OGP Training Template on combatting corruption

1. OGP Training Templateon combatting corruption • General Presentation

2. Disclaimer The use of this document is subject to agreement with the following disclaimer: "Whilst every effort has been made to ensure the accuracy of the information contained in this publication, neither the OGP nor any of its members past present or future warrants its accuracy or will, regardless of its or their negligence, assume liability for any foreseeable or unforeseeable use made thereof, which liability is hereby excluded. Consequently, such use is at the recipient’s own risk on the basis that any use by the recipient constitutes agreement to the terms of this disclaimer. The recipient is obliged to inform any subsequent recipient of such terms." NB This slide is not an integral part of the template presentation

3. Introduction Welcome to the OGP Training Template on Combatting Corruption. The template has been prepared to assist OGP Membership in preparing their staff in how to identify and address issues relating to potential corruption in day-to-day business. It may be used in full or in part as required and has been prepared in an ‘editable’ style so that it can be amended and adapted for specific use, to reflect individual company approaches to this important topic. At specific points in the template, text boxes, highlighted in yellow, have been inserted. These are intended as points where it might be appropriate to insert company-specific information in a training exercise or event. Although the template has been designed and reviewed by a cross-section of the OGP membership, we would welcome any feed-back you may have on the material and suggestions for improvement and adaptation are always welcome. Comments can be sent to the OGP Secretariat (john.campbell@ogp.org.uk) directly or be transmitted via your OGP Member representative. NB This slide is not an integral part of the template presentation

4. Tools • Slide presentation • Written policies, codes, manuals, guidelines • Case studies presented during training sessions • Discussion • Feedback and suggestions Opportunity for teachers to understand problems and doubts; questions important to direct further improvement An interesting way to convey messages and plunge employees into possible concrete situations

5. How to make a training programme effective • Make sure employees at all levels are involved, • Carefully disseminate written materials, including codes of conduct and primers • Use regular questionnaires and discussions to test employees’ comprehension and commitment

6. Purpose The purpose of training is to help employees understand the fundamental ethical problems encountered in industry, identify what tends to be the easy (but ineffective) way out of an ethical dilemma and pinpoint the difficulties in confronting problems. Provide information on where assistance can be found within the company

7. Areas covered • Company values • Company approach to corruption • Facilitating Payments • Gifts, hospitality and payments • Dealings with third parties • Violations reporting • Helpline

8. Company Values • List and explain values that constitute the baseline for the company’s activity • Compliance with company’s values is expected from employees at all times • Strong message from top management

9. TOP MANAGEMENT COMMITMENT “Compliance with the law and honesty and integrity in our dealings with others are not to be sacrificed in the name of profits. Management does not and will not condone any such action. Our success will be attained through compliance with the law, dealings evidencing fairness and integrity and a commitment to quality” Example

10. Code of conduct Reference to Company’s Code of conduct whereby ethics principles have paramount importance in the way the company conducts business • We Comply with Applicable Laws • Observe High Standards of Business and Personal Ethics This is the only way we do business

11. What is bribery? Options: [insert definition of applicable legislation], or [insert definition from company’s policies], or [insert definition deemed understandable by employees] [give examples, relevant to company/employees’ experience and practice, of what would be considered as a bribery]

12. Applicable laws The United States of America Foreign Corrupt Practices Act of 1977 (FCPA) FCPA prohibits: • Corruptly offering/giving anything of value: • To foreign government officials (including employees of government owned companies), foreign political parties and candidates, and employees of public international organizations • Directly or Indirectly • To influence any act or decision of such officials in their official capacity or in violation of their lawful duties or to secure any improper advantage • To obtain or retain business • Exceptions: • Reasonable and bona fide expenses • Legal under the written laws of the foreign country Could insert slides on other applicable laws

13. Applicable laws Many countries (UK, France, Canada, Italy, Japan, etc.) have adopted anticorruption legislationwith respect to international transactions followingsignature of the 1997 OECD Convention. The main features of the Convention are: • Bribery of a foreign official is prohibited • Companies accountable for employees’ conduct • No guidance on Facilitating Payments (each country to handle as appropriate) • International cooperation enhanced in judicial enforcement

14. Why is bribery not acceptable? • Breach of law • Breach of ethics • Breach of company’s values • Bad for business: • Affects competition • Induces lower product quality standard • Unstable economic/political environment

15. Bribes and kickbacks • Not permitted • If proven, company’s disciplinary action will be undertaken Dismissal and/or prosecution Need to consider local employment law constraints on dismissal and use of information to prosecute

