report on un regional meeting africa 2009 lagos

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THE REPORT OF

2009 UN GLOBAL COMPACT REGIONAL CONFERENCE

“BUSINESS TAKING A STAND AGAINST CORRUPTION”

MARCH 16TH

- 19TH

2009

SHERATON HOTEL AND TOWERS, IKEJA – LAGOS

NIGERIA



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Introduction

The 2009 UN Global Compact Regional Conference Africa was held on 16 th – 19th March, 2009,at Sheraton Hotel, Ikeja Lagos, Nigeria with the theme “Business taking a stand in the fightagainst corruption”. The meeting presented a unique opportunity for participants to benefit fromdiscussions on the subject of Business challenges, opportunities and approaches to collectivelytackling corruption. The objective of the workshop was to equip business leaders and GlobalCompact Local Network Focal Points from Africa with practical collective action tools andstrategies to counter corruption in business operations.

The conference had two days of closed meetings (16th -17th) in which companies examined howto utilize collective action to counter corruption and introduce new collective action strategies/ tools for business operations.

The third day of the conference (18 th) had three sessions during which the following sub themeswere examined through real life dilemmas of individual companies and organizations; (i)Corporate Governance as a Tool to Fight Corruption, (ii) The Role of Financial Institutions-Risks and Challenges of Corruption, and (iii) The Political Economy of Corruption and

Collective Action as a Tool to Fight Corruption.

The last day was also a closed regional meeting that provided Global Compact Focal Points andother members of the Network Steering Committees with an opportunity to learn from theachievements of other networks and to share experiences on the processes of issues that wererelevant within the regional context.

The participants were drawn from the public sector, the organized private sector, developmentpartners, civil society and UNGC networks from Africa and around the world.



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DAY ONE 16th

March 2008

Workshop on Fighting Corruption through Collective Action: Practical Strategies for

Companies.

Introduction

Welcome Address- Mrs Olajobi MakinmaIntroductory Remarks Micheal JarvisPresentations: Micheal Jarvis

Kathrin Frausher

Case Studies (a) Columbia(b) NEPAD(APRM)(C) BAAC & CBI.

Success Stories- Ghana & Pakistan

Introduction to ProgrammeMrs. Olajobi Makinwa gave a welcome address she appreciated participants (Local Networks) forbeing able to come to the meeting. Michael Jarvis did a brief introduction of the workshop. He notedthat this would be the first time a workshop of this nature was being organized in the AfricanRegion.

Interactive Session

The interactive session started with some burning questions that participants addressed.Participants were split into workgroups to address different burning questions which also, amongother things, gave them the opportunity to know each other and ask key questions regarding howthey tackle challenges of these types in their countries.

Some of the questions used for the discourses were as follows;Who are you? Where do you work and what do you do? Why are you here at this workshop?

What are the key questions you would want to cover during the workshop?

A range of issues deriving from the theme of the conference were discussed among which includedthe following:

• The behavior of private sector towards anti-corruption issues

• Government involvement- how they make policies to affect corruption threats

• Coalitions Building to getting Collective Action going

• How better uses of international instruments in dialogues could be made

• Improving Public/ Private Sector awareness on corruption, and

• Why corruption was endemic in Nigeria as well Socio-cultural issues etc

Presentations

1. Understanding Collective Action- Michael Jarvis and Kathrin Frausher

The presentation defined collective action and looked at how it could strengthen anti-corruptioneffort. Examples were taken from companies, government and NGO’s that successfully implementedCollective Action in several industries including energy, construction, transport, and pharmaceuticals



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in both emerging and developed markets (Germany, Colombia, South Africa, Mali, Russia,Indonesia).It said corruption in Africa cost the continent nearly US$150 billion a year, leading to a loss of approximately 50% of tax revenue; thus creating an urgent need to address it and necessitating a joint-effort solution to the menace. This will cover issues such as Private Sector competitiveinvestment climate, Responsible private sector, Public Management (transparent Public financialmanagement and procurement), Administrative and Civil service reform, and Civil Society action.Other members are the Media and Oversight Institutions - state oversight institution, judiciary, SAI,Transparency & Participation (right to information, user participation). Local Governance – coveringCommunity driven development, Local government transparency, Downward accountability are alsonecessary just as Governance & Service Delivery –Transparency, participation, accountability inservice provision (health, education, transport), Sector level corruption issue (EITI, Forestry) arecritical.

2. Selected success Stories

a. Ghana Experience – the Ghanaian Anti-Corruption Coalition (GACC) which has four CivilSociety Organization (CSOs) as members monitor the government’s anti corruption activities andlobbies for governance and anti-corruption reforms. Their main achievement is the setting up of

Ghana’s Revenue Agency Board and designing the guidelines for the Civil and Human RightsAdvocacy and Justice (CHRAJ) and the Regional Construction Sector Transparency Initiative(CoST) – a partnership between government, companies and CSO’s to increase transparency inconstruction procurement. This includes disclosure, auditing and oversight of government financedconstruction projects, roll-out stage and identify pilot in other Africa countries. The mainachievement was that pilot studies were launched in Ethiopia, Malawi, Tanzania and Zambia andDFID committed funds while the World Bank Group (WBG), Transparency International (TI) andthe UK Anti-Corruption Forum are supporting partners.

b. Pakistan: The Integrity Pact for International Airlines (PIA) spearheaded the Integrity Pact whichwas formulated and MOU signed between PIA and Transparency International-Pakistan (TI-P) for

transparency in procurement systems under the recommendation of the government of Pakistanwhile the TI plays a monitoring role. Their main achievement was the development of PIAProcurement Manual for all SBD’s on procurement of works, goods and services based oninternational standards and recommended by the National Accountability Bureau and it was a bestpractice model for anti-corruption initiatives across Asia.

c. WBI Programme on Collective Action:

This programme includes the following:a. Awareness raising and trainingb. Diagnostics

c. Organizational developmentd. Implementation supporte. Knowledge Management

Phases of WBI Collective Action Projects includeNeeds assessmentsConsultationsTrainings and information disseminationImplementation supportKnowledge Exchange



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The following questions were raised at the end of this section.Do you already have examples of Collective Action in your country/area and/or business

/organizations?How do we tackle corruption; at multi sectoral levels or at regional levels for effectiveness?Can business organizations tackle corruption without the involvement of government?

3. Presentation with Exercise Session:

Further Presentations on Collective Action was made, followed by group exercises on its strategies

How to implement Collective Action

This was presented by Jens Berthelsen, Global Advice Network.This session laid emphasis on the variety of collective action frameworks and tools that companiesand organizations can apply to counter external corruption pressure in high risk operations. Some of the strategies discussed were more appropriate for minimizing corruption in specific projects, suchas procurement for a major infrastructure project. The rest were for longer term approaches that seek to strengthen the institutions and regulatory frameworks against corruption. The session focused onreal life examples.

Demand for Bribes/ Exhortation- This include bribe/facilitation payment, influence/politicalcontributions, opaque payments via agents/intermediaries, gifts/scholarship/employmentopportunities and other advantages. This however resulted in denial of goods, denial of services,problem of access to utilities, problem of access to licenses, legal sanction, physical threats and lostopportunities.The World of Bribes- Although Companies are confronted with the dilemma of bribery atindividual level, but this challenge will be better solved at a collective level because different kindsof risks need different kinds of solutions.Key issues in opposing corruption- This involves time, vulnerability, alternatives, and possibilityof escalation. This will require a joint action taken by businesses, and assistance from others.

Different types of Collective Action –This could include Ethical Commitment which is an anti-corruption declaration on the short term, Project- Based Agreement and Principle-Based Initiative onthe long-term initiative or external enforcement. It is Integrity Pact on the short-term, project basedagreement and certifying business coalition on long- term initiative.

Tanzania Experience Exhortation - This is a help desk at business organization that deals with irregular tax collection,gathering of facts to be presented to government and it was initiated by confederation of TanzanianIndustriesSupply chain problems - This is very difficult to tackle because of typical issues such as who bearsthe responsibility. The question is what is the limit of responsibility and cost-sharing (for instance in

Tanzania, bribery is a criminal act)?

Russia Experience

A typical example is tracing wood from Russia, initiated by Axel Springer Verlag A/G.Pressurefrom NGOs traced the main source of paper to Stora Enzo. The NGOs organized a coalition(Springer, Enzo, Time Warner, Random House, Tetra) with the purpose of uniting and supportingthe Russian provider. The main issues were stated as irregular bidding for new concessions, nofacilitation payments and ultimately better revenue.



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Wining, Dining and Gifts

These are unethical behaviors at sector level. For instance the pharmaceutical companies wereaccused of bribing doctors to prescribe their products. In a situation like this, sector solutions shouldbe proffered after external pressure has been applied, such as Code of Conduct (detailed rules forhospitality, travel, meals and training). Independent monitoring which include reporting mechanism;retirement of ticket and reimbursements, Again Internal Sanctions which are internationally bindingshould also be considered. This was initiated by the Government and Business Association.

Market Access

Using your own Code of Conduct as a market access instrument requiresUniting a group of minded companies with the purpose of introducing level play is fieldDialoguing with government on rewarding clean companies.Independent monitoring

This was initiated by individual companies thus creating level playing field in which businesslobbying are practiced for better regulation.

Questions and Answers/Comments

It is important to know at what level lobbying or an act of facilitation becomes bribery.

4. CASE STUDIES:

(a) Columbia

Collective Action related to procurement law reform in Columbia- This reform becamenecessary because of:

‐ High level of corruption

‐ Public pressure for greater transparency in government

‐ Outdated legal mechanism

‐ Inefficient use of public resources

The key partners involved in the Collective Action related to procurement law reform in Columbiawere

• Colombian Confederation of Chambers of Commerce

• Political Science Institute

• Business Association and

• National Congress and various contracting agencies.

The following lessons were learnt from this reform programme

a. The need for on-going follow up on draft laws with various stakeholders

b. Government willingness to participate, accept feedback helps, but if absent still advocatefor change

c. Establishment of open channels of communication to engage broader public

d. Plan sufficient resources to study the impact of the new law on national and local level.

e. Consensus and leadership among business groups which helps move business forward.



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Benefits derived from the reform to the engaged parties Included:

• Introduction of more transparent procurement practices

• Greater competition among companies

• Increased involvement of international participants in procurement

• Greater assurances for the public and evaluation of investments.

General Experience from the reform:

a. Collective Action is not an easy thing to do

b. Collective Action might be appropriate tool for fighting corruption and creates integrity

c. Collective Action involving business, government and civil society might be remarkablealternatives to obsolete legislation

(b). NEPAD (APRM) and Collective Action

It was observed that available network/opportunity for engagement existed but a lot of stakeholders

were not seizing the opportunity. Discussants sought to know how many of the participants wereinvolved in the NEPAD/APRM process. It cited two key models/experiences that enhance thisprocess of engagement and collective actions to include:

‐ Political will- the President of Malawi personally endorses the anticorruption actions

‐ Mo Ibrahim Foundation experience was also cited.

It underscored the need to look at specific cases in each country and continue to see them as a cross-cutting issue. It was also realized that CSO involvement was weak. Therefore, they could not be atpar with the private sector.

(c). BAAC & CBi Case Studies

The Experience of Business Action Against Corruption and the Convention on BusinessIntegrity initiatives in West Africa and Nigeria

This session studied two initiatives namely: Business Action Against Corruption (BAAC) (aprivate-public initiative to tackle corruption in 15 African countries) and Convention on BusinessIntegrity, a Nigerian initiative for maintenance of ethical conduct, competence, transparency andaccountability by private sector operators. The session also explored lesson that could be learnt fromthese collective action initiatives. Value added was discussed in-depth for a set up or strengtheningof similar initiatives elsewhere.

