Organizational Governance

Anti-Corruption, Respect for Human Rights Are Part of One Holistic Business Challenge

What Legal Counsels and Chief Compliance Officers have to learn from sustainability and human rights experts is that this can never be a question of compliance alone.

By Richard Howitt | Published 5 years ago | About a 4 minute read

Image: janeb13/Pixabay

Everyone says they’re against corruption.

Very few dare to say they don’t care about the environment, too; and anti-corruption activists are going through the very same curve of turning good words in to action as those in the sustainable business movement.

But this year’s Business and Human Rights Forum (see here for a recap of day one) has shone the spotlight on the direct relationship between the two.

As campaigning NGO Global Witness told the Forum on Tuesday, corruption is “the glue” holding together corporate human rights abuses — or even their “root cause,” according to legal rights NGO Rights and Accountability in Development (RAID).

Substantive agreement came from companies themselves, with the International Chamber of Commerce replying that the processes that companies use to address corruption can also be used to improve performance on human rights.

Partly this involves transparent procedures for good corporate governance within the company. But it also involves new types of collaborative partnership, such as the wave of new “integrity pacts” being developed between civil society and the business community in several countries, to jointly advocate for full corporate transparency.

This has been mirrored at the global level this month, with the launch of a new Global Future Council on Transparency and Anti-Corruption, to build on the results of the B20 Task Force on Integrity and Compliance — in which I was proud to participate last year.

The principal efforts internationally to combat bribery and corruption have been led over many years by the OECD — whose recent report on conflict minerals in the Democratic Republic of Congo showed that every battery in the five million climate-friendly electric cars in developed countries is potentially tainted by widespread evidence of bribery and child labour in one-in-four mines from which the copper and cobalt is sourced.

So, was does this all mean within a company itself?

Mapping of systems and supply chains has to be undertaken in a systematic and structured way for both anti-corruption and human rights objectives. It makes sense to do this together in a holistic way.

The key concept of due diligence in supply chain management means enhanced efforts to know-your-supplier, addressing the beneficial ownership question by ensuring knowledge of true identity of ultimate beneficiary.

The biggest risk comes in conflict zones, where legitimate concerns about the security of staff and plant have sometimes drawn companies into relationships with private and public security forces, who themselves have been implicated in human rights abuses — the same background checks companies would think as normal for individual staff should be applied to any cooperation with security forces.

Indeed, tools used for human rights due diligence in all countries should be enhanced to incorporate corruption risk.

But just as a remedy for victims of human rights breaches remains the most challenging area for progress in the three pillars of the UN Guiding Principles, the direct reference to corruption comes in the challenge of UNGP 25 — which requires remedy mechanisms to be impartial, protected from corruption and free from political or other influence.

Raphael Lafetá, Sustainability Director at Brazilian construction giant MRV explained how a complaints hotline coupled with an independent audit procedure had been central to creating an integrity culture in the company.

The UN Global Compact in Australia reported on a major counterfeiting scandal being uncovered in the country, only thanks to the existence of a robust whistleblower system within the company affected.

Meanwhile, what Legal Counsels and Chief Compliance Officers have to learn from business sustainability and human rights experts is that this can never be a question of compliance alone.

Business culture, continuous learning and a commitment to prevention are as essential elements of the fight against corruption as for human rights.

The common challenge is one of mindset within the company that risk management isn’t simply for shielding the company and its reputation, but in assessing responsibility across its value chain and considering risk to others - including to victims.

Anti-bribery and corruption is known as ‘ABC’; the Forum asked those responsible for compliance within their companies to re-learn what risk means ... like learning your ABCs.

Richard Howitt

Richard Howitt is a strategic adviser on Corporate Responsibility and Sustainability, Business and Human Rights. He is also a Board member, lecturer at Audencia Business School and host of the Frank Bold ‘Frankly Speaking’ responsible business podcast. Richard was Member of the European Parliament responsible for the EU’s first rules on corporate sustainability reporting and subsequently Chief Executive Officer of the International Integrated Reporting Council.

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