10 ANTI-CORRUPTION PRINCIPLES FOR STATE-OWNED ENTERPRISES

The SOE Principles are aligned to the Business Principles for Countering Bribery, first published in 2003 as an initiative of Transparency International and now in a third edition. The Business Principles have shown how voluntary codes can contribute to change, not only by affecting the behaviour of businesses but also by having a significant influence throughout the world on the development of anti-bribery laws, codes and tools. Transparency International looks forward to the SOE Principles having the same impact on governments, SOE and their stakeholders.

The 10 Anti-Corruption Principles provide guidance for state-owned enterprises (SOEs) of all types and sizes on anti-corruption best practice. SOEs are important economically: they constitute a significant portion of global business and social services delivery and increasingly operate internationally. They meet the needs of communities by providing crucial services in areas such as infrastructure, water and power supplies, natural resources, food, banking and financial services and health. SOEs may be used by governments as tools for development, to protect strategic resources and interests and to raise a country’s global presence. Many SOEs have been partly privatised and the largest commercial SOEs now rank among the world’s top global companies.

 

SOEs have specific corruption-related vulnerabilities. These include:
• close relationships between government,
politicians, SOE boards and senior management
• poor governance and management
• poorly managed conflicts of interest
• lack of accountability through transparency and public reporting

 

Without effective anti-corruption policies and procedures these vulnerabilities can result in corruption, including:
• bribery in procurement
• corruptly structured purchases and sales of assets
• misuse of the SOE to provide finance to political parties
• anti-competitive behaviour

 

Public ownership carries enhanced responsibilities for SOEs: they are required to act in the interests of the society in which they operate and they are able to set standards which can influence positively their business partners and stakeholders. In countries that are struggling to improve their anti-corruption performance, SOEs can provide an example, at the highest level, of anti-corruption practices for all sections of society – and specifically for private sector players. In this way, governments can use the activities of SOEs to drive ethical business practices.

 

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