Author Archives: Amol Nadkarni

Politicizing Anti-Corruption Campaigns

13 Friday Apr 2018

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Photo Credit: FARS News Agency

Across the globe, countries have taken varying approaches to combat the problem of corruption. In South Africa, the Parliament finally took steps to hold President Jacob Zuma accountable for his unethical dealings, resulting in his resignation in February 2018. While in Bangladesh, the head of the Bangladesh Nationalist Party Khaleda Zia was recently sentenced to five years in prison for corruption and embezzlement, thus eliminating her from running for Prime Minister.

In recent years, Thailand’s private sector has united to tackle their corruption issue through collective action, while in Brazil open data platforms are becoming a popular tool for reducing misconduct in the country in recent years. While it is clear that fighting corruption should be a main priority for every country, not every anti-corruption campaign is what it appears to be on the surface. At times, these initiatives are executed in a manner that does more harm than good.  Read More...

Podcast: Changing the Global Compliance Environment

26 Monday Mar 2018

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Photo Credit: SCCE “Compliance & Ethics Blog”

A new podcast from the Society of Corporate Compliance & Ethics (SCCE) features CIPE’s global anti-corruption work at a time when more and more countries are enacting legislation designed to restrict bribe-making and bribe-taking. In this edition of the weekly “Compliance Perspectives” podcast, host Adam Turteltaub, an SCCE vice president, and Frank Brown, Director of CIPE’s new Anti-Corruption and Governance Center, offer listeners an overview of CIPE’s mission in those emerging market countries where new laws make the business community increasingly sensitive to corruption risk.

In one such country, Indonesia, a recent Supreme Court ruling found that companies are subject to corporate criminal liability for corrupt practices. Overnight, this caught business leaders’ attention as they strove to understand the implications for their own operations and to discern which Indonesian law enforcement body would take the lead in the new environment. The development also illustrated the sort of opportunity that CIPE looks for in deciding where to deploy limited anti-corruption resources.  Read More...

Fixing the System: Government/Business Relationship in South Korea

09 Friday Mar 2018

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Photo Credit: Panarmenian 

On February 5, Samsung’s Jae-yong Lee, vice-chairman and the heir to Samsung, was released on probation by an appellate court, avoiding a five-year prison sentence handed down from a previous ruling. The court could not find any “evidence of typical government-business corruption”, but instead ruled that Samsung was a political victim of former President Park Geun-hye, who coerced Samsung to support horse-riding lessons for Yoo-ra Jung, the daughter of Park’s closest confidant, Soon-sil Choi.

The court has admitted that 3.6 billion was paid (US$3.3 million) in bribes – far short of the 43.3 billion (US$39.4 million) alleged in the indictment. It’s not hard to imagine that if any other company in Korea gave or received a bribe of similar size, someone would certainly be sent to prison. Unsurprisingly, the “free pass” given to Lee and Samsung demonstrates the cozy relationship the conglomerate has with the government and its ability to ride out a scandal that brought down a president.  Read More...

CG Fund: New Investment Tool to Boost Governance Standard

02 Friday Feb 2018

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Most people now accept that good governance is a basis for long-term business success and sustainability. When it comes to investing in stocks, firms with good governance should be seen as relatively safe bets. Wouldn’t it be great if there were funds that handpicked stocks with such desirable qualifications for you?

Thailand’s investment community took a proactive role by introducing mutual funds that limit its investment portfolio to stocks of companies with proven track records of high governance standards and established internal graft-prevention mechanisms.

Some 11 asset management companies, controlling over 90% of the domestic market share, made a joint announcement in August 2017 that they will separately introduce the so-called corporate governance or “CG funds.” So far, 10 funds have been set up, raising over THB 4 billion orUS$125 million from investors.

One unique element of the Thai CG funds is that all 11 asset management companies agreed to contribute 40% of their fund management fees to organizations that promote corporate governance and anti-corruption.  Read More...

Can We Make Anti-Corruption Sustainable?

19 Friday Jan 2018

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Photo Credit: CIPE

On December 8th, 2017, the Center for International Private Enterprise (CIPE) and the Partnership for Transparency co-hosted an event that asks, “Can We Make Anti-Corruption Sustainable?” Following a brief introduction by Frank Vogl, Co-Founder of the Partnership for Transparency and Transparency International, Dr. Delia Matilde Ferreira Rubio gave her first speech in the United States following her recent election to Chair of the International Board of Directors of Transparency International. Dr. Rubio discussed her vision and strategy regarding the challenges in the fight against corruption. Dr. Rubio’s speech was followed by a panel discussion moderated by CIPE’s Managing Director Andrew Wilson featuring Dr. Rubio, CIPE Senior Program Officer Frank Brown and Alina Mungiu-Pippidi, Professor of Democracy Studies at the Hertie School of Governance in Berlin.

