SHARED VALUES

SQUAD'S CODE OF CONDUCT: ETHICAL PARTNERSHIPS

Our Code of Conduct applies to all SQUAD agents, consultants, contracted labor, and others when they are representing or acting for, or on behalf of, SQUAD. We expect our partners, subcontractors, and suppliers worldwide to be guided by these principles as well. We seek out customers and partners who share our values and standards of conduct.

All business partners, agents, and external consultants are contractually required to adhere to SQUAD’s Code of Conduct and agree to anti-bribery terms and conditions in our contracts.

SQUAD’s due diligence process for partners and exclusive subcontractors follows a tiered approach depending on, among other considerations, the anti-corruption risk in the market where the work is performed. Due diligence for all suppliers and subcontractors involved in high-risk services (e.g. customs clearance, security, airport greeter service, etc.) includes enhanced anti-corruption analysis.

SQUAD'S CODE OF CONDUCT: ETHICAL PARTNERSHIPS

During the due diligence process, agents and intermediaries are specifically asked questions about ownership and control. The process also includes a search for any media coverage that could identify any beneficial ownership issues prior to engagement. Third-party research companies are engaged when the status of beneficial ownership is not clear from other sources. 

SQUAD will only retain agents or intermediaries in those circumstances where it is either required by law or there is a necessary and compelling business reason to do so. In the limited instances where we use these third parties, the company has a robust policy and accompanying legal instructions for vetting and onboarding anyone who will fill an agent or intermediary role. Approval for engaging agents or intermediaries must go through multiple approval levels within the business and with legal/compliance up to and including the general counsel. In addition, all agents must confirm their commitment to SQUAD’s Code of Conduct and each contract has anti-bribery commitments including certifications that must be signed before any payments are made for services.

Agents are not awarded incentive fees. When the relationship includes commission-based compensation, it is capped at reasonable levels. SQUAD’s contractual agreements with agents include expectations to comply with all anti-bribery legislation. 

All agents and intermediaries are contractually agreeing to:

  • Abide by SQUAD’s Code of Conduct;
  • Not violate any applicable laws related to anti-bribery or corruption;
  • Train any relevant parties about relevant anti-corruption laws that are employed by the agent or intermediary that will work on the contract;
  • Not make any prohibited payments to any government official with respect to any activities undertaken relating to the contract;
  • That no part of the value received under the contract will be used for any improper purposes;
  • That it has fully disclosed to SQUAD any existing family relationships or current or former close business relationships between itself or any of its employees, partners, officers, directors, or stockholders and any government official, party political official, or candidate for political office and agrees to notify SQUAD of any such relationship that may arise during the term of the agreement.

JOINT VENTURES

SQUAD’s joint venture (JV) relationships are governed by extensive representations and warranties related to anti-bribery compliance. For example, the following terms and conditions, among others, are included in all agreements:

  • Each party shall comply with all relevant anti-corruption legislation.  
  • Neither party will accept or use anything of value received under the agreement for any purpose that would constitute a violation of any relevant anti-corruption laws. 
  • Each party shall ensure its affiliates and representatives do not take any action in connection with the agreement or project that would constitute a violation of any anti-corruption legislation.  
  • No party will request any service action or inaction by the other party that would or might constitute a violation of any anti-corruption laws.  
  • Each Party represents that none of its (or its affiliates or its affiliates) employers, officers, directors and representatives, and employees who are engaged in implementing the agreement (together, the “Related Parties”), is a government official.  Each party represents that it has disclosed to the other party any family relationship between any of its Related Parties and any government official and agrees to notify the other party of any such family relationship that may arise during the term of this agreement.  
  • No party will make or permit any off-the-books accounts, inadequately identified transactions, recording of non-existent expenditures, entry of liabilities with incorrect identification of their object, or the use of false documents with respect to any activities undertaken relating to this agreement or the project. 

 

SQUAD’s due diligence for JV partners and exclusive subcontractors follows a tiered approach depending on the anti-corruption risk in the market at issue. Anti-corruption risks are categorized as low-risk (“A”), medium-risk (“B”) or high-risk (“C”) depending on the relative risks inherent in the project that include Transparency International’s Corruption Perception Index rating, past experience, and the number of bribery enforcement actions as well as the information we uncovered as part of our own independent due diligence activities.

OTHER COMPLIANCE CONSIDERATION

SQUAD does not enter into contracts that require an offset obligation.

Instructor-led, project-specific anti-corruption training is provided to relevant personnel in high-risk markets.

  • Risk Assessment of Business Commitments
  • Due Diligence for Business Associates
  • Due Diligence for Business Representatives
  • Due Diligence for Joint Associations
  • Expectations for Suppliers, Subcontractors & Vendors

RISK ASSESSMENT OF BUSINESS COMMITMENTS

SQUAD’s “Commitments to Perform Services and Risk Assessment” policy specifies the detailed internal process and levels of approval required before any business can be undertaken by the company. It identifies a wide variety of risks that must be evaluated and disclosed as part of the approval process. There is a specific category of ethics and compliance risks that must be thoroughly analyzed before a SQUAD business entity can obtain corporate approval to take on work.

BUSINESS ETHICS AND COMPLIANCE ISSUES

Discuss any Business Ethics and compliance issues such as the Patriot Act, terrorist financing violations as well as any money laundering or other suspicious payments, import/export license requirements, etc. The existence of a Business Ethics or compliance issue may constitute an unusual risk.
 
Does the make-up of the customer organization raise any issues that would compromise SQUAD’s ethical standards (this should not be limited to the customer’s CEO or President)?
 
State what due diligence has been undertaken on the customer, the corporate group of companies of which the customer forms part, and the key personnel of those entities. Contact the Legal Department for the latest due diligence process requirements.
 
