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Control corporate corruption by training supply chain partners

Posted: 05 Jan 2015 ?? ?Print Version ?Bookmark and Share

Keywords:Dow Jones? corruption? bribery? FCPA? SEC?

Microsoft requires annual anti-corruption training for employees of partners who "resell, distribute, market or otherwise dispose of Microsoft products." Partner organisations can tailor their own training on anti-corruption laws to meet Microsoft's requirements. Otherwise, the partner's employees can take an online training course provided by Microsoft at no cost.

Fluor has spearheaded a number of international anti-corruption training and awareness initiatives. In partnership with the American Society of Civil Engineers (ASCE) it developed ETHICANA, a training video that dramatises the devastating effects of corruption in engineering and construction projects. The film and accompanying training materials geared for corporate and university instruction is available in 28 languages.

The case for training has become more compelling as enforcement authorities have started considering these programs as a factor in corruption cases. When a company is under investigation for corruption by its business partners, according to a resource guide by the US Department of Justice (DOJ) and Securities and Exchange Commission (SEC), the agencies that enforce the anti-corruption law, "will evaluate whether [a company] has taken steps to ensure that relevant policies and procedures have been communicated throughout the organisation, including through periodic training and certification for all directors, officers, relevant employees, and, where appropriate, agents and business partners."

Anti-corruption laws to guide compliance

Indeed, anti-corruption training at least for high risk third parties, is now routinely included in FCPA settlement agreements among compliance "best practices." Requiring settling companies to train agents and business partners "where necessary and appropriate" traces to the Panalpina case, settled in 2010, in which the Swiss logistics company admitted to paying $27 million in bribes to government officials on behalf of oil industry companies.

The UK Bribery Act Guidance reflects a similar trend, noting that in the context of ensuring that a company has "adequate procedures" in place to prevent bribery, "it may be appropriate to require associated persons [which can include agents] to undergo training."

Companies cite many reasons for not wishing to conduct anti-corruption training with critical third parties. The perception that such a program will be too costly is at the top of the list, though this issue can be overcome through use of technology and online resources, as some of the pioneering companies are demonstrating.

On occasion, business partners may be reluctant to accept training, so it may be best to require it as a condition of doing business.

The reality is that the balance is tipping. There is greater risk in ignoring the actions of third parties, and keeping at a distance, than in pulling them close and imparting anti-corruption practices, loud and clear. And in the long run, it is the healthier path for the companies involved, and for the interconnected global economy.

- Leslie Benton

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