ICC Integrity book 2023 by ICC Nederland

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Colophon The Moral Compass, Shared Values in a Global Context This book was established in the context of the Week of Integrity 2023, an initiative of the Week of Integrity Foundation, founded by ICC Netherlands. © Week of Integrity Foundation. 2023. The views expressed in this publication are those of the authors and do not necessarily reflect the views and policies of the Week of Integrity Foundation nor of ICC Netherlands. The Week of Integrity Foundation does not guarantee the accuracy of the data included in this publication and accepts no responsibility for any consequence of their use. The Week of Integrity Foundation holds all copyright and other intellectual property to this work. Week of Integrity Foundation | Stichting Week van de Integriteit Bezuidenhoutseweg 12, 2594 AV, The Hague, The Netherlands www.weekofintegrity.org/integrity-book The Week of Integrity Foundation is an ICC Netherlands initiative, part of ICC The world business organization. ICC Netherlands Bezuidenhoutseweg 12, 2594 AV, The Hague, The Netherlands www.icc.nl | www.iccwbo.org Graphic Design: Odesign, www.odesign.nl Cover illustration: Suzanne van Soest, www.suzannevansoest.com Photos: John Denton: © International Chamber of Commerce | Mirjam Bakker-Vergouw: © Hannie Verhoeven | Ghada Fathi Waly: ©Dean Calma | Iohann Le Frapper: © SNCF | Robert Mardini: © Niels Ackermann | Juliana Darini Teixeira: © Bruno Cine | Annette Kraus: © Kubinska and Hofmann | Claudia Escobar Mejía: © Xavier Dussaq | Jonathan Soeharno: © Maria Heijdendael and Marjolein Annegarn | Renske Leijten: © Wiebe Kiestra | Robbert de Bree: © Sander Foederer | Marin Mrčela: © Council of Europe

John Dento, Secretary General International Chamber of Commerce Mirjam Bakker-Vergouw, Chair, ICC Netherlands Henk Broeders, Chair Supervisory Board Ghada Fathi Waly, Executive Director, United Nations Office on Drugs and Crime Iohann Le Frapper, Chief Ethics Officer, SNCF Robert Mardini, Director-General, International Committee of the Red Cross Juliana Teixeira, Ethics and Compliance Director Latin America, Natura & Co Annette Kraus, Chief Compliance Officer and Human Rights Officer, Siemens AG Prof. Dr. Claudia Escobar Mejía, Distinguished Visiting Professor, the Schar School of Policy and Government, George Mason University Prof. Dr. Jonathan Soeharno, Professor of Administration of Justice and Legal Philosophy, University of Amsterdam Renske Leijten, Member of the House of Representatives of the Netherlands Robbert de Bree LLM, Attorney at law, Wladimiroff Advocaten N.V., The Hague Dr. Marin Mrčela, President, GRECO

TABLE OF CONTENTS

PREFACE

WEEK OF INTEGRITY FOUNDATION

FOR LEADERS, INTEGRITY IS ALWAYS A CHOICE

THE MORAL COMPASS: DO CIRCUMSTANCES ALWAYS MATTER IN THE CORPORATE WORLD?

FOSTERING INTEGRITY AND TRUST IN A COMPLEX HUMANITARIAN ENVIRONMENT

ETHICAL DECISION-MAKING IN TIMES OF UNCERTAINTY AND SHIFTING EXPECTATIONS

DOING THE RIGHT THING: WHY IS ETHICS BECOMING INCREASINGLY IMPORTANT?

JUDICIAL INTEGRITY IN KLEPTOCRATIC STATES

THREE TEMPTATIONS WHEN DEALING WITH ALLEGED INTEGRITY VIOLATIONS

AN ETHICAL GOVERNMENT IS A COLLECTIVE RESPONSIBILITY

INTEGRATION OF (DISCUSSION ABOUT) INTEGRITY INTO COMPLIANCE PROGRAMMES

PUBLIC SECTOR CORRUPTION: FOSTERING PROGRESS WITH PEER-TO-PEER MONITORING

THE WEEK OF INTEGRITY

ICC AND ITS LEGACY ON BUSINESS INTEGRITY

Week of Integrity The Moral Compass, Shared Values in a Global Context

PREFACE It almost goes without saying that the economic strains and disruptions of recent years have accentuated corruption risks in many countries around the world. From a real economy perspective, this context further emphasizes the importance of effective action to combat corruption in all its forms -- and ensure a level and fair playing field for businesses across the world. No stone should be left unturned in this effort to place integrity at the heart of global commerce. As we reach the 20th anniversary of the UN Convention against Corruption, it’s incumbent on us all to ask whether more can be done to enhance the implementation of this legally binding instrument. We also recognize that business has a responsibility to lead from the front on this agenda. That’s why over the course of the last year we have pursued an ambitious revision of the ICC Code on Combatting Corruption -- a tool which will set a new benchmark for corporate practice in managing integrity risks throughout global value chains. We are also committed to supporting the mobilization of business as a real advocate for integrity reforms in the public sector. Corruption thrives in the shadows and we must be ready to speak up if we are to stamp it out. As the institutional representative of 45 million companies worldwide, the International Chamber of Commerce is committed to doing all we can to ensure that integrity can be the cornerstone of a thriving and inclusive global economy. We salute the leadership of ICC Netherlands in developing this publication to foster reflection for responsible leadership, which we anticipate will guide businesses and governments alike.

John Denton

Secretary General International Chamber of Commerce

Week of Integrity The Moral Compass, Shared Values in a Global Context

PREFACE Courageous leadership in a global context Is decision making on integrity by corporates sufficiently aligned with expectations of society? Companies struggle to keep up with the pace of regulatory developments and the norms and values of society. There are many examples to be given. Varying from the capability to adequately prevent, detect and respond to fraud, corruption and money laundering, to avoiding human rights infringements and managing environmental risks. Not to forget the misalignment between companies and their stakeholders on the pace of the energy transition, underlying regulatory requirements and a common understanding of an acceptable outcome. Can we overcome this impasse? Courageous ethical leadership is required to navigate these diverse interests of the stakeholders in the global context in which many public and private organisations operate. The various essays in this book underpin this need to show courage in business integrity. ‘Courageous’ derives from the Latin word ‘cor’ meaning heart, innermost feelings or temper. What does this mean in our daily practice? In my opinion this means setting the context for courageous conversations and decision making. Not only within organisations, but also in engagement in the public debate when aligning public and private interests. Engagement and dialogue can bring together the often prevailing short term interest of

Week of Integrity The Moral Compass, Shared Values in a Global Context

companies and the interest of society. By example in finding an acceptable pathway for the ESG transition. The principle of the ‘Just transition’ is, that a healthy economy and a clean environment can and should co-exist. By being as fair and inclusive as possible to everyone concerned, creating decent work opportunities and leaving no one behind. No one will disagree with this principle. Translating it to practical solutions acceptable for society and economy is where the true challenge lies. This requires courageous ethical leadership. This requires engagement with clients, stakeholders such as society at large and courage to make bold moves or, using the words of Prof. Dr. Johathan Soeharno in this book, ‘the courage to be morally prudent’. We thank the different renowned authors for their contributions to this Integrity Book 2023. With the Closing Conference of the annual Week of Integrity and this book, ICC Netherlands wishes to contribute to courageous ethical leadership. Our ICC team does this by offering a platform for learning and crucial dialogue on ethical leadership in business practice.

Wishing you inspirational reading.

Mirjam Bakker-Vergouw

Chair, ICC Netherlands

Week of Integrity The Moral Compass, Shared Values in a Global Context

FOREWORD In front of you is a valuable collection of essays. The complexity of the current problems In the world, or rather various crises of the moment, require companies and institutions to provide a thorough answer to continue to guarantee the integrity of their organization. Such a sound answer can only be given, within the complexity of the problems, if there is a clear moral compass, or rather a clear ethical framework. It is up to institutions and companies to develop such a compass or framework, because only then can the integrity of the organization’s actions be maintained for the organization as a whole, but also at the level of the workplace within the organization. The essays before you explore this problem and I can therefore highly recommend taking this knowledge to you.

Henk Broeders

Chair Supervisory Board Stichting Week van de Integriteit

Week of Integrity The Moral Compass, Shared Values in a Global Context

FOR LEADERS, INTEGRITY IS ALWAYS A CHOICE

Ms. Ghada Fathi Waly Executive Director, the United Nations Office on Drugs and Crime (UNODC) Ms. Ghada Fathi Waly is the Executive Director of the United Nations Office on Drugs and Crime, which acts as the guardian of the United Nations Convention against Corruption and the primary entity responsible for supporting its implementation. Ms. Waly also holds the rank of Under-Secretary-General of the United Nations. She has decades of experience in the fields of poverty reduction and social protection. Moreover, she was a chairperson of several entities, amongst others the National Center for Social and Criminology Research and the Nasser Social Bank, a pro-poor developmental financial institution. From 2014 until 2019, Ms. Waly served as Minister of Social Solidarity of Egypt.

Week of Integrity The Moral Compass, Shared Values in a Global Context

Ms. Ghada Fathi Waly

FOR LEADERS, INTEGRITY IS ALWAYS A CHOICE The choice between integrity and corruption is not always a simple one: circumstances can dictate the choices that many people are willing or able to make. People may often find themselves faced with the choice to pay a bribe to access an important service or to be denied that service, to report on wrongdoing at personal risk or to trade their silence for safety, or even to make illicit personal gains in the absence of accountability or to threaten an entire network of collusion simply for refusing to take part in their corruption. Conducive circumstances do not justify immoral or corrupt choices for the individual, but in businesses and in societies, there is no doubt that circumstances can shape the choices that are available, as well as their consequences. For those who lead, however, circumstances are not an excuse but a responsibility. Those who are in positions of leadership in business, in government, or in different walks of life have the power to make the right choices, and the duty to foster circumstances that encourage others to do the same. Leaders have the agency needed to break long-standing norms and practices that normalize corruption and fuel cycles of collusion in institutions. To put it plainly, the personal cost of choosing integrity is often lower for a leader than for others, and by making the right choices a leader can embolden correct approaches and deter unethical ones, helping to make integrity not just the ethical choice but the more feasible one for everyone. In my own experiences in leadership positions, both as an Under-Secretary General at the United Nations and earlier as a Minister in Egypt, I always found that choosing integrity starts at the top. A leader is responsible for establishing a zero-tolerance policy for corrupt and unethical behaviour, and an institutional culture that embraces this policy and its values. This means leading by example, communicating clearly, and intervening directly when necessary. In business, the circumstances that may lead to unethical behaviour are plentiful: limited or unclear regulations, differences in legislation between countries, the opportunity to make short-term gains, a lack of safeguards in emergencies and crises, or a dysfunctional judicial system. In some contexts, corrupt practices are well established, embedded in everyday processes and considered ‘business as usual’, sometimes difficult to detect and accepted as a norm.

