Are Dutch companies doing enough to combat corruption?

Are Dutch companies doing enough to combat corruption?

With its fifth position in Transparency International’s Corruption Perception Index, a measure of the perceived levels of corruption in a country’s public sector, the Netherlands is considered to be one of the least corrupt countries in the world. In recent years however, Dutch businesses such as Vimpelcom, Ballast Nedam, KPMG Netherlands and SBM Offshore, have been embroiled in allegations of bribery and corruption resulting in considerable reputational damage and media exposure.

Although bribery and corruption within Dutch national borders might be limited, Dutch businesses are likely to be exposed to risks resulting from dealings with organisations, partners and other third parties working in less transparent and more corrupt environments. GoodCorporation asked Aldo Verbruggen, a partner at Jones Day who specialises in corporate criminal investigations, to lead our inaugural Business Ethics debate in Amsterdam on whether Dutch companies are doing enough to combat corruption?

Aldo began by asserting that Dutch businesses are wrongly perceived as “pure and innocent”, and the recent scandals in the Netherlands shows the potential corruption risks. These cases have resulted in growing pressure from Dutch society to do more to tackle corruption. He also emphasised that passive bribery (the receiving of a bribe) is an underestimated threat for businesses and that the focus within the majority of Dutch businesses is still very much on reducing the risk of criminal and civil liability with businesses appearing not be interested in the ‘ethical perspective’ or the cost of corruption to developing country societies.

A number of questions were posed and the responses recorded.

Are Dutch businesses doing enough to combat corruption?

The poll results showed that the vast majority (77%) of those present thought that Dutch companies are not doing enough to combat corruption. Most felt that smaller companies have often done little or nothing to address corruption risks, even if they are exposed to international trade. Larger companies tend to have programmes in place of some type, but many recognised that Dutch attitudes are sometimes complacent and much more could be done to strengthen these programmes.

Should Dutch authorities strengthen anti-bribery and corruption (ABC) legislation and force Dutch companies to put in place ABC programmes?

The majority of those present (67%) agreed with the statement that Dutch authorities should strengthen ABC legislation and force Dutch companies to put in place ABC programmes. It was however agreed that Dutch authorities are not currently in a position to enforce such legislation, with no budget available to prosecute. Most agreed that legislation could act as a real incentive, leading to boards placing anti-corruption practices higher on the agenda. It could also lead to far greater resources being allocated to ensure compliance and the prevention of corruption. There was however some hesitation as to what extent enforcement through legislation will be sufficient to ensure staff behave ethically. Many believe ethics and compliance should be about how an organisation wants to work in an ethical way rather than a tick-box exercise to fulfil legal requirements. Legislation-driven compliance programmes and related sanctions have often proved to be an ineffective deterrent for sales staff or other staff in the field. Organisations should put a stronger focus on implementing a compliance programme that is driven by ethical values but tailored to their various local markets. For this to be successful, an ethics and compliance programme needs to be fully embedded and owned by the company, particularly senior management and third party sales agents may need to be avoided altogether.

Is your organisation doing enough to combat corruption?

Organisations were almost equally split in terms of their own organisation’s anti-corruption programmes. Many felt that they were already doing a lot, but there is always more that can be done. The challenge lies in defining when “enough is enough” and how far an organisation should go in its measures to combat corruption. One of the challenges discussed was ensuring employees, and sales staff specifically, are actively engaged in discussions on bribery and corruption and other aspects of ethical business conduct. Some organisations have found ABC compliance a challenge to implement. Unlike health and safety, which can be relevant to the jobs of much of the workforce, bribery and the steps needed to prevent it, can seem far removed from the day-to-day remit of many employees. Additionally, employees frequently do not feel comfortable speaking up about dilemmas or possible breaches for fear of losing their jobs. An open discussion with employees about ABC through face-to-face training could be a way of doing this, tailored to different audiences. Strong management of third parties was also cited as a key part of a successful anti-corruption programme.

The GoodCorporation Perspective:

Tackling corruption is an immensely difficult challenge; it has an impact on the ethics and culture of our businesses, but also on the wider society in which they operate. It undermines the rule of law, the functioning of the market and our democracies. Winning the fight would be of significant benefit, to both companies and countries – particularly developing ones.

Undoubtedly, the best preparation for any possible interaction with the Dutch prosecutor, UK Serious Fraud Office or Department of Justice alike is a robust system of ABC controls that is audited and monitored, but there is more to it. In the best businesses, compliance and ethics teams are working together to ensure that the right spirit and tone from the top is established, developing systems and processes that govern behaviour and go beyond box-ticking exercises that simply aim to meet regulatory requirements. Businesses need to understand that what they do and how they do it really matters, even when no one is watching. Where best practice is in operation, an anti-bribery and corruption programme is driven by an ethical culture which demands that good behaviour is the norm throughout the organisation and employees are empowered to speak up when they feel that something is wrong.

GoodCorporation has been working with international organisations to help prevent corruption for over 15 years. We offer a range of anti-corruption compliance services including high level reviews of policies and processes, whole company anti-corruption audits using the GoodCorporation Anti-Bribery and Corruption Framework, anti-corruption due diligence as well as ABC programme and code of conduct development and benchmarking.

 

Posted November 2016