Clearing Corruption

Transparency International works globally against exploitation, bribery schemes

By Danielle Lee

Background
In 1993, when Peter Eigen, the World Bank’s Director of the Regional Mission for Eastern Africa, felt the international banking institution was refusing to confront corruption, he founded Transparency International.

Dedicated to eradicating and building awareness about corruptive practices, which the group defines as those exploiting public power for private gain, Transparency International is a worldwide network of international governments, corporations and individuals. The organization has 95 national chapters.

Chapters in some of those countries—like Uruguay and Chile—focus on gaining greater public access to government information.

The U.S. chapter includes an entirely corporate roster of sponsors and members. Members of the U.S. board of directors include executives from General Electric, AIG, Pfizer and Goldman Sachs.

One of many tools available to all TI chapters, the Business Principles for Countering Bribery offers a map for companies implementing an anti-bribery program. A steering committee of corporations, academic institutions and NGOs that includes Shell, SAP and BP drew up the guide. The committee meets every six months to devise new anti-corruption strategies.

Recent Successes
Many organizations have used these principles outright or as a basis for developing similar anti-bribery codes. The World Economic Forum uses these systems and many corporations have started including them in their annual reports.

“In the last 10 years, the biggest change has been that business leaders no longer talk openly about the need to be involved in bribery to work in exporting,” said TI Director of Private Sector Programmes Jermyn Brooks. “They used to say the only way to do it is using bribery, but now they don’t even talk about it privately. It’s much more unacceptable. One reason is the advocacy work and the anti-bribery convention.”

This convention is the Organisation for Economic Cooperation and Development (OECD) Anti-Bribery Convention, the largest instrument in the fight against bribery of foreign officials in international business transactions. The convention develops and enforces anti-bribery and anti-corruption legislation that has now been ratified by 100 United Nations-member countries.

The United Nations similarly addressed the issue after Secretary General Kofi Annan introduced the voluntary guidelines of the U.N. Global Compact in 2000. The Compact contained nine principles, but none addressed corruption. Transparency International, with the help of businesses and other organizations, lobbied for the anti-corruption tenant that was added in 2004.

Current Initiatives
To assist companies in complying with the standards of organizations like the U.N. Global Compact and the World Economic Forum, Transparency International plans to introduce a transparency index in 2008 to publicize issues that the companies are reporting as well as to publicize examples of good reporting.

“It is to encourage companies to be more open and more willing to promote publicly what they are doing,” said Brooks. “People in Nigeria need to understand the total value the government is getting from the exploitation of oil so they can hold their government accountable for what they’re doing.”

Upcoming Trends
Brooks points to the recent bribery scandals at Siemens that have resulted in millions of dollars in fines, employee prosecutions and resignations of the chairman and chief executive as an example of a hands-off approach to transparency that does not work.

“[The Siemens case is a] good example of what happens to a large company that thinks it’s doing the right thing but doesn’t follow that you need to have detailed implementation,” said Brooks. “You [have to] train your people, evaluate regularly what you’re doing, and be prepared to talk about it in reports and on the website so it has substance behind it and so the staff believes what senior management is saying.”

TI has also continued work in what it deems the two most corruption-prone industries: the public works/construction sector and the defense industry. Within these two fields, it is urging greater transparency in both the public agency bidding process involving private construction contractors and in arms-export countries, where illegal weapons transactions and bribery can occur.

A frontier more recently susceptible to corruption is emergency aid, said Brooks, with some estimates putting losses of funds raised by various groups at 50 percent due to inefficiency and corruption. TI is focusing on working with these organizations to increase the effectiveness of their aid resources.