The Voice of OECD Business

Guidelines, Recommendations and Practical Help for Companies

• Asia-Pacific Economic Co-operation (APEC) Initiatives

• Avoid Corruption – A Guide for Companies

• Avoid Corruption in International Business

• Business Anti-Corruption Portal

• Business without Corruption – An Action Guide

• Extractive Industries Transparency Initiatives (EITI)

• Global Compact (10th Principle)

• International Association of Oil and Gas Producers’ Guidelines on Reputational Due Diligence

• ICC Rules of Conduct

• OECD Guidelines for Multinational Enterprises

• OECD Risk Awareness Tool for Investors in Weak Governance Zones

• Pacific Basin Economic Council Charter

• Preventing Corruption – Recommendations by the Federation of German Industries

• United States Defence Industry Initiative (DII) on Business Ethics and Conduct

• Wolfsberg Anti-Money Laundering Principles

• World Economic Forum Initiatives (PACI)

• Transparency International Tools and Initiatives

• TRACE International

Asia-Pacific Economic Co-operation (APEC) Initiatives

APEC members instituted the Anti-Corruption and Transparency Expert Task Force's (ACT) in 2005 tasked with the implementation of international corruption instruments in the region. The Task Force formulated “Best Practice Principles for the Private Sector” (January 2007). Their widespread adoption could raise standards across industries and contribute to the goals of good governance and economic development. Further, under its collective action plan on government procurement, APEC also drafted a set of non-binding principles on government procurement in 1999. NBPs have contributed to the successful promotion of transparency and the liberalization of government procurement markets across member economies.

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The guide has been developed by the BIAC member Confederation of Danish Industries (DI) and updated in 2007. It provides definitions and information about the occurrence of corruption as well as information about the legal environment for fighting corruption in Denmark and internationally. The DI guide also provides thoughts and concrete suggestions concerning the development of corporate strategies, anti-bribery codes of conduct and the implementation of anti-bribery policies in companies. It includes additional chapters concerning agents and other intermediaries, control and reporting as well as internal whistleblowing. Copies of the publication “Avoid Corruption – A Guide for Companies” can be ordered on the website of the Confederation of Danish Industries (http://www.di.dk/English/Shop/).

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The report Avoid Corruption in International Business (Korruption bei Auslandsgeschaeften vermeiden), which was produced by ICC Austria in co-operation with the Austrian Federal Economic Chamber (AWO), is available in German language. It informs companies about legal provisions, definitions, reasons for the occurrence corruption and what to do in certain situations. The report also discusses special issues such as problems concerning SMEs and certain sectors, public procurement, doing business with government owned companies, dealing with agents and consultants, and dealing with suppliers. Further, the report suggests a number of concrete measures to be implemented by companies and offers a checklist for anti-corruption measures as well as a model code of conduct. Annexes include information. WKO and ICC Austria also offer hands on consultation for individual companies (for more information check out http://www.icc-austria.org/).

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With the aim of supporting in particular the SME’s in avoiding and fighting corruption, this portal offers information about corruption in a number of developing countries. So far, country profiles exist for 24 developing countries. These profiles comprise detailed information about corruption categorized according to sectors and levels as well as facts about public and private anti-corruption initiatives and ratification status on international conventions. The Business Anti-Corruption Portal also offers due diligence tools for identifying and avoiding corruption risks in typical business situations, integrity system on how to integrate anti-corruption policies and practices in the existing company procedures, a contact network which serves as entry point to public and private organisations in the countries, information on relevant legislation and initiatives, links to business relevant national and international organizations and training modules. The Portal is a public private partnership between the Danish International Development Agency and the consultancy Global Advice Network in conjunction with Transparency International as well as the UN Global Compact.

This guide has been developed by the Russian think tank IDEM Fund and the business organisation OPORA with support from USAID and the Center for International Private Enterprise (CIPE). The objective is to give small business owners in Russia tools to resist corruption and strategies to survive and grow in an aggressive environment. The assessment of the corruption situation in Russia is followed by a set of recommendations focusing on how to deal with bureaucrats and how to use civil society institutions to protect businessmen. The suggestions are based on the research results, an analysis of positive experience, and extensive interviews with SME representatives. The analysis and recommendations are accompanied by specific examples and quotations from anonymous interviews with businesspeople.

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EITI is a voluntary initiative that seeks to create transparency and accountability in countries dependent on revenues from oil, gas and mining. It is supported by a coalition of companies, governments, investors and civil society organizations from about 20 countries. Alongside other efforts to improve transparency in government budget practice, the EITI begins a process whereby citizens can hold their governments to account for the use of those revenues. The Initiative works to build multi-stakeholder partnerships in developing countries in order to increase the accountability of governments. There is a need for a mutually agreed set of EITI criteria required to be complied with by all countries wishing to implement the EITI. The Multi-Donor Trust Fund (MDTF) administered by the World Bank is currently disbursed to implementing countries to help meet the EITI criteria. In addition, extractive industries transparency is now being mainstreamed into World Bank country programs. The EITI Secretariat has developed an EITI Source Book that provides guidance for countries and companies wishing to implement the Initiative. EITI is governed by a Board consisting of five constituent groups representing implementing countries, supporting countries, civil society organisations, industry, and investment companies.

