rumour about corruption in connection with this project? How is the project funded? Does it have the backing and related scrutiny of the World Bank or other International Funding Institutions? Have you done this type of work before? In this market? For this client? Is the work inherently high-risk, such as construction or construction management?
e Due diligence on your JV partner(s) ■ ■
■
12
Have you contracted with this company before? Is it a ‘blue chip’ company or otherwise subject to significant regulatory scrutiny? Who owns it?
■
■
■
■
f
Is it connected with public officials or other individuals associated with the project owner? Is it in any way connected to the client or project owner? Is there any information to suggest that the partner or any public officials or other individuals connected with it have been involved in corruption? Does it appear to operate to high ethical standards, and does it have an anti-corruption compliance programme, as described below?
Due diligence on other third parties If it becomes necessary to form a JV company with separate staff and the JV company needs to engage agents, consultants or sub-contractors, similar due diligence should be conducted on these third parties.
g Due diligence on key employees At some point, it may be advisable to conduct due diligence on key employees, for example senior managers appointed to the JV by the partner company. It may be that much or all of the due diligence can be conducted by your company using the internet, corporate and court filings and other publicly available information. Due diligence by specialist external firms may be expensive, but if it is focussed on key questions, it may be more efficient and reliable, and it should be considered when the risks are high. Such firms can use proprietary or subscription databases and search engines to which your organisation may not have access; they know what to look for and where to look for it; they generally have local sources; and they are experienced in sifting through the plethora of information that, for example, an internet search may throw up. An Anti-Corruption Compliance Programme Depending on the risks, the circumstances and structure of the JV, you should consider requiring that it adopts an anti-corruption compliance programme that contains the elements described in paragraphs 1 to 12 on pages 6 and 7.
GUIDANCE ON THE BRIBERY ACT 2010 FOR THE INFRASTRUCTURE SECTOR
Satisfy yourself that, as a minimum, your partner company has also adopted an appropriate anti-corruption compliance programme. Management Control In principle, the more management control or oversight you can exert over the joint venture, the better. For example your senior management appointees may have oversight and control of the appointment and payment of key third parties. However, such control can create a false sense of security, as it does not necessarily mean that you can detect, let alone control, what the next levels of management within the JV, or anyone within your JV partner’s organisation, may be doing. Contractual Undertakings from your JV Partner The stronger and more credible your partner’s anti-corruption compliance programme, the more confident you can be that they will not engage in corrupt activities outside your control to benefit the joint venture. Equally the more likely it is that they will agree to strong procedures and controls within the joint venture itself, and that their staff will comply with these and enforce them. The elements of a compliance programme that you should look for in your partner are the same as described above. The absence of some or all of those elements is a red flag, but it may not be fatal to the partnership or indeed altogether surprising. Depending on the results of your due diligence on the partner, and if the joint venture adopts the controls described above, you may conclude that you can manage the risks of your partner engaging in corrupt activity to benefit the joint venture company through contractual provisions. For all joint ventures, you should require that both parties give reciprocal representations, warranties and undertakings about compliance with laws and, specifically about not making or accepting any corrupt or improper payments, gifts or hospitality. There should also be an express right of termination for breach of any such provisions.
GUIDANCE ON THE BRIBERY ACT 2010 FOR THE INFRASTRUCTURE SECTOR
Case Studies ■
Scenario 1 How does the situation change if A decides to form a joint venture company with company B, but with A taking only a minority interest?
■ It is implicit in this scenario that A will not retain
management control of the JV company and will not be able to insist that the JV company adopt the policies, procedures and controls described in A Typical Situation, on page 11. This is not necessarily the case: it depends on the parties’ respective bargaining positions. If A’s policies are not to be adopted, A needs to satisfy itself that similar policies are in place to govern the joint venture, and in any case, if A cannot be satisfied that the corruption risks are being adequately managed without those joint venture company controls, it may have to refuse to go ahead with a minority stake. As a minimum, A should ensure that there is total transparency of the projects accounts, including the activities of sub-contractors, the way they are selected and their costs. All of the considerations and procedures discussed above remain just as important, or arguably more so, if A has less control over the joint venture company. However, the manner in which they are implemented and how compliance is ensured may differ. In addition to the due diligence described above, A will ideally want to ensure that all the compliance programme elements discussed above are in place. If this is not possible, then A must decide whether it is safe to proceed on the basis only of the knowledge gained from its due diligence into B, B’s own compliance programme, and the contractual protections described above. A’s minority interest may make it less logical (or acceptable) for the joint venture company to adopt A’s Code of Conduct and the rest of A’s compliance programme; but it is doubtful whether A could then safely proceed without the joint venture company adopting B’s or its own equivalent compliance programme.
13
■
Scenario 2
■
As negotiations progress, it has been decided that no separate company will be formed and that A and B will form a contractual JV, not a JV company. What anti-corruption policies and procedures should A put in place?
Scenario 3 A has shortlisted company B, a medium-sized firm in country X with a lot of experience and contacts in this particular type of project. The project team has decided that it would like to form a joint venture company with B and take a 51% controlling interest.
Agents and Distributors The terms ‘agent’ and ‘distributor’ will mean different things to different businesses. They may refer to a company, organisation or person in a certain territory that has an agreement to: ■ Promote or represent the interests of your
■ The same points made in relation to Scenario 1
described above and it has been decided that there are no obvious questions or risks that cannot be satisfactorily answered or managed, other elements of an effective anti-corruption programme should be addressed. In this case, A will be in partnership with B, the project works could go on for a considerable amount of time, and there is the possibility of the joint venture company winning more high-value contracts. Given A’s lack of knowledge of the local market and its corruption risks, this means A would rely heavily on B, and B’s contacts and local knowledge, to win bids and execute any project works successfully. Therefore there is the possibility that B’s owners and employees, and employees of the joint venture company, would be engaging regularly with local agents, public officials and individuals representing private clients. Presumably, A’s 51% interest will enable it to gain significant management control of the joint venture company. In this case, as A has a controlling stake in the joint venture, A also ought to be able to require that the joint venture company adopt the anticorruption compliance programme described above. As a minimum, A should ensure that it has full transparency of B’s financial dealings with the clients.
apply here. This scenario does not alter the need to conduct due diligence and to seek assurances about B’s anti-corruption compliance programme. If B does not have an acceptable code of conduct equivalent to A’s, then B should ideally undertake to comply with A’s, as well as giving the anti-corruption representations, warranties and undertakings referred to above. However, it may be unrealistic to seek B’s agreement to train all staff on A’s code and to adopt and embed the other elements of a compliance programme. It may be possible to ensure that B’s staff working on the JV are trained on A’s code and have access to the external helpline, but it may not be practical to seek to implement most of the management, financial and commercial controls referred to in Scenario 1. It therefore follows that, in this scenario, A is more exposed to the risk of potential corrupt conduct by B and its staff. A is placing heavy and possibly undue reliance on contractual protections, and may conclude that it is not safe to proceed unless B’s own anti-corruption compliance programme is already strong and credible.
Summary Guidance There is a risk that you could be held liable for the actions of a JV in which you are a partner, or if the JV partner engages in corrupt activity for the benefit of the JV. ■
■
■
14
are no risks, or that no additional controls are warranted. ■
Controls adopted by the JV, and senior management oversight of the JV, are important but will not mitigate the risk of the JV partner engaging in corruption for the benefit of, or in connection with, the JV. Turning a blind eye to what a JV partner, or its staff working for a JV, may do is not a defensible option. Appropriate due diligence must be conducted, but a clean due diligence report does not mean that there
business.
■ When sufficient due diligence has been undertaken as
■
In addition to contractual undertakings regarding corruption, you should look for evidence of clear ethical standards and a credible compliance programme within the partner company. Without this it may be possible to manage the risks, but the risk of failure is much greater. Ultimately, the test should be this: is it reasonable to conclude, and do you genuinely believe, that the partner organisation and all staff working in the JV will comply with the relevant anti-corruption policies, procedures and contractual provisions?
GUIDANCE ON THE BRIBERY ACT 2010 FOR THE INFRASTRUCTURE SECTOR
■ Enter into contracts on your behalf. ■ Perform marketing services only. ■ Perform in-country works for you. ■ Provide logistical support for you.
guidance given is necessarily general, and should be interpreted for your specific business. Representative Selection and Appointment The Market ■
■
■ Purchase goods or products from you and then
sell them on to third parties.
■ ■
This guidance is intended to cover any party that your company wishes to have acting on its behalf that is not a direct employee. Such parties are referred to here as ‘representatives’. Depending on the exact relationship, they would very likely be considered your ‘associated persons’ under the Bribery Act. This guidance suggests what should be considered during the relationship with a representative, and describes typical case studies that mat be encountered. An appropriate response is offered for each. Comments have been grouped to reflect the critical periods of a representative relationship: ■
Representative Selection and Appointment.
■
Tender and Contract Award.
■
Representative Remuneration.
■
Renewal and Termination.
The guidance is built around applying a risk based analysis and responding in an appropriate manner to that level of risk. A robust anti-corruption ethics and compliance programme will ensure that an organisation’s reputation will be enhanced and its properly selected representatives will want to maintain that reputation. The comments below set out some key questions regarding the risks you may be running and possible ways to consider mitigating them. The
GUIDANCE ON THE BRIBERY ACT 2010 FOR THE INFRASTRUCTURE SECTOR
■
■
■
Why do you need or want a representative in the market? Does the relationship need to be success fee-based? Could the representative be an employee? Where does the country appear on the TI Corruption Perceptions Index? Have you had previous experience of operating in the market? How long ago? Are there any local legal considerations that need to be taken into account? Who are your clients likely to be and how will work be won - by public tender or negotiated contract?
The Representative ■
■
■
■
■
Why is the representative being selected? Is it for product knowledge, knowledge of procurement processes or other local market factors, or because of contacts within the client organisation? Each raises different questions. How do we select the representative? A single source, perhaps by recommendation, or by competition? Was the representative recommended by a current or targeted client? This would raise further questions. Does the representative have sufficient resources to provide the services required? Does the representative have anything adverse recorded, such as poor press reports from his previous employment or other business engagements?
■
Are there any conflicts of interest?
■
Is it suggested that payment be made offshore?
15
■
Scenario 2
■
As negotiations progress, it has been decided that no separate company will be formed and that A and B will form a contractual JV, not a JV company. What anti-corruption policies and procedures should A put in place?
Scenario 3 A has shortlisted company B, a medium-sized firm in country X with a lot of experience and contacts in this particular type of project. The project team has decided that it would like to form a joint venture company with B and take a 51% controlling interest.
Agents and Distributors The terms ‘agent’ and ‘distributor’ will mean different things to different businesses. They may refer to a company, organisation or person in a certain territory that has an agreement to: ■ Promote or represent the interests of your
■ The same points made in relation to Scenario 1
described above and it has been decided that there are no obvious questions or risks that cannot be satisfactorily answered or managed, other elements of an effective anti-corruption programme should be addressed. In this case, A will be in partnership with B, the project works could go on for a considerable amount of time, and there is the possibility of the joint venture company winning more high-value contracts. Given A’s lack of knowledge of the local market and its corruption risks, this means A would rely heavily on B, and B’s contacts and local knowledge, to win bids and execute any project works successfully. Therefore there is the possibility that B’s owners and employees, and employees of the joint venture company, would be engaging regularly with local agents, public officials and individuals representing private clients. Presumably, A’s 51% interest will enable it to gain significant management control of the joint venture company. In this case, as A has a controlling stake in the joint venture, A also ought to be able to require that the joint venture company adopt the anticorruption compliance programme described above. As a minimum, A should ensure that it has full transparency of B’s financial dealings with the clients.
apply here. This scenario does not alter the need to conduct due diligence and to seek assurances about B’s anti-corruption compliance programme. If B does not have an acceptable code of conduct equivalent to A’s, then B should ideally undertake to comply with A’s, as well as giving the anti-corruption representations, warranties and undertakings referred to above. However, it may be unrealistic to seek B’s agreement to train all staff on A’s code and to adopt and embed the other elements of a compliance programme. It may be possible to ensure that B’s staff working on the JV are trained on A’s code and have access to the external helpline, but it may not be practical to seek to implement most of the management, financial and commercial controls referred to in Scenario 1. It therefore follows that, in this scenario, A is more exposed to the risk of potential corrupt conduct by B and its staff. A is placing heavy and possibly undue reliance on contractual protections, and may conclude that it is not safe to proceed unless B’s own anti-corruption compliance programme is already strong and credible.
