Global Ethics, Compliance & Integrity E-Book

Bartosz Makowicz

• Herausgeber: Fachmedien Recht und Wirtschaft
• Kategorie: Fachliteratur
• Serie: Recht Wirtschaft Steuern - Handbuch
• Sprache: Englisch

Seitenzahl: 462

Veröffentlichungsjahr: 2019

Beschreibung

Mit dem vorliegenden Werk wird eine Publikationsreihe begründet, mit der der weltweiten Compliance-Community die aktuellen Entwicklungen zu Compliance, Wirtschaftsethik und Integrität in Organisationen auf globaler Ebene sowie in verschiedenen Ländern der Welt fortlaufend vermittelt werden. Die erste Ausgabe enthält über 40 Einzelbeiträge von Fachexperten für Compliance aus diversen Staaten und internationalen Organisationen (darunter der OECD, Weltbank, G20 und anderer), die in mehrere thematische Abschnitte eingeteilt wurden: grenz- und kulturüberschreitendes Compliance Management (nebst Aspekten der Ethik und Integrität), grenzüberschreitende Korruptionsbekämpfung, grenzüberschreitende Standardisierung und Kommunikation, Whistleblowing und interne Ermittlungen sowie die Compliance des internationalen Handels. Abgerundet wird die Ausgabe um die Beiträge zu den Compliance-Herausforderungen der Zukunft. Das Werk bietet damit einen umfassenden, aktuellen und kompetenten Überblick über weltweites Know-how und die Entwicklungstendenzen in der Entwicklung der Compliance, Ethik und Integrität in diversen Organisationsarten auf nationaler und globaler Ebene. Um diesem Anspruch gerecht zu werden, erscheint das Werk vollständig in englischer Sprache. This yearbook is the first in the series of annual publications designed to inform the global expert community of the latest developments and future challenges in the area of Ethics, Compliance and Integrity in different organizations (corporations, associations, the public administration etc.). This first edition contains over 40 individual contributions by professionals representing various disciplines, countries and international organizations. It is divided into several thematic chapters, including cross-border and cross-cultural compliance and ethics management, cross-border anti-bribery systems, global standardization and intercultural communication, whistleblowing and internal investigations as well as international trade compliance. The yearbook is dedicated to compliance and ethics professionals, officers and managers, company directors, consultants, authorities, prosecutors, judges, scholars and any other interested persons.

Leseprobe

Global Ethics, Compliance& IntegrityYearbook 2018

Edited by

Prof. Dr. Bartosz Makowicz

Authors

Lino Arboleda; Leas Bachatene; Pierre-Antoine Badoz; Elodie Beth; Dr. Sophie Luise Bings; Nicola Bonucci; Philip Brennan; Tom Brown; Dr. Daniel Lucien Bühr; Henry Chen; Alex Conesa-Pietscheck; Prof. Dr. hab. Wiesław Czyżowicz; Geert Delrue; Ousmane Diagana; Dr. Oskar Filipowski; Prof. Dr. Peter Fissenewert; Cynthia Gabriel; Marcin Gomoła; Christin Grothaus; Michael Kayser; Shahzad Khan; Gabriel Kurt; Ingrid Leonard; Prof. Dr. Bartosz Makowicz; Dr. Rainer Markfort; Dr. Klaus Moosmayer; Noor Naqschbandi; Dr. Barbara Neiger; Dr. Raluca-Isabela Oprişiu; Will Phua; Meinhard Remberg; Prof. Dr. Han-Kyun Rho; Prof. Dr. iur. Achim Rogmann (LLM); Helena Sjöholm; Marcin Szczepański; Dr. Tobias Teicke; Thomas Thomas; Christine Uriarte; Anatoly Yakorev; Vincent Pepito F. Yambao; Jose F. Zamarriego; Deming Zhao; Liviana Zorzi; Nico Zwikker

Fachmedien Recht und Wirtschaft | dfv Mediengruppe | Frankfurt am Main

This Yearbook 2018 consists of articles produced within the scientific project „Cross Cultural Compliance“. The project was initiated and conducted from 2015–2017 by Professor Bartosz Makowicz and Partners at the Viadrina Compliance Center, European University Viadrina Frankfurt (Oder) (www.compliance-academia.org) and was supported by Center B/ORDERS IN MOTION at the European-University Viadrina Frankfurt (Oder), Germany. The articles reflect the personal views and opinions of their respective authors, unless stated differently in the particular article. Authors intrested in submitting their texts for future editions of this Yearbook are kindly invited to contact the editor under [email protected].

Bibliographic information of the German National Library

The German National Library lists this publication in the Deutsche Nationalbibliografie (German National Bibliogaphy); detailed bibliographic data are available on the internet at http://dnb.de.

ISBN 978-3-8005-0009-3

i 2018 Deutscher Fachverlag GmbH, Fachmedien Recht und Wirtschaft, Frankfurt am MainThis work is protected by copyright in all parts. Any use outside the narrow limits of copyright law without the consent of the publisher is inadmissible and punishable by law. This applies in particular to reproductions, adaptations, translations, microfilming and the storage and processing in electronic systems.

Typesetting: Lichtsatz Michael Glaese GmbH, 69502 Hemsbach

Printing and processing: WIRmachenDRUCK GmbH, Mühlbachstraße 7, 71522 Backnang

List of authors

Arboleda Lino

GE Global Operations, Singapore

Bachatene Leas

ethiXbase, Singapore

Badoz Pierre-Antoine

Orange S.A., Paris, France

Beth Elodie

United Nations Development Programme, New York, United States of America

Bings Sophie Luise, Dr.

Deloitte Legal Rechtsanwaltsgesellschaft mbH, Düsseldorf, Germany

Bonucci Nicola

Organisation for Economic Cooperation and Development, Paris, France

Brennan Philip

Raiseaconcern Ltd., Straffan, Ireland

Brown Tom

Kaizen Compliance Solutions, London, United Kingdom.

Bühr Daniel Lucien, Dr.

Ethics and Compliance Switzerland, Bern, Switzerland

Chen Henry

The Compliance Reviews, Partner at Dentons, Beijing, China

Conesa-Pietscheck Alex

United Nations Development Programme, New York, United States of America

Czyżowicz Wiesław, Prof. Dr. hab.

Warsaw School of Economics, Warsaw, Poland.

Delrue Geert

Detective Commissioner, Brussel, Belgium.

Diagana Ousmane

World Bank, Washington D.C., United States of America

Filipowski Oskar, Dr.

KGHM Polska Miedz S.A., Lubin, Poland

Fissenewert Peter, Prof. Dr.