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The Global Compact is a voluntary international initiative that seeks to promote responsible corporate citizenship to ensure that business can be part of the solution to the challenges of globalisation. The tenth principle ("Businesses should work against corruption in all its forms, including extortion and bribery" ) commits UN Global Compact participants to not only avoid bribery, extortion and other forms of corruption, but also to develop policies and concrete programs to address corruption. To fight corruption and respect their commitment, Global Compact urges participants to first introduce anti-corruption practices and policies in their own organisations and then share experiences and join forces with co-participants.

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The guidelines are designed as a resource for member companies of the Association, intending to establish and/or maintain effective anti-corruption practices. These include evaluation of the potential risks of doing business with associates and implementation of measures to reduce those risks. It sets out to provide guidelines on designing and conducting due diligence procedures and establishing a framework for in-house programmes. Companies can adapt the guidelines to fit the particular needs and circumstances of their own organisation.

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The International Chamber of Commerce’s Rules of Conduct are intended as a method of voluntary self-regulation by business against the background of applicable national laws. The rules, which were revised in 2005, aim at assisting enterprises to comply with their legal obligations and with the numerous anti-corruption initiatives at international level. These rules are of a general nature constituting what is considered good commercial practice but are without direct legal effect. The rules cover the following substantive issues: prohibition of bribery and extortion; agents and other intermediaries; joint ventures and outsourcing agreements; political and charitable contributions and sponsorships; gifts, hospitality and expenses; facilitation payments; corporate policies; financial recording and auditing; and responsibilities. Further guidance regarding the implementation of these rules is provided by the ICC’s handbook “Fighting Corruption: A Corporate Practices Manual”.

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The Guidelines are voluntary recommendations addressed by governments to multinational enterprises operating in or from adhering countries. They cover all the major areas of business ethics. Chapter VI of the Guidelines provides recommendations on combating bribery. The main recommendation is that “Enterprises should not, directly or indirectly, offer, promise, give, or demand a bribe or other undue advantage to obtain or retain business or other improper advantage. Nor should enterprises be solicited or expected to render a bribe or other undue advantage.” Adhering governments have committed to promote the Guidelines among multinational enterprises operating in or from their territories. The instrument’s distinctive implementation mechanisms include the operations of National Contact Points (NCP), which are government offices charged with promoting the Guidelines and handling enquiries in the national context. Adhering countries comprise all 30 OECD member countries, and nine non-Member countries. The Investment Committee has oversight responsibility for the Guidelines which are one part of a broader OECD instrument (Declaration on International Investment and Multinational Enterprises). Clarifications provide interpretations of how certain provisions of the Guidelines should be understood, as a result of deliberations by the OECD Investment Committee.

The Tool aims at helping companies that invest in Weak Governance Zones (WGZ), i.e. countries where governments are unwilling or unable to assume their responsibilities. Through a checklist of questions the Tool addresses risks and ethical dilemmas that companies are likely to face in such weak governance zones, including obeying the law and observing international instruments, heightened care in managing investments, knowing business partners and clients and dealing with public sector officials, and speaking out about wrongdoing. Chapter 2.3 (“Combating Corruption and Money Laundering”) raises several questions that aim at increasing companies’ awareness for the risks of corruption in WGZ.

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The Pacific Basin Economic Council, an association of senior business leaders representing more than 1,200 businesses in 20 economies grouped around the Pacific Ocean, advocates transparent and honest transactions between business and government. The PBEC's Charter on Standards for Transactions Between Business and Government, a set of voluntary standards for its members released in 1997, tracks closely amongst others, the OECD Convention on Combating Bribery of Foreign Public Officials. It calls for business to respect laws and standards and to refuse extending direct or indirect bribes.

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The 3rd edition of “Preventing Corruption – BDI Recommendations” informs about the legal anti-corruption environment for companies. The BIAC member BDI calls on companies to make an important contribution to the fight against corruption and it highlights the crucial role that CEOs and senior management play in leading companies’ efforts. BDI recommends to prohibit all forms of corrupt behavior and – irrespective of any criminal law consequences – and to impose labor law and disciplinary sanctions. The business association suggests spelling these sanctions out in a general code of conduct, which could be made an integral part of employment contracts. BDI calls for the implementation of appropriate corporate organisational measures to enforce agreed rules of behaviour uncover violations and prosecute infringements. The organization offers nine principles and practical suggestions that are meant as a guide for the preparation or enhancement of codes and internal organisational measures.

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A number of U.S. defense industry companies have signed the DII Principles of Business Ethics and Conduct acknowledging and expressing their federal-procurement-related corporate responsibilities to the Department of Defense, as well as to the public, the Government, and to each other. The six DII principles cover the following areas: (1) written codes of business ethics and conduct; (2) employees' ethical responsibilities; (3) corporate responsibility to employees; (4) corporate responsibility to the government; (5) corporate responsibility to the defense industry; and (6) public accountability. In addition to adopting and adhering to this set of principles of business ethics and conduct, signatories seek to assume a leading role in making the principles a standard for the entire defense industry, and a model for other industries.

