A group of non-governmental organizations this week wrote a letter to the OECD Working Group on Bribery urging them to develop global standards for corporate settlements based on best practice. The issue was further discussed at the OECD Anti-Bribery Ministerial meeting in Paris today.
In its letter dated March 10, four NGOs—Corruption Watch, Global Witness, Transparency International, and the UNCAC Coalition—asked the OECD Working Group on Bribery to address “urgently” whether the use of settlements has sufficient deterrent effect.
“This is particularly important in light of fact that several parties, including Australia, Canada, and Ireland are looking closely at introducing settlements as a means to resolve foreign bribery offences,” the NGOs said. “Before there is widespread adoption of this method of enforcement, close attention needs to be paid in each country and at a global level to the lessons learned from the use of corporate settlements so far.”
“With this letter we would like to express our concern that the increasing use of corporate settlements in the way they are currently implemented as the primary means for resolving foreign bribery cases may not offer ‘effective, proportionate and dissuasive’ sanctions as required under the Convention,” the NGOs said. “Additionally, the use of settlements varies greatly from country to country providing an uneven playing field for anti-corruption enforcement.”
At its Ministerial meeting on March 16, the OECD further considered how settlement procedures could be used to facilitate effective voluntary disclosure, even though the use of corporate settlements to resolve foreign bribery cases isn’t exactly new. According to the OECD Foreign Bribery report, of 126 companies across the world that faced criminal sanctions for foreign bribery between 1999 and 2014, 69 percent were resolved through of out-of-court settlements.
The NGOs’ letter to the OECD Working Group on Bribery described the following 14 principles that settlements should meet:
Settlements should be one tool in a broader enforcement strategy in which prosecution also plays an important role, and should be executed on a proper legislative basis;
Settlements should only be used where a company has genuinely self-reported, and cooperated fully;
Judicial oversight which includes proper scrutiny of the evidence should be required;
Settlements should only be used where a company is prepared to admit wrongdoing.
Settlements, including their detailed terms, should be submitted to public hearing and should be accessible to the public, as well as the relevant facts admitted, including identification of officials who received the bribes, company employees involved in the wrongdoing, and detailed justification for why a settlement is suitable for the case;
Settlements should require companies to strengthen and monitor compliance programmes and to report publically on how they have met the terms of the settlement;
Settlements should be used to leverage full disclosure of wrongdoing within a company;
Prosecution of individuals should be the standard practice and settlements must preclude companies from paying directly or indirectly for fines and legal fees of individuals implicated in the case;
Settlements must provide effective, proportionate and dissuasive penalties;
Settlements should require companies to provide total cooperation with authorities and agencies in other jurisdictions;
Compensation to victims, based on the full harm caused by the corruption, must be an inherent part of a settlement;
Countries and as far as possible all persons who would be affected by the settlement should be notified of the intention to enter into a settlement, given a right to representation at settlement hearings and informed of how to make representations about compensation;
Settlements must not preclude further legal actions in other jurisdictions that are not parties to the settlement, subject to applicability of the non bis in idem principle (double jeopardy). Authorities should make all relevant evidence available to their counterparts in other relevant jurisdictions;
Settlements must not be influenced by factors that fall outside the case such as Article 5 considerations, or be used to protect companies from debarment; and
Settlements should not typically be used where a company has had a previous corruption-related enforcement or regulatory action taken against it.
The letter concluded, “Unless the use of settlements for foreign bribery can be seen to be delivering real deterrence and effective sanctions, public confidence across the world in the fight against corruption will be undermined.”