OECD CONVENTION ON COMBATING BRIBERY OF FOREIGN PUBLIC OFFICIALS IN INTERNNATIONAL BUSINESS TRANSACTIONS BUSA WORKING

1. 1 OECD CONVENTION ON COMBATING BRIBERY OF FOREIGN PUBLIC OFFICIALS IN INTERNNATIONAL BUSINESS TRANSACTIONS BUSA WORKING GROUP 14 JULY 2010

2. 2 BACKGROUND In March 2004, Cabinet approved South Africa�s accession to the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions (the Convention). On 19 June 2007, South Africa became the 37th country to accede to the OECD Convention and to join the OECD Working Group on Bribery in International Business Transactions (WGB). The WGB is tasked with monitoring and evaluating countries� efforts to implement the Convention through a rigorous peer review mechanism that is applied consistently and equally amongst all members monitoring Convention.

3. 3 THE CONVENTION The OECD Convention is relatively narrow and specific in its scope. It focuses solely in the use of domestic law to criminalise bribery of foreign public officials. It applies to both active and passive bribery but does not apply: to forms of corruption other than bribery, to bribery that is purely domestic, or to bribery in which the direct or indirect recipient of the benefit is not a public official.

4. THE CONVENTION� cont The Convention needs to be read in conjunction with other related instruments: 2009 Anti-Bribery Recommendation; Good Practice Guidance Note on Internal Controls, Ethics and Compliance; OECD Guidelines for Multinational Enterprises OECD Principles on Corporate Governance 2009 Recommendation on Tax Measures for Further Combating Bribery of Foreign Public Officials in International Business Transactions; 2006 Recommendation on Bribery and Officially Supported Export Credits; 1996 Recommendation on the Development Assistance Committee on Anti-Corruption Proposals for Bilateral Aid Procurement; OECD Bribery Awareness Handbook for Tax Examiners 4

5. Measures applicable to the private sector The Convention in Article 8: Accounting addresses issues relating to the private sector. Strengthening of the measures in 2009 Recommendation � Annex 2: Good Practice Guidance Non-legally binding guidance to companies Businesses and professional associations Linked with the company�s overall compliance framework Flexible and intended to be adapted by companies especially small and medium sized enterprises 5

6. Annex 2: Good Practice Guidance for Companies Strong, explicit and visible support and commitment from senior management Clearly articulate and visible corporate policy prohibiting foreign bribery Compliance with the prohibition is the responsibility of individuals at all levels of the company Oversight of ethics and compliance programmes including authority to report to independent monitoring bodies Internal audit committees Boards of directors Responsibility of a senior corporate officer- level of autonomy from management, resources and authority Applicable to all directors, officers, employees and entities over which a company has effective control Gifts, hospitality, customer travel, political contributions, charitable donations and sponsorship, facilitation payments and solicitation and extortion. 6

7. Annex 2: Good Practice Guidance for Companies� cont Applicable to third parties, such as agents and other intermediaries, consultants, representatives, distributors, contractors, and suppliers, consortia and joint venture partners Periodic communication and documented training for all levels Disciplinary procedures to address violations Periodic reviews of the ethics and compliance programmes and measures 7

8. Annex 2: Good Practice Guidance for Companies�. cont Actions by business associations and professional organizations Provision of assistance and support in the development of internal control measures in particular SMEs Dissemination of information, including developments in international and regional forums and access to relevant database Making training, prevention, due diligence and other compliance tools available Provision of advice on carrying out due diligence General advice and support on resisting extortion and solicitation 8

9. 9 REVIEW MECHANISM The review process involves three phases: Phase 1 involves reviewing Parties� compliance to the OECD Convention and Phase 2 focuses on the implementation and application of the Convention at the national level. Phase 3 focuses on cross-cutting issues and follow-up matters from the Phase 2 reviews. South Africa underwent the Phase 1 review in 2008. The steps towards completing the Phase 1 review includes the submission of the Self-Evaluation Report to the OECD Secretariat; Assessment of the Self-Evaluation Report by lead examiners, Australia and Slovenia, supported by the OECD Secretariat; opportunity to respond to the issues raised by the lead examiners and discussion by the OECD Working Group of South Africa�s Phase 1 Report. South Africa�s Phase 1 Report was adopted by the WGB in June 2008.

10. 10 REVIEW MECHANISM CONTINUED: PHASE 2 South Africa underwent Phase 2 review in 2009 and 2010. The Phase 2 review largely follows the Phase 1 evaluation processes with some few additions. These include completion of supplementary questionnaire over and above the standard questionnaire. The questionnaire focuses specifically on implementation and application of the Convention at the national level. Additionally, the Phase 2 involves a week long onsite visit by the OECD Secretariat and the lead examiners (United States of America and Slovenia). The onsite visit involves discussions with government officials, civil society and the private sector. South Africa�s Phase 2 Report was approved by the WGB in June 2010.

11. 11 Q & A