Corruption can be substantially denoted as a hurdle in social and economic growth across the globe. It has adverse effects on considerable development and specifically put negative impacts on under-developed communities.
For organizations, corruption imposes serious legal and reputation threats, hinders the business development and rockets costing. Hence, new and stricter laws have emerged throughout the world to combat corruption. Organizations are required to have vigorous anti-corruption tactics and wise approaches to tackle risks that can be inherited due to corrupt practices. To protect their reputation and sidestep any possible legal suit, organizations must have valuable measures to fight corruption.
How Anti-Corruption Laws Evolved?
Since last decade, there has been a significant development in the international legal framework to fight corruption. The development is indicated by the conventions such as the United Nations Convention against Corruption (UNCAC) which currently has 168 parties, the convention started its journey in 2005. The Convention on Combating Bribery of Foreign Public Officials in International Business Transactions is another indicator of the development, it took effect in the year 1999 and currently encompasses 40 states parties. The Inter-American Convention against Corruption and the African Union’s Convention on Preventing and Combating Corruption are the regional indicators of a significant development in the fight against corruption.
Domestic Laws such as the European Union’s anti-corruption act outlined in the article 29 of the Treaty on the European Union have a direct impact on the business and the level of corruption as these laws persuade the government to convict the corrupt businessmen and the parties involved in such activities. One thing that the aforementioned conventions can do is to hold the legal officials responsible and answerable to the state for not being vigilant about the corrupt practices in their domain, the OECD Anti-Bribery Convention is an example of this practice. The convention has outlaid instruments that require the member states to impose codes of conduct and adopt international controls of ethics that may be necessary to eradicate bribery and corruption from the relevant institutions and companies. In 2009, OECD issues a “Good Practice Guidance” on international controls and ethics to support the provision. The AU needs to do the same, it needs to involve the private parties and the men in charge to work in compliance and develop strategies to combat corruption. These conventions are backed by the World Bank’s system of sanctions that it can impose, the bank is authorized to issue an elimination notice to the convicted party and ask for the indemnity of the illegally attained resources.
Matching with the Global Compliance Standards of Anti-Corruption
The US Foreign Corrupt Practices Act (FCPA) and the UK bribery act have a central place in the plea of anti-corruption laws. A similar responsibility is to be shown by the relevant authorities around the globe. The institution of BRICS (Brazil, Russia, India, China, South-Africa) have enacted laws to begin its journey of fight against corruption, another example is the signing by forty countries on the OECD anti-bribery convention which requires convicting the foreign public officials in found guilty and to ordain measures of the implementation of these laws in via domestic legislature.
An effective and universal anti-corruption program is a strenuous task in a way that it may be counterfactual to neglect the local community and the related laws and impose the one empyrean law everywhere. The multi-national companies and other pertinent ascendancies should lay down the measures to substantiate the compatibility of these universal anti-corruption laws and the local community.
The US FCPA and its endorsement by several countries illustrate the emblem of a competent anti-corruption compliance program. It is one step ahead of the OECD guidance program. World Bank, International Chamber of Commerce and the Transparency International have also played their role by recommending these guidelines.
Let us have a look at the core components of a compelling anti-corruption compliance program.
- The top community needs to start the plea in order to embolden the process of anti-corruption. It is believed that corruption is a culture, it can never be terminated immediately, and it requires a rival culture that promotes anti-corruption standards and practices. These are best spread if the communities at the top, the top officials adopt them.
- The states need to have a distinctly articulated corporate policy to culminate the threats of corruption. The laws should be made public and every individual should have easy access to the relevant anti-corruption authority.
- If the anti-corruption program is to be implemented successfully, the relevant higher officer would require having the autonomy. The companies need to make sure that it happens. It will enable the oversight by senior corporate officers. For example in Canada, the companies are required to establish “Direct Reporting Obligation” to “Independent Minority Bodies” which oversee the compliance with the relevant international standards.
- The authorities should focus more on the high-risk areas, according to the OECD, high-risk areas include political contributions, charitable donations, solicitation, facilitation customer travel and as such. The FCPA guidelines highlight that the companies should depreciate the high-risk factors to motivate anti-corruption program.
- The companies in the field of financing and accounting should have stronger internal controls. The Brazil’s Clean Company Act takes into account the internal control and audit when it implies penalties. The internal controls should be given the preference and value to promote a culture of anti-corruption.
Corruption hinders growth in almost every field. The international anti-corruption compliance program roars to eradicate the plague of corruption by following some of the practices we just discussed. Besides these, the companies need to be consistent and periodic in their approach. A positive approach towards the compliance program should be encouraged and the supporting employees should be looked after. The companies should hold periodic reviews to enable a dynamic anti-corruption program. Corruption is a culture, it can be quashed and defeated by acclimating an anti-corruption culture with the help of international compliance program.