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COMPANIES CAN PLAY A LEADING ROLE IN EFFORT TO FIGHT GRAFT, SAY EXPERTS

Firms asked for strong stand to end corruption

WHEN IT comes to its position in world rankings of corruption, Slovakia has little to shout about. And even though some other post-communist countries suffer from high corruption too, this is no reason for not tackling it in Slovakia. Ways to combat corruption are well-established and even those companies that do not want to expose themselves to public attention by speaking about the subject can make a contribution.

Gorilla is now a term alleging corruption in 2005-6. (Source: SME)

WHEN IT comes to its position in world rankings of corruption, Slovakia has little to shout about. And even though some other post-communist countries suffer from high corruption too, this is no reason for not tackling it in Slovakia. Ways to combat corruption are well-established and even those companies that do not want to expose themselves to public attention by speaking about the subject can make a contribution.

Gabriel Šípoš, the head of Transparency International in Slovakia, confirmed that the country has a problem with corruption.

“In the ranking of perception of corruption by Transparency International we [Slovakia] are the fifth worst in Europe,” Šípoš told The Slovak Spectator. “Behind us are only Romania and Bulgaria and, from the older members of the European Union, Italy and Greece. This is a bad reference point for us. It harms quality of life, lowers trust in democracy and undermines economic growth.”

The Pontis Foundation devoted part of its regular conference on corporate responsibility held in Bratislava on May 11 to corruption, as it perceives the theme as particularly topical owing to recent corruption cases.

“As many as 65 percent of CEOs in Slovakia are concerned about corruption,” Beata Hlavčáková, programme director at the Pontis Foundation and director of the Business Leaders Forum, told The Slovak Spectator, citing a survey conducted by PwC in early 2012. It was for this reason that the foundation wanted to contribute to the discussion from the viewpoint of business.

The Slovak Donors’ Forum, another organisation involved in corporate philanthropy in Slovakia, also regards corruption as a big problem and believes that the private sector should serve as a positive example.

“It is particularly important for the private sector to resolutely and clearly distance itself from corruption,” Lucia Faltinová of the Slovak Donors’ Forum told The Slovak Spectator. “Any suspicion or direct involvement in such misconduct has long-term implications for the company, from loss of reputation to reduced business potential.”

She believes that a responsible choice of suppliers, involvement in fair trade, strict adherence to contracts, and correct relationships with partners and all company stakeholders must be the norm.

“Such an approach shapes the business environment from within, an environment that is vital for sustainable growth and the prosperity of all,” said Faltinová. “We thus see the role of the private sector particularly in leading by setting an example of good practice – in shaping public opinion, increasing transparency, pointing out and publicising cases of corruption, and respecting written and customary rules.”

Pontis used the conference to show that there are also positive examples and that it is possible to do business in Slovakia and the Czech Republic in a responsible and ethical way. It invited representatives of companies that have experience fighting corruption to participate in the discussions. These included Skanska construction company and Bayer pharmaceutical company, as well as Stanislav Bernard, the owner of a family brewery in the Czech Republic.

What companies can do

Hlavčáková said that the only possibility companies have to combat corruption is not to give bribes and to report anyone demanding a bribe to the authorities. But the existing environment is a key factor in this respect and she argues that it is necessary to praise each anti-corruption deed, as they are acts of courage.

The programme director listed several ways in which companies can combat corruption within CSR, from preparing codes of ethics, through training of the most exposed employees, up to whistleblower telephone lines to which corruption can be reported.

“But the most important is the ‘head of the company’, what means its owner or boss,” said Hlavčáková. “If ethical values are rooted in them, then everything is easier.”

According to Šípoš, firms can do three things to combat corruption.

“They can introduce anti-corruption tools in their own company, for example codes of ethics, heavy fines for faults, and anti-corruption lines,” Šípoš said, explaining what the first package of measures should contain. “Second, they can speak out publicly about corruption if they encounter it during business contacts with other companies or the state. The more companies speak about it, the more politicians have to deal with it. Being silent contributes to keeping it unresolved.”

Third, he says, those companies that do not want to speak out publicly about corruption can financially support those who do, for example local activists or non-governmental organisations.
Faltinová agreed, adding that businesses have an additional important, yet still underestimated role.

“As philanthropists, they can have a dual role in combating and preventing corruption,” she said. “First, they can act as multipliers of good practice by focusing on non-profit fundraisers with a good track record in transparent practice. Businesses can even encourage this by requiring, as donors, codes of ethics or other standards on the part of recipients of philanthropic support. Second, businesses should address the need for sustained, long-term support to those NGOs that may not be attractive at first sight, but play a key role in good governance.”

According to Hlavčáková, companies already use opportunities to combat corruption.

“Most companies within the Business Leaders Forum have implemented codes of ethics, trained their employees and have whistleblower telephone lines on which people can report violations of ethical rules,” Hlavčáková stated, adding that they have implemented quite robust processes which should protect companies from unethical behaviour. “The rest is up to employees as individuals, and their values.”

Hlavčáková perceives the situation in Slovakia as being similar to that in neighbouring countries, pointing to the example of Czech MP David Rath, who was recently arrested carrying what was alleged to be a substantial bribe in cash.

“It was a surprise for me that even in Belgium 36 directors out of 100 are willing to give a bribe to get an order,” said Hlavčáková, adding that in the Czech Republic the number was 28. These numbers are the lowest in northern Europe, which she perceives as a target to which she hopes Slovakia gets closer.

According to Šípoš, the effort to combat corruption abroad, especially in Anglo-Saxon countries, is several times stronger than in Slovakia. But his feeling is that international companies operating in Slovakia are gradually beginning to speak more about corruption, citing as examples companies like Accenture, Skanska, Bayer and GSK, while noting that the process is slow. He listed the CSR system of Západoslovenská Energetika, which also supports anti-corruption organisations, as one of the best functioning CSR systems. Slovenské Elektrárne is also active, according to him.

“It would help most if people, or firms’ clients, require this,” said Šípoš. “Just as they want companies to contribute to the ill or to children, and to be responsible towards the environment, they should put more pressure on companies for them to have anti-corruption strategies and behave honestly in public tenders. Based on our survey, people regard corruption to be the fifth most important problem facing society. If they require more from companies in this direction, Slovakia’s position would be not so low in corruption rankings.”

Faltinová said that the fight against corruption requires a thoroughly comprehensive approach and that it should begin with people’s upbringing and that education at home, school and in private businesses, as well as in the non-profit sector, each have their unique, yet crucial, role in the prevention of – and fight against – corruption.

Both Faltinová and Hlavčáková perceive enforceability of the law and an unbiased and uncorrupted judiciary as the most fundamental condition in the fight against corruption.

“There are many responsible and honest representatives of the state, prosecutors and judges, but it is not always easy for these people to establish themselves in this system,” said Hlavčáková. “This is why activities of companies as well as individuals are important, because they show examples of how it is possible to break the vicious circle. Other countries have managed this too and I’m convinced that we in Slovakia will also manage it. People as well as business are fed up with this [situation].”

Topic: Corporate Responsibility


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