CONVENTION ON BUSINESS INTEGRITY – SOJI APAMPA

The Business Context

Anti -corruption campaigns were usually seen as Anti Government in Nigeria even as corruptionremained a moral or survival issue. The connection between Democracy and Development gave riseto such concepts as inadequate “voice”, inadequate “participation”, ineffective and inefficientservice delivery and diminishing standards of living. The impact of corruption was evidenced in thelevel of playing field because it blurs commonly agreed standards and shared ideals, ineffectivesanctions and brought about insufficient rewards. Also the impact on the search for power, wealthand prestige gave rise to poor access to finance, poor access to markets and poor access to know howwell to interact with market and consumers, workforce and supply chain, as well as trade partnersand Investors etc.



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Improving Governance

Towards improving governance, a series of questions need to be asked before this can be fulfilled.These are: Why would you do right? Is it to avoid punishment, take advantage of rewards, impresscircle of friends, to be seen as law abiding, for the common good of the majority, or to ensure justicefor all? This was asked considering, the fact that we still have weak institutions, weak enforcementand negative incentives.

Compliance Issues

Compliance was said to depend on the answers to a number of questions including but not limited to;‐ Focus of the standard regime

‐ Locus of control

‐ Control Mechanism

Focus on value and standard include Goals, Means and Access and they incorporate Shared Beliefs,Norms, Behavior and Character. They are strongly emphasized by society.(a) Locus of Control seeks to identify where regulation is effected such as:

1. Business- Self regulation, Strong Motivating Force, Benchmarks

2. Government – Regulations, Effective Monitoring, Effective Control, Effective Sanctions

3. Civil Society- Activism, Incentives/ Agenda, Leverage, Plenty of Social Capital

(b) Control Mechanism is about1. Market Mechanism which involves Norm of Reciprocity and “Prices” depending on the

information2. Bureaucratic Mechanism which involves Norm of Reciprocity, agreement on appropriate

Authority, “Rules” depend on enforcement

3. Clan Mechanism which involves Norm of Reciprocity, Agreement on AppropriateAuthority, Shared values and Beliefs, “Traditions” depend on socialization, Alignmentof incentives (sanctions and rewards) with appropriate behaviours

Fighting Corruption

The different stages in corruption act include

1. Willing and Uncompromising

2. Willing but Compromising

3. The compromised and Unwilling

4. A good number of Nigerians feel “trapped” by the system and “helpless” unableto resist corruption on their own including regulators, companies andstakeholders.

5. Coalition of the willing – it involves Social Consensus, Immediacy, Proximity,Magnitude of impact, Concentration of effect, Probability of impact, Politicalwill, voice& space and timing

So What Works?‐ “Strategy” not just “Responsibility”



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‐ Bias for “Action” not “Rhetoric”

‐ Removal of “Barriers”

‐ Avoid Moral “Posturing”

‐ “Homegrown” approach and not simply “imported”

‐ “Collective Action” not “Unilaterism”

CBi Collective Action

The framework is built around the traditional African System. it is a system of SharedIncentives – Pooling of Credibility, reduced Business Risk, Improved terms of trade, MutualAccountability Network of “Peer Review”, “Peer Pressure” and Appeals.The Road Map to this involve, Accreditation and Attestation while the Code is a System of Shared Values.He cited that CBi for instance is both a Certifying and Principle Basedinitiative with compliance related prerequisite for membership. The requirements foradoption of membership is checked by external assessment and members get certified oreventually get excluded as ethical principles bind signatories to not engage in corruption in

their daily businesses.

Rating System

The Credential factor for rating performance is based ona. Value System- it has to be Articulated, Ethical, and Acceptable

b. Accountability-This requires appropriate disclosure of activities to anti-corruptionprinciples, process and actions tolerance for appropriate scrutiny, not acting ultra vires, aswell as appropriate oversight in decision making

c. Commitment- to anti-corruption principles, process and actions

d. Track Record

Strong Brands

The need to build Global ‘kite- mark” for business integrity. This is required for:(a) Affecting Competitiveness through the following such as

Access to affordable finance and to markets by corporate players which influences.

‐ It provides alternative credibility verification schemes

‐ It is a means of Mentoring, Certification and Sponsorship in the corporate area

‐ It enables the reduction of transaction costs in businesses

Development of a shared value system

Setting up of commonly agreed standards

Effective Compliance monitoring

control mechanism

Reducing Vulnerabilities



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- Business Envoy Services- This involves taking up advocacy on behalf of an individual company,group of companies or entire industry on generic issues that allows corruption to flourish. Forexample telecom companies probably have a few issues they would like a business envoy to sort outwith NCC on their behalf which if they tried to address directly might prejudice them. Other relatedrisks reduction areas include;- Consumer Protection- Public feedback and Complaint Handling businesses

Managing Risk Reputation Risk Management – This is a tool that helps map stakeholders of a company and theirown stakeholder relationships in turn, in order to identify areas of corporate reputation risks andsuggest ways of minimizing themImproving brand reputation

Deriving Value from Investment in Ethics –The primary aim of CBi current fund raising is to be ableto intensify its deviation of value from its investment in ethnics. This is to ensure that companiesinvesting in integrity effectively convert this into equity.Further comments

• Collective Action participants are from previously independent CSO initiatives

• It is built around alliances between government, business and civil society.

• It sought to ensure buy-in of Presidency (achieved in Nigeria under Obasanjo and now beingredone with the current government) and in Cameroon with the blessings of president?Ephraim Inoni.

• Its future focus is still on- Business, Government and Civil Society with the aid of theCIVITAS model (a, Voice, SMS, Mail and Data processing system).

Michelle Ntab- African Institute of Corporate Citizenship (AICC)

The effectiveness of the BAAC Model in Malawi was realized through trust, leadership andcommitment as well as strategic country approach combined with a multi-sectoral implementationapproach.For action against corruption to be effective it needs Political will and Commitment fromgovernment, a commitment for profound governance reform and transparency, very reliable sourcesof information and statistics and a platform for actions bringing together Private and Public Sectors,anti corruption bodies and Civil Society.Defining the role of each Actor;Private Sector- Commitment and Financial Support is its expected role value.Anti-Corruption body- prepares and implements public policies, while

Civil society – facilitates dialogue and collective initiatives with support from development partners

Successes achieved from the initiative include that it has become a:1. Permanent platform for discussions to facilitate policy reforms which has also transformed

into a monitoring taskforce

2. Code of conduct for private sector and public enterprise endorsed by all parties atmanagement level



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3. An independent rating system to access systemic action of companies and SOEsprocurement process/activities.

4. National framework on competition launched in February, 2009 with permanent awarenessraising activities for the next 3 years.

Challenges

‐ Getting accurate information from the public is problematic compled with and changinggovernance orientation

‐ Getting Companies to regularly use the self evaluation and raising tools

‐ Long term commitment from government and private sectors (deep rooted commitments)ISnot forth coming

‐ Leadership from the NGO sector – Working the Talk

‐ Building a movement which has a life cycle such as in-Collective Action

‐ Getting Organizations to respond to social responsibilities is very difficult unless it is madeclear that it will affect the core interest of their businesses

Reactions/Comments

Legislation should be made available to back up the fight against corruption

What is integrity to business, government and civil society? It is important to codify this.

The possibility of making succeeding governments accept the idea of Integrity Pactpropounded by CBi is necessary so that there will be no need to refresh eachgovernment on this principle

Building Trust- regular meeting, individual networking most especially with Civil

Society and Private Sectors is necessary.

Scenario Exercise

(1) Corruption dilemmas in Multi-Stakeholder Situation– Jens Berthelsen, Global Advice

Network

The Business of Collective ActionThe session was based on real life collective action initiatives. The objective of the interactivescenario session was to illuminate on the kind of problems that decision makers may face in highrisk operations and to discuss on how they can be addressed through Collective Action.

This initiative was supported and adopted by the World Bank Institute, the Global Compact, Centerfor International Private Enterprise CIPE, Grant Thornton, Siemens, Global Advice Network, andTransparency International.Two types of anti- corruption efforts from the private sector included setting up internal mechanismto prevent corruption and reforming internal operating environment to reduce corruptionopportunities.

He said that Fighting Corruption collectively with all stakeholders increases the impact of individualaction therefore endorsing the strategy of Collective Action, which enhances values as it:

a. Is a collaborative and sustained process of cooperating between stakeholders



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b. Increases the impact and credibility of individual action

c. Brings vulnerable individual players into alliance of like-minded organizations

d. Levels the playing field among competitors

e. May complement, or temporarily substitute for and strengthen, weak local laws and anti

corruption practicesHowever Collective Action is not easy or quick, and requires patience, hard work and expertise

Benefits

All stakeholders benefit from anticorruption Collective Action through the following medium1. Bidding Companies – get increased chances of fair selection as a supplier and enhanced

access to markets, protection from legal penalties, economization of finances formerly paidas bribes, enhanced reputation, and the assurance of ethically and responsibly behavedemployees and competitors.

2. Government – provision of incentives are transparent. There is the benefit of strengthened

rule of law, increased credibility, political and stability, higher investment levels fromdomestic and foreign investors. These create improved image of country on effectivegovernance mechanism and more effective procurement

3. Civil Society/ Non Governmental Organizations – get improved access to essentialresources, such as healthcare and education, and other better social development if money/taxes are used for social projects instead of bribery it creates increased trust andconfidence in business, consistent and fair enforcement of regulations it also enables agreater traction for the objective of a more transparent environment and attention to corruptpractices.

4. Customer – there is consequently enhanced competition in bidding processes which

becomes most efficient openness such that not the best connected bidder wins it alsoenhances, reputation, makes for the avoidance of time-consuming law suits/blocking pointafter decision on supplier company, focused business relationships on quality and reliabilityof goods and services

The future for Collective Action

Each Participant in the core group has accepted to promote Collective Action

However, the widespread attention is supported with little knowledge of best practices

These is a growing understanding of Collective Action as a business development tool

There is a further development of the tool to include best practices

Group work

Participants were divided into 3 task teams to discuss the subject area1. Trust among Competitors2. Trust in Business-Government relations3. Trust between Business & CSOs

Group A- Trust among Competitors



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‐ The question was how could free riding be prevented?

In providing answers, the team said that in order to build trust there is need to take initiativesprovides leadership and nurture advocacy. There is need to be transparent, committed andresult oriented and minimized corruption. The group furthermore believes the followingshould also be considered criticala. The creation of affiliates to enhance trust

b. Minimizing corruption through business listing

c. Global compact Communication on Progress (COP) will aid more openness and trustamong competitors

d. Blacklisting of companies that refused to comply will help to enforce compliance

e. Reporting back to the society on how they are responding to the community/ society

‐ Another question was should there be internal/ external monitoring?

The group said yes, it is internal in the sense of business monitoring businesses and externalwhen government will be monitoring business

‐ How?

a. By developing clusters where business talks freely among its members

b. Through Peer Review in order to encourage business abide by the law or get blacklistedas a group on account of one bad member.

c. There should be provision for code of conduct, audited by local communityshareholders, and establishments such as Environmental & Human Right Commission

‐ Should there be Sanctions?

Yes, provision of code of ethics that enforces Naming and Shaming, alongside with PenalCode to ensure that law breaking leads to exclusion from Business Associations/ClubGlobal compact compliments already existing efforts of business compliance with laid downregulations

Group B Trust in relation between business and governments.