Will this project be located in a High-Risk location as defined by SQUAD Security; or first-time presence in the past 10 years? If recommended by the Legal Department, projects located in such locations must have a project-specific ethics and compliance program procedure, including a compliance training plan for all project employees.

DUE DILIGENCE FOR BUSINESS ASSOCIATES

To provide the requirements for the preparation and completion of a due diligence investigation of proposed partners and business associations (“Associate”). Associate includes a relationship that arises where SQUAD makes a binding commitment either unilaterally or as the result of complying with local law to use a specific subcontractor or supplier on a project either before or after SQUAD submits a bid. Proper completion and review of the due diligence investigation is fundamental to a thorough assessment of all business Associates and is essential for ensuring compliance with the SQUAD’s policies.
  
Appropriate due diligence of the Associate must be performed before a commitment is made. This instruction applies to the diligence investigation conducted for every Associate for which the Joint Associations (Partnering) policy requires approval. The status and results of the due diligence must be reported in the request for approval under the policy, together with a statement as to when any outstanding due diligence will be completed.
 
An investigation will always entail satisfying certain basic minimum requirements. Additional investigative steps must be satisfied in certain situations, such as when the initial review of the Associate raises a “red flag” (e.g., the Associate is owned by a government official or evidence of a prior or current bad reputation) or the project will take place in a jurisdiction that presents a high risk of corrupt actions.
 
Instructions for completing the required due diligence investigation are set forth in the Due Diligence Guidelines for Business Associates found in Attachment A to this instruction. 

RESPONSIBILITIES

GLOBAL BUSINESS UNIT OR FUNCTIONAL UNIT

The GBU or Functional Unit team is responsible for conducting the due diligence investigation according to the Ethics and Compliance Due Diligence Guidelines for Business Associates set forth in Attachment A, completing the due diligence questionnaire and file, and making a recommendation and explanation to GBU or Functional management on the acceptability of the Associate. All financial information relating to an Associate that must be reported in the request for approval under the Joint Associations (Partnering) will be obtained through the GBU CFO.
 
The GBU team sends the completed due diligence questionnaire and file to the Legal Department for permanent filing. 

LEGAL DEPARTMENT

The Legal Department is responsible for assisting the GBU or Functional Unit by conducting research in support of the GBU due diligence team’s investigation.
 
The Legal Department maintains a register of Associates who have already been the subject of a due diligence investigation and a central repository for all completed due diligence questionnaires and due diligence files.
 
The Legal Department conducts periodic updates of due diligence investigations for Associates on active projects, or who have been designated by a GBU or Functional Unit to be kept up-to- date, and shares the results of such periodic searches and updates with the original GBU or Functional Unit sponsor of the Associate and with any other GBU that has registered an interest in the Associate.
 
The Legal Department periodically reviews and updates the due diligence guidelines and questionnaire as appropriate.

SCOPE OF DUE DILIGENCE

These guidelines describe the due diligence investigation that is required to be performed in making a decision on whether or not to form a joint association under the Joint Associations (Partnering) policy. Specific questions regarding a due diligence investigation will be referred to either the Legal Department’s Principal Counsel (Compliance) or GBU’s Principal Counsel.
 
The due diligence investigation of a potential Associate should be made early in the relationship, usually at the same time that the SQUAD and the potential Associate are negotiating the terms of their relationship, and of their joint pursuit of a project.
 
Deviations from these guidelines must be documented and explained.

SUBJECT OF DUE DILIGENCE

The GBU or Functional Unit will make a due diligence investigation as described in these guidelines for every member (an “Associate”) of any joint association for which the Joint Associations (Partnering) policy requires approval. The policy requires approval for all project-specific and multi-project joint associations, joint ventures, joint stock companies, teaming agreements, partnerships, exclusive subcontractor relationships1, and similar joint undertakings of any sort.
 
It is important to identify the precise legal entity with which we will partner, and if it is a subsidiary, sister company, or a special purpose entity of a parent company, you will conduct the appropriate due diligence inquiry for both the Associate and its parent company. The appropriate due diligence related to a parent company may vary depending upon ownership interests including whether the parent is publicly traded on a recognized major stock exchange, or where a substantial interest in or control over an otherwise publicly traded company is actually held or exercised by a private individual (e.g. through front or shell companies or ownership of “golden” shares).

If one of the SQUAD’s Associates is itself a joint association, the GBU or Functional Unit will conduct a due diligence investigation for each member of that second-tier joint association.
 
The GBU or Functional Unit will also do a due diligence investigation for any agents of the SQUAD’s Associates who are working on the same project. Use the Business Ethics Due Diligence Guidelines for Agents for this purpose.
 
The Legal Department will up-date the due diligence investigation, concerning those parts of the due diligence requirements for which it is responsible, for all approved Associates with whom we have an existing project, or who have been designated by a GBU or Functional Unit to be kept up-to-date, at least every two years, and will provide the results of the investigation to each GBU or Functional Unit who has registered an interest in the Associate. 

CLASSIFICATION OF ASSOCIATES

The extent of the due diligence investigation will vary depending classification of the Associate.
 
The GBU or Functional Unit will assign one of three classes (Class A, Class B or Class C) to each Associate after the initial screening. The due diligence required for a Class A Associate represents the minimum investigation that must be performed for all Associates. Additional information is required for Class B and Class C Associates. It is important to note that the class of an Associate may change as a result of information discovered during the due diligence investigation. It is possible that an Associate may satisfy the criteria of more than one Class. In that event the GBU must perform a due diligence investigation that satisfies the more restrictive of the applicable Class obligations.

