Transcript Document

TRAC: TRANSPRENCY IN REPORTING OF
Bribery & Corruption
IPCAA Compliance Seminar 2014
NH Vienna Airport Hotel
‘Compliance, Transparency and Disclosure’
March 18th 2014
Nick Maxwell, Transparency International UK
Transparency International
Founded in 1993
Chapters in over 100 countries
Specialist anti-corruption NGO
Transparency International’s Approach:
• Zero tolerance
• Corruption has victims
• Any bribery embeds corruption in the system
• Fighting corruption often requires collective action to achieve
systemic change
Corruption and Bribery
What is corruption?
“The abuse of entrusted power for private gain”
What is bribery?
“The offering, promising, giving, accepting or soliciting of an
advantage as an inducement for an action which is illegal,
unethical or a breach of trust.”
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How Does Bribe Paying Happen?
Grand
Corruption
(Large
bribes)
Offsets
Facilitation
payments
Benefits &
Perks to
Relatives
Gifts
Employing
of Relatives
Hospitality
Bribery
Education &
Training
Projects
Political
donations
In-kind help
&
Charitable
donations
support
Enhanced
Copyright Transparency International UK 2011
Agents
commissions
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Five Types of Risks (MoJ)
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•
•
•
Country Risk
Sectoral Risk
Transactional Risk
Business Opportunity Risk
Business Partnership Risk
• Also legal/ regulatory framework
risks
Corruption Perception Index (CPI) 2013
Global Corruption Barometer
Global Corruption Barometer 2013
Bribe Payers Index
THE SCALE OF THE PROBLEM
1. Historically, bribery has
been very common.
2. Companies have challenges
with adequate procedures.
3. Regulation is rapidly
increasing worldwide.
4. It is part of a wider trend.
5. Changing attitudes from
regulators, JV partners,
auditors.
The tightening net
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Legislation and Regulation increasing
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UNCAC Anti-corruption Laws
• Signatories encouraged to criminalise:
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Passive bribery of all public officials
Illicit enrichment
Abuse of function
Trading in influence
Private sector bribery and embezzlement
Money laundering and concealment of assets
• Whistleblower reporting and protection measures
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Common features of anti-bribery laws
•
•
•
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They seek to punish bribe givers and takers
Extra-territoriality
Criminal offence
Foreign public officials
Penalties for individuals and organisations
Corporate liability
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UK Bribery Act
“It is correct to describe the Act as the
most draconian anti-bribery law.”
Vivian Robinson QC, General Counsel, Serious Fraud
Office (UK)
• Came into force on 1 July 2011
• Several tiers of liability:
– Personal
– Corporate
– Director and Officer
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UK Bribery Act
• Introduces four new offences:
1.
2.
3.
4.
The offering, promising or giving of an advantage with the
intent to induce a person to act improperly
Requesting, agreeing to receive, accepting of an advantage
intending that a function be performed improperly
Bribery of a foreign public official
Failure by a commercial organisation to prevent a bribe being
paid for or on its behalf.
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UK Bribery Act
– Applies to any British citizen or “person with a close
connection with” the UK
– Covers bribe-paying anywhere in the world
– Covers bribes of any size
– Applies to any company if it has commercial
operations in the UK
– Extends to ‘associated persons’
– Personal liability (up to 10 years in jail)
– Corporate liability (unlimited fines)
– Director & Officer liability
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Managing Risks
Risks
• Legal
– Prosecution
– Fines and imprisonment
– Large legal and compliance costs.
• Organisational
– Loss of focus – takes up management time
– Huge internal disruption
• Reputational
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–
–
–
Loss of face
Brand reputation damage
Loss of Key Customers
decrease in morale
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SOLVING THE PROBLEM
You must have…
1. An active corruption risk assessment process
2. Full support of your top leadership
3. Detailed policies, procedures and training
4. A genuine approach to whistleblowers
5. Serious monitoring & review at Board level
Serious challenges remain for companies
EXAMPLE:
GLOBAL DEFENCE COMPANIES
• Detailed analysis of
company ethics and anticorruption programmes
• 129 large companies
• Only 1 company in Band A
• 70% of the companies
have inadequate
programmes
CONCLUSIONS
1. Anti-bribery regulation is rapidly increasing
worldwide.
2. The UK Bribery Act is important; but just one of
several legislative developments globally
3. There is a wider global trend of corporate
transparency and citizen reporting.
4. Companies generally have challenges in
adequate procedures against corruption.
5. A strong ethics and a-c programme is essential.
Pharmaceuticals & healthcare
• In 2012, Global spending on health was $7.2 trillion.
• An estimated 10% - 25% of global spending on health public
procurement was lost to corruption (Global Corruption report,
TI, 2006).
• Out of a global survey of over 114,000 people, on average,
45% believed medical and health services to be corrupt or
extremely corrupt (The Global Corruption Barometer 2013)
• In 17 countries surveyed in 2013, over 70% of the public
believed medical and health services to be corrupt or
extremely corrupt –
these are Serbia; Albania; Tanzania; Bulgaria; Kyrgyzstan; Morocco; Ukraine;
Bosnia and Herzegovina; Russia; Egypt; Greece; Lithuania; Mongolia; Kosovo;
Malawi; Moldova; Mozambique
(The Global Corruption Barometer 2013)
Pharmaceuticals & healthcare
• What can research do?
Examples from the TI Network
• TI Georgia – research around lack of competition in the
Pharmaceutical sector, drug prices soared and disposable
income. Average household spending 34% of its disposable
income on healthcare.
• TI Slovakia – research and advocacy around competitive
bidding for Slovakian public health procurement and
potential savings of EUR35 million identified.
• TI Uganda – ICT implementation project for Health Service
Delivery. Empowering communities, improving accountability
and communication between service providers and users
GUIDANCE FROM TI
Available at www.transparency.org.uk
TI Pharmaceuticals & healthcare programme
Further information
James Sale
Pharmaceuticals and Healthcare Programme
Transparency International UK
[email protected]
www.transparency.org.uk - www.transparency.org