Over the last five years, we have seen greatly increased coherence and consistency in anti-corruption compliance programs. But, individual corporate action has only limited ability to confront and address what two authors called “wicked problems” of systemic corruption.
There are numerous examples of systemic integrity challenges, one of which is repeated, entrenched demands for operational facilitation payments (grease payments), often combined with extortion. It is clear that tackling systemic integrity challenges requires collective action — for companies to join forces and share information and approaches, but also to engage governments and civil society.
Differences in styles, agendas, timeframes, goals and approaches mean that driving meaningful change among these actors is difficult, and corruption poses particularly knotty challenges of disclosure and liability.
One example of successful collective action in this area is the Maritime Anti-Corruption Network (MACN). MACN was established in 2011 as an industry-led initiative, working collaboratively towards the vision of a maritime industry free of corruption that enables fair trade to the benefit of society at large. The network is comprised of vessel-owning companies within the main sectors of the maritime industry and other companies in the industry including cargo owners and service providers.
MACN has expanded rapidly since its formation, and currently has more than 70 global member companies. The network is governed by a member-elected steering committee and facilitated by BSR — a global nonprofit business network and consultancy.
Since its launch, MACN has implemented a strategy addressing both the supply and demand sides of bribery and corruption. The strategy consists of two work streams:
- The internal, supply side work focuses on strengthening MACN members’ anti-corruption and compliance programs.
- The external, demand side work focuses on improving the operating environment by engaging with stakeholders to reduce demands for bribes and facilitation payments.
The first workstream is focused on raising the bar for corporate internal compliance programs. Although the elements of a successful compliance program have been exhaustively discussed, it is relatively unusual to share challenges and best practices, due to anti-trust, confidentiality and competitive concerns.
MACN provides a forum for information sharing on issues that affect particular markets and ports, and discussions on best practice and innovation in compliance programs. Member companies are currently turning their attention to wider organizational culture.
The second workstream tackles the supply side via well-defined interventions in particular countries and by raising awareness on the corruption challenges in the maritime sector. This involves MACN member companies working closely with government agencies and civil society to drive transformational change. This is an approach that needs to take account of particular market conditions. Local employees of MACN member companies, and local NGOs and civil society organizations therefore participate actively in the design and implementation of MACN´s collective action projects.
The experience of MACN offers some initial lessons on how practitioners might approach systemic challenges, as follows:
Stakeholders must have a lot to gain, and a lot to lose: To successfully engage organizations with different goals, agendas and approaches, the issue needs to be causing visible, measurable problems, and there needs to be a possibility of clear improvement in a realistic timeframe. Otherwise, parties will not have the energy or interest to remain at the table and to work together.
Defining the challenge is critical: MACN probably would not have succeeded if it had aimed to tackle maritime facilitation payments at a global level. The network has been effective because it has leveraged the global reach and financial clout of member companies with very detailed, local engagement in particular markets. Many initiatives fail because they are loose, over ambitious and ill defined, or too specific and narrow to keep influential stakeholders engaged.
The private sector needs a business case: For companies to show up and support an initiative, there has to be evidence that the problem is generating significant regulatory, operational and reputational risk, but also that the solution will ease the costs of doing business and that progress can be measured and documented.
Political will is important: MACN has focused on countries where members can document and share problems, and where the government is ready and willing to listen. There are many other countries with systemic port challenges where prospects for change are limited to non-existent, so these are not the focus of energy and effort.
Data is critical: Gathering and sharing information on incidents, networks and practices is very powerful in making the case for change, and gives authority to proposals for action. The MACN’s focus on gathering and sharing data has been a critical starting point for driving successful change.
Local ownership is key: Multinational companies and organizations will not be successful unless they can work in collaboration with local communities and governments, and give ownership to these stakeholders. Companies are just one part of a wider system, and the whole system needs to be involved and engaged in the creation of a change process.
Focus on practicality and quick wins: If a collective initiative can tackle a short term, achievable goal first, this will help build buy in and trust to tackle the larger challenges. If initiatives start with the most ambitious and long term elements, there is a danger that momentum will be lost early and never recovered.
Commit for the long term: However, progress can only be made over the long term, and mutual commitments are essential. Collaborations need independence, governance, and operating principles – a framework to manage competition and trust, and a safe space to share ideas.
Martin Benderson is an associate of BSR based in Copenhagen. He focuses on projects related to climate change, local sustainable performance, human rights, and gender issues. He also supports the Maritime Anti-Corruption Network, where he engages with multilateral and bilateral donor agencies and collective action programs. Follow him @hMBenderson.