ANTI-BRIBERY MANAGEMENT SYSTEM

Companies across the private and public sectors are being requested to implement anti-bribery management systems in a bid to minimize losses and attract fresh capital to Ecuador.

BRIBERY AND CORRUPTION are factors that affect organizations and raise concerns in the political, economic, social, and moral environment. Not only do they undermine good governance and human rights, hamper development, and distort competition, but they also generate uncertainty in business transactions, increase the cost of goods and services, destroy trust in organizations, and adversely affect the evolution, growth, and improvement of markets. Consequently, many organizations and executives are now investing resources and time in the development and implementation of procedures to prevent bribery, corruption, and related events.

ISO 37001, which was approved in October 2016, enables organizations to establish, implement, maintain, review, and continuously improve an anti-bribery management system, thereby providing a compliance program that combats bribery and corruption.

ISO 37001 is the first international standard that includes a set of guidelines that enable organizations to implement an anti-bribery and anti-corruption management system.

The standard is applicable to all types of organizations, whether public, private, or non-profit; large, medium, or small. It includes aspects such as bribery by the organization; by personnel on the organization’s behalf or for their own benefit, that of the organization, or the business partners; or with regard to deeds accepted/offered by or through a third party. The standard provides for the establishment of controls and measures based on good practices for mitigating the risk of bribery and can be integrated into a global management system or independently. The main aspects to consider when implementing an anti-bribery system include:

• establishing policies and procedures for the prevention of bribery, which must be clearly communicated within the organization;

• the commitment of senior management to combat bribery, approve related policies and procedures, and promote an anti-bribery culture within the organization;

• awareness of risks related to bribery, both external and internal;

• due diligence, as part of good corporate governance;

• communicating and enabling management system policies and procedures so that they are accessible and disseminated among internal and external parties; • training to increase awareness on bribery issues and provide the knowledge and skills necessary to address issues related thereto; and

• monitoring the follow up and review of the procedures established in the organization to avoid bribery.

BENEFITS APLENTY

The benefits of implementing an anti-bribery management system are:

• maximizing profits and minimizing shareholders’ financial losses by establishing controls, processes, and procedures focused on mitigating bribery and corruption;

• creating an anti-bribery culture (internal and with third parties), as part of the organization;

• creating competitive and differentiating advantages over the competition;

• increasing trust and good reputation/prestige of the organization among society, clients, and potential investors; and

• in the event of an investigation, provides evidence that the organization has the necessary procedures to detect, react, and prevent bribery and corruption.

Implementing ISO 37001 does not eliminate past nor what has already happened within the organization. Neither does it ensure that bribery incidents will not occur. What is guaranteed is that if incidents do occur they will be identified on a timely basis so that they do not materialize. Or, if they do materialize, all the evidence and support will be available to take the necessary administrative or legal actions.

Implementing this standard in Ecuador has become increasingly more important, a consequence of Ecuador’s recent experience and because of the current government’s commitment to improve the image of state organizations. This is why the state’s principal companies, such as EP Petroecuador, Petroamazonas, CELEC, CNEL, CNT, and Flopec have been requested to implement this standard.

Work has already started, and to date, EP Petroecuador and Petroamazonas have made most progress in this challenging task. Hopefully, this will mark the beginning of a change in the country’s image and will serve to attract fresh capital to Ecuador.