‐ It was observed that government often suspects Collective Action to be an expression of collusion. So the question was what could be done to overcome this barrier? The followingwere considered of significance:

a. Better enforcement will ultimately lead to Better Government

b. Formulation and effective implementation of appropriate policies

‐ It was also noted that business often experiences being “punished” for staying clean. Whatkind of rewarding systems can be invented to overcome the paradox?

a. The needs for SME’s involvement was stressed

b. Credit Reference Bureau (CRB) was agreed to be useful in resolving the global economiccrunch



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Group C Trust in relations between business and CSO’s: This became necessary as a lot of mistrust is considered to be on both sides

The critical questions addressed included:

‐ What competences will business be looking for in search for partners in collective action

‐ What kind of risk exist in dealing with business as seen from a CSO perspective

There are lots of misgivings by business when relating with CSO’s because business sees the formeras;

a. Self interest propelled groups

b. Threats to business, conservatives that have non-profit making oriented attitude

c. Too many, but because of endless public issues that are of societal interest, which createbusiness suspicions.

d. Being Extortionists especially given the experience of some considered as portfolio NGO’s

e. Given to proliferation of CSO without clear aims and objectives

f. Having differing interest as against the Profit making objective of businesses

CSO perception of Business, on the other hand include that1. CSO believes that businesses are not returning enough back to the society. CSO seeks to

find out how much businesses pay back to the environment in which they operate.

2. CSO wants to find out the extent to which the companies are committed or sociallyresponsible to the community in which they operate

Competencies-The competency factors expected of CSO to meet the expectation and trust of both

government and business include that each organization:a. Must be duly registered

b. Must have properly defined objectives

c. Must have Audited Financial Statement

d. Good track record

e. Integrity of the members must not be in question

f. Brand value

g. Trust

h. Networking Strength and Capabilities

Risk Involved in trust arises between business and CSOs include

• The likelihood of reputation hazards resulting from doing business

• Capture of CSO arising from compromise/ Business Capture

• Trust.



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Communiqué- A communiqué was developed and communicated to the media on the UNevent.

DAY TWO 17TH

MARCH, 2009 The day continues with another workshop. A recap of the previous day’s workshop was made.

Workshop II Presentations by

Oliver Stolpe , UNODC

Mr. Osita, Transparency Nigeria

How to improve Transparency in Procurement- Oliver StolpeThis session looked at voluntary transparency pacts that involve bidders and the government andhow they can help restrict opportunities for corruption in a particular project. It considered theprocurement process as being highly exposed to corruption and exposed how both public and privateactors in the procurement process could be tempted to divert goods and services or public funds fortheir personal use. It further examines the different forms and applications of transparency pacts and

how to implement them.

Corruption as experienced by business in Nigeria

From the experience and perception of the private sector, it was gathered that;

• Out of 2203 businesses interviewed, 9.4% admitted having paid a bribe in 2006 even as14.3% preferred not to respond

• 76.7% indicated that they did not know what the bribe had been paid (10% for a bettertreatment, 4.6% for access to information, 4% to speed up the process)

• 24.4% indicated that paying a bribe to a public official to do his/her job is very or fairly

frequent.• 21.6% said the same for paying a bribe to public official to make him/her not to do his

job.

Some of the reasons why corruption is an obstacle to doing business include that itfurther leads to Crime and Insecurity, more Corruption, Tax, Inflation, PoliticalInstability, Complicated business registration, Unclear LawCorruption in Public Procurement involve; for instance clearing goods through theCustoms, obtaining Road Worthy certificates, Procurement for/by government,Procurement for Private Sector, Business License and permits, Traffic Offences, Contactwith the courts, Police investigation,

Corruption in Public Procurement comes in the following forms:

1. Bribery to influence the planning or selection process or the contract execution

2. Fraud i.e. misrepresentation or omission of facts in the selection process or contractexecution

3. Collusion between several companies with or without the knowledge of the procuringentity, aimed to inflate prices at non-competitive level



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4. Coercion to discourage participation in a procurement process, or affect the executionof a contract.

Public Sector Action

Article 9, UN Convention against Corruption “established appropriate systems of procurementbased on transparency, competition and objective criteria in decision making, that are effective inpreventing corruption”. It explains Public distribution of information on procurement procedures and

tenders, Adequate time for bidding, Objective and predetermined for selection of procurementmethod, conditions of participation and award criteria, Effective and independent review/appealmechanism, Oversight, accountability and training of procurement personnel.

Long –Term Strategies;1. Advocacy to reduce vulnerabilities include legislative advisory programmes to

influence the national and regional business agenda, regular dialogue on corruption atcompany level, association level as well as private sector level and public-private sectorlevel, corruption risk analysis.

2. Joint Training of procurement Officers and Company Staff

3. Training of the supply chain

4. Joint development of principle of business ethics on the following

a) Gifts, gratuities, honorariums, entertainment, hospitality

b) Conflict of interest

c) Political contributions

d) HR policies (Post-employment restrictions)

e) Charitable contributions and sponsorships

f) Facilitation payments

g) Use of Agents, subsidiaries, joint ventures, contractors.

Short –term (Ad-hoc) Strategies; here, the Integrity Pact is necessary

It is a formal agreement between a government office and enterprise intending to participate in afully transparent and legal way in the binding process and contract execution. The pact contentmay include that there is

a) No bribe to offer, solicit or accept a bribe;

b) No other inducements;

c) Limit to payment to agents to reasonable compensations;

d) No collusion with other bidders;

e) No other unfair practices contrary to free competition

Short- Term Strategies; Integrity Pacts (Consequences)



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a). Predetermined arbitrator equipped with powers to investigate violations, to involve orengage third parties in the investigation, and issue sanctions

b). There will be full cooperation in any investigation

c). Pre-approved sanctions could require

I. Handing over of all relevant information to national or foreign law enforcement bodies

II. Termination of contract

III. Penalties

IV. “Naming and Shaming”

V. Banning from future government procurements

Project on Enhancing Ethics and Transparency in Business Transactions

This project is meant to supporting the development and promotion of principle of business ethicsand help to design a governance infrastructure that will ensure

a) Monitoring of compliance

b) Regular Dialogue and advocacy

c) Research and analysis

d) Receipt and follow up on complaints

It will also involve awareness raising and training of participants especially on corruptionRisk Assessment Methodology

2. Engaging Partners in Anti-corruption efforts; the experience of Transparency

International by Mr. Osita, Transparency Nigeria

He spoke about the public Procurement Act of 1997 which emphasis the procurement, tendering andprocess for review etcHe also observed that deployment of personnel is based on political consideration, federalism/ federal character which are ways that encourage corruption. He also enumerated the interventionefforts of Transparency Nigeria to include the introduction of a) Integrity pact- which brought government and private sector together the presence of witness,b) Appointment of monitors who serve as social witness

Questions

1. What are the specific challenges companies are facing in the context of publicprocurement?

2. What do you expect from the government in terms of addressing these challenges

3. What can businesses do to address this challenges

Answers

Some of the things expected from government are to address the following challengesAnd condition below



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a) To address the situation of lack of clear rules and procedures which encouragesnon transparency

b) Political appointments (Lack of independence) creates strogism

c) Indigenous lineage (Favoritism and nepotism breeds corruption)

d)

Independent procurement officers need to be recruitede) Tampering after biddings has been concluded must be stopped

f) Nepotism

g) Absence of uniform rules breeds favoritism

h) Development issues must be centrally mainstreamed in processes and procedures

i) Enforcement and proper implementation of rules is very necessary

j) Awareness creation about procurement process need to be carried out down to

grass roots

k) Sincerity of purpose on the part of the government is extremely necessary

l) CSO which should act as whistle blowers, should be enabled or allowed to do so

m) Absence of Information Law- the Freedom of Information law need to be enactedimmediately

n) Development of code of Ethics on the part of businesses is necessary forconfidence among stakeholders

o) Capacity building on the part of the procurement officers should be undertaken

p) Simplified and available procurement guidelines should be made accessible tousers

q) Procurement boards should be independent and the need for government to adoptand involve in e-governance is here emphasized

r) Conflict of interest – people in government owning and influencing decisions oncontracts present a crisis of confidence situation

s) Undue advantage example is Nigeria and PDP

t) Sanctions should be put in place for people who negate the code of ethics of business

u) Sale of approved tender to third party

FOCUS GROUP INTERVIEWS

Enhancing Ethics and Transparency conduct of Business in Nigeria

This interactive session provided the unique opportunity to explore jointly, the value system asrelevant to the conduct of businesses in Nigeria. The objective of this dialogue was to develop a set



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of business-owned ethical principles for doing business in Nigeria, drawing from relevantinternational standards. It is necessary

• Supporting the development and promotion of principle of business ethics

• Helping to design a governance infrastructure to ensure

e) Monitoring of compliance

f) Regular dialogue and advocacy

g) Research and Analysis

h) Receipt and follow up on complaints

• Awareness and Training

• Corruption Risk Assessment Methodology

Presentation from Transparency Morocco and the Francophone’s coalition against corruptionwith over 15 countries and 23 CSO working on the issue of corruption showed that informationtools are vital instrument to their success story. However the challenge of daily access to internetstill subsist

Issues

Where do we go from here?1. Corruption; the Corporate Affairs Commission should be empowered to make checklist theregistration of companies and CSO’s, then follow up and ensure they comply with the laid downrules and regulations.2. The constitutional clause of resignation from present office while contesting for an electivepost should be reviewed because it encourages corruption in a way. For instance an office holderwill be tempted to acquire illicit wealth while serving because he was not sure of returning to

his/her source of livelihood after the tenure.3. Developing pressure groups right from the communities through proper capacity building andraising the awareness level of the citizen is also very important4. There is lack of communication in the continent on general issues or is it an African problem?

BRAINSTORMING SESSION

STARTING/STRENGTHENING INITIATIVEThis interactive session gave the opportunity for fellow participants, experts and collective actionpractitioners to brainstorm over Collective Action opportunities in markets and projects. It was agreat session structured for discussions and networking.

• Generate statistical data on corruption

• Advocacy from the CSO to eradicate PR and facilitation in Business

• Access to Information – tax payers and EFCC Records

• Transparency and Monitoring Techniques/Mechanism

• Welfare Packages of Law Enforcement Agents should be reviewed from time to time.



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• Entrepreneurship Development on the part of CSO’s and Private sector to address issue of poverty

• Anticorruption Law and Access to Information Act should be promulgated using the SouthAfrica Experience

• CSO Monitoring. Professional Associations

• Formidable Regional Network using the country’s Local Network

• Awareness Strategy/ Popularising UNGC

• Constant Peer review and Information Sharing

• Engage Regional bodies- influence SADC, AU, NEPAD.

DAY THREE; 18TH

MARCH 2009

The third day was the general conference involving all economic stakeholders both public and

private. The programme was jointly organised by the World Bank Institute, United Nations GlobalCompact, United Nations Office on drugs and Crime and Global Compact Network Nigeria. Theopening ceremony was followed by technical sessions and discussions.

Opening Ceremony

Speakers:Frank Nweke Jr., DG, NESG

Mr. Soren Petersen, Head, Global Compact Networks

Welcome Address – Mr. Frank Nweke Jr., Director General NESGThe welcome Address was smoothly delivered by Mr. Frank Nweke Jr., Director General of Nigeria

Economic Summit Group, NESG and he urged all other organizations, CSO’s Public and PrivateSector that has not joinED the Global Compact to do so. He enumerated the 10 principles of theGlobal Compact and the need to incorporate it into the daily activities of one’s organization. Hewelcomed all participants (especially those from outside Nigeria) to the event on behalf of the localnetwork while apologizing for the absence of the Chairman of NESG, Mazi. Sam Ohuabunwa.