Week of Integrity The Moral Compass, Shared Values in a Global Context

Creating the conditions for clean business To create an environment conducive to ethical business, leadership must embody a company’s fundamental values of integrity, transparency and accountability: enact effective policy on preventing corruption: and incorporate that policy into day-to-day decisions and operations. Accountability is built on transparency and clarity. To build a strong foundation for ethical business requires communicating a clear corporate policy widely and effectively, to make it broadly understood that corruption is prohibited at all times and in all forms, whether small or large, direct or indirect, active or passive. This vision needs to be supported by an effective ethics and compliance programme to put words into action and to ensure that procedures are understood by all employees and partners. It must also be a two-way street: employees must be able to communicate to managers, including to identify and address challenges and to empower employees to speak up against wrongdoing, with no fear of retaliation. In cases of violations, zero tolerance must be put into action, and reporting wrongdoing should be encouraged and when appropriate, rewarded. Leadership must also be proactive in promoting a culture of integrity and instilling the values and policies of a company into how employees do business, including through training and awareness raising. Establishing standing guidance on ethical dilemmas can also be very useful, as well as encouraging employees to seek guidance when confronted with ethical dilemmas. This will often require investing sufficient human and financial resources in initiatives focusing on ethics and integrity, a choice that may not always be popular in the short term. Digitization is also a powerful tool in preventing corruption and building resilience. Transitioning to digital processes can automatically boost transparency and trust, while eliminating opportunities for fraud and even cutting costs. The COVID-19 pandemic showed how digital tools can be fundamental in safeguarding resources from corruption, for example in public procurement. Digital solutions can also be leveraged to monitor and detect corruption and analyze trend, for governments as well as within the private sector. Small and Medium Enterprises (SMEs) require their own specific approach to preserve integrity in business. SMEs are generally more vulnerable to corruption, due to more limited resources and capacities, and they can also often be the victims of corrupt practices that eliminate their ability to compete. Tailored tools and guidance are needed for SMEs to be able to operate with integrity and under its protection, to ensure that they prosper to the benefit of economies, societies, and business a whole.

Week of Integrity The Moral Compass, Shared Values in a Global Context

Taking the initiative A solid moral compass points towards ethical choices, but it also points in the direction of good business. In the long run, corruption constitutes a business risk that can lead to significant costs, damage to a company’s reputation, lower levels of employee and customer satisfaction and retention, or simply loss of business. Presently, more than 1,200 companies and individuals have been debarred from projects financed by regional and international development banks due to fraud and corruption. Conversely, ethical business practices can help avoid fines and other sanctions, provide preferential access to market opportunities, improve brand value, increase partner, customer and employee loyalty, and encourage innovation through fair competition. The United Nations Convention against Corruption (UNCAC), which today enjoys nearly universal membership with one hundred and eighty-nine States Parties, incorporates commitments to take action against corruption in the private sector, and affirms the vital role of the private sector in combating corruption. Fifty-eight country reviews have been completed under the UNCAC peer review mechanism, and almost all reviewed States have adopted legislative or other measures to prevent corruption in the private sector. Yet fifty-three of these States have received recommendations to improve their implementation efforts. Some of the most prevalent challenges include limited cooperation between businesses and law enforcement, lack of post-employment restrictions for former public officials, and limited standards and procedures to safeguard the integrity of the private sector. Almost half of the States still allow the tax-deductibility of bribes, the infamous ‘facilitation payments’, while only nine States were found to have good practices to prevent corporate corruption. Companies and their leaders are increasingly confronted with a choice: waiting for governments to impose legislation to prevent corporate corruption, or taking the initiative through self-regulation, public-private partnerships, and collective action, to the benefit of governments, businesses, and society as a whole. With the twentieth anniversary of UNCAC, 2023 is set to be a landmark year for global anti-corruption efforts, culminating in the eleventh Conference of States Parties in December in Atlanta. Strong leadership is about choosing the right moments for transformative action, and the anniversary is an opportunity for businesses to take the lead and capitalize on international momentum through individual and collective action. One important step could be the establishment of universal compliance standards, creating a single, voluntary set of anti-corruption norms for the private sector to guide action and review progress.

Week of Integrity The Moral Compass, Shared Values in a Global Context

There is also a need to invest in the next generation of business leaders. Through our work with more than 1,200 academics worldwide to develop and implement education modules on anti-corruption, integrity, and ethics, the UN Office on Drugs and Crime has found that such modules have an immediate impact on moral judgement for students transitioning from university to private sector employment. One survey found that the number of students providing ethical responses to dilemmas on private sector corruption had nearly doubled after taking the courses. The business community can help nurture a new generation of ethical leaders by empowering and including young people who promote integrity, and by working with partners and stakeholders to develop education and training. The global circumstances today are ripe for business leaders to lead on integrity and ethical practices. If leaders make the right choices, integrity can be an easier choice for everyone.

Week of Integrity The Moral Compass, Shared Values in a Global Context

THE MORAL COMPASS: DO CIRCUMSTANCES ALWAYS MATTER IN THE CORPORATE WORLD?

Iohann Le Frapper Group Chief Ethics Officer, SNCF Iohann Le Frapper is Group Chief Ethics Officer at SNCF Group. SNCF is France’s national state-owned railway company and a leader in passenger transport and freight logistics around the globe. Mr. Le Frapper is responsible for the Ethics Program of the company, which is to be followed by more than 270,000 employees. He has a long-standing experience of teams’ management across several continents. Also, he has worked on corporate and commercial transactions and multi-jurisdictional legal and compliance exposure. Mr. Le Frapper has advised on corporate governance, ethics, risk management and compliance, among other topics. Moreover, he is former Vice-Chair of the ICC Commission on Global Anti-Corruption and Corporate Responsibility.

Week of Integrity The Moral Compass, Shared Values in a Global Context

Iohann Le Frapper

THE MORAL COMPASS: ‘DO CIRCUMSTANCES ALWAYS MATTER IN THE CORPORATE WORLD?’ My humble practitioner’s reflections below are personal and do not reflect the views of my current or previous employers. They are based upon twenty years of corporate experience in the field of ethics and compliance in several industries and companies, listed and private, and I have been dealing with ethical dilemmas worldwide. Although I have been working mainly in France, I was also confronted with strong intercultural challenges as a result of assignments in Asia and the Middle East. Circumstances may require changing and adapting our corporate values about what is right or wrong, like continuing to do business or not in a country that launched a war against its neighbor. However, corporate values cannot fluctuate too easily depending on the everchanging circumstances. Like ship captains whose duties are to reach safely the port of destination, one may need to adapt or even to change routes to ensure the security and safety of employees and assets without however losing track of the corporate purpose and goals. Enterprises and their leaders need to take into account the moral compass both in their decision-making process and in the implementation of business decisions. The moral compass has a dual dimension: at a corporate level and an individual level. Pressure towards companies and individuals to act or not to act in a certain way may come from multiple stakeholders: peers, managers, governance bodies, shareholders, business partners, trade unions, employees, public authorities, regulators, political leaders, NGOs, media, relatives and networks, etc. Corporate culture has been severely impacted by the Covid times: as whitecollar employees developed habits to work from home, the hybrid model with part-time remote working has become the new normal for many staff members. Adherence to corporate culture, including corporate values, has become a true challenge: how to keep a strong corporate ‘glue’ among employees and with their managers? There is an unquestionable integration challenge for young generations who got accustomed to full remote working in the last three years and consequently may have developed a free-lance mindset. The junior hires need to be convinced that spending time at the offices is not a waste of time but is useful for bonding with their colleagues and getting familiar with corporate values and expectations about everyday behavior. Accordingly, employers

Week of Integrity The Moral Compass, Shared Values in a Global Context

should thoroughly reconsider their onboarding process and the use of office time. A corporate integrity system relies upon several success factors. Firstly, there should be unambiguous clarity of the tone at the top, irrespective of the circumstances. Around 80% of CEO’s consider that ESG topics are key factors to gaining a net competitive advantage, despite political backlash in certain states against ESG-driven investments. One of the challenges could be consistency over time where the sense of accountability for meeting financial goals by year-end may conflict with other long-term goals such as business ethics. Another success factor is ‘walk the talk’ by managers. Most corporate leaders understand the importance of integrity in our current times. However, the tone from the top is not sufficient if concrete ways are not found to embark middle managers who may be under pressure to deliver on their sales or financial targets, especially in listed companies where short-term expectations are high due to the quarterly financial filings. Moreover, consistency of business conduct across the organization, i.e. no double standard depending on a variety of questionable criteria such as: - the seniority of managers whose exemplarity is critical, as their behavior is scrutinized by their team members. For example, I crossed roads with some senior managers who were convinced that they were not bound by the same regulatory or corporate rules as the average employees. Like some political leaders, they gravitated above the corporate standards or so they thought. - the region or country of operation, where the implementation of the rule of law or ethical standards may be much more relaxed than at headquarters. One danger is what some call ‘cultural relativism’ that is used by some to argue that the company needs to adapt to the culture of the countries in which it operates. - the corporate stance when a very significant business deal can be closed with a customer or end-user in a sanctioned country. Although one can understand senior management’s reluctance to forego a lucrative business deal that is ‘too big to lose’ in favor of a competitor that may not be subject to the same ESG pressure from its stakeholders, the long-term reputational and financial risks associated therewith should drive the right decision to make. I have witnessed first-hand a few corporate leaders, whose judgment was nearly blindsided by the prospects of a potential high sales contract value despite the high regulatory risks.

Week of Integrity The Moral Compass, Shared Values in a Global Context

- A similar challenge arises when a major and profitable investment is at stake because of its negative impact on the environment or the communities which may have not been fully considered prior to the investment decision: faced with external pressure, senior management must sometimes decide to either move forward, including some remedial steps, or write off/down a key investment in a country where the enterprise may have long-standing business operations. When a business leader faces serious risks for the security or safety of its employees or its suppliers’ staff, a ‘whatever it takes’ route is often counterproductive as demonstrated by the recent Lafarge case in Syria. Acting consistently with the corporate social responsibility pledge of the enterprise seems a natural assumption these days but not harming the enterprise’s ecosystem has become the challenge of the 21st century: beyond recent current compliance standards in some European countries, large enterprises must anticipate the standards of tomorrow and take into account growing expectations from all stakeholders about their sustainability due diligence duties in Europe and elsewhere, that is aiming to either not harm their ecosystem, or mitigating the adverse impact of their activities on human rights and the environment (see the draft EU corporate sustainability due diligence directive). It has become extremely difficult for multinational companies to maintain a political neutrality and to continue doing business anywhere with anyone, irrespective of wars (e.g. invasion of Ukraine by Russia) or political tensions (such as the one among US and China). They have new geopolitical duties as the result of external pressure, depending upon their ‘nationality’ driven by their country of incorporation or the place of headquarters or the stock exchanges where they are listed. Irrespective of sanctions, many US and EU companies had indeed to reconsider since early 2022 which countries they could invest or should divest from, and which customers, business partners, or suppliers they had to sever business links with, notwithstanding the negative business and financial impact upon their enterprise. A nightmare PR scenario for a multinational company is to be accused by media and NGOs of aiding and abetting a non-democratic state (e.g. Myanmar or Iran) in its fight against political dissidents or in its war efforts against a neighboring country. Even when a company decides to exit a country, the disinvestment itself may turn out extremely challenging. For example, the sale of business and assets to a local company close to the host government may trigger other risks such as a high risk of corruption of public officials or a requirement for a financial contribution to the state budget to overcome administrative hurdles, thus exposure to media/NGOs allegations of war funding.