Buse Heberer Fromm Rechtsanwälte Steuerberater PartG mbB, Berlin, Germany

Gabriel Cynthia

The Center to Combat Corruption and Cronyism, Selangor, Malaysia

Gomoła Marcin

T-Mobile Polska S.A., Warsaw, Poland

Grothaus Christin

Mahidol University, Bangkok, Thailand

Kayser Michael

Idox Compliance, Berlin, Germany

Khan Shahzad

Mubadala Investment Company, Abu Dhabi, United Arab Emirates

Kurt Gabriel

AWB Rechtsanwaltsgesellschaft & AWB Steuerberatungsgesellschaft, Münster, Germany

Leonard Ingrid

National Crime Agency, London, United Kingdom

Makowicz Bartosz, Prof. Dr.

Viadrina Compliance Center, European University Viadrina, Frankfurt (Oder), Germany

Markfort Rainer, Dr.

DICO – Deutsches Institut für Compliance, Partner at Dentons Europe, Berlin, Germany

Moosmayer Klaus, Dr.

Siemens AG, Munich, Germany

Naqschbandi Noor

Alliance for Integrity, Berlin, Germany

Neiger Barbara, Dr.

neiger. C advisory, Wien, Austria

Oprişiu Raluca-Isabela, Dr.

STALFORT Legal. Tax. Audit, Sibiu, Romania

Phua Will

Thyssenkrupp, Singapore

Remberg Meinhard

DICO – Deutsches Institut für Compliance, SMS GmbH, Düsseldorf, Germany

Rho Han-Kyun, Prof. Dr.

International Anti-Corruption Academy, Laxenburg, Austria/Kookmin University, Seoul, Korea

Rogmann Achim, Prof. Dr. iur. LLM

Brunswick European Law School, Wolfenbüttel, Germany and Murdoch School of Law, Perth, Western Australia

Sjöholm Helena

Direndi AB, Lund, Sweden

Szczepański Marcin

Siemens Sp. z o.o, Warsaw, Poland

Teicke Tobias, Dr.

CMS Hasche Sigle Germany, Berlin, Germany

Thomas Thomas

ASEAN CSR Network, Singapore

Uriarte Christine

Organisation for Economic Cooperation and Development, Paris, France

Yakorev Anatoly

Center for Business Ethics & Compliance, Moscow, Russia

Yambao Vincent Pepito F.

Boehringer Ingelheim Singapore Pte., Ltd. as the Senior Compliance Manager for South East Asia and South Korea

Zamarriego Jose F.

Farmaindustria, Madrid, Spain

Zhao Deming

Partner at HaoLiWen Partners, Bejing, China

Zorzi Liviana

United Nations Development Programme, New York, USA

Zwikker Nico

Compliance Associates, Apeldoorn, The Netherlands

Content

Deckblatt

Titel

Impressum

List of authors

Content

A. Introduction

B. Challenges and Future of Compliance

I. The future of Compliance

1. Where does compliance stand today?

2. Does compliance have a future?

3. How can we improve the prospects of compliance?

II. Some Challenges for Cross-Border Compliance Across Europe

III. Key Recommendations of B20 Cross-Thematic Group Responsible Business Conduct & Anti-Corruption

1. Introduction

2. Key Recommendations

2.1 Establish Beneficial Ownership Transparency

2.2 Recognize Compliance Efforts

2.3 Enhance Responsible Business Conduct in Infrastructure Projects

3. About “Business 20”

C. Cross Border Ethics, Compliance and Integrity

I. Compliance, Culture and Integrity in Global Perspective

1. Integrity is the New Compliance

2. Integrity in a Global Cultural Context

3. Issues with a Culture of Integrity

4. Challenges for Establishing a Culture of Integrity

5. Resume

II. Compliance Culture & Governance

1. Culture of Compliance

1.1 Tone from the top

1.2 Recruitment

1.3 Spirit vs. letter of the law

1.4 It doesn’t matter what competitors are doing

1.5 Systems and processes

1.6 Training and competency development

1.7 The Chief Compliance Officer

2. Governance

2.1 Ownership of the responsibility to comply

2.2 COSO framework

2.3 Positioning, composition and independence of the Compliance function

2.4 Monitoring

2.5 Reward

2.6 Employee Disclosure

III. Compliance Across Cultures: Towards an Increased Awareness of the Self and the Other

IV. How Ethics Can Support Effective Compliance and Anti-Corruption Programmes

1. Introduction

2. The Origin of the Link between Ethics and Compliance in the United States

3. The Highs and Lows of Managing Ethics through a Code of Conduct

4. Lessons from corporate scandals

5. Ethics and Compliance in Developing Countries

6. Summary

V. How to Implement a Culture of Integrity in International Groups

1. Introduction

2. Compliance Dialogue

3. Local Management as a Role Model for Compliance

4. The Bottom Line

VI. Culture and Value, Easily-forgotten Paths to Deep Compliance

1. Introduction

2. The Costs of “Superficial” Compliance

3. A Third Meaning of Compliance: Multiplication of a Control System

4. Enhancing the Social Learning Aspect of Compliance through Culture and Value

VII. Compliance, Culture and Morality

VIII. Contributing to Sustainable Development Goal 16.5 and Strengthening Compliance with the Alliance for Integrity

1. Introduction

2. Sustainable Development Goals (SDGs)

3. Compliance and Culture

4. Collective Actions

5. Global Initiative

5.1 Peer-to-peer learning and international dialogue

5.2 Public-private dialogue

5.3 Awareness raising and information-sharing across a wider professional audience

5.4 Compliance training and train-the-trainer

6. The Alliance for Integrity approach

IX. Penalties or Rewards – How Should Legislators and Justice Support a Sustainable Compliance Culture? Insights from a German Perspective

1. Introduction

2. Overview of the Legal Situation in Germany

2.1 Penalties or Rewards? The Status Quo under German Law

2.1 Overview of Liability Provisions under the German Act of Regulatory Offences

2.3 Recent Legal Developments and Rewarding Tendencies in Germany

3. Some Ideas on How Legislators and Courts Could Potentially Promote a Sustainable Compliance Culture

3.1 Support by Authorities for SMEs when Implementing a CMS

3.2 Rewarding the Work of Compliance Personnel in the Form of Legal Protection

3.3 Self-Disclosure

3.4 Action required at EU-Level

3.5 Action Required at International Level: Mutual Recognition of Fines (ne bis in idem)

X. The Nordic Model of Governance

1. Introduction

2. Good governance creates values

3. The role of the boards for compliance and ethics

4. Roles and responsibilities in the Nordic governance model

4.1 The shareholders’ meeting

4.2 The statutory auditor: controls and reviews the boards and CEO administration of the company

4.3 The board of directors: determines and ensures strategic focus and internal control

4.4 The Chief Executive Officer executes

5. Nordic governance focuses on ethics and compliance through the division of power

6. A third corporate governance model

7. Applying good governance

8. How can boards further reinforce compliance and good governance?

9. Conclusion

XI. A Culture of Integrity as a Chance for Sustainable and Stable African Entrepreneurship

1. Introduction

2. Fundamental questions

2.1 Question 1: ”How has corruption affected growth in Africa?”

2.2 Question 2: ”What is needed to change the dynamics and encourage growth and development?”

2.3 Question 3: ”How do you evaluate the current state of compliance in Africa?”

2.4 Question 4: ”What countries do you see as champions that have already made significant progress in the area of integrity?”

