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Monday
Aug112014

Collective Action: Our reason for hope (Part One)

There’s been a lot of talk about Collective Action, including on the FCPA Blog, but what is it exactly and how can it be used to fight corruption? Above all how can companies get in on the act?
 
At IBLF Global, alongside other international NGOs, we’ve been promoting responsible business through collective action for a number of years. In this series of three posts, I’ll try to shed some more light on this new approach and share some of our experience.
 
To start, let’s get it straight. Collective Action is not completely new. There have long been terms for this cross-over area, where business comes into contact with other sectors of society and together with government and civil society, contributes to social development. You’ll recognize some of them – cross-sector partnerships, public-private partnerships, multi-stakeholder initiatives. These are all familiar terms in the world of corporate social responsibility, sustainability and environment.
 
Collective Action is much the same. The World Bank defines collective action as “a collaborative and sustained process of cooperation amongst stakeholders.” What’s new is how it’s being applied to fighting corruption.
 
Underlying the concept is a simple assumption: you can’t go it alone. Even governments with strong dirigiste tendencies like France, or outright authoritarian systems like China, have understood that government cannot effectively impose how companies and individuals behave. Enforcement is of course critical, but incentives, guidance, education, “soft power” if you like, are critical to create an environment where employees, entrepreneurs, and individuals in society actually want to play by a new set of rules. People, companies and society have to be brought along voluntarily, not dragged and kicking.
 
And that’s where business comes in.
 
Companies have the experience, intelligence, data and the management structures to create “islands of integrity” or “corruption-free zones” among their employees, in their supply and distribution chains, and in their industries. Further, in countries where civil society and rule of law are weak, business may be the only force in society capable of upholding the best international standards.
 
Business, as the traditional supplier of bribes to government officials, is part of the problem but is also part of the solution. It is the pre-eminent partner of government most capable of putting a stop to corrupt practices, and promoting best practices throughout the markets in which it invests.

In the next post, we’ll look at why companies spend time and money cooperating with other companies and governments to combat corruption.

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Brook Horowitz is CEO of IBLF Global and a member of the IBLF Global board. A graduate of Cambridge and Harvard Universities, he's a contributor of opinion pieces on raising business standards to the Financial Times, International Herald Tribune, Moscow Times and others.