Global Competitiveness Empowerment Forum (GCEF) organized the Fair Player Club Seminar for Compliance and Business Ethics with the Korean-German Chamber of Commerce and Industry, co-hosted by the Korean-German Chamber of Commerce and Industry and Global Compact Network Korea on Tuesday, November 21, 2017.
Celebrating its third year, Fair Player Club collaborated with foreign embassies and chambers of commerce to introduce overseas anti-corruption laws and benchmarking business cases to foreign corporations in Korea and Korean corporations with overseas branches. For this seminar, Fair Player Club organized a pre-workshop for Siemens Ltd. Seoul (Siemens)’ partner companies to explain Siemens’ efforts for compliance and business ethics, and to reaffirm the importance of collective action through Fair Play Anti-corruption Pledge with about 40 businesses.
The seminar began with opening speeches from Mr. Kim Jong-kap, Chairman & CEO of Siemens Ltd. Seoul, and Korean Chairman of the KGCCI Board of Directors, and Mr. Park Suk-bum, Secretary-General of the GCNK. With his opening speech, Mr. Kim Jong-kap stated that by sharing his knowledge and experience of organizing Fair Player Club project, he wishes to encourage Korean businesses to effectively deal with German businesses’ strict policies on compliance and business ethics and contribute to making a more transparent society.
Mr. Park Suk-bum emphasized that leading industrialized nations have already developed legal frameworks that enhance transparency in business environments, and mentioned that Korean businesses must keep pace by responding proactively and cautiously to global anti-corruption laws and policies. In addition, he also explained that Germany is a very important market for Korea considering the market size of import and export between Korea and Germany, and hoped that the seminar would enhance Korean businesses’ understanding of German laws and anti-corruption standards.
Following the opening speeches, Mr. Joern Elbract, Foreign Attorney of Kim & Chang, Mr. Han Seong-uk, Director of Deloitte Anjin LLC, Ms. Kim Hye-won, Compliance Director of Mercedes-Benz Korea, and Mr. Park Jong-kun, Regional Compliance Officer of Siemens Ltd. Seoul, presented best practices by corporations.
Mr. Joern Elbract highlighted German government’s efforts to keep up with globalized anti-corruption trends by complying with international agreements regarding anti-corruption, and strengthening compliance and business ethics programs in listed companies and multi-national corporations. Mr. Elbract also presented the legal application of anti-corruption laws in Germany in comparison to those in Korea; in this segment, he mentioned that while Korea imposes upper limit on fines, Germany decides the amount of a fine based on the offender’s net profit, levying much heavier penalty as a result. He added that management supervisors of compliance and anti-corruption can be subject to severe penalty as well. As German businesses could risk losing qualifications for public procurement if they are listed as untrustworthy, they make greater efforts to prevent corruption.
Our second presenter, Mr. Han Seong-uk, Director of Deloitte Anjin LLC, explained that as nations increasingly cooperate on corruption cases, the standards of compliance are being integrated globally, and many nations, including Korea, are strengthening anti-corruption laws due to increasing new laws and possibility of criminal liability. Mr. Han explained the stages of business compliance, and pointed out that Korean businesses remain stagnant at the reactive compliance stage, which is characterized by limited resources and passive response. Mr. Han stated that in order to effectively operate on compliance standards that are required globally, businesses are encouraged to assess their compliance system and implement impact analysis based on ISO 37001, a global standard on anti-corruption business management system.
Afterwards, Ms. Kim Hye-won, Compliance Director of Mercedes-Benz Korea, introduced German automotive corporation, Daimler’s compliance system and best practices. She explained that following investigation regarding violation of the United States’ FCPA in 2004, Daimler has constructed compliance departments in all branches worldwide, and enforced continuous monitoring to examine its status of compliance management. Daimler has implemented a separate compliance management program for countries and sectors that are considered to be high-risk, conducting site visits and due diligence of partner companies, and put emphasis on training program for its employees and partners. Ms. Kim ended her speech by emphasizing that “the essence of compliance and ethical business management comes from your attitude; you have to abide by it because you think of it as righteous and good, not because you want to avoid regulations.”
Mr. Park Jong-kun, Regional Compliance Officer of Siemens Ltd. Seoul, explained that the transformation of Siemens from company with the highest penalty in the history of FCPA to the representative company of business ethics and compliance has been due to continuous management of corruption risks and the board’s commitment and responsibility on compliance through virtuous cycle of ‘prevention, detection, response’. Moreover, Mr. Park illustrated Siemens’ various efforts to manage and prevent different types of corruption risks such as Siemens’ prior approval tool regarding gifts and hospitality expenses, and compliance analysis using big data, which can be utilized to identify different types of risks and simulate scenarios. Mr. Park stated that companies should always have ‘nevertheless’ mindset even if there is an effective anti-corruption system already in place; businesses should always be aware of possible risks and continue efforts to prevent and respond to those risks.
Lastly, Ms. Lee Eun-kyung, Chief/Senior Researcher of the GCNK, introduced various anti-corruption guidelines and presented compliance system analysis of Korean businesses. Ms. Lee explained the necessity for Korean businesses to strengthen top management’s oversight and monitoring responsibilities, develop tailored anti-corruption polices and program, enforce incentive program, apply anti-corruption policies to business partners and enhance public reporting to improve their compliance system.
Fair Player Club is jointly hosting EU Seminar with EU Delegation to the Republic of Korea and European Chamber of Commerce in Korea on December 5th and China Seminar on December 20th with the China Chamber of Commerce in Korea, Korea Chamber of Commerce in China, and Korea Chamber of Commerce BISD. Moreover, we are currently inviting businesses to join in efforts to create fair and transparent market environment through Fair Play Anti-corruption pledge. Thank you for your interest.