Summary Guidance There is a risk that you could be held liable for the actions of a JV in which you are a partner, or if the JV partner engages in corrupt activity for the benefit of the JV. ■
■
■
14
are no risks, or that no additional controls are warranted. ■
Controls adopted by the JV, and senior management oversight of the JV, are important but will not mitigate the risk of the JV partner engaging in corruption for the benefit of, or in connection with, the JV. Turning a blind eye to what a JV partner, or its staff working for a JV, may do is not a defensible option. Appropriate due diligence must be conducted, but a clean due diligence report does not mean that there
business.
■ When sufficient due diligence has been undertaken as
■
In addition to contractual undertakings regarding corruption, you should look for evidence of clear ethical standards and a credible compliance programme within the partner company. Without this it may be possible to manage the risks, but the risk of failure is much greater. Ultimately, the test should be this: is it reasonable to conclude, and do you genuinely believe, that the partner organisation and all staff working in the JV will comply with the relevant anti-corruption policies, procedures and contractual provisions?
GUIDANCE ON THE BRIBERY ACT 2010 FOR THE INFRASTRUCTURE SECTOR
■ Enter into contracts on your behalf. ■ Perform marketing services only. ■ Perform in-country works for you. ■ Provide logistical support for you.
guidance given is necessarily general, and should be interpreted for your specific business. Representative Selection and Appointment The Market ■
■
■ Purchase goods or products from you and then
sell them on to third parties.
■ ■
This guidance is intended to cover any party that your company wishes to have acting on its behalf that is not a direct employee. Such parties are referred to here as ‘representatives’. Depending on the exact relationship, they would very likely be considered your ‘associated persons’ under the Bribery Act. This guidance suggests what should be considered during the relationship with a representative, and describes typical case studies that mat be encountered. An appropriate response is offered for each. Comments have been grouped to reflect the critical periods of a representative relationship: ■
Representative Selection and Appointment.
■
Tender and Contract Award.
■
Representative Remuneration.
■
Renewal and Termination.
The guidance is built around applying a risk based analysis and responding in an appropriate manner to that level of risk. A robust anti-corruption ethics and compliance programme will ensure that an organisation’s reputation will be enhanced and its properly selected representatives will want to maintain that reputation. The comments below set out some key questions regarding the risks you may be running and possible ways to consider mitigating them. The
GUIDANCE ON THE BRIBERY ACT 2010 FOR THE INFRASTRUCTURE SECTOR
■
■
■
Why do you need or want a representative in the market? Does the relationship need to be success fee-based? Could the representative be an employee? Where does the country appear on the TI Corruption Perceptions Index? Have you had previous experience of operating in the market? How long ago? Are there any local legal considerations that need to be taken into account? Who are your clients likely to be and how will work be won - by public tender or negotiated contract?
The Representative ■
■
■
■
■
Why is the representative being selected? Is it for product knowledge, knowledge of procurement processes or other local market factors, or because of contacts within the client organisation? Each raises different questions. How do we select the representative? A single source, perhaps by recommendation, or by competition? Was the representative recommended by a current or targeted client? This would raise further questions. Does the representative have sufficient resources to provide the services required? Does the representative have anything adverse recorded, such as poor press reports from his previous employment or other business engagements?
■
Are there any conflicts of interest?
■
Is it suggested that payment be made offshore?
15
■
How are the fees to be calculated, and are remuneration expectations proportionate to the services offered? Are they market rates in the territory considered, and are they fair and reasonable in your view?
You should consider a process that answers the questions listed plus any others that are relevant. Depending on the risk level identified, a two tier due diligence is ideal: an external independent review in as much depth as the business demands, including business and financial references, a media search and a Companies House equivalent search. This should then be overlaid by the company’s own assessment of the representative’s values and openness. Face to face meetings with the candidates, subsequently recorded, are likely to be essential. The risk assessment created should be the basis for future review meetings and assessment of training needs. The selected representative should commit to operating ethically. A robust Representative Agreement is essential. This should include: ■
■
■
Details of the commercial agreement, the services to be provided and the remuneration.
■
■
■
■
16
In addition to checking the appropriateness of invoices, any payment requested or made in cash should be regarded as a major warning signal. Consideration should also be given to the following: ■
■
■ ■
Is the representative providing the service as originally envisaged?
Is the payment location as previously agreed? Has the representative’s relationship with current or target clients changed?
Ethical performance can be verified by audit of books and records to track expenditure; or a scope of work review to confirm expenditure. Renewal and Termination A structured review of commercial and ethical performance may be necessary as part of your management of the representative.
Details of your audit requirements.
Consider:
Has anything happened since the appointment of the representative? Is the relationship working as envisaged, or has something changed? How have we addressed this? Have the ownership structures of partners (JVs or representatives) changed in the period? Was there anything unusual during the tender phase, for example odd payment location requests, or additional factors not aligned to the project? Is the basis on which the contract was awarded transparent and legitimate?
■
Ethical performance.
■
Remuneration earned.
■
Client perception.
■
Training undertaken.
■
Forthcoming projects identified.
■
Representative ownership structure.
■
■
Scenario 1 A media search shows that a potential representative allegedly received a 25% commission on an order of US$50 million. Those who paid the commission were recently involved in a US Department of Justice case and settled out of court. No public record is available. What do you do?
Does the representative still have the same ownership structure?
Clear representations and warranties regarding anti-corruption and compliance with local and other applicable laws.
Ethical considerations should be made clear at the very first opportunity in a project. Consider the following:
Case Studies
Payment is often made over the life of a project.
Involve your due diligence provider if one is used. Renewal of a representative presents less risk than taking on a new one; but complacency should be avoided.
Tender, Contract Award and the Relationship with the Representative
■
Payment of the Representative
Review of original due diligence including any red flags.
■
What has changed?
■
Audit performance.
Representative Selection and Appointment You should perform due diligence on a potential representative as part of selection.
■ During due diligence you may find that your
Scenario 2 You discover that a Mr X owns 30% of the representative company; and that he is the son of the Minister of the Interior for that country. You ask why he is a shareholder. What does he bring to the company? How involved is the father? The response may be: “I went to school with Mr X” or “You should not be concerned about this as you cannot judge a son by his father”. You do your own check on the father and find that about ten years ago there were suggestions about possible money laundering.
proposed representative has been the subject of negative comment in the press or on the Internet. First consider the legal aspects. Most negative comment turns out to be unsubstantiated. Did it result in a legal process? What was the result? If there was no legal process, you should still consider the reputational aspect. If the figure really was 25% commission does this not inevitably suggest corruption? You should ask the representative: ■ Was this information in the press valid?
What can you tell us about it? ■ What services did the representative
provide to receive 25% commission, which seems excessive? ■ Did the authorities in the country act on this?
If yes, what was the result? If no, why not? The questions listed above will generate further questions. It is rare that one answer closes the issue. The fact that any negative comment has been refuted or has not been substantiated should not be ignored, and the original existence of that negative comment should continue to be a concern until and unless practical and extended experience of working with the representative indicates otherwise. Always consider the risk to your own company’s reputation. That reputation has more value than any one contract or project. A common mistake is to be concerned about upsetting the potential representative: a forthright, open and transparent approach is best.
The extent of due diligence should be appropriate to the representative role, the country of operation and the services to be provided.
GUIDANCE ON THE BRIBERY ACT 2010 FOR THE INFRASTRUCTURE SECTOR
■
GUIDANCE ON THE BRIBERY ACT 2010 FOR THE INFRASTRUCTURE SECTOR
■ As part of due diligence you will want to ascertain
the ownership structure of the potential representative company. The immediate concern you will have is that Mr X’s father may be influencing the award of work to the representative’s clients so that Mr X (and directly or indirectly, his father) obtains a benefit. There is also reputational risk to consider, especially in a developing country, where the elite are typically a small percentage of the population. Think about how this could be misinterpreted after the fact in the media or even in Court. You cannot definitely say the father of Mr X has no influence, so you have the following options: ■ Do not appoint the representative. ■ Only proceed with the representative if the
work you are seeking is in sectors that could not be influenced by Mr X’s father. ■ Ask if they will consider setting up a new
company without his involvement. Consider your risk profile if this course is adopted. ■ Proceed, but insist on full public transparency.
In making this choice it would certainly be necessary to weigh up the potential reputational risk of the relationship; but with full transparency and clear policies and procedures it may be an acceptable risk. If the representative company has something to hide, the demand for full transparency and the requirement for anticorruption procedures may of itself result in a swift end to the discussions and the withdrawal of the representative.
17
■
How are the fees to be calculated, and are remuneration expectations proportionate to the services offered? Are they market rates in the territory considered, and are they fair and reasonable in your view?
You should consider a process that answers the questions listed plus any others that are relevant. Depending on the risk level identified, a two tier due diligence is ideal: an external independent review in as much depth as the business demands, including business and financial references, a media search and a Companies House equivalent search. This should then be overlaid by the company’s own assessment of the representative’s values and openness. Face to face meetings with the candidates, subsequently recorded, are likely to be essential. The risk assessment created should be the basis for future review meetings and assessment of training needs. The selected representative should commit to operating ethically. A robust Representative Agreement is essential. This should include: ■
■
■
Details of the commercial agreement, the services to be provided and the remuneration.
■
■
■
■
16
In addition to checking the appropriateness of invoices, any payment requested or made in cash should be regarded as a major warning signal. Consideration should also be given to the following: ■
■
■ ■
Is the representative providing the service as originally envisaged?
Is the payment location as previously agreed? Has the representative’s relationship with current or target clients changed?
Ethical performance can be verified by audit of books and records to track expenditure; or a scope of work review to confirm expenditure. Renewal and Termination A structured review of commercial and ethical performance may be necessary as part of your management of the representative.
Details of your audit requirements.
Consider:
Has anything happened since the appointment of the representative? Is the relationship working as envisaged, or has something changed? How have we addressed this? Have the ownership structures of partners (JVs or representatives) changed in the period? Was there anything unusual during the tender phase, for example odd payment location requests, or additional factors not aligned to the project? Is the basis on which the contract was awarded transparent and legitimate?
■
Ethical performance.
■
Remuneration earned.
■
Client perception.
■
Training undertaken.
■
Forthcoming projects identified.
■
Representative ownership structure.
■
■
Scenario 1 A media search shows that a potential representative allegedly received a 25% commission on an order of US$50 million. Those who paid the commission were recently involved in a US Department of Justice case and settled out of court. No public record is available. What do you do?
Does the representative still have the same ownership structure?
Clear representations and warranties regarding anti-corruption and compliance with local and other applicable laws.
