BreakbulkEurope Alexandra Wrage. President, TRACE International 20 May 2015 Antwerp, Belgium

Transcription

1 BreakbulkEurope 2015 Alexandra Wrage President, TRACE International 20 May 2015 Antwerp, Belgium Raising the Standard of Anti-Bribery Compliance Worldwide 2015 TRACE International, Inc.

2 Anti-Bribery Trends More More enforcement actions More expensive investigations (WalMart) More - and larger penalties (Siemens) More prison sentences (15 years) More countries involved More diplomatic pressure More international cooperation Raising the Standard of Anti-Bribery Compliance Worldwide 2015 TRACE 5/28/2015 International, Inc. 2

3 Anti-Bribery Enforcement - US Over 100 companies are currently the subject of an ongoing and unresolved FCPA-related investigation. Nearly 90 percent of FCPA cases involve conduct by 3rd parties. All 2014 corporate resolutions involved allegations concerning third parties (such as distributors, channel partners, consultants, agents). Rise of international, multi-agency cooperation, and increasing global enforcement. More compliance is expected of companies each year. Improving transparency across supply and marketing chains requires collaboration. Raising the Standard of Anti-Bribery Compliance Worldwide 2015 TRACE 5/28/2015 International, Inc. 3

4 Top 10 FCPA-Related Monetary Settlements Siemens (Germany): $800 million in 2008 Alstom (France): $772 million in 2014 KBR / Halliburton (USA): $579 million in 2009 BAE (UK): $400 million in 2010 Total S.A. (France): $398 million in 2013 Alcoa (USA): $384 million in 2014 Snamprogetti Netherlands B.V. / ENI S.p.A.(Holland/Italy): $365 million in 2010 Technip S.A. (France): $338 million in 2010 Weatherford (Switzerland): $253 million in 2013 JGC Corporation (Japan): $218.8 million in 2011 Raising the Standard of Anti-Bribery Compliance Worldwide 2015 TRACE International, Inc.

5 What do companies view as their most significant anti-bribery compliance challenge? 9.5% 5.4% 8.1% 18.9% 58.1% Understanding government expectations when evaluating adequacy of compliance programs Gifts, hospitality and entertainment Third party due diligence Supply and marketing chain compliance Dealing with state-owned enterprises 58.1% Raising the Standard of Anti-Bribery Compliance Worldwide 5/28/ TRACE International, Inc. 5

6 Costs of Bribes to Third Parties Puts company s value and reputation at risk Loss of current and future business with principals Creates uncertainty in commercial transactions Slippery slope Fosters a permissive atmosphere for other business crimes Fraud and money laundering Undermines employee confidence in management Costs companies millions of dollars each year to investigate and settle bribery charges. Raising the Standard of Anti-Bribery Compliance Worldwide 5/28/ TRACE International, Inc. 6

7 Third Parties Face Fines Panalpina World Transport and Panlapina Inc. (2010) Global logistics firm for multinational corporations Bribes to customs officials to clear equipment and goods in at least seven countries: Angola, Azerbaijan, Brazil, Kazakhstan, Nigeria, Russia and Turkmenistan. Settled with the DOJ and SEC for $70.5 million. Investigation radiated out from center Raising the Standard of Anti-Bribery Compliance Worldwide 5/28/ TRACE International, Inc. 7

8 Anti-Corruption Risk in Project Cargo Raising the Standard of Anti-Bribery Compliance Worldwide 5/28/ TRACE International, Inc. 8

9 Types of Risk At ports, shipowners and shipmasters face numerous illegal demands: in / out charge for the smooth passage of the vessel Marlboro Canal Opaque ownership of ships Officials working in ports are: Isolated Underfunded Working without the benefit of exposure to any compliance practices Raising the Standard of Anti-Bribery Compliance Worldwide 2015 TRACE International, Inc.

10 Increasing Transparency Among Shipping Parties Shipowners Disclose true beneficial ownership Share information about their compliance programs Obtain certification to demonstrate commitment to transparency Charterers Vet both upstream and downstream partners Can state preference for shipowners and technical shipmanagers that commit to transparency. Use compliance ratings as part of risk management vessel selection criteria Raising the Standard of Anti-Bribery Compliance Worldwide 2015 TRACE International, Inc.

11 Increasing Transparency Among Shipping Parties, cont d Third Party Technical Ship Managers Should certify themselves Ensuring that they have the appropriate processes and procedures in place to be able to support a vessel owner and communicate a strong message to everyone in their supply chain. Port Agents Face extortionate demands at ports. Should access training and other resources of the companies they represent. Comply with their customers request for transparent and ethical business conduct Raising the Standard of Anti-Bribery Compliance Worldwide 2015 TRACE International, Inc.

