BRITISH STANDARD 10500

 

As Anti-bribery legislation gets tougher the world over and bribery is being recognized as one of the business risks, more organizations are also taking anti-bribery seriously in the way they do business. Public perceptions are important to companies, especially those operating on the global platform. And the society is making a clear delineation between ethical and unethical companies.
 
The UK Bribery Act 2010 has compelled businesses to take reasonable measures to ensure that its business associate and vendors to comply with these measures. Therefore, BS 10500 has been designed to help company turn the legal requirements of the act into practical measures. It can be implemented in a reasonable and proportionate manner to the size of the organisation and the bribery risk it faces.
 
The BS 10500 standard also empowers company to identify risks early and prove that company have the right anti-bribery controls in place across the business and throughout company supply chains independently certified by a third party such as BSI. BS 10500 is designed to help organizations to prove to both internal and external stakeholders that they have robust anti-bribery practices in place and that they are being implemented adequately.
 
While company may include other offences such as fraud, anti-trust/competition and money laundering in their own risk assessment, the BS 10500 is applicable to bribery only.

 

BS 10500 PROHIBITIONS

BS 10500 brings big benefits to all companies of all sizes. By allowing company to respond to the increasing customer demands for proof of anti-bribery measures, a BS 10500 compliant management system can improve company’s business confidence, reputation and future growth. It also helps companies as follows:

  • Demonstrate compliance to the anti-bribery legislation and provide peace of mind to stakeholders and customers
  • Ensure suppliers are committed to anti-bribery best practice
  • Monitor and manage risk throughout the business and its respective supply chain
  • Meet growing stakeholders’ demand for sufficient anti-bribery measures
  • Gain opportunities to improve efficiency across working practices
  • Minimizing risks – manage any risks your organization may face by identifying them earlier
  • Best practice – continually manage and improve anti-bribery practices

BS 10500 is likely to be useful to organizations in the following way : –

  • It will help provide assurance to the board and shareholders of an organization that their organization has implemented best practice anti-bribery controls.
  • A project developer or project funder may require the contractors, suppliers and consultants which are constructing a project to provide certification to BS 10500 as evidence that they have implemented anti-bribery controls in their organizations.
  • Organizations may require their major sub-contractors, suppliers and consultants to provide evidence of certification to BS 10500 as part of their supply chain approval process (on a similar basis to their requiring evidence of certification to ISO 9001 etc.).

BS 10500 is applicable only to bribery. It is not applicable to other criminal offences such as fraud, anti-trust/competition offences, and money laundering, although the organisation may choose to extend the scope of its ABMS to include these other offences.

RELATED LAWS & PROCEDURE

1. UK Anti-Bribery Act 2010

Refer documents below

 

2. Anti-Bribery Management System (ABMS)

Anti-Bribery Management System (ABMS) has six (6) principles as follow:

a) Proportionate procedures

A commercial organization’s procedures to prevent bribery by persons associated with it are proportionate to the bribery risks it faces and to the nature, scale and complexity of the commercial organization’s activities. They are also clear, practical, accessible, effectively implemented and enforced.

The term ‘procedures’ is used in this guidance to embrace both bribery prevention policies and the procedures which implement them. Policies articulate a commercial organization’s anti-bribery stance, show how it will be maintained and help to create an anti-bribery culture. They are therefore a necessary measure in the prevention of bribery, but they will not achieve that objective unless they are properly implemented. Further guidance on implementation is provided through principles 2 to 6 (ABMS).

b) Top Level Commitment

Commitment from the top-level management of a commercial organization (be it a board of directors, the owners or any other equivalent body or person) is necessary in preventing bribery by persons associated with it. They need to foster a culture within the organization in which bribery is never acceptable.

They are in the best position in the organisation hierarchy to foster a culture of integrity whereby the practise of bribery is absolutely unacceptable. The purpose of this    principle is to encourage the involvement of top-level management in the determination of bribery prevention procedures. It is also to encourage top-level involvement    in any key decision making relating to bribery risk where that is appropriate for the organization’s management structure.

c) Risk Assessment

The commercial organization assesses the nature and extent of its exposure to all manner of potential external and internal risks it may confront and the risk of bribery    on its behalf by persons associated with it. The assessment is periodic, informed and documented.

For many commercial organizations this principle will manifest itself as part of a more general risk assessment carried out in relation to business objectives. For others,    its application may produce a more specific standalone bribery risk assessment. The purpose of this principle is to promote the adoption of risk assessment    procedures that are proportionate to the organization’s size and structure and to the nature, scale and location of its activities. But whatever approach is adopted the    fuller the understanding of the bribery risks an organization faces the more effective its efforts to prevent bribery are likely to be.

d) Due Diligences

The commercial organization applies due diligence procedures, taking a proportionate and risk based approach, in respect of persons who perform or will perform services for or on behalf of the organization, in order to mitigate identified bribery risks. Due diligence is firmly established as an element of corporate good governance and it is envisaged that due diligence related to bribery prevention will often form part of a wider due diligence framework.

