HOW TO BENEFIT FROM PPPs TO STRENGTHEN MUTUAL ANTI-CORRUPTION COMPLIANCE

Private-Public Collective Initiatives....

2nd Forum on Anti-Corruption

West Africa Edition

18 – 19 June 2013

Lagos, Nigeria

Contents

Contents

Relevance of PPPs in driving Internal and External Compliance

The PPP Scorecard - how effective have these been and why?

PPPs Solutions that Work

Close

Public- Private Partnerships

Relevance in driving Internal versus External Compliance

Why the PPP Route? Traditionally, PPPs are profit-making

collaboration between public agencies or government bodies at any level and private companies.

It’s been successfully used to improve public utilities and infrastructure - railways, bridges, airlines, schools, hospitals, road networks e.g. Lekki Toll expressway,

Win-win: private sector makes money; government trades bureaucracy with efficiency

The question is how have we applied the concept of PPPs to

Anti- corruption efforts?

Via pacts, agreements, “social

contracts”, joint actions, MOUs

(i) between governments and para-governmental agencies e.g. UN - UNCAC

(ii) between governments and private companies – Cameroon and Ghana model

Investigating private

complaints and prosecuting where necessary

Local anti-corruption enforcement agencies

Internal and External- facing Compliance...

INTERNAL TO THE BUSINESS E.G. ADHERENCE TO

• gifts, travel and entertainment limits,

• conflicts of interest,

• segregation of authorities,

• approval limits,

• Due diligence and background checks

• anti-trust best practices

• entertainment limits, conflicts of interest, segregation of authorities, approval limits, anti-trust best practices

EXTERNAL TO THE BUSINESS E.G. ADHERENCE TO –

• Processing licenses, permits and approvals

• Legislative lobbying

• Participation at congressional hearings

• Taxes and levies

• Fines and penalties

This distinction is well-appreciated in the UK Bribery Act which recognises

bribery simplicita and bribery of government officials

Have Public- Private Partnerships Worked?

What impact have they had in shaping our markets and communities?

The Scorecard... *Country 2012 World

Ranking

2011 World

Ranking

Improvement

/Decline

2012

score

2011

score

Benin

Republic

94 100 +16 36 3

Cameroon 144 134 -10 26 2.9

Cote d’Ivoire 130 168 +38 29 2

Ghana 64 69 +5 45 3.9

Liberia 75 91 +16 41 3.2

Gambia 105 77 -28 34 3.5

Nigeria 139 143 +4 27 2.4

Senegal 94 112 +18 36 2.9

Sierra Leone 123 134 +11 31 2.5

Togo 128 143 +15 30 2.4

Most countries did not progress out of the bottom half scoring less than 50 out of 100 (in 2012) and (less than 5 out of 10 in 2011).

Ghana remains the least perceived corrupt country in the sub-region, while Cameroon is perceived as the most corrupt country in West Africa , closely followed by Nigeria

Most of these countries have anti-corruption government agencies and laws

* Source: Transparency International Corruption Perception Index

The real problem is where does Public - Private interest intersect?

Need arises

(license, contract, approval)

Private sector

submits applicatio

n

Public sector

accepts application

Public sector

reviews application

Public sector

approves or denies

application

Public sector

monitors implemen

tation

Public sector

discovers breach

Public sector hands down

sanction

Periodic reviews

Enter the usual “Governance” challenges...

Lack of political will

Partisan politics

No culture of openness & transparency

Cultural sensitivities

Perceived “soft-landing” punitive measures

Selective enforcement and accountability

Implementation of ideas not controls

End result has been institutionalised corruption: strong demand driving forced supply

Understanding the Key Stakeholders in this Corruption Equilibrium

Demand Supply

Govt – Legislators, Judiciary, Executive

Media

Donor agencies, Diplomatic corps

Private sector, foreign investors

Revisiting the Public- Private Partnership

Public –Private Solutions that may work

A Case for Internal controls not ideas... BORROWING FROM PRIVATE-RUN INSTITUTIONS AND

TRANSPOSING INTO PUBLIC TRANSACTIONS...

Strong conflict of interest mechanisms

Systemic checks and balances

Performance management & reward

structure

Transparency in gifts, travel and

entertainment

Whistleblower platform

Stakeholder management

Moving from paternalistic to

entrepreneurial

Private Sector Controls to prevent bribery

Controls around gifts, travel and entertainment

Strong whistleblower platforms

Conflict of interest limits and declaration

Clarity in charges

Proper recording of financial transactions

Electronic payments

Reporting mechanisms and consequence management

The “Sunshine Principle”

Complexity reduction

Declaration of assets

Cashless transactions

Standard, gazetted charges

Public official Identification

aids

Receipts and recording of

payments

Media awareness &

communication

Some actions and initiatives pursued by governments to eliminate

harassments, requests for arbitrary payments and bribe requests

Typical Public Sector Controls to prevent bribery

To embed a culture of Zero tolerance of Corruption & Bribery, let’s

borrow from the typical brand consumer disposition funnel...

AWARENESS

TRIAL REPERTOIRE

LOYALTY

Organisational

leadership & culture Standards &

Procedures

Training &

Communications

Enforcement &

Incentives

Due care in

delegating authority

Monitoring,

auditing & reporting

Response & continuous

improvement

• Tone from the Top

• Compliance and

Controls structure (FTE

and non-FTEs)

• Incorporating

compliance objs into

coy-wide objs

• Internal policies,

procedures and

SOPs

• Mandatory trainings

• Trainings deep diving into

high risk areas

• Innovative communications

e.g. Internal newsletters,

weekly tips, branded items

• 3rd Party due diligence

• Extending mandatory

trainings to key 3rd

parties

• Annual compliance

certification for key 3rd

parties

• Enhanced whistleblower

reporting platforms

• Backend and front-end

monitoring/compliance

reviews

• Robust breach

management processes

• Feedback employee

compliance surveys

• Annual certifications

(internal & external)

• Robust consequence

mgmt protocols

• Incentives (internal and

external) e.g. Awards,

acknowled-gements,

endorsements

Essential elements of a Corporate Compliance programme

Organisations whether, public or private, should strive towards moving from awareness to repetoire/embedding these pillars in their Compliance programme

Closing

"Corruption is worse than prostitution. The latter might endanger the morals of an

individual, the former invariably endangers the morals of the entire country”

Kraus, Karl