(a)     An Associate will be Class A where 

  • (i) either
  • SQUAD has worked successfully with Associate2in the last three years on a project where the Associate provided similar services (“Recently Approved Associate”), or
  • The associate, the client, and the project are all located in one or more of the following Locations:4
    • United Arab Emirates
    • USA
    • UK
    • India
    • Pakistan
    • Germany
    • Australia
    • Turkye; or
    • With the approval of the Legal Department’s Principal Counsel (Compliance) or the Chief Ethics and Compliance Officer.
  • (ii) The Associate is acting as an exclusive subcontractor or supplier and it will NOT have to interface with any governmental agencies (exclusive of obtaining its own license to do business) for or on behalf of SQUAD in the performance of the project or act in any manner in which it can influence the award of the contract which SQUAD is pursuing (e.g. bring export credit financing or unilaterally satisfy local content requirements).
  • (iii) Provided as to (i) and (ii) above, the initial screening review does not give
    • reason for concern about the Associate’s character, reputation, or ethics, or
    • give rise to any red flags that are not resolved to the satisfaction of the Legal Department’s Principal Counsel (Compliance) or the Chief Ethics and Compliance Officer.

(b) An Associate will be a Class B Associate where one (but only one) of the criteria set forth in Section 3 (a) (i) (B) or (ii) above for a Class A Associate is not met or as to any such Associate the criteria in (iii) above is not satisfied.
 
(c)  An Associate will be Class C where it is not Class A or Class B.

DUE DILIGENCE FILE

It is essential that every step of the due diligence process is recorded in a due diligence file that is kept in an easily accessible place. No matter how thorough our investigation is, it is always possible that we will form an association with someone who does not share our values and who pays a bribe or commits some other breach of trust. In that case, we will want to show that we were careful in selecting the Associate and took reasonable steps to determine that the Associate was someone with whom we should feel safe associating. But the wrongful act of our Associate is often not discovered until years later, perhaps long after the project is finished. Thus, we must be able to find a clear record of our due diligence investigation, even if the people who worked on the project—and their files—are gone.
 
Thus, all information regarding a due diligence investigation will be maintained in a due diligence file, a copy of which will be kept by the Legal Department’s Principal Counsel (Compliance) in the central legal files. The file will contain as applicable:
 
(a) Completed Business Associate Identification Form 
(b)  Results of screening research
(c)  Copy of any early notification letter
(d)  Results of investigation research
(e)  Record of any inquiries (Class B or Class C)
(f)   Record of initial and final interviews (Class B or Class C)
(g)  Completed due diligence questionnaire 
(h)  Completed forms set forth
(i)   Copy of management approval letter

DUE DILIGENCE STEP-BY-STEP

The following sections describe each step in the due diligence process. 

1. STEPS THAT APPLYS TO ALL CLASSES OF ASSOCIATES

(a)  GBU due diligence team

Once a potential Associate is chosen, the senior GBU or Functional Unit officer responsible for the prospect or, where an exclusive subcontractor/supplier is selected after the award of a project is made, the project, should assign a team to conduct the due diligence investigation. The team should include GBU personnel working on the prospect or project, and must include representatives of the GBU Principal Counsel and if a prospect the GBU. A Team Leader from the GBU or Functional Unit should be selected who will be responsible for the completion of the due diligence investigation.

(b) Screening

The initial screening is a quick check of the sort of information that might disqualify even companies that we know well. It will also provide the information needed for any early notification that may be required under the Joint Associations (Partnering) policy. These are the steps of the initial screening:

  • Identify the specific legal entity that will be the Associate, and parent company (if applicable), so that appropriate data is collected. A sister company or special purpose entity is not the same as a parent company.
  • Collect basic publicly available information on the Associate, using readily available sources (e.g., local business contacts, Google), including the Register of Associates, maintained by the Legal Department, who have already been the subject of a due diligence investigation. This will include research on executives/principals of the Associate.
  • Complete the Business Associate Identification Form The Business Associate Identification Questionnaire Forms may be used in support of this step. It is recognized that not all of the information requested on the forms may be available at this early stage.
  • Check on the local reputation of the Associate for honesty in business that is publicly available (e.g., local contacts, Google for the prior 5-year period) and with SQUAD people who may have information about the Associate’s reputation. 

Provide the Legal Department as much information about the company (and the parent company if applicable) as is known. This includes the full name (or as much as you know), business address or where you think the company is located, what type of business or industry the company is in (E&C, water, power), and the full names of the executives (if known). Also, state if you will accept information in other languages (and which languages — such as Pashto, Persian, Urdu, Arabic, Turkish, etc.) and any certainty/uncertainty on the spelling of the company name or the geographic location of its headquarters.

An important item is the spelling of the company’s name. Companies may be referenced in an English form (such as Group Wiese) or in the applicable local language. The Legal Department will attempt to identify alternate spellings if the full name is not known.

Information that is gathered will be provided to the Legal Department so that it can perform a basic media search and a search of Restricted Party Lists.

The results of the preliminary research by the GBU or Functional Unit team and the Legal Department, including the resolution of any red flags, will be used to make a recommendation on whether or not to proceed with the Associate, subject to the satisfactory completion of the remaining due diligence investigation requirements.

(c)  Recently Approved Associate Screening

The screening process described in Section B 1 (b) above completes the due diligence investigation for any Associate who has been approved within the last two years (as shown in the Register of Associates); provided, however, that if that Associate would have otherwise been a Class B or Class C Associate: (i) a full due diligence investigation as set forth in Section B 1 (f) for that Associate has been completed within the last three years, and (ii) any red flags that were found were fully resolved as determined by the Legal Department’s Principal Counsel (Compliance) or the Chief Ethics and Compliance Officer. If red flags are found that cannot be resolved on available information, an additional investigation for Class A Associates will be conducted.

(d) Early notification.

GBU management will prepare an early notification, if it is required under the Joint Associations (Partnering) policy, based on the input of the GBU team. 