Ethical considerations should be made clear at the very first opportunity in a project. Consider the following:
Case Studies
Payment is often made over the life of a project.
Involve your due diligence provider if one is used. Renewal of a representative presents less risk than taking on a new one; but complacency should be avoided.
Tender, Contract Award and the Relationship with the Representative
■
Payment of the Representative
Review of original due diligence including any red flags.
■
What has changed?
■
Audit performance.
Representative Selection and Appointment You should perform due diligence on a potential representative as part of selection.
■ During due diligence you may find that your
Scenario 2 You discover that a Mr X owns 30% of the representative company; and that he is the son of the Minister of the Interior for that country. You ask why he is a shareholder. What does he bring to the company? How involved is the father? The response may be: “I went to school with Mr X” or “You should not be concerned about this as you cannot judge a son by his father”. You do your own check on the father and find that about ten years ago there were suggestions about possible money laundering.
proposed representative has been the subject of negative comment in the press or on the Internet. First consider the legal aspects. Most negative comment turns out to be unsubstantiated. Did it result in a legal process? What was the result? If there was no legal process, you should still consider the reputational aspect. If the figure really was 25% commission does this not inevitably suggest corruption? You should ask the representative: ■ Was this information in the press valid?
What can you tell us about it? ■ What services did the representative
provide to receive 25% commission, which seems excessive? ■ Did the authorities in the country act on this?
If yes, what was the result? If no, why not? The questions listed above will generate further questions. It is rare that one answer closes the issue. The fact that any negative comment has been refuted or has not been substantiated should not be ignored, and the original existence of that negative comment should continue to be a concern until and unless practical and extended experience of working with the representative indicates otherwise. Always consider the risk to your own company’s reputation. That reputation has more value than any one contract or project. A common mistake is to be concerned about upsetting the potential representative: a forthright, open and transparent approach is best.
The extent of due diligence should be appropriate to the representative role, the country of operation and the services to be provided.
GUIDANCE ON THE BRIBERY ACT 2010 FOR THE INFRASTRUCTURE SECTOR
■
GUIDANCE ON THE BRIBERY ACT 2010 FOR THE INFRASTRUCTURE SECTOR
■ As part of due diligence you will want to ascertain
the ownership structure of the potential representative company. The immediate concern you will have is that Mr X’s father may be influencing the award of work to the representative’s clients so that Mr X (and directly or indirectly, his father) obtains a benefit. There is also reputational risk to consider, especially in a developing country, where the elite are typically a small percentage of the population. Think about how this could be misinterpreted after the fact in the media or even in Court. You cannot definitely say the father of Mr X has no influence, so you have the following options: ■ Do not appoint the representative. ■ Only proceed with the representative if the
work you are seeking is in sectors that could not be influenced by Mr X’s father. ■ Ask if they will consider setting up a new
company without his involvement. Consider your risk profile if this course is adopted. ■ Proceed, but insist on full public transparency.
In making this choice it would certainly be necessary to weigh up the potential reputational risk of the relationship; but with full transparency and clear policies and procedures it may be an acceptable risk. If the representative company has something to hide, the demand for full transparency and the requirement for anticorruption procedures may of itself result in a swift end to the discussions and the withdrawal of the representative.
17
■
Scenario 3
Contract Award
Your potential representative is a part owner of an elite safari business. Your company’s reason for wanting to appoint this representative is his relationship with senior government officials, who are part of the small ruling elite in the country. The potential representative has no obvious experience in your business field.
■ ■ You need to consider the suitability of that
representative for the territory concerned, and the business you are trying to achieve. Another part of that review should verify that services provided are aligned to the remuneration offered. With no sector experience, there could be a presumption that the appointment is not a proper one. You should consider the increased risk of this type of representative. Typical legitimate representatives are either: ■ Technically aligned - the representative works in
your field. ■ Commercially aligned - he is familiar with the
An organisation should review contracts received that have been won using the services of a representative.
After selection, appointment and contract award this is another area where tight control must be exerted.
Drivers for such a review could include commission value, the country of award, the tender process, the type of award etc. During this review the following scenario may be encountered:
The following scenarios should raise alarm signals:
Funding is to be by a public private partnership, with tolls funding the road for the first 20 years. The individual wishes to purchase a prefabricated bridge from you in connection with the project and asks for a quote to a vague specification that he provides. You provide this quotation and he sends his solicitors to meet you and work out a supply agreement. At that meeting he requests that he becomes your exclusive distributor in that country for a 6% fee. He requests that you resubmit your supply quotation with the additional 6%.
■ Is this the model you wish to operate in
the country? ■ If yes, would you increase their training? ■ If yes, would you increase their review and
audit frequency? ■ What legitimate services would the
representative be performing that would warrant a significant fee?
validity of the ‘project’.
Management of representatives is a difficult area, and requires difficult judgements. This section tries to list the factors that should be considered in dealings with representatives. It is not exhaustive. Representative ethical issues are rarely simple, and one question often leads to another. If in doubt, do not enter into the arrangement. Remember that under the Bribery Act you may be held responsible for the actions of those who act on your behalf:
■ This is a classic red flag indicating corruption:
you should refuse to amend the agreed payment method. Services should be paid for in the country in which the services were rendered. You should explain why you are refusing and update the representative’s risk profile to trigger an immediate review and audit, possibly with more frequent review.
Scenario 6 At time of payment your representative asks to be refunded extra costs incurred in winning the business.
■
■
■
■
You may have been provided with only one piece of formal paperwork. Why is that? The request to supply and then ‘kick back’ 6% is improper. Also you should not accept or commit to a new representative arrangement without completing your due diligence process. You are unlikely ever to determine the real cause of the request for quotation, but the scenario demonstrates that you must first of all be satisfied that any project you supply to is real and genuine.
Another consideration is that such a representative may use informal third parties, eg call on the services of a member of his family to meet a client on a specific issue. If the member of the family is not an employee of the representative company, it is unlikely that your representative agreement will bind him or her. This introduces additional risk.
18
Summary Guidance
■
■
■ In this situation you should seek to determine the
Scenario 5 Your representative requests that you pay some of his fee into an offshore account to pay for his son’s school fees, and the balance to a nominated account at time of selection.
An individual approaches your company with a project that is required by a local regional administration in his country.
■ Relationship aligned - he knows the
A relationship aligned representative presents the highest risk. You should consider the model, not the individual and determine:
■
Scenario 4
relevant procurement process. appropriate people.
Remuneration
■ In this situation you must be very sceptical.
Your team should manage your representative sufficiently that all additional expenditure outside that agreed is controlled and authorised appropriately. As with all expenditure, the extra costs must be supported both by paperwork and reasoning that can be validated. If an additional payment is made, consider requiring a signed declaration by the representative that funds were not used for improper purposes. You may want to update the risk profile, and ensure that members of staff react correctly should this be repeated. Another possibility is a request to pay VAT in a third country. Any such payment should incorporate an audit to ensure that the reasons are genuine.
GUIDANCE ON THE BRIBERY ACT 2010 FOR THE INFRASTRUCTURE SECTOR
GUIDANCE ON THE BRIBERY ACT 2010 FOR THE INFRASTRUCTURE SECTOR
■
■
■
■
■
■
Consider, confirm and document your need for a representative in the market. This should incorporate a review by an independent body as part of due diligence. Know your representative - maintaining personal contact by more than one member of your staff provides assurance. You must be able to trust your representative to act ethically, and this may well imply training. Perform effective risk-based due diligence, and have a selection process and representative management process to suit your business model. This may mean supplementing your own process with a due diligence report by an external provider. Document and publish your process and comply with it. Document your dealings with your representative - you may need to demonstrate that you have followed your process. This should include, for example, details of ethical training provided and reports from your sales team. Identify, document and mitigate other key risk areas. Engage your representative via a binding agreement that addresses not only the role and services to be provided but also ethical responsibilities. Have an exit route - always be prepared to exit either a relationship or a contract, accepting the commercial implications as necessary. Consider a mechanism for checking that remuneration is not excessive. Make your representatives aware of your ethical requirements. Tailor this training to suit the role and document the training. Take legal advice when in doubt about legal considerations.
19
■
Scenario 3
Contract Award
Your potential representative is a part owner of an elite safari business. Your company’s reason for wanting to appoint this representative is his relationship with senior government officials, who are part of the small ruling elite in the country. The potential representative has no obvious experience in your business field.
■ ■ You need to consider the suitability of that
representative for the territory concerned, and the business you are trying to achieve. Another part of that review should verify that services provided are aligned to the remuneration offered. With no sector experience, there could be a presumption that the appointment is not a proper one. You should consider the increased risk of this type of representative. Typical legitimate representatives are either: ■ Technically aligned - the representative works in
your field. ■ Commercially aligned - he is familiar with the
An organisation should review contracts received that have been won using the services of a representative.
After selection, appointment and contract award this is another area where tight control must be exerted.
Drivers for such a review could include commission value, the country of award, the tender process, the type of award etc. During this review the following scenario may be encountered:
The following scenarios should raise alarm signals:
Funding is to be by a public private partnership, with tolls funding the road for the first 20 years. The individual wishes to purchase a prefabricated bridge from you in connection with the project and asks for a quote to a vague specification that he provides. You provide this quotation and he sends his solicitors to meet you and work out a supply agreement. At that meeting he requests that he becomes your exclusive distributor in that country for a 6% fee. He requests that you resubmit your supply quotation with the additional 6%.
■ Is this the model you wish to operate in
the country? ■ If yes, would you increase their training? ■ If yes, would you increase their review and
audit frequency? ■ What legitimate services would the
representative be performing that would warrant a significant fee?
validity of the ‘project’.
Management of representatives is a difficult area, and requires difficult judgements. This section tries to list the factors that should be considered in dealings with representatives. It is not exhaustive. Representative ethical issues are rarely simple, and one question often leads to another. If in doubt, do not enter into the arrangement. Remember that under the Bribery Act you may be held responsible for the actions of those who act on your behalf:
■ This is a classic red flag indicating corruption:
you should refuse to amend the agreed payment method. Services should be paid for in the country in which the services were rendered. You should explain why you are refusing and update the representative’s risk profile to trigger an immediate review and audit, possibly with more frequent review.
Scenario 6 At time of payment your representative asks to be refunded extra costs incurred in winning the business.
■
■
■
■
You may have been provided with only one piece of formal paperwork. Why is that? The request to supply and then ‘kick back’ 6% is improper. Also you should not accept or commit to a new representative arrangement without completing your due diligence process. You are unlikely ever to determine the real cause of the request for quotation, but the scenario demonstrates that you must first of all be satisfied that any project you supply to is real and genuine.
Another consideration is that such a representative may use informal third parties, eg call on the services of a member of his family to meet a client on a specific issue. If the member of the family is not an employee of the representative company, it is unlikely that your representative agreement will bind him or her. This introduces additional risk.
18
Summary Guidance
■
■
■ In this situation you should seek to determine the
Scenario 5 Your representative requests that you pay some of his fee into an offshore account to pay for his son’s school fees, and the balance to a nominated account at time of selection.
An individual approaches your company with a project that is required by a local regional administration in his country.
■ Relationship aligned - he knows the
A relationship aligned representative presents the highest risk. You should consider the model, not the individual and determine:
■
Scenario 4
relevant procurement process. appropriate people.
Remuneration
■ In this situation you must be very sceptical.
Your team should manage your representative sufficiently that all additional expenditure outside that agreed is controlled and authorised appropriately. As with all expenditure, the extra costs must be supported both by paperwork and reasoning that can be validated. If an additional payment is made, consider requiring a signed declaration by the representative that funds were not used for improper purposes. You may want to update the risk profile, and ensure that members of staff react correctly should this be repeated. Another possibility is a request to pay VAT in a third country. Any such payment should incorporate an audit to ensure that the reasons are genuine.