2.5 Question 5: ”What advice would you give foreign companies seeking to invest in Africa?”

3. Summary

D. Cross Border Anti-Corruption Aspects

I. Towards a holistic approach of business integrity and the fight against corruption

1. Introduction

2. From control and command to a better understanding of corporate compliance

3. Going beyond implementation

4. Conclusion

II. Self-Regulation and Compliance: A Perfect Marriage

1. Introduction

2. Legal & self-regulatory background

3. Building trust & confidence

4. Transparency initiative

III. Promoting a Fair Business Environment in ASEAN: UNDP’s Approach

1. Importance of the private sector engagement to achieve the Global Goals

2. UNDP’s programme on Promoting a Fair Business Environment in ASEAN

3. What are the UNCAC provisions to prevent corruption in the private sector?

4. How can multi-stakeholder platforms be used to reform procurement?

5. Recommendations for stronger partnerships between governments and private sector in the context of ASEAN

IV. Preventing Cross-Border Bribery through Effective Compliance Measures

1. Introduction

2. Main areas of progress

3. Continuing compliance challenges

3.1 Small and Medium-Sized Enterprises lagging behind

3.2 Coordination with related compliance functions

3.3 Use of incentives

3.4 Use of whistleblower channels

3.5 Managing third-party risks

3.6 Independence of the audit and compliance functions

3.7 Risk of enforcement

3.8 Smart business decision

4. Conclusion

V. The National Crime Agency: Advice for SMEs on How to Protect Your Business from Bribery and Corruption

1. Introduction

2. Outreach

3. IFBT

4. Corporate Liability

5. Facilitation payments, hospitality and promotional expenditure

6. What are the key features that an SME should consider in framing adequate procedures?

6.1 Ownership

6.2 Employee Awareness

6.3 Managing third party risk

6.4 Continuous Improvement

7. Contacting the ICU

VI. China’s New Definition of Bribery Is Anti-Competitive

1. Introduction

2. Revise the definition and scope of commercial bribery

3. Clarify Corporate Liability for Commercial Bribery and Distinguish It from Individual Responsibility

4. Strengthen the Enforcement Agency’s Investigative Power

5. Increase Administrative Penalties

6. Conclusions

VII. Grand Corruption in Malaysia: How Money Is Laundered and Who Is Facilitating It?

1. Introduction

2. How It All Started

3. On the Trail of the Missing Billions

4. Where 1MDB’s US$3.657 Billion Went

5. How Money Laundering Was Facilitated

5.1 Many Banks Involved, Some Large

5.2 Shell companies

5.3 Money Laundering and International Neglect

6. Some of the Assets Purchased

7. Malaysia’s Legal System

8. Conclusions

VIII. Cross-border Compliance, Corporate Governance and Culture in Russia

1. Introduction

2. Sanctions compliance

3. Compliance standards in banking

4. Compliance in state owned companies

5. “Soft law”

