Last week ushered in the lunar new year for 2015 – the year of the sheep (or goat) according to Chinese zodiac watchers. Sheep have long proved useful for their fleece, but it’s a different kind of fleecing that concerns us here. The sustainability initiative the B Team believes that it is time to dig the dirt on international corruption and shine a brighter light on the activities of those responsible.
This is also a big year for the 10 nations of the Association of Southeast Asian Nations (Asean) , which are on their journey towards economic integration. One of us (chairman of Volans, John Elkington) was in Bali recently for the Asean Next-Gen CSR Forum, where the fight against corruption was in the spotlight. Interestingly, the Indonesian president Joko Widodo, who had been announced as a keynote speaker, came under fire that week because of his choice of an allegedly corrupt general as his new police chief, which he later withdrew.
Whatever the facts in that case, Transparency International reports that corruption plagues most countries in the region. The average score for Asean countries covered in their 2014 Corruption Perceptions Index was 38 out of 100. (A score of 100 is considered very clean and a score of 0 is considered highly corrupt). Strikingly, almost 50% of people polled in six Asean countries believed that corruption had increased, while only a third thought that their government’s efforts to fight corruption had been effective.
Nor are such concerns confined to the Asean region. China has seen anti-corruption efforts intensify since President Xi Jinping flagged graft, or political corruption, as a top priority in 2012. Critics may query his motivations, but the real human impact was underscored when the Communist party launched an inquiry into the number of its officials and members committing suicide during anti-corruption investigations.
The inquiry is probably not motivated by humanitarian concerns. Instead, as the Financial Times reported, the concern may be that such suicides “bring about the end of any investigation into the alleged corruption, protecting any accomplices or associates and allowing families to keep assets, ill-gotten or otherwise. Officials found guilty of corruption are not only handed lengthy prison sentences or even the death penalty; they are and their families are invariably stripped of generous state pensions and all of their assets.”
In Brazil, meanwhile, the spotlight has been on Maria das Graças Foster, who rose from one of Rio de Janeiro’s most dangerous slums to become chief executive officer (CEO) of Petrobras. The state-controlled oil giant has been embroiled in the largest bribery investigation in the country’s history. She eventually lost her job, though her successor inspired little immediate confidence.
Corruption comes in many varieties and is not limited to certain regions. Consider campaign finance in the US. Climate change campaigners were deeply disappointed last year by the failure of Tom Steyer, a former hedge-fund manager, to counter heavy spending by pro-fossil-fuels organisations such as Americans for Prosperity – a cleverly branded front organisation for the rightwing Koch brothers.
Steyer is thought to have spent at least $57m to get climate change on to the agenda – while the Koch brothers are estimated to have spent about $290m on various causes last year. Some may see such financial arms races as modern democracy incarnate, but – to borrow from the Occupy lexicon – it often seems that the 1% are buying the right to impose unfair and unsustainable outcomes on the 99%.
In last year’s letter to the G20, the B Team spotlighted the adverse impact of beneficial ownership and anonymous shell companies, long targeted by nongovernmental organisations (NGOs) such as Transparency International and Global Witness. About $1 trillion a year is siphoned off from developing economies, with such companies routinely serving as getaway vehicles for the illegal diversion of resources.
Happily, some solutions are simple. One of us (founder of Celtel International, Mo Ibrahim) experimented with a fairly basic approach to help local Celtel CEOs and employees deal with requests for bribes. A new policy required that any cheque for more than $30,000 be approved. The level was set low so that when a minister or other official asked for more, the Celtel employee could say: “You’re asking for two million? I need to write to the board for permission.” Few government officials went the next step.
Ultimately, corruption is a cultural issue. Britain, for example, was probably the most corrupt nation on earth during the slavery era – with campaigners such as William Wilberforce targeting both slavery and wider corruption. The cleanup continues today with the UK Bribery Act of 2010.
The battle is never really won in a world where corruption is still the default setting in many markets. That’s why we’ve concluded that any successful Plan B for tomorrow’s economy must ensure that we regulate against – and effectively police – corrupt practices, wherever they occur and with whomever may be involved.
John Elkington is chairman of Volans, a member of the B Team Advisory Board and co-author with B Team co-chair Jochen Zeitz of The Breakthrough Challenge: How to Connect Today’s Profits With Tomorrow’s Bottom Line. Dr Mo Ibrahim is the founder of Celtel International, one of the first mobile phone companies to serve Africa and the Middle East. He fights corrupt leadership in the region through the Mo Ibrahim Foundation.
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