Part 4 of T.R.U.S.T : Systematic Review, Monitoring and Enforcement

Section 17A - Corporate Liability Provision - Adequate Procedures

This is part 4 of a 5 part series on T.R.U.S.T. - the acronym for the Guidelines on Adequate Procedures to mitigate Section 17A - Corporate Liability provision. In Part 4 of T.R.U.S.T, we discuss Principle 4 - Systematic Review, Monitoring and Enforcement.

The Corporate Liability provision was enacted ostensibly to promote business growth in an environment free from corruption. It was designed to plug existing loopholes within the MACC Act 2009 that did not adequately address liability for corporations and their senior management when corruption was used as a means to benefit the commercial organisation.

When the Corporate Liability provision – Section 17A of MACC Act (Amendment) 2018 – comes into force on 1 June 2020, companies shoulder the burden of proof that they have put in place adequate procedures to mitigate the risk of corruption and bribery in their organisation. These are designed to protect both the business and their directors and senior management from personal liability in the event of a corruption investigation by the enforcement authorities.

Systematic Review

The commercial organisation’s anti-corruption compliance program and framework should be reviewed regularly by an independent function. This provides objective assessment on the program and framework. Once the compliance framework and program is reviewed, any recommendations for improvement should ideally be discussed and agreed at by all the necessary stakeholders to ensure buy-in, refinement, subsequent implementation and accountability.

Scope and Frequency

The scope and frequency of such reviews and the deliverables should be agreed upon at the outset, ideally during the development stage of the anti-corruption compliance program and framework. The most effective reviews detail the function that is tasked with the monitoring and the manner in which feedback is to be given. The frequency could range from yearly reviews to once every 3 years depending on the size and complexity of the organisation.

Monitoring and Enforcement

Evaluations on the effectiveness of the anti-corruption program must be documented to provide the necessary audit trail on the systematic assessments conducted by the company. In the same vein as a process review, lapses in control and loopholes in the program should be addressed timeously to prevent disadvantageous use by unscrupulous parties both within, and external to, the company. Disciplinary actions must be taken on serious breaches.

The adequate procedures – T.R.U.S.T. - are principles based and work best when encapsulated within an organisation-wide anti-corruption compliance program. The guidelines, whilst not being prescriptive, nevertheless forward compelling arguments that an anti-corruption program designed and developed by compliance professionals both meet the spirit and the intent of adequate procedures.

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