6. Compliance industry

7. Anti-trust compliance

8. Cross-border governance

9. Corporate governance

10. Cross-border culture

11. Conclusion: Main compliance challenges

E. Compliance Standardization – Global and National Perspectives

I. ISO 19600 – An Open and Flexible Standard in a Regulated Context that also Offers Benefits at International Level

II. Introducing Compliance to the Shop Floor – ISO 19600 and Germany

1. Introduction

2. Compliance in Germany

3. Operational and Legal Aspects

4. The Approach

5. Adoption, Use and Benefits

6. Where Are We Now?

7. Outlook

III. Cross Border Compliance – Standardisation Experience from Austria

IV. Cross-Border Compliance Standardisation – A Swiss NGO Perspective

1. Introduction

2. Standards are, by nature, genuinely cross-border and cross-cultural

3. To effectively promote compliance, access to know-how must be low cost and easy

4. Public organisations and standardisation

5. Standards strengthen sound principles, good governance and foster accountability

6. Summary

F. Cross Cultural Compliance Communication and Other Methods

I. Cross-Cultural Compliance and Communication – the thyssenkrupp Experience

1. Introduction

2. Asia Pacific

3. Best Practices

4. Conclusion

II. Lessons on Cross-Cultural Compliance Communication

1. Introduction

2. Understanding the “Whys” of Compliance

3. Policies, Process and Tools

4. Compliance Training and Communication

III. Compliance communication in crossborder cases

IV. “Integrity Has No Borders”: Collective Action on Business Integrity in ASEAN

1. Introduction

2. Acknowledging the Problem

3. The Challenges

4. The Opportunities

5. Business Initiatives Against Corruption

6. At ASEAN Level: Regional Working Group on Business Integrity

7. Conclusion: Moving Forward

V. Compliance & Third Party Due Diligence

1. Introduction: Anti-Corruption Compliance Landscape

2. Historic Third Party Due Diligence Challenges

3. Increasing Regulatory Expectations

4. Redefining Best Practices: Steps to Achieving 100 % Third Party Due Diligence

4.1 Step 1 – Understanding the scope of your third party network

4.2 Step 2 – Conduct Baseline Screening for 100 % of Third Parties

4.3 Step 3 – Review Potential Third Party Risk Indicators and Categorise Risk

4.4 Step 4 – Escalation & review

4.5 Step 5 – Ongoing monitoring

5. Conclusion

VI. The Role of Middle Management in CMS

1. Introduction

2. What the “tone at the top” actually means

3. Middle manager – man caught in the middle

4. Closing remarks and summary

VII. Compliance in and for Africa: perspective of a SME

1. Introduction

2. Why is Compliance an Important Topic for Companies Willing to Engage in Africa?

3. How Can Small and Medium-sized Companies Strengthen a Culture of Integrity in Their Business Practice?

4. How Important are Public-Private Dialogue and Collective Action?

5. Result

G. Whistleblowing and Internal Investigations

I. How to Act in Cases of Cross Border Fraud

1. Introduction

2. Conducting investigations

3. Conclusion

II. Dealing with Compliance Cases at Siemens

1. Introduction

2. Compliance Management System

2.1 Prevent

2.2 Detect

2.3 React

3. Compliance Case Handling Process

4. Conclusion: Challenges

III. Conducting a cross border compliance investigation in a crisis

1. Introduction

2. The Facts

3. Dealing with internal and external pressures, leadership

4. Change

5. Conclusion

IV. “Whistleblower protection” – legal threats and challenges in Poland

V. Romanian Whistleblowing Regulations: From Exemplary to Incomplete

1. Introduction

2. Compliance and Ethics in the Public Sector

3. The Whistleblower (Ro. avertizor de integritate)

4. Protection of Whistleblowers

5. The Motivation of a Whistleblower

6. Anonymity of Whistleblowers

7. The Reported Wrongdoings

8. Recipient of the Report

9. Summary

H. International Trade Compliance

I. Current Challenges in International Trade Compliance

1. Introduction

2. Covered Areas

3. The Necessity of Trade Compliance

4. Challenges

4.1 Organization

4.2 Knowledge

4.3 Information Technology

5. Conclusion

II. Managing Customs Compliance in International Trade

1. Introduction

2. Customs Compliance in Cross-Border Trade in Goods: Its Importance and Relevance for Business

3. Customs Compliance: Challenges and Risks in the International Trade in Goods

3.1 Product risk

3.2 Customer risk

3.3 Destination risk

3.4 Delivery risk

4. Main Compliance Risks Affecting the International Trade in Goods

4.1 Valuation

4.2 Classification

4.3 Origin

5. The Programming and Planning of Customs Compliance in Companies Trading Goods Internationally

6. The Best Customs Compliance Practices Adopted by Companies Trading in Goods Internationally

7. Authorised Economic Operator

7.1 The International Legal Basis for AEO

7.2 Objectives and Benefits of AEO Status

7.3 AEO – Challenges and Hopes

8. Conclusions

III. The Nexus between Export Compliance and Anti-Corruption Controls

1. Introduction

2. Export Controls

3. Improper Payments

4. Nexus between Export Controls and Anti-Corruption

5. Conclusion

IV. Customs in the Era of Terrorism

1. The Role of Customs in the Era of Terrorism

2. The Core Elements of the SAFE Framework

2.1 Registration of Economic Operators

2.2 Advanced Communication

2.3 Risk Analysis

2.4 The AEO Programme as Tool for Securing and Facilitating Trade

3. Conclusion

V. China’s Current Export Control Scheme and Draft New Law – An Overview

1. Introduction

2. The Current Export Control Scheme in China

2.1 A Case Study

2.2 Current Export Control Scheme

2.3 Enforcing Authorities

2.4 Consulting Procedure

2.5 Legal Liabilities

3. What Changes does the Draft Act Introduce?

3.1 Scope of Controlled Items

3.2 Exports Subject to Control

3.3 Meaning of “Controlled Items”

3.4 Potential New Risks to Export Transaction Parties

3.5 Filing Requirements

3.6 Transparency When Granting Export Licences

3.7 Obligations of the Overseas Importer and End-User

3.8 Obligations of the Exporter

3.9 Governmental Investigation

3.10 Legal Liabilities

3.11 Mitigation

4. Conclusion

Guide

A. Introduction

Prof. Dr. Bartosz Makowicz

This first edition of the Yearbook of Global Ethics, Compliance and Integrity focusing on “Cross Cultural Compliance” is the result of a number of projects, various discussions, conferences, workshops and international congresses on Ethics, Compliance and Integrity. At these events, industry representatives (usually chief compliance officers) repeatedly complained about the considerable challenges they faced when attempting to implement internationally uniform and reliable compliance management systems (CMS) within a global organization or group structure. Certainly, methods and standards on how to determine and manage risks in individual countries do exist. However, social and cultural borders or foreign culture and values may make it difficult to ensure not only compliance but also the integrity of all members of an organization / corporation.

Yet why is all this necessary? What does compliance have to do with values, ethics, culture and integrity? There is only one answer: everything! Human beings are at the center of any CMS along with their culture and underlying values. Human culture and values are formed by experiences, education, environment, religion and many other factors: these same values and culture determine whether a bribe has been accepted, environmental standards breached, interest rates manipulated or customers deceived. In all cases of non-compliance, values and the human culture therefore play a crucial role. In addition, human conduct and the values directing it are the subject of ethics, a branch of philosophy. A CMS cannot function effectively without a sound understanding of ethics and thereby the values and culture that prevail in the area where it operates. Is it not enough then for people to internalise the culture and underlying values? No! They must also ensure that their outward acts consistently accord with these values. It is at this point that integrity comes into play. Compliance and integrity may therefore be regarded as two sides of the same coin, whereas ethics represents a specialist discipline within these two areas. This explains the first of the two approaches in this work “Ethics, Compliance and Integrity”. The boundaries between these three terms are porous and complement each other.

The second approach deals with challenges where the boundaries are somewhat clearer. Nowadays, when national economies are so closely interwoven, it would be wrong to adopt a single approach to Ethics, Compliance and Integrity; rather developments should be viewed from a global perspective. Once a CMS has been implemented in one part of the organization or extended to a part located in a different culture, one must consider the differing ethical and moral rules, the culture and the values of its inhabitants. Otherwise, the system will be re-jected and produce nothing more than undesirable side-effects, thereby resulting in attempts at evasion.

This work takes up the challenge of creating a constantly updated compendium of expert knowledge on Ethics, Compliance and Integrity. The contributions contained in this first edition have been produced by over 44 experts from different continents and countries, diverse cultures and corners of the world with the common aim of promoting Ethics, Compliance and Integrity by means of effective and efficient CMS. They share valuable knowledge, techniques, experience, practice and methods. In this book, you will find practical contributions divided into seven chapters (besides this brief introduction). These have been produced as part of the “Cross Cultural Compliance” series of conferences which have taken place in Frankfurt, Bangkok and Hamburg over the past three years. The authors are not just lawyers but also renowned economists, philosophers, psychologists, communication experts, practitioners, consultants, public officials and other experts. This is the only way of doing justice to the interdisciplinary dimension of Ethics, Compliance and Integrity.

Starting with this introduction (Chapter A), several contributions deal with the future of compliance (Chapter B). The main part of the book (Chapter C) investigates challenges in the fields of compliance and integrity which arise in respect of the cross-border implementation of CMS. We then focus on the most common risks for global compliance in the field of corruption (Chapter D). Despite sophisticated anti- corruption systems, the preventive instruments of international organizations and the efforts made by the international community in this field, corruption still remains a wide-ranging phenomenon in many states. CMS standards (Chapter E), attempt to take account of cross-border differences and diverse cultures, on the one hand, and the efforts towards creating uniform solutions on the other. The last three chapters deal with more practical subjects: namely, the preferred methods of CMS (Chapter F), especially intercultural communication and whistle-blowing systems, which are heavily influenced by cultural aspects (Chapter G). The final chapter concerns Ethics, Compliance and Integrity in international trade (Chapter H).

