PRESS CONFERENCE ON FIGHT AGAINST CORRUPTION

PRESS CONFERENCE ON FIGHT AGAINST CORRUPTION

World corporate leaders meeting at United Nations Headquarters in New York today reinforced their commitment to take more responsibility for human rights, labour practices, and the environment –- the hallmarks of Secretary-General Kofi Annan’s Global Compact initiative –- by vowing to help put a stop to bribery, extortion, and other forms of graft.

Adopting a simple, straightforward statement that “business should work against corruption in all its forms, including extortion and bribery”, the Global Compact Leaders Summit took up the challenge Mr. Annan made some four years ago when he called on world business and labour leaders to “embrace and enact” the benefits of global economic development through voluntary corporate policies and actions.

At a press conference announcing the move, Peter Eigen, Chairman, Transparency International, one of the world’s leading non-governmental organizations committed to fighting corruption, recalled that, until very recently, the world business community regarded corruption as a necessary evil, with some top executives openly defending the practice of bribing foreign firms with a shrug of the shoulder and a cavalier remark:  “I hate to do it...and I hate all the problems it will cause down the line...but I have too”.

But, following the wide-scale endorsement of the United Nations Convention against Corruption last year, the first globally agreed instrument to provide sweeping measures regarding the prevention of graft, its criminalization, international cooperation against it and recovery of illegal assets, “there was now a solid consensus behind the need to fight corruption”, he said.

The Global Compact sets forth nine guiding principles for corporate citizenship that focus on human rights, labour standards and concern for the environment.  Companies subscribing to the principles are encouraged to make clear statements of support and to submit an annual report that includes concrete examples of “good practices” for other firms to emulate.  The Summit’s action today essentially makes the anti-corruption pledge the initiative’s tenth principle.

“The overwhelmingly positive response of participants to the addition of an anti-bribery principle shows that companies are waking up to the need to fight corruption”, Mr. Eigen said, adding that non-governmental organizations, civil society groups and intergovernmental institutions would also be very important in that fight.  He also said that overcoming the scourge of corruption was the only way to achieve the other nine principles.

“The days when investors thought that a little corruption was okay as long as companies made their quarterly numbers are long gone”, said Elizabeth McGeveran, Vice-President of London-based ISIS Asset Management, who also spoke at the briefing.  Today’s investment community was waking up to the long-term damage to companies from bribery and corruption -- non-transparent and corrupt markets were expensive for companies, and all the costs were off the balance sheet.

When public money was siphoned off through corruption, roads did not get maintained; schools did not get built; hospitals did not get supplies; and sometimes, weapons and arms were purchased, which in some countries drove insurance premiums through the roof, she said.  “More and more investors are taking notice and are demanding transparency of company payments to governments in the extractive industries, among others, essentially making it harder for that oil and gas money to be siphoned off by corrupt officials.”

Bill McDermott, Chief Executive Officer of software inter-enterprise software application giant SAP, in charge of the company’s North American division, which had built the Global Compact’s enterprise portal, and Eva Joly (Norway) also expressed support of the anti-corruption principle.  Mr. McDermott said that people were becoming more and more aware that shareholder value went hand in hand with company value.

Ms. Joly said Norway supported the initiative through its bilateral work.  It was a prerequisite for the effective enforcement of human rights.  Corrupt regimes and corrupt judiciaries undercut human rights, she said, stressing that law enforcement was not enough, and it was very important for companies to change their attitudes.

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