THE BLOG

Is the Time Right to Design Corruption out of the System?

We see an unprecedented opportunity to turn popular discontent into a force for good. All around us, from the Middle East to Asia to Europe, media interest in and public protests about corruption have been growing rapidly in recent years as people demand that the fruits of rapid growth -- or the pain of austerity -- be fairly shared.

So there is good news and bad news in the fight against corruption. The good news is that there has never before been such a high level of interest, or so many ideas and initiatives. The bad news is that, without greater coordination, these initiatives may still fall short.

Two weeks ago in Geneva, the World Economic Forum's Partnership Against Corruption Initiative (PACI) task force -- comprising high-level business, government, and NGO representatives -- met to discuss how the global anti-corruption agenda can be aligned and the current slew of initiatives can be better coordinated.

Simultaneously, many more global businesses are throwing their weight behind the fight against corruption. Across emerging and developing economies, there is fast-growing investment in the kind of large-scale strategic infrastructure projects -- roads, airports, hospitals, energy grids, ICT networks -- which are traditionally plagued by bribery. New global players from emerging and developing markets are increasingly competing for these projects with Western-based firms.

This creates an uneven playing field, in that strict national anti-corruption regulations bind many multinationals wherever they do business, while rules applying to their emerging rivals may be more lax. Consequently, many firms are seeking to address this competitive disadvantage by pushing vigorously for effective anti-corruption legislation in emerging and developing markets. At the same time, governments are clear that a level playing field attracts investment and ultimately improves competitiveness.

The combination of popular anger, government action and backing from leading CEOs is creating a tipping point: There is now no shortage of good intentions in the fight against corruption, nor of proposals for action.

But corruption is sophisticated, fast-moving and dynamic -- and regulatory institutions often lag behind. Greater alignment and coordination of the many fragmented anti-corruption initiatives being embarked upon around the world is the only way to tackle that challenge successfully.

Governments, companies and civil society organizations must work in collaboration to align policies and practices nationally, regionally, globally and for specific industry sectors. As the only global anti-corruption initiative driven by the private sector and rooted in CEO commitment, PACI provides a neutral platform for the discussions that need to take place.

Over 100 companies have signed up to PACI, which involves pledging a zero-tolerance policy toward bribery and corruption and implementing an internal anti-corruption program. Now, the Forum's dive for "Designing Corruption out of the System" seeks to facilitate multi-stakeholder partnerships which can reach agreement on common risks and define agendas for action.

Improving public sector procurement procedures is one obvious place to start. More challenging is the creation of mechanisms to encourage voluntary disclosure and to establish early warning mechanisms. Yet whatever specific measures are explored, we believe that all efforts need to follow some guiding principles: They should be systemic and integrated; strategically seek opportunities to encourage good behavior and build a climate of trust and openness; have clear and measurable success metrics; and attempt to minimize bureaucratic burdens.

We have also learned the value of framing and narrative. Rather than talking about anti-corruption efforts in terms of risk mitigation and reacting to harmful practices, we are shifting the conversation towards emphasizing anti-corruption's potential to create economic value.

Over the next three years, PACI will work to map out the interconnections among diverse issues and drivers of change. This transformation map will create a foundation for a stronger and more strategically aligned global anti-corruption platform.

PACI will also drive more industry-specific projects, building on the recent launch of the first such initiative in the aviation and travel industry -- a sector where the global reach of value chains and the involvement of countless third parties creates considerable exposure to corruption risk. Combining CEO support and the technical expertise of participating companies, similar initiatives are planned in four more sectors: infrastructure, energy, healthcare, and information and communication technologies.

Over the last two years, PACI has been working with the Anti-Corruption Working Group of the B20, a business body that advises G20 political leaders. As we seek to harness the growing momentum created by these and other efforts, we will launch at the January 2014 Davos meeting the "PACI Vanguard", a group of the most committed CEOs who will act as champions for efforts to align global, regional and industry agendas.

Vanguard CEOs are those who realize that a commitment to transparency and ethical practices can provide businesses with a competitive advantage. They see that changing the culture on corruption can create new economic opportunities for everyone -- and recognize that the stars are now aligned for collaborative action to make it happen.

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