We have therefore adopted in this book a rounded and self-contained concept which nevertheless retains a degree of flexibility. We will expand and update the work at regular intervals. We herewith invite interested authors and experts from the world of Ethics, Compliance and Integrity to submit their proposals for contributions. We will also ensure that similar works feature high-quality contributions in order to promote the development of Ethics, Compliance and Integrity in the long term.

It has been an honor and pleasure to have worked with the hundred or so contributors to this work. Thanks are due not only to the numerous authors but also to the proof-reader Christopher Dallimore, the publisher and its team, translators and friends, my team from the Viadrina Compliance Center and all partners, sponsors and supporters who have enthusiastically helped with organizing the Viadrina Compliance Congresses! In particular, I would like to thank the Center “B/Orders In Motion” at the European University Viadrina Frankfurt (Oder) for providing financial support for the “Cross Cultural Compliance” project which gave rise to the contributions in this work with its long-lasting and sustainable results!

I am delighted that this project given rise to a global community of so many distinguished experts from all over the world and sincerely hope that this work will serve to promote the interdisciplinary and global research and practice of Ethics, Compliance and Integrity from the perspective of international organizations in the long term.

Professor Bartosz MakowiczFrankfurt (Oder), 21st November 2018

B. Challenges and Future of Compliance

I. The future of Compliance

Dr. Rainer Markfort

The 4th Viadrina Compliance Congress brings together experts from many different countries to discuss ideas on what the future of compliance will bring and what we can do to contribute to its development in our communities. Before looking ahead, we should start with an analysis of the status quo even though, at first glance, this may not seem very encouraging. By gaining a clear view of where we come from, we can better understand the deficiencies we encounter today (1.). Today, numerous business and social factors are driving the need for a more sophisticated approach to compliance. We must be patient as this evolution will take time (2.). However, only through our own initiative and commitment will we ensure the prospects of success for compliance in the future (3.)

1.Where does compliance stand today?

In Germany, compliance first emerged in 2005. Before then, no one had heard the word “compliance” except bankers and doctors. Daimler then became the subject of investigation by the US Department of Justice (DOJ) and the Stock Exchange Commission (SEC). One year later, the same happened to Siemens and since then a similar fate has befallen a series of large and small companies. Scandal after scandal followed and there were times when almost every day the newspapers were reporting about corruption, fraud, breach of antitrust regulations, manipulation of interest rates and other economic crimes taking place within many respected companies.

Shockwaves rippled through the German Automobile Club ADAC (by far the largest NGO in Germany in terms of members) when manipulations of inquiries and fraud came to light. The same happened to FIFA, the only difference being that many had harbored suspicions regarding FIFA officials whereas the German Automobile Club was a somewhat ‘holy’ institution.

The amounts that corporations were paying in penalties consistently increased and society became used to reading about fines in the billions being imposed. At the same time, the reputation of these corporations were destroyed. Once upon a time, the name “Deutsche Bank” was synonymous with strength and glory. But what is left now?

A whole industry is constantly demonstrating what happens when compliance merely means applying the rules set by the regulator. The banking sector claims that it has practiced compliance for over 20 years. However, a closer look shows that this is only true in specific areas. Some of the biggest scandals in the past, which led to enormous penalties, have occurred in banks. So it appears there has been no value-based compliance for a long time and this may still be true today.

Today, many of Germany’s large corporations have established compliance organizations, appointed compliance officers, implemented anti-corruption and anti-trust policies and trained their employees accordingly. Some of them did so after they experienced corruption and other criminal scandals and were forced to act owing to the pressure of investigative authorities and the public debate. Astute companies were quick to take these measures in order to avoid such situations.

After the initial phase of corporations tackling compliance, a big German corporation was repeatedly fined for breaching anti-trust rules. It responded by implementing a state-of-the-art Compliance Management System. This was one of the first tested by external auditors according to IDW PS 980, a newly developed standard. The accountants certified the Compliance Management System as being adequate, implemented, and effective. It may therefore be surprising to learn that this same corporation was again subjected to high fines owing to a new breach of anti-trust rules! How could this happen? Then it was announced that the board member responsible for legal matters and compliance had to quit his job for a personal breach of the compliance rules. This case clearly demonstrates that compliance requires more than policies and procedures.

It does appear surprising that compliance scandals happen again and again. Did the compliance function fail to achieve its aims? Were there deficiencies in the company’s policies or training? In view of these examples, we may have to admit that compliance is still in its infancy and, in this sense, needs time to develop.

2.Does compliance have a future?

Quite a few people are of the opinion that compliance is just hype and that it will fade away. The burden of compliance bureaucracy could endanger and challenge a company’s competitiveness. Some argue that, in most countries of the world, business does not work without bribes and it is not the company’s responsibility to make the world a better place to live.

A keynote speaker is not a prophet but he may dare a prognosis: Compliance has a future and will not vanish! The reason is that, today, compliance is no longer simply an issue between the authorities on the one hand and corporations on the other. Compliance is far more than this because public opinion has changed dramatically in the past years.

Twenty years ago, tax fraud was viewed as a trivial offence. Bribery and corruption, especially in foreign countries, was a legitimate means of obtaining business. In Germany and other countries bribes were even tax deductible. The biggest mistake in breaking anti-trust rules was to be seen to have been caught. Today, this is different: penalties and damages have increased as has the pressure resulting from investigations. Most of all, however, the corporation’s reputation suffers to such an extent that it influences the value of products and the company as a whole. Here, we see that public opinion has a really dramatic impact which leads to change.

Back in the 70s or 80s, the laws for the protection of the environment were tightened with the support of a strong social movement. At that time, a breach of environmental laws was viewed as a trivial offence, at least within the business community. Some entrepreneurs ignored the stricter rules and argued that following these rules would endanger their business and that they were responsible for creating jobs in society. Today, nobody would dare to suggest that environmental crime is a trifling affair.

One can therefore predict that compliance will undergo a comparable evolution and, for this reason, has a future. How long will it take? Probably one generation of managers. Recently, a study showed that managers’ business attitudes are mainly influenced by their experiences during their first years in business. This finding may not be all that surprising. However, it does show that we must be patient: it may be difficult to convince today’s director that corruption is evil. When this director was a young sales person early in his career, he might have used petty cash to obtain business. However, a young business person today, who has gained his first business experience against the backdrop of compliance scandals and internal investigations, will certainly have a different attitude when he becomes a manager or director.

3.How can we improve the prospects of compliance?

Compliance must become attractive! Compliance must add value to those who run the business and make profits for their company. Compliance should support and promote business and not hinder it. However, compliance is still rarely viewed in this way.

