Category Archives: Global

Local Level Governance in the Philippines and Nigeria

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Government officials in towns, cities, states, and regions across the globe are often the first point of contact for citizens, civil society groups, and businesses seeking assistance in addressing a myriad of local challenges. Regional authorities are responsible for tax collection and are accountable to citizens for the stewardship of public finances. Local public officials are most familiar with the economic, social, and political challenges of their jurisdictions and are most adept at addressing these concerns through the delivery of public services and the passage of appropriate legislation. Often, solutions to problems can be found more quickly by engaging the appropriate local level authorities rather than waiting for the adoption of national level legislation. For these reasons, reforming local level governance is often the most effective way to strengthen democratic and economic conditions in a given country.

Local ownership of projects and a focus on local level and grassroots initiatives have been key components of CIPE’s work.

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A Guide for Anti-Corruption Compliance: The New Imperative in Global Value Chains

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This post originally appeared on Corporate Compliance Trends.

In many countries, fighting corruption seems to be an impossible battle, especially for mid-sized companies with limited resources. While there is a broad global consensus that corruption suppresses competition and innovation, thus hampering entrepreneurship and economic growth opportunities, countering it presents a challenging task due to resistance to reform in corruption-tainted business environments. In many cases anti-corruption rules and regulations may be weak or unevenly enforced, government-led steps to fight corruption remain insufficient or ineffective, and bribes are a widely accepted part of doing business.

Yet businesses committed to anti-corruption are not helpless. They can lead by example by improving their own safeguards against corruption and act together to create a movement for integrity that makes clean business conduct the norm, not the exception.

In today’s globalized world, where international value chains stretch across borders and continents, anti-corruption compliance provides a vital competitive advantage. Ethical companies tend to have higher valuations, are more attractive to potential investors and employees, and are more likely to be engaged in long-term arrangements with their business partners. Increasingly, companies are expected to ensure not just the integrity of their own operations but also the conduct of their suppliers, distributors, and agents wherever they may be. Evidence of this comes from high-profile prosecutions of multinational firms that are not only subject to significant fines but also risk loss of share value and reputation.

CIPE’s newest publication, Anti-Corruption Compliance: A Guide for Mid-Sized Companies in Emerging Markets, is meant to help local companies around the world think about anti-corruption compliance as a strategic investment and take concrete steps to introduce or strengthen their internal compliance programs. Going forward, the guidebook will serve as the basis for CIPE training and capacity building initiatives for businesses in countries ranging from Kenya to Pakistan and Ukraine where, despite persistent challenges, many companies already are a part of global value chains or aspire to join them. In order to be competitive, they need tools outlined in the CIPE guidebook to translate their commitment to integrity into the day-to-day business operations. Stay tuned for the country updates!

Click here to get the guidebook.

Anna Nadgrodkiewicz is Director of Multiregional Programs at CIPE.

Reducing Third-Party Company Risks in Emerging Markets

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This post originally appeared on CIPE’s Corporate Compliance Trends blog.

As the world’s multinational companies seek profits in new, high-risk markets, they inevitably start depending on local businesses – third parties – to operate. Such partnerships bring with them both the promise of mutual growth and, for the multinational, responsibility for the behavior of its new local partner. That’s because aggressively applied laws such as the U.S. Foreign Corrupt Practices Act (FCPA) hold the multinationals responsible for third parties’ behavior.

Of the estimated 106 companies currently under investigation for FCPA-related violations, a significant number of them are related to suspected third party wrongdoing – assuming that past settlements made public are a reliable guide. So, how to reduce the corruption risks presented by doing business with third parties in developing countries where bribery is an accepted practice? CIPE is working on finding answers. So, too, is one of the world’s leading risk management firms,  SAI Global, which recently presented a webinar and offered a few tips on how to construct an anti-corruption training program for third parties.

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Youth Entrepreneurship at CIPE

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Youth play a vital role in shaping the future of every country in the world and yet they are often excluded from the economic and political decision-making process.  For those countries in the world that are striving for democracy based on market-oriented reforms, young people must play an active role as youth entrepreneurs expand opportunities, unleash individual initiative and help to cultivate individual citizens who have a stake in society and democratic governance.

