In 2018, the Asia-Pacific Economic Cooperation (APEC) Anticorruption and Transparency Working Group undertook a capacity-building workshop for law enforcement agents to investigate individual and corporate liability in domestic and foreign bribery. The aims of the workshop were to:
- Enhance the technical knowledge of law enforcement agencies in APEC economies to bolster their ability to detect, investigate and prosecute individuals and corporations for their liability in cases of domestic and foreign bribery.
- Identify different systems of monitoring and supervising effective corporate compliance programs in APEC economies as well as in non-member economies.
A further workshop was held in 2019, where law enforcement agents and participants from the private sector shared practical experiences to compile a set of best practices on combatting bribery and corruption, with an emphasis on monitoring and supervising effective corporate compliance programs at the domestic and international levels.
Released in February 2020, the APEC Guidebook on Best Practices in Monitoring and Supervising Effective Corporate Compliance Programs builds on the findings and best practices identified from these workshops, as well as a range of additional sources such as surveys and research papers.
Best practices in monitoring and supervising corporate compliance programs
The APEC Guidebook is divided into four sections:
- Overview of corporate compliance programs based on data obtained from APEC sources and contemporary literature.
- Discusses formal international legal agreements related to corporate compliance that international organisations have promulgated.
- Highlights various approaches that some economies have used to promote and adopt corporate compliance programs.
- Offers examples of select companies’ approaches to adopting corporate compliance programs.
Section 1: Evolution, design, and implementation of corporate compliance
This section covers:
- The evolution of corporate compliance programs and the increasing importance of internal and external oversight of corporate governance.
- Key elements of corporate compliance programs including risk assessment, policies and procedures, leadership commitment/culture, training and communication, third party management, reporting and investigations, incentives and disciplinary actions, and monitoring or auditing.
- Instruments to operationalise corporate compliance programs including having adequate resources, mechanisms to detect deviant behaviour, hotlines, safeguards to ensure anonymity for reporting employees, and procedures for escalation, follow-up, and oversight.
Section 2: Formal international legal agreements
This section covers international legal mechanisms that have been established to provide a foundation for combatting corruption including:
- Convention on Combating Bribery of Foreign Public Officials in International Business Transactions (OECD Anti-Bribery Convention) – requires the parties to the Convention to ensure that foreign bribery is a criminal offence, and encourages international cooperation.
- United Nations Convention against Corruption (UNCAC) – requires legal persons to be held liable for corrupt practices, as does the OECD Anti-Bribery Convention.
- The World Bank Group – in addition to the conventions listed above, the World Bank’s sanctions system complements international anti-corruption frameworks by applying additional pressure to comply through the issuing of public letters of reprimand to sanctioned parties, ordering their debarment.
Section 3: Tools and incentives for promoting corporate compliance in some economies
The Guidebook highlights how the United Kingdom and United States have reformed their legal and regulatory frameworks to combat bribery and corruption.
The U.K. Bribery Act 2010 has been recognised and much of its contents adopted by OECD member states.
One especially relevant section of the Act is Section 7 “Failure to Prevent Bribery”, which sets out parameters for corporate liability for corrupt activity committed by employees or associated persons, and “adequate procedures” which may afford organisations leniency.
An example of OECD member states adopting components of the U.K. Bribery Act can be seen with Australia’s introduction of the Crimes Legislation Amendment (Combatting Corporate Crime) Bill 2019, which proposed a new corporate offence for failure to prevent foreign bribery by an associate of a body corporate. However, the offence will not apply if the corporation can show it had adequate procedures in place designed to prevent the commission of foreign bribery.
The U.S. Foreign Corrupt Practices Act (FCPA) demonstrates how incentives can be provided to companies to adopt compliance programs.
One example is a Deferred Prosecution Agreement (DPA) which is an agreement between the government and a corporation, where the government agrees to halt any prosecutions of the company if the company agrees to undertake certain obligations, such as cooperating with government investigations and prosecutions.
Many other countries have begun to adopt DPAs as a prosecutorial tool in recent years. The Attorney-General’s Department has considered how a DPA scheme may work in Australia.
Section 4: Examples of private sector adoption of corporate compliance programs
In the 2019 APEC workshop, representatives from the private sector were invited to share their experience in adopting corporate compliance programs. One of these representatives was Australia’s BHP.
BHP’s compliance program
BHP operates throughout Australia, North America, and South America, with a marketing hub in Singapore. Its compliance program began after an investigation by the U.S. Department of Justice under the FCPA for providing inducements, hospitality and gifts to foreign officials. The program is focused where higher risks are identified for the company. Key components of BHP’s compliance program include:
- Commitment from senior management.
- A code of conduct and compliance policies and procedures, which clearly articulate the company’s policy against corruption.
- Built-in accountability mechanisms.
- Ongoing risk assessment.
- Targeted training and communication.
- Incentives and disciplinary measures to promote the compliance program.
- Third-party due diligence – implementation of a system to integrate suppliers’ activities with the compliance program.
- Confidential reporting and internal investigation.
- Periodic testing and review to improve systems.
- Pre-acquisition and post-acquisition due diligence (in the event of mergers and acquisitions).
Corporate compliance programs help to combat domestic and foreign bribery and corruption. However, effective monitoring and supervision systems are required to ensure that compliance programs achieve their intended outcomes. APEC’s Guidebook serves as a useful reference of best practices in monitoring and supervising corporate compliance programs.