Your Questions: Answered - Written by on Monday, February 13, 2012 13:30 - 1 Comment

Are my procedures ‘Adequate’? Your questions answered. By Peter Lloyd CEO Mabey Group

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Dear Peter,

I am Managing Director of an engineering company with a workforce of about 1500 people.  Our products are components used in the car industry.  We have a small sales team and use sales agents in some territories.  Last year we adopted a new anti-bribery policy and provided training about the Bribery Act to our management team, we notified our agents of our new policies and we also included some new anti-bribery wording in our contracts.  Are there any other steps that you would recommend?

Peter’s answer:

Thank you.  You mention having put in place policies and procedures and I assume that these cover all the necessary aspects.  A risk assessment of the business identifying those aspects which might pose the greatest potential risks will be extremely important if one has not already been carried out.

Hand in hand with this goes due diligence into existing and new relationships.  In particular, for example, the use of the words ‘sales agents’ needs more explanation. Are they distributors of your products, buying the items from you and selling them on, or do they simply represent your interests in the country, getting some form of commission on any sales?

My next question would be who are they selling to?  If they are selling to the general public or small enterprises, then the risk of corruption is probably small. It makes no sense to bribe a member of the public to buy an item off you at his or her own expense. If however they are selling to larger organisations, any certainly to public authorities, then the risk of bribery increases, with the potential for public funds to be used improperly in exchange for bribes.

The scale of the transactions would also be of interest, one off small scale purchases do not have the same risks as major procurement decisions involving large sums. At one end of this spectrum I would suggest that you are running little risk, but at the other end the risk is significant and your procedures do not appear to be ‘adequate’.

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