Bipservicepackage

Creating Business Value from Integrity Corporate Integrity Systems and other services offered by Transparency International Cambodia

Transparency International Cambodia’s Business Integrity Programme Transparency International Cambodia (TI Cambodia) is the national chapter of Transparency International, the global civil society organisation leading the fight against corruption. Officially founded on 5 July 2010, TI Cambodia is working together with individuals and institutions at all levels, including the private sector, to promote integrity and reduce corruption in Cambodia.

TI Cambodia launched its Business Integrity Programme (BIP) in January 2014 as part of an international initiative by Transparency International to reduce corruption through improved transparency, accountability and integrity in business practices. TI Cambodia is working directly with businesses to help them take action against corrupt practices and limit their exposure to the costs and risks associated with bribery and corruption.

TI Cambodia offers services and trainings to companies, business organisations and/or NGOs with a view to equip them with the tools to shield themselves from corruption risk and thus make direct financial gains, while fostering a cleaner business environment in the country at large.

All services will be free of charge throughout 2015, which provides a unique opportunity for companies and organisations to improve their anti-corruption programmes and bring them up to international standards.

The business case against corruption Corruption adds up to 10% to the total cost of doing business globally, and up to 25% to the cost of procurement contracts in developing countries.1 No businesses, wherever they operate, are immune to corruption. Companies should proactively combat icorruption for a variety of self-serving reasons, including that it can help reduce their costs and enhance their reputation in an increasingly transparency-demanding global market.

Tackling corruption also boosts economic development. Estimates from 2012 reveal that money lost to private sector corruption alone in developing countries amounted to a staggering USD500 billion, three times the foreign assistance given that year.2 Malaysian company PKNS claimed it managed to save approximately USD125 million over four years by improving its tendering procedure and implementing integrity pacts. For companies operating in an even more corrupt environment like Cambodia,3 the gains to be made are all the more substantial.

This all builds a strong case for local and international businesses in Cambodia to combat corruption and enhance corporate integrity. _____________________________ 1 “Good Business Is Clean Business”, UNGC, ICC, Transparency International, WEF (2008) 2 The Costs of Corruption, Daniel F. Runde, Sadika Hameed, CSIS (2014) 3 Malaysia ranked 18th in the World Bank’s 2014 Doing Business Index and 53rd in TI’s 2014 Corruption Perceptions Index, while Cambodia is ranked 135th in the former and 156th out of 175 in the latter

Building Corporate Integrity Systems to minimise corruption risk in Cambodia Business integrity is often seen as the product of ethical leadership, strong compliance and regulations that prevent and sanction wrong-doing.

While these ingredients are essential, each on their own is not sufficient to comprehensively and sustainably tackle the broad range of interrelated corruption risks that face companies. Only the implementation of a Corporate Integrity system (CIS) enables to address and prevent these risks holistically.

A good CIS creates an effective internal governance structure that limits the possibilities for nepotism, conflict of interest and corruption. It also incites company employees to refrain from corruption by setting clear policies and procedures on how to act and respond when they face corruption.

TI Cambodia is pleased to support companies in their effort to implement a CIS. Bolstered by technical expertise from Transparency International’s Secretariat and TI-Malaysia, TI Cambodia can provide support to companies at each of the six steps of the implementation process.

The CIS implementation process includes the following steps: 1. Companies sign an agreement where they commit to the project.

2. A risk assessment is conducted for each company, evaluating the policies and procedures in place and where the company is most at risk. A risk matrix is designed to help visualising these risks.

3. Training materials and policies are designed in collaboration with key staff from the company, aiming at strengthening the company’s policies, procedures and governance structure. This is often combined with training sessions to both management and general staff to enhance understanding of corporate integrity.

4. The company implements the policies and procedures that were agreed upon.

5. The company’s policies and procedures are once again assessed, looking at the success of the implementation and ways to further improve the framework.

TI Cambodia can continue to support the company after the CIS implementation and adapt to the company’s needs. Companies are advised to appoint an integrity manager to serve as a liaison officer and follow up on the CIS once the implementation is completed.

