«MARCH 2015 TABLE OF CONTENTS UNDERSTANDING BRIBERY ISSUES GLOSSARY OF TERMS INTRODUCTION What is corruption? 3 Why do we care? 4 Legislative ...»
TABLE OF CONTENTS
UNDERSTANDING BRIBERY ISSUES
GLOSSARY OF TERMS
What is corruption? 3
Why do we care? 4
Legislative landscape 4 Penalties for corruption 5 Additional considerations 6 WHAT IS BRIBERY?
Kickbacks 7 Common transactions 7 Government officials 8 Intermediaries 8 Facilitation payments 9 HOW CAN YOU AVOID CORRUPTION?
Which red flags to look out for? 10 What to do when confronted with corruption? 11 Where to turn for help 12 REPORTING VIOLATIONS
UNDERSTANDING BRIBERY ISSUESMARCH 2015
GLOSSARY OF TERMS
BRIBERYBribery is the exchange of something of value to secure an undue, unwarranted or improper business advantage. A bribe may take the form of a financial inducement, goods or services, or some other favour such as an offer of employment to a relative of the person being bribed.
CFPOA The Corruption of Foreign Public Officials Act of 1999 (CFPOA) is Canada’s anti-corruption law, which imposes criminal penalties on Canadian and foreign individuals and corporations for bribes paid to foreign government officials. It was enacted to ratify the OECD Anti-Bribery Convention in Canada.
EXTORTIONExtortion is the use of a threat to induce or force someone to engage in undesired activity or behaviour, typically involving the loss of money or some other benefit from the extorted party. In the context of corruption, an example of extortion would be a government official who demands monetary payment against a threat to use their power to damage the interests of a company or an individual.
FACILITATION PAYMENTSFacilitation payments are small payments to officials with a view to speeding up routine governmental transactions to which the payer is already entitled.
FCPA The Foreign Corrupt Practices Act of 1977 (FCPA) is the main anti-corruption law of the United States. The FCPA prohibits individuals and corporations from paying or offering bribes (including kickbacks) to foreign officials. It imposes strict criminal sanctions for individuals and corporations who violate the act, as well as civil liabilities for improper record keeping.
FRAUD Fraud is a deceitful act committed to secure an unwarranted, unfair and/or unlawful benefit. Corruption is therefore a form of fraud, committed against the public or a private organization by the person who receives the bribe or kickback.
GOVERNMENT OFFICIALGovernment official (or “foreign official”) means not only traditional representatives of governments at the federal, state and municipal levels (appointed or elected), but also a wide range of civil servants and employees of state-owned or state-controlled entities. Government or foreign officials include officers or employees of foreign governments, public international organizations, and any department, agency, or related government or public international entities. It also includes any person acting in an official capacity for or on their behalf.
KICKBACKSKickbacks are a mechanism to commit bribery and arise when suppliers or service providers pay part of their fees to the individuals who give them the contract or some other business advantage.
MONEY LAUNDERINGMoney laundering is the process by which the true origin and ownership of illicitly obtained funds is concealed. Corruption is frequently accompanied by money laundering to hide the illicit nature of bribes or kickbacks received.
OECD ANTI-BRIBERY CONVENTIONThe Organisation for Economic Co-operation and Development Convention on Combating Bribery of Foreign Public Officials in International Business Transactions (OECD Anti-Bribery Convention) is an international treaty intended to reduce corruption in international transactions. Signatories to the convention, including 34 OECD members and 7 non-members as of May 20, 2014 are required to adopt domestic legislation to combat corruption involving individuals and corporations based in their countries. While the OECD AntiBribery Convention has no force of law in and of itself, it has served as the impetus for most domestic anti-corruption legislation around the globe, including the CFPOA, UK Bribery Act and many others. Similarly, the OECD serves as a watchdog for assessing the effectiveness of domestic anticorruption legislation and promotes such legislation in countries where it is yet to be enacted.
PEPS Politically exposed persons (or PEPs) are past or current officeholders, or individuals who are or were formerly entrusted with high-level public functions in a foreign country, as well as their immediate family members and close associates. Examples of these positions of trust and power include senior politicians, heads of state or of government, senior judicial or military officials, and important officials of political parties as well as senior executives of stateowned enterprises.
UK BRIBERY ACTThe United Kingdom's Bribery Act 2010 is an anti-corruption law that prohibits the paying and receiving of bribes to foreign officials (including kickbacks) by individual British nationals and corporations that have a branch or subsidiary in any part of the United Kingdom. It also imposes serious criminal sanctions on both individuals and corporations for violating the act. It was enacted to ratify the OECD Anti-Bribery Convention in the United Kingdom.
