Transparency International Malaysia: Business Integrity Programme

Transparency International Malaysia

Business Integrity Programme Business Integrity Programme & &

Anti Bribery Management System -ISO 37001Anti Bribery Management System -ISO 37001

Dr Muhammad MohanDr Muhammad Mohan16 March 2016, Yangon, Myanmar16 March 2016, Yangon, Myanmar

www.transparency.org.my


Corruption Perception Index 2015

Where is Myanmar Today?

WHAT HAS CHANGED? Comparison 2014 and 2015 performance

COUNTRIES THAT HAVE IMPROVED

IndonesiaThailandVietnamLaosMyanmarCambodia

COUNTRIES THAT HAVE DECLINED

PhilippinesMalaysiaJapanSingaporeHong Kong

SCORES OF ASEAN COUNTRIES-2015

Rank ASEAN Position (168)

CPI Score GDP per capita Rank Difference

1 Singapore 8 85 56,284 - 1

2 Malaysia 54 50 11,307 - 4

3 Thailand 76 38 2,765 + 9

4 Indonesia 88 36 5,977 + 19

5 Philippines 95 35 2,873 - 10

6 Vietnam 112 31 2,052 + 7

7 Laos 139 21 1,794 + 6

8 Myanmar 147 22 1,204 + 9

9 Cambodia 150 21 1,095 + 6

GDP PER CAPITA vs CPI SCORE


Business Integrity Programme


Integrity

‘Unsinkable’

Titanic’s current state


Types of corruption Petty corruption

– Small bribes, eg procurement manager kickbacks– Facilitation payments, eg to Government clerks– Settling traffic offences on the spot

Grand corruption / “state capture”– Manipulating state apparatus to own ends

• Large bribes to top Government officials for securing contracts

• Capture and manipulation of state tendering & procurement process

Businesses participate in both, willingly or unwillingly


How does corruption arise? A combination of:

– Weak systems– Poor enforcement– Acceptance culture

All three have to be dealt with to establish integrity


Company Risk Sectors


Corporate Integrity System Elements


Tackling the problem

Use of Integrity InstrumentsExamples-Malaysian Experience


NO GIFT POLICY


Festive Gifts Delivered to the Office. Is this a bribe?

15


Festive Gifts Sent to the home. Is this a bribe?

16


Tonnes of Oranges Delivered to an Oil & Gas Company during the Chinese New Year in Malaysia

17

Other forms of Gifts

18


Tone from the Top (Board Level & Senior Management)Clear Policy-Clear Communication

Example on No Gift Policy

Are there exceptions? Yes. But requires full disclosures Policy should stipulate value of gift for disclosure

Board Level Commitment CEO committed on the no gift policy Clear communication to the employees Clear communication to the suppliers Announced officially in the newspapers


Corporate Integrity System Elements


Integrity Pact Example


Integrity Pact System (IPS)

Used worldwide by TI to great effect Targeted at tendering & procurement sectors of the

company Builds integrity into bidding and contract management Generates value by creating a legal framework, with

sanctions, to drive out mis-behaviour, fraud, collusion and other costly malpractices

TI-M private sector implementation with PKNS, KSSB, Infineon, etc


Key points to note

Integrity Pacts are bilateral: both parties must commit to acting with integrity

The Pact should be simple and easy to understand: as set of rules

The Pact is legally binding between the parties Arbitration is included as the conflict resolution

mechanism: quicker, easier and cheaper than courts Monitoring and enforcement are the strength of it;

alone, it is just a piece of paper Good contractors like them; bad contractors don’t:

builds supply chain health A useful first stage of a Corporate Integrity System

Contractors Briefing when we collaborated with PKNS


Success stories: Malaysia

PKNS, Selangor State Development Corporation Full Corporate Integrity System No Gifts Policy, advertised Strengthening of tendering procedure

Successful because of the support from the Chief Minister, State Secretary and the management.

25


Lessons learned from Malaysia Commitment from the top is essential – but driven by the

people. Government has a role to play through state agencies.

Civil society also: TI and others Change takes time, but the greater the pressure, the

faster the improvement Business tends to respond to what they encounter in the

marketplace and dealing with Government Business-led change is rare and requires the right

drivers When the mood of the country changes, substantial

reform is possible


ISO 37001 Anti Bribery Management System

ISO/PC 278

International Organization for StandardizationPromotes the development of technical

standards, standardization and related activities in the world.

Established on Feb. 23, 1947 - Geneva, Switzerland.

