Podcast hosts Ken Jaques and Julie Johnson with John Morrell (center)
In this week’s podcast, CIPE’s Regional Director for Asia John Morrell discusses when he witnessed for the first time how lack of governance and corruption undermines democracy and how that experience shapes his work today. Morrell talks about business-led solutions to corruption challenges and a CIPE project underway in Thailand that is changing the business culture in that country. Morrell also discusses his early career experiences in the Philippines and a non-profit he founded there to support an orphanage for abandoned children.
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Photo: Citizen Digital
A recent report by Kenya’s Ethics and Anti-Corruption Commission (EACC) paints a rather grim picture of the extent of corruption in Kenya. In the top 10 counties by average bribe size, bribes range from KSH 80,000 (about $800 US) to about KSH 6,000 ($60 US) — in a country where the average monthly wage is just $76. Situations where bribes are most commonly solicited include obtaining basic services such as medical attention or a national identity card. Not surprisingly, Transparency International puts Kenya at 139th out of 168 countries in its latest corruption ranking.
Even a cursory review of Kenyan daily news coverage shows that corruption at all levels (from county to national) and in all its forms (from bribes to graft) is a major issue of concern for the country. Many commentators express frustration at the extent of the problem and the dearth of constructive solutions. Against that background, CIPE and its partner organization, the Kenya Association of Manufacturers (KAM), are working to help change Kenya’s corruption-tainted narrative and provide the private sector with tools to proactively build integrity into business operations.
To that end, CIPE, KAM, and Global Compact Network Kenya (GCNK), where KAM serves as the secretariat, created a joint training program for Kenyan companies on anti-corruption compliance. The training is based on CIPE’s Anti-Corruption Compliance: A Guide for Mid-Sized Companies in Emerging Markets and was adapted to the unique needs and concerns of local businesses. As KAM’s Chairman Pradeep Paunrana put it, “You cannot clap with one hand, it takes two people to make a corrupt deal.” Through this initiative, Kenya’s private sector is taking responsibility for holding itself to a higher standard and disrupting the “supply side” of corruption.
Photo: U.S. Department of State
This post originally appeared on CIPE’s Corporate Compliance Trends blog.
Despite the thick Lagos air and long journey 60 women entered the The Moorhouse hotel on a recent Saturday morning, exchanging excited greetings and fresh ideas. Women business leaders adorned in brightly colored fabric and empowered with strong ambitions went around the room introducing themselves and their businesses.
It was the inaugural meeting of the Lagos chapter of the African Women’s Entrepreneurship Program (AWEP), launched by the U.S. Department of State in July 2010 to assist women entrepreneurs across sub-Saharan Africa. The program supports African women entrepreneurs to promote business growth, increase trade both regionally and to U.S. markets, create better business environments, and empower African women entrepreneurs to become voices of change in their communities.
Although AWEP in Nigeria initially started as a group of women’s businesses in agriculture, the members now represent a variety of sectors including fashion, textiles, professional services, cosmetics, and home decor. Since AWEP’s inception, chapters such as the Lagos chapter have started all over Africa bringing together 1,600 women entrepreneurs and 33 business associations across the continent creating over 17,000 jobs.
This past year has been filled with both positive and negative news regarding ongoing reforms in the Ukrainian economy. Ukraine entered into a historic free trade agreement with the European Union that went into effect on January 1, 2016, which was met with the predictable implementation of retaliatory tariffs on Ukrainian goods by Russia.
Additionally, and in spite of raucous parliamentary sessions and infighting among the parties, the Rada (Ukraine’s legislature) has adopted various pieces of pro-reform legislation, some of which were proposed by CIPE’s partners under a recently completed USAID-funded program Supporting Urgent Reforms to Better Ukraine’s Business Environment (SURE).
The support of USAID allowed CIPE and partners to build a sustainable institutional framework for business associations representing SMEs to have direct input into legislation that effects SME operations specifically, and to improve the environment for doing business in Ukraine more broadly.
Photo credit: Lithuania Ministry of Foreign Affairs, Flickr
By Eric Hontz and Marc Schleifer
In a stunning announcement in Kyiv on February 3, Ukraine’s Minister of Economic Development and Trade Aivaras Abromavicius submitted his resignation to President Poroshenko. The Lithuanian-born Abromavicius cited several factors contributing to his resignation, including pressure to appoint questionable individuals to his team or to key positions in state-owned enterprises. In particular, he named Igor Kononenko, considered a Poroshenko ally in parliament. President Poroshenko has reportedly urged Minister Abromavicius to stay on, and has promised that the National Anti-Corruption Bureau would investigate his claims against Kononeko.
A public statement signed by 10 ambassadors to Ukraine, including from the United States, the United Kingdom, Germany, and France, released hours after the resignation, emphasized deep disappointment and noted the importance of Ukraine’s leaders setting aside parochial differences and the necessity of putting the vested interests that have hindered progress for decades in the past.
Corruption has been a major roadblock to a meaningful and sustaining democracy in Thailand. According to CIPE Asia Regional Director John Morrell, “corruption was the stated justification for the military’s ousting of an elected government in 2006 and the Supreme Court’s sacking of another elected government in 2008.” In Transparency International’s 2014 Corruption Perception Index, Thailand was ranked 85th out of 175 countries.
To address this corruption issue in Thailand within the local context, CIPE partnered with Thai Institute of Directors (IOD) and launched a Collective Action Against Corruption initiative in 2010. This project is unique in that CIPE and IOD aim to combating the supply side corruption in the private sector through a coalition of member companies, established in this initiative, which vowed to adhere to the highest standards of corporate governance, compliance, and anti-bribery protocols.
“If a company’s goal is to stay in business for a long time, why take the shortcut and pay bribes, which can damage the company in the long term?” asked Sammy Hamzah, president of Indonesian Petroleum Association, at the launch event of CIPE and International Business Links (IBL)’s new Anti-Corruption Compliance guidebook for mid-sized companies in Indonesia’s oil and gas industry.
“When a company commits a corrupt behavior, it takes on average 20 to 30 years to bring back the company’s credibility.”
Corruption is a major problem in Indonesia. According to a Gallup poll, more than 8 in 10 Indonesians say that corruption is widespread throughout the nation’s government and businesses. The oil and gas sector is particularly susceptible to corruption because of the multiple steps in the procurement and licensing processes, as well as the sheer amount of the money involved.
That’s why CIPE and IBL produced the guide. It’s intended to help mid-sized companies looking to become suppliers of local or international oil and gas companies to understand the business case for anti-corruption compliance and instruct them on how to create an internal compliance system.