Corruption
“How can a company successfully pursue commercial activities in countries with a history of corruption, whilst at the same time ensuring it does not compromise its own anti-corruption or human rights commitments?”
Dilemmas and case studies
This page presents all relevant good practice case studies that showcase how business have addressed the Corruption dilemma. Case studies have been developed in close collaboration with a range of multi-national companies and relevant government, inter-governmental and civil society stakeholders. We also draw on public domain sources, including the UN Global Compact's own published Communications on Progress through which signatories are required to report on their performance against the Ten Principles.
The case studies explore the specific dilemmas and challenges faced by each organisation, good practice actions they have taken to resolve them and the results of such action. We reference challenges as well as achievements and invite you to submit commentary and suggestions through the Forum.
Alcatel-Lucent: Phasing out of third party agents and consultants – Global
In 2009, French-based technology company Alcatel-Lucent instituted a ‘zero tolerance’ policy to compliance issues, insisting upon “100 percent integrity in all business practices”. Under this policy, the company decided to phase out the use of external agents and consultants in order to reduce the risk of corruption. Instead, internal sales specialists were encouraged to develop new ways of engaging with markets. An added benefit of this approach has been to encourage closer client relationships by allowing for more direct contact between the company and its customers. The company takes a transparent approach to past allegations on corruption and other compliance issues. For example, it publishes what it terms ‘controversies’ on its website, including those relating to investigations launched in 2004 by the Costa Rican authorities into payments alleged to have been made by consultants for a subsidiary to public officials. Other ‘controversies’ include those relating to alleged bid-rigging and illicit payments by employees of a Taiwanese affiliate in relation to a Taiwan Railways contract, and concerns around alleged payments made to consultants in Kenya and Nigeria.
ABB: Business ethics standards based on the principle of ‘zero tolerance’ – Global
Swiss-based power and automation group ABB has published a set of business ethics standards based on the principles of ‘zero tolerance’, full and fair recording of transactions, continuous employee training and awareness-raising, and regular monitoring and reporting. Among other things, these standards cover conflicts of interest, bribery and corruption, agents and intermediaries, and political contributions. For example, employees should not seek or accept gifts with parties doing business with (or wanting to do business with) the company “which might reasonably be believed to influence business transactions”. Likewise, employees must not “offer undue monetary or other advantage to any person or persons, including public officials or customer employees, in violation of laws and the officials’ or employees’ legal duties, in order to obtain or retain business”. Similarly, commissions/fees paid to agents and consultants should be “reasonable in relation to the service provided”.
BASF: Network of 100 compliance officers headed by a Chief Compliance Officer – Global
German-based chemicals company BASF has an extensive compliance programme in place, which is aimed at preventing a wide range of legal violations, including incidents of corruption. In 2002, the company became the first in Germany to appoint a Chief Compliance Officer (CCO) – who is now supported by a network of 100 compliance officers worldwide. The CCO reports directly to the Board of Executive Directors on issues including the results of compliance audits and information gained from the company compliance hotline. All employees receive mandatory compliance training in the first year of their employment – supported by subsequent refresher courses (including interactive learning programmes). In 2009, more than 25,000 employees took part in compliance training. When selecting suppliers in non-OECD countries, the company uses a questionnaire to determine whether they have established a code of conduct and compliance guidelines. The BASF Corporate Audit department carries out audits of the Compliance Programme. In 2009, it performed 109 group-wide audits of the company’s dealings with business partners and government representatives.
BHP Billiton: Business Conduct Advisory Service – Global
BHP has established a global Business Conduct Advisory Service for employees, contractors and external parties to ask questions relating to business conduct or to raise a business conduct concern from any country in which the company has an operation or major office. The service is confidential, is available in a range of languages and can be accessed by a variety of means (including phone, Internet, fax or post). Although the company encourages business conduct issues to be raised and resolved locally, the service is provided in light of the need to provide a highly accessible service that allows issues to be raised outside normal management structures. The service is operated by EthicsPoint on a secure external server. BHP Billiton prohibits any form of punishment for raising or helping to address a genuine business conduct concern. The company notes that retaliation of this nature is grounds for discipline, including dismissal.