16. Facilitating payments: definition [Small] payment made to secure or expedite performance of a routine or necessary action to which the payer of the facilitation payment has legal or other entitlement Note: In certain jurisdictions, FPs are tolerated, under certain conditions; however, the line between a facilitation payment and bribe is thin. If the company’s policy allows FPs, in case of doubt ASK FOR ADVICE! For further information, refer to TRACE “High cost of small bribes”

17. Facilitating payments Examples of what is considered to be routine governmental action: • Obtaining permits, licences, or other official documents to qualify a person to do business in a foreign country • Processing governmental paper (eg visas, work orders) • Providing police protection, mail pickup, and delivery • Scheduling inspections associated with contract performance or related to cross-country transit of goods • Providing phone service, power, and water supply • Loading and unloading cargo or protecting perishable products or commodities from deterioration

18. Facilitating PaymentsCompany policy elements • Options: A) Allowed in accordance with law B) Strictly controlled, accounted for as FP and only made with the advance guidance of the Legal/Compliance Department C) Actively discouraged, prohibited if illegal D) Totally prohibited (whether legally permitted or not)

19. Easier said than done… How to handle demands ? Staff safety at risk Staff safety not at risk Safety first; if obliged to pay then: Report payment explaining circumstances; Company to report to appropriate local authorities Always comply with policy

20. Gifts, hospitality and expenses • See principle in Code of Conduct or company guidelines (if relevant) • Define : • Gift: money, goods, services or loans given ostensibly as a mark of friendship, or appreciation • Hospitality includes entertaining, meals, receptions, tickets to entertainment, social or sports events, participation in sporting events, such activities being given or received to initiate or develop a relationships between business people • Expense: provision or reimbursement to a public officer of travel and other related expenses incurred in connection with a promotional visit or contract with a government

21. Gifts, hospitality and expenses How to handle: (Options) • Within upper limits set in policy • Management approvals in advance • Appropriateness to business practice • Obligation to report • Registry of gifts • Make them openly (secrecy would raise suspicion)

22. Gifts, hospitality and expenses • Company may prohibit any giving of gifts, hospitality or other expenses that could influence or be perceived to be capable of influencing a contractual or material transaction. Take into account cultural differences, and local customs, allow some flexibility Need guidance? Refer to [Compliance], [Counsel], [Policy…]

23. Dealings with third parties Bribery can take place through agents and intermediaries; Company can also be held liable for acts of Joint Venture partners or other third parties bound by contractual relationship

24. Dealings with third parties • For the purposes of company policy, third parties may include: • Agents, Consultants, Sponsors • Joint Ventures, Consortium or Shareholder Agreements • Marketing, Sales Representations, Licence Agreements • Subcontracts where third party will perform majority of work • Agreements in accordance with company policy and guidelines; must be reviewed by [Legal,] [Compliance], [Finance],… • Selection of other party must be subject to “Due Diligence” investigation and senior management approval to exclude discretion and ensure transparency in selection process

25. Dealings with third parties Beware Red Flags: • Payments under relevant contracts are requested to be made in a country with a wide spread history of corruption; • A third party refuses to confirm that he will abide by the provisions of Company’s Compliance Policy; • An agent has family or business ties with government officials; • An agent has a bad reputation in the business community; • An agent requires that his identity not be disclosed; • A government official recommends the agent; • An agent makes unusual requests such as a request to backdate or alter invoices;

26. Dealings with third partiesRed flags (cont’d) • An agent is new to the business or lacks the facilities and staff to perform the required services; • An agent asks for payment by unorthodox or convoluted means such as through bank accounts outside the country where the services are being offered; • An agent requests cheques to be made out to "bearer" or "cash" or requests payments to be made in cash or some other anonymous form; • There are multiple middlemen performing the same task; • An agent asks for commissions that are substantially higher than the "going rate" in that country or requests unusually large bonuses or substantial up-front payments.

27. What to do if a Red flag is identified • Report concern to [legal], [compliance], [superior] • Conduct (or monitor) further review to ascertain that red flag does not hide actual concern • Keep process and findings documented • Address (if possible or appropriate) in contract, with assistance of Legal

28. Violations reporting • Employees’ cooperation is a key contribution for improving compliance • Company policies and standards of business conduct should encourage employee reporting • No retribution • (Whistle-blowing protection?) [consider legal implications and cultural issues]

29. How do I report a violation? • Refer to [Compliance function], [legal], [audit] • Make anonymous reporting to [set details] • Hotline • Ensure that allegations are investigated by the appropriate group • Ensure that a record of each investigation is maintained