Partnering Against Corruption Initiative Leads Industry Battle Against Corruption

For more than eight years, I have had the opportunity to work on one of the most interesting issues of my professional career: the battle against global bribery and corruption. Little did I know in January 2003—when Fluor Chairman and CEO Alan Boeckmann returned from the World Economic Forum’s annual meeting in Davos, Switzerland, and asked me to help him establish a set of business principles for combating corruption—that I would today be part of one of the foremost initiatives in the world.

Following that first meeting in Davos, the world’s leading engineering and construction firms formed a task force to design a zero-tolerance program to combat corruption and contribute to the goals of ethical conduct, good governance, and economic development. Boeckmann, along with CEOs from companies in Europe, Asia, the Middle East, and North America, worked collaboratively with various global groups to develop benchmark business principles that address ethical conduct regarding bribes, facilitation payments, political contributions, gifts, and charitable contributions and sponsorships.

The business principles were formally launched at the World Economic Forum’s annual meeting in 2004, and since then, have been embraced by companies in a number of other industries. In 2005, the effort was organized under the name Partnering Against Corruption Initiative (PACI) and has gained global recognition as one of the world’s foremost anticorruption forces.

At last count, we have more than 140 companies from 39 nations that have signed the PACI Principles for Countering Bribery, most from the global energy, mining and minerals, and engineering and construction industries, but there are others as well. The most recent signatories include the Big Four accounting firms as well as Shell Oil, Merck, Coca-Cola, and TNT. In total, these signatories represent more than US$600 billion in revenues and over two million employees worldwide.

As a private sector, supply-side initiative, PACI complements public sector, demand-side approaches to fighting corruption. These began in 1977 with the U.S. Foreign Corrupt Practices Act and extend through the much more recent United Nations Convention Against Corruption. Countries that belong to the Organization for Economic Cooperation and Development have had laws on their books for years, although they are not as rigorously enforced as those in the United States.

The sole focus of PACI is to establish multi-industry principles and practices that create a competitive, level playing field based on integrity, fairness, and ethical conduct. It requires that each participant company chief executive officer sign a commitment statement requiring two things: (1) a zero-tolerance policy toward bribery, and (2) the implementation of a robust anticorruption program to guide their employees’ behavior.

Throughout our efforts, we found that most companies already had ethics and anticorruption programs of one sort or another. These companies used the PACI principles for benchmarking purposes and found ways to strengthen their existing programs. On becoming members of PACI, all companies receive immediate access to a variety of support mechanisms that include a process for sharing experiences and best practices, which assist them in effectively addressing ongoing issues and challenges.

Because PACI is an action-oriented initiative, members have access to useful information and an array of proactive services. These include practical tips and best practices, semiannual task force meetings, and a variety of communications materials. A suite of training tools is currently being developed to help companies reduce their exposure to corruption. With leadership and guidance from Transparency International, a self-assessment document on adherence to anticorruption principles and practices is in process and will soon be released.

Transparency International, the broader PACI team, and the Big Four accounting firms are all working on a system of voluntary third-party verification, which will provide signatories with the mechanism to translate commitments into concrete actions, adding to their own as well as PACI’s credibility. Fluor served as the pilot to test this process. In addition, PACI has been collaborating with Transparency International in an effort to convince the World Bank and regional development banks to require bidders on large contracts to demonstrate their anticorruption credentials. We hope that one day every company will be required to submit anticorruption policies with their bids on all development bank projects. Finally, PACI also played a supporting role in incorporating anticorruption language into the United Nations Convention Against Corruption.

It’s important to recognize that corruption is not a necessary evil. The anticorruption environment is already changing for the better. In fact, yesterday’s tolerance for corruption is diminishing faster and more dramatically than is commonly appreciated, substantially changing the stakes for all concerned. I encourage you to consider what your organization is doing to combat corruption. Consider joining PACI, which you can do without being a member of the World Economic Forum. Attend task force meetings, utilize the materials developed for signatories, and work with your industry associations. Check the World Economic Forum’s Partnering Against Corruption Initiative Web site, http://www.weforum.org/en/initiatives/paci/index.htm, or call those of us intimately involved with the process. In whatever way you choose, join the fight. We need you all.