There are a number of very simple tools for businesses to oppose corruption, says Natalia Otel Belan, Deputy Director for Europe, Eurasia and South Asia, at the Center for International Private Enterprise (CIPE), an American non-governmental organization that runs several projects in the Republic of Moldova for the empowerment of the Moldovan private sector. The expert described these tools in an interview with Radio Free Europe.
An interview with the deputy director for Europe, Eurasia and South Asia at the Center for International Private Enterprise (CIPE)
Natalia Otel Belan: “Of course, corruption has two parts – the demand side and the supply side. In our case, it is very common that the government is the demand side, and those in society, especially in the business sector, are often forced to offer bribes or other, very often illegal, transactions to resolve problems and decrease the risks they face.
In fact, businesses often finds themselves in these situations, but not because they want to incur a risk of corruption. Most often business people are “unwelcome” participants – they have to find a solution to a problem and very often this solution means paying a bribe or some other way of resolving the situation more quickly.
Our experience shows that businesses can oppose these risks. There are a number of tools that Moldova can apply and which Moldovan business can use to fight these risks and protect themselves. These are anti-corruption compliance tools developed by the International Standards Organization, ISO 37001. However, there are some far simpler standards that business can apply but which have the same effect: defense against corruption. ”
Radio Free Europe: Could you give us some examples?
Natalia Otel Belan:“These standards include relatively simple elements. One of the elements is risk assessment. A company must have a very clear understanding of which of these companies’ transactions or relations with the state administration may create corruption risks. Most companies know what they are, but these risks need to be documented.
Another element is developing, based on this risk assessment, a code of conduct for all employees, including the Board of Directors—from the highest structure in the company to all employees in the company. They need to understand the risks and the reporting, documentation and remediation procedures that each employee can do.
It is a relatively simple system, but the fact that this system exists in Moldova is not very well known. We are very excited to see that business in Moldova is starting to ask for and understand that it needs to adopt these standards.
In the past two years, our organization has established a partnership with a number of Moldovan associations and chambers of commerce, over 30 organizations that have joined together to assess the key risks facing small and medium-sized businesses. They have developed a series of recommendations to governors to mitigate these risks, these corruption challenges. Among these priorities is the improvement of the public procurement system – not just the legislative part, but the implementation of this legislation and the improvement of the system of controls. Controls are usually among the biggest risks of corruption.
We bring the analysis methodology – a systemic analysis, not a transaction analysis, that is, not what business is facing day by day, but an analysis of the system, where those difficulties are, those loopholes in the system. Comparing Moldova with other countries, the private sector understood that it has a role to play in fighting corruption, protecting itself against the risks of corruption and preparing a proposal document with very concrete reforms.
What’s interesting for us is that usually in the countries of this region, in post-socialist countries, the factors that cause the authorities to make reforms often are international organizations. We are very happy to see that Moldova’s business is being organized, created this common platform and is creating this dialogue with the corruption officials. ”
Radio Free Europe: The business that remains, you probably want to say, because last year’s data showed that there are thousands of companies that have closed their doors.
Natalia Otel Belan:“Indeed, it is a very sad reality. But those who remain are trying to consolidate and fight, to defend their business.
Indeed, we hear from several associations that many companies in different sectors are closing down, and the owners or the employees, in bad faith, are moving abroad. It is a really sad reality, but we do try to support those who still have motivation, who still have this desire and optimism that something will change. ”
Radio Free Europe: What are the reasons for this?
Natalia Otel Belan:“The biggest problem is corruption. Corruption has a very widespread effect. ”
Radio Free Europe: And what can be done in this situation?
Natalia Otel Belan:“Businesses must continue to be active players in improving the economic situation. Their role is not just to maintain their business and grow it, to fight day by day with all the risks they face. Their role is to strengthen their business position, communicate, create this channel, and make these changes.
Change can happen not only from top to bottom. It is very important for civil society, citizens, and businesses to be more active in promoting these changes. Businesses need to be very firm in their positions, insist on the changes they want, and push politicians to respond to these wishes of civil society and the private sector to not only improve the business environment, but also to boost the economy.”
Radio Free Europe: Why would they do it if it is easier, perhaps, to be friends with a politician?
Natalia Otel Belan: “This friendship is very short-lived. Politicians in Moldova, as in any other country, come and go. A true entrepreneur, when she creates a business, does not create it for a short period of time. She creates this business because she has a vision, she has a dream she wants to fulfill.
The entrepreneur is the one who has an idea and wants to implement it. A real entrepreneur has a long-lasting interest, and she understands that affiliation with a politician can create benefits for the moment but can also create risks because political waves come and go; today one political movement is in power, and in a few years, as we see in any country, including Moldova, political power will change. This is the natural political cycle.
And I believe that many real entrepreneurs do this. And for us, working with Moldovan business associations over the past 10 years, it is very clear that this vision of entrepreneurs who care very much for their business, keep to the jobs they created, belong to the communities that they have created around their business. And I think there is this healthy segment of Moldovan business. It is very small, but it exists. ”
Radio Free Europe: Yes, but the biggest segment is perhaps the one we always hear about, that its interest is not to keep the jobs it created, or to maintain a dream of accomplishment, but to get as much money as possible for as long as possible. What should we do about this?
Natalia Otel Belan: “Those are not entrepreneurs, real businessmen. They are opportunists – people who use the time to make that money. Because the goal of a true entrepreneur is not just to make profit, but profit is one of the goals. Other goals are also job creation and improving the situation of the community, society. In the end, any business creates a good or service for the community, something society needs. And business women who really want to develop their business are not affiliated, or do not want these affiliations because they come at a cost.”
Free Europe: At the end of our discussion, I would like you to address a message to the Moldovan entrepreneurs who are working very hard, as well as a message to the government.
Natalia Otel Belan: “Entrepreneurs in Moldova must realize that they have decision-making power and they have to use it. This power is in collective action. A single entrepreneur cannot change the situation, cannot change the law or improve the business environment. However, if entrepreneurs join their efforts and unite in this vision of improving the country, then they can become not only advocates, promoting recommendations for better lawmaking and improving implementation of this legislation, but they can also proactively implement these international anti-corruption standards that we talked about. So they have to realize that they really have this power of change.
Regarding the government—for the governments I have a relatively simple message. I would like the government really to be open to the recommendations, the wishes of the Moldovan business and the wishes of the Moldovan society. They have to respond to citizens’ needs. Very often, governments focus on conditions that are proposed by international organizations such as the World Bank, the International Monetary Fund and so on, but these recommendations for change must respond to the needs of society first. ”