He further stated that NESG had played an important role in the formation of the UNGC network inNigeria and that the theme of this year’s regional conference “Business taking a stand in the fight against Corruption” happened to be in sync with the ideals of NESG. Corruption according to himcertainly did involve at least two parties (the giver and the taker); and that it was thereforereasonable to assume that when one party takes a firm stance against corruption, the corruption

process may be aborted. He further noted that corruption happened to be rife in African countries;most times focused on the public sector therefore that is was time for the private sector to take a boldstand on this critical matter. He thanked the United Nations leadership for initiating the GlobalCompact and it was his believe that if all countries in Africa were to subscribe to the ten principlescentered on human rights, labour, environment, and anti-corruption, Africa would quickly rise frompoverty. According to him, it was NESG’s hope that countries that were yet to subscribe to theGlobal Compact would take a stand to do so. He concluded by once more welcoming all present onbehalf of the UN Global compact Nigeria local network, and prayed for fruitful and usefuldeliberations of the gathering.



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Opening Address – Mr. Soren Petersen, Head, Global Compact Networks - The Head of GlobalCompact Networks welcomed everyone present at the conference and sent out his special thanks tohis friends, teams, partners and especially the local networks for making the conference happen. Henoted that while the UNGC was a laudable initiative, the conference would have not been possiblewithout the cooperation and commitment of the local network. He then briefly went back ten yearsin time to recapture the birth of the UNGC which according to him was initiated by the former UNSecretary General, Mr. Kofi Anan. He stated that the then Secretary General launched the initiativeagainst the back drop that globalization was headed in the wrong direction. He’s vision was for theprivate sector and globalization to be a part of the initiative and one year later, the Global compactwas established. He further noted that the Global compact started off with nine principles and in2004 the tenth principle (the anti corruption principle) was added. The fight against corruptionaccording to him should be a part of the integrated package when companies accept responsibility.He added that when the UNGC started to talk about environmental, social, and governance (ESG)issues, no one had any idea of what they were talking about then but that today, that concept isbecoming part and parcel of what companies are doing.He explained that the UNGC started with 50 companies singing off in 2000, and more than 5,000companies globally have signed onto the Global compact presently. In addition to this, he noted thatanother 1500 non company participants, NGOs, and academic institutions were on the list totaling

6500 participants from all around the world. Expositing on networks, he confirmed the establishmentof local networks in 90 countries of the world including Nigeria while over 130 countries aremembers of the global compact.

. Highlighting on the operational areas of the UNGC, Mr. Petersen identified four basic areasnamley: Human rights, Labour, Environment/development, and Anti-corruption. While commentingon the current global financial crisis he asked: “What now happens to corporate responsibility are wenow going to forget about it and go back to the ways we used to run things? In conclusion he notedthat there is always a price to pay for corruption and it is only the companies that stay clean thatwould survive the current crisis. With these words he ended his remarks.He explained the Global Compact 10 principles which is subdivided into four (4) main sectornamely; Environment, anti-corruption, Labour and Human Right.

Session I: Corporate Governance as a tool to fight corruption

Moderator: Mr. Olumide Ajayi, Deputy Director, Africa Leadership Forum

Speakers: (i) Mrs. Ito Ugbana, Company Secretary, MTN Nigeria,(ii) Mrs. Deji Delana, Chief Compliant Officer, Onado Plc,

(iii) Mr. Oliver Stolpe, UNODC Abuja

The session was moderated by Dr Olumide Ajayi, Deputy Director of Africa Leadership Forum. In abrief introduction, he explained that the session was, among other things, to find linkages between

governance and corruption, how corporate governance can be effectively used as a tool in fightingcorruption.

1 st

Presentation:

MTN Perspective - Mrs. Uto Ukpana, Company Secretary, MTN Nigeria

The address was delivered by Mrs. Ugbanna, the company secretary of MTNNigeria, she stated that corruption is the abuse of entrusted power for privategain. She further explain that the cost of corruption is equal to more than 5% of global GDP (US $ 2.6 trillion), and over US$1 Trillion paid in bribe each year. She



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also stated that corruption added up to 10% of the total cost of doing business globally and in thedeveloping world sometimes up to 25% of the cost of procurement contracts and these realitiesunderscored the need for businesses to take a stand against corruption.

She expatiate on the five brand value in which her organization MTN deals withcorruption, which are Integrity, Leadership, Relationship, Innovation and Can-Do.And also explained the ways in which her organization fights corruption throughPrinciple, Practices and Progress, principles upheld by the board and regularly reviewed inline with business terrain.

She also explained the mechanisms such as provision of Code of Ethics, Whistleblowing Policy, Document Retention Policy, Corporate Social Responsibility, Zerotolerance for fraud and Gift & Donation policy and ultimately, they provided aguideline in the conduct of Government Affairs which assist the organization inputting checks and balances to corruption pandemic.

MTN Nigeria is signatory to Convention on Business Integrity (CBi) and the United

Nations Global Compact (UNGC). And as a practice, MTN Nigeria always submitsthe UNGC Communication on Progress (COP), the online publication that isrequired to communicate the activities of member organization.

PROGRESS In further efforts to fight corruption, she shed a bit of light on the various initiatives and activitiesthat MTN Nigeria is involved in alongside the progress they have made so far as follows:

• MTN had completed the 2008 COP and COP 2009 is on course for submissionthis month. It is one of the few companies that has communication on progress (COP)to show case what it has done internally in the fight against corruption.

• MTN won the FIRS award for Best Corporate Tax Payer in 2007.

• Award of Commendation by Lagos State Government at Lagos State

Taxation Shareholders’ Conference in 2008

• Notified that MTN will be showcased in the UNGC 2008 AnnualReview

• MTN is a signatory to Convention on Business Integrity – CBI, and UN GlobalCompact – UNGC.

•

• It contributed to the RESIST Project which is also an initiative of the UNGC.

• It contributed to “The Business Case Against Corruption which is a joint publication of theInternational chamber of commerce, Transparency International, the UNGC and the WorldEconomic Forum Initiative against corruption.

• In terms of progress, MTN Nigeria was one of the first Nigerian companies to complete COP2008,.

She said MTN Nigeria’s efforts have been recognised locally such as the Federal Inland RevenueService’s Best Corporate Tax Payer (2007).



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MTN Nigeria, she also reported, received notification that it will be positively featured in the Global

Compact’s 2008 Annual Review for its practices in the area of Anti-Corruption.

Finally, she ended her presentation by reiterated her organization’s support forthe fight against corruption despite all odds.

2 nd Presentation: OANDO Perspective Mrs. Deji Delana, Chief Compliant Officer, Onado Plc This was presented by Mrs. Oredeji Delano, the Group Company Secretary & Chief Compliance Officer. She told the participants that as an organization, theystrongly believe that Corporate Governance can help in the fight againstcorruption. As an organization, they have a Corporate Governance Committeeformed in 2006 comprising of Non- Executive Directors.

She enumerated some of the best practices that the company embarked on as anorganization leading the fight against corruption, she explained that OANDOamong other things was listed on Johannesburg Stock Exchange which ensures

that within 12 months, they must have 50% compliance with best practicesaround the world such as the King’s Code (King II and any revisions).

She also stated that the company has just established the OANDO Foundation which will take care of part of the company’s Corporate Social Responsibility(CSR). They also formulated and implemented Gift policies, Related TransactionPolicies for the Employees and Directors, Whistle Blowing Policies and EthicsHotline. The whistle blowing policy as emphasized by her is just in the process of beingimplemented. The board established a Compliance & Ethics Office on March 14, 2007 as part of Oando’s corporate governance practices and formulated, approved and implemented a Code of Business Conduct & Ethics for the employees, directors and business partners of the Company.

On the Ethics Hotline, the organization have started training members of staff with the assistance of independent consultants, also they have Ethics Watch, amonthly bulletin, keeping track of records of best practices and drumming warnings to all staff from time to time.

In addition to this, Oando has embarked on business partner training in order to address corruptionfrom all business angles.

In taking the fight against corruption a step further, Oando made a public commitment in terms of became a Signatory to the Partnering Against Corruption Initiative (PACI) and floated a monthly

publication called the “Ethics Watch” to sensitize staff on the importance of ethical conduct.

In conclusion she stated that Oando would not have grown to what it is today if its management hadnot sat down and thought and taken appropriate measures to ensure that structures were put in placeto achieve sustainability. She expressed the confidence that Oando would stay forever given thestructures and policies put in place and the monitoring and compliance and their undertaking to beethical in all things.

3 rd

Presentation: Global Perspective – Oliver Stolpe, Mr. Oliver Stolpe, United Nations

Office on Drugs and Crime (UNODC) Abuja



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He emphasizes the need to systematically tackle the Syndrome “Corruption” thathas eaten deep into the fabrics of our society. In 2007 UNODC conducted a studyin collaboration with EFCC on how corruption and Related Practices haveimpacted the Markets and Business in Nigeria and they came up with findingssuch as;10% admitted that they paid bribe at one time or the other15% refused to answer the question20% agree that it is very frequent to bribe when conducting business in Nigeria.75% rated corruption and insecurity as the most serious obstacle to doingbusiness in Nigeria.40% admitted its advantageous for their business to survive in this decayedeconomy.

Mr. Stolpe noted that for more than a decade, the public enterprise sector had acknowledged thenegative impact of corruption on business and economic development, and that both corporateleaders and policy makers alike have come to realize the risks of corruption which impacts on

competition and the rules of free market economy.He stressed the fact that while corruption is detrimental to all types of companies, the smallercompanies especially the SMEs often feel the impact more. He therefore emphasized the need tosystematically tackle the Syndrome “Corruption” that has eaten deep into the fabrics of our society.According to him a study was conducted in 2007 by the United Nations Office on Drugs and Crimein collaboration with the National Bureau of Statistics, the EFCC and supporting partners (theEuropean Union) on how corruption and crime related practices have impacted the markets andbusinesses in Nigeria and they came up with the following findings:

• 10% admitted that they had paid bribe within the 12months prior to the study.

• 15% refused to answer the bribe related question.

• 20% agreed that it was needful to bribe when conducting business in Nigeria.

• 75% rated crime and insecurity as the most serious obstacles to doing business in Nigeria.• 8% of the businesses interviewed admitted no refraining from making new investments

because of the fear of corruption.He therefore posited that addressing the issue of crime, corruption and insecurity might be amongthe issues that Nigerian law makes would need to tackle in the country in order to promote economicdevelopment.

4 th

Presentation: Mr. Jose Cruz- Osorio, Corporate governance consultant, World Bank/IFC

The issue of corruption according to Mr. Osorio could be put into perspective on a global scale inline with the current global financial crisis. In his words he noted that the World Bank had estimatedthat for every 1% decrease in world growth, 20million people were put into poverty which implied

that with the current down turn, already 58billion more people have been put into poverty. In tryingto do a comparative analysis, he looked at the positive and the negative sides of the equation, andnoted that on the negative side; the problem of corruption is a problem of global proportions and thatthere really are no simple answers and no simple solutions to fighting it. But on the positive side of the equation, he thought that there were many developments that really do paint a promising futurefor making a difference. One of the key things according to him is the fact that the private sector isreally taking charge as within a decade of fighting corruption, various corporate governance toolshave emerged and that this trend happened to be significant as before now the private sector wasseen as the problem. He therefore noted that the framework for collective action was beginning topay off in providing solutions to the phenomenon of corruption.



