On Tuesday, 23 September, MCRB hosted a half-day workshop on “Anti-Corruption Programmes” for Myanmar businesses in Yangon. The workshop, held in collaboration with Spectrum – a Yangon-based sustainable development knowledge network - was the first in a series of events to follow-up on the Transparency in Myanmar Enterprises (TiME) report and build business capacity in the area of anti-corruption and human rights.

1. Pwint Thit Sa/TiME follow-up:
Anti-corruption programmes best practice workshop
Vicky Bowman, Director, Myanmar Centre for Responsible Business
ျမန္မာ့စီးပြားေရးက႑တာ၀န္ယူမႈရွိေရးအေထာက္အကူျပဳဌာန(MCRB)
Tuesday 23 September 2014
www.mcrb.org.mm
အမွတ္၁၅၊ရွမ္းရိပ္သာလမ္း
(ဆာကူရာေဆးရံုအနီး)
စမ္းေခ်ာင္းၿမိဳ႔နယ္၊ရန္ကုန္ၿမိဳ႕
ဖုန္း/ ဖက္(စ္) ၀၁၅၁၀၀၆၉

2. Current core funders:
•UK Department for International Development
•DANIDA (Danish development aid)
•Norway
•Switzerland
•Netherlands
•Irelandwww.myanmar-responsiblebusiness.org
15 Shan YeikthaStreet,
Sanchaung, Yangon
Tel/Fax: 01 510069
Founders:
Objective:Toprovideaneffectiveandlegitimateplatformforthecreationofknowledge,capacityanddialogueconcerningresponsiblebusinessinMyanmar,basedonlocalneedsandinternationalstandards,thatresultsinmoreresponsiblebusinesspractices.

4. •2ndTI ‘TRAC’ report was published 2012
•research into the public reporting practices of 100 emerging markets companies comprising a list of Global Challengers 2011.
•TI researchers collected and analysedpublicly available data on three dimensions of transparency:
1.Reporting onanti-corruption programmes (covering inter alia bribery, facilitation payments, whistleblower protection and political contributions),
2.Organisational transparency (including information about corporate holdings), and
3.Country-by-country reporting (including revenues, capital expenditure and tax payments).
Inspired by Transparency International’s reports on ‘Transparency in Corporate Reporting’……….

6. Transparency International also published a ‘TRAC’ report on emerging economies (2013)

7. 60 large Myanmar companies chosen based on 2012/3 top taxpayers lists as a proxy for size
Websites reviewed for content on:
1.Organisational transparency
2.Anti-corruption programmes
3.Human Rights and HSE, including grievance mechanisms (instead of country by country tax reporting as in TI TRAC report)

8. Companies included in the research were first informed about their inclusion in late March 2014/ Early April both in hard copy and by email where known.
The project was also launched in the local media, with the aim of inter aliaalerting company senior managers to the project and encouraging them to participate actively.
Last week of May 2014, companies provided with initial scores and scoring schedule. Companies asked to give feedback. Encouraged to upload more information to their websites by 30 June.
MCRB available to meet with companies. Almost twenty companies contacted us
Some websites were significantly overhauled during the research period as a result of the project.
Problems communicating with some companies due to absence of a website (25 companies), or one with reliable contact information/Public Affairs Department

9. Desk research on websites 1stApril to July 1st2014. Websites accessed frequently, monitored changes (significant in 10 of the companies).
Out of the 60 companies surveyed, only 35 companies have websites.
The scoring schedule was based on Transparency International’s scoring system and was also sent to the companies.
Scores of 1, 0.5, or 0 were given to each question depending on the extent to which information was fully reported.
A question was N/A and was not considered if not relevant to the organization.
Score standardized and rescaled to a maximum of 10.
The higher the score, the more information a company is publishing on its official website about its business approach towards anti-corruption policy, organizational transparency, human rights and HSE.
However, the score reflects information disclosure only and does not measure a company’s performance on the ground on these issues. It also does not provide a 100% check of the accuracy of the information disclosed on the website.

