1. Private Sector Integrity Obligations World Bank UEA 2014

2. Actors of clean business practices Business Government Trade Union and Civil society World Bank UEA April 2014 2

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5. Integrity policies from the business side: agenda  Introduction : prevention of corruption in the private sector  I) The advantages of acting responsibly  II) History of compliance programs: from voluntary to mandatory  III)Compliance Programs  IV) Training World Bank UEA April 2014 5

6. I. Business incentive for companies: why implementing compliance programs? World Bank UEA April 2014 6  Reputation management  Portfolio diversification  Operational efficiency gains  Compliance with internationally recognised principles and standards  Access to new markets  Attracting and retaining talent  Increase in added value for consumers

7. SMEs ? World Bank UEA April 2014 7  OCDE 2014: « Risk Management and Corporate Governance »  Cost of risk management failures is underestimated  After the financial crisis, companies (essentially MNE) have started to pay more attention  All should pay more attention to ex-ante identification of risks

8. Business Incentives in public procurement: Mitigating the debarment risk World Bank UEA April 2014 8

9. 9 Sanctions applied to all entities controlled by the Respondent

10. Voluntary Disclosure Program  « In exchange for a Participant committing to and satisfying its obligations under the VDP Terms & Conditions, the World Bank’s sanction for a Participant’s disclosed past Misconduct is the financial obligation imposed on the Participant under the VDP Terms & Conditions. This sanction will not be publicized or communicated by the Bank to any third party. The Bank will not seek the Participant’s debarment for its, or its current or former officers’, employees’, or agents’ involvement in disclosed Misconduct that occurred prior to the Participant joining the VDP » World Bank UEA April 2014 10

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12. II. Origin of compliance programs Under U.S. law, corporations are responsible for the wrongdoing of their employees. E.g.1977 : Adoption of the Foreign Corrupt Practices Act : « it requires these companies to have an adequate systems of internal accounting controls » and anti-bribery rules. In November 1991, the U.S. Sentencing Commission promulgated the Federal Sentencing Guidelines for Organizations (FSGO) which offers reduced sentences for corporate offenders that cooperated with investigators and/or established effective compliance and ethics programs to promote respect for the law. World Bank UEA April 2014 12

13. Today’s International framework 1997 : Convention on Combating Bribery (OCDE, 38 countries) 2005: (UNCAC) UN Convention against corruption 2009 (OCDE) Recommendations for further Combating Foreign Bribery, encourage companies to develop and adopt adequate internal controls, ethics and compliance programmes or measures for the purpose of preventing and detecting foreign bribery. World Bank UEA April 2014 13

14. Anti-corruption framework in the EU European Union’s anticorruption policy, outlined in Article 29 of the Treaty on European Union and carried out via two main instruments: the Convention on the Protection of the European Communities' Financial Interests (1995) and the Convention against Corruption Involving European Officials or Officials of Member States of the European Union (1997). Public Procurement Directives : automatic debarment for corrupt and fraudulent practices World Bank UEA April 2014 14

15. Generalization of compliance programs in countries International instruments such as conventions mandate that Countries criminalise and punish a variety of corrupt practices. Relevant domestic laws have a direct impact on business, especially in countries where laws require the establishment of liability of legal persons for corrupt acts. World Bank UEA April 2014 15

16. UK Bribery Act 2010 World Bank UEA April 2014 16 The Act has a near- universal jurisdiction, allowing for the prosecution of an individual or company with links to the United Kingdom, regardless of where the crime occurred. Described as "the toughest anti- corruption legislation in the world”. Targets: crimes of bribery, being bribed, the bribery of foreign public officials, and the failure of a commercial organization to prevent bribery on its behalf.

17. Compliance programs World Bank UEA April 2014 17

18. Definition of compliance programs  In general, compliance means conforming to a rule, such as a specification, policy, standard or law.  Due to the increasing number of regulations and need for operational transparency, organizations are adopting the use of consolidated and harmonized sets of compliance controls.  A compliance program is composed by the internal programs and policy decisions made by a company in order to meet the standards set by government laws and regulations or any other soft law requirements. + remediate misconduct World Bank UEA April 2014 18

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20. OECD MNE Guidelines  Most comprehensive government backed instrument in existence today. The Guidelines cover all major areas of business ethics.  Originally adopted in 1976, updated five times since then, most recently in 2011  Their recommendations are set out in 11 chapters and cover topics such as information disclosure, human rights, employment and labour, environment, anti-corruption, and consumer interests. The Guidelines also encompass three areas - science and technology, competition, and taxation - not as fully covered by any other international corporate responsibility instrument.  the OECD Principles of Corporate Governance. World Bank UEA April 2014 20

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22. Examples of Integrity Pacts:  a pact governing all contracts involved in the construction of Berlin’s new international airport – a €2.4 billion project. This pact was agreed between the company that runs the airport, Flughafen Berlin-Schönefeld GmbH, and our chapter in Germany.  Since 2002, our chapter in Mexico has implemented pacts in over 100 contracts worth US$ 30 billion. It has also emphasised the use of independent monitors, dubbed ‘social witnesses’, and since 2004 the country’s Public Administration Authority has made social witnesses mandatory for public contracts above a certain threshold.  Our chapter in Pakistan introduced integrity pacts in 2000, in the Greater Karachi Water Supply project implemented under the responsibility of the Karachi Water and Sewerage Board. The chapter monitored the bidding process for the design and supervision of the project and recommended a series of procedures that were maintained for the remaining contracts of the project, which was completed ahead of schedule at a total cost US$10 million less than initially estimated. World Bank UEA April 2014 22

23. Corporate internal Policies: Develop an effective Program when bidding on government contracts  Know the law  Perform risks assessment  Due diligence of employees  Restrict arrangements with former Public officials  Limit, control and monitor: gifts, hospitality, entertainment, travel and expenses.  Limit, control and monitor Political contributions  Monitor charitable donations & sponsorships  Keep records  Due diligence re: business Partners World Bank UEA April 2014 23

24. Promotion of compliance programs  Chambers of Commerce  Professional organisations  Trade Unions World Bank UEA April 2014 24

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26. TR World Bank UEA April 2014 26

27. Training For the private sector World Bank UEA April 2014 27

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