Week of Integrity The Moral Compass, Shared Values in a Global Context

Accordingly, beyond the obvious need to implement dual-sourcing strategies, many companies have been looking seriously at nearshoring or friend-shoring to reduce the potential impact of a cold war upon the company’s assets or business as superpowers may one day leave no other option to multinational companies than choose one side and exit the other side’s market. This shift in global supply chain strategy may also raise another dilemma of how to reconcile integrity with a limited choice of business partners or strategic suppliers in a nearby country where business ethical standards may be very low. A ‘speak-up’ corporate culture should be promoted at every level of the organization to ensure employee confidence, the maintenance of social cohesion, and adherence to the enterprise’s values. Whistleblowers, who may put their career prospects at risk, need to feel safe to report internally inappropriate behavior or breaches of laws or policies. The enterprise shall act with diligence and efficiency, and take remedial steps, failing which the whistleblowers will have no other realistic option than reporting to the authorities or disclose to the media. A true incentive to internal reporting also requires a switch from the traditional management mindset. Indeed, historically, the first reaction of some managers was often to ask questions about the identity of the whistleblower and what was his/her agenda, instead of asking whether the serious allegations are credible and can be substantiated by documents or witnesses. The effectiveness of the ‘no retaliation’ policy is also one of the pillars of an effective speak-up culture. In conclusion, corporate leaders are subject to unprecedented scrutiny by stakeholders about the ethical dimension of their investments and business operations on one hand, and the exemplarity of their behavior on the other hand. It is not an easy task to conciliate a firm grip on the moral compass, the need to adapt business strategy to unforeseen circumstances, and to anticipate the higher integrity standards of tomorrow as the latter will determine the societal acceptability of yesterday’s corporate behavior.

Week of Integrity The Moral Compass, Shared Values in a Global Context

FOSTERING INTEGRITY AND TRUST IN A COMPLEX HUMANITARIAN ENVIRONMENT

Robert Mardini Director-General, International Committee of the Red Cross Robert Mardini is Director-General of the ICRC. He is responsible for leading the organization’s global humanitarian operations, helping people affected by conflict and armed violence, with 21,000 staff in more than 100 countries. As Director-General, he also oversees the office of ethics, risk and compliance for the entire organization. Mr. Mardini began his career at the ICRC in 1997 and held various positions, such as Regional Director for the Near and Middle East and Permanent Observer and Head of Delegation of the ICRC to the United Nations in New York. In 2021, Mr. Mardini was elected to the Swiss Academy of Engineering Sciences in recognition of his ability to mobilize teams to provide effective emergency aid to victims of major armed conflicts.

Week of Integrity The Moral Compass, Shared Values in a Global Context

Robert Mardini

FOSTERING INTEGRITY AND TRUST IN A COMPLEX HUMANITARIAN ENVIRONMENT Integrity, and the lack of it, is inseparable from the issue of trust, which is perhaps the single most important component of the ICRC’s licence to operate. Trust and reputation can take decades to build but disappear overnight, a problem affecting many sectors including business and politics, as well as individuals. But for us as a humanitarian organization, one mandated by the Geneva Conventions to protect the lives and dignity of victims of armed conflict and other situations of violence and to provide them with assistance , the stakes are particularly high, as is the responsibility to ‘do the right thing’. Trust challenges to humanitarian action are plentiful in today’s turbulent and highly polarised global environment. For one, we see widespread misunderstanding , and sometimes wilful misrepresentation, of what neutral, impartial and independent humanitarian action actually is. In some cases, sustained misinformation campaigns and false narratives around our role and mandate, including its limits, have seriously hampered our activities , and those of our partners within the Red Cross Red Crescent Movement. We also see scepticism of international ‘western’ aid agencies, amid drives to ‘decolonialise’ and ‘localise’ aid. And in some cases, we see scandals around the sexual or financial behaviour of individual humanitarian workers damaging the perception and reputation of the sector as a whole. All this comes at a potentially huge cost. Without the trust of all our stakeholders, we simply cannot succeed in our mission. In order to have confidential dialogue with State and non-State actors, to be able to visit detention centres, to be given the all-clear to deliver humanitarian assistance across front lines, we need to be trusted. And a crucial element of earning, and maintaining, trust is to demonstrate integrity at all levels , operational, individual and institutional. For a start, in our day-to-day operations, we need to be able to demonstrate what humanity, neutrality, independence and impartiality actually mean in practice. This requires proper accountability to affected people, putting the interests of people and communities we aim to serve at the centre of our decision-making. Our continuous efforts to stay physically close to conflict-affected people and communities are essential to understanding their needs, vulnerabilities and abilities and to building relationships of trust that allow for partnerships to grow. At the same time, engaging with all stakeholders, on all sides of conflicts, is key to gaining the widest possible acceptance and respect, and through this the widest possible humanitarian access.

Week of Integrity The Moral Compass, Shared Values in a Global Context

In addition, impactful and sustainable humanitarian action requires unequivocal commitments to the management of risks inherent to our work: to the protection and responsible use of our resources: to the highest standards of integrity throughout the entire value chain of ICRC’s humanitarian mandate and mission: and to the creation of a safe and respectful environment for our staff, for our partners and, above all, for the affected people we protect and assist. At the ICRC, these commitments are bundled into the active promotion of a culture of integrity , one that we define as an ethics-driven organizational culture that prevents and addresses misconduct of any kind, and that creates a safe and respectful environment for our humanitarian work. This culture of integrity is built on the seven Fundamental Principles of the Red Cross and Red Crescent Movement that underpin our humanitarian mission, the ICRC’s Code of Conduct and the more recently adopted Values Compass, thus combining a principles, rules and values-based approach when striving for highest integrity standards. Yet, to the extent that culture is constantly evolving, the promotion of a culture of integrity is understood as a continuous journey. And in this journey, circumstances matter and circumstances have informed the nuanced and risk-based approach that the ICRC is taking to promoting and strengthening its culture of integrity. The contexts in which we work are typically characterised by precarious security situations and dire humanitarian needs and vulnerabilities within local populations, hence extreme power imbalances between humanitarian workers and affected people. The nature of the ICRC’s mission, the places where we operate and the scale of our operations inevitably give rise to serious risks, including those related to staff conduct, in particular fraud, corruption and sexual exploitation, abuse and harassment (SEAH). It goes without saying that these risks need to be managed and mitigated through an effective system of controls, and a robust response to all allegations of misconduct. At the same time, we consider it essential to invest heavily in prevention and awareness-raising, to ensure that behavioural standards are clear, and managers and staff are equipped to make good decisions and ‘do the right thing ‘. At an institutional level, these interconnected workstreams are led and supported by our Ethics, Risk and Compliance Office (ERCO), located in the Executive Office of the Director-General. Its various functions , ethics, risk management, assurance, investigations , contribute to building a coordinated, structured and systematic approach to risk management, internal control, investigations and behavioural ethics, and lay the ground for our culture of integrity to grow.

Week of Integrity The Moral Compass, Shared Values in a Global Context

Given the wide range of environments and unique challenges faced by our staff, we recognise that an individual ‘moral compass ‘ alone is often not enough for them to navigate such complex situations. To be able to live up to the highest standards of integrity, they must be able to rely on an organization that supports them in dealing with the ethical questions or dilemmas they face in their day-to-day decision making. Those questions might relate to how best to reconcile ICRC standards with cultural codes, or to finding a way to deal with pressure from colleagues, family members, communities or local authorities while carrying out their work. They might also relate to existing or perceived barriers to speaking up and raising ethical concerns about someone else’s behaviour. Making good decisions requires clarity about the standards of behaviour expected from everybody working for the ICRC, clarity that our evolving compliance framework and internal values provide. It also requires an environment of trust and the existence of safe spaces, where staff feel encouraged to raise concerns and ask questions when faced with difficult decisions and ethical dilemmas, where they feel safe to speak out and where allegations are taken seriously and accountability for perpetrators is assured. Such an environment cannot be set up centrally by one office alone. Rather it needs to grow in all places where we work and at all levels of the hierarchy. It requires managers willing to listen and equipped to guide staff in the grey zones, and staff motivated by high standards of integrity to speak up. It requires a shared sense of purpose and recognition by all staff that protecting and strengthening our culture of integrity is key to sustainable and impactful humanitarian action. And last but not least, integrity , and the trust that comes with it, must be mutual. This is especially important as we work in partnerships more than ever before , not just within the Red Cross Red Crescent Movement, but with an increasingly broad range of actors. It is vital, at a minimum, that we share the same core values and , within our Movement , adhere to the same Fundamental Principles. An ethical failing by one can quickly tarnish the reputation of all, limiting our license to operate. The people ultimately affected most by this would be the very ones who most need protection and assistance , something none of us can afford to let happen.

Week of Integrity The Moral Compass, Shared Values in a Global Context

ETHICAL DECISIONMAKING IN TIMES OF UNCERTAINTY AND SHIFTING EXPECTATIONS

Juliana Darini Teixeira Head of Ethics & Compliance Latin America, Natura & Co Juliana Darini Teixeira is Head of Ethics and Compliance at Natura & Co Latin America, a Brazilian global cosmetics group. The company consists of four socially conscious beauty brands, namely Natura, Avon, The Body Shop, and Aesop. Together they form the fourth largest beauty company in the world. Mrs. Teixeira has been responsible for developing and implementing the Compliance Program of Natura &Co in Latin America. She is a lawyer with more than twenty years experience in ethics, compliance, data privacy, human rights, risk and crisis management and investigation. Previously, she worked for PepsiCo, supporting their Ethics and Compliance Program. Mrs. Teixeira was also Professor of Business Law at the Pontifícia Universidade Católica de São Paulo.

