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

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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  1. What are Adequate Procedures? ACFE March 1st 2011 Robert Barrington Director of External Affairs, Transparency International UK

  2. 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

  3. 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

  4. What is adequate?

  5. 1. The Six PrinciplesTransparency International’s view

  6. Six Principles • Tone from the Top • Risk assessment • Detailed Policies & Procedures • Implementation • Due diligence • Monitoring & Review

  7. 2. Corruption risk-mapping

  8. Corruption Perceptions Index

  9. 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

  10. 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

  11. Bribe Payers Index: high-risk sectors Bribery of Public Officials by Sectors 2008 • Worst performers • Public works contracts & construction 5.2 • Real estate & property development 5.7 • Oil & gas 5.9 • Heavy manufacturing 6.0 • Mining 6.0 • Best performers • Banking & finance 7.1 • Fisheries 7.1 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

  12. 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

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

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

  15. 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

  16. 3. Adequate Procedures tools

  17. Business Principles for Countering Bribery • High-level principles • Developed by TI • Multi-stakeholder process • Similar to PACI and ICC

  18. Definitions

  19. Adequate Procedures Guidance

  20. 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

  21. 4. Conclusions

  22. 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

  23. Documents and links available at: www.transparency.org www.transparency.org.uk www.adequateprocedures.org.uk

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