GUIDANCE ON THE BRIBERY ACT 2010 FOR THE INFRASTRUCTURE SECTOR
GUIDANCE ON THE BRIBERY ACT 2010 FOR THE INFRASTRUCTURE SECTOR
■
■
■
■
■
■
Consider, confirm and document your need for a representative in the market. This should incorporate a review by an independent body as part of due diligence. Know your representative - maintaining personal contact by more than one member of your staff provides assurance. You must be able to trust your representative to act ethically, and this may well imply training. Perform effective risk-based due diligence, and have a selection process and representative management process to suit your business model. This may mean supplementing your own process with a due diligence report by an external provider. Document and publish your process and comply with it. Document your dealings with your representative - you may need to demonstrate that you have followed your process. This should include, for example, details of ethical training provided and reports from your sales team. Identify, document and mitigate other key risk areas. Engage your representative via a binding agreement that addresses not only the role and services to be provided but also ethical responsibilities. Have an exit route - always be prepared to exit either a relationship or a contract, accepting the commercial implications as necessary. Consider a mechanism for checking that remuneration is not excessive. Make your representatives aware of your ethical requirements. Tailor this training to suit the role and document the training. Take legal advice when in doubt about legal considerations.
19
The Supply Chain One of the areas of high risk for organisations working in the construction sector is the supply chain: sub-consultants, sub-contractors, suppliers, advisors, etc. In some cases, there may be many of them. Your organisation may have highly effective anti-corruption procedures, but a supplier may commit a corrupt act. You may be unaware that a supplier or subcontractor has paid a bribe to a public official or client’s representative in connection with a project you are working on or bidding for. If this was done with the intention of winning or retaining business, or creating some other business advantage for your company as well as his, and you ought to have been aware of this risk, your company could face prosecution under the Bribery Act. The only defence will be that you can demonstrate that you had in place ‘adequate procedures’ to prevent this happening. As noted above, it is common in construction projects to have a large number of project participants linked together in a complex contractual structure. The greater the complexity, the higher the risk of undetected corruption in the supply chain will be. Each link has its own contractual documentation, and unique risks and difficulties. The resultant contractual cascade could easily have in excess of 1,000 contractual links in a major project, each of which depends to some extent on other contractual links in the chain. In every contractual link, there is an opportunity for someone to pay a bribe in return for an award of the relevant contract. The further down the supply chain, the more difficult it is for the main contractor/consultant to be aware of corrupt activity. There are some steps that can be taken, such as requiring contract provisions to be cascaded down. But unless your company can demonstrate that it has in place adequate procedures against the risk of bribery, it could still face prosecution, in addition to those directly involved, if this was done with the intention of winning or retaining business or creating some other business advantage for your company as well as his, and you should have been aware of this risk.
20
GUIDANCE ON THE BRIBERY ACT 2010 FOR THE INFRASTRUCTURE SECTOR
GUIDANCE ON THE BRIBERY ACT 2010 FOR THE INFRASTRUCTURE SECTOR
As part of a set of adequate procedures, you should consider undertaking an appropriate level of due diligence on suppliers and sub-contractors, in order to assess the risks of corruption and ensure they are taking adequate steps to prevent this happening. In particular, you should consider the use of procurement and contract management procedures, eg preferred supplier lists, that minimise the opportunity for corruption by the supply chain against the organisation. Evaluating and screening sub-consultants, sub-contractors, suppliers and advisors, often in different countries including developing and transitional countries, can be difficult. The Ministry of Justice Guidance acknowledges this and suggests that your procedures may only need to extend to your direct contractors, however we believe that this may not be sufficient in a high-risk environment. Certain steps can and should be considered: ■ ■
■
■
Identify the supply chain as far as possible. Request direct sub-contractors to provide details of their internal anti-corruption programmes and ethics policies and to confirm that they have details of the anti-corruption programmes and ethics policies of their suppliers. Check to see if any of the supply chain known to you have a reputation for corruption (even though they may have no convictions) and ask them to confirm that they have checked that their suppliers do not have a reputation for corruption. Checks can be carried out using internet and media searches, relevant professional institutions and commercial organisations, embassies and contact networks. Check to see if any suppliers are being investigated or prosecuted, or have been convicted or debarred from tendering, for corruption. If so, the organisation should ascertain as far as possible the facts of the case. Ask them to confirm that they have checked that their suppliers are not being investigated or prosecuted, or have been convicted or debarred.
21
The Supply Chain One of the areas of high risk for organisations working in the construction sector is the supply chain: sub-consultants, sub-contractors, suppliers, advisors, etc. In some cases, there may be many of them. Your organisation may have highly effective anti-corruption procedures, but a supplier may commit a corrupt act. You may be unaware that a supplier or subcontractor has paid a bribe to a public official or client’s representative in connection with a project you are working on or bidding for. If this was done with the intention of winning or retaining business, or creating some other business advantage for your company as well as his, and you ought to have been aware of this risk, your company could face prosecution under the Bribery Act. The only defence will be that you can demonstrate that you had in place ‘adequate procedures’ to prevent this happening. As noted above, it is common in construction projects to have a large number of project participants linked together in a complex contractual structure. The greater the complexity, the higher the risk of undetected corruption in the supply chain will be. Each link has its own contractual documentation, and unique risks and difficulties. The resultant contractual cascade could easily have in excess of 1,000 contractual links in a major project, each of which depends to some extent on other contractual links in the chain. In every contractual link, there is an opportunity for someone to pay a bribe in return for an award of the relevant contract. The further down the supply chain, the more difficult it is for the main contractor/consultant to be aware of corrupt activity. There are some steps that can be taken, such as requiring contract provisions to be cascaded down. But unless your company can demonstrate that it has in place adequate procedures against the risk of bribery, it could still face prosecution, in addition to those directly involved, if this was done with the intention of winning or retaining business or creating some other business advantage for your company as well as his, and you should have been aware of this risk.
20
GUIDANCE ON THE BRIBERY ACT 2010 FOR THE INFRASTRUCTURE SECTOR
GUIDANCE ON THE BRIBERY ACT 2010 FOR THE INFRASTRUCTURE SECTOR
As part of a set of adequate procedures, you should consider undertaking an appropriate level of due diligence on suppliers and sub-contractors, in order to assess the risks of corruption and ensure they are taking adequate steps to prevent this happening. In particular, you should consider the use of procurement and contract management procedures, eg preferred supplier lists, that minimise the opportunity for corruption by the supply chain against the organisation. Evaluating and screening sub-consultants, sub-contractors, suppliers and advisors, often in different countries including developing and transitional countries, can be difficult. The Ministry of Justice Guidance acknowledges this and suggests that your procedures may only need to extend to your direct contractors, however we believe that this may not be sufficient in a high-risk environment. Certain steps can and should be considered: ■ ■
■
■
Identify the supply chain as far as possible. Request direct sub-contractors to provide details of their internal anti-corruption programmes and ethics policies and to confirm that they have details of the anti-corruption programmes and ethics policies of their suppliers. Check to see if any of the supply chain known to you have a reputation for corruption (even though they may have no convictions) and ask them to confirm that they have checked that their suppliers do not have a reputation for corruption. Checks can be carried out using internet and media searches, relevant professional institutions and commercial organisations, embassies and contact networks. Check to see if any suppliers are being investigated or prosecuted, or have been convicted or debarred from tendering, for corruption. If so, the organisation should ascertain as far as possible the facts of the case. Ask them to confirm that they have checked that their suppliers are not being investigated or prosecuted, or have been convicted or debarred.
21
Contracts with sub-consultants, sub-contractors, suppliers, advisors, etc should include adequate anti-corruption warranties, and termination and compensation provisions in the event of corruption. Breach of the warranties should entitle the organisation to deny payment under the contract, and to obtain compensation from the appropriate party. One further idea to consider is the use of a ‘project integrity pact’ with sub-consultants, sub-contractors, suppliers and advisors, which is enforced during the bidding and project delivery phases. Each party undertakes to the other parties that it will act with absolute integrity in relation to the project. Compliance with the pact can then be monitored by an independent assessor. The pact should include enforceable sanctions and arbitration mechanisms. You should consider specific training for staff to monitor the supply chain and identify and report warning signs of potentially corrupt activities. Allegations of corrupt practices should be acted on by the organisation and, where relevant, be reported to the authorities and other relevant bodies as soon as possible. In addition, you should consider training employees to identify and report warning signs of potentially corrupt activities by the supply chain.
Case Studies ■
Scenario 1 Tenders are sought from international contractors for the supply and construction of a wind farm at a budgeted cost of £35 million. One of the short-listed contractors identifies a supplier to supply and install the turbines at a cost of £20 million. The agreement between the contractor and the supplier includes an initial advance payment. The contractor has an ethics policy in place. Unknown to the contractor, the CEO of the supplier engages an agent in the project country who claims to have excellent contacts with members of the bid evaluation committee. The agent guarantees the contractor will win the contract, in return for 2.5% of the total contract price, to be paid to the agent’s offshore account once the contractor places the order for the turbines with the supplier. The contractor submits his tender to the Ministry for £33 million and is awarded the contract. The contractor places the order with the supplier for the turbines and the supplier makes a payment to an offshore account for the sum of £825,000. A disgruntled former employee of the supplier blows the whistle on the corrupt payment and the supplier and the contractor are investigated by the SFO. The supplier may be prosecuted for paying a bribe to a foreign official under the Bribery Act 2010, and the contractor may also be prosecuted for failing to have adequate anti-bribery procedures in place.
■ The key question for the contractor is whether
adequate procedures were in place to prevent the bribe happening, or at least significantly reduce the risk of it happening. The contractor did not request the supplier to provide details of his internal anti-corruption programmes and ethics policy and he did not check to see if the supplier had a reputation for corruption (had he checked with contacts in the industry he may have been able to establish this). The supplier’s contract with the contractor was a simple contract that did not include any anti-corruption warranties, termination and compensation rights in the event of corruption. Both failures demonstrate a lack of adequate procedures.
22
GUIDANCE ON THE BRIBERY ACT 2010 FOR THE INFRASTRUCTURE SECTOR
■
Scenario 2 Tenders were invited from international contractors for the construction of 300 km of bitumen highway and associated work. Soon after the award of contract, the Ministry involved issued an amendment to the contract which resulted in a significant increase in the thickness of the bitumen layer, and an increase in the overall contract value by 10%. The contractor was of the view that the changes were not really necessary, but despite his suspicions he did nothing, as he stood to gain financially from the amendment. Unknown to the contractor, the local sub-contractor for the supply and laying of the bitumen had paid a bribe in return for the amendment going through. The contractor is openly accused by one of the other British bidders of paying a bribe to win the contract and the SFO decides to investigate. The contractor may be prosecuted for failing to have adequate anti-bribery procedures in place.
■
Scenario 3 A sheet piling sub-contractor has successfully tendered for work on a major marina development. During construction the sub-contractor makes a deal with the engineer’s clerk of works and the contractor’s site engineer to claim that the sheet piles had to be driven a further two metres into the ground. In exchange for confirming this requirement the contractor's site engineer and the clerk of works are paid £15,000 each by the sub-contractor. The sub-contractor innocently submits a claim to the contractor who in turn submits a claim to the engineer for an additional £200,000 for sheet piling. The engineer investigates the claim by exposing small sections of the sheet pile and finds they have been driven to 13 metres only. The sub-contractor may be prosecuted for bribery under the Bribery Act 2010; the clerk of works and agent’s site engineer may be personally liable to prosecution and the contractor may also be prosecuted for failure to have in place adequate procedures to prevent what was going on.