Today, most managers understand that they may be held liable for the misconduct of their employees. However, they may still claim that in foreign markets they could lose business to competitors who are less rigorous with regard to compliance. Sales persons and people from procurement departments are unhappy about the amount of training and e-learning. They are annoyed and frustrated about having to check company policies on gifts and hospitality when they want to invite a business partner for lunch. They blame compliance for the bureaucratic hurdles they have to overcome before they can start business with a new partner. So what can we do?

Let’s look at the example of third party checks, often referred to as “Business Partner Due Diligence”. For business, the integrity check is not the most important thing when starting a new relationship. For people on the front line, it is more important to understand whether a new business partner will be able to deliver quality and whether he has good financial standing so that he might survive a longer business relationship or a challenging project. Now, if the Compliance Department were able to provide exactly this information at this very early stage (i.e. immediately after the first contact has been made), all stakeholders would be fine. The company’s decision-makers would have relevant information available for their business decisions and the Compliance Department would be involved at a very early stage and might be in a position to check for potential risks. Business and compliance working hand-in-hand are much better at supporting compliance than policies and controls.

When management takes compliance seriously and entrepreneurial decisions are guided by values then compliance can be a useful tool for good leadership. People are much more creative, effective and, ultimately, productive when they work in an environment that reflects their own values and principles. A management that uses compliance as a leadership tool need not fear liability owing to their employees breaking the law.

Finally, compliance will support competition. Brand, reputation, sustainability and corporate social responsibility are becoming increasingly important as they represent a substantial part of the added value of a product. In such an economic environment, compliance is a competitive advantage. In today’s world, a product or company’s value will, to a certain extent, be determined by good compliance. However, writing down a set of core values won’t be enough. What we need (as in all other areas of business), is specific implementation, best practice, and support. At the same time, not every company has to reinvent the wheel. The wider stakeholders in the economy should come together to establish common rules for good business.

This was exactly the idea and goal when, in November 2012, German corporations, university professors, accounting and law firms took the initiative and founded the German Institute for Compliance, DICO. Today, DICO has more than 200 members, more than half of which are corporations from all sectors and industries. Over 200 individuals are personally engaged in six committees and 11 working groups. They discuss and develop guidelines, working papers and training materials on various topics such as business partner compliance, internal investigations, qualifications, compliance certificates and quality management. Other working groups cover healthcare compliance, data privacy, anti-trust and export control. They formulate opinions and develop proposals for legal initiatives. By this means, DICO protects the stakeholder interests to avoid bureaucratic and excessive laws and regulations. On the other hand, DICO members can rely on proposals and models that they have developed collaboratively.

This is the best way to ensure compliance. We are taking the initiative, developing our own ideas and not waiting for the legislator to intervene. Let us take compliance into our own hands, work together to further its development and improve compliance’s prospects of success in the future.

II. Some Challenges for Cross-Border Compliance Across Europe

Pierre-Antoine Badoz

Orange is a telecom operator and services provider formerly known as “France Telecom”, the French incumbent. Since its creation, it has widely expanded geographically and now has a large international footprint. In Europe, it provides mass market telecom services in France, Belgium, Luxembourg, Moldova, Poland, Romania, Slovakia and Spain. In Africa and the Middle East, it offers services for mass market customers in 21 countries from Egypt to Ivory Coast, Jordan, Madagascar, Morocco and Senegal, to name but a few. Orange also provides telecom services for business customers in more than 200 countries and territories through its Orange Business Services subsidiary: cross-border issues are a daily challenge at Orange!

Orange revenues totalled € 40 billion in 2015 with 156 thousand employees serving more than 252 million customers worldwide; 16 million of them are using “Orange Money”, a mobile wallet service.

Orange strategy focuses on the quality of networks and services and reasserts Orange’s international ambitions in Europe and MEA countries as well as its commitment to continued expansion in mobile financial services and “connected objects”.

Looking at Orange’s strategy and assets through the “lens of compliance” makes one realise that each of them involves specific ethics or compliance risks and challenges, as shown in figure 1 below.

Fig. 1: Our Ethical and Compliance challenges

Orange strategy is supported by business development and M&A activities with potentially “non-fully compliant” targets in countries which are not necessarily Transparency International’s leaders (according to its “Corruption Perception Index”). In addition, Orange’s expansion in the internet of things and mobile financial services may lead to personal data protection and security issues or banking compliance challenges with the focus on anti-money laundering and counter-financing terrorism (AML/CFT).

The Orange brand needs to be protected against reputational risks while stakeholders’ trust in its ethical values must be continuously reinforced along with the awareness of every Orange employee in sharing, promoting and acting in accordance with these values. Other “must haves” are training employees whose activities may expose them to corruption risks, knowing every customer as required by both banking and telecom regulations and making proper due diligence vis-á-vis intermediaries and partners.

Last but not least, its international footprint exposes Orange to an ever increasing number of national and international laws and regulations involving corruption, sanctions, anti-trust, privacy, technical requirements, tax, environmental issues, etc. It also exposes Orange to differences in “cultural approaches to the rule of law”.

Recently, various compliance issues concerning the telecom sectors have arisen, examples of which are listed below:

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Vimpelcom, the Russian operator is a subsidiary of Telenor, the Norwegian incumbent, which is listed on NASDAQ and registered in the Netherlands. In February 2016, it was fined $795 million for having paid a $114 million bribe to an Uzbekistani public agent in order to obtain its mobile license in Uzbekistan.

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A source reported that this action was “a precursor for a much larger settlement coming down the line with TeliaSonera” as Telia, the Swedish and Finnish incumbent, faces investigations by the US Department of Justice and Swedish prosecutors. It announced its withdrawal from all central Asian countries and suffered the dismissal of its CEO, CFO, legal director and several other top managers.

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Meanwhile, the American judiciary is working overtime with more than 80 ongoing FCPA investigations, five of which concern telecom operators or suppliers.

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In addition, the US is pragmatically investing part of the fines in recruiting FCPA prosecutors and FBI agents. In 2015, it also rewarded whistleblowers with more than $ 54 million. In the same year, Ms Yates, Deputy Attorney-General of the DoJ wrote a famous memo requesting American prosecutors to focus their efforts on the personal liability of managers.

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MTN, the South African telecom giant, was recently fined the equivalent of $ 5 billion and recently reached agreement with Nigerian authorities to pay close to $ 1.7 billion for “missing a deadline to disconnect unregistered customers”.

These examples show that compliance is indeed a very hot topic in telecoms!

At Orange, we therefore deployed a comprehensive compliance programme back in 2012, leveraging our previous anti-fraud and anti-corruption programmes. We used a “classical” 6-step approach to comply with the requirements of various guidelines (including the FCPA and the UKBA). Each of these steps raises very practical issues when deployed across our footprint, as can be seen from figure 2 below.

