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Corporations and Corruption:

Corporations and Corruption: . What Role for Companies. Emerging Framework. Corporate Responsibility Norms Corporate Governance Principles Treaty-based Rules. Common Elements. Obligation to criminalise bribery and other corrupt practices Natural and Legal persons

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Corporations and Corruption:

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  1. Corporations and Corruption: What Role for Companies

  2. Emerging Framework • Corporate Responsibility Norms • Corporate Governance Principles • Treaty-based Rules

  3. Common Elements • Obligation to criminalise bribery and other corrupt practices • Natural and Legal persons • Broad jurisdictional reach • Criminal, civil and administrative sanctions • Monitoring • Public Scrutiny

  4. OECD Convention • Criminalises bribery of foreign public officials • Applies to bribery in international business transactions (excludes facilitation, “grease” payments • Territorial/nationality jurisdiction • Disallows economic and political considerations • Facilitates extradition and mutual legal assistance • Prohibits tax deductions for bribes

  5. Monitoring Mechanism • All Parties must undergo monitoring • Results are submitted to international body of Parties • Parties must implement recommendations • Evaluations are made public

  6. Monitoring Phases • Phase 1 – assesses whether countries have correctly transposed the Convention in national law • Phase 2 – evaluates whether countries are effectively applying their national laws in practices

  7. Where do we stand?

  8. Impact on Company Behaviour • “…awareness of the Convention has hardly improved in the three years: only 7% of all respondents expressed familiarity with the Convention compared to 6% in 1999”.

  9. TI 2003 Global Corruption Report “In a notable development, scores were found to have improved slightly since the 1999 survey: companies are marginally less likely to bribe now than three years ago”

  10. Increase in Risk Awareness • Low public tolerance • Internal company controls to increase transparency, prevent bribery, improve corporate governance • Greater awareness of national anti-bribery laws and non-deductibility of bribes • Loss of reputation and damage to firm

  11. Creating a corporate culture of compliance • Corporate code of ethics • Facilitating reporting of illegal activities, “whistle-blowing” • Linking compliance and governance: CEO, Audit Committee, Board

  12. Measuring the level of risk awareness • Content of company codes (general or specific references to bribery, corruption, legal rules) • Compliance processes • Training of company officers • Application to Subsidiaries

  13. A “Disabling Environment” for Corruption • Legislative/regulatory framework (may need adjustments) • Synergies between treaty-based obligations and governance norms • Recognizing “value-added” of good governance and corporate responsibility • Ensure enforcement

  14. The Great Governance Challenge Making a positive contribution to economic development and the alleviation of poverty while serving its clients and making money for its owners.

  15. Thank you

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