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SPECIAL MEETING ON "ENHANCEMENT OF PROBITY AND THE FIGHT AGAINST CORRUPTION IN THE HEMISPHERE"
FRIDAY,
MARCH 31, 2000
WASHINGTON, D.C.
Michael N. Davies,
Q.C.
Chairman, Committee on Corruption and Bribery
Canadian Council for International Business
COMMITMENTS
AND PROPOSALS REGARDING PROBITY –
CODES OF CONDUCT AND OTHER PRIVATE SECTOR EFFORTS
Introduction
- I have been asked this morning to talk a little about what the private sector is doing, or can and should be doing, regarding probity – for example, in areas such as codes of conduct as well as other private sector efforts that contribute to the fight against corruption.
- In this regard, I wear the hat today of Chairman of the Committee on Corruption and Bribery of the Canadian Council for International Business.
Canadian Council for International Business (CCIB)
The CCIB is the official voice of Canadian business in the international community
- at the Business & Industry Advisory Committee (B IAC) of the OECD; and
- at the International Chamber of Commerce (ICC)
It has a number of Committees:- Competition Law & Policy, Arbitration, Environment, Tax, Trade Policy and International Telecommunications.
In 1997 the CCIB established a new Committee on Corruption and Bribery whose mandate is:-
- to deal specifically with the issue of bribery in international business transactions;
- to provide input to BIAC (the Informal Contact Group on Corruption & Bribery), the ICC (Standing Committee on Bribery and Extortion) and other international agencies regarding this issue; and
- to provide comments and recommendations to the Canadian government relating to international initiatives to curb corruption.
Activities of the CCIB Committee on Corruption and Bribery
- International Conventions;
The Committee promotes and supports the establishment and effective implementation of international anti-corruption conventions – such as the OECD and OAS Conventions
a) OECD Convention on Combating Bribery of Foreign Public Officials
- provided strong support for the Convention through active involvement in BIAC and ICC Committees
- following signing of the convention in December, 1997, led the charge (in partnership with the Canadian Chapter of Transparency International) to secure Canadian legislation implementing the Convention before December 31, 1998 in order that Canada would be the required 5th major trading nation to do so and thereby cause the Convention to come into effect in early 1999;
- throughout the process have consistently urged and stressed the need for an effective monitoring process.
- why is a monitoring process so important? - As stated in a written CCIB presentation to the OECD in October 1997:-
"What is important is that "there be" an effective ongoing OECD monitoring and follow-up process to ensure that, subject to legitimate domestic legal constraints, the convention is being interpreted, implemented and applied in a fair and reasonable manner by all members"
b) OAS Inter-American Convention Against Corruption
- contains no specific provision for monitoring or peer review
- the CCIB has been encouraging the Canadian government on three fronts:-
- to sign the Convention – was signed in June, 1999
- to ratify the Convention – Justice Department currently addressing what changes, if any, in Canadian laws are required; and
- to promote and support the adoption of an effective monitoring process as a key element in the successful implementation of the Convention - Canadian government representatives have indicated its support
2. Promoting Good Corporate Governance and the Development and Use of Effective Company Codes of Conduct
- ICC Standing Committee on Extortion and Bribery
- in early 1999, updated and revised the ICC Rules of Conduct to Combat Extortion & Bribery in International Business Transactions – a method of self regulation by international businesses
- in May, 1999, published a Corporate Practices Manual on Fighting Bribery – to assist companies in complying with the OECD Convention and in the development of meaningful and effective codes of conduct
- in February 29, 2000, held a full day workshop in Paris for European companies on corporate governance and anti-bribery compliance
- CCIB has participated in numerous other workshops and seminars for business enterprises on how to develop codes of conduct and effective compliance programs such as:
- CIDA International Days, Alberta, April, 1999
- Inter-American Bar Association Workshop, Mexico, June 1999
- A key message when speaking about codes of conduct:-
"Whether a code of conduct is only a "fig leaf" or whether it is a true expression of the ethical culture of the organization and an effective tool in governing employee behaviour depends very much on whether the Company has an effective compliance program."
- Some of the essential ingredients of an effective compliance program
- universal top-down commitment to the policy ("walk-the-talk")
- education and training programs
- a clear road map of what to do if you have a concern (employees must feel comfortable reporting and protected from retribution)
- a clearly defined process for dealing with a concern, and
- ongoing periodic monitoring activities through management activities and audit programs.
FOLLOW UP MECHANISM FOR OAS CONVENTION
Similarly, in the case of international conventions (such as the OAS Convention) if countries simply sign and ratify the convention and that is it - doesn’t mean very much; won’t be consistently implemented.
As with a code of conduct, there needs to be some sort of monitoring or follow-up mechanism for it to be effective.
A strong feeling of consensus has evolved over the past year on the need for some form of monitoring program for the OAS Convention,
- Carter Conference, Atlanta, Georgia
- IABA Blue Ribbon Workshop, Mexico City
- Experts Roundtable on a Hemispheric Approach to Combatting Corruption, Washington, D.C.
- FOCAL Workshop, Montreal
As Canada’s Ambassador to the OAS, Peter Boehm said on December 15, 1999 in a statement to the OAS: - "Canada supports the development of a multilateral monitoring mechanism --- we agree with the report’s recommendation calling for the development of a peer review system that is flexible, sanctionless and based on consent"
At the February 3, 2000 Cancun meeting of the Finance Ministers of the Western Hemisphere, chaired by Mexico’s Finance Minister, Angel Gurria,:-
- Ministers noted corruption’s adverse affect on "investment, public revenues, growth and development" and that it has been identified as a threat to investor/taxpayer confidence; and
- called upon all OAS member governments "to ratify and implement the OAS Anti-Corruption Convention and to support establishment of a follow-up OAS mechanism for multilateral and mutual review and evaluation of progress towards effective prevention and punishment of corruption".
The time for action has come. The collective goal should now be to attain a resolution at the June OAS Ministerial providing for some form of monitoring or follow-up mechanism for the OAS Convention.