CIPE recognizes the important role youth play in fostering democracy and the free market in developing countries.  As a result, CIPE focuses on building skills through entrepreneurship and management programs and supporting chambers of commerce and business associations that provide networking, services, and forums for young leaders.

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Introducing Corporate Compliance Trends, a Website for Anti-Corruption Compliance in Emerging and Frontier Markets

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The need for anti-corruption compliance programs in companies of all sizes in global value chains has never been greater. Since 2006, the U.S. government has settled or prosecuted nearly 300 corruption cases against companies from around the world, including many where the corrupt conduct originated from multinational corporations’ suppliers, vendors, and agents. The average cost of resolving these enforcement actions now tops $80 million.

Beyond the U.S. Foreign Corrupt Practices Act (FCPA) and the UK Bribery Act, new anti-corruption laws with international reach are hitting the books, such as Brazil’s Clean Companies Act, introduced earlier this year. Similarly, many international bodies, including the Organisation for Economic Co-operation and Development (OECD) and the International Chamber of Commerce, have introduced conventions and norms meant to combat bribery of foreign officials. Few doubt that this growing global trend toward rooting corruption out of international business conduct is here to stay.

Still, as a recent study found, the number of global companies with anti-corruption policies has increased by only 1 percent over the past two years, and a sizable minority of these companies have yet to implement even the most basic of compliance programs. Nearly 60 percent of global companies surveyed said they never train third parties despite the fact that many compliance actions have resulted from conduct by agents or intermediaries.

While governments and international organizations set anti-corruption rules and standards, and while law enforcement agencies around the world aggressively pursue potential violations, many companies simply lack sufficient practical knowledge on how to comply with these new global norms. Understanding what effective anti-corruption compliance looks like and how to set up internal compliance programs that mitigate the risk of corruption is an especially daunting challenge for firms operating in emerging and frontier markets, where the Center for International Private Enterprise (CIPE) has worked since 1983 with local partners such as chambers of commerce, business associations, and economic think tanks.

To share our experiences from supporting private sector-focused anti-corruption programs in high-risk countries around the globe, and to help advance international best practices on anti-corruption compliance in these countries, CIPE is launching this new website, Corporate Compliance Trends.

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How Youth Are Working to Solve Global Problems

Youth around the world are agents of change. They are political and economic leaders and participants in their communities, and have many thoughts on how to shape their nation’s future.

As part of celebrating such individuals on International Youth Day, two recent CIPE-Atlas Corps Think Tank LINKS alumni – Fayyaz Yaseen from Pakistan and Iryna Fedets from Ukraine – analyzed two issues young people care about in their communities: youth unemployment and anti-corruption. In this week’s Economic Reform Feature Service articles, the two authors explore how to bring about democratic and economic reform changes in their respective countries.

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The Challenge of Anti-Corruption Compliance for Emerging and Frontier Market Firms

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Visit cctrends.cipe.org, our new site just for anti-corruption compliance in emerging and frontier markets.

“Among a people generally corrupt, liberty cannot long exist.” - Edmund Burke

Until recently, corruption has been accepted and treated as a cultural norm in countries across the world. Increasingly, thanks to the efforts of organizations like Transparency International (TI) and a range of business groups, nonprofits, and government initiatives, the private sector is now openly talking about corruption. But to make significant progress, not just multinationals but also domestic companies in emerging and frontier markets need to believe in the business case for anti-corruption compliance.

As a community we are at a crossroads, as a wide range of actors have not only come to realize the destructive nature of corruption but are putting their heads together to create the conditions necessary to combat it.

TI-USA’s new report on Verification of Corporate Anti-Corruption Programs, the project of extensive research and consultation, marks an important step towards a unified vision of what successful anti-corruption compliance programs should look like. At a July 24 event presenting TI’s key findings and recommendations on corporate compliance, Andrew Wilson, CIPE’s Deputy Director for Strategic Planning and Programs, shared his views as part of a panel that included speakers from TI, Siemens AG, and Tyco.

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