Post on 25-Sep-2020
Community Development and CSR: Managing Expectations & Balancing Interests
The 8th Risk Mitigation and CSR Seminar Canada-South Africa Chamber of Business Tuesday, October 16, 2012
Introduction
OBJECTIVE: Establish and maintain a strong social license to operate in
compliance with law and best practices SPECIFIC CHALLENGE: To mitigate corruption risks attendant to community
development projects and avoid allegations that social support for project was obtained through improper means (i.e. bribery)
Outline
MEETING THE CHALLENGE: 1. What is Bribery? 2. Adopt a Strategic Approach
• Business Objectives • Local Environment • Set Parameters
3. Establish, Maintain and Communicate anti-corruption program
• Corruption risks in the delivery of Community Investment programs
What is Bribery?
• To authorize, offer, promise or give anything of value,
whether directly or indirectly, to a government official to influence official action or to anyone to induce them to perform their work duties improperly.
What is Bribery?
Foreign Bribery
• Corruption of Foreign Public Officials Act (CFPOA) • Foreign Corrupt Practices Act (FCPA) • UK Bribery Act 2010 • EU (Criminal Law Convention of Corruption) • Division 70 of the Criminal Code Act 1995 (Australia)
Domestic Bribery • Local laws
• Laws ‘on-the books’ in most jurisdictions (whether enforced or not)
• Criminal Code (Canada)
What is Bribery?
• Key Issues
• Broad definition of ‘public official’ (foreign and domestic) Tribal leaders may be considered public officials
• Aboriginal leaders included within definition of “official” under Criminal Code (Canada)
• Individuals working for state-owned enterprises (FCPA) • Perception of corruption
• Failure to achieve ‘buy-in’ from communities and other stakeholders
• Failure to manage stakeholder expectations
Community Investment
• Part of a broader exercise of managing company-community relationships
• Builds upon and is informed by the following:
• Risk Management (direct and indirect project impacts) • Impact Assessments (environmental, social, human rights,
conflict)
• Stakeholder Engagement (ongoing engagement in the broader project) • Identification of stakeholders
• Local Community Content • employment, procurement of goods and services, and
assisting local vendors to become suppliers.
Community Investment – Strategic Approach
• Take a strategic approach to community investment • NOT ad hoc
• Develop a strategy (stated objectives, criteria, guiding principles) • Determine business case; leverage core competencies • Determine stakeholder priorities • Align business goals with development priorities of stakeholders
• “Shared Value” • Monitor, disclose, communicate on a continual basis
• Establish and maintain an effective anti-corruption compliance program
Strategic Approach – Business Objectives
• Link company’s community investment objectives and its business objectives.
• More relevant, sustainable, effective where alignment between business operations and community investment programs
• Better outcomes for company and local communities
• Deeper buy-in from company and local communities = less risk from a corruption perspective
Strategic Approach – Local Environment
• Understand the local environment and implications for community investment.
• Build on:
• Impact assessments (environmental, social, human rights, conflict);
• Initial stakeholder identification; • Stakeholder engagement on overall operations.
• Time your community investments • Once major issues resolved and relations established:
• Corruption: community investment perceived as a “pay-off”
Strategic Approach – Stakeholder process
• Establish a stakeholder process that engages and represents different groups and sub-groups of • Affected Communities (Indigenous Peoples; Local Communities) • Other relevant stakeholders (with an interest in project + potential
partners) • National and local authorities • Neighbouring projects • Nongovernmental organizations
Strategic Approach – Stakeholder process
“How” a company engages mitigates risk of corruption • Manage engagement and consultation processes carefully
• Avoid consolidating decision-making power • Avoid ‘elites’ capturing funds and resources
• Undermines representation, participation and fairness • Corruption issues – where ‘elites’ are ‘public officials’
• Ensure views of chosen representatives validated by wider community • Verify the views of stakeholders’ representatives with the
broader community to ensure accountability
Strategic Approach – Stakeholder process
• Be transparent, inclusive and open • Involve government, nongovernmental organizations, other key
stakeholders • Multi-stakeholder partnerships
• Shared ownership and responsibility
• Establish grievance process to receive complaints
Strategic Approach – Set Parameters
• Set and document the specific parameters for community investment:
• Types of projects that will be supported • How programs will be designed and implemented
• Discuss and validate parameters with all stakeholders • Manage expectations of stakeholders • Accountability
• Disclose and communicate effectively on a regular basis outcomes
Anti- Corruption Compliance Program
• Establish, maintain and communicate an effective anti-corruption compliance program
• base on international conventions and guidelines (e.g.
Convention on Combating Bribery of Foreign Public Officials in International Business Transactions); guidance from regulatory and enforcement officials in United States (FCPA); Canada (CFPOA); United Kingdom (Bribery Act 2010).
• Include specific policies and procedures governing donations,
sponsorships, gifts, hospitality, entertainment and expenses, political contributions, customer travel.
Anti- Corruption Compliance Program
• Ensure that employees, directors, agents and business partners receive appropriate training and guidance on the organization’s policies and procedures.
• Monitor and review anti-corruption compliance standards and
procedures on a continual basis; update and adapt them as appropriate, taking into account relevant developments in the field and evolving international and industry standards, to ensure their continued effectiveness.
Anti- Corruption Compliance Program
• Communicate organization’s anti-corruption compliance program including Code of Conduct and policies on community spending:
• To the public – communities, stakeholders, governments • Employees • Agents • Intermediaries
• Document and Communicate mitigations and improvements.
Delivery of Community Investment Programs
• How will the program be funded? • Is the organization the only contributor?
• Multi-stakeholder partnership
• Is the program sustainable?
• How will funding contributions be made? • Cash/stock; in-kind
Delivery of Community Investment Programs
• Who will receive the funds? • Due diligence
• Any involvement of government officials? • Suppliers, Vendors
• History of recipient organization
• How is accountability and oversight being maintained? • Written agreement
• Audit Rights • Termination Rights
Summary
1. Time community projects appropriately 2. Be strategic (NOT Ad Hoc)
• Align business objectives with community needs
3. Be transparent and systematic • Establish a transparent system for community spending • Disclose systematic information on criteria for projects • Measure and communicate outcomes
4. Establish, maintain and communicate an effective anti-corruption program
• Maintain accountability and oversight over community investment programs
5. Make use of resources