11. 0
0.5
1
1.5
2
2.5
3
3.5
UPG
KMD
SPA
Dagon
MPRL
City Mart
Parami
Shwe Taung
SMART
KBZ
Max Myanmar
Transparency about Anti-Corruption Programmes (ACP)

12. 1.Does the company have a publicly stated commitment to anti-corruption?
2.Does the company publicly commit to be in compliance with all relevant laws, including anti-corruption laws?
3.Does the company leadership (senior member of management or board) demonstrate support for anti-corruption?
4.Does the company’s code of conduct/anti-corruption policy explicitly apply to all employees and directors?
5.Does the company’s anti-corruption policy explicitly apply to persons who are not employees but are authorised to act on behalf of the company or represent it (for example: agents, advisors, representatives or intermediaries)?
6.Does the company’s anti-corruption programme apply to non-controlled persons or entities that provide goods or services under contract (for example: contractors, subcontractors, suppliers)?
7.Does the company have in place an anti-corruption training programme for its employees and directors?

13. 8.Does the company have a policy on gifts, hospitality and expenses?
9.Is there a policy that explicitly prohibits facilitation payments?
10.Does the programme enable employees and others to raise concerns and report violations (of the programme) without risk of reprisal?
11.Does the company provide a channel through which employees can report suspected breaches of anti-corruption policies, and does the channel allow for confidential and/or anonymous reporting (whistle-blowing)?
12.Does the company carry out regular monitoring of its anti-corruption programme to review the programme’s suitability, adequacy and effectiveness, and implement improvements as appropriate?
13.Does the company have policy on political contributions that either prohibits such contributions or if it does not, requires such contributions to be publicly disclosed?

14. Workshops with companies on good practice in:
•Anti-corruption programmes (Tuesday 23 September)
•Human rights policies (October)
•Reporting (November)
•Grievance mechanisms (December)
2ndTiME report in 2015

15. The benefits of building an effective anti-corruption programme
15
“Having an anti-corruption programme in place and publicizing it is seen as valuable or very valuable to a enterprise’s brand by 86% of respondents.”
PricewaterhouseCoopers, Confronting corruption – The business case for an effective anti-corruption programme, January 2008
“Companies with anti-corruption programmes and ethical guidelines are found to suffer up to 50 % fewer incidents of corruption, and to be less likely to lose business opportunities than companies without such programmes.”
Transparency International, Global Corruption Report 2009 -Corruption and the Private Sector

16. There is a strong business case to counter corruption
10%
Corruption adds up to 10% to the total cost of doing business globally.
20%
Moving business from a country with a low level of corruption toa country with medium or high level of corruption is found to be the equivalent of a 20% tax on foreign business.
25%
Corruption adds 25% to the cost of procurement contracts in developing countries.
16
Source: UNGC / ICC / Transparency International / WEF, 2008)

17. Managing risks by implementing anti-corruption programmes
17
Legal & Regulatory Sanctions: Businesses (and their representatives) must adhere to laws & regulations in order to avoid the risks of fines, civil damages, loss of license to operate, and imprisonment.
Financial Loss:Businesses face pressure from their stakeholders (e.g. customers, investors, export credit agencies) to adopt, implement and monitor good practice anti-corruption standards to avoid the risks of losing business, encountering operational constraints and falling share prices.
Damage to Reputation: Business compete in globalized markets not only with their goods and services, but also with their reputation; corrupt practices increase the risk of negative publicity and damage to reputation (e.g. through media coverage, civil society campaigns, social networking).

18. Examples of the cost of corruption to businesses
18
Businesses must implement effective anti-corruption programmesto reduce financial, legaland reputational risks.
*
* Reporting on anti-corruption programmes –‚PROMOTING REVENUE TRANSPARENCY 2011 REPORT ON OIL AND GAS COMPANIES’

19. But, business also BENEFITS from ensuring that they adhere to anti-corruption standards
In Brazil, the Controladoria-Geral da União (CGU), an agency of the Federal Government, established a whitelistof businesses (Empresa Pró-Etica) that qualify for advantages in public tenders.
Businesses located in the City of Philadelphia / USA are eligible to receive tax credits (to be used against their annual taxes), once they are certified as a sustainable business (which includes anti-corruption elements).
Under the UK Bribery Act 2010, commercial organisations are liable to prosecution if a person associated with it bribes another person. However, the organisation will have a complete defense if it can show that despite an isolated case of bribery, it nevertheless had appropriate anti-bribery proceduresin place.
The 2011 Promoting Revenue Transparency on Oil and Gas companies publishes the names of top performing companiesin this area. 19
Businesses must implement effective anti-corruption programmesto gain a competitive advantage with customers, suppliers, investors etc.

