Johannesburg, South Africa, 23 March 2012

1. Johannesburg, South Africa, 23 March 2012 Engaging the private sector in UNCAC implementation & monitoring Gillian Dell, Programme Manager Transparency International

2. Corruption, private sector and civil society “72% of overall respondents agreed that Civil Society Organizations do not focus on businesses enough when fighting corruption – a view also shared by a clear majority of business respondents (66%).” HUMBOLDT-VIADRINA School of Governance, Motivating Business to Counter Corruption – A Global Expert Survey on Incentives & Sanctions, 2012

3. Corruption, private sector and civil society A part of your advocacy strategy Potentially influential allies for effecting change Potential challenges and risks

4. Corruption, private sector and civil society Process of tapping into or generating private sector interest in countering corruption using UNCAC implementation and monitoring to counter corruption They are part of the problem, they are victims and they are part of the solution. How much engagement possible?

5. Agenda • HOW can CSOs identify engagement opportunities with the private sector on UNCAC? • WHAT are typical challenges and solution approaches when engaging with the private sector?

6. Engagement opportunities with the private sector can be based on the following… Examples • Companies that see corruption as bad for businessand UNCAC as a viable channel for combating it • Companies that prefer ethical business practices and believe they lose business to corrupt competitors • Companies that see engagement on UNCAC as beneficial for their public image • Companies with existing anti-corruption programmes that would like to see anti-corruption standards become more widespread • Companies that have joined voluntary initiatives (e.g. UN Global Compact) that are persuaded of the benefits of joint action. • Which others?

7. … and can be identified and planned by the CSO • In order to systematically develop a private sector engagement plan, CSOs should follow 4 intuitive steps: • Step 1: a CSO should identify and prioritize target groups within the local private sector (e.g. multinational enterprises) to utilize its limited resources efficiently. • Step 2: a CSO should seek to understand the needs of the selected target groups (e.g. training, advise, tools) and their corruption-related challenges (e.g. extortion, facilitation payments). • Step 3: a CSO needs to select activities that match the needs of the target groups. • Step 4: a CSO should develop a clear private sector engagement strategy, which documents the major objectives, activities, effort, timeline etc. 2 3 4 1 Identify your target group Understand their needs Select your activities Plan your engagement

8. Step 1: Identify your target group (1/3) • CSOs may engage with business for different reasons (e.g. collaborate on research, establishing business coalitions, advocacy); however the overarching objective in this case is to enlist business support for UNCAC implementation and monitoring, including inputs into the review process • CSOs have only a limited number of resources to engage with the private sector and therefore should identify and prioritize target groups within the private sector. • The private sector itself is not a homogeneous entity, but comprising companies with different sizes and ownerships, operating in different industries and doing business locally or internationally. • In order to identify and prioritize business, the following 3 major target groups should be considered: • These 3 target groups should be further specified by additional attributes, such as industrycategories(e.g. SOEs from Oil & Gas industry or SMEs in the Informal Sector). State-ownedenterprises (SOE) Multinational enterprises (MNEs) Small and medium enterprises (SME)

9. Step 1: Identify your target group (2/3) • A CSO should ask the following two questions for each of the identified target groups: What is the potential influence of the target group for UNCAC implementation and monitoring? ? ? What chances of activating the target group? What chances of resistance from target group? • Factors to consider: • Size of company • Access to decision makers • Strategic industry (e.g. information technology, environment) • Driver in public perception, standing in communitry • Factors to consider: • Size and complexity of business operations • Industry • Country of origin • Business model (e.g. sales through intermediaries) • Formal/ informal sector

10. Step 1: Identify your target group (3/3) • The outcomes of this process should be visualized in a Prioritization Map. • Target groups with a high degree of influence and a high likelihood of interest should be prioritized for engagement. • CSOs facing limited resources and multiple target groups (in the “red zone”) can further prioritize according to: • Contacts to target groups • Knowledge about target groups and sectors • Past experiences with target groups (also from other National Chapters), etc. Some MNEs and some successful local ? Other MNEs high Accounting & auditing companies? Other local companies medium DEGREE OF INFLUENCEr ??? ??? ??? low SMEs-Agriculture low medium high LIKELIHOOD OF INTEREST  Exemplarily visualization of a Prioritization Map. MNEs: Multinational enterprises; SMEs: Small and medium enterprises; SOEs: State-owned enterprises

