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28 February 2017
Engaging the private sector in UNCAC
implementation & monitoring
Gillian Dell, Programme Manager
Transparency International
Corruption, private sector and civil society
“72% of overall respondents agreed that
Civil Society Organizations do not focus
on businesses enough when fighting
corruption – a view also shared by a clear
majority of business respondents (66%).”
HUMBOLDT-VIADRINA School of Governance,
Motivating Business to Counter Corruption – A Global Expert Survey on Incentives & Sanctions, 2012
2
Corruption, private sector and civil society
A part of your advocacy strategy
• Potentially influential allies for effecting change
• Potential challenges and risks
3
Corruption, private sector and civil society
Process of tapping into or generating private sector
interest in
• countering corruption
• using UNCAC implementation and monitoring to
counter corruption
They are part of the problem, they are victims and they
are part of the solution.
How much engagement possible?
4
Agenda
5
HOW can CSOs identify engagement opportunities
with the private sector on UNCAC?
WHAT are typical challenges and solution
approaches when engaging with the private sector?
Engagement opportunities with the private sector
can be based on the following…
Companies that see corruption as bad for business and UNCAC as a viable channel for combating
it
Companies that prefer ethical business practices and believe they lose business to corrupt
competitors
Companies that see engagement on UNCAC as beneficial for their public image
Companies with existing anti-corruption programmes that would like to see anti-corruption
standards become more widespread
Companies that have joined voluntary initiatives (e.g. UN Global Compact) that are persuaded of
the benefits of joint action.
Which others?
6
Examples
… and can be identified and planned by the CSO
7
In order to systematically develop a private sector engagement plan, CSOs should follow 4
intuitive steps:
Step 1: a CSO should identify and prioritize target groups within the local private sector (e.g.
multinational enterprises) to utilize its limited resources efficiently.
Step 2: a CSO should seek to understand the needs of the selected target groups (e.g. training,
advise, tools) and their corruption-related challenges (e.g. extortion, facilitation payments).
Step 3: a CSO needs to select activities that match the needs of the target groups.
Step 4: a CSO should develop a clear private sector engagement strategy, which documents the
major objectives, activities, effort, timeline etc.
Identify your
target group
Understand
their needs
Select your
activities
Plan your
engagement
1 2 3 4
Step 1: Identify your target group (1/3)
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CSOs may engage with business for different reasons (e.g. collaborate on research, establishing
business coalitions, advocacy); however the overarching objective in this case is to enlist
business support for UNCAC implementation and monitoring, including inputs into the review
process
CSOs have only a limited number of resources to engage with the private sector and therefore
should identify and prioritize target groups within the private sector.
The private sector itself is not a homogeneous entity, but comprising companies with different
sizes and ownerships, operating in different industries and doing business locally or internationally.
In order to identify and prioritize business, the following 3 major target groups should be
considered:
These 3 target groups should be further specified by additional attributes, such as industry
categories (e.g. SOEs from Oil & Gas industry or SMEs in the Informal Sector).
Multinational enterprises
(MNEs)
Small and medium
enterprises (SME)
State-owned enterprises
(SOE)
A CSO should ask the following two questions for each of the identified target groups:
Step 1: Identify your target group (2/3)
9
?What is the potential influence
of the target group for UNCAC
implementation and
monitoring?
?What chances of activating the
target group? What chances of
resistance from target group?
Factors to consider:
Size of company
Access to decision makers
Strategic industry (e.g. information technology,
environment)
Driver in public perception, standing in
communitry
Factors to consider:
Size and complexity of business operations
Industry
Country of origin
Business model (e.g. sales through
intermediaries)
Formal/ informal sector
Step 1: Identify your target group (3/3)
highlow medium
hig
hlo
wm
ed
ium
LIKELIHOOD OF INTEREST
DE
GR
EE
OF
IN
FL
UE
NC
Er
The outcomes of this process
should be visualized in a
Prioritization Map.
Target groups with a high degree
of influence and a high
likelihood of interest should be
prioritized for engagement.
CSOs facing limited resources
and multiple target groups (in the
“red zone”) can further prioritize
according to:
Contacts to target groups
Knowledge about target groups
and sectors
Past experiences with target
groups (also from other National
Chapters), etc.
Some MNEs and some
successful local ?