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Another thing of significance according to him is the fact that there is now a foreigninternational legal framework that can really help to drive forward the process of fighting corruption;the OECD convention against bribery, and the UN convention against corruption amongst others. Incapping up his presentation he shed a bit of light on the activities of his own organization. He statedthat they did have a new publication called the “The moral compass of companies: Business aspectsof corporate governance as anti-corruption tools”. The publication deals with various collectiveeffort tools at fighting corruption and how to look forward and become an industry leader in leadingthe collective action effort as a recent study proves that investors are willing to pay a premium forcompanies that are willing to demonstrate high governance standards ranging from 15% to 30%depending on the region.He concluded by noting that institutionalization of best practices, leadership, and organizationalcommitment to ethics are the only ways to walk the talk.

COMMENTS, QUESTION AND ANSWER SESSION

1. Comment: Henry Egbiki, Country Managing Partner, Ernst & Young- In 2008 Ernst &Young did a review of the top global business risks and reputational risk moved from number22 in 2008 to number 10 this year. That is to show the importance of empirical nature of reputational risk to survival of our businesses. Looking at the environment, I feel part of your

responsibility of corporate leadership is how we build a culture for our people to recognizethat they have to do the right thing in the right season. I feel this is a challenge in thisenvironment and the time to start looking at the system, the processes and the procedures wehave in place is not when the whole world is knocking at the your door steps looking for theanswers when something has gone wrong. It is therefore critical that business leaders shouldcontinue to evaluate our processes and our qualities to ensure that we are building a rightculture in our people. Further more, there should be a reporting culture for things that aredone right.

2. Question: Ms Yemisi Ransome Kuti, Executive Director, Nigerian Network of NGOs- It isgood to talk about ‘whistle blowing’ and hotline systems for fighting corruption. It might beworking for Oando, but there is no visible kind of difference in the society at large and there

is the question of whether your whistle blowing activities have resulted in you connectingwith EFCC or the police because it is important for the institutionalization of the process tobe connected in a way that makes a difference in the society.

3. Question: Mr. Kola, Pan African Labor and Industrial Magazine- (I) What can the UNGCdo to help Africa as a whole on the issue of Multiple taxation? (II) How can businesses standagainst corruption in a nation where law and legislative frameworks are weak?

4. Question: Dr. Igbenedion,Faculty of Law,University of Lagos- My question relates to thelegitimacy of some of the organizers of this conference. I feel that Siemens that had beenindicted for corruption should not be a part of the organizers of this conference on corruption.

5. Question: Mr. Wale Adeleke, Chartered Account- How corporate is the governance of mostorganizations in Nigeria? Take for instance the Banking sector; they usually have inflated

profits and financial statements. 6. Question: Bolanle Olafumiloye, Company Secretary, Pronatura International – I would

like to direct my question to Oando and MTN: Which major areas of your processes arecorruption highly pronounced and what are you doing to curb it?

7. Comment: Emeka Ibe, Legal Practitioner- The effort to sanitize the corporate environmentis a very lofty ideal, but I’d like to bring back all the theories here in Nigeria because Nigeriais a very peculiar nation. You all will agree with me that in fact so many lofty political andeconomic theories that have worked wonders elsewhere did not work in this country. Anexample is Structural Adjustment Programme (SAP) which transformed many Asian



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countries but did not in the case of Nigeria. Before we impose these anticorruption theorieson ourselves in Nigeria, what have we done to ensure that the foundation is right? I’d like todwell on motivation for instance. The average Nigerian today is not properly motivated astheir employers are not comfortable enough to pay them appropriately. What motivationalmodels are we therefore propounding to ensure that companies in our environment arecomfortable enough to propagate corporate governance?

ANSWERS

• Mrs. Ito Ugbana, Company Secretary, MTN Nigeria- Responding to Miss. Ransome Kuti’squestion she explained that there are internal and external mechanisms in place whenreferring to the whistle blowing policy. She further clarified that MTN does collaborate withrelevant law enforcement agencies namely; the EFCC and the Nigerian police which is a partof the external mechanisms in place. With respect to pointing out evidence of the policybeing operational, she said she could not readily recall any incident but was sure that thefraud department of MTN did keep such records. While she confirmed that whistle blowingis a useful tool that can be replicated in the larger society she cautioned that it should not beused as an avenue to witch-hunt people, and therefore guidelines and set parameters wouldneed to be put in place.

• Mrs. Deji Delana, Chief Compliant Officer, Onado Plc- Also responding to Miss. RansomeKuti’s question on whistle blowing, she noted that the whistle blowing policy in Oando isstill in its infancy stage, but the staff of Oando are not left in doubt as to the fact that theywould be handed over to the appropriate authorities should they be caught in the act of corruption.

• Also reacting to the poser from Pronatura International, she noted that corruption usuallystood out whenever there was the need to get approvals e.g. renewal of licenses whichmanifested either as missing files or the very slow progress of other files. They dealt with itby requesting for official receipts.

• Mrs. Ito Ugbana, Company Secretary, MTN Nigeria- In response to the Pronatura question,MTN shared their own experience that corruption is usually prevalent especially in the areaof double taxation, laying of fibers (where people would want to extort money from thembefore they lay the fiber), site acquisition and that they dealt with it by not compromisingtheir stand after duly paying the legally stipulated fees and dues howbeit, according to her itusually delays the progress of work pace. She however, attested to the fact that thesepractices have reduced their cost of doing business.

• Mr. Oliver Stolpe, United Nations Office on Drugs and Crime (UNODC) Abuja- whiletrying to address the issue of the legitimacy of Siemens and its role in convening aconference on corruption noted that companies just like human beings do not displayconstant and unchanging behaviors. He stated that what was however important was what anindividual or company does once the aberration is noticed. He confirmed that at present hecould attest to the fact that Siemens now has instituted one of the most comprehensivecompliance systems that any corporation could have.Responding to the question that touched on the survival of companies in an environment of weak legal structures, he reiterated that the collective action framework spoken of by Mr.Osorio in the fourth presentation is one avenue by which this could be tackled.



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• Mr. Jose Cruz- Osorio, Corporate governance consultant, World Bank/IFC- Mr. Osorioalso addressed the issue of business survival in the face of weal legal systems and noted thatthe issue of weak legal structure calls for collective efforts on the part of stakeholders (theprivate and public stakeholders). He said that this would be necessary as a whole variety of issues needed to be synergized before things like hotlines/whistle blowing can be effective.Such things according to him include having a credible complaints system, a credible reviewsystem, and effective training of staff in ethical competence.

• Mr. Frank Nweke Jr., Director-General NESG – In his own reactions noted that the essenceof the day’s gathering was not for the reason of pointing accusing fingers, but for dialogue.He stressed that it was not about what an individual or corporation had done wrong, butabout what such an individual or corporation had been able to do afterwards to correct thesaid wrong doing and according to him, that is what Siemens as a corporation had succeededin doing so far.Commenting on Mr. Wale Adeleke’s question that touched on the issue of so calledcorporate organizations falsifying and inflating their financial statements, he pointed out thatit would require that more be done on the part of the appropriate regulatory bodies in charge.Also on MTN Nigeria and Oando Plc, he noted that the two corporations had done well andwere worthy of emulation.Finally, he attested to the fact that he had been in government and could tell that most of thetime that it was the private sector that came up with the shortcuts that government buys into.

Session ll: The Role of Financial Institutions: Risks and Challenges of Corruption

Chairman: Olusoji O. Apampa, Executive Director, Convention on Business Integrity (CBI).Speakers (i) Mr. Afiz Bakare, Head of Corporate Planning, (representing Dr. Lamido Sanusi,MD/CEO) First Bank of Nigeria;

(ii) Mr. Lawal Hakeem, Independent Corrupt Practices Commission (ICPC);(iii) Mr. Solomon Omorokewe representative of Mr. Francis Atuche, MD/CEO, Bank PHB

(iv) Mr. N.S Wokoma, Director, Nigerian Financial Intelligence Unit.(v) Mr. Akin Atalu, Deputy Director, Oceanic Bank represented Chief Mrs. Celia Ibru.

Mr. Apampa, chairman of the session in a remark appealed that the presentations at this session shouldnot be limited to Nigeria alone but to other African countries, noting that about 19 African countrieswere represented.

The Role of Financial Institutions: Risks & Challenges of Corruption – First Bank Perspective

Dr. Lamido Sanusi represented by Mr. Afiz Bakare spoke on the “FirstBank Experience in dealingwith corruption. The thrust of the presentation hinged on Financial Institutions (FIs) in Nigeria, whatis corruption, FIs and corrupt practices, FirstBank’s experience and policy response

The main Financial Institutions (FIs) according to Dr. Lamido Sanusi include: Banks, Insurance,Capital Market Operators, Pension Custodian and administrator. He explained that financialinstitutions generally allow trade in financial securities, commodities, and other fungible items of value noting that efficient financial markets ensure that prices reflect available levels of competitionand low transaction costs.

Furthermore, he noted that financial services sector is vital to economic development of the nationbecause of its significant role which includes generator of domestic savings, provider of investiblefund as well as allocation of financial resources to profitable sectors/entities. Until recently, the



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financial institutions was characterized mainly by the banking industry because of its operations withthe public in the area of deposits and access to credit, however, the recent reforms of the sector aswitnessed in other part of the world (like Kenya for example) has changed this perspective with theintroduction of new products/services and diversity of delivery channels. Continuing, Dr. Sanusinoted that intensity of competition has invited attention to the moral dimensions of the industry.Furthermore, the series of reforms in the sector have raised the industry’s profile. He gave anexample with the pension industry with assets under management in excess of N800bn (Dec. 2007)which has become a key player in the sector. The stock market according to him witnessed growthup to mid 2008, and also in 2007, the insurance sector rivaled the banking sector as one of the mostactively traded stocks on the NSE.

Corruption he said endangers the ongoing efforts to deepen the industry which also threatens theindustry’s ability to act as driver and catalyst of economic growth/development. Quoting fromWikipedia and Webster dictionary, Dr. Sanusi gave two definitions of corruption as “the dishonestexploitation of power for personal gain” and “any organised interdependent system in which part of the system is either not performing duties it was originally intended to or performing them in animproper way to the detriment to the system’s original purpose” Emphasising on the negative effectof corruption, Dr. Sanusi noted that NEPAD document made five references to the word

“corruption” and its adverse effect on the African continent while the NEEDS document, referred to“corruption” sixty (60) times which seemed to buttress the fact that corruption is indeed a key factorhindering development of the African economy.

Continuing, he said “The corruption quagmire in Nigeria is rooted in the failure and virtual collapseof governance, the contamination of democratic values, the erosion of procedures for accountability,and the prevalence of bad leadership” Thereafter, he highlighted some of the negative impact of corruption in the development of the economy as follows:

1. Corruption constricts the economy’s capacity to meet the peoples’ most basic needs;2. It adds to the domestic cost of doing business, without bringing any additional benefits;

3. The personal gains that lie at the heart of corrupt conduct are the nutritive medium for thetensions in the social fabric, whose very promise of random violence is the biggest threat tothose “who have made it”.

On Financial Institutions (FIs) & Corrupt Practices the paper raised the following questionsDid the froth in stock prices conduce to a subversion of processes?

• Was there a relationship between financial leverage and the talking up of share prices on thefloor of the exchange?

• Was unfair advantage taken of near-term share price gains?How complicit are the financial institutions in the recent indictments by the anti-corruption

agencies of serving officers of the state?

• Concerning Banks:

╴ How useful are the statutory requirements (KYC, anti-money laundering, etc.)?

╴ Are they compliant?

╴ How strong are the existing enforcement protocols?