■ Once again, there appears to be a lack of adequate
procedures. How much work has the British contractor done to establish the probity of the supply chain? What due diligence has been done? The contractor should have raised the issue of the unnecessary contract amendment with senior Ministry officials, ensuring his views were recorded in writing. He would also have been well advised to ask for sight of the sub-contractor’s internal anticorruption programmes and ethics policy before entering into a contract. The contract issued by the contractor to the subcontractor should have included anti-corruption warranties, termination and compensation rights in the event of corruption.
GUIDANCE ON THE BRIBERY ACT 2010 FOR THE INFRASTRUCTURE SECTOR
■ To avoid possible prosecution, the contractor should
have put in place further measures to ensure the probity of the sub-contractor, and in particular should have asked to see the sub-contractor’s internal anti-corruption programmes and ethics policy before entering into the contract. The contractor and the engineer should have screened and trained the site engineer and clerk of works respectively. The contractor should have considered a process for quality checking the site engineer's work.
23
Contracts with sub-consultants, sub-contractors, suppliers, advisors, etc should include adequate anti-corruption warranties, and termination and compensation provisions in the event of corruption. Breach of the warranties should entitle the organisation to deny payment under the contract, and to obtain compensation from the appropriate party. One further idea to consider is the use of a ‘project integrity pact’ with sub-consultants, sub-contractors, suppliers and advisors, which is enforced during the bidding and project delivery phases. Each party undertakes to the other parties that it will act with absolute integrity in relation to the project. Compliance with the pact can then be monitored by an independent assessor. The pact should include enforceable sanctions and arbitration mechanisms. You should consider specific training for staff to monitor the supply chain and identify and report warning signs of potentially corrupt activities. Allegations of corrupt practices should be acted on by the organisation and, where relevant, be reported to the authorities and other relevant bodies as soon as possible. In addition, you should consider training employees to identify and report warning signs of potentially corrupt activities by the supply chain.
Case Studies ■
Scenario 1 Tenders are sought from international contractors for the supply and construction of a wind farm at a budgeted cost of £35 million. One of the short-listed contractors identifies a supplier to supply and install the turbines at a cost of £20 million. The agreement between the contractor and the supplier includes an initial advance payment. The contractor has an ethics policy in place. Unknown to the contractor, the CEO of the supplier engages an agent in the project country who claims to have excellent contacts with members of the bid evaluation committee. The agent guarantees the contractor will win the contract, in return for 2.5% of the total contract price, to be paid to the agent’s offshore account once the contractor places the order for the turbines with the supplier. The contractor submits his tender to the Ministry for £33 million and is awarded the contract. The contractor places the order with the supplier for the turbines and the supplier makes a payment to an offshore account for the sum of £825,000. A disgruntled former employee of the supplier blows the whistle on the corrupt payment and the supplier and the contractor are investigated by the SFO. The supplier may be prosecuted for paying a bribe to a foreign official under the Bribery Act 2010, and the contractor may also be prosecuted for failing to have adequate anti-bribery procedures in place.
■ The key question for the contractor is whether
adequate procedures were in place to prevent the bribe happening, or at least significantly reduce the risk of it happening. The contractor did not request the supplier to provide details of his internal anti-corruption programmes and ethics policy and he did not check to see if the supplier had a reputation for corruption (had he checked with contacts in the industry he may have been able to establish this). The supplier’s contract with the contractor was a simple contract that did not include any anti-corruption warranties, termination and compensation rights in the event of corruption. Both failures demonstrate a lack of adequate procedures.
22
GUIDANCE ON THE BRIBERY ACT 2010 FOR THE INFRASTRUCTURE SECTOR
■
Scenario 2 Tenders were invited from international contractors for the construction of 300 km of bitumen highway and associated work. Soon after the award of contract, the Ministry involved issued an amendment to the contract which resulted in a significant increase in the thickness of the bitumen layer, and an increase in the overall contract value by 10%. The contractor was of the view that the changes were not really necessary, but despite his suspicions he did nothing, as he stood to gain financially from the amendment. Unknown to the contractor, the local sub-contractor for the supply and laying of the bitumen had paid a bribe in return for the amendment going through. The contractor is openly accused by one of the other British bidders of paying a bribe to win the contract and the SFO decides to investigate. The contractor may be prosecuted for failing to have adequate anti-bribery procedures in place.
■
Scenario 3 A sheet piling sub-contractor has successfully tendered for work on a major marina development. During construction the sub-contractor makes a deal with the engineer’s clerk of works and the contractor’s site engineer to claim that the sheet piles had to be driven a further two metres into the ground. In exchange for confirming this requirement the contractor's site engineer and the clerk of works are paid £15,000 each by the sub-contractor. The sub-contractor innocently submits a claim to the contractor who in turn submits a claim to the engineer for an additional £200,000 for sheet piling. The engineer investigates the claim by exposing small sections of the sheet pile and finds they have been driven to 13 metres only. The sub-contractor may be prosecuted for bribery under the Bribery Act 2010; the clerk of works and agent’s site engineer may be personally liable to prosecution and the contractor may also be prosecuted for failure to have in place adequate procedures to prevent what was going on.
■ Once again, there appears to be a lack of adequate
procedures. How much work has the British contractor done to establish the probity of the supply chain? What due diligence has been done? The contractor should have raised the issue of the unnecessary contract amendment with senior Ministry officials, ensuring his views were recorded in writing. He would also have been well advised to ask for sight of the sub-contractor’s internal anticorruption programmes and ethics policy before entering into a contract. The contract issued by the contractor to the subcontractor should have included anti-corruption warranties, termination and compensation rights in the event of corruption.
GUIDANCE ON THE BRIBERY ACT 2010 FOR THE INFRASTRUCTURE SECTOR
■ To avoid possible prosecution, the contractor should
have put in place further measures to ensure the probity of the sub-contractor, and in particular should have asked to see the sub-contractor’s internal anti-corruption programmes and ethics policy before entering into the contract. The contractor and the engineer should have screened and trained the site engineer and clerk of works respectively. The contractor should have considered a process for quality checking the site engineer's work.
23
Clients
Summary Guidance Ask yourself these questions, whose answers will lead you to determine the type of measures to consider when dealing with the supply chain:
The Client is the project owner, and may be from the public or private sector. Whichever it is, there are a number of ways in which a dishonest client, or his employee, agent or representative, can put you in the position of committing an offence under the Bribery Act 2010.
■ Have you worked with the various members of
the supply chain before? ■ What kind of anti-corruption policies do they
have? ■
■ Are they preferred suppliers? ■ What is their reputation in the market? ■ Have you met them and asked them about their
ethical policies and processes? ■ Are they open and transparent in all their
dealings with you?
Scenario 1
Summary Guidance
An influential public sector client has decided to defraud his own Government by falsely inflating the cost of a project he has tendered. After the input of significant resources, your company wins the tender in good faith, but the client then reveals his intention and asks for agreement to share the proceeds.
In all such cases, asking yourself the following questions, and performing the due diligence required to answer them will help you to assess the likely level of risk that you will be faced with corruption: ■
■ Do the contracts include relevant anti-corruption
provisions? ■
■ Have relevant staff members, especially those
■ If your employee or agent agrees to help inflate
with site and certification roles, been trained to be alert to irregularities?
the cost, an offence has been committed and your company may be prosecuted. If he or she does not, you have lost your money and the client may well accuse your company of attempted bribery to conceal his own wrongdoing. Your people may be arrested on trumped-up charges and you may suffer reputational damage and much expense.
■
Scenario 2 A public sector energy client is tendering for a power project in country X. During the tender, an official within the client organisation contacts one of your staff working on the tender and states that in return for a cash payment of $15,000, he will ensure that the contract is awarded to you.
■
■
■
■
Has the client organisation or individual been investigated or prosecuted, or been convicted or debarred for corruption? If not, does the client have a reputation for corrupt behaviour? The local Embassy or High Commission can be helpful here, but it may be desirable to engage a specialist organisation to check. Is there clarity about the main source of funding for the project? Does the client organisation have an anticorruption policy, and are project anti-corruption measures to be implemented? If the project is in a country with a bad reputation for corruption, do your staff on the ground have sufficient training to help them detect wrong doing and deflect bribe-seeking? Does the country concerned have a clear system for reporting bribe-seeking in such a way as to avoid any risk of liability for defamation on the part of the person making the report?
■ To pay the solicited sum would involve the
commission of a criminal offence under the Bribery Act. You should consider the following: ■ Should you withdraw from the tender?
The taint of corruption, even if the sum is not paid, could spread to your business. ■ Should you inform the client at a senior level of
what has happened? ■ Should you inform the local British Embassy, and
perhaps the local police?
24
GUIDANCE ON THE BRIBERY ACT 2010 FOR THE INFRASTRUCTURE SECTOR
GUIDANCE ON THE BRIBERY ACT 2010 FOR THE INFRASTRUCTURE SECTOR
25
Clients
Summary Guidance Ask yourself these questions, whose answers will lead you to determine the type of measures to consider when dealing with the supply chain:
The Client is the project owner, and may be from the public or private sector. Whichever it is, there are a number of ways in which a dishonest client, or his employee, agent or representative, can put you in the position of committing an offence under the Bribery Act 2010.
■ Have you worked with the various members of
the supply chain before? ■ What kind of anti-corruption policies do they
have? ■
■ Are they preferred suppliers? ■ What is their reputation in the market? ■ Have you met them and asked them about their
ethical policies and processes? ■ Are they open and transparent in all their
dealings with you?
Scenario 1
Summary Guidance
An influential public sector client has decided to defraud his own Government by falsely inflating the cost of a project he has tendered. After the input of significant resources, your company wins the tender in good faith, but the client then reveals his intention and asks for agreement to share the proceeds.
In all such cases, asking yourself the following questions, and performing the due diligence required to answer them will help you to assess the likely level of risk that you will be faced with corruption: ■
■ Do the contracts include relevant anti-corruption
provisions? ■
■ Have relevant staff members, especially those
■ If your employee or agent agrees to help inflate
with site and certification roles, been trained to be alert to irregularities?
the cost, an offence has been committed and your company may be prosecuted. If he or she does not, you have lost your money and the client may well accuse your company of attempted bribery to conceal his own wrongdoing. Your people may be arrested on trumped-up charges and you may suffer reputational damage and much expense.
■
Scenario 2 A public sector energy client is tendering for a power project in country X. During the tender, an official within the client organisation contacts one of your staff working on the tender and states that in return for a cash payment of $15,000, he will ensure that the contract is awarded to you.
■
■
■
■
Has the client organisation or individual been investigated or prosecuted, or been convicted or debarred for corruption? If not, does the client have a reputation for corrupt behaviour? The local Embassy or High Commission can be helpful here, but it may be desirable to engage a specialist organisation to check. Is there clarity about the main source of funding for the project? Does the client organisation have an anticorruption policy, and are project anti-corruption measures to be implemented? If the project is in a country with a bad reputation for corruption, do your staff on the ground have sufficient training to help them detect wrong doing and deflect bribe-seeking? Does the country concerned have a clear system for reporting bribe-seeking in such a way as to avoid any risk of liability for defamation on the part of the person making the report?
■ To pay the solicited sum would involve the
commission of a criminal offence under the Bribery Act. You should consider the following: ■ Should you withdraw from the tender?
