China’s “Fight” Against Corruption

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Photo Credit: The 7 Day Travel 

Since coming to power in November 2012, Chinese President Xi Jinping has made it his mission to further legitimize the authority of the Chinese Communist Party (CCP). In an effort to do so, Xi and his administration, have embarked on an unprecedented and far-reaching campaign against corruption. Ever since economic reforms began in 1978, political corruption in China has grown significantly, as bribery, graft and kickbacks have become the norm across the state. This increase in corruption led President Xi to vow to crackdown on “tigers” (powerful leaders) and “flies” (lowly bureaucrats) in a full-scale effort to reform the Communist Party and its image among the population.

On the surface, this anti-corruption campaign looks like a positive step towards ultimately ridding corruption from the public sector, however a more in-depth look at Xi’s ambitious initiative may reveal a different motive.

It is no secret that the Chinese public are more than frustrated with the blatant corruption that has imbedded itself into the Chinese economic system and as a result Xi’s campaign has enjoyed immense popularity.  Read More...

Public Ethics and Corruption, Discussions from Latin America

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The 21st Annual CAF Conference in Washington, DC on September 6th and 7th added a new, overdue panel to its agenda, corruption. The very first question for the panel, featuring representatives from Brazil, Argentina, Guatemala, and members of CAF (the Latin American Development Bank), was “is there more corruption in the region, or is it more visible?” Resoundingly, the answer was both. The head of CAF suggested that only recently have the citizens of the region come to understand the full scope of corruption in the public sector and few believe that what they are seeing today is anything new.

Interestingly, a panel on upcoming elections suggested the issue of corruption will be a leading influencer for the region’s electorates, more so than ideology or even peace, in the case of Colombia. Some panelists lamented that many citizens of the region are resigned to the fact that all politicians are corrupt and therefore it is not a disqualifier for office.  Read More...

Confronting Corruption in Asia’s New Democracies

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This blog was originally posted on CIPE’s Development Blog

Corruption is detrimental to countries’ economies because it leads to reduced productivity, high unemployment, and poverty. In addition to the economic cost, corruption corrodes democracies by weakening citizens’ confidence in their governments. This distrust and disenfranchisement can drive people to join extremist groups. “In conflict-affected areas, especially where Al-Qaeda or the Islamic State are trying to set up shop, economic grievances make it much easier to recruit local nationals into their fight,” commented Jennifer Anderson, CIPE’s senior program officer for South Asia. “Not only is corruption debilitating democracy in Afghanistan, it’s also leading to recruitment. Right now in Afghanistan, the Taliban has either control or influence over 40 percent of the country.”

Anderson spoke in a CIPE panel discussion in July that examined the issue of corruption in Asia, with a focus on Afghanistan and Cambodia. Other panelists included experts from CIPE’s Asia Department; the Hudson Institute; and SILAKA, a Cambodian nonprofit organization.  Read More...

Self-Deception – The ethical bleach that removes the willingness to speak up 

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Photo Credit: ahslifeofpi5 via Wikispaces

Originally posted on the “Ethic Intelligence” blog, Wendy Addison, Founder and CEO of SpeakOut SpeakUp Ltd, discusses the process of self-deception as it relates to corporate compliance and ethics. According to Addison, self-deception is the ethical bleach that removes the willingness to speak up.The “should self” behaves according to ethical principles and in line with our idealized self, whereas the “want self” is characterized by self-interest and relative disregard for ethical considerations. These two selves are in conflict with one another and distract people away from their intrinsic values. The question for employers becomes how can compliance-training programs be designed to empower employees to act on their “should self” instincts?

Wendy lived through an eleven-year battle against corporate corruption in a case known as South Africa’s Enron, the biggest corporate disaster in South Africa’s history. Since securing justice she has maximised her experience through the study of social psychology and the neuroscience of decision-making at Stanford University in addition to being accredited to train for Social FitnessTM, a course developed over 25 years at Stanford by Professor Emeritus Philip Zimbardo and Dr Lynne Henderson, Ph.D.  Read More...

A Common Approach to Mitigate Corruption, Environmental and Labor Risks in Global Supply Chains

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Photo Credit: Wikipedia

The challenge of improving ethical standards in global supply chains begins with the complexity of today’s commodity networks. Richard Locke, responsible for supply chain management in such leading firms as Nike, Cola-Cola and HP, indicates current challenges come from two major shifts from supply chains in the past: changes in the geography of global manufacturing – from advanced industrial states to developing countries, and in the organization of production – which includes thousands of independent suppliers typically located in emerging markets.

This shift has important implications for achieving international ethical standards. There is a lack of visibility of second- and third-tier suppliers and gaps in accessing real-time information on supply chain activities, disparate local regulations that may not integrate well with industry requirements, and the inherent unforeseen risks of being a small business. Simultaneously, legal and regulatory developments as well as consumer pressure across the global North are pushing multi-national corporations (MNCs) and their third-party providers to have measures in place that comply with global anti-corruption norms, and environmental and labor standards.  Read More...