Week of Integrity The Moral Compass, Shared Values in a Global Context

Juliana Darini Teixeira

ETHICAL DECISION-MAKING IN TIMES OF UNCERTAINTY AND SHIFTING EXPECTATIONS In the last few years, we have been facing continuous crises, from natural and humanitarian disasters to a devastating pandemic and a generalized political turmoil. Pressures to navigate the underlying adversity have been creating favorable conditions to an increase in corruption, fraud, and other types of ethical deviations. Additionally, there is an undeniable escalation of other relevant issues such as intolerance, discrimination, inequality and poverty and the worsening of a global scale climate crisis, just to mention some of the main challenges humankind has to face nowadays. Failing to hold tight to high ethical values can be specially devastating for companies and for society as a whole in current times. As such, companies must commit to follow and comply with the established rules, despite the various pressures to bypass them, and adopt state-of-the-art compliance programs, to keep them strong and resilient as means to mitigate significant and new risks that arise for them and their stakeholders. This becomes even more relevant when, in an increasingly fast-changing world, we observe that leaders tend to be judged today for decisions taken in the past. Actions and decisions are analyzed based on the lens of the future, not necessarily with the lens of the past when they took place. Thus, companies and leaders must consider how to take decisions in a world full of ambiguity and uncertainty, when information, expectations and standards change so quickly, and knowing in advance that they (companies and their leaders) will be judged years ahead, under different standards and even under a different moral compass. Considering this challenging environment there is no doubt that following the existing rules is vital. But as it is not easy, or even possible, to foresee all issues and changes ahead, having a strong values-driven culture is the basis to allow companies to be resilient over time, no matter the circumstances, turbulence, or moral crises underway. Companies must be attentive not only to rules, but on values and purposes that will remain valid regardless of circumstances or wind changes. In addition to assuring compliance with all requirements created by authorities and regulators, stakeholders increasingly expect that companies go beyond strict compliance but also take additional steps to deliver a positive impact to

Week of Integrity The Moral Compass, Shared Values in a Global Context

the world. As such, companies that want to be around for a long while, have already been urged to assess where they have potential to make a positive impact beyond the borders of their traditional responsibility with their shareholders, and firmly commit to deliver that consistently. Purpose-driven companies have a clear direction of what they want to achieve and, most importantly, how they want to do it, which is guided by its sets of values and principles, a clear purpose as part of its business strategy, and constantly improved by several people aligned with these values and principles. They genuinely want and thrive to be a force for good, to go beyond what is expected from them and to deliver value, not only to shareholders and employees, but also to several external stakeholders. These companies have bold ethical values and are bound by positive external impact commitments embedded into their strategies, finances, processes, supply chains and operations, influencing permanently how their executives and employees take decisions. They have strong cultures and clear sets of guiding principles which give their leaders the needed incentives to take the right decisions if ethical challenges emerge during difficult times. Therefore, culture, principles and values are embedded in such companies and their management that will allow for the right decisions to be taken even at challenging circumstances. These sets of values or principles set the expectations on how a company should interact with its stakeholders and on how such company expects employees to do their jobs and interact with colleagues, customers, competitors, governments, etc. Culture and awareness of such values and principles will be the right instruments for employees on their day-to-day activities and, as a consequence, mitigate risks to a company. No matter how the circumstances change, they have this moral compass that will guide their decisions. Of course, that just proclaiming such values it is not enough: companies and their leaders really have to live up to the values they preach for, they need to ‘walk the talk’ setting the right tone at the top through actions and behaviors. Companies that are truly purpose-driven can attract leaders that have the same values. These leaders have a clear vision of the goals they want to help the organization to achieve, and these goals are typically much higher and bolder than just the financial and commercial ones. They share this passion with stakeholders, inspiring and engaging employees, increasing customers’ loyalty and partners’ trust. They know that their acts and behaviors will have an impact in their companies’ ability to fulfill their purposes and they embrace their role as moral guides, living by the values they preach for.

Week of Integrity The Moral Compass, Shared Values in a Global Context

Deep ethical leaders have a strong moral compass, that provides them with the courage to take tough decisions when facing business dilemmas. When they stand up for what is right, treat others with respect and loyalty, they can generate trust and strengthen bonds with all stakeholders, allowing the company to be successful in the long term. They know that sometimes they will have to take painful decisions in the short-term, but that will pay off in the long run. Notwithstanding the fact that companies that are purpose-driven can attract the best talent (specially in the younger generations), engage, and inspire their employees, generate trust among their partners/suppliers, it is impossible for them to control and to guarantee that everyone is committed to the same set of values and have the same understanding of ethics and integrity standards. To implement low to zero deviation tolerance strategies, consistently with their purpose and values, companies need to have strongly effective systems to refrain, detect, investigate, and apply consequences to those that do not abide by the same standards. Scrutiny over companies is higher than ever, and the mechanisms to harm companies´ reputations, like social media with instantly available information, are broadly available to almost anyone, anywhere. This reality just reinforces the importance of having ethics and integrity embedded in the soul of the businesses, and of having the right processes, systems, and controls in place to guarantee proper response and crisis management, and to naturally expel those behaviors that are not aligned with the direction organizations intend to move towards. It is clear that in a world full of ambiguity and volatility, in which risks are increasing and the future is uncertain, Compliance has an important role to play, by protecting a company and its leaders from the internal and external threats, assessing the emerging risks, assuring that the company is really delivering its purpose (avoiding reputational harm and allegations of purpose-washing or green-washing), and supporting leaders on defining how to navigate tradeoffs among stakeholders’ interests, commercial objectives and social/economic/ political shifts. Companies which do business developing continuously and leveraging robust Compliance programs are run more efficiently and, at the end of the day, will be more profitable. Ethisphere has demonstrated, with some 16 years of data from its World’s Most Ethical Company awards, that winners have a better average performance than the S&P 500.

Week of Integrity The Moral Compass, Shared Values in a Global Context

In sum, having purpose in the company’ essence, ethical values in their DNAs and strong Compliance programs as part of the business strategies, have been proving to be effective ways to support these organizations keep profitability and delivering positive impact in the world, regardless of the external forces that threaten their morality every now and then.

Week of Integrity The Moral Compass, Shared Values in a Global Context

DOING THE RIGHT THING: WHY IS ETHICS BECOMING INCREASINGLY IMPORTANT?

Annette Kraus Chief Compliance Officer and Human Rights Officer, Siemens AG Annette Kraus is Chief Compliance Officer and Human Rights Officer at Siemens and heads the company’s global Compliance Organization. Mrs. Kraus is also responsible for the Siemens Integrity Initiative, which supports organizations around the world that fight corruption and fraud through collective action, education and training. She joined Siemens in 2009 and has applied her broad compliance expertise in a wide variety of senior management positions. Before joining Siemens, she served as a compliance advisor, as a member of an international law office and a management consulting firm. In addition, Mrs. Kraus heads the Compliance Section of the German Association of Corporate Counsel.

Week of Integrity The Moral Compass, Shared Values in a Global Context

Annette Kraus

DOING THE RIGHT THING: WHY IS ETHICS BECOMING INCREASINGLY IMPORTANT? It was a morning I will never forget. 24 February 2022. When I woke up and looked at my phone to learn the past night’s developments, I was shocked and terrified: Russia, against all hopes, illegally invaded Ukraine. An aggressive military invasion in the middle of Europe. How could that be? I immediately cancelled all my morning meetings to give myself time to better understand the situation and the implications for Siemens. First and foremost, in my mind was Ukraine and our Ukrainian colleagues. But I also thought of our Russian colleagues, and Siemens’ business and long history in Russia. Despite so many uncertainties, the Siemens Managing Board wasted little time to decide to place an immediate hold on all new business and international deliveries to Russia. We were one of the first companies to do so. In the first days, the company also issued the following statement: ‘We join the international community in condemning the war in Ukraine and are focused on supporting our people and providing humanitarian aid.’ But this was only the beginning. We soon realized the continuing war, the widespread international condemnation, and the international sanctions and Russian countersanctions would have a massive impact on our business. Siemens had had an active presence in Russia for almost 170 years. It had long-standing customer relationships and, importantly, 3,000 active employees. There was no precedent for this situation. There were conflicting regulatory regimes. How should the company move forward? What was the right thing to do? After painstaking deliberation, in mid May 2022, the company announced publicly it would exit the Russian market and it started to take steps to wind down its business activities and industrial operations. The company also decided it would continue to support Siemens employees in Russia to the best of its abilities, while at the same time provide humanitarian assistance to our colleagues in Ukraine and the people of Ukraine. This was not just a legal or business decision. It was also an ethical decision. To do business around the world today requires companies to carefully consider the ethical underpinnings of its actions. The way we go about our business is as important as our economic achievements. External stakeholders have set clear expectations: Companies that behave ethically are perceived by employees, customers, business partners, shareholders,

Week of Integrity The Moral Compass, Shared Values in a Global Context

and other stakeholders as trustworthy, dependable, and a positive force on society. As the world becomes increasingly focused on the challenges of digitalization, environmental issues, fair trade practices, suitable working conditions, and other societal concerns, corporations must consciously strive to live up to our social responsibility in a sustainable manner. In response to these demands, prior to the Ukraine crisis, ethics became part of Siemens’ sustainability strategy. But integrating ethical decision making into business routines is a challenge. Sometimes there are conflicts between purely economic decisions and what is right for people, the environment, and/or society in general. How does a corporation understand and evaluate the viewpoints and interests of all sides and balance ethical principles before the right decision can be made, knowing that whatever is decided may negatively impact one or more competing interest? To achieve this, Siemens is building ‘Ethics Management’ as an overlay to our Business Conduct Guidelines and our already robust Compliance Management System. The leader of this process is the global compliance organization, which acts as an ‘enabler’ and ‘moderator’ through cross-functional networks. Imbedded in our Business Conduct Guidelines are six Ethical Principles: - We are honest and truthful in our dealings. - We respect the dignity, privacy, and inherent rights of individuals. - We protect the health, personal security, and occupational safety of our employees. - We act in line with our responsibility for the environment. - We engage with reputable and law-abiding partners. - We explore other ethical concerns. The last principle is a very important one. Each of us has our own ethical and moral code and our work activities may implicate our own ethical considerations. If something does not feel right to a Siemens employee, they know the company provides resources to help them decide whether it is right for them and for Siemens. After thoroughly and carefully balancing the circumstances, despite the finan-

Week of Integrity The Moral Compass, Shared Values in a Global Context

cial impact, the company decided exiting from Russia was the right thing to do. And paramount in our decision-making was in addition to the comprehensive sanction regime against Russia the health and personal security of our employees. Our ethics journey continues. We are integrating ethics within our corporate culture. Our focus is on how to help our employees consciously incorporate Siemens’ values and Ethical Principles into their day-to-day decisions and actions. We want our people at all levels to be empowered to: - Understand the Company’s values and Ethical Principles - Identify situations that present ethical concerns, conflicts, and dilemmas - Weigh possible options systematically and in accordance with our Ethical Principles - Make good decisions Ethics Management will not be static. We regularly review our approach and progress and seek feedback from the business to ensure Ethics Management continuously evolves, adapts, and improves. The Siemens Ethics Management system actively helps develop the company’s response to challenging events through identifying, exploring, and analyzing the myriad of perspectives and outcomes. The Ethics Management plays a crucial role in this Ethics journey, as decision-makers, communicators, and role models. Like the Russia/Ukraine conflict, global companies will continue to face complex situations where laws and regulations do not provide easy direction. Ethical considerations are increasingly relevant. In such situations, whereby circumstances change rapidly and there is no playbook on how to act, ethical principles can provide the framework that allow us to stay true to our moral compass. In the end, it is always about “doing the right thing”.