Due diligence procedures are both a form of bribery risk assessment (see Principle 3) and a means of mitigating a risk. By way of illustration, a commercial organization may identify risks that as a general proposition attach to doing business in reliance upon local third party intermediaries. Due diligence of specific prospective third party intermediaries could significantly mitigate these risks. The significance of the role of due diligence in bribery risk mitigation justifies its inclusion    here as a Principle in its own right.

The purpose of this Principle is to encourage commercial organizations to put in place due diligence procedures that adequately inform the application of  proportionate measures designed to prevent persons associated with them from bribing on their behalf.

e) Communication (including training)

The commercial organization seeks to ensure that its bribery prevention policies and procedures are embedded and understood throughout the organization through    internal and external communication, including training that is proportionate to the risks it faces. Communication and training deters bribery by associated persons by    enhancing awareness and understanding of a commercial organization’s procedures and to the organization’s commitment to their proper application. Making    information available assists in more effective monitoring, evaluation and review of bribery prevention procedures. Training provides the knowledge and skills needed    to employ the organization’s procedures and deal with any bribery related problems or issues that may arise.

f) Monitoring and review

The commercial organization monitors and reviews procedures designed to prevent bribery by persons associated with it and makes improvements where necessary.  The bribery risks that a commercial organization faces may change over time, as may the nature and scale of its activities, so the procedures required to mitigate those    risks are also likely to change. Commercial organizations will therefore wish to consider how to monitor and evaluate the effectiveness of their bribery prevention    procedures and adapt them where necessary. In addition to regular monitoring, an organization might want to review its processes in response to other stimuli, for    example governmental changes in countries in which they operate, an incident of bribery or negative press reports.

 

CASE STUDY

Balfour Beatty (Reason for interest in BS 10500)

BACKGROUND

  • Balfour Beatty undertakes business in numerous medium and high corruption risk territories. The board and management of Balfour Beatty are determined to ensure that the company has adequate procedures in place to prevent it becoming involved in any corrupt transactions.
  • Balfour Beatty believes that it has implemented an anti-bribery compliance programme which is compliant with international best practice for the following reasons:
    - To explore how BS 10500 could be used by a qualified external body to assess and the implementation of the company’s anti-bribery compliance programme.
    - As a positive contribution to the development of anti- corruption best practice.

ASSESSMENT OF ANTI-CORRUPTION PROGRAMME AGAINST BS10500

  • Balfour Beatty’s Head of Ethics and Compliance and Head of Risk Management & Assurance discussed each BS 10500 requirement with a BSI-appointed consultant, and compared the company’s policies and procedures with the BS 10500 requirements.
  • Balfour Beatty’s compliance with it, following the assessment and believes that its anti-bribery’s compliance programme is consistent in all material respects with the requirements of the standard:
  • Balfour Beatty’s has a clear anti-corruption policy, which has been communicated to its employees, clients and supply chain and is posted on the company’s web-site.
  • The company’s board and senior management actively lead the implementation of this policy.
  • The company has a Board Committee. They meet three times per year and review the company’s implementation of its anti-bribery policies and procedures. Meetings are also attended by the Head of Ethics & Compliance and other relevant executive managers.
  • The Head of Ethics & Compliance is responsible for ensuring that the company effectively implements its anti-corruption policies and procedures.
  • Balfour Beatty has risk assessment and due diligence procedures which apply in relation to the appointment of agents, joint venture partners, sub-contractors and suppliers, and prior to tendering for projects in medium or high corruption risk markets.
  • The company also leverages its financial, commercial and procurement controls to help monitor and control corruption risks in relation to transactions.
  • Controls are in place in relation to gifts and hospitality, and facilitation payments are prohibited.
  • They have an internal audit function which is responsible for compliance audits, as well as audits of financial and commercial controls.
  • An externally administered whistle-blowing helpline is widely publicized to employees and other relevant parties. Any report relevant to the company’s compliance programme is referred to the Head of Ethics & Compliance and is required to be investigated in accordance with the company’s investigation procedures.
  • The company maintains records of its anti- corruption programme and any compliance issues which arise. Records include matters such as the steps taken to implement the anti-corruption programme, training provided, gifts and hospitality given and received, due diligence conducted, and the rustications for the selected method of carrying out business in high risk countries.

KEY TAKEAWAYS

From the assessment, Balfour Beatty learnt that:

  • BS 10500 appears to be a suitable tool for assessing the anti-bribery management systems of a company such as itself.
  • There were no significant differences between the requirements of BS 10500 and the anti-bribery compliance programme that Balfour Beatty has implemented.
  • The pilot study exercise helped demonstrate that BS 10500 works well in practice and could be used to assess a company’s implementation of an ABMS.

Reference: BSI Case study
DOCUMENT

  • The Bribery Act 2010 – Guidance
  • BS 10500 – Anti Bribery UK
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