The taint of corruption, even if the sum is not paid, could spread to your business. ■ Should you inform the client at a senior level of
what has happened? ■ Should you inform the local British Embassy, and
perhaps the local police?
24
GUIDANCE ON THE BRIBERY ACT 2010 FOR THE INFRASTRUCTURE SECTOR
GUIDANCE ON THE BRIBERY ACT 2010 FOR THE INFRASTRUCTURE SECTOR
25
Facilitation Payments A commonly accepted definition of a facilitation payment is ‘a payment for goods or services to which the payer would otherwise be legally entitled’. They are sometimes referred to as ‘speed’ or ‘grease’ payments. They are unofficial payments made to public officials in order to secure or expedite the performance of a routine or necessary action. There is no exemption from the law in respect of facilitation payments. They were illegal under the previous legislation and the common law and remain so under the Bribery Act. Facilitation payments are normally relatively small sums; this may encourage the payer to believe that, because the sum is so insignificant, it somehow does not count. However a facilitation payment is a bribe, regardless of its size, and making such payments potentially leaves the individual, colleagues and the company exposed to prosecution. Moreover, facilitation payments can add up to a very large amount over time. Most attempts at securing facilitation payments are aimed at individuals, either personally or as company employees, and are often demanded for immediate payment. In such cases, the payment should be queried and a receipt requested. If this is denied, ask to speak to the person in charge for justification of the payment required. If payment is still demanded it should be made only if there is no reasonable alternative, and a note should be made with a report back to the home company.
It should be noted that just because non-payment of the facilitation payment would be likely to result in significant loss to the company and/or serious damage to the delivery of the project, payment may not necessarily amount to a public interest factor for not prosecuting. If a payment is made, the amount and the circumstances should be recorded and reported to the company for further action as appropriate with the authorities. The fact that a payment has been made on one occasion should not be taken as setting a precedent for future situations. Even if the circumstances do not offer some defence, if the payment is transparently accounted for in the company’s accounts, and the circumstances causing the payment are accurately recorded and reported to the authorities, the company will have a measure of credibility if it is subsequently questioned by UK enforcement agencies. The illustrative examples that follow are viewed from the perspective of the individual employee who is faced with a demand for a facilitation payment.
Even if the payment is accepted as evidence by the prosecuting authorities, there may be public interest factors for not prosecuting, for example if: ■ ■
■ ■
26
GUIDANCE ON THE BRIBERY ACT 2010 FOR THE INFRASTRUCTURE SECTOR
It was a single small payment. The payment was made in response to threats to the payer, colleagues or families, particularly in a remote location. The payer was in a vulnerable position. There was a clear company policy setting out procedures to follow in such circumstances, which the payer had attempted to follow.
GUIDANCE ON THE BRIBERY ACT 2010 FOR THE INFRASTRUCTURE SECTOR
27
Facilitation Payments A commonly accepted definition of a facilitation payment is ‘a payment for goods or services to which the payer would otherwise be legally entitled’. They are sometimes referred to as ‘speed’ or ‘grease’ payments. They are unofficial payments made to public officials in order to secure or expedite the performance of a routine or necessary action. There is no exemption from the law in respect of facilitation payments. They were illegal under the previous legislation and the common law and remain so under the Bribery Act. Facilitation payments are normally relatively small sums; this may encourage the payer to believe that, because the sum is so insignificant, it somehow does not count. However a facilitation payment is a bribe, regardless of its size, and making such payments potentially leaves the individual, colleagues and the company exposed to prosecution. Moreover, facilitation payments can add up to a very large amount over time. Most attempts at securing facilitation payments are aimed at individuals, either personally or as company employees, and are often demanded for immediate payment. In such cases, the payment should be queried and a receipt requested. If this is denied, ask to speak to the person in charge for justification of the payment required. If payment is still demanded it should be made only if there is no reasonable alternative, and a note should be made with a report back to the home company.
It should be noted that just because non-payment of the facilitation payment would be likely to result in significant loss to the company and/or serious damage to the delivery of the project, payment may not necessarily amount to a public interest factor for not prosecuting. If a payment is made, the amount and the circumstances should be recorded and reported to the company for further action as appropriate with the authorities. The fact that a payment has been made on one occasion should not be taken as setting a precedent for future situations. Even if the circumstances do not offer some defence, if the payment is transparently accounted for in the company’s accounts, and the circumstances causing the payment are accurately recorded and reported to the authorities, the company will have a measure of credibility if it is subsequently questioned by UK enforcement agencies. The illustrative examples that follow are viewed from the perspective of the individual employee who is faced with a demand for a facilitation payment.
Even if the payment is accepted as evidence by the prosecuting authorities, there may be public interest factors for not prosecuting, for example if: ■ ■
■ ■
26
GUIDANCE ON THE BRIBERY ACT 2010 FOR THE INFRASTRUCTURE SECTOR
It was a single small payment. The payment was made in response to threats to the payer, colleagues or families, particularly in a remote location. The payer was in a vulnerable position. There was a clear company policy setting out procedures to follow in such circumstances, which the payer had attempted to follow.
GUIDANCE ON THE BRIBERY ACT 2010 FOR THE INFRASTRUCTURE SECTOR
27
Case Studies ■
Scenario 1 Your employee is visiting country X at an important stage in contract negotiations. An immigration official demands a $50 ‘entry fee’ to allow your employee into his country, even though his or her passport and visa are in order.
■
Scenario 4 A customs official demands a $100 ‘clearance fee’ before he will authorise release of essential project materials.
■ The employee should: ■ The employee should: ■ Politely ask the immigration official where the
notice of requirement for the ‘entry fee’ is displayed. ■ If the official cannot supply official validity of the
entry fee, then politely refuse, stating that paying such a fee would be against UK law, and that you would be liable to legal action on return to the UK. ■ If the official still demands the payment, ask to
see the official’s supervisor. ■ If that is refused, or if the supervisor also asks
for payment, and it is clear that if no fee is paid entry will be denied, pay the fee, and ask for a receipt. Ideally, the receipt should identify the immigration official’s name and relevant identification number. ■ Report the incident to the company as soon as
possible. The company should then decide whether or not to report the incident to the authorities in the country concerned or report the incident to the British Embassy and take their advice.
Scenario 3 A Police Officer demands to see your employee’s passport, but he or she has left it at their hotel. The law of that country requires valid identification papers to be carried at all times. The police officer offers to overlook the offence, in return for a small cash ‘fine’.
■
Scenario 4 Invoices have been submitted on time, and in order, but payment awaits formal sanction ‘in due course’. When pressed, the client’s representative offers to expedite authorisation in return for a payment of $1,000.
■ Politely ask the customs official where the notice
of requirement for the clearance fee is displayed. ■ If the official cannot provide either evidence or
another credible response, then politely refuse, stating that paying such a fee would be against UK law, and you would be liable to legal action on return to the UK. ■ If the official still demands the payment, ask to
see the official’s supervisor. ■ If that is refused, or if the supervisor also
demands payment, and it is clear that without a fee, the project materials will not be released, and the official(s) will not take any responsibility for the materials in the interim, withdraw from the scene, and refer the matter to a senior member of company management for guidance. ■ If your on the spot assessment is that delay
would result in severe commercial risk to the company resulting from damage to, or disappearance of the project materials, pay the fee, and ask for a receipt. Ideally, the receipt should identify the immigration official’s name and relevant identification number. ■ Report the incident to the company as soon as
possible. The company should then decide whether or not to report the incident to the authorities in the country concerned or report the incident to the British Embassy and ask their advice.
28
■
GUIDANCE ON THE BRIBERY ACT 2010 FOR THE INFRASTRUCTURE SECTOR
■ The employee should: ■ Politely apologise for the oversight, and offer to
produce the passport at a police station within an acceptable and agreed timescale. ■ If that is refused, politely ask if a colleague can
be contacted to locate and bring the passport to the Officer’s station. ■ If that is refused, politely ask if the ‘fine’ is part
of a published list of fines - the objective being to try and establish if the ‘spot fine’ is legitimate. ■ Advise the police officer that unless you can be
certain that the ‘fine’ is legitimate, paying would be against UK law, and you would be liable to legal action on return to the UK. ■ If the Police Officer is insistent that an offence
has been committed, then offer to accompany him to a police station, from where you expect to call the local British Embassy and the company for assistance, and if necessary arrange for payment of the fine through official channels. If the employee cannot establish that the ‘fine’ is legitimate, the payment cannot be made. It is a straightforward bribe to alter or defer the action of local legal or governmental action.
GUIDANCE ON THE BRIBERY ACT 2010 FOR THE INFRASTRUCTURE SECTOR
■ The employee should: ■ Politely ask how long it will take for formal
sanction to be released. ■ If the resulting period is significantly longer than
that dictated by the contract, politely remind the client representative of this fact. ■ If this does not result in a commitment to pay
the invoices within a reasonable timeframe, tell the representative that the company will have to formally contact the client organisation at a senior level, and any related international funding institution, to register the company’s objection. ■ Report the situation to higher management.
There is no justification for paying the client’s representative to expedite payment of the outstanding invoices. The incident should be formally reported to the client organisation, and to any related international funding agencies. In this case, the local British Embassy should be informed, and depending on the local circumstances, consideration should be given to contacting the local police.
29
Case Studies ■
Scenario 1 Your employee is visiting country X at an important stage in contract negotiations. An immigration official demands a $50 ‘entry fee’ to allow your employee into his country, even though his or her passport and visa are in order.
■
Scenario 4 A customs official demands a $100 ‘clearance fee’ before he will authorise release of essential project materials.
■ The employee should: ■ The employee should: ■ Politely ask the immigration official where the
notice of requirement for the ‘entry fee’ is displayed. ■ If the official cannot supply official validity of the
entry fee, then politely refuse, stating that paying such a fee would be against UK law, and that you would be liable to legal action on return to the UK. ■ If the official still demands the payment, ask to
see the official’s supervisor. ■ If that is refused, or if the supervisor also asks
for payment, and it is clear that if no fee is paid entry will be denied, pay the fee, and ask for a receipt. Ideally, the receipt should identify the immigration official’s name and relevant identification number. ■ Report the incident to the company as soon as
possible. The company should then decide whether or not to report the incident to the authorities in the country concerned or report the incident to the British Embassy and take their advice.
Scenario 3 A Police Officer demands to see your employee’s passport, but he or she has left it at their hotel. The law of that country requires valid identification papers to be carried at all times. The police officer offers to overlook the offence, in return for a small cash ‘fine’.
■
Scenario 4 Invoices have been submitted on time, and in order, but payment awaits formal sanction ‘in due course’. When pressed, the client’s representative offers to expedite authorisation in return for a payment of $1,000.
■ Politely ask the customs official where the notice
of requirement for the clearance fee is displayed. ■ If the official cannot provide either evidence or
another credible response, then politely refuse, stating that paying such a fee would be against UK law, and you would be liable to legal action on return to the UK. ■ If the official still demands the payment, ask to
see the official’s supervisor. ■ If that is refused, or if the supervisor also
demands payment, and it is clear that without a fee, the project materials will not be released, and the official(s) will not take any responsibility for the materials in the interim, withdraw from the scene, and refer the matter to a senior member of company management for guidance. ■ If your on the spot assessment is that delay
would result in severe commercial risk to the company resulting from damage to, or disappearance of the project materials, pay the fee, and ask for a receipt. Ideally, the receipt should identify the immigration official’s name and relevant identification number. ■ Report the incident to the company as soon as
possible. The company should then decide whether or not to report the incident to the authorities in the country concerned or report the incident to the British Embassy and ask their advice.
