Bribery is the act of offering, promising, agreeing, accepting or soliciting cash or anything of value (gratification), for the purpose of influencing a decision or action, in order to retain or obtain business.
Corruption comes in many forms. Bribery, embezzlement, money-laundering, patronage, cronyism, extortion and obstruction of justice are some systemic corruption activities that are carried out by persons entrusted with positions of authority, who abuse that power for personal gains.
Risks of corruption and bribery are identifiable in almost any situation. As the Malaysian Anti-Corruption Commission Act’s Section 17A corporate liability provision has been enacted and its imminent enforcement in June 2020, it is a company’s impetus to ensure adequate procedures are in place to deter the potential or actual occurrence of such offences. The leadership of an organization must be the first in line to disclaim all unethical business practices. With that, the leadership is going to spearhead and have ownership of their organization’s compliance program that generally carries the best practices as provided under the said Guidelines to Adequate Procedures pursuant to Section 17A Subsection (5) of the MACCA.
Those adequate procedures are contextualized as follows:
1. Set up a taskforce to introduce a compliance program
Like a team, all functional departments that come together to structure the organization’s compliance program can create solidarity amongst employees (leaders, managers and their staff). Under the leadership’s direction, as employees understand, relate to and put into motion the defiance of corruption practices in their operations and processes, a strong compliance program is ostensibly conceived.
2. Nominate or hire a compliance officer for the organization
A compliance officer has a significant role in bringing the compliance program to life by consistently providing training, communications and ensuring that compliance staples are met. Employees can turn to compliance officers for advisory, clarity, affirmation or even bringing up concerns (actual or suspicious) on non-compliant activities in discretion. Another key role that a compliance officer has is to be a general compliance counsel to the leadership. They keep the leadership in an informed state on the company’s compliance initiatives and other activities in the company that require compliance oversight like sales tender participations, sponsorships, donations, employees’ general behavior in providing or receiving business courtesies, conflicts of interests, controls audit, remediation of failed controls, third party due diligence, etc.
3. Identify and assess bribery risk areas
Again, all functional departments must be able to understand and identify any bribery hotspots in their day-to-day activities. Only then, appropriate controls (both financial and non-financial) are put together, the performance of controls is monitored, and the controls are reviewed and improved upon.
Simply putting this into perspective - A finance department may need to watch for payment transactions to bank accounts advised by third party suppliers which do not belong to them. Likewise, a sales department must be able to resist entertaining customers frequently (and probably lavishly) to retain their business relationships. The supply chain department too that is often handling government officials, like customs officers on customs duties or being offered personal benefits by transportation service providers to woo them for business opportunities. Even the human resources department needs to be aware of the perceived influence in offering employment opportunities to parties related to government officials of whom the company has dealings with.
4. Due diligence on all third parties and potential business transactions
Due diligence should commensurate with the risk profile of each business dealing. It will be quite meaningless to evaluate a taxation consultant advising on tax-saving offshore accounts in the same way as the company’s office supplies vendor. Obviously, both parties bring different risk factors to the business dealings that a company must analyze and address.
5. Relevant policies dealing with Anti-Bribery and Anti-Corruption (ABC)
Anti-bribery & anti-corruption policies provide applicable instructions clearly for activities to be done in the manner that is approved within the compliance program. A compliance program is never quite complete without an ethics reporting channel which encourages employees to raise concerns on non-compliance. These instruments require some literature on the end-to-end processes of observing and completing activities according to the requirements of relevant policies.
A robust compliance program that has the unwavering commitment of the leadership lines all the (above) ducks in a row, thrives and lives on for as long as the company exists. This makes you an attractive business partner to prospective clients. If you would turn the table, would you care to engage in business with an organization that is effective with its ethics stance, or would you rather take the risk with an organization that has no known anti-corruption commitment under our present Section 17A enforcement?
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Post Tags: Guidelines to adequate procedures (MACCA 2009), garis panduan tatacara mencukupi, pelan antirasuah nasional 2019-2023, guidance on adequate procedures (UKBA 2010), due diligence, bribery risk assessment, anti-corruption policies, anti-bribery policies, tone from the top, walk the talk, walk the walk Found this relevant? Share this post.
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