11. Step 2: Understand their needs (1/2) • Each target group may have different needs relating to anti-corruption challenges that need to be understood by the CSO: The target group may need… …regarding the benefits of UNCAC • Information • Raising awareness • Training • Advice • Tools • Support for ‘leveling the playing field’ • Public sector integrity • Procurement etc. • Whistleblowing • Leveling the playing field • Technical assistance to government • International counterparts with whom to discuss issues

12. Step 2: Understand their needs (2/2) • CSOs can obtain information for understanding the needs and challenges of the target group(s) from the following major sources: • Each target group (as identified in step1) has a set of needs and major corruption-related issues that should be addressed by the CSO. Direct inquiries The bestapproachistogetinformationdirectlyfromthetargetgroups, e.g. informal discussionsatconferences, workshops, surveys. UNCAC Coalition Another source for information are other CSOs with experiences in working with a particular target group Research Finally, thereis a wealthofinformation on theinternetabouttheneeds and challengesofparticular private sectortargetgroups (e.g. sector-specificinformation, current ‚Hot Topics‘).

13. Step 3: Select your activities (1/2) • There are a variety of activities for CSOs to engage with the private sector; selecting and prioritizing the most appropriate activities should be based on a clear understanding of the needs and challenges of the target group (refer to Step 2). • TI’s Private Sector Activity Framework provides CSOs and other groups with an generic overview of engagement activities. • The Framework aligns the most common engagement activities according to • Engagement partners: CSOs can not only engage with a single business or a group of companies (BUSINESSES), but also jointly with businesses and public sector representatives in multi-stakeholder groups (MULTI-STAKEHOLDERS) or with key influencer of the private sector, such as regulators, investors, academia etc. (INFLUENCERS). • Degree of engagement: The effort and knowledge for the CSO to engage with businesses can be classified in LOW, MEDIUM, or HIGH, offering an indication for CSOs about the scope of engagement.

14. Step 3: Select your activities (2/2) Private Sector Activity Framework (partial, adapted for UNCAC work) Awareness & Commitment Training & Support Business Coalitions Advocacy The activities listed should not be seen as a sequential processes; typically, activities are conducted in parallel.

15. Awareness & Commitment Detailed activities • As a starting point as well as an ongoing engagement element, CSOs should seek to increase awareness and commitment among private sector participants. • These activities will also help to increase the visibility and credibility of a CSO positing itself as a valuable partner for the private sector and providing information about UNCAC and the review process. • Level of commitment from businesses Low Awareness & Commitment Newsletter Publications Events Initiatives High

16. Awareness & Commitment Initiatives Advantages Overview • An Initiative (e.g. Pact, Declaration) – either short- or long-term – seeks to mobilize businesses (e.g. specific industry sector) in order to strengthen their UNCAC-related commitment around major issue areas, such as Implementation and Monitoring. • Such initiatives may involve anti-corruption stakeholders from the public sector, private sector and civil society. • Such initiatives should result in tangible outcomes and commitments from all participating stakeholders, publically documented in an Action Plan. • Regular interaction with private sector participants • Publically documented committment from private sector • Follow-up opportunities (e.g. support of action items) • Results of initiative affect large number of businesses • Possibility to introduce TI tools and publications • Support for UNCAC Needs coverage Disadvantages / Constraints • Requires time & effort, especially to sustain ‚momentum‘ of initiative • Requires significant awareness among all stakeholders to start such an activity