Week of Integrity The Moral Compass, Shared Values in a Global Context

JUDICIAL INTEGRITY IN KLEPTOCRATIC STATES

Prof. Dr. Claudia Escobar Mejía Distinguished Visiting Professor, the Schar School of Policy and Government, the George Mason University Prof. Dr. Claudia Escobar Mejía is a Distinguished Visiting Professor in the Schar School of Policy and Government at the George Mason University and she is affiliated with its Terrorism, Transnational Crime and Corruption Center. Prof. Dr. Escobar is a lawyer and a former judge of the Court of Appeals of Guatemala, known for her commitments against corruption. She is also the Executive Director of Be Just, an organization that promotes the rule of law by strengthening institutions of the justice sector. She received the ‘Democracy Award’, awarded by the National Endowment for Democracy and she was honored by Harvard Law School in their ‘Women Inspiring Change’ exhibition. In addition, Prof. Dr. Escobar is an active member of the Anti-Corruption Advocacy Network and Transparency International.

Week of Integrity The Moral Compass, Shared Values in a Global Context

Prof. Dr. Claudia Escobar Mejía

JUDICIAL INTEGRITY IN KLEPTOCRATIC STATES The ethical behavior of public officials is crucial to the credibility of institutions. In all areas of public administration, citizens expect officials to do their duty according to the law. But especially when it comes to those who work in the institutions of justice, like judges or prosecutors. The judge’s impartiality is essential to guarantee the judicial system’s integrity and ensure that justice is dispensed fairly and equitably. Their behavior is critical in their ability to be impartial. Judges must always act professionally and ethically to protect the judicial system’s integrity. If a judge shows a preference for one of the parties in deciding a case, their impartiality may be questioned, affecting their ability to dispense justice objectively. It is, therefore, essential that judges take all necessary measures to preserve their impartiality and objectivity. The Universal Declaration of Human Rights and many other human rights conventions recognize it as a right that all persons have access to justice. Also, when people have recourse to justice, they have the right to be heard, on equal terms, by an impartial and independent tribunal. Judges responsible for applying the law and resolving problems between two conflicting parties must always maintain an even-handed and neutral demeanor. In liberal democracies, where there is a proper separation of powers, judges are considered independent officials, subject only to the law. Judges are people with high ethical standards and impeccable conduct. Those who go to court expect the judge to rule in their favor. Still, they know that trying to influence a judge’s decision is an act that violates the impartiality and independence of the judiciary, which may constitute a crime. The parties trust their lawyers and have confidence that the courts will analyze the case objectively. On the contrary, in incipient democracies, post-conflict societies, or countries marked by authoritarianism, the justice system is weak and is often subject to other branches of government. It is also permeable to the interests of influential sectors and may be infiltrated by organized crime in the worst cases. In these contexts, basic internationally recognized standards and principles relating to judicial independence are not rigorously applied. When judicial services are required, unscrupulous individuals seek to manipulate justice and influence the decisions of prosecutors and judges. The greater the relevance of the case, the greater the pressure to which judicial officials are subject.

Week of Integrity The Moral Compass, Shared Values in a Global Context

However, those who work in the judiciary must strive to maintain probative and ethical conduct, regardless of the circumstances. Judges are obliged to defend their independence at all times. One guide to orient the behavior of judges is the Bangalore Principles, adopted in 2002 by the Judicial Integrity Group, composed of presidents and magistrates of the High Courts of different countries. These principles establish the ethical standards that judges must follow to ensure impartiality, integrity, and independence in performing their duties. Generally, those working in justice institutions know what is right and wrong. But in an environment where prosecutors or judges are not protected by a system that guarantees their stability and security, they are constantly subjected to external factors that threaten their independence. In places with high rates of violence, it is easy for a judge to feel threatened. In many cases, fear is the external factor that most influences corruption. Criminal groups seeking impunity use corruption to achieve their goals, but if it does not work, they pressure justice officials and threaten them. In the 1990s, many judges and prosecutors died at the hands of the Italian mafia or Colombian drug traffickers. These criminal groups continue to use the same tactics in the countries where they operate. There is a predisposition to believe that all judicial officials are corrupt in contexts where corruption is systemic, and impunity is widespread. I had the opportunity to serve as a judge in Guatemala at a historical moment when there was a real effort to strengthen the institutions of justice. At the end of a period of military dictatorships, a constitution was approved that recognized the independence of the judiciary. When the internal armed conflict finished, a peace agreement acknowledged the need for profound reforms to the judicial system. Afterward, Congress approved the Judicial Career Law, which laid the foundations for a new generation of justice officials appointed through competitive merit-based processes. However, this only applied to the first levels of the courts, for justices of the peace or instance. Later on, an International Commission against Impunity in Guatemala -CICIG- was established to support dismantling criminal groups within the institutions. But all this was not enough, as corrupt politicians and other powerful groups (military, economic, and illegal) regained control of Justice. The system is designed to facilitate corruption, and politicians can - every five years - decide who occupies the country’s high courts and prosecutor’s office. Although many judges and prosecutors have solid convictions for exercising their office honestly, they fear the consequences of confronting power groups. In most cases, judges do not facilitate or lend themselves to corruption, but neither do they denounce it when they detect it because they are afraid. Many

Week of Integrity The Moral Compass, Shared Values in a Global Context

prefer to remain silent or look the other way when witnessing deterioration. Some officials allow themselves to be tempted by bribery and promote it or fear inclines them to accept the pressures of the corrupt. But there are also few who act with courage, who fight against corruption and denounce it. They are those who are willing to defend justice at any cost. The ones who know, like the Italian prosecutor Giovanni Falcone, that if they caress a tiger, they may lose their hand. Some of them have paid for their audacity with exile; others face spurious charges, and some are unjustly imprisoned. Unfortunately, Central America has become a hub for international organized crime, as efforts to strengthen justice institutions have failed to confront those who promote corruption and profit from impunity. In this region, as in many others, there is a need for courageous judges willing to put a face to the mafias. Judges cannot forget that they are called upon to defend the rights of all citizens. In conclusion, impartiality, integrity, and ethics in the behavior of judicial officials are essential to guarantee confidence in justice institutions and ensure that justice is imparted relatively and equitably. In contexts where corruption is systemic and impunity is widespread, it is essential to have courageous judges willing to defend the rights of all citizens and not be intimidated by the power of criminal groups or corrupt politicians. Those who work for justice must do the right thing regardless of the consequences and not become accomplices of corruption and injustice. Society needs honest and ethical judges who act with courage to face the challenges of the judicial system in today’s world.

Week of Integrity The Moral Compass, Shared Values in a Global Context

THREE TEMPTATIONS WHEN DEALING WITH ALLEGED INTEGRITY VIOLATIONS

Prof. Dr. Jonathan Soeharno Professor of Administration of Justice and Legal Philosophy, the University of Amsterdam Prof. Dr. Soeharno is a full Professor of Administration of Justice and Legal Philosophy at the University of Amsterdam. He is specialized in the fields of ethics and integrity. Among his publications are the books The Integrity of the Judge, The Value of the Oath and Integrity within Corporate Lawyering. Dr. Soeharno is also Lawyer at De Brauw Blackstone Westbroek, acting Judge at the Den Bosch Court of Appeal and Member of the Dutch Disciplinary Court of Appeal for Lawyers. He chairs the supervisory board of the (non-profit) Centre for Organizational Integrity, is ethics lecturer for the Dutch Judiciary and formed part of the Committee that revised the Dutch Code of Conduct for Lawyers in 2018. In addition, he is a former member of the Dutch Senate.

Week of Integrity The Moral Compass, Shared Values in a Global Context

Prof. Dr. Jonathan Soeharno

THREE TEMPTATIONS WHEN DEALING WITH ALLEGED INTEGRITY VIOLATIONS There is no gold standard for dealing with alleged integrity violations. In practice, dealing with alleged integrity violations can be difficult, especially when under the felt pressure and within the unfiltered panopticon of (social) media or (internal or external) stakeholders. An often-seen trend is a disproportionate reaction that comprises the very own integrity standards of the organisation. In this contribution I will focus on three temptations that may lead to overreactions; but I will first sketch some background. The pattern can be simple. It starts with the occurrence of allegations of integrity violations related to, for example, socially sensitive issues such as racism, #metoo or social safety. Then comes vocal pressure, either internally or externally from media, interest groups or stakeholder groups. And then: leadership faltering the tight rope between doing too little, choosing to downplay signals or failing to protect the alleged victim and too much, ranging from immediate dismissals, the sacrifice of board members, the reversal of well-thought-through decisions or the closure of local branches. Both approaches may be disproportionate. Where on the one hand media can be keen to reproach leadership for being slow to action or too inconsiderate of the alleged victims or bystanders, on the other hand judges, in the few cases that eventually make it to court, rule surprisingly often that boards overreacted towards the alleged culprit. There is a logic to disproportionate reactions. Allegations of integrity violations can cause great anxiety. Take police officers who allegedly violated their codes of conduct by apparently forging official police reports, seemingly to be rebuked by video footage. They may have put not only their own integrity on the line, but also the trustworthiness of the police force. The intuitive reaction of leadership can be to quickly dismiss the alleged culprits. Because this may be considered necessary to restore trust, both within and towards the organisation. Leadership may also be keen to avoid blame afterwards for not doing having done enough. It may also consider that truth finding, the hearing of both sides or employing other instruments to ensure fairness can be time and cost consuming. And may stir up even more turmoil. Under- or overreactions come, however, at a price. Disproportionate reactions to alleged integrity violations may be at odds with the (organisation’s) own integrity standards. Codes of ethics, mission statements or core values, that form the infilling of the organisation’s moral compass, often contain wording such as ‘fair and equal treatment in the workspace’, a ‘safe, secure and inclu-

Week of Integrity The Moral Compass, Shared Values in a Global Context

sive environment’ or ‘treating others with respect at all times.’ These standards, however, apply equally to alleged culprits as they do to alleged victims and bystanders. When violated, disproportionate reactions may have a negative impact not only on those concerned but also on the organisational culture based on these values. More fundamental values may also be compromised. Take the hearing of both sides, the foreseeability of punishment, objectivity (the placing of facts over opinions), equal respect or the presumption of innocence. These values are fundamental to integrity standards. Tarnishing these fundamental values may have a grave impact on the individuals concerned, but also, in the longer term, on the trustworthiness of the organisation.

How then to deal with alleged integrity violations with integrity? Now that the context is sketched, I will focus on overreactions. In practice I come across three temptations that often form a portal to overreactions: - Using too big a stick to beat with, as a result of translating vague integrity standards into norms - Failure to acknowledge integrity violations without ethical fault and - Relying on the illusion of a fixed moral compass rather than on prudence. This list is of course not exhaustive. The first temptation relates to the vagueness of integrity standards. The aspirational and broad manner in which the values, principles or standards are formulated may conflict with the foreseeability principle. For example, one may strive for sustainability, integrity, diversity, social safety, independence, honesty or trustworthiness, yet one can never ‘fully meet’ these values or standards. After all, it is always possible to be more sustainable, divers, independent, honest or trustworthy. In other words: in light of these values, integrity may always be deemed to have been violated. Just as any complaint about a lack of social safety is difficult to refute as it may depend on subjective impressions (a compliant in itself could justify the impression that the atmosphere was not socially safe enough). This is especially true for the value integrity itself, it is so vague that practically every aberration can be punished on the basis of this value. Using values as a basis for reactions may conflict with the principle of foreseeable punishment, a long standing adage in law, that is to bring about certainty and reduce arbitrariness.