28
■
GUIDANCE ON THE BRIBERY ACT 2010 FOR THE INFRASTRUCTURE SECTOR
■ The employee should: ■ Politely apologise for the oversight, and offer to
produce the passport at a police station within an acceptable and agreed timescale. ■ If that is refused, politely ask if a colleague can
be contacted to locate and bring the passport to the Officer’s station. ■ If that is refused, politely ask if the ‘fine’ is part
of a published list of fines - the objective being to try and establish if the ‘spot fine’ is legitimate. ■ Advise the police officer that unless you can be
certain that the ‘fine’ is legitimate, paying would be against UK law, and you would be liable to legal action on return to the UK. ■ If the Police Officer is insistent that an offence
has been committed, then offer to accompany him to a police station, from where you expect to call the local British Embassy and the company for assistance, and if necessary arrange for payment of the fine through official channels. If the employee cannot establish that the ‘fine’ is legitimate, the payment cannot be made. It is a straightforward bribe to alter or defer the action of local legal or governmental action.
GUIDANCE ON THE BRIBERY ACT 2010 FOR THE INFRASTRUCTURE SECTOR
■ The employee should: ■ Politely ask how long it will take for formal
sanction to be released. ■ If the resulting period is significantly longer than
that dictated by the contract, politely remind the client representative of this fact. ■ If this does not result in a commitment to pay
the invoices within a reasonable timeframe, tell the representative that the company will have to formally contact the client organisation at a senior level, and any related international funding institution, to register the company’s objection. ■ Report the situation to higher management.
There is no justification for paying the client’s representative to expedite payment of the outstanding invoices. The incident should be formally reported to the client organisation, and to any related international funding agencies. In this case, the local British Embassy should be informed, and depending on the local circumstances, consideration should be given to contacting the local police.
29
Gifts, Hospitality, Entertainment and Sponsorship
Summary Guidance When an employee is faced with a demand for a facilitation payment, he or she should: ■ Be polite. ■ Avoid threatening language. ■ Be prepared to say no, but only if this is not likely
to provoke a response that could put you at risk.
In all cases, the company decision as to whether or not further action should be taken, and the extent of that action, should take due regard for the personal security of the employee (and other employees of the company) while they are working in the country concerned.
■ If possible, seek advice from company
management - if not possible, take company guidance as being the preferred course of action. ■ Have regard for his or her personal security and
Gifts, hospitality and entertainment are usually distinct, but the distinction may blur where the giver of hospitality or entertainment is not acting as host or is not even present. A gift is something given to the recipient without any consideration, often portrayed as a mark of friendship, appreciation or gratitude, for example a case of wine given to a team of engineers on topping out a building. Hospitality and entertainment are widely accepted behaviour in a business context, for example the business lunch. They can help to develop and strengthen personal and business relationships and contribute to a more effective working relationship.
for that of colleagues and families. ■ If possible, depersonalise any actions taken or
statements made by referring to company policy. ■ Keep detailed notes of related conversations -
with whom and what was said. ■ If there is no reasonable alternative but to pay,
However, gifts, hospitality and entertainment can be inappropriate and may amount to a bribe. This is often a question of the overall context in which the gift or other offering is provided and the underlying purpose behind it. Any question of what is reasonable needs to take into account the considerable differences between cultures. However, your organisation’s policies will almost certainly have to prohibit certain activities that may be acceptable in certain cultures, such as giving cash or cash equivalents.
assess the impact on the company, project, and corporate reputation resulting from non-payment, and act accordingly. ■ Report the details to the company without delay. ■ Wherever possible, report the details to the local
British Embassy, and request details of follow-up action taken.
Gifts, hospitality and entertainment can amount to a bribe where they are intended to influence commercial or contractual transactions, or interactions with public officials. Perceptions are very important and anything that may create a perception that it intended to influence a transaction or decision should be avoided.
this is appropriate to the relationship and the circumstances, including the geographical location. ■
■ ■
■
■
■
■
■
30
GUIDANCE ON THE BRIBERY ACT 2010 FOR THE INFRASTRUCTURE SECTOR
The reason for the gift, hospitality or entertainment. Is it to influence improperly?
■
■
■
The context in which it is made. Is it given in the context of seasonal celebration, or in the build up to the award of a contract? Whether the gift, etc imposes an actual or implied obligation on the recipient. Whether the gift etc is given openly and, if required by the recipient or giver’s company/organisation rules, whether it is disclosed. The nature and value of the gift etc and whether
GUIDANCE ON THE BRIBERY ACT 2010 FOR THE INFRASTRUCTURE SECTOR
How the gift etc would be perceived by others. Whether the gift etc conforms to the recipient’s rules, including local laws and regulations in respect of gifts to public officials. The recipients - does the gift etc extend to relatives/friends of a business contact?
Sponsorship in the sense of sponsoring things like events or buildings in return for name recognition, is a perfectly legitimate form of marketing, but may give rise to similar issues. Unlike a gift, the sponsorship of an event, award, conference etc is given with the intent of receiving a reciprocal benefit. These benefits may be legitimate, for example raising brand awareness, but it is important that the sponsorship arrangements are not used or perceived to be used to gain an improper advantage or for personal gain. The following should be considered when evaluating sponsorship opportunities:
Ask yourself about the following: ■
The frequency with which gifts and entertainment are given to a recipient.
■
There should be a written sponsorship agreement that clearly sets out the benefits associated with the sponsorship. Any benefits received should be commensurate with the value of the sponsorship. Sponsorship arrangements should not be entered into during a tender period, where the proposed sponsor may be bidding for work offered by the recipient of the sponsorship or where there is potential for some other conflict of interest. No commission or benefits-in-kind should be offered or accepted by individuals for personal or professional gain in connection with a sponsorship deal. Benefits received by the company, for example, free tickets to an event, should be used appropriately. If it is intended to offer them to guests, the company’s gifts and entertainment policy should be followed, including in respect of travel/ accommodation costs associated with attending an event.
31
Gifts, Hospitality, Entertainment and Sponsorship
Summary Guidance When an employee is faced with a demand for a facilitation payment, he or she should: ■ Be polite. ■ Avoid threatening language. ■ Be prepared to say no, but only if this is not likely
to provoke a response that could put you at risk.
In all cases, the company decision as to whether or not further action should be taken, and the extent of that action, should take due regard for the personal security of the employee (and other employees of the company) while they are working in the country concerned.
■ If possible, seek advice from company
management - if not possible, take company guidance as being the preferred course of action. ■ Have regard for his or her personal security and
Gifts, hospitality and entertainment are usually distinct, but the distinction may blur where the giver of hospitality or entertainment is not acting as host or is not even present. A gift is something given to the recipient without any consideration, often portrayed as a mark of friendship, appreciation or gratitude, for example a case of wine given to a team of engineers on topping out a building. Hospitality and entertainment are widely accepted behaviour in a business context, for example the business lunch. They can help to develop and strengthen personal and business relationships and contribute to a more effective working relationship.
for that of colleagues and families. ■ If possible, depersonalise any actions taken or
statements made by referring to company policy. ■ Keep detailed notes of related conversations -
with whom and what was said. ■ If there is no reasonable alternative but to pay,
However, gifts, hospitality and entertainment can be inappropriate and may amount to a bribe. This is often a question of the overall context in which the gift or other offering is provided and the underlying purpose behind it. Any question of what is reasonable needs to take into account the considerable differences between cultures. However, your organisation’s policies will almost certainly have to prohibit certain activities that may be acceptable in certain cultures, such as giving cash or cash equivalents.
assess the impact on the company, project, and corporate reputation resulting from non-payment, and act accordingly. ■ Report the details to the company without delay. ■ Wherever possible, report the details to the local
British Embassy, and request details of follow-up action taken.
Gifts, hospitality and entertainment can amount to a bribe where they are intended to influence commercial or contractual transactions, or interactions with public officials. Perceptions are very important and anything that may create a perception that it intended to influence a transaction or decision should be avoided.
this is appropriate to the relationship and the circumstances, including the geographical location. ■
■ ■
■
■
■
■
■
30
GUIDANCE ON THE BRIBERY ACT 2010 FOR THE INFRASTRUCTURE SECTOR
The reason for the gift, hospitality or entertainment. Is it to influence improperly?
■
■
■
The context in which it is made. Is it given in the context of seasonal celebration, or in the build up to the award of a contract? Whether the gift, etc imposes an actual or implied obligation on the recipient. Whether the gift etc is given openly and, if required by the recipient or giver’s company/organisation rules, whether it is disclosed. The nature and value of the gift etc and whether
GUIDANCE ON THE BRIBERY ACT 2010 FOR THE INFRASTRUCTURE SECTOR
How the gift etc would be perceived by others. Whether the gift etc conforms to the recipient’s rules, including local laws and regulations in respect of gifts to public officials. The recipients - does the gift etc extend to relatives/friends of a business contact?
Sponsorship in the sense of sponsoring things like events or buildings in return for name recognition, is a perfectly legitimate form of marketing, but may give rise to similar issues. Unlike a gift, the sponsorship of an event, award, conference etc is given with the intent of receiving a reciprocal benefit. These benefits may be legitimate, for example raising brand awareness, but it is important that the sponsorship arrangements are not used or perceived to be used to gain an improper advantage or for personal gain. The following should be considered when evaluating sponsorship opportunities:
Ask yourself about the following: ■
The frequency with which gifts and entertainment are given to a recipient.
■
There should be a written sponsorship agreement that clearly sets out the benefits associated with the sponsorship. Any benefits received should be commensurate with the value of the sponsorship. Sponsorship arrangements should not be entered into during a tender period, where the proposed sponsor may be bidding for work offered by the recipient of the sponsorship or where there is potential for some other conflict of interest. No commission or benefits-in-kind should be offered or accepted by individuals for personal or professional gain in connection with a sponsorship deal. Benefits received by the company, for example, free tickets to an event, should be used appropriately. If it is intended to offer them to guests, the company’s gifts and entertainment policy should be followed, including in respect of travel/ accommodation costs associated with attending an event.
31
Case Studies
■
Scenario 1 X is employed in a full-time site inspection role on a construction site. Periodically during his time on site he is offered gifts and entertainment from the contractor including wine and cinema tickets. X accepts these gifts, as he believes that they are small tokens of the contractor’s appreciation for the long hours that he has worked on site, and for assisting the contractor to meet deadlines by doing so.
■
■
X’s company has a register for any gifts/ entertainment received; but as the gifts have been of relatively low value he has not registered them. About 12 months into the project, the developer discovers that the contractor has made an error in construction and that this had not been notified or addressed by X.
■
■
■ X has put himself in a vulnerable situation even
though he accepted the gifts in good faith. There may be legitimate reasons why the error has not been dealt with by X, but there may be a perception that X has been unduly influenced by the gifts from the contractor to act in the contractor’s interests. In such a situation, an individual should consider the reason for the gifts and the context in which they are made. Although individually the gifts may not be of significant value, it is important to consider the number of gifts that are received in a relatively short period of time and their cumulative value. The individual should comply with his employer’s policy and specific guidance on gifts, consulting with senior management as appropriate and recording any gifts he receives in the company register as required. He should recognise that in a situation where he has a role in monitoring the performance of a contractor, any gift from that contractor may put him under an implied obligation and is very likely to be perceived as inappropriate in the circumstances.
