How to become anti-bribery compliant

Remaining blasé about foreign corrupt practices law is an increasingly risky game, warns Audine Bartlett, a senior associate at Carter Newell Lawyers.

She notes that many Australian companies, especially those in the resources sector, operate in some of the least transparent jurisdictions in the world, where it is de rigueur for business to be “facilitated” with bribes and public sector corruption is endemic.

She says a company will be especially vulnerable if:

  • It operates in multiple medium to high risk jurisdictions.
  • Relies on third party intermediaries or agents to do business.
  • Lacks a rigorous internal anti-corruption compliance process.

In a recent issues paper, Bartlett observes: “Until more recently, the Australian government has paid scant attention to the activities of Australian companies abroad. In fact, the Organisation for Economic Co-operation and Development (OECD) is ‘seriously concerned’ by Australia’s lack of bribery convictions, with just a single case leading to prosecution out of 28 referrals in 13 years. The level of enforcement is simply not commensurate with the risk profile of Australian companies.”

But she believes times are clearly changing. “Companies participating in corrupt practices could now find themselves in the spotlight of Australian and overseas anti-corruption regulators as a greater emphasis is being placed on cross border co-operation between law enforcement agencies,” she says.

There are a range of actions a company can take to become anti-bribery compliant and to safeguard against prosecution from anti-corruption regulators. Bartlett recommends the following compliance measures:

  • Establishing an executive/managerial level commitment of “zero tolerance” towards bribery that filters throughout the organisation and influences the company culture as a whole.
  • Establishing a corporate policy that imposes a blanket ban on the use of facilitation payments. If operating in multiple jurisdictions, this enables companies to manage the risks more effectively.
  • Conducting regular (at least yearly) anti-corruption training for all staff (including contractors and secondees) on all aspects of foreign corrupt practices law relevant to the jurisdictions in which the company operates. General training should be mandatory as part of the induction process for new employees. However, employees in high risk roles (for example, procurement, project approvals and gas marketing) may require more specialised training.
  • Developing a comprehensive (and well-resourced) company compliance program with nominated internal anti-bribery specialists who can keep, implement and improve the compliance system as required. If the company moves into new jurisdictions or undertakes new activities the compliance program will need to be reviewed. The compliance program needs clear corporate guidelines for gift giving, entertainment and hosting which are easily accessible to all personnel (including the company’s agents and contractors).
  • Devising standard anti-bribery and business ethics provisions in all contracts (for example, based on the Australian, UK and US laws) and which stipulate that all contractor/service provider’s subcontracts need to be back-to-backed.
  • Conducting adequate research on prospective third party intermediaries (and prospective joint venture partners) to determine: their past operating practices; whether they have any history of foreign corrupt practices; their commercial standing; their known affiliations; whether they are accurately representing their technical/professional capabilities; and if they have an adequate compliance program in place.

Bartlett adds that if you are considering engaging an intermediary, the following should put you on “red alert”:

  • They request payments are to be made to offshore bank accounts.
  • The business it is normally engaged in differs from what you are engaging it for.
  • The terms of contract are vague and ambiguous.
  • Unreasonably large commissions or discounts.
  • The intermediary is related to a foreign official or was recommended by a foreign official.

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