(e) Investigation
 The investigation is a more in-depth evaluation of data for each Associate. These are the steps of the investigation:

  1. General Background Information for all Classes of Associates
  • ​​The GBU or Functional Unit team has completed the initial screening set forth in Section B 1 (b) above and any gaps have been resolved (e.g. if the full names of the executives/principals were not provided in the initial screening stage, they will be provided now). 
  • ​The GBU or Functional Unit team will complete the due diligence questionnaire. The form of the questionnaire is set forth (see also the Business Associate Identification Questionnaire Forms). The questions should be answered to the best of your ability. If a question seeks a “yes” or “no” answer, but cannot be answered in that fashion, please explain why in the “comments” column. 
  • The Legal Department will conduct, as further described, (A) a search of company information through the company’s website (if available), (B) a media search, (C) a search of Restricted Party Lists, (D) a search of information on the country (unless it is a Class A Locations – see section A.3) in which the project and the Associate are located to determine the level of corruption that is perceived to exist in those jurisdictions, and (E) a review local laws concerning improper.
  • The GBU or Functional Unit team should investigate how business is transacted in the host location, for two principal reasons:  to see how likely improper payments are in the location; and to provide input to the Legal Department to see how the local laws concerning improper payments would apply. 
  • The GBU or Functional Unit team will review the information available about the Associate and the project (including any experience of SQUAD with the Associate), the results of the research by the Legal Department, and any red flags. If red flags are found in the investigation of a Class A Associate that cannot be resolved between the GBU or Functional Unit and the Chief Ethics and Compliance Officer or the Legal Department’s Principal Counsel (Compliance) on available information, the additional investigation for a Class B Associate or Class C Associate, as applicable, will be conducted. 

2. ADDITIONAL STEPS FOR CLASSES B ASSOCIATES:

a.Inquiries
Check the Associate’s reputation with private parties and certain government agencies. Guidance on making the inquiries is given. Checks can be made with:

Private parties

  • (A) Companies that we know well, who are already working in the country

Government agencies (the staff of the SQUAD Afghanistan office may be able to facilitate contacts

  • (A) Commercial officer at the Afghanistan embassy in a foreign country
  • (B) Other foreign embassies (e.g. US, UK or United Arab Emirates)

b. Interviews
The process for Class B Associates includes at least one interview with a senior officer of the Associate so that the GBU or Functional Unit can access reliable detailed information and will also include an inspection of the Associate’s facilities.

 

3. ADDITIONAL STEPS FOR CLASSES C ASSOCIATES:

Additional steps are added for Class C Associates that are not used for Class A Associates or Class B Associates:
 
a. Inquiries 
In addition to inquiries for a Class B Associate, the GBU or Functional Unit team will check on the local reputation for honesty in the business of the Associate with private parties (e.g. independent reputable local business persons). These may include: 

  • (A) Local lawyers and banks (Corporate Treasury may be consulted for assistance in identifying potential contacts with local banks); and
  • (B) Public Accounting Firms (Corporate Finance may be able to contact local offices of international accounting firms for assistance with information about local laws and practices) 

 

b. Interviews
The process for Class C Associates includes two interviews. The initial interview will meet the same criteria as that performed for a Class B Associate. There will also be a personal meeting, face-to-face, between a senior official of SQUAD and the Associate (e.g. Owner or Managing Director). This meeting has two primary purposes:  to make sure that the Associate understands that the SQUAD is deadly serious about compliance with its policies concerning business practices and to allow senior SQUAD managers to assess the depth of the Associate’s commitment to following our rules. With the approval of the GBU President and the Legal Department’s Principal Counsel (Compliance), these interviews can be omitted for any Class C Associate, if: 

  • (A) it is a public company whose securities are traded.
  • (B) the initial screening review does not give reason for concern about the Associate’s character, reputation or ethics, or raise any red flags that have not been resolved. 

4. ADDITIONAL DUE DILIGENCE FOR EXCLUSIVE SUBCONTRACTOR/SUPPLIERS

a.Inquiries
Check the Associate’s reputation with private parties and certain government agencies. Guidance on making the inquiries is given. Checks can be made with:

Private parties

  • (A) Companies that we know well, who are already working in the country

Government agencies (the staff of the SQUAD Afghanistan office may be able to facilitate contacts

  • (A) Commercial officer at the Afghanistan embassy in a foreign country
  • (B) Other foreign embassies (e.g. US, UK or United Arab Emirates)

b. Interviews
The process for Class B Associates includes at least one interview with a senior officer of the Associate so that the GBU or Functional Unit can access reliable detailed information and will also include an inspection of the Associate’s facilities.

 

5. SUMMARY COMMENTS (APPLIES TO ALL CLASSES OF ASSOCIATES

The GBU Counsel and the Legal Department’s Principal Counsel (Compliance) shall review the due diligence concerning the Associate prior to the completion of the Due Diligence questionnaire.
 
For all classes of Associates, there will be a final summary, based on the answers to all of the questions in the questionnaire, stating whether or not the person completing the questionnaire believes that SQUAD should consider partnering with this company.6  The GBU Principal Counsel or the Legal Department’s Principal Counsel (Compliance) shall approve the completed due diligence package as set forth prior to the submission of the Policy Management Approval Letter. 

6. DUE DILIGENCE FILE RECORD RETENTION

Whatever the outcome of the Joint Associations (Partnering) policy process and whether or not any formal agreement with the Associate is in fact entered or whether the prospect or project goes forward, the GBU or Functional Unit team will send a completed due diligence questionnaire and a complete due diligence file (section A.4) to the Legal Department’s Principal Counsel (Compliance), for permanent filing.

7. PERIODIC UPDATES

The Legal Department will up-date the due diligence file concerning those parts of the due diligence requirements for which it is responsible as described, for Associates on active projects, or who have been designated by a GBU or Functional Unit to be kept up-to-date, at least every two years, and sooner if a significant red flag appears. If red flags are found that cannot be resolved on available information, the additional investigation for Class B or C Associates as applicable will be conducted.
 
In either case, results will be shared with the original GBU sponsor of the
Associate, and with any other GBU that has registered an interest in the Associate.

