Individual assessment Case study 1

• Your company is currently discussing a contract for the construction of solar panels with the Government of Vindalubia.
• Your company is requested pay a motivation fee for the Minister of Energy of Vindalubia in order to facilitate the signature of the contract with the Government of Vindalubia.
• The CEO of the company asks you to look into this issue.
• Do you pay the motivation fee? Why? What are the legal aspects you will take into consideration in order to justify your decision?
• Please prepare a document explaining your decision, your arguments and the legal reasons for your decision

Assessment Case study 1 Answer

We will disagree with paying the motivation fee and considering it as bribery. We will notify the CEO. An act done with an intent to give some advantage inconsistent with official duty and the rights of others. It includes briberybut is more comprehensive;because an act may be corruptly done, though the advantage to be derivedfrom it be not offered by another, this is considered as well as corruption.

The forms of corruption are diverse in terms of who are the actors, initiators, and profiteers, how it is done, and to what extent it is practiced.

The Convention does not utilize the term “active bribery” (to avoid it being misread as implying that the briber has taken the initiative and the recipient is a passive victim). Moreover, that could lead the further company dispute.We will also refer to The OECD Convention.

• Article 1

Each Party shall take such measures as may be necessary to establish that it is a criminal offense under itslaw for any person intentionally to offer, promise or give any undue financial or another advantage,whether directly or through intermediaries, to a foreign public official, for that office or a third party,so that the official act or refrain from acting concerning the performance of official duties, from obtaining or retaining business or another improper advantage in the conduct of international trade.

We will refer to the United Nations Convention of 2003 Convention Against Corruption

• Active and passive corruption by a public official

Passive corruption or bribery has been described as the acceptance of any undue advantage by a public official in exchange for performing a corrupt act relating to his or her public functions. Active corruption could be described as the granting of any undue advantage by a public official for himself or herself in exchange for performing an act of fraud relating to his or her public functions. Both offenses can be committed either directly or indirectly.

• Article 15

The article prohibits passive and active corruption and mandates the States to take measures to establish as criminal offenses.

• The elements constituting rushing offense are those promising or offering or giving something to a public official.
• An undue advantage may be something tangible and intangible, whether monetary or non-pecuniary. The unfair advantage, however, must be linked to the official’s duties.
• Passive bribery requires soliciting and accepting the bribe to constitute an offense.

The primary reason for my decision against the payment of the above mentioned ‘motivation fee’ is that the demand or the ‘request’ for the amount of such a sum of money for the facilitation of the business contract falls in the domain of bribery. The demand for a motivation fee is an attempt of solicitation and extortion from the office of the Minister of Energy to enable the company to construct solar panels with the government of the country. Solicitation is defined as the ‘demanding of a bribe, whether or not coupled with a threat if the demand is refused.’

Resisting such demands and ‘requests’ of solicitation and extortion are imperative for the leadership and executive management of the company to foster and maintain a culture that promotes and encourages ethical and moral business practices within the organization. Apart from the moral and ethical obligations, specific legal considerations also call for the resistance against attempts of solicitation for securing business contracts. One of the major international projects that are aimed at enabling the companies and businesses to resist solicitation during business transactions is the RESIST Program, which is a joint venture between the ICC, UNGC, PACI, and Transparency International (ICC, 2019).

Individual assessment Case study 2

• Your company signed a contract for the construction of solar panelswith
• the Government of Vindalubia (fictitious state).
• Your company paid a ‘motivation fee’for the Minister of Energy of Vindalubiato facilitate the signature of the contract with the Government ofVindalubia.
• A few months later, the Government of Vindalubia terminated the
• The CEO of the company is really concerned about this issue. CEO asks you to look into
• What should the companydo?
• What are the methods of resolving the dispute?Why?
• Pleaseprepareadocumentexplainingyourdecisionandthereasonswhy? you propose your answer.

Assessment Case study 2 Answer

International business contracts and transactions are incredibly susceptible to a range of global factors and influences that can easily result in the termination of such agreements. It is, therefore, imperative for a company to prepare and plan for conflict resolution in case of international business contracts, especially in the context of dealing with a foreign government. A dispute resolution clause is a vital aspect of a global business contract that outlines the steps and legal procedures that need to be taken to arrive at a possible and viable solution to the conflict.

The company should verify that contract in detail. The contract should be sufficiently precise so that difficulties of complying with the contractual provisions are unlikely, but also flexible enough so that foreseeable contingencies fall within the scope of the agreement. If the company desires an ongoing commercial relation, they may wish to specify that disagreements be initially addressed by re-negotiation, mediation, or conciliation, or other forms of dispute resolution mechanisms as an alternative to court or arbitral proceedings.

A well-drafted contract will also contain a clear and precise clause specifying the dispute resolution technique agreed upon by the parties.

International arbitration is the most common way of solving international business disputes.If the company failed to provide for a specific dispute-resolution mechanism in their contract, they might try to agree after a dispute has arisen.

