Corporate Social Responsibility

Corporate Social Responsibility

Corporate Social Responsibility

Introduction

The current environment Bribery and corruption are major global issues pervading political, economic, social and environmental arenas, thus presenting barriers to democracy, eroding national wealth and contributing to poverty. Much of the world's bribery and corruption is facilitated through procurement systems by global businesses and presents serious risks to those involved(Robbins, Bergman & Coulter, 2003, 69-174). The potential damage to reputation, and ultimately to corporate financial health, of being associated with allegations of bribery and corruption cannot be underestimated.

Bribery and Corruption

Corruption stems from the lack of an honest, transparent and accountable governance system. Corruption may result in government's loss of control and order, leading to institutional breakdown and conflict. Consequently, multinational organizations and NGOs are increasingly drawing the private sector into the global initiative against corruption in order to encourage good governance and conflict prevention. Financial institutions that once considered themselves removed from social and environmental controversies have suddenly found themselves the center of attention (Ganzi, Steedmand, Quenneville, 2004, 79-166). The financial industry has become a major focus of the global anti-terrorism movement, as evidenced by the US and European governments' efforts to freeze the assets of suspected al-Qaeda supporters and other terrorist organizations (McWilliams, Siegel and Wright, 2006, 89-102).

In 2000, the anti-corruption organization Transparency International convened a meeting of 11 international private banks, including Citibank and Chase, to agree upon a set of “know thy customer” anti-money-laundering guidelines, which became known as the Wolfsberg Principles. Transparency International's integrity pact calls for businesses to control extortion, bribery and corruption and to adopt policies of full transparency regarding funding arrangements in government contracts. Similarly, the UN Office of the Global Compact is examining the issue of transparency in revenue sharing as a tool for conflict prevention (Nagler, 2007, 89-177). BP, Statoil and Newmont Mining Corporation have begun acting on these principles.

Combating Corruption

In combating corruption all over the world, businesses find themselves complying with international laws. The Organization for Economic Cooperation and Development's (OECD) Convention on Combating Bribery of Foreign Public Officials in International Business Transactions, known as the OECD Bribery Convention, obligates its 34 member states to criminalize the bribery of foreign public officials in the conduct of international business.

Similar laws have been passed by numerous regional organizations such as the Organization of American States (OAS), Global Coalition for Africa (GCA), Asia Pacific Economic Cooperation (APEC) and Council of Europe (COE). UN member states are negotiating a new legally binding international convention against corruption, to address the problems it poses.

As a result of high-profile initiatives from the Organisation for Economic Co-operation and Development (OECD), The World Bank and Transparency International, major developments in global bribery and corruption legislation have occurred in recent years. It is clear that further pressure will now be placed on regulatory bodies to enforce the new legislation in order to deter international businesses from making corrupt payments (Ganzi, Steedmand, Quenneville, 2004, 79-166).

In the United Kingdom, the government has been criticised in recent years for its poor record on tackling ...