South African companies can still win international clients if they establish accredited anti-corruption compliance programmes and management systems, says WWISE
As unfortunate as it is, the reality is bribery and corruption are rife globally.
According to auditor Deloitte, about two-thirds of all fraud reported in India has a corruption angle to it.
In 2019 alone, companies with operations in the United States paid or agreed to pay settlements collectively amounting to more than $1-billion (R15-million) to the Securities and Exchange Commission and the US Department of Justice for their involvement in corruption cases in other countries, including Russia, India, China, Mexico, and Brazil.
South Africa, of course, is no stranger to bribery and corruption, as exemplified by the findings of the State Capture Commission of Inquiry. At the most conservative estimate, the pillaging of state coffers cost the country some R100-billion, though some analysts have put this figure as high as R1.5-trillion.
South Africa also scored a lowly 44 out of a 100 on Transparency International’s Corruption Perception Index (CPI) 2021, another in a series of below-par scores registered in the past 10 years.
“The country’s consistently mediocre ranking since 2012 has failed to produce the necessary impetus to lift it out of the doldrums – meaning that the government’s efforts to make real inroads against the root causes of corruption have been futile,” the CPI report, released in January, states.
The tragedy is that South African companies, no matter how law-abiding they may be, continue to pay the price for others’ unscrupulous actions.
South Africa has been tainted as “high risk corruption” country, meaning that international clients are wary of forging business relationships with local companies.
Fortunately, there is hope for businesses in the form of globally-accredited standarisation.
The International Organisation for Standardisation (ISO) Standard 37001:2016 for anti-bribery management systems offers direction for private and government-owned organisations alike in establishing new, or strengthening existing, anti-corruption compliance programmes and management systems.
Muhammad Ali, managing director and lead auditor of South African ISO standards training and implementation specialist WWISE, explains that ISO 37001 sets out the policies, processes, procedures and controls an organisation needs to contextualize and define what bribery is.
“For example, the company might identify gifts or meals as a form of bribery. The standard then explains what the organisation’s code of conduct is to control and proactively manage, monitor and clamp down on bribery and corruption,” Ali says.
“This is vital, as international organisations that are listed and dealing with South African companies require a form of assurance. They need to ensure they have controls in place to manage anti-bribery and generally require certification of this standard to have reliance on a third party conducting regular audits on the organisation’s systems aligned to these standards.”
For this standard to be implemented effectively, several processes need to be followed.
The first step is a Gap assessment, which reviews current policies, systems, procedures and controls that define bribery. The existing independent reviews or audits managing this process also need to be reviewed.
There also needs to be forensic investigations when suspicious behaviours are noted, together with
a risk-based lifestyle audit that is subject to compliance and consent from the company code of conduct.
“The system is a combination of policies, processes and procedures with controls to prevent bribery in an organisation with awareness programmes and communication to control an organisations ethics and values,” Ali says.
Ideally, the implementation of this standard should occur at the end of the financial year when companies are looking to sign contracts and release budgets for the identified projects.
In most cases, a company’s legal and human resources departments would be custodians of the system, with strong input and involvement from top management.
A careful consideration of how sales, marketing, supply chain and finance are affected is also beneficial for a successful system to be implemented.
By doing so, the company is able to minimise financial losses through bribery and corruption in operations, increase visibility and reputation of the company brand and reinforce an anti-bribery culture within the organisation.
Further information can be found on the WWISE website under “How do I implement ISO 37001?” A video and brief introduction of the standard can also be viewed at https://wwise.co.za/about-iso/iso-370012016/