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Designing Corruption Out of The System: Collective Action Through Transformation Mapping

Note:  Professor Juliet Sorensen (Northwestern University School of Law) and Northwestern Law students Akane Tsuruta and Jessica Dwinell are attending the Fifth Conference of the State Parties (CoSP) to the United Nations Convention against Corruption in Panama City, Panama.  See here for a live feed of the States Parties’ discussions.

This post regarding the proceedings is by Akane Tsuruta.


Companies can be agents of change.  But it is better if they act together, and act with a focus.

Representatives from the World Economic Forum`s Partnering Against Corruption Initiative (PACI), the OECD, the Basel Institute on Governance, and Siemens agreed on the need for collective action by companies against corruption and “transformation mapping” as an innovative way to focus their action.

Collective action in the corruption context is a “coordinated, sustained process whereby businesses and their partners jointly tackle the problems of corruption that affect them all.”  To be successful, action requires trust, time, and a joint understanding of the risks and potential areas for change.  But in an area as complex as corruption, companies and their collective endeavors may not know where to start.

Transformation mapping is a method to figure that out.  It “helps companies be more efficient about where to engage in collective action.”  It works by first brainstorming central topics and then radiating outward by identifying related issues, stakeholders, solutions, and challenges, until there is a “constellation” of ideas.  Such a visual may build understanding by illuminating connections and gaps between the various points – areas where company action may be especially impactful.

Yesterday at the CoSP , state delegates and observers tried transformation mapping corruption.  Some ideas that emerged were:

  • Corruption as an interaction between human beings and a system.  Human beings create the system but also react to it.
  • Corruption is the big elephant in the room, and the best way to tackle an elephant is bit by bit.
  • Language is important.  Just like visual mapping may build understanding, visual words may also better aid the emergence of new ideas.  Language may also be an indicator of business and country readiness to engage in real anti-corruption initiatives.  For example, if a company’s compliance officer cannot bear to say “corruption” and prefers “circumlocution,” the company might not be ready to take effective action.
  • Balancing collective action and anti-trust allegations. Collective action among industry competitors may raise eyebrows.  In the course of collective action, company competitors may need to discuss details that would verge on collusion.
  • Effective anti-corruption collective action may be realistically limited to companies who together hold a significant share of their market.  If competition abounds, a small band of small companies may not make a difference – bribe solicitors can just go to someone else.
  • An anti-corruption “tone from the top” should come from business leaders and government leaders, but anti-corruption recommendations should also be sensitive to the real consequences in some countries of “sticking your head above the parapet.”

In an area like corruption, where the target is always moving and adapting, transformation mapping may be a valuable means of gathering experts–whether CEOs or state delegates—and identifying the gaps where corruption may not exist now, but has the potential to spring up like a weed in the future.

The Legal Profession’s Contribution To The Global Fight Against Corruption

Note:  Professor Juliet Sorensen (Northwestern University School of Law) and Northwestern Law students Akane Tsuruta and Jessica Dwinell are attending the Fifth Conference of the State Parties (CoSP) to the United Nations Convention against Corruption in Panama City, Panama.  See here for a live feed of the States Parties’ discussions.

This post regarding the proceedings is by Jessica Dwinell.


Politicians with legal training routinely participate in state reporting procedures and legislation drafting. Yet, the question remains, how can practicing attorneys join in the anti-corruption efforts? Yesterday at the CoSP, members of international and national bar associations, the OECD, the UNODC and the Brazilian Institute of Business Law discussed how practicing attorneys could influence countries’ anti-corruption efforts.

Practicing attorneys can assist anti-corruption efforts in three main ways: by revising and/or drafting legislative anti-corruption laws, by participating in either OECD on-site visits or during the UNCAC review process, and by serving, more or less, as an enforcement arm of the government.

In the legislative drafting context, the value of practitioners’ insight is obvious. Practitioners work daily with corporate clients, often in transnational situations, and thus understand the business realities and likely consequences of proposed laws both on domestic and foreign business. Though the politician may be well-versed in how to draft legislation, the practicing attorney will better understand the law’s practical implications.

In regards to practitioners’ participation in the UNCAC review processes, Annika Wythes (Crime Prevention and Criminal Justice Officer of the UNODC) stressed that attorneys are invaluable objective participants, able to assess strengths and weakness of national legislation and can highlight enforcement weaknesses.