Fig. 2: Our Ethical and Compliance challenges

Let’s take the example of step 1 “tone from the top”: to start with, there is the very practical language issue as 6 different languages (Flemish, French, Polish, Slovak, Spanish and Romanian) are spoken within our European Business-to-Customer footprint. This number more than doubles within our European Business-to-Business footprint and more than doubles once again within our worldwide footprint where many employees speak neither French nor English.

There is also the important issue of the person who carries the message: should it be the local CEO, the Division Executive Committee member or our Group CEO? The answer is not obvious, as the impact of the message is not necessarily commensurate with the speaker’s position within the organisation as the following example shows.

At the end of 2015, our CEO and every ExCom member signed a short message renewing our Group’s commitment of “zero tolerance towards corruption”. This message was then sent to every manager in our Group, both in France and abroad (over 14,000 to be precise). When travelling and asking managers about this message, I discovered that not all of them outside France remembered having received it (contrary to the situation in France). After discussing this finding, one of our Chief Compliance Officers decided to duplicate the initiative within her local organisation. A similar commitment was then signed by the country CEO and local management committee and subsequently disseminated through the organisation with positive feedback and very high recognition ratio.

Governance is key for Compliance and sometimes full of tricky issues such as:

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Controlled entities and minority shareholders: owing to their position, minority shareholders must sometimes show strong conviction and marshall excellent arguments to increase local management’s and other shareholders’ awareness of compliance risks and convince them to deploy a robust and effective compliance programme.

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M&A and cultural misunderstanding: telcos, and especially incumbents, tend to have a strong corporate culture with centralised management which may conflict with one another or with the less structured new entrants.

Risks obviously depend on the country Orange operates in: the Customer Perception Index ranking of Orange European countries of operation ranks from 10 in Luxembourg to 103 in Moldova, not to mention some of our African or Middle-Eastern operations which hover around the bottom of Transparency International’s ranking. Resources, due diligence, training, communication, every aspect of our compliance programme needs to be adequately adapted to the country in question – and to our local business. Adequate adaptation is essential: having insufficient controls in a difficult and complex environment is obviously problematic but having an overly strict and burdensome programme in a low risk environment would also be counterproductive. This will be the case if the procedure appears too complex or if operational staff does not understand why strict due diligence and training is necessary. This situation runs the risk that the procedure will not be followed adequately. Complaints may also be made about the time, resources and ultimately money being wasted on an apparently useless bureaucratic procedure, thereby undermining the support of management which is essential for compliance.

Policy and procedures: this is really where we need group policies but also local procedures to make sure that they are effectively enforced. I will illustrate my point with 2 examples. The first one concerns whistleblowing, which is an extremely sensitive issue in some countries (e.g. Belgium and France) owing to the fact that it is widely seen as denunciation. Accordingly, we rely not only on the alert mechanism but also on our networks of HR advisors, ethics advisors and compliance officers, respected employees or managers that people trust and are prepared to rely on for alerts.

The second issue concerns the procedures to enforce our gift and entertainment policy, which has to be adapted to the local culture. At Orange Poland, for instance, the management developed a clever solution to respect the cultural habit of significant business gifts during Christmas and New Year season whilst remaining compliant with our group’s gift policy. The solution is that every top manager of Orange Poland has to give up the external gifts he or she receives in December and January. The resulting “pool of gifts” is then donated to an NGO through the Orange foundation in a widely publicised event. This effective solution is now publicised within the Group as it may also work as efficiently and positively in other operations.

Finally, controls are essential to measure the effectiveness of compliance programmes and should be deployed adequately throughout the organisation. The only thing that may vary geographically is the level of resources needed to enforce them!

In conclusion, I would like to share two strong convictions: the first one is that compliance, more than any other business issue, is a domain where we should think globally and act locally. The second one is that being an ethical and compliant company is not only a winning formula in managing risks but is also becoming an increasingly important competitive advantage.

III. Key Recommendations of B20 Cross-Thematic Group Responsible Business Conduct & Anti-Corruption

Dr. Klaus Moosmayer

1.Introduction

Responsible Business Conduct and Anti-Corruption was a major pillar in the B20 framework under the German G20 Presidency 2017. As a consequence a Cross-Thematic Group was established in order to come up with strategic but also pragmatic recommendations and best practice examples in order to give the view of the business community to the G20 leaders.1

To raise standards of living, economic growth is indispensable. Job creation, training, and education, innovation and technology development – business plays an integral part in improving living conditions around the globe. Foreign direct investment can positively contribute to local economic development.

Around the world, countless companies are committed to Responsible Business Conduct (RBC), improving health and safety at work, living conditions, society, environment, and consumer welfare. More and more companies are integrating this concept in their value chains.

An important aspect of Responsible Business Conduct is fighting corruption. Corruption reduces efficiency and increases inequality. It distorts the efficient allocation of resources. It raises the costs of doing business. It undermines the trust in governments and erodes the rules of law.

According to the World Economic Forum the cost of corruption equals more than five percent of global GDP (US$ 2.6 trillion). Much has already been done to fight corruption. But we can do better. B20 Germany thus decided to establish a Cross-thematic Group on Responsible Business Conduct and Anti-Corruption.

Relevance of Cross-Thematic Group Recommendations for the G20 focusses “Ensuring stability”, “Improving viability for the future”, and “Accepting responsibility”

2.Key Recommendations

2.1Establish Beneficial Ownership Transparency

Recommendation 1: G20 members should increase their efforts to implement beneficial ownership transparency so that risks related to the ultimate owner(s) can be identified.

Policy Action 1.1: Implement Beneficial Ownership Action Plans – G20 members should continue to lead the world in realizing beneficial ownership transparency by progressively implementing their action plans, raising global standards of data quality, exploring possibilities of connecting ownership information, and monitoring implementation progress.

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G20 members should align Beneficial Ownership Action Plans with Financial Action Task Force (FATF) recommendations and the proposals that were made to G20 Finance Ministers in October 2016.

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G20 members should improve the quality of their company registers so that they provide high-quality data. Members should also explore possibilities of linking and centralizing ownership information.

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G20 should ask a relevant third party (such as the World Bank) for a review of implementation progress before the 2018 G20 Summit.

Policy Action 1.2: Ensure Availability of Information – G20 members should ensure easy access to, and efficient use of, beneficial ownership information by laying down clear rules governing access to information, and facilitating access for users through adequate measures and guidance.

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G20 members should specify user access rights to beneficial ownership information.

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Users should have adequate tools and guidance to access and analyze this data quickly.

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G20 members should define technical and organizational measures to ensure easy access for authorized users, both nationally and internationally.