Continuing, he gave the following as the most blatant unethical practice in the banking sector:1. Insider-related lending which he said included

Pervasive influence of family and related party affiliations that result in hugelevels of insider abuses and connected lending



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Resources allocated via insider-related transactions which distort the efficientworking of the entire system, leading to massive levels of sub-optimization;

Higher credit risks resulting from the subversion of proper credit allocationprocesses;

Loan defaulter2. Rendition of false returns to the regulatory authorities and concealment of information from

bank examiners;

3. Fraud and forgeries: Obvious increase in cases of fraud & forgeries are witnessed and as wellas increase in staff involvement in the act of fraud and forgeries.

Corruption according to him has the following negative effects on the financial market terms:

╴ Threatens the rule of law;

╴ Erodes public confidence in the markets’ price discovery function;

╴ Loss of confidence precipitates market seizures and

╴ Leads to a contraction in domestic output growth

Given First Bank’s experience, he informed the participant that it falls under corporate governanceand improved internal control.

First Bank’s Corporate Governance Practice according to the paper included pioneering industry bestpractices and delivering long-term value to its shareholders. First Bank did pioneered new industrydisclosure standards in its 2002/2003 annual accounts and has topped the Johnston Irving Consulting(JIC) Governanceplus Ratings since 2003; it has set up the Board Audit & Risk AssessmentCommittee. This committee is responsible for the internal audit/control function and risk assessmentand compliance functions.

The paper noted that First Bank’s Internal Control Practice included good recruitment policy; well-

defined responsibilities, segregation of duties; effective supervision, rotation of staff/prevention of key-man risks, authorization& approval, adequate training, continuous monitoring of integrity andinstitution of a sound disciplinary policy. Others include institution of a fraud policy – whistle-blowing policy; adequate documentation; physical control; regular process review; spot checks;strict compliance with known your customer (KYC); institution of a sound Corporate Governanceframework; regular audits; and effective prosecution of fraudsters.

Looking at policy response, the paper noted that the task in Financial Market terms involves thefollowing:

╴ Strengthening of regulatory infrastructure;

╴ Strengthened board of directors (better corporate governance practices);

╴ Increased shareholder activism , shareholders should begin to ask question about theirshares

╴ Enhancement of information flows, especially “bottom-up communication and

╴ Improved auditsIn conclusion the paper noted that the mechanisms for greater transparency across the financialmarket required that the regulatory infrastructure focus on anti - competitive behaviour, marketmisconduct, asymmetric information, systemic instability and market failure rather than on thehealth of individual institutions.



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Mr. Lawal Hakeem, Head Independent Corrupt Practices Commission (ICPC) Lagos,representing the Chairman explained that ICPC is basically meant to control the incidence of corruption in the public sector noting that some of the ICPC Acts has things to do with incidence of certain happening in the financial sector. ICPC according to him actually regulates corporategovernance issues, and also has the authority to carry out any investigation on the financialinstitutions. In addition, he explained that should any of the officials of the financial institutioninvolved in a case of bribery with respect to concessionary or in case of staff manipulation, ICPC hasthe power to investigate that official. Apart from investigating financial entities, Mr. Hakeeminformed the participants that ICPC also handles issues relating to other sectors. With regards tocrimes, he explained that section 15 of the Act allowed them to carry out an investigation on anysuspected organization/person and all information required regarding the crime must be disclosed tothem failure to abide by this will lead to ICPC suing the organization/person separately. There isalso a provision under the law that gives ICPC power to carry out studies and reviews of anycorporate body in order to know the level of compliance within the corporate body.

Continuing, he noted that corruption always occurs when the parties involved are looking forconcessions, and upon such event it can only bring the succession of corruption. He furtherexplained that no organization or structure is isolated even while practicing Social Corporate

Responsibility. He remarked that the public sector might demand for bribe but it is the duty forcorporate entities to say No to their demands adding that there is corruption in the private sectorbecause the public sector encouraged it. The public sector he said will always make demand andsince there is competition among the private sector, they will always give in to this demand. Headvice that individual/organization should shun corruption together, this he said was possiblethrough collective action than fighting corruption in isolation. He emphasized the need for synergyand this he believed will go a long way in the performance of Social Governance.

Nigerian Financial Intelligence Unit (NFIU) Perspective- Mr. Norman S. Wokoma

Mr. Wokoma stated that his organization served as a national repository for financial crime data.Giving a brief run down of the duties of the Financial Intelligence Unit, he noted that they received

information from financial institutions which enables his organization to monitor the activities of financial transactions in a bid to fight corruption that has to do with money laundering. He furthernoted that his organization did work in collaboration with other agencies and institutions such as theimmigration, customs, ministry of finance, and corporate affairs commission that have tracks of information which impact positively on the operations of the financial intelligence unit. He statedthat corruption usually does defy country boarders and that concerted efforts needed to be made on aglobal scale to fight the menace. He however noted that in spite of the synergy between otherinstitutions and his organization, the arrangement was not water tight as it was very easy forperpetrators of financial crimes to spot the weakest link and work on that link to carry out theirfinancial crimes. In closing, he stressed that collective action was the only way by which corruptioncould be tackled.

Bank PHB Perspective- Mr. Solomon Omorokewe, Representing Francis Atuche

Mr. Omorokewe said Nigeria is a country that has potential to be great but is not growing because of the corruption. The issue of corruption he said was very critical in the society stressing that ourresources are not optimize because of corruption. He emphasized that removing corruption from oursystem will not change the destiny of our nation, adding that it will still not be the solution becauseof the existence of a decayed society. Continuing he posed the following questions

• Are there corruptions in other societies?

• If yes, what is the level of corruption in these societies?



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• Has corruption affected the ability of these societies to advance to where they should be?

• What do our society recognized as failure or achievement?

• What do we celebrate and what do we reward?

• What do we sanction as a people and how do we sanction it?

• Is there a purpose for a collective interest?The focus he said should be more in cleaning up our value system. Further, he advised that the

institutional framework should be reviewed and the structures should be empowered as well asfunctioning properly. He stated that corruption should be first treated by checking the human make-up, for instance in corporate organizations, people’s values and goals should align with theorganization’s mission and vision, although, as individuals we are prone to selfishness and self centeredness. He recommended that issues should be treated in an enlightened self-interest andindividual objective should meet collective objectives noting that if as an individual we all take astand against issue of corruption, we will reap the benefits in the nearest future.

COMMENTS, QUESTIONS and ANSWERS

Comment: The development of cashless system will further reduce corruption; also there should bea limit to the amount of cash withdrawals from the banks so that fraudulent and corrupt practices can

be traced.Comment: Nina (Malawi) - In establishing audit, ethic, code of conduct etc committee, we need tobe mindful. The issue is not about establishing these committees as a box ticketing exercise, butensuring that they are duly followed to the latter “working the talking”. It is wonderful and nice toset up rules, audit and compliance units, and investigation frameworks but if they are not properlyintegrated and enforced, it will amount to wasted efforts and resources.Question: Does your audit committee report in your annual reports any fraudulent act/activities thatwas not raveled during the reporting period?

Question: What are the regulatory bodies doing to ensure corrupt free financial institutions such asmoney laundering?Comment: Global Compact Kenya: You will acknowledge that corruption has a lot to do withbusiness. In Kenya, 10% of firms confirmed that corruption is one of the major cost of doingbusiness, 1/3 of their profit goes to corruption, this in addition to paying taxes. Do we go out of thisforum today without changing that attitude? We need to change the way we do things in our variouscountries. We need to set targets before the end of this forum for instance we should be able to saythat in 2009 this was the level of corruption in our continent and when we meet again next time weshould be able to compare the level to ascertain if corruption has fallen or it has increased.

Question: What can United Nation Global Compact (UNGC) do to lobby our government to cleanthe system from corruption?

Question: I would like to know what sort of data the Nigerian Financial Intelligence Unit compileswhen we take into consideration the fact that we do not have social security system or numbers(national identity system) that can easily link an individual to a financial crime.

Question: Banks are in the business of making money, how do financial institutions react when theydiscover that one of their esteemed customer has been bringing unclean deposit, how do theymanage the conflicting interest of making profits and at the same time protecting the interest of thecustomer thereby boycotting the laws and regulations.



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Question: What is the moral justification in the recruitment of young ladies by banks to market withridiculous target which must be met, in most financial institutions? Also what are the moralresponsibilities of these banks especially looking at the future of these ladies?

Question: Is there a concrete statistical data relating to reporting financial fraud within the society,so that it can be traced and monitored? On the issue of gift, where do you categorize Obasanjo’slibrary? If you say it is for the public, will you say that the whole N7bn was actually spent for thelibrary?

Question: Is it possible to have a self regulation if you don’t have some underlying motivationalforce that will keep you focused on that objective?

Question: What can be done about corruption that emanates from examinations malpracticesbecause most of the people involved in this act can never fight corruption truthfully?

Comment: The solution to our entire problem is reorientation. There is a disconnect here as thegrass root people have been disconnected from the government and the private sector. We have to goback to the grass root level and reconnect them with the government and the private sector. If you

are interested in reconnecting the grass root with the others it is necessary that you join the Coalitionfor Issues-based Politics and Good Government (CIPOGG). We have been organizing localgovernment town hall meetings to re-educate the grass root about their civic rights andresponsibilities thereby closing the gap between them, the government and private sector.

Question: How do we tackle the problem of pilfering of customers’ money through unauthorizedbank charges? This is another form of corruption in the financial institutions and how effectively dothey do “Know your customer” (KYC)?

First Bank Response:

On the issue about the audit committee, it is not about box ticking. These are committees of the

board which help in the areas of corporate governance. The statutory audit committee can be equatedto box ticking because it is statutory; it is the shareholders of the banks that have to vote for aparticular committee. Other committees cannot and should not be equated to box ticking. It wasnecessary for us to have more above what is statutory that was how the audit committee such asKPMG was created. All their findings (the Audit Committee) during any period under review arealways stated in the annual report.

Mr. Wokoma, Nigerian Finance Intelligence Unit (NFIU), Abuja- Responding to the questionconcerning the type of data his organization collects vis-a-viz social security numbers, explained thatthey had several identification mechanisms in place amongst which are the national drivers license,international passport which were of course fraught with manipulations and forgery. He however

stressed that the short comings of these types of identification systems was what necessitated theneed to have other mechanisms in place such as signatures and passport photographs when carryingout certain financial transactions. Shedding light on the type of data that his organization collects, hementioned the following: currency transaction report and suspicion transaction report. He furthernoted that his organization was in collaboration with other agencies such as the Immigration,Customs, Ministry of Finance, and Corporate Affairs Commission that have tracks of informationthat add value to their own operations. Such value, according to him, can be illustrated as follows:When a person uses a forged passport or drivers license it becomes a bit easy to track down such an



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individual as a result of access to the database of the other organizations that the NFIU is inpartnership with.