The implementation process usually takes between three and nine months, depending on the company’s size and capacity.

Policies and procedures addressed in the Corporate Integrity System 6) Integrity pacts; 1) Gifts & Hospitality; 7) Whistleblowing; 2) Charitable Donations & Sponsorships; 8) Staff Integrity Pledges 3) Political contributions; (Staff education and format of the pledge); and 4) Facilitation payments; 9) Conflict of Interest.

5) Support letters; Solid policies and procedures in these areas can significantly decrease the exposure to corruption and minimise the risk of being a victim of or engage in corrupt practices. This can not only lead to significant financial gains by reducing overhead costs but also build pride and integrity among company employees and contribute to build a strong and attractive brand for the company.

Other Services Offered by TI Cambodia The BIP has access to legal expertise and can provide trainings in both Khmer and English to staff at all levels. Trainings can be conducted confidentially if so requested by companies. All the services and training curricula have been developed with the support of experts from Transparency International’s Secretariat, TI-Malaysia and the Cambodian private sector. The trainings and services can be tailored to the needs of the companies, their structure, industry sector and time constraints.

Basic Anti-Corruption Law training (One-day training: 1/2 day staff training and 1/2 day management training) The existing Cambodian Anti-Corruption Law from 2010 has up to this point not been thoroughly enforced on the private side. Yet, in order for companies to file corruption complaints, a basic understanding among both low-level staff and management is crucial. The BIP can offer trainings on the Anti-Corruption Law and how to apply it to fight corruption. The training seeks to enhance staff’s understanding of corruption mechanisms and how to combat it, and make companies more resistant, enabling them to make financial benefits in the long run.

Public service fees and basic regulatory procedures – a way to minimise corruption (One-day training) Due to a lack of access to information, companies are often facing situations where they do not know the adequate price of a public service and the procedure to follow. This might lead to companies engaging in corruption unintentionally.

The BIP can provide a one-day training on the right procedures and public service fees. The training is a great way for companies to educate their staff and gain confidence in dealing with public officials.

“Partial CIS” training for companies of fewer than 100 employees (One-day staff training, 1/2 day management training, orientation & follow-up meetings) Companies generally need to have a minimum of 100 employees to be able to implement a comprehensive CIS. If smaller, due to limited human resources and governance structure, all aspects of a CIS do not apply. However, the BIP is keen to engage with smaller companies and offers trainings on partial corporate integrity systems, with a focus on policies and procedures that are essential to curb corruption risk, namely gift giving and hospitality, facilitation payments and whistleblowing & corruption reporting.

Health checks, risk assessment and self-assessment tools Anti-corruption audits are needed to assess where companies are at high risk of corruption and to look into the costs incurred by it. Companies which seek to set up anti-bribery/corruption programmes need to identify where they are most vulnerable and what areas they need to strengthen. As for companies which already have compliance programmes, corporate integrity systems or other antibribery/corruption programmes in place, there is always a need for selfassessment and room for further development. With this in mind, the BIP offers three types of services: • A health check for companies that already have policies and procedures in place to provide them with evidence-based recommendations on how to improve their anti-corruption framework and reduce their exposure.

• A risk assessment for companies that do not have anti-corruption policies and procedures in place. The BIP will identify where companies are most at risk and most exposed to corruption, produce a risk matrix showing the different levels of risk within the companies’ governance structure and provide clear recommendations to address the challenges.

• A technical training on the self-assessment tool developed by Transparency International’s Secretariat in Berlin. This tool enables companies to evaluate their policies and procedures and identify their strengths and weaknesses. A company that develops technical expertise on the self-assessment tool can conduct the assessment on a yearly basis and track their progress.

Integrity services for NGOs/Projects The BIP also offers its services to NGOs that are looking to boost their anticorruption programme. These services include risk assessments, advice on policies and procedures and the trainings mentioned above but tailored to suit the needs of NGOs in eliminating corruption-related risks.

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CONTACT

+855 23 21 44 30 / 23 21 42 11 matsstridsman@ticambodia.org www.ticambodia.org