GCC anti-corruption policies, compliance need improvement

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Middle East governments and companies continue to struggle with the implementation of effective anti-corruption policies, delegates at a recent business ethics conference in Doha heard. Representatives from regional and international governments, businesses, and non-governmental organisations discussed cooperative approaches to fighting corruption. Several prominent global firms also shared their anti-corruption policies and procedures, including approaches to implementing a common platform across far-flung jurisdictions. Nadeem Anwer, regional compliance officer at Siemens LLC in the UAE, described the company's new ethics programme, implemented after a recent price-fixing and bribery scandal resulted in massive fines. The new policy framework focused on prevention, detection and response, Anwer said. Prevention involved a highly detailed code of conduct for business relationships, as well as screening of intermediaries, suppliers and senior management for past ethical issues, he explained. In terms of detection, Anwer noted that all parts of the business were responsible for identifying and reporting potential breaches. Additionally, Siemens now operated a global whistle-blowing hotline that was available to both employees and third parties, he said, adding that suppliers were contractually obligated to report unethical conduct by Siemens employees. When breaches occurred, Anwer said that the firm's policies set out detailed investigation, disciplinary and follow-up measures. Referring to the recent Siemens bribery scandal, Anwer said that the firm significantly increased its compliance staff globally and identified certain high-risk business areas. One such area was the projects business, whose high corruption risk led Siemens to devise an analysis tool that assessed a project's corruption risk at every stage, from offer through to execution. Inam Siddiqui, general counsel for General Electric Energy Services in the UAE, said that managing corruption risks in a company with more than 300,000 employees came down to corporate culture and management accountability. "If someone slips in terms of compliance, we do a wide analysis of what happened, and if we discover that the culture in that department or region wasn't the GE culture, then we deal with the management," Siddiqui said. "We 'operationalise' compliance and accountability so that management is responsible for recognising integrity and compliance issues; they can't just point to lawyers or HR and say 'well they didn't stop me.'" Joe Berti, corporate counsel at Schlumberger in Paris, highlighted the importance of training in promoting a genuine culture of business ethics. He noted that Schlumberger's model emphasised local experience. "You want to make sure you know what the realities on the ground are; you want to frame it in a way that is practical," Berti said. "Many situations are not clear and you have to make sure business managers understand ethics enough to have the right reflexes." For example, Berti said, it was common for suppliers in some countries to request employment opportunities for relatives, which should be seen as requesting a bribe. "On the reactive side, you want to have an effective programme where, if something happens, it doesn't take years to investigate," Barti said, adding that Schlumberger had a strict 90-day target for investigating incidents and implementing recommendations. "It's not just about morals, but about doing the right thing because it makes business sense," Barti explained. "Middle management is a very challenging job and they don't usually see beyond the end of the month in terms of [profit and loss], so it's very challenging to speak the same language in terms of compliance. You want them to look at compliance from the pro-active side, as a business enabler." In terms of business relationships, Berti noted that local SMEs posed a compliance challenge because they were under less pressure to maintain ethics programmes. "It can be challenging and can add transaction costs, because you spend extra time adding ethics clauses to the contracts," he said. "When you have a reputation for being an ethical company, you set the standard for your external partners." Corruption in Gulf countries Ali Al Marri, Qatar's attorney general, said that the country's recent anti-corruption initiatives, such as signing the United Nations Convention Against Corruption, were a good start, but acknowledged that formidable challenges remained. "We in Qatar, despite our advanced position, still aim to achieve more in the field of anti-corruption practices in both local and international arenas," he said. "In the coming years, we hope to see more steps that will contribute to achieving more tangible results in implementing UNCAC and enhancing the role of the private sector [in fighting corruption]." Al Marri called on GCC business leaders to adopt policies that were compatible with the anti-corruption principle of the UN Global Compact. "Corruption adversely impacts markets and drives away foreign direct investment, causes the deterioration of public services and destroys opportunities to achieve sustainable development," he said. "Therefore the contribution of the private sector will become necessary and will be in the service of the sector itself, because corruption is a hidden cost that leads to the degradation of quality without any benefits to producers." Professor Ahmad Ashour, of Alexandria University, referred to Transparency International's corruption perception index, noting that Qatar and the UAE were ranked far above other GCC and Middle East states. But illicit financial flows from the GCC were alarmingly high, he said. According to Global Financial Integrity's most recent illicit funds data, Saudi Arabia, Qatar, Kuwait and the UAE were among the world's top 10 exporters of illegal capital between 2000 and 2009, accounting for nearly $1trn.