More responses to some of the questions:

i) The bribe that comes is mostly in cash form and not cheques, but at the same time corruptionissues is also at the local level. In addition the issue of gifts cannot be underemphasizedbecause when people do such, they do so in response to a favour or in anticipation of one yetto come. Furthermore, the development of Share Transfer and Electronic transfers makes itpretty difficult to trace corruption. The corruption in the Public Sector is endemic because of lack of transparency and accountability of whatsoever and it started during the militaryregime in Nigeria, when people in authority could not be held responsible or accountable totheir citizenry for the actions.

j) This corruption issues boils down to our value system, integrity and personality involved andthat is the reason we should all go back to the drawing board and start reorientation from thegrassroots. Topics on attitude building and values should be incorporated into the educationalcurriculum of the right from the primary school level.

k) It was established that there are penalties, fines, requirements for sack, and revocation of banking license. But the sanctions can only be founded when there is a political will andmechanism to implement them.

l) Money Laundering issues should be reported to the Central Bank of Nigeria, regardless of the person involved (being a worker within the financial institution or not) and the Chief Compliance Officer must be charged with the responsibility of ensuring that all members of staff comply with laid down rules. And all financial institutions must clearly separate InternalControl from Internal Audit. On the issue of bank charges, the CBN is really doing its work.It has asked the banks to publish their various charges and rates so that there will be a

common knowledge to all their customers. Please note that once you are over charged, youhave the right to report to the appropriate authority because there is a policy on this.

m) Self regulation is good but must have a minimum standard.

Session III: The Political Economy of Corruption and Collective Action as a Tool to Fight

Corruption.

Moderator: Dr. Chibuzo Nwoke, Director, Nigerian Institute of International Affairs

Speakers: (i) Mr. Muazu, Lagos Head, Economic & Financial Crimes Commission (EFCC),(ii) Mr. Soji Apampa, Executive Director, Convention on Business Integrity (CBI),

(iii) Chief J. Schroeter, Chief compliance Officer, Siemens Nigeria Ltd,

(iv) Dr. Demola Ajayi, First Deputy President, NACCIMA

(v) Ms. Michelle Ntab, Business Action against Corruption Africa,

(vi) Michael Jarvis, World Bank Institute,

(vii) Mr. Norman Wokoma, Director, Nigerian Financial Intelligence Unit (NFIU) Abuja.



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1 st

Presentation: Mr. Muazu, Lagos Head, Economic & Financial Crimes Commission (EFCC) -

He apologized for the absence of is chairman, Chief Mrs. Farida Waziri. He then thanked theorganizers for the thoughtfulness of choosing this theme especially at a time as this when corruptionhad remained the greatest threat to the collective survival of Nigeria. On the socio-economicconsequences of corruption, he stated that the effects of corruption in both the public and privatesectors have the greatest negative repercussions on the growth and development of nations. Inaddition he added that it undermined democratic processes and threatened political stability, affectedinfrastructure, impacted negatively on public revenue, bred unemployment, insecurity, poverty, anddisease which is currently prevalent in the Nigerian society. It was his opinion that the fight againstcorruption did certainly call for collaborative effort between Nations and such International agenciesas the UN the EU, the World Bank and others. Touching on government efforts, he stressed that thegovernment had no doubt demonstrated the needed political will and desire to fight corruption byestablishing specialized agencies and empowering them with enabling laws to combat corruption.EFCC as one of such agencies according to him was in constant partnership with the United NationsOffice on Drug and Crime and other agencies alike in the global fight against corruption. This in hisown words is what collective effort is all about. In conclusion, he thanked the conveners of theforum and urged all and sundry to make the fight against corruption everybody’s business.

2 nd Presentation: Mr. Soji Apampa, Executive Director, Convention on Business Integrity (CBI) -Separating the private from the public realm, he argued that the public realm of Nigeria typified thepublic realm in all of Africa; in which before the colonial era had only one public (ourcommunities/primal public) and with the advent of the colonial era, two publics characterized intothe public with western exposure (civic public) and the public without western exposure (primalpublic). The segregation of the ‘publics’ brought along with it what is known today as corruption. Heexplained that the “primal public” during the colonial era had only one mission which was tosabotage the efforts of our then colonial masters, and after the colonial masters left the “civic public”took charge and the same attitude of sabotage on the part of the “primal public” continued; the gapbetween the two publics, as we know them today, kept on widening and has becomeinstitutionalized. This gap between the two publics’ sustained corruption over the years, and the

advent of military rule further worsened it through the formation of ‘mafias’ which only served toincrease this disunity.This scenario, he explained, was the reason why the formal institutions in Nigeria and Africa as awhole are not as binding on the behavior of individuals as does that of the informal institutions. Thiswas also the reason why the government has been seen as something that has power but nolegitimacy, and as a result those in power have to continue to buy their place at the table of powerfor the control of ideology, control of resources, control of public policy and control of the use of force. He then sought the way to fight corruption by saying: “let’s have a whistle blowing framework”The solution to the fight against corruption in Mr. Apampa’s opinion laid in the fact that theobjective of Collective Action should be to close the existing gap between the “civic public” and the

“primal public” through re-orientation of our core value system. According to him, it would requirecollaboration between business, government, and civil society. He noted that these stakeholderswould have to identify how to close the gap, and would need a socially constructed set of ruleswhere it is through our behavior, our doing it, our working at it that we stand to create a new realitythat becomes institutionalized. He advised that to do this the stakeholders’ involved would needsomething that is anchored in civil society (that space that is not occupied by government) and not ingovernment to achieve this objective.



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3 rd

Presentation: Chief Jochen Schroeter, Regional Compliance Officer, Siemens Nigeria Ltd- Chief Schroeter confirmed the fact that about two years ago, Siemens was shaken by corruption anda lot of the management staff were surprised because many of them had no idea whatsoever of whatwas going on or how it turned out to be so bad. This according to him prompted Siemens afterwardsto adopt very stringent and tough measures to combat the menace. He stated that they had adoptedtwo forms of collective action namely – project-specific agreements and long-term initiatives indoing so. Under the project specific agreements he explained that all bidding companies wererequired to sign an Integrity Pact issued by the Public Sector customer with the tender involved.This he said made equal and fair anti-corruption standards possible, external monitoring of tenderprocesses, and sanctions applicable in case of infringements, while the long-term initiatives on theother hand consists of components that pave the way for clean business in any country of Siemens’operations. To shed more light on how these components of collective effort have been working inSiemens he did a breakdown of a project the company handled recently in Berlin as follows:The project was in Berlin airport, the volume was 2 million euros, and duration of 5years. Theintegrity pact was done together with the Mayor of Berlin in 2005 and a tender was issued. He notedthat the integrity pact brought benefits of varying degrees to the three major stakeholders involved(customer, the city of Berlin, and the contract bidders), while Siemens enjoyed low costs as a resultof the clean business that transpired among the parties involved.

In conclusion, he stated that Siemens would continue to uphold and sustain the principle of collective effort through the application of Integrity Pact, Compliance Pact, and Independent 3 rd Party.

4 th

Presentation: Dr. Demola Ajayi, First Deputy President, Nigerian Chamber of Commerce,

Industtry, Mines and Agriculture (NACCIMA)While noting that corruption was a phenomenon unlimited by politics or geography, he stressed thata ready climate for corruption was usually fostered by lack of transparency at any level, coupledwith lack of a free press and democratic systems devoid of checks and balances. HighlightingNACCIMA’s effort so far, he stated that NACCIMA had established a Business Ethics andArbitration Committee to monitor and ensure compliance by NACCIMA members to best practices

and transparency in their dealings. He further noted that NACCIMA collaborated with Transparencyin Nigeria (TIN) in 2000 to organize a workshop on “Integrity Accord for Public- Private Sectors.He concluded by stressing the need for the leadership, political will, and public support componentsof collective effort to be upgraded for effective control and eradication of corruption in Nigeria.5 th

Presentation: Ms. Michelle Ntab, Business Action against Corruption Africa-In her short presentation, she stressed that it was important for multinationals to begin to learn toplay by the laws and regulations of the African countries that they operate in. She noted that it wasnot enough collective action for these multi nationals to abide by the laws and regulations of othernon-African countries that they operate in and do otherwise in African countries.She then called on African countries to rise up and ensure that these multinational do comply withregulations, because the companies in question had no reason not to comply. This according to her

would help in stemming corruption.

6 th Presentation: Michael Jarvis, World Bank Institute- Michael stated that the problem of

corruption happened to be an overarching one that called for several approaches for it to be tackled.According to him the World Bank Institute happened to be in collaboration with several bodies in allsectors cutting across the globe in its fight against corruption. He then referred participants to theWorld Bank Institute website on corruption for more details- www.fightingcorruption.org .

COMMENTS, QUESTION AND ANSWER SESSION



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1. Comment: It will interest everyone here to know that NEPAD is an instrument that is supposedto drive the African Peer Review mechanism, and I am shocked to note that not even one of thespeakers in this conference could link NEPAD with our discussions. This brings to bear the pointthat there seems to be that disconnect in terms of what is happening locally and internationally.

2. Comment: I observed throughout that none of the speakers mentioned a reward mechanism inplace for corporate organizations that have been performing excellently in terms of corporategovernance and anti corruption practices.

3. Question: Ghanaian Participant- Don’t you think that our present form of governance is ratherwidening the gap between the two polities and also, do you agree with me that our traditionalsystem is one of the best forms of collective action?

4. Comment: Ivorian Participant – We need to critically look into how we can utilize the media(the television in particular) in our fight against corruption.

5. Comment: Nigerian Participant – When the political spectrum is wrong, the economy will bewrong and vice versa. The inequalities of opportunities in the society breeds corruption. This isseen when a rich man steals money and a trial is started, what we see is that this trial goes intolimbo and the man is walking about as a free man. The signal that this gives to others is that theyare free to do the same thing. Therefore there is the urgent need to have a political equilibriumwithin society. Now we have been discussing all day and I am surprised that neither Lagos State

government is officially represented here nor any of the other states of the federation.

ANSWERS

• Mr. Soji Apampa, Executive Director, Convention on Business Integrity (CBI) - tried toaddress the question posed by the Ghanaian participant concerning if our present system of government does more to widen the gap between the publics. He thought that it had more todo with the present way in which we conducted our politics that widened the gap. On theissue of whether we should go back to our traditional systems, he noted that the traditionalsystems were not uniform and that not all aspects of our traditional systems happened to beuseful and as a result should not be advocated. He thought it would however be nice if wecould import some of the good parts of the traditional system into our present system of

governance.• Dr. Demola Ajayi, First deputy president, NACCIMA- Tackling the question that had to do

with the African Peer Review Mechanism (APRM) and New Economic Partnership forAfrican Development (NEPAD), noted that NACCIMA does play it part in NEPAD eventhough it was not officially represented. Touching on the subject of reward processes forcompanies that do not dabble into corruption, he noted that NACCIMA is hoping to begin togive such companies awards and publicize such companies.

Vote of thanks- Mrs. Olajobi Makinwa, UN Global Compact- Mrs. Makinwa thanked allparticipants (especially those from outside Nigeria) for attending the conference. Her specialthanks went to the following sponsor and supporting organizations: MTN Nigeria, Oando Plc,

Siemens, Poise Nigeria, Neimeth International Pharmaceuticals Plc, Standards Organization of Nigeria (SON), and the Convention on Business Integrity (CBI). Words of appreciation wereexpressed to the event organizers and the UNGC secretariat – Nigerian Economic SummitGroup, resource persons, and the media. She stated that it was her hope and belief that the takeout from this conference would chart a better course for the fight against corruption in Africa andthe world at large. With these final comments she officially pronounced the close of the 2009UN Global Compact Regional Conference in Africa.



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DAY 4: 19th March, 2009. Africa Regional UNGC Meeting

Meeting of UNGC Africa Focal Points

The UN Global Compact convened its second Regional Meeting for Focal Points of Global CompactLocal Networks in Africa as part of the Africa Regional meeting. Following the conference“Business Taking a Stand in the Fight against Corruption,” it brought together participants from 12country networks to discuss the key issues and challenges in creating sustainable networks.

The meeting featured some examples of focal point activities from Kenya, Malawi, Zambia, andGhana. Despite some major challenges for networks in Africa, they all show commitment and driveto continue to expand and strengthen their networks even during the current financial and economiccrises.