17. Advocacy Advantages Overview • Finally, CSOs can engage with businesses to “influence the attitudes and behaviour of targeted actors in order to change the policy and practice of governments and institutions” and achieve UNCAC implementation and monitoring • Such target actors can be from the public sector (e.g. regulators, public procurement agencies), the private sector itself (e.g. investors, business associations) or civil society (e.g. media). • Also, CSOs can engage with the above-stated actors to change behaviour of businesses. • Advocacy activities typically go hand-in-hand with “collective action” activities (e.g. Initiatives, Business Coalitions). • Interaction with private sector participants • Understand private sector challenges and solution options • Follow-up opportunities • Results of initiative affect large number of businesses • Raising awareness • Support for ‘leveling the playing field’ Needs coverage Disadvantages / Constraints • Requires time & effort • Requires high credibility of CSOs • Risk that CSO is seen as being „misused“ by the private sector * Taken from „WIN – Advocacy Guide, 2010“.

18. Step 4: Plan your engagement (1/2) • In order to increase private sector activities, it is recommended that CSOs develop a clear private sector engagement plan. • A private sector engagement plan should include the following key elements: • Strategic objectives for engaging with the private sector • Definition of target group and outcomes of needs assessment • Selection and prioritization of activities • Work plan (detailed activities, resource allocation, delivery strategy) • Timetable (max. 3 years) • Other information (e.g. assumptions, output, performance measures, risks, growth potential) • Engaging with the private sector should not be seen as a standalone endeavor within a CSO ; consequently, the strategy should also showhow these activities interface with the overall activity portfolio of the CSO (e.g. engagement with the Public Sector).

19. Step 4: Plan your engagement (2/2) • Documenting an engagement plan does not only help to plan and execute the activities, but it is also beneficial when seeking external support. • CSOs may seek financial, operational and/or knowledge support for the development of a private sector engagement plan, e.g. from: • National and international organizations (e.g. development banks) • Local embassies • Business Associations • Business Schools • Multinational corporations (and their local subsidiaries)

20. Agenda • HOW can CSOs identify engagement opportunities with the private sector on UNCAC? • WHAT are typical challenges and solution approaches when engaging with the private sector?

21. Key challenges for CSOs in working with the private sector • Different organizational cultures and structures can inhibit communication and create mistrust. • Different approaches to operations and expectations from respective key stakeholders –can prevent the identification of mutually beneficial goals, roles and responsibilities essential to an effective partnership. • For example, • The private sector’s primary goal is profit. It seeks quantifiable changes in production and sales, expecting positive results in very short periods of time. • NGOs are focused on issues related to social change. NGOs closely monitor the activities leading to improvements in the well-being of citizens served by the organization’s work. The work of NGOs often requires long-term commitments, and progress in the short term is often difficult to measure. It is therefore difficult for NGOs to demonstrate that their approaches to fostering change are cost effective and produce tangible benefits.

22. Key risks for CSOs in working with the private sector Their policy agenda may be incompatible with yours in important ways Unknown to you they may be implicated in improper practices

23. FAQ: Why would the private sector engage with CSOs? Demonstrate value for private sector: Businesses may engage with a CSO if it is believed that the CSO can be of value to them, ranging from information provision to one-on-one training sessions or workshops. Credibility of CSO: Businesses may engage with a CSO if it is believed that the group has the knowledge and it understands business challenges and constraints. Reliability of CSO: Businesses may engage with a CSO if they present themselves as a reliable and predictable partner who follow through on commitments and will not cause them unpleasant surprises or embarrassment. Engage constructively and speak their language: Private sector and civil society have different languages and cultures. Companies may also sometimes feel threatened by CSOs. Try to learn their language and engage constructively for a good line of communication. ! ! !

24. FAQ: What should CSOs emphasize when engaging with the private sector? Independent, politically non-partisan and well-governed: CSOs should be ready to demonstrate that they are not potential risks as partners. They should make clear that they are focused on the public interest rather than serving any specific political or private sector interest. They should also be ready to demonstrate that their internal governance meets high standards. Aiming for constructive dialogue with government: It is useful to emphasise the constructive nature of the planned engagement in UNCAC implementation and monitoring. However, this does not prevent CSOs from publicly criticising institutions for failing to take meaningful steps towards reform. Common positions can be useful but are not essential. CSOs may wish to communicate that businesses are not expected to sign up to positions though there may be circumstances when they wish to do so. UNCAC and UNCAC review matters: Businesses interested in fighting corruption may need to be persuaded that UNCAC and its review process will make a difference to that problem ! ! ! !