Week of Integrity The Moral Compass, Shared Values in a Global Context

Other than legal norms, integrity standards serve different purposes. These standards are designed to promote ethical behaviour, to help ensure that people and organizations are accountable for their actions and to help prevent misconduct. These can also help to build confidence in an organization or individual and to foster a culture of integrity. Integrity standards are often purposively vague: to leave room for fast-changing moral views (inclusion, #metoo or social safety are good examples), to ensure that conflicting moral views can co-exist and to allow for situational infilling. Using integrity standards to determine how to react to alleged violations therefore requires special attention. This should be a cause for prudence for those who enforce integrity standards. Making a proper distinction between values, what is aspired and norms, what is the limit of acceptable behaviour and communicating this well and clearly within the organisation, is an important first step in every dealing with alleged violations of integrity. Second, there can be a temptation of scapegoating in the absence of ethical fault on an individual level. There are many examples of integrity violations without individual fault. Take IT-systems that are incompatible (a problem often countered by banks in AML-related contexts) or policies forged by changing management. There can also be unintended consequences of technology (think of algorithms that cause inappropriate segmentation of customers, miss-selling of products through chat-robots) without mistake made by individuals in an ethical sense. Lastly, there can be behavior that leads to the justified appearance of a mistake, without ethical reproach on an individual level. This is prevalent within the judiciary but may also be relevant for subjective values (such as social safety). It is set case law by the European Court of Human Rights that a judge or a tribunal can objectively appear to be partial (impartiality is a core value of the judiciary) even though it also established that this is not due to the wrongdoing of an individual judge. The objective appearance of partiality can be based on various circumstances (ranging from the structure of the judicial system to unfortunate slips of tongue). In other words: integrity does not always translate directly to individual ethics as it does to the trust in a profession, role, sector, institution, organization or corporation. This dynamic has important consequences for dealing with allegations of integrity violations. For in these cases, ‘punishing’ individuals could amount to the mere finding of scape goats. It goes against fundamental values to blame people for mistakes that are not their fault. In fact, daring to admit that sometimes there is no ethical fault, can be in itself part of integrity. Third, there can be the temptation of resorting to the illusion of a clear-cut moral standard.

Week of Integrity The Moral Compass, Shared Values in a Global Context

Ensuring a culture of integrity requires more than rules, standards or procedures. It requires prudence: determining and weighing normative considerations against relevant circumstances. Taking moral dilemmas and conflicting interests seriously. Also when it comes to alleged integrity violations: Whether to allow for anonymous complaints? Whether to convene parties for an amicable solution? Whether to protect the identity of the whistle-blower? At what point to communicate to the press? Whether and on what terms to start an internal investigation and what to do with its conclusions? Whether to publicly rehabilitate if the allegations turn out to be (mostly) ill-founded? Prudence does not merely concern the prudence of management. Dealing effectively with integrity violations may require stimulating or activating prudence on other levels too. Traditionally, the focus has been on the prudence on management, shareholder and regulatory levels. In the last decades more attention is paid to the prudence on the level of the individual employees, teams, clients, the sector, politics and societal stakeholders. On all these levels and between these levels, prudence can be required: ranging from internal reporting, ongoing feedback loops to calling in or calling out. This multilevel prudence shows the immense difficulty of effectively dealing with allegations of integrity violations, let alone realizing a culture of integrity. In policy documents, there is a strong focus on moral tone-setting at the top. Research, however, shows that vigorous moral tone-setting can reduce prudence rather than stimulate it. It may give the impression that there is no need to discuss what is right or wrong. That the moral compass simply faces North. Reality, however, is more difficult. It is better to set a tone that admits to mistakes, that acknowledges conflicting individual interests, that underlines the difficulty of knowing what is ‘right’. This is also true for dealing with alleged integrity violations. What tone is set by leadership? Does it acknowledge the aspiratory nature of integrity standards? Potential hindsight bias when interpreting past behavior in the light of present day norms? The given that integrity violations do not always imply ethical fault? The potential implications for the individuals concerned and the long term impact on the culture of the organization? Or does it fall into the temptation of simply saving the day? In conclusion, these temptations have in common that it can be hazardous to simply rely on the idea of a clear-cut moral compass. After all, integrity values are often purposefully designed to allow for a plurality of (changing) moral views. And it may lead to seeking moral fault on an individual level where there is none. Lastly and most importantly, focusing on a moral compass should not come at the expense of prudence. The courage that is required of leadership when dealing with alleged integrity violations is, above all, the courage to be morally prudent.

Week of Integrity The Moral Compass, Shared Values in a Global Context

AN ETHICAL GOVERNMENT IS A COLLECTIVE RESPONSIBILITY

Renske Leijten Member of the House of Representatives of the Netherlands Renske Leijten is a Member of the House of Representatives (Socialist Party) and the spokesperson for democracy, digital affairs, economics and climate. She has been working as a Member of Representatives for over fifteen years. Mrs. Leijten was heavily involved in the uncovering of ‘The Childcare Benefits Scandal’ in the Netherlands. She worked closely with victims of the Tax Administration’s failed policies and discriminatory algorithms to receive recognition and deliver justice. She was a member of the Parliamentary Interrogation Committee on Childcare Benefits. Following the Committees report, the Dutch government stepped down in January 2021.

Week of Integrity The Moral Compass, Shared Values in a Global Context

Renske Leijten

AN ETHICAL GOVERNMENT IS A COLLECTIVE RESPONSIBILITY Five years ago, if you would have said that the most important government institution, the Tax Administration, will accuse people without evidence of acting fraudulently, you would have been laughed away. If you elaborated and said that people will be put on a blacklist because of an unjust accusation of fraud, those same people would not be helped with questions or are allowed to contact the Tax Administration, that the subsistence minimum would not count for them, or that they would be denied debt restructuring, you would have been told to take a long vacation. In the well-organized Netherlands, surely you would assume we have rule of law, where if a government institution makes an unjustified or disproportionate decision, a judge would correct it. Sadly, we have been shaken awake from this dream by the childcare benefits scandal. Rule of law existed for the few, not the many, as the government threw its own citizens into poverty and did not restore its mistakes when they were noticed. Uncovering everything is still ongoing, as to this day there is a lack of transparency at the Tax Administration and worse: there is no intrinsic motivation within the institution or the ministry of Finance to clean up their mess and prevent similar scandals. Lawyers and members of parliament have been taunted and belittled in the six years it has taken to uncover everything. Journalists were misled, information was withheld and civil servants who reported injustices were ignored. Again and again, the misconduct of the Administration was not the problem, but those who accused the misconduct were the problem. Still not all facts are on the table and still there are situations that should be rectified but are covered up instead.

An overview of the childcare benefits scandal In short, in the child benefits scandal people were unjustly accused as fraudulent actors and lost all support from the government and the judicial system because of it. The accusation was justified with the argument that people did not comply with the rules and were not able to prove that they had a right to childcare benefits. How did we get to the point where tens of thousands of families suffered heavily from financial, material and immaterial damages and people finally saw that there was a scandal? Its history in a nutshell: Since 2006, there have been benefits for working parents to cover some of the costs of daycare. It actually is not financially favorable to work were it not for these benefits: income earned is lower than the costs of daycare during working

Week of Integrity The Moral Compass, Shared Values in a Global Context

hours. Benefits are applied for and awarded first and it is checked afterwards if those people had a right to the benefits and or if they received too much money. Detection of unjust use of childcare benefits started with the implementation of the benefits-system in 2006 and over the years, evolved to become a fraud-detection system. Fraud-detection went off the rails, as we now know, in 2013 and 2014. Heavy-handed methods fit well in the political context: there were large budget cuts to public facilities and everyone benefiting from them encountered aggressive pushback. People were victimized, which, in spite of many signals and questions, stayed hidden. Parents have a right to financial benefits for childcare if they meet certain conditions. One of those conditions is that you need to be able to submit relevant proof to the Tax Administration if they request this. People who were investigated were often selected based on their low income, a far distance between their home and the daycare, being a single parent, their postal code, but also their origin. There was also a potential of failing to submit this evidence: evidence did not arrive or was incomplete. People already considered vulnerable often times could not provide information and consequently were marked as fraudulent actors in the Tax Administration’s systems: without being able to defend themselves from this decision, they were labeled as law violators ‘with intent and full blame’ and were punished. All the benefits, which parents often received for multiple years, had to be paid back. This could be a sum of tens of thousands of euros. Being unable to pay meant seizures of income, savings, their house, or car. Parents, often mothers, have lost their job because they could not afford the daycare, and often their home because they could not pay rent or because they had to sell their house. Some parents had such big problems that it was decided they could not care for their children, leading to child protection agencies removing the children from their custody. The methods of the Tax Administration were unjust, and parents would fight the Administration’s decisions in court. The Administration would purposefully withhold documents in those court cases: documents that would prove the parents’ innocence. Cases were brought to the highest court and even the highest court failed to see these cases independently. The Administration would always continue their procedures even if a judge ruled in the parents’ favor. People assumed that the Tax Administration was somehow working legitimately. The Council of State apologized for making this assumption. The uncovering of these injustices meant the end of Prime Minister Rutte’s third cabinet. The judiciary has done extensive research on its own behaviour and is

Week of Integrity The Moral Compass, Shared Values in a Global Context

handling its own criticism. Laws are analyzed to see if they are too punishing. Things are changing for the better but the damaged integrity of the government has not been repaired yet.

Integrity is a collective task Many people agree that the state failed to protect its own citizens. That this failure is a collective failure and to maintain the government’s integrity is something that many find complicated. This requires more of representatives, directors, journalists and civil servants expressing their compassion. It also requires self-criticism and uncomfortable analysis. In a state with rule of law, you are supposed to assume that laws are fair, even if they are strict. The judiciary is supposed to step in to maintain the rule of law, as they act like a protective cushion. The same goes for unjustified behaviour of executive government agencies: they are supposed to be corrected by the law and by representatives when they hear of unjust behaviour. If the rule of law is not respected by legislative, executive, nor by judicial powers, than the controlling powers of representatives and the media can step in. All these powers did not pick up on signals and did not see the larger picture. That makes sense: people trusted in rule of law and proper decision-making. Now that that trust proved to be unfounded, the trust in the controlling powers also has been damaged. Where were they? Were the signals they received not extreme enough to warrant investigation until valid answers were given? Protection of the rule of law that the government was supposed to give was absent for years during the childcare benefits scandal. There are many explanations, but an important one is the organized distrust towards citizens who need assistance from the government. The assumption that people should be mistrusted is grounded deeply in the government and its controllers. Judges, journalists, representatives, ombudsmen, and aid agencies trusted the government instead of people. Not everyone, but the vast majority did. These elites were not there for the people who were falsely accused by the Tax Administration. It was this uncaring elite that formed the government. The result was a scandal and its cause: a form of mistrust and disinterest and looking down on people in poverty. Separation of powers exists for a reason, the powers are supposed to balance each other out. Laws are supposed to be in the common interest and proportional, judges are supposed to be blind to the people in front of them, journalists are supposed to find the truth no matter what, and representatives and lawmakers are supposed to serve everyone. If institutions that are supposed to act for the common interest cannot be trusted, than that is an attack on our democracy. If the controlling powers do not correct damages to integrity, than

Week of Integrity The Moral Compass, Shared Values in a Global Context

there is something fundamentally wrong. In Dutch politics, integrity is seen as something individual. There are few rules concerning it that exist and even if they exist, it is ‘soft law’. Someone who reminds others of the rules is seen as a puritan annoyance and not as an enforcer of authority and integrity. This is a large problem. The integrity of the government, the director of a whole country, is not an individual task, but a collective one. Everyone is part of a culture from which a government with integrity flows forth. The childcare benefits scandal exposes how little integrity is seen as a collective task in the Netherlands. Only when there is room for being critical, recognizing mistakes and correcting them, can a government with integrity exist.

