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Bribery and corruption concerns for super
Monday, 8 April 2013 12:35pm

Superannuation funds must take into account the company's bribery and corruption policy when investing, as at least half of ASX-listed companies don't have a clear statement on these issues, according to recent Citi research.

The study investigated the public disclosure of anti-bribery policies implementation, management systems and monitoring of 80 ASX-listed companies.

"Half of the companies provide information on bribery and corruption, but half of the others don't and that can be because they haven't made it public yet or because they don't have one," Elaine Prior, Citi research industry thematics and ESG analyst said.

Last month, Citi was awarded Best ESG Broking Firm of 2012 at the ESG Research Australia awards, where Ann Byrne, chief executive of the Australian Council of Superannuation Investors (ACSI) reminded superannuation funds the importance of looking at bribery and corruption policy when investing.

"We assume that Australia is a country where there is no bribery and corruption risk," Byrne said.

"As investors, we really need to think about how we price particular risks and how we talk to companies about how they disclose their policies."

According to the research, BHP Billiton and Rio Tinto were the companies with the most rigorous approach to managing bribery and corruption risk, but smaller mining companies as well as financial services companies were high-risk areas.

Commonwealth Bank and Macquarie Group, for example, provide little detail on their management of this risk area, the research found.

"Companies that fall foul of international law can suffer a variety of outcomes, including big fines and damaging their relations with regulators," Prior said.

The study lists high profile cases and its costs. In December 2008, Siemens was fined $1.6 billion for bribery and associated legal fees have been estimated at around $2 billion.

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