Awaiting passing of POCA Amendment Bill: What lies ahead for commercial organizations?

Bharat Anand & Satish Padhi

The POCA Amendment Bill 2013 (“POCA Amendment Bill 2013”) specifically makes a commercial organisation guilty of giving a bribe to a public official if any person associated with the commercial organisation gives or promises to give any undue advantage to a public servant intending to obtain or retain business for such commercial organisation.

The Amendment Bill 2013 states that the commercial organization can reduce liability by demonstrating that it has put in place adequate procedures to prevent persons associated with it from undertaking bribery and has clarified that the Central Government will issue guidelines post consultation with the stakeholders on the criterion for commercial organizations to demonstrate that they have put in adequate compliance procedures.

Given that the POCA Amendment Bill 2013 specifically states that having adequate procedures in place would be a defence for commercial organizations in an action against anti-bribery, commercial organizations should immediately consider putting in place adequate compliance procedures.

The procedures put in place to implement an organization’s bribery prevention policies should be designed to mitigate identified risks as well as to prevent deliberate unethical conduct on the part of associated persons. The following could be an indicative list that bribery prevention procedures might embrace depending on the particular risks involved:

1. a) The involvement of the organisation’s top-level management
2. b) Risk assessment procedures
3. c) Due diligence of existing or prospective associated persons
4. d) The provision of gifts, hospitality and promotional expenditure; charitable and political donations; or demands for facilitation payments
5. e) Direct and indirect employment, including recruitment, terms and conditions, disciplinary action and remuneration
6. f) Governance of business relationships with all other associated persons including pre-and post contractual agreements
7. g) Financial and commercial controls such as adequate bookkeeping, auditing and approval of expenditure
8. h) Transparency of transactions and disclosure of information.
9. i) Decision making, such as delegation of authority procedures, separation of functions and the avoidance of conflicts of interest.
10. j) Enforcement, detailing discipline processes and sanctions for breaches of the organisation’s anti-bribery rules.
11. k) The reporting of bribery including ‘speak up’ or ‘whistle blowing’ procedures.
12. l) The detail of the process by which the organisation plans to implement its bribery prevention procedures, for example, how its policy will be applied to individual projects and to different parts of the organisation.
13. m) The communication of the organisation’s policies and procedures, and training in their application
14. o) The monitoring, review and evaluation of bribery prevention procedures

Authors are Bharat Anand (Partner) and Satish Padhi (Associate), Khaitan & Co