Executive Director Antonio Maria Costa
Corruption is everybody's business: let's fight it together
Business Council of the United Nations
New York 30 November 2006
Ladies and Gentlemen,
My views on corruption are straightforward: everybody pays for it, so let's fight it together. We now have a common platform, the UN Convention against Corruption: the first global law to do something about the problem.
The Convention came into force one year ago to the day: I am proud to talk about it, as my office - the United Nations Office on Drugs and Crime - was the broker of it, and now is its custodian.
Of course, international agreements are only as good as people want them to be. So this morning I have two objectives in mind: first, I'll point out those aspects of the Convention that are relevant to the corporate world. Next, I wish to explain how the private sector can make use of the Convention to improve its business environment.
A) The UN Convention against Corruption
Our tough law is made up of four components, two of them relevant to business. The four pillars are:
(i) Prevention and (ii) asset repatriation - both relevant to business.
(ii) Criminalization and (iiv) legal assistance - both a concern of governments.
(i) Preventive Measures
The articles dealing with prevention mandate public management practices based on transparency and accountability:
· The Convention imposes disclosure by public officials of their annual earnings and financial assets. When we negotiated this article, we had in mind especially those civil servants who earn $200/month and drive a new Mercedes. Of course, discrepancy between reported incomes and life styles does not only apply to public officials: I'm sure you get the message.
· Transparency in procurement contracts and in the management of public finances is mandated by the Convention. This includes transparency of accounting and auditing standards by publicly traded corporate as well.
· The Convention requires domestic supervisory regimes for financial institutions. Most importantly, and this is a novelty, banking secrecy can no longer be an impediment to corruption and money laundering investigations.
· The Convention also enforces transparent rules related to funding to political parties and electoral campaigns. We all agree on the imperative of preventing the blending of interests such funding generates.
The Convention's second and third pillars are pertinent to governments.
(ii) There is no definition of corruption in the Convention. Yet, the criminalization chapter makes it mandatory to adopt legislation against bribery, embezzlement, abuse of power, misappropriation, along with abuse of functions and illicit enrichment.
(iii) Similarly, the convention calls for international co-operation on extradition, legal assistance, law enforcement and joint investigations - a government responsibility.
This leads me into the another key chapter: asset recovery. It represents a major breakthrough, relevant to the private sector.
(iv) Asset recovery
Under the Convention parties are obliged to return properties to their owners. This clause is a most effective prevention measure, but to succeed it requires the collaboration of the private sector. At the moment too many tax havens, too many banks, too many entrepreneurs - well, let me be provocative - too many local administrators and too many ministers protect the crooks rather than their victims. This has to come to an end and I call on the private sector (and of course on public officials) to face their responsibility: if assets stink, don't keep them in your refrigerator or the rest of your food will also go bad.
B) What else can the private sector do?
Foremost: protect your interest by protecting thy neighbour's interest. Here are suggestions about how you can accomplish this.
Let me begin with the first assembly of the countries that have ratified the Convention: it will meet in Amman next week. I need your help. We need an agreement on mechanisms to monitor how governments are dealing with corruption. We also need an agreement on comparable, international measurements of corruption. Without these monitoring and measuring mechanisms, we will continue to have no idea of the effectiveness of anti-corruption efforts and whether we are making progress in fighting corruption. You would be surprised to know how many delegates to Amman will oppose these common sense measures. Yet without being able to properly measure and monitor corruption we will just be talking slogans, about generalities.
Second, I ask the private sector to publish what it pays and what it receives, in international transactions. You have heard of efforts to render public, payments made by the extractive industries. Why only mining and oil companies? Why only payments? I propose that all multi-national companies apply, and request from counterparts, maximum transparency in international transactions so as to ensure investment propriety. You would be surprised to discover how far moral suasion can go, with a bit of name and shame.
Third, be a mentor and an active partner. Your companies must have established good integrity checks (you wouldn't be here otherwise). I urge you to pass on this experience to your clients and peers. UNODC has established an anti-corruption mentoring programme: we need your help. An international anti-corruption academy is to be established in Vienna, to provide training and technical assistance: I urge you to support it.
Finally, and to show that I am not castigating the private sector alone, I have a message for international public servants (like me) -- practice what you preach. In Amman I will propose that the UN anti-corruption Convention be applied to international bureaucrats (UN, World Bank etc). This will strengthen our credibility when requesting countries, and people like you, to abide by anti-corruption measures. We must lead by example: I ask you to do the same.
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In conclusion, international action to control corruption will be successful if done in a consistent way. The UN Convention against Corruption has established a common framework. Let's make use of it.