Cleaner business

OECD Observer

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Extortion, bribery, kickbacks, political handouts – a lot is said about fighting corruption, but how is it being fought? The Annual Report on the OECD Guidelines for Multinational Enterprises 2003: Enhancing the Role of Business in the Fight Against Corruption has some answers.

The 2003 report on OECD’s renowned Guidelines for Multinational Enterprises, released in November, updates progress made in promoting appropriate business conduct among big business. While observance of the Guidelines, which were released in 2000, is voluntary for companies, adhering governments are committed to promoting them. This annual report, the third in a series, describes what governments have done to live up to this commitment. In particular, it gives a valuable progress report on the business sector’s participation in the fight against corruption.

One way to measure this participation is to look at what enterprises are saying to their employees and to the public. How do big enterprises promote integrity inside and out of the office? The report examines public statements on corruption published on 100 large multinational enterprises’ websites, pointing out differences in sector; in kinds of anti-corruption commitments, whether private-to-private corruption or bribery of public officials; what management tools are used; and whether companies report publicly on how they honour or implement these commitments.

The shortcoming of this approach, of course, is that information provided to the public does not necessarily reflect practices in the field, yet the annual report states that publicly available material does shed light on the importance a company attaches to the issue. Furthermore, the difficulty of framing anti-corruption commitments lies mainly in identifying and describing the transactions to be proscribed. While the connotation of the words “bribery and corruption” includes the general idea of unethical transfer of resources, the challenge of developing an operational definition of corruption takes companies and workers into grey areas, where the boundaries between right and wrong are not clearly drawn.

The report found that, of the 43 enterprises that do publish anti-corruption material on their websites, 32% prohibit offering and/or giving bribes, while 33% prohibit attempts at solicitation and/or receiving bribes. Furthermore, public statements vary widely in their vocabulary and language. For example, the words used to describe resources that might be transferred in the course of a corrupt transaction included terms like donation, gratuity, service, discount, kickback or incentive, whereas when describing acceptable payments or benefits, words such as appropriate, legitimate, reasonable, business-related and courtesy were often used.

Take “facilitation payments”, for example. Are they a form of bribery or an acceptable – and sometimes only – way to get the job done? Ten of the 100 companies discuss facilitation payments, yet there are divergences of view about whether company policy should tolerate them. Some firms prohibit them entirely while others set forth transparency mechanisms, requiring that facilitation payments be properly authorised and recorded.

Over a fourth of the enterprises in the study cite challenges from cultural and local customs, and what might be called “endemic bribery”, and many set out a company stance on accepting gifts or entertainment. A focus on appearance hints at the role of public opinion and social pressure in determining companies’ assessments of what defines acceptable conduct. As cited on the website of a petroleum company, “Local customs, traditions and mores differ from place to place, and this must be recognised. But honesty is not subject to criticism in any culture.”

The OECD Guidelines for Multinational Enterprises are recommendations addressed by governments to multinational enterprises operating in or from 38 adhering countries, and are posted online at www.oecd.org, under Corporate Governance. The 2003 report can be purchased at www.oecd.org/bookshop.

©OECD Observer No 240/241, December 2003




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