Making Integrity Part of Your Brand Building Trust and Transparency

FCPA Enforcement Trends • 50 companies - over $2.5 billion FCPA

settlements 2010- 2012 • Top ten FCPA settlements (8 in 2010 & 2011)

total $3 billion • 9 of top 10 involve non-US companies – the

FCPA has a very long reach • Settlements of KBR/JGC/Technip/Snamprogetti

case totaled $1.6 Billion. 3 now in jail. • Longest ever FCPA-related prison sentence (15

yrs) in 2011 • 90 companies under FCPA investigation in 2013

Canada’s Record with CFPOA Only 1 prosecution to 2009; 1 investigation in 2010. Initially no centralized investigation or prosecution as in the US All offenses Criminal – burden of proof issue New RCMP anti-corruption unit – Ottawa and Calgary. 35 investigations in progress Niko Resources - $10 million fine for a $200 k bribe in Bangladesh Griffiths Energy – voluntary disclosure - $10 million fine for a $2 million bribe Actions to strengthen CFPOA before Parliament

What can happen to your firm?

Reputational damage can be severe

Bonny Island – Largest FCPA Fine to an Engineering Firm

A reputation problem!

Are Transparency and Integrity good for business?

• Industry associations can inform, but individual firms must take action

• The “Trusted Advisor” must be trustworthy! • Investing in Integrity and Compliance yields

long term dividends • May need to walk away from some clients

or countries • Consider your firms’ stakeholders and their

expectations – owners, employees, clients, communities

Avoidance of Legal Consequences

• This is the “negative” side of anti-corruption for individual firms

• Many clients and potential partners conduct Due Diligence – want to see no scandals and an anti-corruption culture – Denied Party Lists, Internet searches

• Reputational damage very hard to repair • Fines and jail time are becoming more

common • A sound Compliance program is essential

if facing legal action

Be Aware of Compliance Steps

• Tone from the Top, senior leadership • Independent reporting channels • Code of Business Conduct – specifically

forbid bribery. Publicize and train all staff • Risk analysis – rigour and focus of

Compliance measures depends on risk • Compliance effort and cost proportional to

firm size, risk profile • Due Diligence for high risk situations –

especially Partners and Representatives • Auditable – like a QA system

Extra Slides

Consulting Engineers as Export Leaders

• Beginning in the 1950s with the Colombo Plan, Canadian Consulting Engineers led the way in many developing country markets

• Bilateral (CIDA) projects were relatively uncomplicated, but CIDA has declined in importance in the 1990s

• MDB programs took over – new consultants, slow domestic markets – intense competition

• Canadian firms competed well, expanded their business, and received positive publicity collectively and individually

Changing Attitudes to Corruption • Until mid-90s, corruption seen by many as “the

price we have to pay for development” • Corrupt relationships developed involving

consultants, Government Officials, intermediaries – condoned by many

• Too many development projects were tainted by corruption, diversion of resources

• Led to formation of TI in 1993 by Peter Eigen (former World Bank Regional Director)

• In 1996, World Bank initiated its anti-corruption program. Acres International was one of the first major engineering firms affected by the WB program

Parallel Anti-Corruption Developments

• 1977 – US FCPA passed. Amended in 1988 and 1998.

• US lobbying to “level playing field” – led to OECD Anti-Corruption Convention in 1999.

• Canada’s CFPOA in effect March 1999 • UN Convention Against Corruption in 2005 • Acceleration of FCPA prosecutions in

2000’s. • UK Bribery Act enacted in 2010 – viewed

as even tougher than the FCPA

The Role of FIDIC • 1996 – FIDIC issued policy statement on

corruption, in response to World Bank initiatives • BIMS outlined by FIDIC in 1997-98, and presented

at BIMILACI 1999. JWGI formed • Engeli & Pieth Background Paper for FIDIC 2000 • BIMS Guidelines presented at FIDIC 2001, followed

by Training Manual, Model Rep. Agreement • FIDIC continues to work via IMC and MAs

(including ACEC) to develop tools for use with BIMS, expand its adoption by members. Regular dialogue with WB continues

• Name change to FIMS to make the IMS unique to FIDIC