AFD_REGISTRATION_DOCUMENT_2017

CORPORATE SOCIAL RESPONSIBILITY

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Information on commitments to promote sustainable development

2.3.3.2 The importance of subcontracting and consideration of suppliers’ and subcontractors’ corporate social

Checks made during a project’s life cycle In accordance with banking regulations, prior to beginning a project, the counterparty and any appropriate shareholders are researched in depth in order to identify the beneficial owner. Persons subject to political exposure are also identified. In order to monitor the execution of projects, procedures for reimbursing and winding up equity investments are monitored carefully because they may reveal fraudulent practices. In addition, at the time of the examination, and then throughout the life of the projects, the Group provides its employees with a filtering tool which consolidates information such as the financial and commercial sanctions adopted by France, the European Union, the United States, the United Kingdom and the UN. Such screening is also included in the processing chain for payments issued by AFD’s Financial Department. The purpose is to ensure that no counterparty or individual involved in such checks, or the supplier or winner of a call for tender funded by AFD, is under financial sanction or operates in sectors under embargo by France, the European Union, the United Nations, the United States or the United Kingdom. Checks carried out as part of the public procurement process Foreign public procurement for contracts financed by AFD Group undergo specific checks ensuring that the various stages of the procurement process unfold under the required conditions of integrity, transparency, fairness and efficiency. These checks are published through the issuance of a notice of no objection (NNO) and are carried out ex ante at specific stages of the public procurement process. Over and above these checks, AFD Group imposes exclusion criteria (2) on the Project Owner, in addition to those covered by local legislation, in connection with processing and awarding contracts that AFD is likely to finance. Counterparty commitments AFD Group’s financing agreements include a certain number of provisions that impose commitments on counterparties in terms of combating corruption, fraud, cartels, money laundering and terrorist financing. These provisions make it possible for AFD Group to suspend payments, cancel the portion of its financing in relation to which improper or non-compliant practices have been detected and demand early repayment of all or part of a loan or repayment of all or part of a subsidy paid. Information reporting systems There are several information reporting systems within AFD Group. Firstly, Group employees have an operating incident declaration system which collects and centralises all shortcomings identified by employees (including AML/CFT/ corruption and fraud issues). Group employees must also report, through a reporting mechanism following management reporting lines, any suspicion of irregular practices within and outside projects. The handling of these suspicions is managed

responsibility in their relationships with AFD The diversity of the countries in which AFD is involved, their singularities and the specificity of the services requested makes it normal to make use of subcontracting during the course of performance of the services by our suppliers. In order to extend its CSR work to subcontractors and suppliers, the Purchasing and Public Procurement Division has provided, in its contractual documents, for a commitment on the part of bidders to comply with and to ensure compliance by all their subcontractors, in accordance with the laws and regulations applicable in the country where the project is being carried out, with the environmental and social standards recognised by the international community, which include the fundamental agreements of the International Labour Organization (ILO) and the international conventions for the protection of the environment. 2.3.4 Fair practices 2.3.4.1 Initiatives for preventing corruption, fraud, money laundering and terrorist financing To combat corruption, money laundering, terrorist financing and fraud that could taint projects, AFD has developed a general policy on the subject. This is a reference document that describes, in particular, the checks to be made by Group employees at the various stages of a project’s life cycle. This is a public document (1) . It is organised into relevant internal procedures. Moreover, following the adoption of the so-called “Sapin II” Act of 9bDecember 2016bon transparency, fighting corruption and modernising economic life, since 2017 AFD Group has been implementing its anti-corruption and influence peddling programme which is based on eight measures provided for in the Act: i) adopting a Code of conduct on corruption and influence- peddling, ii) reinforcing the training of the most exposed executives and employees, iii) introducing a whistle-blowing system for employees and certain individuals working on behalf of the Group, iv) performing a new corruption and influence- peddling risk mapping that is more detailed than the current mapping, v) implementing an assessment procedure for first tier suppliers and for intermediaries in the context of combating corruption, vi) strengthening accounting control procedures particularly second level controls, vii) preserving the current disciplinary system and viii) reinforcing the internal control and assessment system for measures implemented by second and third level controllers. This compliance programme will apply to AFD as an industrial and commercial State public undertaking and also to Sogefom and Fisea and to Proparco and its subsidiary TR Propasia. This programme will take effect in the first half of 2018.

(1) See the Guidelines for Procurement of AFD-Financed Contracts in Foreign Countries –bApril 2015. (2) General AFD and Proparco policy on combating corruption, fraud, cartels, money laundering and terrorist financing –bJanuary 2013.

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REGISTRATION DOCUMENT 2017

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