Although it may appear counter-intuitive that private attorneys could serve as a “leveraged enforcement tool of the government,” the panelists often spoke of the attorney’s ability to teach clients how to comply with anti-corruption laws. By reducing resistance from the business community and ensuring compliance with new anti-corruption bills, private attorneys can effectively save governments the resources traditionally needed to investigate and prosecute corruption cases.

Governments may not universally seek assistance from private practice attorneys to draft legislation or complete anti-corruption review processes. Nevertheless, attorneys who want to participate in anti-corruption efforts should reach out to government personnel to see how they can assist and, if necessary, send written submissions to the OECD during their countries’ review process. The OECD, UNODC and most countries to date would welcome their participation and view attorneys’ insights into business realities and objective assessments of enforcement gaps as invaluable.

Constructive Public-Private Partnerships to Prevent Bribery Solicitation: The High Level Reporting Mechanism

Note:  Professor Juliet Sorensen (Northwestern University School of Law) and Northwestern Law students Akane Tsuruta and Jessica Dwinell are attending the Fifth Conference of the State Parties (CoSP) to the United Nations Convention against Corruption in Panama City, Panama.  See here for a live feed of the States Parties’ discussions.

This post regarding the proceedings is by Jessica Dwinell.


To date, most governmental anti-bribery efforts focus on either the offering or giving of bribes. However, on Monday afternoon, members of governance institutions and the business community discussed an innovative approach to prevent demand-side bribery solicitation by public officials: the “High Level Reporting Mechanism” (HLRM). The Basil Institute on Governance and the OECD developed the HLRM concept—a mechanism dependent on public-private partnerships—in response to company concerns regarding the extent of bribery solicitation and extortion, and their fear of retaliation should they report illicit public official activity. According to the HLRM Concept Brief submitted by the OECD and Basil Institute on Governance, the HLRM seeks to mitigate such concerns by “allow[ing] companies faced with bribery solicitation to report these to a dedicated and high-level institution that is tasked with responding swiftly and in a non-bureaucratic manner to reports.”

Successful implementation of an HLRM depends on several factors, including access to high level reporting, institutional independence, ability of the institution to address concerns quickly, country-specific procedures, and, perhaps most importantly, public and corporate trust in the host institution. However, as panelists Rafael Merchan (Secretary for Transparency in the Office of the President of Colombia) and Enery Quinones, (Chief Compliance Officer of EBRD) underscored, HLRM implementation is not a cookie-cutter process and the mechanism procedures can vary greatly.

For instance, Mr. Merchan explained that prior to implementing the HLRM in the area of procurement, companies faced with bribery solicitation by Colombian officials had three choices: (1) seek a judicial remedy which could take four to five years to resolve and never adequately address corporate concerns; (2) pay the bribe and risk prosecution; or (3) refuse to invest in the country. To address this prisoner’s dilemma—one in which all companies would be better off should they collectively refuse bribery solicitations—Colombian officials proposed an HLRM. Specifically, the Colombian pilot program consists of a group of experts dependent on the Secretary for Transparency (thus providing high level access), yet independent from the agencies that make procurement decisions. Complaints of solicitation are sent directly to Mr. Merchan, who maintains confidentiality and prevents press leakages. In return, companies sign transparency pacts in which they agree to engage only in public procurement meetings, not to offer gifts to public servants and refrain from hiring public officials until two years after the completed transaction. Though the HLRM has yet to receive a complaint, the Colombian government has shown a clear political will to fight corruption and fifteen companies have voluntary signed the transparency pacts.

Ukraine’s proposed HLRM—designed in large part to address private sector concerns in an expedient manner—differs vastly and, as Ms. Quinones explained, its creation “has been a very difficult process.”  When the Ukrainian government realized that it was struggling to attract foreign investors, and the European Bank for Reconstruction and Development (EBRD) considered withdrawing its investments entirely, Ukrainian officials had to listen to investor concerns. Thus began the process of detailing an HLRM completely independent of the government. Though such independence proved the “first stumbling block,” Ms. Quinones told government personnel, “businesses will not trust this [HLRM] process if [Ukrainian officials] are controlling it.”

