For information only - not an official document
8 December 2010
On International Day, UN Calls on Private Sector to Step up Fight Against Corruption
VIENNA, 9 December (UN Information Service) - On the International Day against Corruption, the Executive Director of the United Nations Office on Drugs and Crime (UNODC) Yury Fedotov urged the private sector to make more effective use of the United Nations Convention against Corruption - the world's strongest legal instrument to build integrity and fight corruption. The Convention, which came into force in December 2005 and has 148 Parties, includes strong measures to prevent and fight corruption in both the private and public sectors.
While corruption threatens the transparent and fair conduct of business, the Convention can help companies to build oversight and curb financial crime such as bribery and other forms of economic crime.
The United Nations Secretary-General Ban Ki-moon stressed: "Preventing corruption makes good business sense. Increasingly, investors are factoring not only environmental, social and governance considerations into their decision-making, but sound ethical performance as well."
Importantly, the Convention includes guidance for the private sector, which can make it part of the solution rather than merely a victim of corruption. "The private sector plays a key role in fostering development, but it is lagging behind the public sector in its efforts to stop corruption. In the past year, a number of countries have stepped up enforcement of anti-corruption laws, and we have seen high-level prosecutions of major companies, but many of these cases have ended in plea bargains. Companies have been fined billions, but that money has stayed in the States where the settlements were reached, it hasn't gone back to the countries from which it was stolen. Ordinary people are the losers. We need to address this integrity deficit. I encourage the Working Group on Asset Recovery to look into this," said Mr. Fedotov.
But the economic impact of graft is no less damaging. Corruption is a threat to development, hampering democracy and undermining stability. It distorts markets, curbs economic growth and discourages foreign investment. It erodes public services and trust in officials.
There is every incentive for the private sector to act since stronger economies and more prosperous societies are good for business. And payoffs are a form of illegal tax. "Corruption eats into profits; it is a hidden overhead charge that increases prices and reduces product quality. Corruption undermines business confidence and corporate integrity and destroys the reputations of respected companies," said the United Nations Secretary-General.
Anti-corruption is now firmly established as one of the principles of the United Nations Global Compact - the largest corporate sustainability initiative in the world and one of the Organization's main interfaces with the business community. UNODC and the UN Global Compact are helping "equip" the private sector to face its challenges and to deepen its understanding of the UN Convention against Corruption. The anti-corruption e-learning tool that both agencies launched in New York today is a practical example. The interactive tool shows how the Convention and the Global Compact's anti-corruption principle can contribute to corporate integrity polices and actions.
The private sector is taking steps to ensure transparency. Companies may increasingly be required to prove that they are responsible and reliable. Citizens are waking up to the fact that impunity for corrupt practices has gone on too long. The Convention has effectively scrapped secrecy laws, which are no longer an obstacle to money-laundering investigations and international cooperation. More private companies are establishing ethics and compliance programmes to build the foundations of an accountable work-force.
But much more needs to be done. "On this International Anti-Corruption Day, let us all do our part to foster ethical practices, safeguard trust and ensure no diversion of the precious resources needed for our shared work for development and peace," said the United Nations Secretary-General.
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