Fluor: Multilateral partnership via PACI and the American Society of Civil Engineers – Global, US
US-based engineering company Fluor is a founding member of the World Economic Forum’s Partnering against Corruption Initiative (PACI), which is led by the company’s Chairman and CEO Alan Boeckmann. The company’s approach is reflected in the company’s ‘zero tolerance’ approach to corruption – as well as its extensive ethics and compliance programme. In addition, Fluor works with the American Society of Civil Engineers on anti-corruption and Boeckmann is honorary chair of the group’s Anti-Corruption Education and Training Project (ACET). The centrepiece of ACET is the ‘Ethicana’ movie, which examines corruption in the global construction industry – and what can be done about it. The movie – which Fluor contributedUS$100,000 towards– includes dramatised bribery situations, as well as discussion topics, train-the-trainer instructions and takeaway materials. The video is being provided free of charge to companies, government agencies and universities around the world. Fluor also maintains strong relations with Transparency International, which it provides with financial support.
Merck: Full transparency around grants to medical, scientific and patient organisations – US
Pharmaceutical company Merck takes a particularly transparent approach in disclosing grants to medical, scientific and patient organisations (both inside and outside the US), payments to US-based healthcare professionals, philanthropic grants, political contributions and clinical trial disclosures. In doing so, the company offers a particularly high level of detail in its disclosures. For example, grants to medical, scientific and patient organisations in the US are broken down into quarterly spreadsheets detailing payments of hundreds of dollars to hundreds of thousands of dollars. Likewise, non-US grants (to countries ranging from Algeria to the UK) are broken down by country on an annual basis.
Norsk Hydro: Navigating the ‘grey areas’ through the assessment of corruption risks – Global
Norwegian aluminium and energy company Norsk Hydro acknowledges that when working in developing countries, there can be ‘grey areas’ that can be difficult to navigate. The company provides a case study outlining its approach to entering into new activities or relationships. This includes a risk assessment of the country the company will operate in. The company also reviews prevailing socio-economic conditions – and a range of other issues, including review of Transparency International’s Corruption Perceptions Index. In addition Norsk Hydro carries out ‘integrity due diligence’ of potential partners and consultants. This includes backgrounds checks, media reviews and identification of previous legal incidents. When working together with third-parties, project managers and line management undertake continual assessment – as well as a review of status at project milestone stages. Nonetheless, the company acknowledges that it is sometimes necessary to be sensitive to the fact that other cultures sometimes have a different approach to some of these issues – whilst at the same time sticking to the company’s guidelines.
Vestas: Scrutinising gifts, entertainment and hospitality under the PACI - Global
Since 2010, Danish wind turbine producer Vestas has been a signatory to the World Economic Forum’s Partnership Against Corruption Initiative (PACI). The initiative not only provides a framework for the design and implementation of corporate anti-corruption policies, but also helps enhance practices globally through peer exchange and the determination of best practices. As part of its PACI membership, Vestas has established a Code of Conduct requiring the registering and senior approval of gifts, entertainment and hospitality received or provided when certain criteria is met. These rules are tightened further in respect of operations involving cooperation with government officials.
Petronas: Collaborating with the Malaysian Anti-Corruption Commissioner (MACC) - Malaysia
In March 2012, Malaysia oil company Petronas announced a collaborative initiative with the Malaysian Anti-Corruption Commissioner (MACC), involving the provision by the latter of advisory services and training programmes on the best strategies for corruption prevention. The project comes as part of the company’s Corporate Enhancement Programme (CEP), as adopted by President and CEO Shamsul Azhar Abbas when he took office in February 2010. The CEP has also involved a changing of the company’s board and the creation of governance, risk, remuneration and audit committees. The company’s Code of Conduct and Business Ethics (CoBE) also implements policies regarding bribery, corruption and money laundering that are applicable to all employees, non-executive directors and contractors. These include supplementary country-specific issues.
