ANAB HU # 96 Commissions and Incentives to Consultants by Certification Bodies

Sidney Vianna

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ANAB posted this Heads Up. It will be interesting to see how they will enforce this.

(broken link removed)

ANAB said:
The purpose of this issue is to state clearly and unambiguously the position of ANAB about a certification body paying a commission, finder’s fee, or other incentive to a management system consultant.


Can a CB pay a commission, finder’s fee, or other incentive to a management system consultant? The answer is yes, but:
a. If this is for an organization NOT consulted by the consultant, the CB may audit and certify the organization without delay. (Essentially, the consultant is acting as a commissioned sales person for the CB.)
b. If this is for an organization that received management system consulting by the consultant, this is perceived as creating an unacceptable threat to the impartiality of certification, based on ANAB Advisory 16 and ISO/IEC 17021:2006, 5.2.7. Therefore, the CB cannot audit or certify this organization for at least two years after the consultancy ended.
 
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Marc

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As many times as I've been approached by a registrar to steer companies to them in return for a fee over the last 15+ years, I've never accepted. That was my personal position to avoid any conflict of interest problems or accusations.

Enforceable? Nope.
 

MajorBVNaik

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Dear Sir
There is discussion on IRCA on line forum on the topic which is about whether CBs are acting as commercial organization.But coming to the present topic of discussion. The problem is that this practice of paying consultants a sort of commission is prevalent in my oart of the world. I was thinking/hoping that it was there in the deveoped economies.
I feel that payment of commission by the CBs to the consultant who has provided consultancy to the organization & he brings the management of the organization to a CB for business & he gets paid for doing so would most certainly affect the impartiality of the CB. I am positive that the CBs are looking from the commercial angle & tend to be as linient as possible in cases where consultant bring large number companies to them.
Of course the payment can be direct or indirect. For example, a CB has on its panel number of auditors who are also IRCA/RAB approved auditors. The pracice followed is that these auditors audit each others companies & obvoiusly this way impartiality automatically suffers.
What is the solution? No idea. Question is how can any one overcome problems created by certain kind of human nature. It will be really difficult to enforce any king legislation.
As normally happens in life people who do their work sincrely tend to get side lined by the system.
 

Sidney Vianna

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ANAB has a new Heads Up (#176) on this subject. It states, in part
In Heads Up 96, ANAB announced that its application of ISO/IEC 17021, clause 5.2.7, would be
that if a CB pays a commission or finder’s fee to a consultant for referral of the consultant’s client to the CB, the CB cannot certify that organization for at least two years. In Heads Up 96 ANAB also stated that if another method were considered accepted and agreed by appropriate bodies internationally and communicated to all stakeholders, ANAB would also accept this method.
In October 2009, several discussion papers submitted to the IAF Technical Committee related to this subject. The issue was referred to the IAF TC Working Group on the Credibility of Management Systems Certification. In March 2010, based on a recommendation of the Working Group, the IAF TC decided the following:
Consensus of the IAF TC is that there are alternative methods to the 2 year
option to manage impartiality in the case of payment of commission/finder’s fee to consultants. The WG on CMSC was assigned the task to further develop the methods based on the principle of transparency.
The Working Group met after the IAF TC meeting and decided on the following 10-step method:A CAB has to demonstrate the following:
1. Transparency - all documentation relevant to this relationship are recorded and available on request to AB. The client and relevant CAB personnel are aware of this relationship and/or payment of commission/finder’s fee and that the CAB does not provide special treatment.
2. Management of the CAB has signed the relevant declaration of impartiality that includes reference to such relationships and their management.
3. Risk assessment conducted for the specific relationship between the involved parties. Special attention given to the threats arising from
relationships of the parties/individuals involved.
4. Impartiality committee reviews the effectiveness of management of risk due to such relationships.
5. A process is established to ensure there is no special treatment of clients during the certification process.
6. Instances of pressure or influence from management, consultant or client are reported and mitigated.
7. Additional witnessing of the audits may need to be conducted by the CAB.
8. Closer scrutiny of audit output and certification / recertification decisions.
9. Monitoring of such relationships through internal audit.
10. An AB may need additional time to assess the management of such relationships and may also need to conduct additional witness audits.

ANAB accepts this method as an acceptable alternative to the two-year rule based on the consensus of the IAF TC Working Group on CMSC and based on the assumption that it will be confirmed by the IAF Technical Committee at its next meeting in October 2010.
 

DannyK

Trusted Information Resource
It is surprising to me that the registrars pay off consultants to steer clients to them.

Is this happening in North America?
 

Marc

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It is surprising to me that the registrars pay off consultants to steer clients to them.

Is this happening in North America?
For years. Back in the late 1990's the typical payoff offered was about US$1500 to US$2500 per client.

And still is happening today. I won't mention names but a sales person from a large registrar took me out to eat recently. Let's just say I explained how I'm neutral and when I work for a client it is the client I work for. I never have, and never will, 'sell out'.

I long ago made up a spreadsheet for clients to use to choose a registrar with. I have never recommended any specific registrar.
 

Sidney Vianna

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It is surprising to me that the registrars pay off consultants to steer clients to them.
I've heard of cases where not only a consultant "sells" a client to a specific CB, but that same consultant, who also works as a subcontracted auditor for that same CB gets assigned as an auditor to the same organization he just "finished" "assisting" in implementing the system. A clear violation of ISO 17021. But, unless someone blows the whistle, it is almost impossible to be caught.

Unscrupulous behavior at it's worst.
 

Randy

Super Moderator
I've heard of cases where not only a consultant "sells" a client to a specific CB, but that same consultant, who also works as a subcontracted auditor for that same CB gets assigned as an auditor to the same organization he just "finished" "assisting" in implementing the system. A clear violation of ISO 17021.
Are you serious:mg:? That's about as messed up as one can get and one of the biggest "Bozo no-no's" there are. Totally messed up ethics there.
 
J

Joy

Are you serious? That's about as messed up as one can get and one of the biggest "Bozo no-no's" there are. Totally messed up ethics there

It may be happening everywhere.I can say it is very common in India and 70-80% certification business is controlled by consultants here.So consultants quote includes certification fees.Consultants dictate results,selection of auditor, practical audit hours,audit dates,certificate release and the CB's price offer.More strange is the role of accreditation body.They see everything but don't act.:cool:
What Sidney has mentioned that same consultant is going for audit is happening here too,even in AS.
Another starange thing I observe here is the difference in level of ethics by CBs operating in USA and here with same name.There are many big players who earned good name in USA but there reputaion is very bad here.

For every rule there is a way to violate so these people find ways to fool HUs,rules or ISO 17021 and this may continue till a system is developed when the organisation requiring certificate cannot choose the CB.I believe that 90% CBs in India are paying to consultants.

Optimistic thought-Good consultants are still surviving and there are good organisations.Consultants those practising such unethical acts are not capable to implement any system and basically they are brokers.
 

Sidney Vianna

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So consultants quote includes certification fees.
That CLEARLY violates ISO 17021, section 5.2.9
The certification body's activities shall not be marketed or offered as linked with the activities of an organization that provides management system consultancy
Consultants dictate results,selection of auditor, practical audit hours,audit dates,certificate release and the CB's price offer.More strange is the role of accreditation body.They see everything but don't act.:cool:
What Sidney has mentioned that same consultant is going for audit is happening here too,even in AS.
What accreditation body? If it is happening in the A,S&D ICOP Scheme, it is time to involve the OPMT folks. Please note that OASIS has a feedback loop to the AB's now.
 
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