One of the most fundamental and significant ways, in order to solve business conflicts and disputes between contracting parties, is through the process of international arbitration. It is considered to be more effective in the context of decision enforcement than litigation in the instance of a global business conflict. The company should discuss the possible terms and aspects of an arbitration process with the officials and representatives of the government of the country. The two parties should decide on which arbitration rules and frameworks to follow to solve the business conflict. Some of these arbitration rules include the

• UNCITRAL Model,
• Washington Convention,
• ICC Arbitration Rules etc.

Apart from deciding the governing rules, the parties should also agree on other aspects of the arbitration process, including the choice of arbitrators, the duration and obstacles of the process, and the place of arbitration. Additionalprocedures for solving the business dispute include negotiations, the establishment of a dispute review board, conciliation and mediation,etc. However, reaching an agreement on elements such as the place of arbitration, the applicable law to the merits of the case, and the selection of the arbitral institution and the range of the arbitral tribunal may be complicated(Redfern & Hunter, 2004).

Individual assessment Case study 3

• You recently joined your company as the Chief Compliance
• The company is a medium-sized company based in Riyadh doing business in the construction
• TheCEOofthecompanyisreallyconcernedbecausetheCompanydoes nothaveaComplianceandEthicsTheCompanypreviously haddifficultexperiencesinnegotiatingcontractswithnewclientsand subcontractors.
• TheCEOasksyoutoproposeanewComplianceandEthicsProgrammetobediscussedatnextTheCEOalsowantsyoutomakeproposalsforaCorporateGovernanceofthecompanyifthiscanfacilitate thesettingupof thenewComplianceandEthicsProgramme.
• Please prepare a document detailing your proposed Compliance and Ethics Programme and a new Corporate Governancestructure.
• Explainthereasonsforthisnewprogram,theobjectivesandthelegalbackground.

Assessment Case study 3 Answer

The establishment of an effective corporate governance structure is necessary for the compliance and ethics program to function efficiently. Some of the proposals for corporate governance are as follows;

1. Establish clear Vision and Mission and Values to be communicated through all levels of employees.
2. Establish clear objectives and goals
3. Establish clear measures for evaluating the performances of senior managers and executives of the company.
4. Most of the members on the board of directors of the company should be independent actors. An independent nomination committee and a distinct process for monitoring the performance of the directors should be established.
5. Policies should be drafted to develop a clear and distinct code of conduct for the company. The system of conduct should serve as the guiding framework for all business decisions and activities of the organization.
6. An independent audit committee should be set up to maintain the integrity and transparency of the financial activities of the board and the organization’s business dealings.
7. A capable communications team should be established with the sole objective of disclosing all the relevant data and information regarding company activities to the shareholders in a timely and efficient manner.
8. An independent remuneration committee should be established that designs and maintains fair and just compensation procedures for higher management (ASXGC, 2007).
9. A Risk Management Committee should be setup, The Committee should have overall responsibility for monitoring and approving the risk policies and associated practices of the Company. The risk management committee will also be responsible for reviewing and approving risk disclosure statements in any public documents or disclosures.

The establishment of a corporate governance structure along with a compliance and ethics program will help in developing a code of conduct for the company, which will govern and monitor all organizational policies and practices. The primary objective of the ethics and compliance program is to effectively protect and safeguard the interests of all the stakeholders associated with the organization. The program will not only enable the employees to carry out their work practices in an effective and ethically compliant manner, but it will also facilitate the shareholders of the company and streamline the business practices with their interests by establishing values of transparency, integrity and disclosure. The corporate governance structure and the compliance and ethics program will also help with the effective planning and implementation of risk management practices (Jackson, 2010).

The Organization for Economic Cooperation and Development (OECD) has developed a framework for organizations and business that provides a guideline for establishing compliance and ethical practices within the company. Such principles include development and promotion of transparent and effective policies and business strategies, clear and distinct division of responsibilities, protecting the interests and rights of shareholders, ensuring the equitable treatment of all stakeholders of the company, provision of equal opportunities to all shareholders to obtain effective redress in case of violation of their rights, ensuring effective and efficient disclosure and transparency practices, establishing monitoring and evaluation mechanisms and accountability activities within the company, and ensuring that the board of directors and the managerial leadership of the company performs its duties effectively (OECD, 2004).

References

• (2007). Corporate governance principles and recommendations.
• (2019). Resisting Extortion and Solicitation in International Transactions (RESIST). Retrieved December 30, 2019, from ICC – International Chamber of Commerce website: https://iccwbo.org/publication/resisting-extortion-and-solicitation-in-international-transactions-resist/
• Jackson, G. (2010). Understanding corporate governance in the United States: An historical and theoretical reassessment. Arbeitspapier, Unternehmensmitbestimmung und Unternehmenssteuerung.
• (2004). The OECD principles of corporate governance. Contaduría y Administración, (216).
• Redfern, A., & Hunter, M. (2004). Law and practice of international commercial arbitration. Sweet & Maxwell.
• https://www.sec.gov/Archives/edgar/data/1067491/000106749107000015/exv15w07.htm