News & what's on - Written by on Thursday, August 4, 2011 23:14 - 0 Comments

BSI draft standard on anti-corruption compliance out for consultation – what do you think?

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The British Standards Institute (BSI) announced in July the consultation in relation to a British Standard on Adequate Procedures to prevent bribery.  The consultation closes at the end of August.

BSI is an independent, private, non-profit company which describes itself as helping organizations improve their quality and performance, reduce their risk, manage and protect their reputations, and help them be more sustainable.

In its press release BSI announced the development of a new standard, BS 10500, designed to help UK businesses that want to verify both internally and to external stakeholders that they have robust anti-bribery practices in place and that they are being implemented adequately.

To read and comment on the Draft, please go to http://drafts.bsigroup.com/. It is free to register and access the BSI Draft Review.

At the end of the consultation period comments will be reviewed by the BSI  Anti Bribery Committee’s drafting panel in September.  It is anticipated that the full standard will be published by the end of 2011.

In many ways it is hard to argue with the draft standard and the suggestions it makes for Adequate Procedures much of which bears a striking resemblance to the Ministry of Justice guidance.

As one of the BSI’s management systems it is expected that it will be possible to obtain certification of compliance.  The BSI states that certification is available when an accredited third party such as BSI Management Systems visits an organization, assesses their management system and issues a certificate to show that the organization abides by the principles set out in the standard. This is followed by regular visits to review ongoing compliance.

It will be interesting to see how many companies sign up to the new standard when it is finalised.

We would like to understand more about the certification process.  What exactly will be involved in permitting a third party to come in and review an applicants systems and controls? Will this review be undertaken in a legally privileged environment?  What happens if a business fails the test?

How will other companies react to companies which received certification?

On the one hand dealing with a certified organisation will provide comfort to counterparts.  On the other hand, as the draft says:

This publication does not purport to include all provisions necessary to prevent bribery. Users are responsible for implementing necessary procedures.  Compliance with a British Standard cannot confer immunity from legal obligations.”

Will it be enough for a business dealing with a certified counterparty to rely solely on that fact as fulfilment of its own Adequate Procedures to prevent bribery due diligence requirements.

For the reasons stated in the health warning, we think it unlikely.

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