12 Benefits of Compliance Raising the Standard of Anti-Bribery Compliance Worldwide 5/28/ TRACE International, Inc. 12

13 Demand for Compliance and Transparency Your global business partners: are under pressure to have checks and controls in place to detect unlawful behavior by their suppliers, vendors, etc. will require you to demonstrate your good practices and transparency. Companies who adopt effective compliance programs will have a competitive advantage over competitors. Raising the Standard of Anti-Bribery Compliance Worldwide 5/28/ TRACE International, Inc. 13

14 Benefits of Compliance Programs 1. Enhance Company s Reputation 2. Marketing and Promotional Value 3. Create a Culture of Good Governance 4. Increase Employee Confidence in Management 5. Reduce Liability if Something Goes Wrong 6. Deter and Prevent Inappropriate Payments, Fraud and Money laundering 7. Detect Inappropriate Demands 8. Avoid Related Bookkeeping Anomalies 9. Avoid Costs Associated with Investigations and Settlements Raising the Standard of Anti-Bribery Compliance Worldwide 5/28/ TRACE International, Inc. 14

15 Key Elements of a Compliance Program A sound program need not be expensive or require extraordinary internal resources, but it should have: A Clear Message from the Top Code of Conduct and Anti-Bribery & Corruption Policy Employee Training Incentives and Consequences for Violations Anonymous Reporting Mechanism/Complaints Mailbox or Hotline Raising the Standard of Anti-Bribery Compliance Worldwide 5/28/ TRACE International, Inc. 15

16 A Concise Written Policy Effective anti-bribery policies address prohibited behavior simply, concisely and unambiguously. Policies should define clearly the prohibited behavior. Policies should include a prohibition on retaliation against employees who bring violations to the attention of management. Policies should include a prohibition on facilitation payments. Flat prohibitions can save companies money. Raising the Standard of Anti-Bribery Compliance Worldwide 5/28/ TRACE International, Inc. 16

17 Compliance Tools & Resources Raising the Standard of Anti-Bribery Compliance Worldwide 5/28/ TRACE International, Inc. 17

18 Ascertaining Best Practices The OECD s Good Practice Guidance U.K. Serious Fraud Office Guidance DOJ & SEC Resource Guide to the Foreign Corrupt Practices Act UN Office on Drugs and Crime: An Anti-Corruption Ethics and Compliance Programme for Business: A Practical Guide Publications/2013/ _Ebook.pdf World Bank: Fighting Corruption Through Collective Action A Guide for Business: antic/whole_guide_oct.pdf Raising the Standard of Anti-Bribery Compliance Worldwide 2015 TRACE 5/28/2015 International, Inc. 18

19 Written Policies UNODC Database ( Anti-corruption policies and measures of the Fortune Global 500 UN TRACK ( Tools & Resources for Anti-Corruption Knowledge Gift and Hospitality Guidelines ( The US Department of State maintains per diem thresholds for almost all cities, broken down by meals, accommodation and incidentals. Raising the Standard of Anti-Bribery Compliance Worldwide 2015 TRACE 5/28/2015 International, Inc. 19

20 Training Tools TRACE Training Video Toxic Transactions: Bribery, Extortion & the High Price of Bad Business Global Infrastructure Anti-Corruption Center (GIACC) Anti- Corruption Training Manual Training manual designed for infrastructure, construction, and engineering sectors. RESIST Training Tools Pamphlet providing brief scenarios aimed at training employees to avoid extortion & online video tool ( Raising the Standard of Anti-Bribery Compliance Worldwide 5/28/ TRACE International, Inc. 20

21 Other Resources OAS s Anti-Corruption Portal of the Americas Provides model laws, training programs and tools categorized by topic. Group of States Against Corruption (GRECO) Offers resources for sharing best practices, as well as reports on anticorruption legislation and enforcement in member states. Raising the Standard of Anti-Bribery Compliance Worldwide 5/28/ TRACE International, Inc. 21

22 TRACEcertification It means that you or your company have completed a comprehensive due diligence process administered by TRACE, the world s leading anti-bribery standard setting organization. Certification by TRACE signifies that you have completed internationally accepted due diligence procedures and have been forthcoming and cooperative during the review process. The successful completion of TRACEcertification demonstrates your commitment to commercial transparency, allowing you to serve as a valued business partner to multinational companies. Raising the Standard of Anti-Bribery Compliance Worldwide 2014 TRACE International, Inc. 22

23 What is TRACEcertification? A detailed due diligence review. Includes anti-bribery training, which is now required by most multinational companies. Results in certification by TRACE, an internationally respected anti-bribery standard setting organization. Certified companies own their verified due diligence reports and have the ability to share them with an unlimited number of global partners. Raising the Standard of Anti-Bribery Compliance Worldwide 2015 TRACE International, Inc. 23

24 Value of TRACEcertification to Project Cargo Industry Save time and enhance reputation Quickly and efficiently share your compliance information with current and potential business partners. Showcase your commitment to anti-bribery and supply chain compliance with an internationally recognized compliance credential. Win new contracts by getting ahead of your competitors with TRACEcertification. Raising the Standard of Anti-Bribery Compliance Worldwide 2015 TRACE International, Inc. 24

25 About TRACE The world s leading anti-bribery standard setting organization. Internationally recognized and respected provider of third party due diligence and shared-cost anti-bribery compliance solutions. Hundreds of multinational members and thousands of TRACE Certified small & medium-sized enterprises around the world. Continuously benchmarking to provide actionable information. Raising the Standard of Anti-Bribery Compliance Worldwide 2015 TRACE International, Inc. 25

26 Annapolis New York Dubai Manila Visit us online at facebook.com/traceinternational twitter.com/trace_inc youtube.com/traceinternational linkedin.com/company/ TRACE-international-inc. Raising the Standard of Anti-Bribery Compliance Worldwide 5/28/ TRACE International, Inc. 26