ICARS anti-bribery, fraud and corruption policy

Purpose

The aim of this Policy is to safeguard the reputation and financial viability of ICARS through improved management of bribery, fraud and corruption risk.

Coverage and scope

In accordance with the ICARS Code of Ethics & Professional Conduct, this Policy applies to the following (all “Covered Persons”)

(a) Members of ICARS’ Board of Directors and other governing bodies such as advisory forums
(b) ICARS Staff
(c) ICARS Partners: ICARS requires that third parties, who work with or on behalf of ICARS, i.e., grant recipients, service providers, and consultants (collectively, “Partners”) will meet the standards embodied in this policy.

This Policy applies to all internal and external activities and operations of ICARS, including i) Any project (co-)funded by ICARS; and ii) any project implemented by ICARS and any government agency and/or other cooperating partner.

ICARS measures to prevent bribery, fraud, and corruption

ICARS commits to fight bribery, fraud, and corruption by:

1. Demonstrating top-level commitment against the risk of bribery, fraud, and corruption
2. Promoting a culture of integrity, accountability, and ethics in line with the ICARS Code of Ethics and Professional Conduct
3. Conducting regular bribery, fraud, and corruption risk assessments of operations
4. Implementing procedures proportionate to the risks identified
5. Ensuring openness and transparency toward the general public and ICARS partners. In accordance with ICARS statutes, information is generally accessible to the general public in accordance with the Danish Public Administration Act and the Danish Access to Public Administrative Documents Act. ICARS further ensures openness and transparency through ICARS’ own website (www.icars-global.org) and other means, such as ICARS social media accounts.
6. Conducting adequate and proportionate due diligence on third-party service providers, partners, and grant recipients, including through proper procurement practices for the engagement of service providers. ICARS’s partners are both governments of Low- and Middle-income Countries (LMIC) and other organisations/entities, such as international and local organisations and companies. Therefore, the due diligence process conducted on downstream partners will depend on the nature of the partnership and the type of the partner entity involved (please see APPENDIX 2 for the relevant documentation requested from partners for due diligence process purposes). Concerning projects funded by ICARS, ICARS will be conducting regular quarterly meetings to monitor and control project implementation, with the initial meeting taking place before the start of the implementation process, where the requirements and reporting procedures are clarified and explained to the partners. In addition, any procurement of goods or services on behalf of ICARS must be made in accordance with the internal ICARS’s Procurement Policy or, where contractual obligations dictate otherwise, with procurement rules of another party so long as they are regarded as reflecting international best practices[2].
7. Including the zero-tolerance policy for bribery, fraud, and corruption and appropriate clauses about the consequences of fraud, bribery and corruption in all contractual arrangements, as well as requiring the signing of a statement of compliance (which includes reference to the clauses on fraud, bribery, and corruption) by all partners for disbursement of funds under a grant agreement.
8. Awareness raising among, and training of, covered persons on the content of this policy – view the ICARS Code of Ethics and Professional Conduct.
9. Implementing and regularly evaluating the effectiveness of bribery, fraud, and corruption prevention procedures and strengthening the procedures based on the outcome of the evaluations.
10. Effective internal and external auditing controls, the results of which will be reported directly to the Board of Directors and followed up by the Executive Management as appropriate.

Roles and responsibilities

In addition to the roles and responsibilities outlined in the ICARS Code of Ethics & Professional Conduct, each individual covered by this policy and ICARS senior staff and management have the following responsibilities:

The Board of Directors

The ICARS Board of Directors has a board member who is involved in overseeing the organisation’s work to prevent anti-bribery, fraud and corruption in its activities. This board member acts as a champion for the Anti-bribery, fraud, and corruption policy, is a point of contact for ICARS management to discuss policy issues and provides oversight on the implementation of the policy.

ICARS senior staff and management responsibilities

• Ensure that reasonable steps are taken to prevent fraud, bribery, and corruption of ICARS’ funds and that proper, transparent, robust financial controls and procedures suitable for ICARS’ activity are in place.
• Keep proper and adequate business and financial records for both the receipt and use of all funds together with audit trails of decisions made.
• Authorize, review,w and monitor the implementation of this Policy.
• Ensure adequate resources are allocated to tackle the risk of fraud, bribery, and corruption.
• Ensure that fraud, bribery, and corruption risks are regularly assessed and included in strategic risk management.
• Ensure that proportionate and adequate measures to mitigate risks are applied – at the organizational and at project level (view the ICARS Risk Management Policy).
• Act responsibly within the interests of ICARS and in line with the principles of response set out in this Policy if a suspicion occurs.
• Sensitize staff and partners about the bribery, fraud, and corruption risks in the local environment regularly, act transparently, and encourage open discussion on challenges.
• Ensure implementation and communication of a management action plan post-incident.
• Where ICARS has suffered pecuniary loss or loss of other material assets, take prompt action to seek restitution from the individual(s) or entities responsible.
• Review the implementation of the changes made to the system of internal control subsequent to a case of fraud, bribery, or corruption to evaluate their efficiency and effectiveness.