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The Wolfsberg Group is an association of twelve global banks, which aims to develop financial services industry standards, and related products, for Know Your Customer, Anti-Money Laundering and Counter Terrorist Financing policies. In 2000, the group published its Anti-money Laundering Principles for Private Banking (revised in 2002) and in 2002, it also released the Wolfsberg Anti-Money Laundering Principles for Correspondent Banking. These guidelines lay down what acts may call on for due diligence and special attention and also provides monitoring mechanisms. In 2006, the Group published the paper, “Guidance on a Risk Based Approach for Managing Money Laundering Risks” to assist institutions in managing money laundering risks and to prevent the use of their institutions for criminal purposes. The paper also seeks to articulate relevant considerations which institutions may find useful in developing and implementing a reasonably designed risk based approach while dealing with clients. In 2007, the Group issued its Statement against Corruption describing the role of the Wolfsberg Group and financial institutions more generally in support of international efforts to combat corruption. The Statement against Corruption identifies some of the measures financial institutions may consider in order to prevent corruption in their own operations and protect themselves against the misuse of their operations in relation to corruption.

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The World Economic Forum Partnering against Corruption Initiative (PACI) was launched in January 2004. It aims at developing multi-industry principles and practices that will result in a competitive level playing field, based on integrity, fairness and ethical conduct. The PACI principles “Partnering against Corruption – Principles for Countering Bribery” were developed by a multinational Task Force of companies working with the World Economic Forum, Transparency International, and the Basel Institute on Governance. The aim of these principles is to provide a framework for good business practices and risk management strategies for countering Bribery. They are intended to assist enterprises to: eliminate bribery; demonstrate their commitment to countering bribery; and making a positive contribution to improving business standards of integrity, transparency and accountability wherever they operate.

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Transparency International is a civil society organisation with about 90 national local chapters whose objective is to lead the fight against corruption. It provides a number of initiatives and publications that companies may find helpful. These include the Business Principles for Countering Bribery (BPCB), introduced in December 2002, that provide a model for companies seeking to adopt a comprehensive anti-bribery programme which companies may consider using as a starting point for developing their own anti-bribery programmes or as a benchmark for existing ones. The two principles (Principle 1: “The enterprise shall prohibit bribery in any form whether direct or indirect”; Principle 2: “The enterprise shall commit to implementation”) have been designed for use by large, medium and small enterprises. They apply to bribery of public officials and to private-to-private transactions. The purpose of the BPCB is to provide practical guidance for countering bribery, creating a level playing field and providing a long-term business advantage. TI offers also a comprehensive Guidance Document which provides additional background and practical information for those wishing to implement the principles. The TI Six Step Implementation Process is a “how-to” guide for companies that are early on in the process of devising and implementing an anti-bribery programme. TI is also developing a Self-Evaluation Module to assist companies wishing to assess their anti-bribery performance.

The Global Integrity Pact (IP) developed by TI is a tool aimed at preventing corruption in public contracting. It consists of a process that includes an agreement between a government or a government department and all bidders for a public contract. It contains rights and obligations to the effect that neither side will: pay, offer, demand or accept bribes; collude with competitors to obtain the contract; or engage in such abuses while carrying out the contract. The IP also introduces a monitoring system that provides for independent oversight and accountability. Sanctions apply in cases of violations ranging from loss of contract, forfeiture of the bid or performance bond and liability for damages, to blacklisting for future contracts on the side of the bidders, and criminal or disciplinary action against employees of the government.

TI has also developed indices which provides indication regarding the occurrence of corruption respectively perceptions about the occurrence of corruption in countries (Corruption Perceptions Index, Bribe Payers’ Index and Global Corruption Barometer).

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TRACE is a non-profit membership association that specializes in anti-bribery due diligence reviews and compliance training for international commercial intermediaries (sales agents and representatives, consultants, distributors, and suppliers). TRACE has a model Code of Conduct, which specifically addresses local and foreign laws, bribery and facilitating payments, kickbacks, extortion, conflicts of interest, political and philanthropic contributions, gifts, hospitality and entertainment, accounting and reporting requirements, and communication of and training for the code. In July 2007 TRACE launched its Business Registry for International Bribery and Extortion (BRIBEline). The BRIBEline is a medium though which companies and individuals can safely and anonymously report demands for bribes by government officials worldwide. The BRIBEline initiative focuses exclusively on the demand side of bribery and aims at providing a more detailed picture than is currently available to the public, with the assistance of the collective knowledge of the private sector. It is not a law enforcement tool and reports made do not trigger any investigation. It does not collect individual names, job titles, or corporate names associated with either the individual making the report or the individual who requested a bribe. Instead, the information is to be collated and reported in the aggregate, by country and by government department: customs, defense, health, transportation, mining, etc. The published BRIBEline provide companies with a more precise tool to evaluate risk and allocate anti-bribery resources, leading to stronger compliance with anti-bribery laws and reducing corrupt activity.

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