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UN Global Compact: Transparency, like technology, is irreversible

By Georg Kell
Executive Director, UN Global Compact

Corruption is emerging from the shadows and into the bright light of public scrutiny – which, in an era of the Internet, social media and means of national and international regulation and investigation – can cast violation of the public trust into particularly sharp relief.

 Corruption is a cancer that strikes directly at the operation of markets as well as at the quality of governance. The cost is not measured in the amount that is palmed by the incorrect party. It is the de-motivation for businesses to pursue quality, innovation, integrity and pricing as means to advance, if bribes or cronyism are faster steps to success.  It accentuates poverty and social unrest and it holds back employment, human and labour rights, and environmental sustainability.

 At the United Nations, where not more than two decades ago the “c” word was never spoken, an international convention is in place and gaining some ground. For good reasons, both the G20 and the OECD have made anti-corruption a signature issue and have set up active working groups.

UN Global Compact image Pannel2_Side1_render Climate Section

 In many arenas, awareness precedes action, and action precedes accomplishment. This seems to be the case with the anti-corruption movement, which has built up an impressive array of tools and resources and established a secure position on the moral and strategic high ground, but has not yet produced decisively discernible results.

 Yet surveys conducted by Transparency International do not show a notable swing away from the perceived incidence of graft. The toppling of or challenge to Governments that are seen by its citizens to be bastions of self-aggrandizement and self-entitlement has, in some cases, left a vacuum of authority that in turn has resorted to bribery to get things done.

 One new development that will help to build momentum is the supplementing of the moral case against corruption with the business case.

 Traditionally both victim and co-perpetrator in the art of the bribe, businesses are increasingly learning that, the mechanics of graft work against them. Strenuous efforts to control expenditure and to attract investment are stymied by the transaction costs of corruption. Firms in emerging markets making a bid to move to the top of their fields find corruption to be a dead weight dragging them down.

 Business leaders in Africa have been particularly vocal in asserting their collective responsibility to pay taxes and eschew bribery. The G20, in last year’s declaration, recognized the business community’s overall collective actions against graft, and new institutional arrangements within the private sector.

 The business case against corruption is emerging as well in discussions at the United Nations on a new global development agenda to further the work of the Millennium Development Goals (MDGs) after its targets expire in 2015.

 Governance was not a component of the MDGs, and the “partnership for development” of its eighth goal was based on a traditional notion of Northern support for the developing world. But Governments at the UN have ordained that a new set of Sustainable Development Goals (SDGs) should be universal in nature, and should address sustainability issues, that is, impediments to steady, continuous and long-term progress.

 Corruption, which entangles actors from the North and South and both public and private sectors, and impedes the ability of either sector to carry out development goals and responsibilities, is suggested as a key feature.

 As talks at the UN have gathered steam, the United Nations Global Compact has issued an international Call to Action with the business perspective on how to integrate good governance and anti-corruption into the Post-2015 Development Agenda. It asks businesses from all countries to support competitive and transparent procurement processes through public advertising of all Government procurement cases.

 Accelerated political leadership and collaborative action by private, public and civil society sectors is required to keep the momentum going as the world approaches the pivotal post-MDGs transition:

 

  • The G20 to keep this issue close to the top of its agenda.
  • Focus on what is most doable and demonstrate progress.
  • Promote the rule of law at the national level.
  • Continue to support voluntary initiatives, including civil society efforts such as Transparency International and collaborative efforts including the B20 and the UN Global Compact’s Call to Action.
  • Embrace transparency and openness as a tool to foster competition.

 

The Australian G20 offers an opportunity to make progress on all these fronts.

 Georg Kell is the executive director of the UN Global Compact, the world’s largest voluntary corporate sustainability initiative. 

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