Chief compliance officers in the metals technology industry and beyond seeking best practices for their anti-corruption compliance programs have new, free resources at their fingertips.
The Metals Technology Initiative (MTI), an anti-corruption collective action initiative for the metals technology industry, recently launched a new website making its guidance on gifts and hospitality and third-party due diligence freely accessible.
Established in 2014, the MTI was codeveloped by four companies: Italy-based Danieli and Tenova; Germany-based SMS Group; and U.K.-based Primetals Technologies. Senior compliance managers from these companies meet three times per year to exchange best practices in anti-corruption compliance and fair competition.
Gifts and hospitality: The guidance provides a comprehensive list of criteria that must be met when considering the provision of gifts or business hospitality; examples of scenarios that expose companies to increased risks and, thus, require stricter rules; and what those stricter rules should be. “Escalating levels of approvals should be required as the risk from the provision/receipt of gifts and hospitality increases,” the guidance states.
Included are four real-life case scenarios of both acceptable and unacceptable practices. There is also a section on approvals procedures, whether compliance officers use a scorecard approach, an internal approvals process, or a multi-step process termed the “traffic lights approach.”
Third-party due diligence: The MTI’s third-party guidance addresses only due diligence for the onboarding stage, “to ensure that only reputable and suitably qualified third parties are used by MTI member companies,” the organization states.
The guidance identifies several risk indicators under each of the following scenarios: how the third party was selected; how it is compensated; how it is structured; and whether a lack of business rationale exists for using the third party.
“In conducting due diligence, issues might be identified that present risks that could range from prohibited conditions to minor risks,” the guidance states. Thus, the MTI has created a classified risk-based system, included within the guidance, for the identification and management of risk factors, in which red means the relationship is prohibited, yellow represents high risk, and blue represents medium risk.
“A yellow card in itself does not necessarily mean that the relationship cannot proceed but it will need to be addressed appropriately,” the MTI states. “Where a yellow card cannot be satisfactorily resolved, the company will need to consider whether to terminate the process.”