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INTERNATIONAL DEVELOPMENT

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INTERNATIONAL DEVELOPMENT & STRATEGIES 222, Bd P reire 75017 Paris France ... OECD companies who do not abide by international standards (labour, social ... – PowerPoint PPT presentation

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Title: INTERNATIONAL DEVELOPMENT


1
  • Africa, Companies,International Aid Corruption
  • Philippe Montigny
  • Chairman, Working Group on Preventing
    Corruption,French Council of Investors in Africa
    (CIAN)
  • Executive DirectorInternational Development
    Strategies

2
The French Council of Investors in Africa (CIAN)
  • A business federation of 120 companies
  • 1500 subsidiaries in Africa
  • 80 of French economic activities in Africa
  • Organized with Commission and WG (on economic,
    legal affairs)
  • A working Group on The Prevention of Corruption
    aiming at
  • Analyzing the international legal environment
  • Exchanging on the best practices to prevent
    corruption
  • Exchanging on difficulties (extortion,
    retaliation)
  • Lobbying on French and African authorities to
    combat extortion

3
The Copernician Revolution of French Companies
  • Bribes on foreign markets
  • Before ratification of the OECD Convention (2000)
  • Tolerated as non-recurring commercial expenses
    tax-deductible
  • After ratification of the OECD Convention (2000)
  • CEO facing 10 years in prison 75 000 fine (
    750 000 for the company)
  • Structural adaptation of French companies to ban
    corruption
  • Structural reforms
  • Ethical code of conducts
  • Training
  • Sanctions
  • Better loose a market than face criminal risk

4
The new environment of  corruption  in Africa
  • Corruption, extortion and retaliation
  • Major decrease of bribes from companies
    originating from the OECD area
  • less dirty money in African
    administrationwhich is now very entrepreneurial
    to collect money !
  • Focus on clean companies
  • growing solicitations (extortion, racket)
  • growing retaliation against clean companies
  • slower and more complex decision process for
    the administration
  • Greater exposition of clean companies

5
Aspects of the African extortion
  • Extortion and everyday life (roads, phone,
    working permits)
  • Extortion and tax authorities
  • Extortion and Customs
  • Extortion and calls for tenders (after the
    decision)
  • Extortion and administrative authorization
    (Drugs, Telecom)
  • Extortion and Justice
  • In Africa, companies are subject to the risk of
    extortion in their daily activitiesalthough
    according to the OECD Convention extortion equals
    corruption and some countries (eg France) reject
    the concept of facilitating payments!

6
Africa and corruption A paradoxical approach
  • New legal framework
  • Corruption is criminalised although local and
    certain foreign companies still slip through the
    net
  • Political support from financial backers
  • Conditionality between governance and Aid no
    real change taking place at the moment
  • Officially condemned by developing countries
    governments
  • Creation of mechanisms to combat
    corruptionalthough they are not very effective
    yet
  • Signature of international Conventionsbut
    (almost) no ratification and the legal judicial
    frameworks is not amended yet

7
Inequal competition and the social economic
threat on Africa
  • Corruption is not a criminal offence for many
    companies because
  • They are local companies
  • They belong to non OECD Countries
  • Consequence
  • OECD companies leave Africa
  • They abandon Africa to non-OECD companies who do
    not abide by international standards (labour,
    social environmental issues)

8
Corruption and competitiveness in Africa
9
What shall be done ?
  • At the OECD companies level
  • At the African Government level
  • At the Donorslevel (versus African Government)
  • At the Donorslevel (versus Companies in Africa)
  • At the level of OECD Governments (versus non OECD
    Governements)

10
What shall be done ? (1)
  • At the OECD Companies level
  • Fighting, fighting, fighting
  • Building coalition
  • Lobbying in Africa
  • and in OECD countries
  • Cf CIAN declaration on the prevention of
    corruption
  • At the African Governments level
  • Ratifying AU and UN Conventions
  • Enforcing (efficiently !) the criminalisation of
    corruption
  • Developing an independent justicewith
    enforcement capacity

11
What shall be done ? (2)
  • At the Donor's level (versus African Governments)
  • Priority n1 creating a corruption free
    environment
  • Financing and supporting a strong and independent
    Justice
  • Financing and supporting the anti-corruption
    mechanism
  • Financing and supporting political parties
  • May be before financing anything else !!!
  • Priority n2 linking aid to effective
    anti-corruption progress
  • Linking aid to the ratification of Conventions
    and effective implementation
  • Organising peer review and peer pressure (DC and
    DAC)
  • Making threats on governments as credible as on
    OECD companies !

12
What shall be done ? (3)
  • At the Donor's level (versus companies in Africa)
  • Priority n3 supporting companies resistance
    to extortion and retaliation
  • Inviting companies (incl. local companies) to
    build coalition
  • Being receptive and supportive to companies
    complaints (extortion retaliation)
  • Transmitting these complaints to the local
    government
  • Creating disaggregated indicators on corruption
    (Customs, tax administration, calls for tender.)
    to monitor the progress of anti-corruption
    measures.

13
What shall be done ? (4)
  • At the level of OECD Countries (versus non OECD
    countries)
  • Putting pressure on non-OECD countries so that
    they ratify and enforce the UN Convention
  • Use multilateral fora (WTO, OECD, )
  • Include this aspect in bilateral relations
  • Publishing the list of countries that have not
    ratified the UN Convention
  • Inviting major economic players to sign and
    ratify the OECD Convention

14
Conclusion
  • If OECD Companies are left alone to bear the
    burden of the OECD Convention.
  • they will continue to leave the African
    Continent
  • where corruption will increase to the detriment
    of development
  • In that case the OECD Convention would have been
    counterproductive!
  • So it is urgent to act together now
  • .. and last but not least

15
Last but not least
  • I have been very critical, in particular with
    African officials and civil servants
  • But I and we must pay tribute to some of them for
    their real integrity in a tough environment,
    which means
  • They live in poor material conditions
  • They are subject to pressures (family, career)
  • And sometime there own life is threaten.
  • They are the true heroes of this war on
    corruption and they deserve not only all our
    admiration but our full support.
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