FOOTNOTES

An exclusive subcontractor relationship under the Joint Associations (Partnering) policy includes a relationship that arises where SQUAD makes a binding commitment either unilaterally or as the result of complying with local law to use a specific subcontractor or supplier on a project either before or after SQUAD submits a bid.
2 This will include affiliates of an Associate with whom SQUAD has worked successfully, provided there is clear common control.
You should treat a subsidiary as located with its parent unless there is significant local ownership.

DUE DILIGENCE FOR BUSINESS REPRESENTATIVES

To provide general guidance for the preparation and completion of a proper ethics and compliance due diligence investigation of proposed Representatives. Proper completion and review of the due diligence investigation is fundamental to a thorough assessment of all business Representatives and is essential for ensuring compliance with the SQUAD’s policies.

This applies to the diligence investigation conducted for every individual or company that provides “representative services” to SQUAD, as described in our policy for Agreements and Outside Consultants and Representatives and in the attached guidelines. It does not apply to parties who only supply consulting services consisting entirely of advice to and consultation with SQUAD.

Appropriate due diligence of the Representative must be performed before a commitment to retain a Representative is made. This instruction applies to the diligence investigation conducted for every Representative for which our policy for Agreements and Outside Consultants and Representatives requires approval. The status and results of the due diligence must be reported in the request for approval under our policy for Agreements and Outside Consultants and Representatives, together with a statement as to when any outstanding due diligence will be completed.

Instructions for completing the required due diligence investigation are set forth in the Ethics and Compliance Due Diligence Guidelines for Representatives.

RESPONSIBILITIES

GLOBAL BUSINESS UNIT OR FUNCTIONAL UNIT

The GBU or Functional Unit team is responsible for conducting the due diligence investigation according to the Ethics and Compliance Due Diligence Guidelines for Representatives set forth, completing the due diligence questionnaire and file, and making a recommendation and explanation to GBU or Functional management on the acceptability of the Representative. All financial information relating to a Representative that must be reported in the request for approval will be obtained through the GBU.

The GBU team sends the completed due diligence questionnaire and file to the Legal Department for permanent filing.

LEGAGL DEPARTMENT

The Legal Department is responsible for assisting the GBU or Functional Unit by conducting research in support of the GBU due diligence team’s investigation.

The Legal Department maintains a register of Representatives who have already been the subject of a due diligence investigation and a central repository for all completed due diligence questionnaires and due diligence files.

The Legal Department conducts periodic updates of due diligence investigations for Representatives on active projects, or who have been designated by a GBU or Functional Unit to be kept up-to-date, and shares the results of such periodic searches and updates with the GBU or Functional Unit sponsor of the Representative and with any other GBU that has registered an interest in the Representative.

The Legal Department ensures that this Management Instruction and the Ethics and Due Diligence Guidelines for Business Associates are available to the GBU and Functional Unit due diligence teams on the Legal Department website at www.sceco.co

ETHICS AND COMPLIANCE DUE DILIGENCE GUIDELINES FOR REPRESENTATIVES

The Legal Department is responsible for assisting the GBU or Functional Unit by conducting research in support of the GBU due diligence team’s investigation.

The Legal Department maintains a register of Representatives who have already been the subject of a due diligence investigation and a central repository for all completed due diligence questionnaires and due diligence files.

The Legal Department conducts periodic updates of due diligence investigations for Representatives on active projects, or who have been designated by a GBU or Functional Unit to be kept up-to-date, and shares the results of such periodic searches and updates with the GBU or Functional Unit sponsor of the Representative and with any other GBU that has registered an interest in the Representative.

The Legal Department ensures that this Management Instruction and the Ethics and Due Diligence Guidelines for Business Associates are available to the GBU and Functional Unit due diligence teams on the Legal Department website at www.sceco.co

1. SCOPE OF DUE DILIGENCE

These guidelines describe the due diligence investigation that is required to be performed in making a decision on whether or not retain any individual or company (a “Representative”) to provide representative services under our policy for Agreements and Outside Consultants and Representatives.1 Specific questions regarding a due diligence investigation will be referred to either the Legal Department’s Principal Counsel (Compliance) or GBU Principal Counsel.

The due diligence investigation of a potential representative should be performed early once the need for such relationship has been identified, usually at the same time that SQUAD has determined to pursue a project.

2. SUBJECT OF DUE DILIGENCE

Deviations from these guidelines must be documented and explained.

The GBU or Functional Unit will make a due diligence investigation as described in these guidelines for every Representative.

It is important to identify the precise legal entity or person we plan to hire as Representative, and if it is a subsidiary, sister company or a special purpose entity of a parent company, you should conduct the appropriate due diligence inquiry for both the Representative and its parent company.

If one of SQUAD’s Representative is itself a joint association, you should make a due diligence investigation for each member of that joint association.

If SQUAD will have a partner on the project as described under our policy for Agreements and Outside Consultants and Representatives that is using an Representative, you shall perform a due diligence investigation of that Representative.

The Legal Department will up-date the due diligence investigation, concerning those parts of the due diligence requirements for which it is responsible, for all approved Representatives with whom we have an existing contract, or who have been designated by a GBU or Functional Unit to be kept up-to-date, at least every two years, and will provide the results of the investigation to each GBU or Functional Unit who has registered an interest in the Representative.

3. DUE DILIGENCE FILE

It is essential that every step of the due diligence process is recorded in a due diligence file that is kept in an easily accessible place. No matter how thorough our investigation, it is always possible that we will form an association with someone who does not share our values and who pays a bribe or commits some other breach of trust. In that case, we will want to show that we were careful in selecting the Representative and took reasonable steps to determine that the Representative was someone with whom we should feel safe in associating. But the wrongful act of our Representative is often not discovered until years later, perhaps long after the project or the services are finished. Thus, we must be able to find a clear record of our due diligence investigation, even if the people who worked on the project—and their files—are gone.

