INTEGRITY MANAGEMENT Tools and Trends in Anti-Corruption Jorge Díaz Padilla

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1 INTEGRITY MANAGEMENT Tools and Trends in Anti-Corruption Jorge Díaz Padilla

2 INTEGRITY MANAGEMENT Overview Integrity Management Short Refresher Tools for Integrity Management Model Representative Agreement FIMS FIDIC Integrity Management System FIDIC MA Activities Industry Trends (legal and other) State of Global Corruption

3 FIDIC TOOLS to Combat Corruption FIDIC Model Representative Agreement FIMS FIDIC Integrity Management System Support to Member Associations Integrity Management Committee IMC improves awareness of integrity management within the younger members of FIDIC, global engineering community Tools Available on FIDIC website

4 FIMS TOOLKIT Part I General Principles -- Outlines minimum set of Integrity Management policies and principles that should be adopted by firms ( General Conditions ). Part II FIMS Development -- Provides guidance on various ways that may be used to develop an Integrity Management System (the Particular Conditions ).

5 FIMS Pilot Program Pilot Program Firms felt FIMS Part I was relevant. Small firms were challenged to implement programs. Early FIMS activities involved framework, approach. Documenting of procedures takes time. Differing risk profiles yield different approaches. Flexibility built into systems to address: Changes in legal landscape National laws / cultural expectations

6 Trends: CESA, South Africa (2013) Member Firm Requirements: All CESA firms must follow this Code. Code requires firms to order conduct according to rules and standards of FIDIC while CESA remains a FIDIC MA. Regulatory and Good Practice Components.

7 Trends: ACEC CANADA (2014) Adopted Business Integrity and Transparency Principles and Policies. Based in part on FIDIC FIMS guidelines. Decision driven by ACEC membership. Firms should develop and implement Integrity Mgmt Systems. Notify clients and/or relevant project funding or delivery agencies of any irregularities in procurement. Ensure their employees and agents are aware of local laws regarding corruption and promptly report criminal behavior.

8 Trends: FCPA, USA (1977) FOREIGN CORRUPT PRACTICES ACT Under FCPA, bribing Foreign Official outside the US is a crime in the US. Administered by US DOJ and SEC. Criminal/civil offenses and penalties. Many cases settled out of court. Long Reach FCPA applies even if connection with the US is tenuous DoJ prosecuting non-us firms.

9 Trends: UNITED KINGDOM (2010) Toughest anti-corruption legislation in the world. Act allows for prosecution of individuals/companies with links to UK, regardless of locale of crime. Bribery of foreign officials illegal, including through third-party. Zero tolerance of facilitation payments. First charges brought in 2013 by Serious Fraud Office.

10 Trends: CHINA (2011) Payments to non-prc government officials and/or international public organization officials are illegal. 8 th Amendment to the Criminal Law appears to apply to all PRC citizens and all persons physically present in the PRC. 8 th Amendment applies to firms and business entities (JVs or foreign-owned firms/offices) organized under PRC law.

11 Trends: BRAZIL (2013) Anti-Corruption Law No /2013. Applies to business organizations, foundations, or associations and foreign companies with an office, branch or subsidiary in Brazil. Establishes corporate and individual liability for corrupt acts involving Brazilian and foreign public officials or government bodies (unlike FCPA). Does not require proof of intent. Contains provisions for Government tenders.

12 SUMMARY Integrity Management is critical to sustainable business. FIDIC has a strong position against Corruption. FIDIC provides tools to support MAs and Member Firms. Model Rep Agreement and FIMS Integrity Management Committee finalizing FIMS Many countries passing Anti-Corruption legislation. Existing Anti-Corruption Laws are being enforced. Civil Society is beginning to have a key role in the combat against corruption.