December 9, 2020

To mark International Anti-Corruption Day, we’ve revisited some of the Facing Change conversations we’ve had over the course of 2020 with experts and organisations in the field of anti-bribery and corruption, to get a wider perspective of the issues and challenges at hand.

Most recently, Facing Change spoke to Katja Bechtel – Lead for the Partnering Against Corruption Initiative (PACI) at the World Economic Forum – about how the challenges of fighting bribery and corruption have shifted in 2020 in the face of the global pandemic.

“The role of business is not just to do business, but to also take the interests of all stakeholders into account,” she states.

Katja talked of her concerns around the “amplifying” impact of the pandemic on the fight against global corruption, the real cost of which, she notes, is on health and ultimately human life.  

Katja calls for government commitments to establish measures such as public company registers, to enable far greater transparency and better manage beneficial ownership, as well as for better tracking of COVID relief payments, for example, through independent boards to ensure the money reaches the right places.

Another key battleground is so-called ‘gatekeepers’ – private-sector intermediaries including lawyers, accountants, and bankers,  but also real estate agents, luxury goods dealers, and art advisors with the ability to interrupt or prevent illicit financial flows by withholding specialised services. Citing scandals such as the Panama Papers, Katja emphasises the positive role good actors can play in the global fight against corruption and “the importance of their role now more than ever. In fact, a ‘culture of integrity’, she says can not only facilitating self-regulation, but actually results in more resilience to risk and ultimately, more profitability.

Richard Bistrong, CEO of Front-line Anti-Bribery LLC agrees “if we do things right we make more resilient successful businesses in the long run.” Richard is uniquely placed to offer insight into the bribery and corruption challenges that businesses and their executives face, having once been on the wrong side of the law himself.

Consequently, he knows how difficult it can be to make principled decisions when commercial imperatives can seem to be in conflict with ethical principles. “A licence to succeed is not a licence to take short cuts. Even though we face tough times, now is absolutely not the right time to lower our guard,” he says.

Richard is optimistic in the fight against fraud, citing an increasingly impressive prosecutory toolkit used by regulators and law enforcement, such as the sanctions imposed on 49 individuals by the UK in 2020 and the introduction of unexplained wealth orders in a number of countries that combined “are putting teeth into the fight against crime, corruption and bribery.”  

Barry Robinson, Director of Forensics Services, BDO Ireland, sees a particular risk in the supply chain as a result of the pandemic.

“With shortened supply and increased demand, that will always bring about a risk of the potential for bribery and corruption which companies need to be aware of.”

Barry calls for more transparency in lobbying for public funds, particularly amongst health sector and public sector organisations, being more at risk of corruption during the crisis due to the central role they’re playing in the government response. Equally, sectors that in the past have been considered low risk are receiving “more Board-level attention,” he says, “particularly cybercrime, money laundering and data protection,” and companies are still “getting to grips with regulatory changes.”

When it comes to organisations protecting themselves against bribery and corruption, it’s not enough, Barry says, to simply demonstrate that they identified and reported it. “Companies must be able to show they took ‘all reasonable steps’ to prevent corruption taking place,” he says, adding “the warning signs are there” for other companies.

Chiming with Richard Bistrong’s views, Daniel Bruce CEO of Transparency International UK told us in July, that he thinks “good progress” has been seen globally in recent years in the areas of corporate anti-bribery and corruption.

Looking through the COVID lens, however, he said “if there’s one word to sum up the bribery and corruption challenges thrown up by [the pandemic] it’s ‘procurement.’”

The use of emergency legislation, while “perfectly understandable” as a quick response to the crisis, can unfortunately come at the expense of transparency and accountability, he says.

He highlights the “long list of where it’s gone wrong,” including some very public examples of nepotism in awarding contracts to companies in Latin America, where medical supplies were being sourced “at five times their market value, from companies linked to political elites.”

Much like the ‘culture of integrity’ championed by Katja Bechtel, Daniel thinks part of the solution is internal culture: “now is the moment for organisations to examine their approach,” warning that if companies get it wrong now, suppliers, clients and the general public won’t see them in a good light as we emerge from the crisis.

Daniel would almost certainly agree with one of Richard Bistrong’s favourite assertions that “inconvenience should not be a reason for a compliance pause.” However, when it comes to the crunch, will firms really prioritise principles over preservation? According to Daniel’s sources, the jury is still out: “Worryingly, I’ve heard of numerous conversations… that right now, to preserve the bottom line and get supplies and goods to the front line, commitments to the environment, social and governance and to transparency and bribery and corruption prevention are taking a back seat – in my opinion this is absolutely the wrong response.”

You can watch all of these Facing Change series interviews on our dedicated hub page.

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