The meeting started at exactly 10.00am, with each of the local network representatives introducethemselves while emphasizing the high points of their activities in the previous year.

There were representative from Ghana, Malawi, Nigeria, Uganda, Kenya, Sudan, Morocco, SouthAfrica, Cote d ’ Ivoire, UNIDO and within the UNGC itself.

Majority of the Local Network stated that the bulk of the challenge they faced last year was theproblem of resources and how to report on the COP. The Zambian experience particularly indicatedthe need to organize another training on COP and how to write the report due to the fact thatmajority of the African focal points were not at the Mexico Meeting.

Feedback on the Workshop and Conference

Morocco delegate’s expectation was to learn how to create and implement the Collective Action as away to moving forward from the position at the moment, and this was achieved at the end of theworkshop and conference.The Senegal delegate complained that the conference was not interactive enough and the layout not

lively.The Cote d’ Ivoire delegate commended the efforts of the Local Network in Nigeria by pulling theconference off and said it was a good step in the right direction. He was however concerned that thewhole content was too Nigerian with a lot of speakers from Nigeria because it was hosted in Nigeria.Observing also that there was no enough statistical data about corruption in the presentations, he saidthat overall the workshop was an eye opener and a courageous move by the Nigerian Network whichwill remain a learning process for other Networks and an icebreaker for regional Meetings.

The Nigerian Network explained the idea of the workshop was to address the issue of corruption as acollective enterprise and to learn from each other, further confirmed that the workshop was an eyeopener because most of the organizations present at the meeting now see corruption in a brighter

light as a very important menace. It argued that the Nigerian Network deserved to be praisedconsidering the short time frame and most importantly discussing corruption openly is not an easytask.

Mrs. Olajobi Makinwa, talked about the issue of funding because the organizers run with little or nofunding. She further explained that there was supposed to be a regional representation but the otherspeakers from other regions refused to come citing Transparency International from Lebanon andEgypt as examples of those who declined their attendance at the 11th hour.



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It was further discussed that Investment and Trade opportunities should be integral to the discussionof the meeting because corruption affects trade (and business) bottom line which is the concern of every business person. It was also agreed that we can diversify by sharing country experiences,narrowing down the gap between government, private sector and civil society. Importantly it wascounseled that Global Compact should be seen as an opportunity for every organization to improveon its performance and that it is not strictly for the best or the champion companies.

Nina from Malawi zeroed on the presentation of OANDO in driving the Anti-corruption strategy bysetting up Ethics Office and appreciated the putting in place of appropriate operational structures bythe company.

Also, there was a suggestion about introducing the perspectives from SME’s instead of the big firmsonly and the introduction of a session on Resisting Extortion in International Business/Sales andTransactions. It was generally agreed that each country should reflect on the conference and see howthey can improve on it in subsequent editions. The presence of both public and private sectordiscussing at the meeting was particularly considered the most important value added.

Global Compact Local Network Africa, Management and COP Status

There were a total of 16 networks in Africa, presenting different peculiarities in different Africancountries. The engagement of Civil Society in respective countries was agreed upon to demand aserious need for training of network members especially on the COP. Regret was expressed on thefact that the UNGC has not been able to determine what the minimum on the COP is and how toimprove on it. Given that there are challenges of putting structures together within the local network,the use of the word ‘delisting’ was considered too strong, sensitive and connoting ‘anger’. However,Peter explained that ‘delisting’ happens after 2 yrs of non-submission of reports, 1 year of non-Communicating on Progress and another 1 year of staying out of reach or touch, which amounts tothe grace of 4 years.It was suggested that the example or template for writing a COP should be placed online since theformat for the letter of application or request to join the Global Compact is online. Also it was

considered that the previous policy should be revised so that focal points should be contacted at least90 days before any organization within the network is ‘delisted’. It called for country-based reportsto be championed by the leaders in the Network.

Financing the local network steering committee was also discussed. It was advised that each network should engage multinational companies for this purpose.

MOU Signing by Local Network

- GCO Commitments

• Inform the GCLN on key development and issues related to the overall governance of the

Global Compact Initiative.

• Regular update of the GCLN on the upcoming event and provide advance notice

• Communicate relevant information regularly.

Requirement of Local Network The networks were required to:

• Commit to the 10 principles of the Global Compact.

• Hold a minimum number of events/ activities annually



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• Display a willingness to participate/ support activities of participation to develop a

communication on Progress

• Proactively manage and protect the integrity of the Global Compact Initiative and

develop the capacity to form solution to situation dilemmas among participants in the

network

• Engage companies/ NGO on the local Network, by producing annual activities report

• Identify a person to liaise with GCO on day to day issues related to the running of a

GCLN

• Nominate a person authorized by the GCLN to act on behalf of the LN at the Annual

Local Network Forum and in the management of the Network Logo.

Going Forward (Other Issues)The next Annual Local Network Forum billed to hold in Istanbul June 9-10, 2009 was announced.

Aalso announced was the Global Compact Leaders Summit to hold on 24-25 June 2010 in NewYork. There will also be the 2nd UN Private Sector forum; Climate Change in September, 2010 andthe World Business Summit on Climate Change 24-26 May, 2010 in Copenhagen, Netherlands.

It was agreed that in subsequent global meetings, developing countries should be involved in theknowledge fair and other engagement opportunities.

Peter further explained that each organization will have to do reporting on the 4 thematic area of theGlobal Compact namely, Labour, Environment, Human Right and Anticorruption over a period of 5years stating exactly what was done and the impact in terms of quality and other factors. He statedthat COP is strictly for Private Companies.

Group breakout

Subsequently, members of the African Network broke into 2 groups to discuss the challenges, Wayout, how the Global Compact can come to our rescue and ultimately what we can do to help eachother.

Challenges

• The issue of sustainability was a m major challenge especially in Kenya which

experiences lack of resources.

• How to establish a tripartite cohesion between the government, CSO and the private

sector

• Commitment of the member organizations to the 4 thematic areas which must all be

reported within 5 years

• Translating government willingness to fight corruption

• In Sudan, neglect of SME’s was a major challenge because most of the big companies

belong to government officials.



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• Private sector capture by the public/government sector unlike the SME’s

• In Senegal, a total absence of support from the UNGC Headquarters was raised as the

network concern

• Absence of formal linkage or relationship between the Local Network and other UN

Agencies in each country was considered a big gap

• The need to start all over again and re-launch the Local Network in Senegal

• In Nigeria, there is the issue of resource scarcity to run the programme

• Development of Programmes for the implementation of the Initiative is critical

• The need to strike a balance in the Public and Private Sector participation and

implementation of Compact initiatives.

• Creation of awareness and outreaches also presents some challenges.

• Language barriers in publications.

Strategy/Solution

• Resource mobilization could be carried out through partnerships, sponsorships and

membership fees for sustainability.

How to Help Each Other

• Peer Review

• Online Community for sharing of information and ideas

• Research and Surveys

Going forward, there was a consensus among African Local Networks to more closely coordinatetheir work especially with regards to the preparations for the 2010 Global Compact Leaders Summit,and to continue to share with each other lessons learned and tools and guidance materials in order tobenefit from each other’s experiences in rooting the Global Compact in the African context.



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Appendices:

Appendix 1: Business Against corruption (BAAC)- The Malawi initiative (PowerPoint)Appendix 2: Corporate Governance as a Tool to Fight Corruption: The MTN Perspective(PowerPoint) Appendix 3: Corporate Governance as a Tool to Fight Corruption: Oando’s Perspective(PowerPoint)Appendix 4: The Role of Financial Institutions: Risks & Challenges of Corruption – First Bank

Perspective (PowerPoint)Appendix 5: Political Economy of Corruption and Collective Action as a Tool to Fight Corruption

(PowerPoint)

Appendix 6: Fighting corruption through Collective Action- What Siemens can do to drive fairmarket conditions (PowerPoint)

Appendix 7: List of Participants (by organizations/ institutions)



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Appendix 7: List of Participants

Name Designation Company/Address

Mrs. Makinwa Olajobi Head Anti-Corruption UNGC

Mr. Bello Azeez Chief Inspector Kakawa Discount House

Miss Fatona Feyisayo NESG

Bello Abdul MD UAC Property Plc

Stolpe Oliver Snr.. Proj Coordinator UNODCOlanto Teju Research Manager CBI

Dennis Florence Executive Secretary Ghana Anti-CorruptionCoalition

Nwaiwu Fortune Research Executive NESG

Agbebaku Uaboi G. Legal Adviser NB Plc

Jide C. Chukwuemeka Director Ethics Institute

Kimilu Damaris Corporate Affairs Kenya Association of Manufacturers

Fundenga Rosano Coordinator Global Compact

Zowan Gabriel Consultant JWA/UNODC

Abdullahi Ahmeo Head Compliance Bank PHB, NigeriaDr. Okereke Peter Executive Director Save Visions Africa

Ebrahim Haneif Head of Corporate Affairs Deloitte Johawnes SouthAfrica

The Managing Director FAN Milk Plc

Isibor Mavi CEO Poise Nig Ltd

Marc-Danodu Modupe Manager Poise Nigeria

Njanji Susan Media Agence Trance Presce

Eriodu Buchi Business Manager Poise Nig

Soile Oluwayemisi Administrator CBI

Yemisi Ransome-Kuti Executive Director NNNGO

Owofadeju Imoleayo Programme Officer Africa Leadership ForumSenge Miebi Researchers XLR & Consulting

Gbadamosi Wumi Consultant CIPE

d. Femi RMG

Okoruwa Harry Consultant XLRS

Prof. Nwoke Chibuzo Director NIIA

Nwanze Charles Snr. Programme Officer NESG

Diyaolu Kehinde Manager Oando Plc, V.I

Olagubu Olasunmbo OANDO Lagos Nig

Olaniyan Adenike Corporate Secretary Oando Plc, V/I

Bassey Mathias S.O.NNwosu Chinenye Trainee Oando Plc V.I, Lagos

Rosa Are Researcher NESG

Beauty Alfred Researcher / ProgrammeOfficer

NESG

Laura John Research/Executive NESG

Raji Kamar Lawyer Siemens

Peterson Soren Head, Global Compact UN GC

Cruz-Osorio Jose Consultant Global CompactGovernance Forum

Agbazue Tagbo ADVISER African Institute of

Corporate CitizenshipOkiyi Robert Chief STD SON



43

8. Nigeria Local Network Steering Committee

1. Nigerian Economic Summit2. Nigerian Institute of International Affairs3. Africa Leadership Forum4. Coca-Cola Nigeria and Equatorial Africa Ltd5. MTN Nigeria6. Pro-Natura International Nigeria7. Platinum Bank Limited (PHB)8. Neimeth Int. Pharm. Plc9. POISE NIGERIA

10. The Convention on Business Integrity (CBI)

9. Nigeria Focal Points

A frica Leadership Forum

Th eNiger ian

EconomicSummitGroup

RC: 303317

Secretariat

10. Organizing Sub-committee

1. MTN Nigeria Communications Ltd

2. Nigerian Institute of International Affairs3. Coca-Cola Nigeria and Equatorial Africa Ltd4. POISE NIGERIA5. Pro-Natura International Nigeria6. Siemens Nigeria Limited7. Platinum Bank Limited (PHB)8. Neimeth Int. Pharmaceuticals Plc9. Nigerian Economic Summit Group (NESG)10. Africa Leadership Forum (ALF)11. The Convention on Business Integrity (CBI)12. Oando Plc



11. Sponsors

report on un regional meeting africa 2009 lagos

Documents