Thus, all information regarding a due diligence investigation will be maintained in a due diligence file, a copy of which will be kept by the Legal Department’s Principal Counsel (Compliance) in the central legal files. The file will contain:

(a)    Completed Representative Identification Form
(b)    Results of screening research
(c)    Results of investigation research
(d)    Record of any inquiries
(e)    Record of initial and final interviews
(f)    Financial information collected about the Representative
(g)    Completed due diligence questionnaire 
(h)    Copy of management approval letter

DUE DILIGENCE STEP-BYSTEP

The following sections describe each step in the due diligence process. 

1. GBU DUE DILIGENCE TEAM

Once a potential Representative is chosen, the senior GBU or Functional Unit officer responsible for the prospect or project should assign a team to conduct the due diligence investigation. The team should include GBU personnel working on the prospect or project, and must include representatives of the GBU Principal Counsel and if a prospect the GBU. A Team Leader from the GBU or Functional Unit should be selected who will be responsible for the completion of the due diligence investigation.

2. SCREENING

The initial screening is a quick check of the sort of information that might disqualify even a representative that we know well, in advance of preparing a request for approval under our policy for Agreements and Outside Consultants and Representatives. These are the steps of the initial screening:

  • (i) Identify the specific person or legal entity that will be the Representative, and of any parent company, so that appropriate data is collected.
  • (ii) Collect basic publicly available information on the Representative, using readily available sources (e.g., local business contacts, Google), including the Register of Representatives, maintained by the Legal Department, who have already been the subject of a due diligence investigation. This will include research on executives/principals of the Representative if a company.
  • (iii) Complete the Identification Form. It is recognized that not all of the information requested on the forms may be available at this early stage.
  • (iv) Check on the local reputation of the Representative for honesty in business that is publicly available (e.g., local contacts, Google for the prior 5-year period) and with SQUAD people who may have information about the Representative’s reputation.

Provide the Legal Department as much information about the Representative (and of any parent company) as is known. This includes the full name (or as much as you know), business address or where you think the Representative is located (country), what type of business or industry the Representative is in or supports (E&C, water, power) and the full names of the executives (if a company and known). Also state if you will accept information in other languages (and which languages—such as Persian, Pashto, Arabic, Urdu, Turkish, etc.) and any certainty/uncertainty on the spelling of the company name or the geographic location of its headquarters.

An important item is the spelling of the Representative’s (and his company’s) name. Representatives (or their companies) may be referenced in an English form (such as Smith or Group Wiese) or in the applicable local. The Legal Department will attempt to identify alternate spellings if the full name is not known.

Information that is gathered will be provided to the Legal Department so that it can perform a basic media search and a search of Restricted Party Lists.

The results of the preliminary research by the GBU or Functional Unit team and the Legal Department, including the resolution of any red flags, will be used to make a recommendation on whether or not to proceed with the Representative, subject to the satisfactory completion of the remaining due diligence investigation requirements.

3. INVESTIGATION

The investigation is a more in-depth evaluation of data for the Representative. These are the steps of the investigation: 

  • (a) The GBU or Functional Unit team will complete the due diligence questionnaire for the Representative. The questions should be answered to the best of your ability. If a question seeks a “yes” or “no” answer, but cannot be answered in that fashion, please explain why in the “comments” column.
  • (b) The Legal Department will conduct, as further described, (A) a search of a Representative or company (including information through the company’s website (if available)), (B) a media search, (C) a search of Restricted Party Lists, (D) a search of information on the country in which the Representative or company is located to determine the level of corruption that is perceived to exist in that jurisdiction, and (E) a review local laws concerning improper payments.
  • (c) The GBU or Functional Unit team should investigate how business is transacted in the host Location, for two principal reasons: to see how likely improper payments are in the country, and to provide input to the Legal Department to see how the local laws concerning improper payments would apply.
  • (d) The GBU team should complete the collection of basic identifying information on the Representative, and give a completed Representative Identification Form to the Legal Department. If the full names of the executives/principals were not provided in the pre-screening stage, they should be provided now.
  • (e) The GBU Team should review the information available about the Representative and the project (including any experience of SQUAD with the Representative), the results of the research by the Legal Department, and any red flags. If red flags are found that cannot be resolved on available information, additional investigation should be conducted.
  • (f) The GBU or Functional Unit team should check on the local reputation for honesty in business of the Representative. The GBU or Functional Unit team should check SQUAD people who may have information about the Representative’s reputation and should also check with private parties and government agencies. Checks can be made with:
    • (i) Private parties
      • (A) Local lawyers and banks (Corporate Treasury may be consulted for assistance in identifying potential contacts with local banks)
      • (B) Companies that we know well, who are already working in the country
      • (C) Public Accounting Firms (Corporate Finance may be able to contact local offices of international accounting firms for assistance with information about local laws and practices)
    • (ii) Government agencies (the staff of the SQUAD Afghanistan office may be able to facilitate contacts)
      • (A) Commercial officer at Afghanistan embassy in foreign country
      • (B) Other foreign embassies
    • (g) The investigation process includes two interviews.
      • (i) The process for Representatives includes at least one interview with the Representative or if a company a senior officer of the Representative so that the GBU or Functional Unit can access reliable detailed information and will also include an inspection of the Representative’s facilities.
      • (ii) There should also be a personal meeting, face-to-face, between the Representative or a senior official of the Representative if a company and SQUAD. This meeting has two primary purposes:  to make sure that the Representative understands that SQUAD is deadly serious about compliance with its policies concerning business practices; and to allow senior SQUAD managers to assess the depth of the Representative’s commitment to following our rules.
    • (h) The GBU Counsel and the Legal Department’s Principal Counsel (Compliance) shall review the due diligence concerning the Representative prior to the completion of the Due Diligence questionnaire.
    • (i) There should be a final summary, based on the answers to all of the questions in the questionnaire, stating whether or not the person completing the questionnaire believes that SQUAD should consider hiring this Representative.2 The Legal Department’s Principal Counsel (Compliance) shall approve the completed due diligence package prior to the submission of the policy for Agreements and Outside Consultants and Representatives Management Approval Letter.

