Collective Action – building alliances against corruptionIn the face of the widespread and deep-rooted corruption problem that affects society in general, governments, their procuring entities and the private sector in equal measure, it seems highly unlikely that individual activities alone will be sufficient to bring about significant ethical changes and improve the transparency of business processes.
This is precisely where Collective Action methods become important: Collective Action enables corruption to be fought collectively, with various interest groups, working together and building an alliance against corruption so that the problem can be approached and resolved from multiple angles.
The advantages of Collective Action:
- Collective Action describes various methods of combating corruption. It is a matter of acting collectively and forming alliances against corruption. Collective Action calls for cooperation on the part of participants from the worlds of politics, business and society at large.
- The ultimate goal is thereby to create fair and equitable market conditions, that is a "Level Playing Field", for all marketplace participants and to eliminate the temptation of corruption for all those concerned.
- Collective Action helps to set up the conditions for fair competition within a corrupt environment.
- Collective Action promotes innovation, as the bidder is selected solely on the basis of price, quality and capacity to innovate.
- Observance of anti-trust law when collaborating with other companies must be ensured by a neutral monitor (e.g. in the form of a non-governmental organization).
- Collective Action can, if necessary, cover gaps in legislation or replace or augment inadequate local law.
Integrity Pacts ensure that the award of orders in the case of public-sector contracts is free from corruption. They were developed by the non-governmental organization “Transparency International”, and are intended to guarantee transparency in the order-awarding process and to rule out bribery in the awarding of public-sector contracts.
Following an invitation to tender from a public-sector customer, the bidding companies sign legally binding contracts, and commit themselves to behave with integrity from the start of the tender process until the end of the project. If the contract is breached, sanctions are imposed which can be as severe as the exclusion of the company from further invitations to tender. An independent monitor supervises the contract-awarding process and observance of the Integrity Pact.
The Integrity Pact ensures that the bidder is selected on the basis of fair criteria, and serves all the stakeholders as a means of protecting the integrity of the project.
Sector-wide codes of conduct
Companies from the same sector get together and draw up a code of ethics or code of conduct. These can take various forms, ranging from principles-based provisions to legally binding agreements. In the latter case, companies that violate the anti-corruption code are penalized with sanctions. However the principles-based codes also have a high degree of effectiveness, as the public commitment to anti-corruption and transparency exerts increased pressure on the participating companies not to breach the agreement. This type of Collective Action is particularly suitable in oligopolistic markets. The uncompromising support of senior management within the companies concerned is critical to the success of the initiative. In order to avoid breaches of anti-trust law, it is vital to enlist the services of an external, independent monitor.
Long-term initiatives are particularly effective in states rated as being prone to corruption, as they pave the way to the establishment of an anti-corruption culture. Collaboration between government, commercial companies and society in the fight against corruption contributes to the raising of awareness among politicians and the general public. The acknowledgment that bribery and corrupt behavior damage the entire economy of a state brings long-term benefits for all stakeholders. Long-term initiatives set out the fundamental conditions that will enable project-specific Integrity Pacts and industry-specific Compliance Pacts to come to fruition and achieve general acceptance. Their success contributes towards a world free of corruption and helps to direct the investment of many millions of dollars and other resources towards their intended destination.
1. We at Siemens have internalized Integrity and Compliance.
2. Our business decisions are based on the Siemens values “responsible”, “excellent” and “innovative”.
3. Acting responsibly means that only clean business is Siemens business.
4. We have received high scores in “compliance category" of the Dow Jones Sustainability Index.
5. We have to make the Siemens values our own and practice them every day.
Status of funded projects
The funds provided by Siemens will be allocated in several funding rounds over 15 years. Each funding round will be announced separately.
Over 30 projects from more than 20 countries were selected for funding in the First Funding Round and will receive overall funding of up to US$ 37.7 million. More than 300 project proposals from more than 66 countries were submitted. The response to the call for proposals exceeded expectations by far in terms of number, quality and relevance of applications.
24 projects from more than 20 countries were selected for funding in the Second Funding Round of the Siemens Integrity Initiative and will receive funding of up to US$ 35.554 million. Funding applications were received from more than 180 well-known non-profit organizations from about 60 countries.
Siemens Integrity Initiative
Key information, eligibility and selection criteria, application and selection process
Projects will be selected according to the published selection criteria and to support a balance in topics, size of organizations and in the regional distribution of funds.
The World Bank Group has audit rights over the use of funds and veto rights over the selection of projects and organizations receiving funds.
Some projects may be funded on the basis of the European Investment Bank (EIB) – Siemens AG settlement which was published on March 15, 2013. As part of this commitment, the EIB has the right to reject the projects proposed.
Details will be specified in the relevant Standard Funding Agreements.