Makati Business Club: ‘Integrity Initiative’ promoted in partnership with the ECCP - Philippines
Under the Integrity Initiative, as led by the Makati Business Club (MBC) and the European Chamber of Commerce of the Philippines (ECCP), around 1,500 companies in the Philippines have agreed to combat all forms of bribery, implement internal ethical conduct systems and maintain thorough employee codes of conduct. In addition, by 2014, both the MCB and the ECCP plan for companies under the scheme to do business only with other signatories, including the implementation of a certification standard for prioritised business dealings between such firms. With around 700,000 companies currently registered with the Securities and Exchange Commission, the initiative still has much scope for expansion.
Sasol: Transparent reporting around internal ethics allegations – South Africa
South African integrated energy and chemical company Sasol has published the results of its efforts to proactively manage its ethical performance in its June 2012 Sustainable Development Report. Alleged or actual violations of Sasol’s Code of Ethics can be reported through the company’s independently managed, anonymous reporting facility (Ethicsline) – or using more direct methods (including dedicated “Ethics officers and champions” for each business). Sasol has also established a new group ethics system, which uses specially developed technology “providing strict access controls for ethics investigations, and enhanced reporting on investigations and trends.” During the one-year reporting period covered by their report, 519 calls had been made to Ethicsline – and a total of 1,198 allegations had been made. Of these, 43% related to the ethical principles of ‘responsibility’ (i.e. “related to the application of resources, stakeholder interests, legal compliance, corporate governance and safety”) and 18% to ‘honesty’.
By December 2012, Sasol had finalised investigations into around of these 900 allegations – with 305 investigations ongoing. It was found that there was substance to 110 of the allegations – and partial substantiation with respect to a further 79. For 594 of the allegations, there was no evidence to prove or disprove them – something that has prompted Sasol to work to enhance the ability of its employees to make more substantive ethics reports so that investigations were based on better initial information.
Maersk: Discouraging demands for facilitation payments through on-board cameras – Denmark, Global
Maersk Tankers has placed increased emphasis on the reporting of facilitation payments. In 2012, around 100 of its 170 vessels reported requests for such payments. The company is analysing quarterly reporting from its vessels to understand which ports pose a particular challenge – and to initiate constructive dialogues in these locations to address the issue. The company notes that in some locations it has experienced some push-back when trying to address facilitation payments – including “increased and unwarranted port state control deficiencies, delays and illegitimate fines”. To help address this, the company piloted the installation of dummy security cameras on 16 of its vessels – with the vessels’ captains reporting that port officials were more hesitant in demanding facilitation payments when they believed they were being filmed.
UN Office on Drugs and Crime: Using games to fight corruption – Bolivia
The UN Office on Drugs and Crime (UNODC) has partnered with the Bolivian Ministry for Institutional Transparency and the Fight against Corruption to develop seven anti-corruption games. The games aim to encourage social participation in the combatting of corruption by raising awareness of the rights and responsibilities of the public. In addition to providing information on different forms of corruption and the penalties that they incur, each interactive game provides players with information on the standards, concepts and tools that are available to them for tackling corruption. The interactive nature of the initiative enables participants to absorb information gradually and to engage meaningfully with the topic – with the seventh game enabling players to review what they have learnt. UNODC reported in 2011 that the games had been well-received during their deployment in public places such as parks, fairs and schools in major cities throughout the country.
In 2013, Tullow Oil held its third industry partner forum in Ghana – aimed at raising awareness around:
- Anti-bribery and corruption practice
- The requirements of the UK Bribery Act
- Tullow Oil’s own Code of Business Conduct
More than 80 companies took part in the Ghana meeting – and the company has also engaged more than 160 businesses based in Bangladesh and Kenya with respect to business ethics. According to Tullow Oil, participant companies are generally majority owned by local nations and are either working with – or seeking to work with – Tullow Oil as suppliers and contractors.
@TalkHumanRights / @globalcompact
Website: By 
Verisk Maplecroft in partnership with the United Nations Global Compact