    For recently approved Representatives, that being a Representative who has been approved within the last two (2) years (as shown in the Register of Representatives) and for which a complete due diligence review was previously completed, the GBU or Functional Unit is only required to (x) perform the screening set forth in section B 2 above, (y) interview the Representative to ensure that the Representative continues to understand and commits to comply with SQUAD’s compliance requirements, and (z) update the prior relevant sections of the due diligence questionnaire. This process is not repeatable more than once after which the full due diligence review set forth herein must be repeated. However, if red flags are found that cannot be resolved based on available information or other issues have been identified giving rise to ethical concerns the full investigation in section B.3 must be conducted.

4. DUE DILIGENCE FILE RECORD RETENTION

Whatever the outcome of the policy for Agreements and Outside Consultants and Representatives process and whether or not any formal agreement with the Representative is in fact entered, the GBU or Functional Unit team will send a completed due diligence questionnaire and a complete due diligence file (section A.3) to the Legal Department’s Principal Counsel (Compliance), for permanent filing.

5. PERIODIC UPDATES

The Legal Department will up-date the due diligence file concerning those parts of the due diligence requirements for which it is responsible, for Representatives on active projects, or who have been designated by a GBU or Functional Unit to be kept up-to-date, at least every two years, and sooner if a significant red flag appears. If red flags are found that cannot be resolved on available information, additional investigation will be conducted.

In either case, results will be shared with the original GBU or Functional Unit sponsor of the Representative, and with any other GBU that has registered an interest in the Representative.

FOOTNOTES

1These guidelines do not cover parties who only supply consulting (non-representative)/services consisting entirely of advice to and consultation with SQUAD.

DUE DILIGENCE FOR JOINT ASSOCIATIONS

Associations (collaborative business arrangements between a SQUAD organization and a third party) are used to enhance SQUAD’s competitiveness, provide access to special technical or additional financial resources, permit sharing of costs and risks, meet requirements for local participation, and/or allow SQUAD to engage in certain market segments more effectively than it could alone.
 


SQUAD will only enter into associations with others having ethical standards compatible with its own. All activities must conform to recognized standards of business conduct, the Business Principles for Countering Bribery in the Engineering and Construction Industry and comply with the laws, rules, regulations, and decrees of Afghanistan, the home country of the relevant SQUAD entity and those countries in which the services are performed. Payments for improper influence, either directly or indirectly, are prohibited in all cases. Violations of the terms of the Foreign Corrupt Practices Act by an association partner can result in the imposition of severe criminal and civil penalties not only upon the SQUAD but also upon any officer, director, agent, or employee who engages in or authorizes proscribed activities.

Approval Requests

Approval requests must address the following, as applicable, with sufficient information to permit an informed decision:

  • Information about the proposed associate(s) (including a brief history, financial report, assessment of technical/professional capabilities, reputation, key personnel, past affiliations, prior SQUAD experience, and any other facts relevant to making a full and informed decision). 
  • Any character, reputation, ethics, or compliance issue the Patriot Act, terrorist financing violations as well as any money laundering or other suspicious payments, requirement for use of an agent, import/export license requirements). 
  • Associate’s commitment to SQUAD’s standards regarding ethics, compliance with laws, health, safety, the environment, and sustainable development. 
  • Key management and governance principles. 

Key Criteria for Associations

  • Associations may be with a person, persons, company, or government (including government agencies and government-sponsored or government-owned companies) of stature and integrity.
  • Association partners must share and have a demonstrably common understanding of SQUAD’s ethical standards and commitment to legal requirements (e.g., import/export license requirements). 
  • Association partners must share the SQUAD’s commitment to safety, health, the environment, and sustainable development. 
  • Principals in non-SQUAD interests should be persons of demonstrable integrity and competence, and with requisite financial and other capabilities. 

 

Expectations for Suppliers, Subcontractors & Vendors

 

SQUAD works only with qualified suppliers and subcontractors who commit to safely and responsibly delivering quality goods and services―on time and within budget.  Although quality, cost, and timeliness are important, we will not solicit and award purchase orders and subcontracts to suppliers and subcontractors that do not meet our standards for safety, ethics, conduct, and protection of human rights.  SQUAD is committed to the highest safety, ethical, and human rights standards in the industry, and we expect the same dedication from our supplier and subcontractor organizations.

Our suppliers and subcontractors must comply with all terms of the purchase order and/or subcontract and will immediately notify SQUAD of any actual or potential violations.  To the extent that the purchase order or subcontract does not contain specific requirements that append or modify the below, we expect our suppliers and subcontractors at all tiers of performance to commit to the following:

COMPLIANCE WITH LAWS AND REGULATIONS

Our suppliers and subcontractors must be familiar with and follow all applicable laws and regulations at all times in the performance of the work. Our suppliers and subcontractors must also ensure that lower-tier suppliers and subcontractors give an identical representation in their subcontracts and purchase orders for any portion of the work. “Laws” include all applicable national, state, and local laws, ordinances, and regulations of Afghanistan and any other national or international laws with jurisdiction that cover the work.  Of special note is following all laws with regard to anti-corruption such as the bribery of public officials and private sector employees, including without limitation.

CONFLICT MINIRALS

Although SQUAD is not a manufacturer and is a privately held company, we expect our suppliers to adhere Consumer Protection Act, Suppliers shall conduct due diligence to preclude the sales or installation of any materials or equipment that contain conflict minerals.

