Photo Credit: DFID (via Flickr)
Although the international development community aspires to noble ends, the firms and organizations therein are not free from the same ethical lapses that can befall corporations with more naked profit motives. Adam Smith International (ASI), the largest international development contractor for the United Kingdom’s Department for International Development (DfID), can attest to that point. In February 2017, ASI suffered a major blow when DfID froze all future contracts with ASI after uncovering unethical behavior on the part of ASI. These firm-specific compliance issues open up abroader conversation about the roles of ethics, compliance, and the public in international development.
ASI earned their DfID sanction by hiring an ex-DfID employee who then used their access to proprietary DfID documents to help ASI gain inside information into how to win DfID contracts. ASI also sought to influence the results of parliamentary hearings by engineering the content in letters of support from its beneficiaries. In both of these cases, ASI sought to cover up their wrongdoing with more deception. Taken together, these cover-ups revealed a toxic culture that had been given the time and space to fester.
Podcast hosts Julie Johnson (left) and Ken Jaques (center) with guest Richard Bistrong.
Former FCPA violator and current anti-bribery consultant Richard Bistrong (@richardbistrong) was convicted of violating the Foreign Corrupt Practices Act, cooperated with the FBI, and served time in prison. Today he works with companies to help them deal with anti-bribery and compliance issues around the world. He discusses what led to his conviction, and what he learned about corruption risks and the incentive structures that make bribery more likely. He also shares the advice he would give his younger self before he embarked on that first international sales trip overseas that started it all.
Learn more about his work at www.RichardBistrong.com.
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Writing on Medium, CIPE’s acting Executive Director Andrew Wilson asks: with technological change and trade deals making it easier than ever to enter the global marketplace, how can we ensure robust compliance with anti-corruption, labor, environmental, and corporate governance standards?
Read the story on Medium and follow CIPE for more stories like this one.
2016 OECD Integrity Forum
This post originally appeared on the Corporate Compliance Trends blog.
Mutually beneficial exchange of goods and services is at the heart of David Ricardo’s comparative advantage argument and Adam Smith’s The Wealth of Nations. Over the centuries, such exchange through commerce has connected countries around the globe through a web of economic links and lifted millions out of poverty. In the modern era, international agreements under the World Trade Organization (WTO) have done much to lower tariffs and increase trade. However, in many countries, non-tariff barriers continue to impede growth and development. Lack of integrity in border control and customs administration is one such key barrier.
As estimated by the World Customs Organization (WCO), the loss of revenue among its 180 member countries caused by customs-related corruption is at least USD 2 billion in customs revenue each year. India and Russia alone are losing USD 334 million and USD 223 million, respectively. Beyond monetary losses, lack of integrity in customs also presents big risks for global value chains and security concerns when it comes to criminal activity and illicit trade.
Given this global significance, combatting corruption at the border was an important topic of the 2016 OECD Integrity Forum in Paris conducted under the theme “Fighting the Hidden Tariff: Global Trade without Corruption.” Angel Gurría, Secretary-General of the OECD, made a powerful case for trade with integrity in his opening remarks:
“Integrity is not just a moral issue; it’s also about making our economies more productive, our public sectors more efficient, our societies and our economies more inclusive. It’s about restoring trust, not just trust in government, but trust in public institutions, regulators, banks, and corporations.”
CIPE Indonesia Program Coordinator Arian Ardie (Twitter: @aajkt) talks about the burgeoning Indonesian economy, foreign investment opportunities, and how Indonesian companies are coming to terms with what anti-corruption compliance means for them. Ardie also discusses the challenges of meeting cultural norms while being compliant with international business practices, and the inherent “sloppiness” of implementing decentralization and democracy in one of most populous countries in the world.
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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.