Accounting & auditing
companies?
???
SMEs-Agriculture
Other MNEs
Other local companies
???
Exemplarily visualization of a Prioritization Map.
MNEs: Multinational enterprises; SMEs: Small and medium enterprises; SOEs: State-owned enterprises
???
Step 2: Understand their needs (1/2)
11
Each target group may have different needs relating to anti-corruption challenges that need to
be understood by the CSO:
Information
Raising awareness
Training
Advice
Tools
Support for ‘leveling the playing field’
The target group may need…
Public sector integrity
Procurement etc.
Whistleblowing
Leveling the playing field
Technical assistance to government
International counterparts with whom
to discuss issues
…regarding the benefits of UNCAC
Step 2: Understand their needs (2/2)
12
CSOs can obtain information for understanding the needs and challenges of the target group(s)
from the following major sources:
Each target group (as identified in step1) has a set of needs and major corruption-related issues that
should be addressed by the CSO.
The best approach is to get information directly from the target groups, e.g.
informal discussions at conferences, workshops, surveys.
Direct
inquiries
Another source for information are other CSOs with experiences in working with
a particular target group
Finally, there is a wealth of information on the internet about the needs and
challenges of particular private sector target groups (e.g. sector-specific
information, current ‚Hot Topics‘).
UNCAC
Coalition
Research
Step 3: Select your activities (1/2)
13
There are a variety of activities for CSOs to engage with the private sector; selecting and
prioritizing the most appropriate activities should be based on a clear understanding of the
needs and challenges of the target group (refer to Step 2).
TI’s Private Sector Activity Framework provides CSOs and other groups with an generic overview
of engagement activities.
The Framework aligns the most common engagement activities according to
Engagement partners: CSOs can not only engage with a single business or a group of
companies (BUSINESSES), but also jointly with businesses and public sector representatives
in multi-stakeholder groups (MULTI-STAKEHOLDERS) or with key influencer of the private
sector, such as regulators, investors, academia etc. (INFLUENCERS).
Degree of engagement: The effort and knowledge for the CSO to engage with businesses
can be classified in LOW, MEDIUM, or HIGH, offering an indication for CSOs about the scope
of engagement.
Step 3: Select your activities (2/2)
14
Degree of engagement
Low Medium High
En
ga
ng
em
en
tp
art
ne
rs
Bu
sin
es
se
s
Mu
lti-
sta
ke
ho
lde
rsIn
flu
en
ce
rs
Business
Coalitions
Advocacy
Training &
Support
Aw
are
ne
ss
& C
om
mit
men
t
Private Sector Activity Framework (partial, adapted for UNCAC work)
The activities listed should not be seen as a sequential processes; typically, activities are conducted in parallel.
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Awareness & Commitment Detailed activities
As a starting point as well as an ongoing engagement element, CSOs should seek to increase
awareness and commitment among private sector participants.
These activities will also help to increase the visibility and credibility of a CSO positing itself as a
valuable partner for the private sector and providing information about UNCAC and the review
process.
Aw
are
ness
& C
om
mit
men
t
Le
ve
l o
f c
om
mit
men
t fr
om
bu
sin
es
se
s
Newsletter
Publications
Events
Initiatives
Low
High
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An Initiative (e.g. Pact, Declaration) – either short- or long-term – seeks
to mobilize businesses (e.g. specific industry sector) in order to
strengthen their UNCAC-related commitment around major issue
areas, such as Implementation and Monitoring.
Such initiatives may involve anti-corruption stakeholders from the public
sector, private sector and civil society.
Such initiatives should result in tangible outcomes and commitments
from all participating stakeholders, publically documented in an Action
Plan.
Awareness & Commitment Initiatives
Overview
Needs
coverage Support for UNCAC
Advantages
Disadvantages / Constraints
Regular interaction with private
sector participants
Publically documented
committment from private sector
Follow-up opportunities (e.g.
support of action items)
Results of initiative affect large
number of businesses
Possibility to introduce TI tools
and publications
Requires time & effort, especially
to sustain ‚momentum‘ of
initiative
Requires significant awareness
among all stakeholders to start
such an activity
17
Finally, CSOs can engage with businesses to “influence the attitudes
and behaviour of targeted actors in order to change the policy and
practice of governments and institutions” and achieve UNCAC
implementation and monitoring
Such target actors can be from the public sector (e.g. regulators, public
procurement agencies), the private sector itself (e.g. investors, business
associations) or civil society (e.g. media).