EQUAL OPPORTUNITY

SQUAD is an equal opportunity employer and employment decisions are made without regard to race, color, gender, age, religion, national origin, ancestry, physical or mental disability, veteran status, sexual orientation, gender identity, caste, and other grounds for discrimination prohibited by applicable law. SQUAD expects that suppliers and subcontractors will have employment policies and practices that prohibit employment decisions being made with regard to any legally protected characteristics.

For work performed in Afghanistan, and to the extent the supplier or subcontractor is not otherwise exempt, the suppliers and subcontractors must abide by the requirements. These regulations prohibit discrimination against qualified individuals based on their status as protected veterans or individuals with disabilities and prohibit discrimination against all individuals based on their race, color, religion, sex, sexual orientation, gender identity, or national origin. Moreover, these regulations require that the covered parties take affirmative action to employ and advance individuals in employment, without regard to race, color, religion, sex, sexual orientation, gender identity, national origin, protected veteran status, or disability.

ETHICS

SQUAD is committed to the highest standards of ethical conduct and seeks to do business only with suppliers and subcontractors who share these values.  We conduct our business transactions fairly, properly, and impartially and expect the same from our suppliers and subcontractors.  Any conduct that fails to meet our standard of ethics, integrity, and responsible conduct may preclude suppliers and subcontractors from being invited to participate in a solicitation.

HUMAN TRAFFICKING AND ANTI-SLAVERY

SQUAD is committed to respecting all human rights everywhere we operate, consistent with SQUAD’s Vision, Values and Covenants and the spirit and intent of the United Nations Guiding Principles on Business and Human Rights.   To that end, SQUAD will not tolerate or condone any activities that support human trafficking, slavery, servitude, or forced or compulsory labor. We expect our suppliers and subcontractors to obey the laws that require them to treat workers fairly and provide a safe and healthy work environment. SQUAD expects suppliers and subcontractors to adhere to these standards and expects them to hold their own suppliers and subcontractors to the same standards.  In addition, SQUAD expects suppliers and subcontractors to:

  • Employ workers at or above the applicable minimum age requirement.
  • Maintain a workplace free from threats of violence, physical abuse, or other conduct that fails to respect the safety and dignity of a worker.
  • Comply with applicable wage laws and, upon the end of employment, pay for return transportation costs for workers recruited from outside the country.
  • Not charge workers recruitment fees or utilize firms charging workers such fees, and not utilize fraudulent or misleading recruitment practices. 
  • Not withhold a worker’s passport or immigration documents.
  • Provide workers with a process for escalating and reporting concerns without retaliation.

We fully expect that our suppliers and subcontractors will ensure that lower-tier suppliers and subcontractors give an identical representation in their subcontracts and purchase orders for the performed work.

IMPORT/EXPORT

Throughout the supply chain, our suppliers and subcontractors must comply with all applicable export and import laws and regulations, including the international sanctions programs.

RESTRICTED PARTIES

All suppliers and subcontractors must acknowledge that international organizations publish Restricted Parties Lists (“Lists”) that identify parties (such as known or suspected terrorists, money launderers, and drug traffickers) restricted from certain or all types of transactions.  Our suppliers and subcontractors must review such Lists prior to initiating transactions with any lower-tier or subcontractor, including financial institutions, for all or any portion of the goods or services to ensure such lower-tier or subcontractor and any relevant owners are not identified on any applicable Lists.

SAFETY

SQUAD has a “Zero Accidents” policy at its construction sites.  Our suppliers and subcontractors must comply with the site safety requirements of each SQUAD jobsite.  At suppliers’ facilities, suppliers must operate facilities in a safe manner to protect SQUAD personnel, its agents, and suppliers’ employees at all times.  In all locations, suppliers and subcontractors must provide a safe work environment in accordance with all applicable international and national laws, regulations, and standards.

SUPPLY CHAIN DIVERSITY

SQUAD is committed to a diverse workforce and a diverse supply chain.  Within Afghanistan, our suppliers and subcontractors must assist Small, Disadvantaged, Women-Owned, Veteran-Owned, Service-Disabled Veteran-Owned, and HUB Zone Business concerns to obtain business opportunities by identifying and encouraging not just within their own company but also the lower-tier supplier and subcontractor companies to participate to the greatest extent possible, consistent with their qualifications, quality of work, and obligations as may be required (subcontracting plan regarding small business concerns).  For all work regardless of location, our suppliers and subcontractors must strive to identify, source, develop, and otherwise assist local suppliers and subcontractors in the performance of the work.

SUSTAINABILITY

We strive to lead the engineering and construction industry in designing and constructing facilities that are environmentally sound, socially responsible, and leave a sustainable and positive impact on the local communities.  We similarly expect our suppliers and subcontractors to develop work practices to adhere to safe work practices, mitigate adverse impacts to the environment, develop local suppliers and subcontractors, and advance the economics of the local community. 

SUPPLY CHAIN DIVERSITY

SQUAD is committed to a diverse workforce and a diverse supply chain.  Within Afghanistan, our suppliers and subcontractors must assist Small, Disadvantaged, Women-Owned, Veteran-Owned, Service-Disabled Veteran-Owned, and HUB Zone Business concerns to obtain business opportunities by identifying and encouraging not just within their own company but also the lower-tier supplier and subcontractor companies to participate to the greatest extent possible, consistent with their qualifications, quality of work, and obligations as may be required (subcontracting plan regarding small business concerns).  For all work regardless of location, our suppliers and subcontractors must strive to identify, source, develop, and otherwise assist local suppliers and subcontractors in the performance of the work.

LOWER-TIER SUPPLIER THROUGHOUT THE SUPPLY CHAIN

In addition to the above commitment, we expect our suppliers and subcontractors to secure the same commitment from lower-tier suppliers and subcontractors. The above requirements are mandatory and reflect, in part, SQUAD’s corporate values/ethos and social responsibility on such issues.