INTRODUCTIONWSP Global Inc. and its subsidiaries (collectively, the “Corporation”) take corruption issues very seriously. Our management is committed to maintaining the highest standards of professional and ethical conduct, a commitment reflected in our culture and our policies. One of those standards is our zero-tolerance policy on corruption, in all forms, committed by our employees or third parties acting on our behalf.
We join the ranks of the world’s leading businesses, multilateral organizations and local governments across the globe in the fight against corruption. We make this commitment on ethical grounds and because the Corporation and its employees could be held legally accountable for violating anti-corruption laws, with extremely severe penalties.
As the Corporation continues to increase its international reach, our employees will likely face a wide range of transactions and projects in complex jurisdictions. This includes competitive bids for government and commercial contracts in countries where bribes, kickbacks and facilitation payments may be viewed as a part of doing business. The Corporation, however, takes a strong stand against such behaviour. We do not tolerate corruption.
This document helps Corporation employees to understand the wider international context surrounding corruption challenges and the legal and ethical reasons that explain our zero-tolerance approach. It will also help employees and our business partners to recognize, avoid and deal with situations where bribery and corruption are likely to surface. This document should be read in conjunction with our Code of Conduct, as well as our policies on Working with Third Parties and Gifts, Entertainment and Hospitality.
WHAT IS CORRUPTION?There is no universal definition of corruption. Corruption watchdog Transparency International defines it as “the abuse of entrusted power for private gain.” As such, corruption characterizes a wide range of pernicious behaviours; it can involve everything from petty payments to facilitate routine transactions to multimillion dollar payments to fraudulently secure large public concessions. It may involve any combination of bribery, kickbacks, extortion, fraud, deception, collusion and money-laundering, among other pernicious behaviours.
No country is immune to corruption. Corrupt officials and illegal behaviour can be found throughout the world, including in most developed countries. But some jurisdictions present particularly challenging environments. Weak institutions and limited rule of law make some countries, including environments in which we operate, more likely to suffer from corruption.
Likewise, increased interaction and exposure to government officials during competitive public bidding processes mean certain industries, such as oil and gas, mining, engineering and infrastructure, are also more prone to the influence of bribery and kickbacks. Since we operate in these high-risk segments, the Company and our employees must be especially astute.
While the Corporation does not tolerate any form of corruption, this document focuses on the forms of corruption that are expressly prohibited under international anti-corruption legislation: bribery, kickbacks and facilitation payments. As mentioned above, corruption also implicates a wide range of other dishonest behaviours as well as matters relating to our employees’ political and charitable contributions and involvement. For more information, consult the Corporation’s Code of Conduct, which provides further guidance on these and other related matters.
WHY DO WE CARE?Corruption in all forms is simply bad business. It potentially jeopardizes contracts by making them legally unenforceable. It places honest and fair businesses at a significant competitive disadvantage. It damages employee morale by undermining employee confidence in management and colleagues.
And corruption frequently begets further corruption: paying bribes subjects businesses to corrupt officials who may continue to make ever-increasing demands.
Corruption also harms the countries in which the Corporation does business.
It weakens public accountability and democratic values, undermining the rule of law. It channels public resources away from education, health and infrastructure. And it frequently results in sub-par, defective or dangerous work product, which can even cause injury or death in some cases.
In addition to its harmful effects on business and society at large, there is another important reason you should care about corruption: it is entirely illegal.
LEGISLATIVE LANDSCAPEThe Corporation is subject to the Canadian Corruption of Foreign Public Officials Act (CFPOA), the United States’ Foreign Corrupt Practices Act (FCPA) and the UK Bribery Act, among other anti-corruption laws. This means that the Corporation must adhere to the strictest anti-corruption laws in the world. They apply to all our employees and subsidiaries anywhere in the world, regardless of nationality or location, as well as third parties acting on the Corporation's behalf.
In general, these laws prohibit bribery, kickbacks and facilitation payments (notably in the case of the UK Bribery Act). International organizations such as the Organisation for Economic Co-Operation and Development (the OECD) have also promulgated strict policy provisions against bribery and corruption in international transactions amongst its members and the international community. In addition to the CFPOA, FCPA and the UK Bribery Act, the Corporation is also subject to a wide variety of local anti-corruption laws in the jurisdictions where we operate, many of which were adopted based on the OECD’s Anti-Bribery Convention. The international tide has turned strongly against corruption, and the Corporation has chosen to adopt the best and highest international standards.
To ensure compliance with the letter and spirit of applicable legislation and international standards, the Corporation has committed itself to a zerotolerance policy toward any form of corruption. Bribery, kickbacks and facilitation payments, in particular, will not be tolerated by our management.