As a result, the proposed mechanism would consist of a director, two deputies and staff members tasked with both receiving and resolving business complaints and publicly monitoring and reporting on the actions—and non-actions—of government agencies. These individuals would not serve as law enforcement, they would not investigate allegations and they would not act in a judicial capacity. Rather, they would focus on providing a “way for businesses to feel confident in bringing complaints,” and would offer the means for resolving bribery solicitation complaints in a timely and effective manner. For instance, rather than seek to blame an individual or assess liability in cases of customs bribery solicitation, Ms. Quinones explained that the HLRM would focus on helping companies delayed at customs for failure to pay a bribe seek release of their goods. Since private sector concerns, rather than State political will, drove the creation of the Ukrainian proposal, its aims focus first and foremost on addressing businesses’ immediate concerns.

The panelist’s business representatives generally supported implementation of HLRMs. Javier Lozada, (Vice President and Regional General Counsel of Philips Latin America) stressed that for business, “any reporting mechanism that can help level the playing field, . . . particularly in growth markets . . . is more than welcome.” Dominique Lamoureux (Vice President of Ethics and Corporate Responsibility of Thalès) likewise recognized that you “need two to tango” and that businesses appreciate the HLRM concept.

Nevertheless, both individuals identified potential obstacles from a business perspective. First, they underscored that it may take considerable time for companies to fully trust that filing a complaint in accordance with the HLRM will not provoke retaliatory action. Second, the HLRM’s failure to offer—or protect—confidentiality in reporting mechanisms may dissuade companies from coming forward. And third, companies may fear that competitors who have lost a tender will simply manipulate the system to delay the procurement process.

How Colombian and Ukrainian officials will react when the first complaint is filed remains to be seen and the mandates of the HLRMs will have to clearly outline measures—if any—intended to protect confidentiality and prevent manipulation. Yet, as Mr. Merchan underscored, the process to combat corruption and discourage bribe solicitations will move forward on a “trial and error” basis. Though the HLRM may not be the solution, it is at the very least an additional piece of the puzzle.

The Anti-Corruption Role Of Global Banks

Note:  Professor Juliet Sorensen (Northwestern University School of Law) and Northwestern Law students Akane Tsuruta and Jessica Dwinell are attending the Fifth Conference of the State Parties (CoSP) to the United Nations Convention against Corruption in Panama City, Panama.  See here for a live feed of the States Parties’ discussions.

This post regarding the proceedings is by Akane Tsuruta.


Once a man walked into Barclays with $8 million in cash.  The bank called law enforcement, the man was arrested, and the money was returned to the government from which it was corruptly obtained.  That’s an easy case.

Yesterday, the British Bankers’ Association presented on how banks can deal with harder cases, specifically when Politically Exposed Persons (PEPs), or high profile public officials, try to bank in the UK.  The heart of the recommendation was enhanced due diligence and monitoring.

Banks will conduct enhanced due diligence on PEPs seeking their services based on several indicators of the risk of corruption, though there may be different levels of due diligence.  Banks may consider the PEP’s country and culture; for example, the attitude toward corruption Transparency International’s Corruption Perceptions Index, and whether the country has signed the UNCAC.  Banks may examine the nature of the PEP’s public position: the degree of power and if the PEP is involved in areas or industries that are particularly vulnerable to corruption.  Banks may also read media stories and reports of misconduct to assess the PEP’s reputation.

After this screening, the bank may turn away the customer or may continue to monitor the PEP’s transactions to look for red flags of corruption (banking in cash, for example, or mixing personal and business funds).  PEP transactions are profiled by reference to peer PEPs in order to detect anomalous transactions.  Banks will also watch for “trigger events” in the news that indicate corrupt dealings.

If the bank suspects a PEP of banking with ill-gotten gains, the bank will report the PEP to law enforcement.  In fact, if a bank turns someone away based on this risk assessment, Stephen Foster, Director of Anti-Money Laundering at Barclays Financial Crime Compliance, explained that UK law requires the bank to notify the authorities.  The bank will then try to return the money to the country in cooperation with law enforcement and the country’s government.

