The cost of bribery and corruption
Every year, corruption losses represent over 5% of global GDP (US$2.6 trillion) and bribes exceed US$1 trillion. This is a cost which can be brought to bear on companies and their investors, and one that is detrimental to governments and society. Corruption adds up to 10% to the cost of doing business globally and up to 25% to the cost of procurement contracts in developing countries.
Corruption is best understood as a shorthand reference for a wide range of activities that encompasses bribery as an important subset. Corruption scandals including bribery, fraud, rate and test rigging, can prove catastrophic to companies, as shown below.
Corruption is not an obstacle to business in Australia, which is known for its well-functioning and independent judiciary, transparent regulatory climate and overall low levels of corruption. However, corruption risks exist in relation to foreign bribery and the mining industry. The Criminal Code covers bribery of foreign and domestic public officials, while each of Australia’s states and territories has its own anti-corruption provisions.
Public sector and private sector bribery are addressed, and both individuals and companies can be targeted. Persons convicted of corruption can receive a maximum penalty of 10 years’ imprisonment and/or a fine of up to AUD 1.1 million. For a business, the penalty is a fine of up to AUD 17 million, three times the value of the obtained undue benefit, or 10% of the annual turnover of the company during the period in question. Australian political parties commonly receive gifts and hospitality, but there is little information available on gifts and hospitality in the private sector. Provided they are recorded, facilitation payments are legal in Australia. Source: Australia Corruption Report.
What are Corruption and Bribery?
Corruption – “The abuse of entrusted power for private gain. Corruption can be classified as grand, petty and political, depending on the amounts of money lost and the sector where it occurs.”
Bribery – “The offering, promising, giving, accepting or soliciting of an advantage as an inducement for an action which is illegal, unethical or a breach of trust. Inducements can take the form of gifts, loans, fees, rewards or other advantages (taxes, services, donations, favours etc.).” Source:Transparency International (Anti-corruption Glossary)
On October 15, 2016, ISO (The International Organization for Standardization) published the new standard ISO 37001:2016 – Anti-bribery management systems — Requirements with guidance for use.
Attention! The standard ISO 37001:2016 does not define bribery term. Bribery is defined by law which varies between countries. Therefore the Standard does not provide an independent definition of bribery.
What ISO says about this new standard ISO 37001:2016?
Bribery is one of the world’s most destructive and challenging issues. With over US$ 1 trillion paid in bribes each year, the consequences are catastrophic, reducing quality of life, increasing poverty and eroding public trust.
Yet despite efforts on national and international levels to tackle bribery, it remains a significant issue. Recognizing this, ISO has developed a new standard to help organizations fight bribery and promote an ethical business culture.
ISO 37001, Anti-bribery management systems, specifies a series of measures to help organizations prevent, detect and address bribery. These include adopting an anti-bribery policy, appointing a person to oversee anti-bribery compliance, training, risk assessments and due diligence on projects and business associates, implementing financial and commercial controls, and instituting reporting and investigation procedures.
It is designed to help your organization implement an anti-bribery management system, or enhance the controls you currently have. It helps to reduce the risk of bribery occurring and can demonstrate to your stakeholders that you have put in place internationally recognized good-practice anti-bribery controls.
Who is it for?
ISO 37001 can be used by any organization, large or small, whether it be in the public, private or voluntary sector, and in any country. It is a flexible tool, which can be adapted according to the size and nature of the organization and the bribery risk it faces.
What is an Anti-bribery Management System?
An Anti-bribery Management System is the establishment of a closed-loop control architecture that establishes, implements maintains, reviews and improves management strategies and objectives which address the specific requirements of ISO 37001 standard. Even though the nature of an organisation differs from one another, this standard addresses management objectives for the prevention of bribery in these contexts:
- bribery in the public, private and not-for-profit sectors;
- bribery by the organization;
- bribery by the organization‘s personnel acting on the organization‘s behalf or for its benefit;
- bribery by the organization‘s business associates acting on the organization‘s behalf or for its benefit;
- bribery of the organization;
- bribery of the organization‘s personnel in relation to the organization‘s activities;
- bribery of the organization‘s business associates in relation to the organization‘s activities;
- direct and indirect bribery (e.g. a bribe offered or accepted through or by a third party).