The individual

• Must not engage in any form of bribery, fraud, or corruption, either directly or through any third party – including offering facilitation payments[3](also termed small bribes) on ICARS’s behalf, or in furtherance of, or completion of, any contract entered into with ICARS. Thereby, the following guidance must be taken into account
  • Where the offer or receipt is intended for example for an individual’s relatives or colleagues, or when bribery, fraud, or corruption takes place through third parties, it is still considered to be a bribe.
• ICARS recognizes that covered persons may be faced with situations where health and security are seriously at risk and where a “facilitation payment” is unavoidable. In such cases payment can be made, keeping it to the minimum possible level. However, this only applies in exceptional circumstances when individuals are left with no alternative but to make the payment because of an imminent threat to health, safety, or liberty (duress payments, which provide a legal defense for the payment in most jurisdictions). The person shall report the amount and circumstances to the Executive Management and the Safeguarding Officer for registration in the ICARS Integrity Registry and the Executive Management will, in turn, consider reporting the incident to relevant local law enforcement authorities.

• Gifts[4], hospitalityand gratuities

Gifts, hospitality and other benefits may not be given on behalf of ICARS or received by ICARS staff to or from service providers, project partners, or public officials unless they are:

1. acts of courtesy and are of modest value.
2. do not compromise the integrity and/or the reputation of any of the parties; and
3. do not create the Appearance of Impropriety.

Permissible gifts and hospitality should also have all the following characteristics:

• not be a cash payment.
• be provided in connection with bona fide and legitimate business purposes.
• not be motivated by the desire to exercise improper influence or the expectation of reciprocity.
• be reasonable according to the circumstances.
• be commensurate with generally accepted standards of professional courtesy, and
• comply with local laws and regulations applicable to public officials or service providers.

Further, all gifts given to third parties must be in accordance with the ICARS gift policy.

ICARS acknowledges that the practice of giving business gifts and hospitality varies between countries and regions, and what may be normal and acceptable in one region may not be in another. There may thus be exceptional cases when gifts or hospitality above the limits defined previously in this policy are not appropriate to decline. The test to be applied is whether in all the circumstances the gift or hospitality is reasonable and justifiable. The intention behind the gift should always be considered. Any cases, when gifts potentially above the limits detailed in this policy are accepted, shall be reported in writing to the ICARS Executive Management and the Safeguarding Officer for registration in the ICARS Integrity Register. This also accounts for cases where there are any doubts about whether the threshold is crossed. Offers of gifts and hospitality above the limits detailed in this policy and the ICARS gift policy to third parties by ICARS staff must also be declared.

• Must report any suspected or confirmed incidences of fraud, bribery, and corruption involving ICARS funds as required by this policy and the partner/ grant agreement, and using the reporting avenues as outlined in the ICARS Code of Ethics and Professional Conduct (section 6.7: Reporting unethical misconduct) and the Whistleblowing Policy;
• Must respond to fraud, bribery, and corruption incidences observed or reported to them whilst upholding the principles of response set out in this Policy and following the process as outlined in the ICARS Code of Ethics and Professional Conduct (sections 7: complaints or concerns procedure, and 8: Responses to code violations and follow-up) and the Whistleblowing Policy.

To help identify cases of fraud, bribery, and corruption, some examples have been set out in APPENDIX 1, however, this list is not exhaustive. If in doubt, contact the ICARS safeguarding officer (ethics@icars-global.org),  or report any suspicions via the ICARS whistleblowing system.

Monitoring and Review

Aggregated data on Fraud, Bribery and Corruption incidents and risks thereof will be reported on an annual basis to the Board of Directors.

The Board of Directors shall authorize and oversee a periodic review of the administration of this policy at least every two years or as required by legislation or experience. The review may be written or oral. The review shall consider the level of compliance, the continuing suitability, and whether the policy should be modified and improved.