20. Finally, in addition businesses have a responsibility to act as good corporate citizens
Good corporate citizens engage in the fight against corruption by:
1.setting a positive example through their own conduct; and
2.contributing to and promoting a corruption-free environment.
These engagements reinforce each other and ensure that business plays a pivotal and expanding role in improving the well-being of societies, communities and individuals.
20
* Taken from ‚Beyond profits and rules: the moral case for business to fight corruption globally‘ by Georges Enderle, publishedinTransparency International‘s Global Corruption Report 2009.

21. Principle 10: Businesses should work against corruption in all its forms, including extortion and bribery.

22. •Launched in 1999 by UN Secretary General
•Initiative for businesses that are committed to aligning their operations and strategies with 10 principles in the areas of human rights, labour, environmentand anti-corruption
•Over 12500 business participants in over 135 countries
•In Myanmar there are currently 65 members
•Professor Aung Tun Thet is the chair of the UN Global Compact Local Network in Myanmar
•Companies who sign up to the UN Global Compact should send in an annual ‘Communication on Progress’ detailing how they are applying the10 principles. This is published on the UNGC website
The UN Global Compact….

23. Implementing the 10th principle:
Through organisational change at the company level:
•Companies are asked to integrate anti-corruption and compliance measuresinto their business strategies and operations.
•Companies develop their own code of conduct, including the implementation of a zero tolerance policy and a range of rules and regulations concerning gifts, political contributions, charities and travel.
•To apply these policies, companies implement a range of actions, including the establishment of anonymous hotlines, employee training, supply chain management, risk assessment and disciplinarymeasures.
Through collective action at the country level:
•Companies are asked to take part in collective action, multi- stakeholder dialogue, and integrity or compliance pacts with industry peers.

24. A bribe is two way –it can be given or received.
Many definitions talk about giving or taking an ‘advantage’ or ‘inducement’ in order to perform a function ‘improperly’.
The 2010 UK Bribery Act uses this language:
• A person is guilty of bribingwhere the person offers, promises or gives a financial or other advantage to another person, intends the advantage (i) to induce a person to perform improperly a relevant function or activity, or (ii) to reward a person for the improper performance of such a function or activity.
• A person is guilty of being bribed if the person requests, agrees to receive or accepts a financial or other advantage intending that, in consequence, a relevant function or activity should be performed improperly.
What is bribery?

25. Bribery and corruption can take the form of…
Grand corruption (large bribes)
Facilittationpayments (tea money)
Gifts
Hospitality
Political Donations
Charitable Contributions
Agents
Enhanced Commission
Benefisand perks to relatives
Offsets
Employing relatives
In kind help and support
Education and training projects

26. Roundtable discussions:
•What are the main bribery and corruption risks your companies face?
•How does your company manage and mitigate them?
•Who else needs to act to reduce those risks?

27. Objective: to better understand the risk exposure so that informed risk management decisions may be taken.
A structured approach for how enterprises could conduct an anti-corruption risk assessment is outlined in the following slides.
Each enterprise’s own risk assessment exercise is unique, depending on that enterprise’s industry, size, location, etc.

28.  Establish the corruption risk assessment process
◦ Who owns it? Who should be involved? What data? What
internal/external resources? How will you What framework will be
used to document, measure, and manage the corruption risk?
 Identify the risks
◦ Employee surveys, workshops, brainstorming, audits, desk
research
 Rate the Inherent Risk: probability x impact
 Identify and rate mitigating controls
◦ What controls? Preventative or Detective? How effective
 Calculate the residual risk
◦ Level of risk remaining after control
 Develop an action plan
◦ Is the residual risk tolerable or are further actions needed?
 Establish a corruption risk register to monitor risk
management