Week of Integrity The Moral Compass, Shared Values in a Global Context

INTEGRATION OF (DISCUSSION ABOUT) INTEGRITY INTO COMPLIANCE PROGRAMMES

Robbert de Bree LLM Attorney at law, Wladimiroff Advocaten N.V., The Hague (NL) Robbert has been a lawyer in the field of white collar defense for over two decades. He has a litigation practice with a focus on fraud and corruption cases. Moreover, he has vast experience in the setting up, the enhancement of and the maintenance of corporate compliance programmes, especially in the fields of anti-corruption, antitrust and international sanctions, for companies operating in and outside of the Netherlands. He is the author of various publications, including topics in the field of the attorney’s legal privilege.

Week of Integrity The Moral Compass, Shared Values in a Global Context

Robbert de Bree LLM

INTEGRATION OF (DISCUSSION ABOUT) INTEGRITY INTO COMPLIANCE PROGRAMMES The contradiction of this title will not readily be lost on the reader. Integrity is the basis of and reason for having a compliance programme. So why should integrity have to be integrated in such system? Isn’t is already enshrined into it? The answer to that question is in essence simple: systems can easily be or be-come a subterfuge for the behaviour they aim to encourage and discourage. It can, in some other words, lead to situations where the rule dictates behaviour and where considering and weighing actions before undertaking them is no longer the norm. Sometimes that is exactly what a compliance programme aims at and how it should work. When dealing with safety in industrial working spaces, for instance, there is no need or room for individual workers to consider whether or not a situa-tion requires them to wear their personal protection equipment (PPE). Those situ-ations require hard (and fast) rules. ‘Out in the open, helmet on’; those types of rules. Similarly many parts of compliance programmes in the fields of competi-tion, fraud – corruption (and money-laundering) as well as export controls and sanctions will eventually be of similar nature. For instance, the rule that no confi-dential information shall be shared with competitors can easily be seen as of such hard and fast nature. Equally, the rule that documents shall only be drafted in a correct manner and shall certainly not be backdated is of the same rock solid character. Moreover, it is well and truly understandable that compliance programmes are somewhat static and a solid structural basis. What I mean is that they are up to a certain extent an instructional tool embedded in a structure of administration sending out the various messages of “no cartel” behaviour, “no fraud”, “no corrup-tion” etc. This is usually accompanied by a proper framework, by incorporating the concept of compliance in the corporate identity (including of course by tone from the top) and by a clear roll out in the organization. This often requires easy-to-follow instructions. Of course, organizations ensure that non-compliance is fol-lowed up and remediated. The latter aspects benefit from proper whistleblowing channels. Yet that is only part of the equation. Having compliance programmes does not prevent infractions from occurring. In my own professional experience, both in assisting corporates with their

Week of Integrity The Moral Compass, Shared Values in a Global Context

compli-ance enhancement efforts but especially as a white collar litigator, infractions oc-cur and keep occurring. Sometimes intentionally, sometimes because of wilful or non-wilful blindness and sometimes because of lack of knowledge or experience, to name some common denominators. Based on that experience, I would not state that organisations having compliance programmes do not per se have fewer infractions. I would rather say that organi-sations with compliance programmes that leave ‘room for discussion’ are general-ly more robust than those lacking such and indeed have less occurrence of infrac-tions. I should however again specify this. As said, some rules don’t require much think-ing but only adherence. The “outside – helmet on” rule described above is one. However many situations are either not per se black or white or simply require, or at least benefit from, discussion. That is not so much a call for a shift from rule based to principle based programmes, but more a need to enable discussion of dilemmas. Let me give you a few examples from the white collar practice illustrating the im-portance of ensuring compliance programmes focus on interaction between ac-tors. So as to enable them to properly assess the situation, understand the rules, facts, background and interests. Export controls and sanctions, now in the limelight of world attention due to the war Russia is waging in Ukraine, are a topic of notorious complexity. The EU-Russia (economic) sanctions by now know some 35 annexes with hundreds of goods and the EU Russia (persons) sanctions list to date holds just over 1800 names. That is a stark example of sanctions as we all know, but sanctions in gen-eral as well as export controls, including notably dual use rules, are difficult to grasp. So when company X, active in the business of freight shipping was inspect-ed by the authorities, they found that the company on the one hand had a proper system for dual use labelling, a proper screening for sanctions goods and coun-tries and persons, but on the other hand the instruction for personnel dealing with purchase and execution of commercial activity had been equipped only with a basic manual and similar e-course. It turned out there was a serious disconnect between the ‘export/sanctions compliance department’ and those on the ‘work floor’. In short, a system that looked pretty OK on paper did not work accordingly. It unfortunately led to a serious fine as export controls breaches had occurred. It wasn’t so much solved by more rules, but by (better) interaction between the ac-tors in the company.

Week of Integrity The Moral Compass, Shared Values in a Global Context

The Board of company Y, a large corporate involved in real estate, had instructed a department to sell a portfolio of distressed assets with a book value of 150. The task landed on manager B who also had led the management of the assets. In a bid list, company F was best placed and eventually bought the assets for a value of 135 (the minimum price company Y wanted to obtain). It turned out B was ac-quainted with F’s manager C and that there had been foul play in that B had pro-vided confidential information to C enabling the best bid for the lowest price. This in itself is an example of a rotten apple which can never be prevented (fully). However it also turned out there were several points of information, such as the financial manager knowing C and B were acquainted and another middle manager having observed that company F had never bought such a portfolio as this one, to name two (there were some more). Yet there was no connect between these peo-ple which could have enabled them to discuss these issues. Whether it would have prevented this fraud is uncertain but proper forums for discussion of ethical issues would certainly have made the chance of detection greater. Later on, the company had these installed. Equally of course a proper promotion of whistle-blowing could have assisted here. A last example, in the area of corruption. Company Z was prosecuted for corrup-tion since its commercial manager had obtained draft tender forms from a public procurement tender through an intermediary (on its pay list). The commercial manager hadn’t discussed this internally and had simply never considered this obtainment as anything other than commercially savvy. He had not considered that, as it turned out to be, the intermediary party, may have obtained it through corruption. This case would most likely not have occurred should the company have had proper discussions on the topic such as in dilemma meetings. This mixture of examples from my practice do not per se culminate into one crys-tal clear point. However, I would highlight that interaction and discussion on the integrity underpinning a compliance programme, is a key element that may get more attention in the (roll out and) enhancement of such programmes. That point may be underscored by the latest add-on to these programmes, all the topics covered by the concept of ESG. Many comments can be made on ‘ESG-compliance’ but let me be brief. The area of ESG is about difficult choices in an arena of soft law changing rapidly into hard(er) law. More than ever before, effec-tive compliance in this field will have to travel a road of discussion, implying also that the programme needs to be tailored. But what if things go wrong despite all compliance efforts? In practice the exist-ence of a compliance programme that is properly equipped and adapted,

Week of Integrity The Moral Compass, Shared Values in a Global Context

such as described above, will often be one factor in getting prosecution authorities ame-nable to discuss an out-of-court resolution such as a settlement. And even if a case goes to court it will at minimum support the defence that the alleged mis-conduct was not institutional nor accepted policy, yet an incident. According to the proposal for an Anti-Corruption Directive (COM/2023/234) this may constitute a mitigating factor in terms of sanctions (art. 18 draft). In rare instances having an effective compliance programme may even lead to an acquittal. For example if the misconduct does not constitute accepted policy within the corporate entity. So, for all those who hold compliance high, look for the discussion about integrity as integral part of an effective compliance programme.

Week of Integrity The Moral Compass, Shared Values in a Global Context

PUBLIC SECTOR CORRUPTION: FOSTERING PROGRESS WITH PEER-TO-PEER MONITORING

Dr. Marin Mrčela President, GRECOl Dr. Mrčela is President of GRECO, the Council of Europe’s anti-corruption monitoring body. In this capacity, he has promoted countering corruption through a multidisciplinary approach and has called upon member States to put in place integrity policies that cover all branches of power. He has given lectures on corruption and security topics at numerous universities and institutions around the world. Dr. Mrčela is also Justice of the Supreme Court of Croatia and he has served as a judge in several war crime cases. Within Croatia, he has assumed various presidencies and memberships of key professional institutions, including the Association of Judges.

Week of Integrity The Moral Compass, Shared Values in a Global Context

Dr. Marin Mrčela

PUBLIC SECTOR CORRUPTION: FOSTERING PROGRESS WITH PEER-TO-PEER MONITORING The Council of Europe acted as a pioneer when it made the fight against corruption one of its priorities for international cooperation nearly 30 years ago. Corruption works against everything the Council of Europe represents, defends and promotes: democracy, human rights and the rule of law. It was in fact the Council of Europe’s moral compass that moved it to act, in the particular circumstance prevailing at that time after the end of the Cold War and in an environment favourable to multilateral engagement, and to create a legally binding basis for our member States to prevent and fight corruption. Since then, fighting corruption has moved to the forefront of the national and international debates, a development I welcome and support wholeheartedly. The Council of Europe’s Group of States against Corruption (GRECO), of which I am the President since 2012, was established in 1999 as the anticorruption monitoring body of the Council of Europe. Today, its 48-country membership comprises the Council of Europe member States as well as the United States of America and Kazakhstan. Being a member of GRECO is a commitment to a proactive and sustained combat against corruption and other forms of misuse of power. I am pleased to be able to say that GRECO has become a multilateral reference for anti-corruption reform and for holding states accountable for their anti-corruption efforts and policies. The foundation of GRECO’s work is its peer review monitoring. This approach helps ensure ownership of GRECO’s key messages and it has helped us develop and sustain a very substantial body of expertise within the GRECO community. The organization works by on-site visits organized by thematic rounds followed by detailed evaluation reports and a robust compliance procedure. This procedure may continue for several years until members have reached a satisfactory level of implementation. Our member States accept this methodology and commit to taking action in response. Ad hoc procedures can be launched if GRECO receives reliable information that an institutional reform or a legislative initiative may result in a serious violation of a Council of Europe anti-corruption standard. GRECO’s work is country-specific and based on objective standards and equality of treatment. It is not perception-based, an aspect I have often underlined. Country reports are based on facts. Each assessment is done on its own merit, with no comparative rankings or ratings. GRECO’s recommendations function as benchmarks for assessing progress in the countries’ fight against corruption. Our