Any changes to the policy shall be communicated immediately to all Covered Persons.

Appendix 1 – Examples of bribery, fraud, and corruption

• An ICARS staff member needs to pass a border checkpoint; by paying $25 to the officials there is a “fast track” process (facilitation payment, i.e. a “small” bribe).
• Charging ICARS for goods and services that have not been delivered.
• Seeking to obtain confidential information about a colleague or others, with intent to use it for unauthorized purposes.
• Knowingly providing false, misleading, or incomplete information to ICARS, donors, partners, or other business relations, or deliberately failing to provide information where there is an obligation to do so.
• To speed up the process of co-development or implementation of a project in a partner country a gift is provided by ICARS to the partner organisation (caution is also required to avoid such a perception).
• ICARS decides to go with one ministry instead of another as a project partner, because of a gift received (caution is also required to avoid such a perception).
• ICARS decides to provide more support in project implementation to a specific government partner because of a gift received (caution is also required to avoid such a perception).
• A public official solicits payment for expediting clearing customs at the airport (facilitation payment, i.e. a small bribe).

Appendix 2 – Documentation required from ICARS’ partners in the downstream due diligence process

The Due Diligence process is divided into two phases: the initial due diligence process that takes place at the beginning of downstream partner engagement and the ongoing due diligence that takes place as part of monitoring and evaluation of the project / supporting activity.

The initial phase of the due diligence process will differ based on the entity type (governmental or non-governmental) and the nature of the partnership.

Initial Due Diligence Process:

During the initial due diligence process, it will be first confirmed that the partner organisation (or individual involved in project implementation) is not on the EU terrorist list (EU terrorist list – Consilium (europa.eu))[5].

The documents required from non-governmental partners are listed below. It should be noted that this is a minimum requirement, i.e. additional documentation/information may be requested depending on the nature of each partnership and the organizational structure of the downstream partner.

Required documents:

• Annual Audited Financial report
• Standard Operating Procedures (SOP)
• SOP must include Accounting Instructions with an outline of the internal controls and risk management.

While less documentation is required from the governmental partners in the initial phase of the due diligence process, they will still be assessed according to the following:

• Their corruption perception index (CPI) will be checked [5].
• Their experience in donor funding management will be reviewed.

Ongoing due diligence process:

During the implementation phase of the project, phase 2 (ongoing due diligence process) is conducted on a continuous basis. This process is applicable to both governmental and non-governmental partners.

During this phase of due diligence, all partners are required to submit financial and progress reports on a quarterly basis. It is a requirement to submit an updated asset registry as part of each financial report and provide copies of the receipts for the purchase of the assets and travel costs for the submission period.

In addition, it should be noted that ICARS transfers grant funds in tranches and the payment of funds to the partners will be put on hold until ICARS’ acceptance of both financial and progress reports, and receipt of declarations of compliance.

References:

[1] Amongst others this policy is inspired by IUCN’s Anti-Fraud Policy 2014, IDLO’s IDLO Anti-Corruption and Anti-Fraud Policy, Oxfam’s Anti-Fraud and Corruption Strategy 2021, the Ministry of Foreign Affairs of Denmark Anti-Corruption Policy 2018, NEPCon’s Anti-Corruption Policy 2020, the Fraud, Bribery and Corruption Policy for the Centre for Economic Policy Research (CEPR) and AfDB & OECD’s Anti-Bribery Policy and Compliance Guidance for African Companies 2016.

[2] Please note that the requirements of a particular donor agreement will prevail over ICARS’s own due diligence standards to the extent they are stricter.

[3] Facilitation payments are unofficial (often relatively small) payments made with the purpose of expediting or facilitating the performance by a public official of a routine government action to which the payer is legally entitled. They are used to persuade public officials to carry out a task they are already obliged to do, for example expediting the issuing of licenses or permits or clearing customs. Typically, a bribe demander will use explicit or implied threats of delay, inconvenience, business cost, or some other undesirable outcome.

[4] In the context of bribery, fraud, and corruption, a gift is a financial or other benefit, offered, given, solicited, or received in the expectation of receiving a benefit in return. Gifts and hospitality (e.g. meals, hotels, flights, entertainment, or sporting events) may be in themselves a manifestation of corrupt behaviour. They may be used to facilitate corruption or may give the appearance of corruption.

[5] Further safeguarding measures will be considered in case the project takes place in a “high-risk country” in terms of corruption (2021 Corruption Perceptions Index – Explore the… – Transparency.org).