The full video of the event is below:

The full CIPE Democracy that Delivers podcast featuring Dr. Delia Ferreira Rubio is below:

 

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The One Bribe Democracy

29 Friday Sep 2017

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Photo Credit: Avaaz

Since introducing market-based economic reforms in 1991, India has become one of the fastest-growing economies in the world; to date is the world’s most populous democracy and the sixth largest economy. In fact, according to projections, India is well poised to become the third-largest economy in the world by 2030, surpassing Japan, Germany, Britain, and France. On the surface, India’s upward trajectory appears unstoppable however, a closer look at the inner workings of the Indian economic system shows that one major obstacle stands in India’s path: systemic corruption.

According to a recent survey by Transparency International (TI), India has the highest bribery rate among the 16 Asia Pacific countries surveyed. Corruption is particularly prevalent in the Indian public sector, where nearly seven in ten people who accessed public services in India had to pay a bribe. All segments of society regardless of location, economic status, or business affiliation feel the effects of corruption.  Read More...

China’s “Fight” Against Corruption

19 Tuesday Sep 2017

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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...

Cleaning Up the Skies

20 Tuesday Jun 2017

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Photo Credit: Janak Raja via Flickr

Throughout its forty plus year history, European aircraft and defense group Airbus has been no stranger to controversy. Whether it was the long-running investigation into alleged corruption in an Airbus subsidiary operating in Saudi Arabia or an insider trading investigation involving company shares, scandal seems to follow Airbus, no matter what endeavors the company pursues. However, the latest corruption probe involving the European defense group might be the case that finally forces reforms throughout the Airbus Group.

In August 2016, the UK’s top anti-corruption watchdog, the Serious Fraud Office (SFO), opened a formal investigation against Airbus into allegations of fraud, bribery and corruption in France, Germany and the UK. The investigation is related to irregularities involving third party consultants and the sale of passenger jets overseas. According to the UK’s 2010 Bribery Act, “the bribery risks associated with reliance on a third party agent representing a commercial organization in negotiations with foreign public officials may be assessed as significant and accordingly require much more in the way of procedures to mitigate those risks”.  Read More...

The FIFA Scandal: What We Can Learn about Ethics and Compliance

29 Monday May 2017

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Photo Credit: Wikimedia Commons (https://commons.wikimedia.org/wiki/File:Uruguay)

Soccer (or “football” depending on your geographic orientation) is often referred to as the “beautiful game.” Of late, as recently as this month, the sport has become a bit less beautiful. The Fédération Internationale de Football Association (known as FIFA), the international governing body of soccer, has been embroiled in a corruption scandal that has rocked the organization to its core.

It began in May 2015. Fourteen FIFA officials were arrested and indicted in connection with an investigation by the US Federal Bureau of Investigation (FBI) and US Justice Department into wire fraud, racketeering and money laundering, spanning a period of 24 years. That December, 16 more officials, including two FIFA vice-presidents, were arrested on similar corruption charges. Since then, the events snowballed into a full-blown scandal, with longtime FIFA President Sepp Blatter and other top officials banned from FIFA activities. The investigation into FIFA has revealed a toxic culture of unethical behavior, non-compliance and corruption that started from the top and trickled down to every facet of the organization.  Read More...

The ISO 37001: Seven Months Later

24 Wednesday May 2017

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Photo Credit: International Organization of Standardization (via Veracity Asset Management Group)

Back in October, the International Organization of Standardization (ISO) released the long awaited ISO 37001, a new international standard designed to help organizations prevent, detect and address bribery. As a potential game changer in international anti-bribery standards, the ISO 37001 can be used by any organization, large or small, public or private, to implement an anti-bribery management system designed to fight bribery and promote an ethical business culture. Unlike the previous ISO 19600, which was drafted as a set of guidelines that organizations should incorporate into their compliance programs, the ISO 37001 is drafted as a set of requirements that organizations must implement if they want to be certified.

The standard requires organizations to adopt an anti-bribery policy, select someone to oversee compliance with that policy, implement financial controls, and adopt reporting and investigation procedures. Since the ISO 37001 sets forth specific requirements for companies to meet, it is certifiable by third parties and companies that receive an ISO 37001 certification might potentially have an advantage against competitors that do not have the qualification.  Read More...