32
■
A University invites applications for a company to sponsor a new award at their annual award ceremony to recognise academic contributions to the built environment. B, an engineering company, is considering sponsoring this as Mr A, the CEO of B, is an alumnus of the university and his son has an application pending for next year. Mr A has also heard rumours that the University has recently received funding for the development of a new laboratory facility which he would be interested in tendering for. B submits an application to provide $10,000 to sponsor the award on the following conditions:
The case studies that follow illustrate some of the issues arising from gifts, hospitality, entertainment and sponsorship and suggest ways in which different situations might be dealt with: ■
Scenario 2
That B will be able to have a display at the awards ceremony to market their business.
Some of the conditions that B has attached to their sponsorship offer could be perceived as an attempt to gain an improper advantage. B will need to carefully evaluate whether it is appropriate for Mr A to attend the awards ceremony as it could be perceived that Mr A is using the sponsorship of the awards for personal gain (a place for his son) by seeking to leverage the sponsorship deal to meet with the head of admissions. B should be careful not to use the sponsorship deal to gain access to the head of procurement at the University as this may be perceived as an attempt to secure an improper advantage in any up-coming tender for the laboratory facility. The other conditions that B is seeking to impose would also need to be evaluated taking into the account the value of their sponsorship, in particular whether it is appropriate for six people from B to attend and whether the costs of their travel are reasonable for the University to meet.
GUIDANCE ON THE BRIBERY ACT 2010 FOR THE INFRASTRUCTURE SECTOR
Summary Guidance
A distributorship company (‘X’) acted as representative for suppliers/manufacturers of mechanical equipment. The distributor organised and paid for flights to the city where the factory was located, to enable the client’s engineer to see the plant.
When a gift, hospitality, entertainment or sponsorship is offered:
While in the city, the client’s engineer was treated to a sports event, again at the distributor’s expense. Several years later an action was brought claiming that specifications were drawn up in such a way to favour X and to exclude the particular supplier bringing the action. The individual client’s engineer who had been given the entertainment by the distributor acting for X was named as a party to the action.
That B will have naming rights in respect of the new award.
The University pay the reasonable travel and accommodation costs of six delegates from B to travel to the event. It is Mr A’s intention that he will attend the awards ceremony and will request to meet the head of admissions for the university.
Scenario 3
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Although the individual involved had not acted dishonestly, he allowed himself to be put in a very exposed position, where the wrong inferences could be drawn about the reasons behind the hospitality and entertainment. In any such situation, the individual should consider all the factors set out above, including the reason for the gift, hospitality or entertainment and the context in which it is made, in particular whether it might be perceived as affecting the outcome of a business decision or transaction. He should consider what the legitimate business purpose is for any hospitality or travel expenses and how such hospitality or expenses would be perceived by others. He should follow his employer’s policy and specific guidance on the matter, consulting as appropriate with management. He should also consider how his actions could be misconstrued. Ask yourself this: what would I think if I read about it in the newspapers?
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Know the policy and procedures of your company in relation to gifts, hospitality, entertainment and sponsorship and comply with them. If offered gifts, hospitality or entertainment, give careful consideration to the reason for which gifts etc are made and the overall context in which they are made - could they be perceived as affecting the outcome of a business transaction? Consider the nature and value of the gift or other offer and how it would be perceived by others. Consult with your manager as appropriate or as required in the policy and procedures. If having considered all the relevant factors, it is concluded that the gift or other offer may be accepted, make sure that any required disclosures are made in the company register. In any proposed sponsorship, consider the overall context in which the sponsorship is offered and make sure that it cannot be perceived as an attempt to gain an improper advantage. Make sure there is a written sponsorship agreement setting out the benefits associated with the sponsorship and that any benefits received are to the company, not to the individual, and are in proportion to the value of the sponsorship deal.
In cases like this, most organisations will have a policy making clear that free travel and hospitality should be declined, or can only be accepted if it is reasonable and necessary for the performance of the invitee’s duties. A useful test would be to ask yourself whether the invitee’s employer would be willing to pay the travel and hospitality expenses. In such circumstances, only hospitality that is modest and relevant to the permitted purpose should be accepted.
GUIDANCE ON THE BRIBERY ACT 2010 FOR THE INFRASTRUCTURE SECTOR
33
Case Studies
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Scenario 1 X is employed in a full-time site inspection role on a construction site. Periodically during his time on site he is offered gifts and entertainment from the contractor including wine and cinema tickets. X accepts these gifts, as he believes that they are small tokens of the contractor’s appreciation for the long hours that he has worked on site, and for assisting the contractor to meet deadlines by doing so.
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X’s company has a register for any gifts/ entertainment received; but as the gifts have been of relatively low value he has not registered them. About 12 months into the project, the developer discovers that the contractor has made an error in construction and that this had not been notified or addressed by X.
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■ X has put himself in a vulnerable situation even
though he accepted the gifts in good faith. There may be legitimate reasons why the error has not been dealt with by X, but there may be a perception that X has been unduly influenced by the gifts from the contractor to act in the contractor’s interests. In such a situation, an individual should consider the reason for the gifts and the context in which they are made. Although individually the gifts may not be of significant value, it is important to consider the number of gifts that are received in a relatively short period of time and their cumulative value. The individual should comply with his employer’s policy and specific guidance on gifts, consulting with senior management as appropriate and recording any gifts he receives in the company register as required. He should recognise that in a situation where he has a role in monitoring the performance of a contractor, any gift from that contractor may put him under an implied obligation and is very likely to be perceived as inappropriate in the circumstances.
32
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A University invites applications for a company to sponsor a new award at their annual award ceremony to recognise academic contributions to the built environment. B, an engineering company, is considering sponsoring this as Mr A, the CEO of B, is an alumnus of the university and his son has an application pending for next year. Mr A has also heard rumours that the University has recently received funding for the development of a new laboratory facility which he would be interested in tendering for. B submits an application to provide $10,000 to sponsor the award on the following conditions:
The case studies that follow illustrate some of the issues arising from gifts, hospitality, entertainment and sponsorship and suggest ways in which different situations might be dealt with: ■
Scenario 2
That B will be able to have a display at the awards ceremony to market their business.
Some of the conditions that B has attached to their sponsorship offer could be perceived as an attempt to gain an improper advantage. B will need to carefully evaluate whether it is appropriate for Mr A to attend the awards ceremony as it could be perceived that Mr A is using the sponsorship of the awards for personal gain (a place for his son) by seeking to leverage the sponsorship deal to meet with the head of admissions. B should be careful not to use the sponsorship deal to gain access to the head of procurement at the University as this may be perceived as an attempt to secure an improper advantage in any up-coming tender for the laboratory facility. The other conditions that B is seeking to impose would also need to be evaluated taking into the account the value of their sponsorship, in particular whether it is appropriate for six people from B to attend and whether the costs of their travel are reasonable for the University to meet.
GUIDANCE ON THE BRIBERY ACT 2010 FOR THE INFRASTRUCTURE SECTOR
Summary Guidance
A distributorship company (‘X’) acted as representative for suppliers/manufacturers of mechanical equipment. The distributor organised and paid for flights to the city where the factory was located, to enable the client’s engineer to see the plant.
When a gift, hospitality, entertainment or sponsorship is offered:
While in the city, the client’s engineer was treated to a sports event, again at the distributor’s expense. Several years later an action was brought claiming that specifications were drawn up in such a way to favour X and to exclude the particular supplier bringing the action. The individual client’s engineer who had been given the entertainment by the distributor acting for X was named as a party to the action.
That B will have naming rights in respect of the new award.
The University pay the reasonable travel and accommodation costs of six delegates from B to travel to the event. It is Mr A’s intention that he will attend the awards ceremony and will request to meet the head of admissions for the university.
Scenario 3
■
■
■
■
■
■
Although the individual involved had not acted dishonestly, he allowed himself to be put in a very exposed position, where the wrong inferences could be drawn about the reasons behind the hospitality and entertainment. In any such situation, the individual should consider all the factors set out above, including the reason for the gift, hospitality or entertainment and the context in which it is made, in particular whether it might be perceived as affecting the outcome of a business decision or transaction. He should consider what the legitimate business purpose is for any hospitality or travel expenses and how such hospitality or expenses would be perceived by others. He should follow his employer’s policy and specific guidance on the matter, consulting as appropriate with management. He should also consider how his actions could be misconstrued. Ask yourself this: what would I think if I read about it in the newspapers?
■
■
Know the policy and procedures of your company in relation to gifts, hospitality, entertainment and sponsorship and comply with them. If offered gifts, hospitality or entertainment, give careful consideration to the reason for which gifts etc are made and the overall context in which they are made - could they be perceived as affecting the outcome of a business transaction? Consider the nature and value of the gift or other offer and how it would be perceived by others. Consult with your manager as appropriate or as required in the policy and procedures. If having considered all the relevant factors, it is concluded that the gift or other offer may be accepted, make sure that any required disclosures are made in the company register. In any proposed sponsorship, consider the overall context in which the sponsorship is offered and make sure that it cannot be perceived as an attempt to gain an improper advantage. Make sure there is a written sponsorship agreement setting out the benefits associated with the sponsorship and that any benefits received are to the company, not to the individual, and are in proportion to the value of the sponsorship deal.
In cases like this, most organisations will have a policy making clear that free travel and hospitality should be declined, or can only be accepted if it is reasonable and necessary for the performance of the invitee’s duties. A useful test would be to ask yourself whether the invitee’s employer would be willing to pay the travel and hospitality expenses. In such circumstances, only hospitality that is modest and relevant to the permitted purpose should be accepted.
GUIDANCE ON THE BRIBERY ACT 2010 FOR THE INFRASTRUCTURE SECTOR
33
Annex A: Anti-Bribery Resources There are many organisations active in producing specific help for companies seeking to strengthen their defences against corruption. The following are most likely to be of help to the Infrastructure Sector:
34
GUIDANCE ON THE BRIBERY ACT 2010 FOR THE INFRASTRUCTURE SECTOR
Transparency International
www.transparency.org
Transparency International UK
www.transparency.org.uk
Global Infrastructure Anti-Corruption Centre
www.giaccentre.org
Business Anti-Corruption Portal
www.business-anti-corruption.com
UK Department for Business Innovation & Skills
www.bis.gov.uk/anticorruption
UK Department of Justice
www.justice.gov.uk
International Chamber of Commerce
www.iccwbo.org/policy
International Business Leaders Forum
www.iblf.org
UN Global Compact
www.unglobalcompact.org
World Economic Forum
www.weforum.org/issues/partnering-against-corruption-initiative
GUIDANCE ON THE BRIBERY ACT 2010 FOR THE INFRASTRUCTURE SECTOR
35
Annex A: Anti-Bribery Resources There are many organisations active in producing specific help for companies seeking to strengthen their defences against corruption. The following are most likely to be of help to the Infrastructure Sector:
34
GUIDANCE ON THE BRIBERY ACT 2010 FOR THE INFRASTRUCTURE SECTOR
Transparency International
www.transparency.org
Transparency International UK
www.transparency.org.uk
Global Infrastructure Anti-Corruption Centre
www.giaccentre.org
Business Anti-Corruption Portal
www.business-anti-corruption.com
UK Department for Business Innovation & Skills
www.bis.gov.uk/anticorruption
UK Department of Justice
www.justice.gov.uk
International Chamber of Commerce
www.iccwbo.org/policy
International Business Leaders Forum
www.iblf.org
UN Global Compact
www.unglobalcompact.org
World Economic Forum
www.weforum.org/issues/partnering-against-corruption-initiative
GUIDANCE ON THE BRIBERY ACT 2010 FOR THE INFRASTRUCTURE SECTOR
35
www.anticorruptionforum.org.uk British Expertise 10 Grosvenor Gardens London SW1W 0DH T: 0207 828 1920 mail@britishexpertise.org Price: ÂŁ20
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