Policy Action 1.3: Improve Exchange of Information – G20 members should facilitate the timely and effective exchange of beneficial ownership information at the national and international levels by defining or adopting data standards, providing guidance on legal set-ups in their country, and assisting developing countries in improving company registers.

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G20 members should agree on international standards relating to data privacy and data handling with regard to the exchange and processing of basic and beneficial ownership information.

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G20 members should publish information on legal set-ups in their country, including risk profiles, reporting requirements, sources of basic and beneficial ownership information, and access rights.

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G20 members should support developing countries with the creation and maintenance of reliable company registers by promoting beneficial ownership transparency with technical and financial assistance.

2.2Recognize Compliance Efforts

Recommendation 2: G20 members should be supportive of company’ proactive engagement by providing positive recognition of effective anticorruption and compliance systems.

Policy Action 2.1: Acknowledge Adequate Measures – G20 members should recognize corporate compliance efforts when awarding public contracts and when imposing sanctions for breaches, and they should explore additional ways to acknowledge compliance efforts.

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The existence of an adequate and robust compliance program should be a requirement for being eligible to receive public subsidies or other public funds, licenses, public contracts, export credits and trade insurances.

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G20 members should have the ability to reduce sanctions and penalties based on the fact that companies have implemented adequate compliance programs.

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G20 should commission the OECD to conduct a fact-finding study on countries’ approaches to compliance incentives and identify good practices.

Policy Action 2.2: Encourage Self-Disclosure and Self-Cleaning – G20 members should be encouraged to harmonize their administrative and legal approaches to self-disclosure of compliance breaches, recognize effective and safe internal reporting, and support adequate self-cleaning.

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G20 members should align laws and regulatory requirements that strengthen voluntary self-disclosure mechanisms through reduced penalties and institutionalized leniency programs.

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G20 members should offer discounts that specifically relate to the existence of internal reporting systems and adequate protection to whistleblowers who report misconduct within the company.

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G20 members should recognize self-cleaning efforts after misconduct has been detected and remediated, for example, by allowing them to be reconsidered for inclusion in public tenders.

Policy Action 2.3: Promote a Culture of Integrity – G20 should continue its commitment to building a global culture of intolerance towards corruption by reinforcing international cooperation, including the promotion of key international instruments, supporting the provision of capacity building and training for SMEs and in non-G20 countries, as well as improving education on anti-corruption and integrity in schools and universities.

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G20 members should effectively implement and promote key international instruments to help create a level playing field for businesses.

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G20 members should promote capacity building among SMEs by offering training and guidance on RBC and anti-corruption and by recognizing companies that build such capacities in their supply chains.

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G20 members should support capacity building and the provision of effective and efficient technical assistance to assist non-G20 countries in tackling corruption.

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G20 should work together with businesses and society to explore possibilities of integrating integrity, anti-corruption and RBC in the curricula of schools and universities.

2.3Enhance Responsible Business Conduct in Infrastructure Projects

Recommendation 3: G20 members should increase transparency and accountability at all stages of the project cycle in order to mitigate the risk of corruption and increase efficiency.

Policy Action 3.1: Promote Responsible Government Conduct and Transparency – G20 members should address the demand side of corruption and should ensure that public infrastructure projects are selected, planned, awarded and managed openly and accountably by promoting integrity in their own organizational structures and processes and by enhancing reporting about project risks, impacts, progress and costs.

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G20 members need to mitigate corruption risks and improve transparency and accountability at all stages in the project cycle, from the selection phase, through the procurement and the contract, all the way to ribbon cutting.

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To encourage fair competition, G20 members should ensure the publication of relevant tender documentation in line with international standards and improve information sharing and efficiency through the use of digital technologies.

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G20 members should improve adequate reporting to relevant stakeholders throughout the entire cycle of an infrastructure project and balance the protection of sensitive data with the public’s legitimate interest to know how public money is being spent.

Policy Action 3.2: Ensure Recognition of Responsible Businesses – G20 members should promote integrity among participating businesses by specifying requirements related to RBC, by encouraging coherent sustainability reporting, and by providing awareness training on anti-corruption and integrity.

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G20 members should require bidders to disclose their beneficial owners and to have adequate controls, measures and programs in place to manage corruption risks. They should exclude tenderers that have been convicted of illicit practices or proven unreliable and recognize self-cleaning by allowing bidders to reapply if they have implemented effective measures to manage the risk.

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G20 members should consider environmental, social and governance (ESG) performance as a bidding criteria and strengthen reporting requirements that improve the comparability of ESG information.

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G20 members should provide integrity training for contracting authorities and bidders to raise awareness of the various risks involved and the potential consequences for themselves, as well as for society.

Policy Action 3.3: Support Collective Action – G20 members should promote Collective Action, that is initiatives between different businesses, and between businesses and the public sector, which foster integrity (such as Integrity Pacts and High Level Reporting Mechanisms). G20 should initiate a study that explores joint ways of fighting corruption and misconduct in infrastructure projects.

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G20 members should encourage coordinated efforts by companies, governments and civil society to step up against corruption and strengthen good business practice.

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G20 should set up a review of specific infrastructure projects by an expert group to develop appropriate mitigating strategies and identify ways to further support Collective Action.

3.About “Business 20”

The Business 20 (B20) is the official G20 dialogue with the global business community. On September 4 2016, the leading German business associations BDI, BDA, and DIHK, mandated by the German Chancellery, assumed the B20 presidency. Chair of B20 Germany is Dr. Jürgen Heraeus.

Since September 2016, more than 800 representatives from companies and business association developed recommendations for the G20 on a consensual basis. B20 Germany is organized in seven working groups: Trade and Investment, Energy, Climate & Resource Efficiency, Financing Growth & Infrastructure, Digitalization and Employment & Education, Responsible Business Conduct & Anti-Corruption and SMEs. In February, the B20 Health Initiative was launched. Each group is headed by a chair and several co-chairs. The approximately 100 members of each group represent all G20 countries and sectors of the economy.

B20 Cross-thematic Group Responsible Business Conduct & Anti-Corruption

Chair

Dr. Klaus Moosmayer, Chief Compliance Officer, Siemens

Co-Chairs

Dr. Andrey Bugrov, Senior Vice-President, MMC Norilsk Nickel

Andre Oliveira, Member of South America Executive Team, BASF

Corinne Lagache, Senior Vice President, Group Compliance Officer, Safran

Jorge Mandelbaum, President, CIPPEC

Anny Tubbs, Chief Business Integrity Officer, Unilever

Knowledge Partner

KPMG

Network Partners

Business and Industry Advisory Committee to the OECD (BIAC)

International Chamber of Commerce (ICC)

Concept Partner

Alliance for Integrity

The group consists of 112 members from 26 countries (including the category “international”).

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