Also, CSOs can engage with the above-stated actors to change behaviour
of businesses.
Advocacy activities typically go hand-in-hand with “collective action”
activities (e.g. Initiatives, Business Coalitions).
Advocacy
Overview
Needs
coverage
Raising awareness
Support for ‘leveling
the playing field’
Advantages
Disadvantages / Constraints
Interaction with private sector
participants
Understand private sector
challenges and solution options
Follow-up opportunities
Results of initiative affect large
number of businesses
Requires time & effort
Requires high credibility of CSOs
Risk that CSO is seen as being
„misused“ by the private sector
* Taken from „WIN – Advocacy Guide, 2010“.
Step 4: Plan your engagement (1/2)
18
In order to increase private sector activities, it is recommended that CSOs develop a clear private
sector engagement plan.
A private sector engagement plan should include the following key elements:
Strategic objectives for engaging with the private sector
Definition of target group and outcomes of needs assessment
Selection and prioritization of activities
Work plan (detailed activities, resource allocation, delivery strategy)
Timetable (max. 3 years)
Other information (e.g. assumptions, output, performance measures, risks, growth potential)
Engaging with the private sector should not be seen as a standalone endeavor within a CSO ;
consequently, the strategy should also show how these activities interface with the overall activity
portfolio of the CSO (e.g. engagement with the Public Sector).
Step 4: Plan your engagement (2/2)
19
Documenting an engagement plan does not only help to plan and execute the activities, but it is
also beneficial when seeking external support.
CSOs may seek financial, operational and/or knowledge support for the development of a
private sector engagement plan, e.g. from:
National and international organizations (e.g. development banks)
Local embassies
Business Associations
Business Schools
Multinational corporations (and their local subsidiaries)
Agenda
20
HOW can CSOs identify engagement opportunities
with the private sector on UNCAC?
WHAT are typical challenges and solution
approaches when engaging with the private sector?
Key challenges for CSOs in working with the private sector
• Different organizational cultures and structures can inhibit communication
and create mistrust.
• Different approaches to operations and expectations from respective key
stakeholders –can prevent the identification of mutually beneficial goals,
roles and responsibilities essential to an effective partnership.
• For example,
– The private sector’s primary goal is profit. It seeks quantifiable changes in
production and sales, expecting positive results in very short periods of time.
– NGOs are focused on issues related to social change. NGOs closely monitor
the activities leading to improvements in the well-being of citizens served by the
organization’s work. The work of NGOs often requires long-term commitments,
and progress in the short term is often difficult to measure. It is therefore difficult
for NGOs to demonstrate that their approaches to fostering change are cost
effective and produce tangible benefits.
21
Key risks for CSOs in working with the private sector
• Their policy agenda may be incompatible with yours in important
ways
• Unknown to you they may be implicated in improper practices
22
FAQ: Why would the private sector engage with
CSOs?
23
Demonstrate value for private sector: Businesses may engage with a CSO if it is believed that
the CSO can be of value to them, ranging from information provision to one-on-one training
sessions or workshops.
Credibility of CSO: Businesses may engage with a CSO if it is believed that the group has the
knowledge and it understands business challenges and constraints.
Reliability of CSO: Businesses may engage with a CSO if they present themselves as a reliable
and predictable partner who follow through on commitments and will not cause them unpleasant
surprises or embarrassment.
Engage constructively and speak their language: Private sector and civil society have different
languages and cultures. Companies may also sometimes feel threatened by CSOs. Try to learn
their language and engage constructively for a good line of communication.
!
!
!
FAQ: What should CSOs emphasize when
engaging with the private sector?
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Independent, politically non-partisan and well-governed: CSOs should be ready to
demonstrate that they are not potential risks as partners. They should make clear that they are
focused on the public interest rather than serving any specific political or private sector interest.
They should also be ready to demonstrate that their internal governance meets high standards.
Aiming for constructive dialogue with government: It is useful to emphasise the constructive
nature of the planned engagement in UNCAC implementation and monitoring. However, this does
not prevent CSOs from publicly criticising institutions for failing to take meaningful steps towards
reform.