Anti-bribery Management System – the business benefits
Conformity with ISO 37001 cannot provide assurance that any bribery risk has occurred or will occur in the organization because it is not possible to completely eliminate the risk of bribery. However, ISO 37001 can help the organization to implement the necessary measures to prevent, detect and address bribery. Organizations that are certified and comply with an Anti-bribery Management System are more trusted and recognized for implementing Anti-bribery policies and practicing Anti-bribery culture within the working place and the territory where it operates.
Training and certification of professionals
PECB has created a training roadmap and personnel certification schemes which are strongly recommended to implementers and auditors of an organization wishing to get certified against ISO 37001. Certification of organizations is a vital component of the anti-bribery management system, as it provides evidence that organizations have developed standardized processes based on best practices. Yet, certification of individuals serves as documented evidence of professional competencies and experience, while also providing evidence that the individual has attended one of the related courses and successfully completed exams.
Note: PECB is an accredited Personnel Certification Body by The International Accreditation Service (IAS) under ISO/IEC 17024 – Requirements for bodies operating certification of persons.
ISO 37001 Lead Implementer Course
The ISO 37001 Implementer certifications are professional certifications for professionals needing to implement an ABMS and, in the case of the ISO 37001 Lead Implementer Certification, needing to manage an implementation project.
iQuality Services & RQM Cert are PECB Partners and this course is using PECB accredited course materials and is offered in partnership with PECB.
According to the collaboration agreement, iQuality Services & RQM Cert shall comply with its obligations based on the PECB rules & regulations and based on its own professional knowledge.
This five-day intensive course enables participants to develop the necessary expertise to support an organization in implementing and managing an Anti-bribery Management System (ABMS) based on ISO 37001:2016.
Participants will also gain a thorough understanding of global anti-corruption best practice used to implement the anti-bribery management system based on ISO 37001:2016. This management system is designed to be integrated with any existing system, and can be adapted to any organization in any country.
Who should attend?
- Project managers or consultants waiting to prepare and to support an organization in the implementation of an Anti-bribery Management System (ABMS).
- ISO 37001 auditors wish to fully understand the Anti-bribery Management System implementation process.
- Persons responsible for the Anti-bribery conformity in an organization.
- Members of Anti-bribery team.
- Technical experts of the organization wanting to prepare for Anti-bribery Management System function or for Anti-bribery Management System project management function.
- To understand the implementation of Anti-bribery Management System in accordance with ISO 37001.
- To gain comprehensive understanding of the approaches, methods, measures and techniques required for the effective management of Anti-bribery Management System.
- To gain knowledge and skills in identifying risk and opportunities associated with an organization.
- To acquire the necessary expertise to support an organization in establishing, implementing, managing and maintaining the Anti-bribery Management System as specified in ISO 37001.
- To acquire the necessary expertise to manage a team implementing an ISO 37001.
- To develop the knowledge and skills required to advise organizations on the anti-bribery good practices.
- To help an organization implement the necessary measures in accordance with ISO 37001.
- To prepare an organization for an ISO 37001 audit
Course Agenda (5 Days)
- Day 1: Introduction to ISO 37001 and integration with an existing MS.
- Day 2: Define and Plan the implementation of ISO 37001.
- Day 3: Deploying the ISO 37001.
- Day 4: ISO 37001 measurement, control, continuous improvement and preparation for the certification audit.
- Day 5: Certification Exam.
Complete information about this course, locations and dates of the events:
- Engaging on Anti-Bribery and Corruption: A Guide for Investors and Companies
- Transparency International (Anti-corruption Glossary)
- ISO (The International Organization for Standardization)
Author: Ion Iordache – PECB Certified ISO 37001 Lead Implementer