By Zafar Anjum
It’s a well-known World Bank statistic, but one that bears continual repeating: More than US$1.5 trillion– or two percent of world gross domestic product– is paid in bribes every year, contributing to the demise of governments, inadequate social services, inferior infrastructure, low-quality goods and services, and a general strain on public and private sector integrity.
But the past several years has seen marked progress in the global fight against bribery and corruption, particularly with the adoption of ISO 37001 “Anti-Bribery Management Systems,” which provides generally accepted standards for establishing, implementing, maintaining, reviewing and improving an organization’s anti-bribery management system.
The global adoption of the standard means that organizations worldwide can now publicly demonstrate their intent to battle bribery to the ISO standard. And in doing so, those certified organizations are realizing many key benefits that come with certification, and the extended impact certification has on their supply chain and third-party partners.
It’s no secret why multi-national organizations are increasingly realizing the many benefits of ISO 37001 certification, as they enjoy improved internal systems and procedures, greater operational efficiency and top-down confidence throughout the organization, to reduced corporate risks, and a resulting competitive edge in the international marketplace
ISO 37001 certification is not currently mandated by governments, except for Malaysia and a few other countries which are considering certification as a requirement for private sector organizations bidding for government contracts. That said, multi-national organizations are increasingly seeking certification as a conscientious decision to improve their operations for the good of the overall organization.
In doing so, those organizations are making a strong statement to their stakeholders, customers, authorities, third parties and the international marketplace that they are taking all necessary measures to review, amend and improve their systems and processes to control and prevent bribery.
Even more important, to verify compliance and achieve such certification, those organizations are willing to expose their operations to outside independent auditors who are specifically trained in identifying risks and weaknesses within the organization, while making recommendations for improvement.
From an integrity perspective, the result of certification to the ISO 37001 standard can help reduce internal and external corruption risks, manage compliance risks and boost the public perception and reputation of the organization.
This can provide certain advantages in the tender process and give the organization a competitive edge in business development. Take for example the case of Khyber Pakhtunkhwa Oil & Gas Company Limited (KPOGCL), a provincial oil and gas exploration and production company based in Peshawar, Pakistan, a country widely known for its relatively low rankings on the annual Transparency International Corruption Perception Index.
In 2017 KPOGCL called on CRI Group’s ABAC Center of Excellence to attain ISO 37001 certification. Upon completion, KPOGCL CEO Raziuddin Razi noted this has helped his organization provide full confidence to its partners and shareholders and has opened avenues of investment for international and national companies.
The Ripple Effect of Certification: While one beneficial advantage of certification is that it formally announces to the global marketplace that the organization has gone to great lengths to demonstrate a high level of integrity and can be looked upon as a trusted partner when it comes to affiliations and future dealings, there is also a notable downstream effect.
That’s where the standard requires intense third-party due diligence to verify that the organization’s supply-chain partners maintain a strong commitment to anti-bribery compliance. This subsequently motivates the organization’s business partners, suppliers and third-party providers to examine and improve their own practices, knowing that the organization will not conduct business with outside providers that don’t measure up to its internationally accepted compliance standards.
And managing third-party risks will result in the ongoing supply of high-quality products and services, on-time delivery, reduced legal liability, increased stakeholder protection, higher customer satisfaction and improved reputation, to name just a few of the associated benefits.
Certification Improves the Organization: Finally, ISO 37001 certification is structured in a way that not only identifies risks and weaknesses within an organization’s anti-bribery framework, it also outlines measures designed to improve it and, in turn, contribute to strengthening the overall operation. Here are some examples:
Financially, certification can help identify redundancies, potentially reducing the costs associated with duplication. Additionally, through certification, one can assume that demonstrating an adequate procedures defense may in many cases reduce legal costs in bribery cases and investigations, while also reducing or eliminating potential fines levied in such cases.
Operationally, certification can help to streamline internal processes and controls, and– through effective top-down management advocacy– ensure that all staff levels of the organization stand united in the fight against bribery and corruption.
Ethically, certification shows that the organization is making a conscientious choice to protect its customers by taking strong stances against the effects of bribery, which include overpriced products or services, defective parts, and under-qualified labor– all of which can produce economic hardship, physical harm or even death.
From a brand perspective, certification demonstrates that the organization is committed to operating in an ethical environment, taking strong measures to prevent bad actors from succeeding and exposing the organization to negative media publicity, adverse public reaction and damaged reputation.
And from a business development standpoint, certification can effectively enhance the organization’s ability to secure new business contracts, as public sectors around the world are increasingly requiring such certification as a qualification in the bidding process for large-scale contracts.
It’s no secret why multi-national organizations are increasingly realizing the many benefits of ISO 37001 certification, as they enjoy improved internal systems and procedures, greater operational efficiency and top-down confidence throughout the organization, to reduced corporate risks, stakeholder liability, and a resulting competitive edge in the international marketplace.