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Formulationandimplementationofadequateprocedures– InternationalBestPracticeandLessonsLearnt
Adequateproceduresintheprivatesector
WilsonAngPartner,NortonRoseFulbright(Asia)LLP
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Corporatecriminalliability
• Withoutaclearandviabletestforcorporatecriminalliability,thereisnolegalsignificanceforcomplianceprogramsoradequateprocedures.
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Attributionofliability
• Corporatecriminalliabilitycanbeestablishedvia:– Identificationprinciple:“directingmindandwill”– Respondentsuperior:“Letthemasteranswer”– Failuretoprevent:Crimeofomission,strictliability
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Indonesianapproach
• SupremeCourtRegulationPerma No.13/2016• Corporatecriminalliabilityif:
– Criminalactcommittedbyanyperson– Basedonemploymentorotherrelationshipwiththecompany– Actsforandonbehalfofcompany– Withinoroutsidecompany’sbusinessenvironment
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Indonesianapproach
• Indeterminingcorporateliability,courttoconsiderifabusinessisfoundtohave:– materiallybenefittedfromacrime;– acquiescedtothecommissionofacrime;or– failedtotakeclearstepstowardthepreventionofacrimeormitigationofitsimpact,
itmayfacefines,haveassetsseizedorpersonneljailed.
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Adequateprocedures
• Legalsignificanceofadequateprocedures:– Completecorporatedefence– Sentencingleniency– Prosecutorialdiscretion
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Clearsteps– InternationalpracticeUKMOJ SixPrinciples USFCPA TenHallmarks ISO37001:20161.Top-levelcommitment 1.Commitmentfromsenior
managementandaclearlyarticulatedpolicyagainstcorruption2.Oversight,autonomy,andresources
5.1Leadershipandcommitment5.3Organisationalroles,responsibilitiesandauthorities
2.Proportionateprocedures
3.Codeofconductandcompliancepoliciesandprocedures
5.2Anti-briberypolicy8.6Anti-briberycommitments
3.Riskassessment 4.Riskassessment 4.5Briberyriskassessment4.Communication(includingtraining)
5.Trainingandcontinuingadvice6.Incentivesanddisciplinarymeasures
7.3Awarenessandtraining7.4Communication
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Clearsteps– InternationalpracticeUKMOJ SixPrinciples USFCPA TenHallmarks ISO37001:20165.Duediligence 7.Thirdpartyduediligence
andpayments8.M&A,pre-acquisitionduediligenceandpost-acquisitionintegration
7.2Duediligenceonemployees8.2Duediligenceonbusinessassociates
6.Monitoringandreview 9.Confidentialreportingandinternalinvestigations10.Continuousimprovement:periodictestingandreview
8.4Financialcontrol8.5Non-financialcontrol8.9Raiseconcerns8.10Investigatebribery9.1Monitor,measure,analyseandevaluate9.2Internalaudit
Targetsgiving ofbribesingeneral
Targetsgiving ofbribestogovernmentofficials
Targetsgivingandreceivingofbribesingeneral
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Challenges
• Misplacednationalisticpushbackagainstforeigncorruptionlaws• Blindacceptanceofanti-corruptionundertakingswithout
complianceinfrastructureinplace• Overuseofcertificationinplaceofactualverification• Abuseofculturalguiseandcommunityself-helpascoverfor
corruptionandconflictofinterest• Misconceptionthatcomplianceisthejobofcomplianceofficers• Insufficientresourcesandauthorityforcompliancefunction• Whistleblowinghotlinewithoutinvestigativefollow-upaction
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Recommendations• Adoptjurisdictionallyneutral,broad-basedstandards• Activelypromoteimplementationofcomplianceprograms• Clarifylegalsignificanceofcomplianceprogramsinshowingthat
“clearsteps”weretakentopreventcrime• Empowercomplianceofficersthroughprofessionaltrainingand
ensuringclearaccesstotheboardandseniormanagement• Spreadmessagethatcomplianceiseverybody’sresponsibility• Focusonneedforcompanytoconductinternalenquiryon
allegationssoastoreducedamageandpreventrecurrence• Maintainlawenforcementbalancebetweenprivateandpublic,
givingandreceiving,aspectsofbribery
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