On the occasion of the European Development Days 2016, we had the chance to meet with key experts to discuss how businesses and their stakeholders can work together on the fight against corruption. Simon Webley, Research Director at the Institute of Business Ethics, Igor Soltes, Member of the European Parliament, and Howard Shaw, Head of Anti-Corruption & Whistleblowing Services at Mazars, shares some insights.
Mr. Webley, in countries where bribes are accepted as a way of business, how should private companies deal with this?
Simon Webley: First of all, they will have to evaluate whether they can do business and at the same time hold to their core ethical values. If they can’t find a common basis with the people they want to do business with, it is best not to do it and to explain why! If they decide that they can do it, they must make it very clear that they cannot be influenced by people offering them something additional to the agreed amounts in the contract, in other words: a bribe of some sort! So you have to make it quite clear from the beginning, that you cannot be corrupted and to make everybody know who they are dealing with.
Mr. Soltes, how can private and public sector find a way to cooperate in the fight against corruption? In the scope of regulatory environment, practical tools etc.?
Igor Soltes: In connection to the private and the public sector, it is important to understand that the public sector is the important partner to create the legal framework, namely sound public procurement rules, anti-corruption rules etc., to protect tax payers’ money against corruption and other irregularities. The public sector should listen to the private sector when devising these rules, as the private sector has considerable experience with these risks. Therefore, public and private actors should be able to agree on a certain code of conduct – what are the good practices? What has to be avoided? How can we make the system more efficient?
Also, it is very important to improve the efficiency and effectiveness of the management of public finance. The reporting discipline of the private sector has to be increased. Lastly, it will be important to cut the differences between the rich and the poor – only then can the level of corruption decrease.
Mr. Shaw, why does the public sector in most developing countries get tarnished with being most corrupt, whilst the perpetrators appear to be the private companies who actually pay out large sums in monetary fines?
Howard Shaw: It is true to say that – when we talk about corruption on an international scale – we talk about the perception of risk in the public sector. For example, everyone always refers to the Transparency International Corruption Perception’s Index – it is used as a benchmarking tool for due diligence and the like – and this Index measures the perception of public sector corruption. So, the question you ask is very legitimate. The reality is that the international instruments, such as the OECD Convention, the African Union Convention and others, were originally drafted 15 to 20 years ago and they specifically addressed companies “bribing their way in”, e.g. into infrastructure contracts in the developing world. That was one of the motivations for those international agreements. So, it is not surprising that the international dialogue around corruption risk focuses on the perception of risk in the public sector. But there is a much more sophisticated understanding today, 10 years later, around how corruption is delivered by public and by private actors alike. From private sector companies to other private sector companies, or from them to state-owned enterprises or to state institutions. Today we can say that there is a new focus on tackling corruption as it is delivered by the private sector. So, if you look at the UK Bribery Act, it specifically legislates for private to private action and we are seeing that kind of legislative move in other countries as well. So, yes it is still true to say that the focus is on bribery of the public sector but the reality is that there is a much deeper understanding and a new policy move towards tackling private to private and private to public corruption.