The Private Sector’s Real Experiences Help Measure Corruption

Opinion Ilustracion de Francina Cortes

After two decades of global anti-corruption efforts, it is quite clear that deterring and tackling corruption is a key challenge for any country. Throughout, scholars and practitioners of corruption have broadly agreed on a working definition of corruption – the misuse of public office for private gain. Scholars and practitioners have also agreed on its nature and prevalence, as well as on the dramatic economic, political and social costs it imposes in both the public and private sectors. Yet, the measurement of corruption itself remains a major challenge. Corruption is said to be an unobservable phenomenon due to its informal and hidden nature, and often has diverse meanings in different cultural and historical contexts.

How accurate and reliable are existing – and commonly used – measures of corruption?

Since the 1990s, anti-corruption research has widely used perception-based corruption measures. Transparency International’s Corruption Perception Index (CPI) and the World Bank Governance Indicators (WGI) are surely the most well-known indices based on surveyed respondents’ perceptions, attitudes, and opinions towards corruption.  Read More...

INL Supports Global Anti-Corruption Efforts

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Photo Credit: Bureau of International Narcotics and Law Enforcement (INL)

CIPE Director of Multiregional Programs Anna Kompanek conducted the interview on June 29th at the Washington, D.C. office of the Bureau of International Narcotics and Law Enforcement (INL) division at the United States Department of State

Can you introduce yourself and state your role at the Bureau of International Narcotics and Law Enforcement (INL) division at the United States Department of State?

RL: I’m Robert Leventhal, Deputy Director of the Office of Anti-Crime Programs. I oversee teams working on issues such as anti-corruption, wildlife trafficking, international crime, as well as a global series of international law enforcement academies.

MT: My name is Marianne Toussaint, I am the Anti-Corruption Team Lead. I manage the team dedicated to anti-corruption affairs; it includes five team members and we focus on global and regional multilateral and foreign assistance programming and policy relating to anti-corruption.

Can you offer some examples of how INL works in the global anti-corruption space?  Read More...

Cost-Effective Online Anti-Corruption Compliance Training

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Making anti-corruption training widely accessible and scalable in this day and age often means taking it online. Most multinational companies have done exactly that to extend the reach of their training to employees and subsidiaries globally. Yet, few training resources exist for local companies in these countries who aspire to join global value chains. To help fill that gap, CIPE launched an interactive, online anti-corruption training course based on its Anti-Corruption Compliance guide for mid-sized companies in emerging markets. The training course is designed to teach executives and anti-corruption compliance and ethics officers how to identify, assess, and mitigate corruption risks in their companies. The course involves approximately 40 minutes of instruction and contains four interactive modules that test knowledge and understanding. While the course itself is free, upon conclusion users have the option to purchase a certificate of completion for a small fee.

This online course is designed especially with newly appointed compliance officers in mind.  Read More...

A Shift towards Mandatory Anti-Corruption Compliance?

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Photo Credit: Inside Reg

Private sector anti-corruption compliance is predominantly associated with corporate corruption prosecutions, sanctioning, and debarment, with some positive examples of voluntary integrity building, as in the case of Thailand. Companies, regardless of jurisdiction, are focused on compliance and the required due diligence under the United States (U.S.) Foreign Corrupt Practices Act (FCPA) and/ or the United Kingdom’s UK Bribery Act, especially those seeking access to projects funded by the World Bank and similar development agencies. For companies caught in corrupt practices, anti-corruption compliance programs (or lack thereof) have become a crucial factor for successful conclusion of criminal or debarment proceedings.

Private sector entities in emerging markets that wish to do business with multi-national corporations subject to U.S. or UK rules also have a vested interest in this topic as corruption risk management and due diligence is increasingly becoming a notable condition of contracting and procurement proceedings. However, globally anti-corruption compliance has yet to become a mandatory element of doing business, but this may be about to change.  Read More...

The Unsung Protagonists of Corruption in West Africa

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Photo Credit: Lattitude Canada, Wikimedia Commons

This post is based on a blog originally published on Corporate Compliance & Ethics Africa

It is a basic economic principle that a market exists because there is the concurrence of demand and supply or someone willing to buy and someone willing to sell goods or services. Similarly as it relates to bribing public officials for business advantage or other more egregious purposes, you must have someone willing to give the bribe and the public official willing to take a bribe.

Economists and private sector players propose that in West Africa, the demand side of corruption (public sector) has cultivated and nurtured a system where the private sector is coerced to partake in corruption in order to be successful. The result is an established system involving a series of illegal operations accompanying the actual demand and receiving of bribes (“kickbacks”, “favors”), creating an atmosphere within the private sector that undermines integrity.  Read More...