Anti-Corruption

Derived from Latin “corruptus”, the word “corruption” in the original language means destruction, annihilation, depravity. The meaning indicates to the damage caused by corruption both to the society and to the organizations involved in the act of corruption.

According to the definition provided by Transparency International, corruption is “abuse of entrusted power for private gain” (Transparency International, Business Principles for Countering Bribery).

Prevention and eradication of corruption is one of the main topics of corporate social responsibility.

In most countries, acts of corruption are punishable by the law. However, anti-corruption legislations are often insufficient, or are not enforced effectively (especially in developed countries), leaving many wholes to avoid or bypass the law. Thus, companies’ voluntary initiatives and responsible approaches in this area are especially important, and this is acknowledged by various international treaties and codes of conduct.

An act of corruption involves two sides – one, that initiates a corruptive deal or offer and the other, that commits the act of corruption in response to this offer or deal.

The term “corruption” implies to such actions as: bribery, cheating, extortion, secretive deals, conflict of interests, illegal trade of information, nepotism and patronage, abuse of power for personal gain or advantage, as well as money laundering. In this context, an act of corruption implies to offering or accepting any gift, loan, honorarium, award or other types of benefits to abuse trust in an illegal action or business deal. Non-material gifts, for example, giving products without charge, organizing free vacations, or providing a special personal service is also considered as acts of corruption, if the goal of such gifts is (or it can lead to) getting an undeserved and unfair benefit or advantage, or if such gifts can lead to a moral pressure to get an undeserved and unfair benefit or advantage.

Terms “large” and “petty” corruption are often used to distinguish between acts of corruption that involve large or relatively smaller amounts of money. Large and petty corruption are similarly unacceptable and considered criminal action.

For the time being, many international or regional instruments have been developed to regulate fight against corruption and guide the actions of specific business companies with this regard.

Following are CSR’s main principles and issues in anti-corruption area:

Banning of bribery and extortion
Transparency of political contribution
Transparency of the charitable contributions and sponsorships to prevent them from turning into a concealed way of bribery
Banning of gifts, hospitality and covering expenses if they could affect a business transaction outcomes
Complying with anti-corruption principles in relations with agents, lobbyists and other intermediaries (the company should make all agents or other intermediaries familiar with its anti-corruption policy and demand that all activities on behalf of the company be in line with its this policy; the company should not give bribe through its agents/intermediaries, etc.)
A company should do its best to ensure that activities of its joint ventures and suppliers comply with its anti-corruption principles and values.