Keeping corruption on the corporate agenda
The call for meaningful corporate social responsibility is more urgent than ever. Good public governance is a crucial requirement for progress. The two go hand in hand and influence each other. Despite the street demonstrations in Seattle and Prague, and the ones expected this week in Davos, there is inadequate public recognition of the reality that the abuse of human rights, the exploitation of labour and the degradation of the environment are closely linked to corruption. They depend on the bribery of the judiciary by employers who run sweatshops; they are encouraged by public officials who abuse their function for extortion while awarding a contract in a tender. Improving governance in the public and corporate sector depends to a considerable degree on progress in fighting corruption.
Transparency International is an independent, non-governmental organisation, just like those involved in the Public Eye project and others protesting at Davos. While TI agrees with the Public Eye on Davos on many issues, it uses a different approch.
Transparency International's Chairman, Peter Eigen, is attending this week's World Economic Forum in Davos. "For a coalition dedicated to fighting corruption," he said, " there is no alternative to engagement with governments and the corporate sector. Public demonstrations are no substitute for constructive dialogue with the banks if we are seriously engaged in the battle to curb money laundering. That is why we are dedicated to dialogue." The risks this can pose to the perception of our outward 'independence' are a price worth paying if we can achieve results.
In this spirit, last year Transparency International was instrumental in bringing together 11 leading international banks to announce their agreement on the Wolfsberg Anti-Money Laundering Principles. The new guidelines on business conduct in international private banking state: "Bank policy will be to prevent the use of its world-wide operations for criminal purposes. The bank will endeavour to accept only those clients whose source of wealth and fund can be reasonably established to be legitimate." This initiative was a first step, and Transparency International will continue on this course.
Transparency International is dedicated to building coalitions between NGOs, the private sector and government. From Bulgaria to Nepal and Colombia, Transparency International has engaged governments and the private sector in Integrity Pacts in procurement tenders, auctions and privatisations. Under an Integrity Pact, bidders competing for the supply of goods and services provide binding assurances that they have not paid any bribes in order to obtain the contract, and an undertaking that they will not do so in future. Pre-agreed sanctions come into force if this undertaking is breached.
Though choosing a different approach, TI is in agreement with the signatories of the NGO statement Public Eye on Davos in many respects. As Peter Eigen said: "Transparency International is also campaigning for transparent, accountable and democratic principles. We also support tighter tax laws and enforcement of the law against companies that break it on a national and international level. We believe, however, that TI may best contribute to this and achieve much more by engagement with both those inside and outside Davos."
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