Week of Integrity The Moral Compass, Shared Values in a Global Context

reports are published with the authorization of the member states and are a rich and detailed source of information for anyone interested in corruption and the steps being taken, or expected, to address and prevent it. GRECO is open to all countries. It is a global body and maintains a global dialogue with the other international anti-corruption peer review mechanisms, the UNODC, the OECD and the OAS. Moreover, the EU has observer status and could join as a full member under the GRECO Statute. Corruption is a criminal law offence and requires effective investigations, convictions as well as sanctions that are effective, proportionate and dissuasive. This is clearly acknowledged in the Council of Europe’s 1999 Criminal Law Convention on Corruption. In addition to monitoring the implementation of this treaty under its early Evaluation Rounds, GRECO’s focus has evolved to emphasize the aspects related to prevention. Corruption undermines trust in democratic institutions and threatens the rule of law. It results in funds being diverted which should have been spent on other important things. Relying only on a criminal law-based punitive approach to corruption will not ensure the full internalization of integrity when it comes to the use of power and resources. It is my firm conviction that such integrity in public life must be the basis of a system where resources are used as intended, processes are transparent, misconduct results in accountability, and members of the public receive the services they are not only entitled to, but which they finance through their taxes. Effective investigations are crucial when it comes to the crime of corruption. Again, I would underline that this must be complemented by measures based on the moral and ethical aspects, the fundamental decency and integrity that are required and which we all expect in public life. Certain prerequisites are key to both the legal pursuit of those suspected of corrupt behaviour and to instilling the necessary ownership of public integrity: Independent judiciaries. Effective prosecution services. An independent media that is not thwarted in its work or targeted directly by those whose misconduct might be exposed. A strong civil society, also protected and not hounded by the authorities. I would point to all of these elements as strong barriers against corruption. Good government requires the highest standards of integrity, openness and transparency, and in GRECO we have issued clear and sharp recommendations in this respect in the course of our evaluation cycles. In the process of monitoring, we have scrutinised legislation, its practical implementation, and the requisite institutional arrangements.

Week of Integrity The Moral Compass, Shared Values in a Global Context

We know that corruption can be reduced by means of targeted preventive action. GRECO has already analysed corruption-prevention tools in public administration and with respect to parliamentarians, judges and prosecutors in each of its member States. It is currently examining such measures as regards members of the top executive and law enforcement authorities. To drive anticorruption policy forward, I consider it essential to involve and mobilise all stakeholders. This not only brings greater legitimacy and ownership to reforms, but also contributes to the effective implementation of anti-corruption measures, results in positive changes in attitude and, ultimately, facilitates a culture of integrity. States should provide education and awareness-raising about the harmful effects of corruption vis-à-vis people’s lives, and for our institutions and processes. I have continuously stressed that this work should start already at the kindergarten level and then be supported within families. Mentalities that are formed early remain. Anti-corruption is now mainstreamed across many sectors within the Council of Europe, such as the fight for gender equality, the safety of investigative journalists and transparency of media ownership, integrity in sports, in the education sector, and in the management of migration flows. I would also point to successful cooperation between the public and private sectors is also fundamental. It requires a strong moral compass and real courage to speak up about corruption and other abuses of power or office. The risks for the individuals seeking to do so are considerable and include public gaslighting, financial and legal retaliation, dismissal, and prosecution. As a consequence, those making the disclosures often end up paying a much higher price than those responsible for the actual misconduct and abuse. This balance absolutely has to change. We should all help create the right circumstances so that speaking up will become the norm, and doing so can be done safely and credibly. We must make sure the necessary frameworks are in place to protect and help those who have information that should be in the public domain. It is the responsibility of states to create and enforce such frameworks. For the system to work in practice, whistle-blowers must be able to trust the mechanisms available for their protection. A legislative ban on retaliation should be coupled with workable remedies and relief for whistle-blowers, and there should be adequate sanctions for those who seek to retaliate. GRECO works on this in our 5th Round evaluations, where the majority of states evaluated have received recommendations to strengthen their whistle-blower protection laws and structures, and to raise awareness about how to use them.

Week of Integrity The Moral Compass, Shared Values in a Global Context

Corruption undermines basic human rights. Indeed, the European Court of Human Rights regularly cites the GRECO reports in its judgments related to, for example, the independence of the judiciary and of the prosecution service. Corruption violates the principles of equality and non-discrimination. It makes our societies less fair. No issue does more to alienate citizens and to undermine political stability than corruption in the key branches of the State, the executive, the legislative and the judicial power. Through its peer-to-peer monitoring, we will continue within GRECO to work with our member States so that they do what is needed to prevent and fight corruption. The aim for me is very clear, safeguarding the future of our values and institutions, to the benefit of everyone. There can be no effective fight against corruption without political will and our political leaders must lead by example. Their messages should be unambiguous, and they have to allocate the necessary resources, financial and human, to combating corruption. In short, words must be followed by deeds if we are to see real progress.

Week of Integrity The Moral Compass, Shared Values in a Global Context

The Netherlands, Initiator ww.weekvandeintegriteit.nl Albania www.weekofintegrity.al Macedonia www.integrity.mk Guatemala cig.industriaguate.com/semana-de-la-integridad Week of Integrity, global website www.weekofintegrity.org

WEEK OF INTEGRITY FOUNDATION An ICC Netherlands initiative Since 2016, ICC Netherlands organises the national Week of Integrity, a multi-stakeholder initiative that aims to foster the exchange of knowledge and stimulate the debate on integrity. The Week of Integrity annually takes place from 1 to 9 December, prior to the UN Anti-Corruption day. The Week of Integrity promotes ethical behaviour in both the workplace and in the boardroom, exchanging best practices across sectors. The Week of Integrity connects organisations, facilitating the exchange of knowledge and best practices throughout the year. In 2019, the Week of Integrity Foundation was founded, to secure the long term character of the growing initiative.

Partnering for integrity The Week of Integrity consists of an active and growing network of partners from the private and public sector, and educational and civil society institutions. In total, up to 450,000 employees are reached in the Netherlands. Throughout the year, the network regularly meets, exchanging thoughts and ideas on integrity policies and on concrete issues, resulting in vivid discussions. The Week of Integrity itself consists of a week full of activities, organised by its partners, putting the spotlight on the importance of integrity.

A growing international network It is essential that the stakeholders involved continue to discuss current matters, raise awareness and promote ethical behaviour. Therefore, the initiators of the Week of Integrity are thrilled that other countries embrace the Week of Integrity concept and its multi-stakeholder approach. International partners now include Albania, Guatemala and Macedonia. Businesses and organisations interested in becoming a partner of the Week of Integrity, can contact the ICC National Committee in their respective country.

Week of Integrity The Moral Compass, Shared Values in a Global Context

ICC The world business organization

A unique network active in more than 170 countries

G20

ICC AND ITS LEGACY ON BUSINESS INTEGRITY ICC The world business organization

The International Chamber of Commerce (ICC) is the institutional representative of more than 45 million companies in over 100 countries. ICC is committed to an efficiently functioning global economy characterised by free and fair competition and its core mission is to make business work for everyone, every day, everywhere. Through a unique mix of advocacy, solutions and standard setting, the ICC promotes international trade, responsible business conduct and a global approach to regulation, in addition to providing market-leading dispute resolution services. ICC members include many of the world’s leading companies, SMEs, business associations and local chambers of commerce. For decades, ICC has taken the lead in denouncing corruption and in developing measures and tools to combat corruption. Corruption threatens the integrity of the market, disturbs public trust, increases inequalities in income and wealth and is a burden to society. In 1977, ICC was the first business organisation to publish anti-corruption guidelines with its ICC Rules of Conduct to Combat Extortion and Bribery. In addition, ICC played an instrumental role in the development of the respective OECD and UN Anti-Corruption Conventions. ICC continues to develop standards, guidelines and tools, contributing to a strong organisational integrity framework that promotes ethical behaviour in the workplace. These include, among other the ICC Code on Combatting Corruption, the ICC Guidelines on Whistleblowing and the ICC Guidelines on Gifts and Hospitality. ICC collaborates with partners and intergovernmental organisations around the globe. Since 1946, ICC has held top-level consultative status with the United Nations. Its unique Observer Status obtained in 2016 enables the ICC to contribute directly to the work of the General Assembly.

For more information on ICC and its work on business integrity, visit www.iccwbo.org or www.icc.nl

Week of Integrity The Moral Compass, Shared Values in a Global Context

Ethical management and compliance are non-negotiable. This goes beyond strict adherence to rules and firmly places integrity at the core of our culture and business operations. Roland Busch, President and CEO of Siemens AG

CONTRIBUTION OF THE HAGUE TO THE CONFERENCE BOOK 2023 The Hague, International City of Peace & Justice, is a city which is home to many intergovernmental and non-government organisations working on peace, justice and security. The city of The Hague has partnered previous editions of ICC’s International Integrity & Anti-Corruption Conferences. Conferences which help promote a better, more just and secure world. In 2023, The Hague is proud to again be hosting the event which is taking place in the remarkable location of Madurodam: a monument to commemorate the Curacao born Jewish soldier George Maduro, who eventually died aged 28 in Dachau 1945. Integrity is and continues to be a very important theme. It concerns human behaviour; it is complex and multi-faceted. It constantly requires attention. For that reason, it is very valuable that the ICC keeps the theme on the agenda. By continuing to discuss integrity together, it receives the attention it deserves. This years theme The Moral Compass, Shared Values in a Global Context, evolves around the global mega trends that may impact our moral compass: climate change/sustainability, digitalisation/security/Artificial Intelligence and geopolitical shifts. ICC NL supports its constituency by exchanging knowledge, stimulating debate and offering valuable input from renowned speakers.

THE MORAL COMPASS

SHARED VALUES IN A GLOBAL CONTEXT Society’s moral compass is a concept that has evolved over centuries. It has guided the decisions made by the various sections of our society: not only governments and business, but people going about their day-to-day lives too. Our moral compass is not something that we should ever take for granted. On the contrary, it must be cherished, nurtured and safeguarded. And as the world is in constant flux, there are always new challenges appearing on the horizon: geopolitics, climate change and globalisation to name a few. As we tackle (and hopefully overcome) these challenges, the role of ethical business is paramount. Decisions have to be made with integrity, respect and responsibility. This fifth ICC Integrity Book gathers these themes together in a collection of essays authored by some of the world’s most renowned thought leaders. They share their ideas, addressing questions on subjects such as the increasing importance of integrity, ethical governance, public sector corruption, and judicial integrity in kleptocratic states. In short, this book asks the question of: how do we stay true to ourselves and keep our integrity intact? How do we keep our moral compass? Contributions by: Ghada Fathi Waly | Iohann Le Frapper | Robert Mardini | Juliana Darini Teixeira | Annette Kraus | Claudia Escobar Mejía | Jonathan Soeharno |Renske Leijten | Robbert de Bree | Marin Mrčela |

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