What are  Adequate Procedures
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What are Adequate Procedures ? ACFE March 1st 2011 Robert Barrington PowerPoint PPT Presentation


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What are Adequate Procedures ? ACFE March 1st 2011 Robert Barrington Director of External Affairs, Transparency International UK. Key features of the UK Bribery Act. Result of external pressure on UK government ‘ By no means stricter than …other OECD member states’ Extra-territorial

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What are Adequate Procedures ? ACFE March 1st 2011 Robert Barrington

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What are Adequate Procedures?

ACFE

March 1st 2011

Robert Barrington

Director of External Affairs, Transparency International UK


Key features of the UK Bribery Act

  • Result of external pressure on UK government

  • ‘By no means stricter than …other OECD member states’

  • Extra-territorial

  • Corporate liability


Adequate Procedures

  • A legal defence for ‘failure to prevent bribery’ [Bribery Act, section 7]

  • Outlined in UK Government Guidance

  • Not a defence for a company that has knowingly paid a bribe


What is adequate?


1. The Six PrinciplesTransparency International’s view


Six Principles

  • Tone from the Top

  • Risk assessment

  • Detailed Policies & Procedures

  • Implementation

  • Due diligence

  • Monitoring & Review


2. Corruption risk-mapping


Corruption Perceptions Index


Corruption Perceptions Index

  • Ranks countries 1-180

  • Scores countries 0-10

  • Measures perceptions of public sector corruption

  • 133 countries score less than 5 out of 10

  • 2010 best performers: NZ, Denmark, Singapore, Finland, Sweden

  • 2010 worst performers: Somalia, Myanmar, Afghanistan

  • Undertaken annually


Bribe Payers Index 2008

Country’s companies least likely to pay bribes

  • 22 countries ranked representing 75% of global exports of goods and services and outflows of foreign direct investment in 2006.

  • Based on responses of 2,742 senior business executives from companies in 26 developed and developing countries, chosen by the volume of imports and inflows of foreign direct investment.

  • Conducted every two years

Country’s companies most likely to pay bribes


Bribe Payers Index: high-risk sectors

Bribery of Public Officials by Sectors 2008

  • Worst performers

    • Public works contracts & construction5.2

    • Real estate & property development5.7

    • Oil & gas5.9

    • Heavy manufacturing6.0

    • Mining6.0

  • Best performers

    • Banking & finance7.1

    • Fisheries7.1

      likelihood of companies in each sector to bribe public officials [possible scores range from 0 to 10. 0 represents the view that ‘bribes are almost always paid’ and 10 that ‘bribes are never paid’ by a sector] – extract below of best and worst performers. Source? TI Bribe Payers Index 2008


Global Corruption Barometer

  • Citizen’s view of corruption in their own countries

  • Opinion survey of 77,000 citizens conducted in c.75 countries

  • Every two years


Where are bribes paid? [source: Global Corruption Barometer 2010]


Perceptions and reality: CPI vs GCB?[source: Corruption Perceptions Index & Global Corruption Barometer 2010]


Other risk areas

  • Country risk

  • Sectoral risk

  • Transaction risk – eg licences, permits, procurement

  • Opportunity risk – eg high-value contracts

  • Partnership risk – eg joint ventures, local agents


3. Adequate Procedures tools


Business Principles for Countering Bribery

  • High-level principles

  • Developed by TI

  • Multi-stakeholder process

  • Similar to PACI and ICC


Definitions


Adequate Procedures Guidance


20-point ABC checklist

  • Board member’s airport checklist

  • Global comparison score in your sector [Materials]:

    • number of companies reviewed: 46

    • highest score: 45 points; 5 stars

    • lowest score: 0 points; 0 stars

    • median average score: 18


4. Conclusions


Conclusions

  • Don’t pay bribes

  • Tone from the top

    • corporate culture

    • zero tolerance approach

  • Fully analyse and understand the risks

  • Put in place a robust anti-corruption system

  • Don’t rely solely on the government guidance

  • Don’t pay bribes


Documents and links available at:

www.transparency.org

www.transparency.org.uk

www.adequateprocedures.org.uk


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