Common positions can be useful but are not essential. CSOs may wish to communicate that
businesses are not expected to sign up to positions though there may be circumstances when they
wish to do so.
UNCAC and UNCAC review matters: Businesses interested in fighting corruption may need to be
persuaded that UNCAC and its review process will make a difference to that problem
!
!
!
!
FAQ: What should CSOs emphasize when engaging with the
private sector?
For the private sector corruption is about costs
• Costs to staff (can ruin reputation and result in
sanctions)
• Company level costs (increases costs of doing
business, diverts investment elsewhere)
• Economic and social costs (undermines the rule
of law and keeps foreign investors at bay –
preventing job creation and limiting sustainable
development) etc.
25
FAQ: How to increase the private sector
expertise within a CSO?
26
!
!
!
Seek pro-bono expert support: CSOs can seek support from active or retired private sector
executives (e.g. audit companies) that have been active in the anti-corruption community (e.g.
representing the business in voluntary initiatives, such as the UN Global Compact).
Establish Working Groups: CSOs can establish working groups with TI members and outside
experts that work on a specific topic, e.g. private sector transparency.
Engage with business schools: CSOs can engage with (graduate) business schools to obtain
support, e.g. in conducting a target assessment (step 1), needs analysis (step 2) or to develop
training material, conduct research, etc.
Examples
FAQ: Who should be contacted within a
business?
27
!
!
!
!
Chief Executive Officer (CEO): CSOs may contact the Chief Executive Officer or owner of a
businesses to discuss far-reaching matters, such as the commitment to an anti-corruption
principles, forming of sector-specific anti-corruption initiatives or business coalitions, or the
participation in a Corporate Supporters Forum.
Chief Compliance Officer (CCO): CSOs may contact the CCO to discuss specific needs and
challenges, or to offer training and support. In case the business does not have a CCO or an Ethics
Officer, the Chief Financial Officer should be contacted, as he/she oversees the business’s books &
records and carries the responsibilities of correct financial statements.
Head of Procurement: CSOs may contact the Head of Procurement to discuss specific
procurement-related topics, such as extortion, facilitation payments or the utilization of Integrity
Pacts.
Training departments: CSOs may contact training department of businesses to offer in-house
training and support in anti-corruption related challenges.
Examples
FAQ: What are possible collaboration partners
for engaging with the private sector?
28
!
!
!
!
Academic institutions: CSOs may seek a collaboration with local academic institutions (e.g. law or
business schools) to jointly conduct research, media campaigns, and to support internal processes
(e.g. developing an engagement strategy with the private sector).
Chamber of Commerce: local Chamber of Commerce further the interests of businesses. CSOs
can collaborate with the Chambers on supporting businesses in specific corruption-related
challenges (e.g. extortion, facilitation payments) or to advance broader, advocacy topics (use
Chamber of Commerce as Influencers).
United Nations Global Compact: The UN Global Compact is the worlds largest strategic policy
initiative for businesses that are committed to aligning their operations and strategies with ten
universally accepted principles in the areas of human rights, labour, environment and anti-
corruption. CSOs can either directly contact local members of the UN Global Compact (search on
http://www.unglobalcompact.org) or seek collaboration with the local UNGC Local Network.
United Nations Office on Drugs and Crime (UNODC) / Organisation for Economic Co-
operation and Development (OECD): Both international organizations conduct local
implementation and monitoring activities of their conventions.
Examples
FAQ: How can the private sector contribute to
implementation and monitoring of international
conventions (e.g. UNCAC) ?
29
!
!
!
Lobbying for ratification & implementation: CSOs can collaborate with major national and
international businesses to seek ratification and implementation of international conventions (e.g.
United Nations Convention Against Corruption). Interest from businesses may come for various
reasons:
Aligning local business conditions to international standards (e.g. to decrease
investment risks for foreign institutions)
‘Level the playing field’ by introducing comparable standards for all business
participants.
Monitoring the convention (Peer reviews): The private sector may have important expertise and
information about the challenges to anti-corruption law enforcement in the country under review.
They may appreciate the opportunity to share their experiences during the self-assessment and with
the review team.
Providing support to CSO activities, financially or in kind
Examples
What is your experience?
30
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Private Sector and Conventions
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