Total : 165* country members3,483 Technical Bodies20,500 standards

*At December 2015

http://images.google.com/imgres?imgurl=http://www.ecolog.com/gartnerlee/news/images/Article3-Lightbulb.jpg&imgrefurl=http://www.ecolog.com/gartnerlee/news/3_article.htm&usg=__puoIqXDlpwIpkQKmpQNbaGC_UW4=&h=338&w=256&sz=25&hl=en&start=475&um=1&tbnid=N43uljo4YaGDgM:&tbnh=119&tbnw=90&prev=/images?q%3Dsocial%2Bresponsibility%26start%3D468%26ndsp%3D18%26um%3D1%26hl%3Den%26rls%3Dcom.microsoft:en-us:IE-SearchBox%26rlz%3D1I7ADBR%26sa%3DN

http://images.google.com.sg/imgres?imgurl=http://woodsman-tc.co.uk/images/pageart/csr.JPG&imgrefurl=http://trendsupdates.com/corporate-social-responsibility-csr-simply-good-business/&usg=__sbyUB_FJxHyHiZ6yvwRlDjrlwlo=&h=1050&w=1051&sz=136&hl=en&start=36&um=1&tbnid=1rA085MeQQ8xUM:&tbnh=150&tbnw=150&prev=/images?q%3Dcsr%26ndsp%3D20%26hl%3Den%26rlz%3D1T4RNTN_enSG330SG330%26sa%3DN%26start%3D20%26um%3D1

What is ISO 37001 Standard?

ANTI-BRIBERY MANAGEMENT SYSTEM 29ISO/PC 278

• ABMS (Anti-Bribery Management System Standard)

• It is designed to help an organization to establish, implement, maintain, and improve an anti-bribery compliance program or “management system.”

• It includes a series of measures and controls that represent global anti-corruption good practice.

Who can use this ISO 37001 Standard?


The standard is flexible and can be adapted to a wide range of organizations, including:

Large organizations Small & medium sized enterprises (SMEs) Public and private sector organizations Non-governmental organizations (NGOs)

The standard can be used by organizations in any country.

Does the ISO 37001 Standard requires a Stand-alone Management System?


• ISO 37001 is designed to be integrated with existing management processes and controls.

• Follows the common high-level structure for management system standards, for easy integration with, for example, ISO 9001

• New or enhanced measures can be integrated into existing systems.

What does the ISO 37001 Standard address?


Bribery in the public, private and not-for-profit sectors :• Bribery by the organization or by its personnel or business associates acting on its behalf or for its benefit

• Bribery of the organization or of its personnel or business associates acting on its behalf or for its benefit

• Direct and indirect bribery (e.g. a bribe paid or received through or by a third party)

Bribery Risks


“Bribery” is where it concerns the practice of offering something to gain an illicit advantage .

Bribery can take place anywhere and at anytime.

Bribery can be financial or non financial

Does ISO 37001 Standard defines bribery?


Bribery is defined by law which varies between countries. Therefore the Standard does not provide an independent definition of bribery.

The Standard provides guidance on what is meant by bribery to help users to understand the intention and scope of the Standard.

Does ISO 37001 Standard defines bribery?


However, this general use of the term “bribery” will be further informed and

established by - an anti -bribery management system which will need to be designed to help an organization comply with - the anti-bribery laws applicable to

the organization.

What does ISO 37001 Standard require?


A series of measures and controls to help prevent, detect, and address bribery, among them:•An anti-bribery policy, procedures, and controls •Top management leadership, commitment and responsibility•Senior level oversight•Anti-bribery training•Risk assessments•Due diligence on projects and business associates•Reporting, monitoring, investigation and review•Corrective action and continual improvement

4 Context of the organization

Organization and its Context

Needs and Expectations of Interested Parties

Scope of Anti-Bribery Management System

Bribery Risk Assessment

5 Leadership

Leadership and Commitment

Anti-Bribery Policy

Organizational Roles, Responsibilities and Authorities

6 Planning

Actions to Address Risks and Opportunities

Anti-Bribery Objectives & Planning to Achieve Them

7 Support

Resources

Competence

Awareness & Training

Communication

8 Operation

Operations Planning and Control

Due Diligence

Financial Controls

Non-financial Controls

Implementation of Anti-Bribery Controls

9 Performance and Evaluation

Monitoring, Measurement, Analysis and Evaluation

Reviewed by Anti-Bribery Compliance Function

Top Management Review

10 Improvement

Nonconformity and Corrective Action

PLAN DO CHECK ACT

Documented Information

Anti-Briber Contract Terms

Gifts, Hospitality, Donations & Similar Benefits

Continual Improvement

ISO 37001 ABMS STRUCTURE

Raising Concerns

Investigating & Dealing With Bribery

Internal Audit

How will ISO 37001 Standard benefit an organization?


By providing:

•Minimum requirements and supporting guidance for implementing or benchmarking an anti-bribery management system

•Assurance to management, investors, employees, customers, and other stakeholders that an organization is taking steps to prevent bribery risk

•Evidence that an organization has taken reasonable steps to prevent bribery

Can my organization be ISO 37001 certified?


ISO 37001 is being developed as a requirements standard, making it

capable of independent certification.

If approved as such, third parties will be able to certify an

organization’s compliance with the Standard.

Who will certify?


Certification bodies such as TUV, SGS etc.

ISO is also developing a standard to certify auditors-ISO 17021

TOWARDS ISO STANDARD


Malaysia Participation1.Co-chair of ISO/PC 2782.Member of Drafting and Editing Group3.P-Member

Effective Implementation of Anti-Bribery System


THANK YOUTransparency International – MalaysiaTransparency International – Malaysia

facebook.com/timalaysia

@ti_malaysia

[email protected]

www.transparency.org.my

603-2284 0630

Transparency International Malaysia: Business Integrity Programme

Government & Nonprofit

Transcript of Transparency International Malaysia: Business Integrity Programme