Professor Juliet Sorensen (Northwestern University School of Law) and Northwestern Law students Michelle Kennedy and Cassandra Myers are attending the Sixth Conference of the State Parties (CoSP) to the United Nations Convention against Corruption in St. Petersburg, Russia. For more on the opening of the Conference, see here and here. Over the next few days, FCPA Professor will be publishing various posts regarding the proceedings.
This post is from Cassandra Myers.
In the context of the international market, anticorruption measures are a necessary component to cultivating a thriving public and private economy.
As Alexander Govorunov, the vice-governor of St. Petersburg, simply put it: “Corruption is evil . . . The whole arsenal needs to be put into work here.” During the Convention Against Corruption’s special event on partnerships between the public and private center in combating corruption, Russia outlined its strategies for becoming a world leader in bridging the private/public sector gap.
Encouraging countries to adopt legislation wherein cooperation between public and private sectors can flourish increases the anticorruption movement’s credibility and impact. The way to do this, according to the Executive Director of the United Nations Office on Drugs and Crime Yuri Fedotov, is to make anticorruption measures part of an overall management scheme to be implemented, rather than a compliance exercise to be fulfilled. Proponents aim to show the private sector that “combatting corruption is good for business,” as it lowers prices, enhances reputations among consumers, and creates meaningful competition.
A significant management program serves as the blueprint for a strong anticorruption foundation; it must include partnerships between private companies and local governments in their countries. This “joining [of] forces” entails both parties investing in strengthening and sustaining public infrastructure as well as skills development training for employees. While anticorruption initiatives are helpful, effective cooperation where all parties are invested will yield the ideal results.
For Russia, in its hope to become an example to the world and enhance its global reach, the public-private partnership plan focuses on four factors: openness, transparency, prevention of conflicts of interest, and responsibility. Oleg Plokhoy, the head of the Department on Combating Corruption of the Presidential Administration of Russia, outlined how their plan translates from the public to the private sector, noting that while corruption is “mostly associated with public servants,” it remains widespread in private business. In the current anticorruption measures, 1.5 million public employees are covered, but in the 1000 criminal cases of public corruption filed, nearly 1/3 include criminal corruption activity with a private business. This shows the pivotal need for private anticorruption measures.
By reducing the presence of conflicts of interest between public and private employees and increasing enforcement while stiffening penalties for private corruption, Russia intends to combat corruption from both the “acquaintance” route, that is, relationship-based governance, and the profit, or “thing of value” route. Thorough conflicts checks will deter patronage, and increased criminal and administrative penalties for private businesses will make corruption less profitable and thus, less appealing to private business.
All of the speakers cited the standards articulated in Article 12 of the UNCAC treaty, which includes recommendations for better implementation and enforcement of anticorruption policies for private businesses. The Dean and Executive Secretary of the International Anti-Corruption Academy, Martin Kreutner, pointed out that “For every contract globally, [at least] 10% of the expenses go to corruption.” It’s time the parties to the convention adopted more specific resolutions focusing on the private sector. The last time any such resolutions were adopted was at the 2013 Convention Against Corruption in Panama City, Panama.
The final question broached by panelists considered just how much involvement private actors—businesses and NGOs alike—could have in the discussion and implementation of anticorruption measures. On one hand, allowing businesses to be involved in the decision-making process encourages greater accountability and responsibility in the partnerships. On the other, the practice may encourage lobbying efforts, something that the member countries may want to deter. Anatoly Vyborniy, Chairman of the Russian Chamber of Commerce for Business Security, called for more regulation of lobbying efforts, as the practice hurts mutual trust and undermines the value of high level dialogue between the public and private sectors.
The member countries will continue to foster public and private cooperation and craft solutions to that end, with Russia aiming to lead by example.