25. FAQ: What should CSOs emphasize when engaging with the private sector? For the private sector corruption is about costs Costs to staff (can ruin reputation and result in sanctions) Company level costs (increases costs of doing business, diverts investment elsewhere) Economic and social costs (undermines the rule of law and keeps foreign investors at bay – preventing job creation and limiting sustainable development) etc.

26. FAQ: How to increase the private sector expertise within a CSO? Examples Seek pro-bono expert support: CSOs can seek support from active or retired private sector executives (e.g. audit companies) that have been active in the anti-corruption community (e.g. representing the business in voluntary initiatives, such as the UN Global Compact). Establish Working Groups: CSOs can establish working groups with TI members and outside experts that work on a specific topic, e.g. private sector transparency. Engage with business schools: CSOs can engage with (graduate) business schools to obtain support, e.g. in conducting a target assessment (step 1), needs analysis (step 2) or to develop training material, conduct research, etc. ! ! !

27. FAQ: Who should be contacted within a business? Examples Chief Executive Officer (CEO): CSOs may contact the Chief Executive Officer or owner of a businesses to discuss far-reaching matters, such as the commitment to an anti-corruption principles, forming of sector-specific anti-corruption initiatives or business coalitions, or the participation in a Corporate Supporters Forum. Chief Compliance Officer (CCO):CSOs may contact the CCO to discuss specific needs and challenges, or to offer training and support. In case the business does not have a CCO or an Ethics Officer, the Chief Financial Officer should be contacted, as he/she oversees the business’s books & records and carries the responsibilities of correct financial statements. Head of Procurement: CSOs may contact the Head of Procurement to discuss specific procurement-related topics, such as extortion, facilitation payments or the utilization of Integrity Pacts. Training departments: CSOs may contact training department of businesses to offer in-house training and support in anti-corruption related challenges. ! ! ! !

28. FAQ: What are possible collaboration partners for engaging with the private sector? Examples Academic institutions: CSOs may seek a collaboration with local academic institutions (e.g. law or business schools) to jointly conduct research, media campaigns, and to support internal processes (e.g. developing an engagement strategy with the private sector). Chamber of Commerce: local Chamber of Commerce further the interests of businesses. CSOs can collaborate with the Chambers on supporting businesses in specific corruption-related challenges (e.g. extortion, facilitation payments) or to advance broader, advocacy topics (use Chamber of Commerce as Influencers). United Nations Global Compact: The UN Global Compact is the worlds largest strategic policy initiative for businesses that are committed to aligning their operations and strategies with ten universally accepted principles in the areas of human rights, labour, environment and anti-corruption. CSOs can either directly contact local members of the UN Global Compact (search on http://www.unglobalcompact.org) or seek collaboration with the local UNGC Local Network. United Nations Office on Drugs and Crime (UNODC) / Organisation for Economic Co-operation and Development (OECD): Both international organizations conduct local implementation and monitoring activities of their conventions. ! ! ! !

29. FAQ: How can the private sector contribute to implementation and monitoring of international conventions (e.g. UNCAC) ? Examples • Lobbying for ratification & implementation: CSOs can collaborate with major national and international businesses to seek ratification and implementation of international conventions (e.g. United Nations Convention Against Corruption). Interest from businesses may come for various reasons: • Aligning local business conditions to international standards (e.g. to decrease investment risks for foreign institutions) • ‘Level the playing field’ by introducing comparable standards for all business participants. • Monitoring the convention (Peer reviews): The private sector may have important expertise and information about the challenges to anti-corruption law enforcement in the country under review. They may appreciate the opportunity to share their experiences during the self-assessment and with the review team. • Providing support to CSO activities, financially or in kind ! ! !

30. What is your experience?

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