Banks undertake this enhanced risk assessment, due diligence, and monitoring for their own benefit, too, said Susan Wright, HSBC Group Head of FCC External Relations, HSBC Holdings.  Banks must manage their “reputational risk,” or the risk that they will be seen as a place that allows illicit funds.  As Foster emphasized, “We don’t want criminal money in our bank.  We don’t want corrupt funds.”

But there are other factors to consider, such as to whom to return the funds, the best level of risk, and the effect on economic development.  It may not always clear whether or to whom to return ill-gotten funds.  What happens when a new government comes into power, and asks for the return of funds on behalf of its country?  How do you know who has the authority to act on behalf of the central bank?  Furthermore, banks must balance the obligation to close their vaults to corrupt funds while retaining PEP clients who are “genuinely wealthy.”  This balance may affect economic development.  For instance, legitimate enterprises in corrupt countries may be deemed too risky to bank in the UK, which would hinder growth in countries that need it.

Ultimately, the Director of Financial Crime (Sanctions and Bribery) of the British Bankers’ Association, Justine Walker, emphasized the need for banks to have proportionality between crime control, customers, and development.

Anti-Corruption World Gathers In Panama

Note:  Professor Juliet Sorensen (Northwestern University School of Law) and Northwestern Law students Akane Tsuruta and Jessica Dwinell are attending the Fifth Conference of the State Parties (CoSP) to the United Nations Convention against Corruption in Panama City, Panama.  See here for a live feed of the States Parties’ discussions.

This first post regarding the proceedings is by Jessia Dwinell.


For the next six days, the anti-corruption world will be centered in Panama City, Panama. Specifically, from November 24th to November 29th, 1,500 state party delegates representing approximately 130 nations and 450 representatives from civil society and intergovernmental organizations will participate in the Fifth Conference of the States Parties (CoSP) to the United Nations Convention against Corruption (UNCAC). Ninety-eight journalists are registered to cover the proceedings.

The UN General Assembly adopted the UNCAC in October 2003, an international anti-corruption instrument now ratified by 167 state parties. When first adopted, the UNCAC provided the first global framework aimed at harmonizing anti-corruption measures across borders. Acknowledging the importance of both preventive and punitive measures, the General Assembly included provisions requiring the criminalization of corruption in domestic laws, asset forfeiture, mutual legal assistance and the provision of technical assistance and training to personnel responsible for combating corruption. Participants in the Fifth CoSP will seek to improve the capacity and cooperation between States Parties, strengthen asset recovery mechanisms and review the current implementation of the UNCAC provisions.

In preparation for the Fifth CoSP’s official opening and the States Parties’ general remarks, members of the UNCAC Coalition, civil society organizations and the United Nations Office on Drugs and Crime (UNODC) met on Sunday, November 24 to discuss the role civil society will play at this year’s conference. Members from all of the organizations stressed the need for patience, cooperation between States Parties representatives and civil society and a coherent, focused agenda. For instance, John Sandage, Director of the Division for Treaty Affairs at the UNODC, stressed that combating corruption and strengthening the UNCAC is “a process, not a destination.” Vincent Lazatin, the UNCAC Coalition Chair, mirrored this sentiment when he acknowledged that “these things [changes] are glacial” and called for patience.

The UNODC, an organization that according to Mr. Sandage, “helps civil society participate in States who welcome their participation,” often works with Transparency International to organize civil society training sessions. In preparation for the week’s proceedings, Mirella Dummar-Frahi, the Civil Affairs Officer and Team Leader, Civil Society Team of the UNODC advised civil society representatives, “[i]n normal life, there is the right way and the wrong way, and then there is the UN way. And the UN way is to build consensus.” Mr. Lazatin further underscored that it is often difficult for civil society organizations to find the boundaries without overstepping them. Patience, once more, appeared to be the solution.

As the proceedings commence tomorrow, the States Parties will debate draft resolutions, seek stronger guidelines on what the UNCAC requires in the realm of criminalization and enforcement and push for mandatory access to information laws. Civil society members, likewise, will advance key initiatives—such as to increase transparency, protect whistleblowers and enact measures to better return fruits of corruption to the victims—all measures which fall within the framework and the text of the current Convention. Though only time will tell, hopefully the Fifth CoSP will lead to the productive consensus building that defines the “UN way.”

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