THE REPORT OF

2009 UN GLOBAL COMPACT REGIONAL CONFERENCE

BUSINESS TAKING A STAND AGAINST CORRUPTION

MARCH 16TH - 19TH 2009

SHERATON HOTEL AND TOWERS, IKEJA LAGOS NIGERIA 1

Introduction The 2009 UN Global Compact Regional Conference Africa was held on 16th 19th March, 2009, at Sheraton Hotel, Ikeja Lagos, Nigeria with the theme Business taking a stand in the fight against corruption. The meeting presented a unique opportunity for participants to benefit from discussions on the subject of Business challenges, opportunities and approaches to collectively tackling corruption. The objective of the workshop was to equip business leaders and Global Compact Local Network Focal Points from Africa with practical collective action tools and strategies to counter corruption in business operations. The conference had two days of closed meetings (16th -17th) in which companies examined how to utilize collective action to counter corruption and introduce new collective action strategies/ tools for business operations. The third day of the conference (18th) had three sessions during which the following sub themes were examined through real life dilemmas of individual companies and organizations; (i) Corporate Governance as a Tool to Fight Corruption, (ii) The Role of Financial InstitutionsRisks and Challenges of Corruption, and (iii) The Political Economy of Corruption and Collective Action as a Tool to Fight Corruption. The last day was also a closed regional meeting that provided Global Compact Focal Points and other members of the Network Steering Committees with an opportunity to learn from the achievements of other networks and to share experiences on the processes of issues that were relevant within the regional context. The participants were drawn from the public sector, the organized private sector, development partners, civil society and UNGC networks from Africa and around the world.

DAY ONE 16th March 2008 Workshop on Fighting Corruption through Collective Action: Practical Strategies for Companies. Introduction Welcome AddressMrs Olajobi Makinma Introductory Remarks Micheal Jarvis Presentations: Micheal Jarvis Kathrin Frausher

Case Studies

(a) Columbia (b) NEPAD(APRM) (C) BAAC & CBI. Ghana & Pakistan

Success Stories-

Introduction to Programme Mrs. Olajobi Makinwa gave a welcome address she appreciated participants (Local Networks) for being able to come to the meeting. Michael Jarvis did a brief introduction of the workshop. He noted that this would be the first time a workshop of this nature was being organized in the African Region. Interactive Session The interactive session started with some burning questions that participants addressed. Participants were split into workgroups to address different burning questions which also, among other things, gave them the opportunity to know each other and ask key questions regarding how they tackle challenges of these types in their countries. Some of the questions used for the discourses were as follows; Who are you? Where do you work and what do you do? Why are you here at this workshop? What are the key questions you would want to cover during the workshop? A range of issues deriving from the theme of the conference were discussed among which included the following: The behavior of private sector towards anti-corruption issues Government involvement- how they make policies to affect corruption threats Coalitions Building to getting Collective Action going How better uses of international instruments in dialogues could be made Improving Public/ Private Sector awareness on corruption, and Why corruption was endemic in Nigeria as well Socio-cultural issues etc

Presentations 1. Understanding Collective Action- Michael Jarvis and Kathrin Frausher The presentation defined collective action and looked at how it could strengthen anti-corruption effort. Examples were taken from companies, government and NGOs that successfully implemented Collective Action in several industries including energy, construction, transport, and pharmaceuticals 3

in both emerging and developed markets (Germany, Colombia, South Africa, Mali, Russia, Indonesia). It said corruption in Africa cost the continent nearly US$150 billion a year, leading to a loss of approximately 50% of tax revenue; thus creating an urgent need to address it and necessitating a joint-effort solution to the menace. This will cover issues such as Private Sector competitive investment climate, Responsible private sector, Public Management (transparent Public financial management and procurement), Administrative and Civil service reform, and Civil Society action. Other members are the Media and Oversight Institutions - state oversight institution, judiciary, SAI, Transparency & Participation (right to information, user participation). Local Governance covering Community driven development, Local government transparency, Downward accountability are also necessary just as Governance & Service Delivery Transparency, participation, accountability in service provision (health, education, transport), Sector level corruption issue (EITI, Forestry) are critical. 2. Selected success Stories a. Ghana Experience the Ghanaian Anti-Corruption Coalition (GACC) which has four Civil Society Organization (CSOs) as members monitor the governments anti corruption activities and lobbies for governance and anti-corruption reforms. Their main achievement is the setting up of Ghanas Revenue Agency Board and designing the guidelines for the Civil and Human Rights Advocacy and Justice (CHRAJ) and the Regional Construction Sector Transparency Initiative (CoST) a partnership between government, companies and CSOs to increase transparency in construction procurement. This includes disclosure, auditing and oversight of government financed construction projects, roll-out stage and identify pilot in other Africa countries. The main achievement was that pilot studies were launched in Ethiopia, Malawi, Tanzania and Zambia and DFID committed funds while the World Bank Group (WBG), Transparency International (TI) and the UK Anti-Corruption Forum are supporting partners. b. Pakistan: The Integrity Pact for International Airlines (PIA) spearheaded the Integrity Pact which was formulated and MOU signed between PIA and Transparency International-Pakistan (TI-P) for transparency in procurement systems under the recommendation of the government of Pakistan while the TI plays a monitoring role. Their main achievement was the development of PIA Procurement Manual for all SBDs on procurement of works, goods and services based on international standards and recommended by the National Accountability Bureau and it was a best practice model for anti-corruption initiatives across Asia.

c. WBI Programme on Collective Action: This programme includes the following: a. Awareness raising and training b. Diagnostics c. Organizational development d. Implementation support e. Knowledge Management Phases of WBI Collective Action Projects include Needs assessments Consultations Trainings and information dissemination Implementation support Knowledge Exchange 4

The following questions were raised at the end of this section. Do you already have examples of Collective Action in your country/area and/or business /organizations? How do we tackle corruption; at multi sectoral levels or at regional levels for effectiveness? Can business organizations tackle corruption without the involvement of government? 3. Presentation with Exercise Session: Further Presentations on Collective Action was made, followed by group exercises on its strategies How to implement Collective Action This was presented by Jens Berthelsen, Global Advice Network. This session laid emphasis on the variety of collective action frameworks and tools that companies and organizations can apply to counter external corruption pressure in high risk operations. Some of the strategies discussed were more appropriate for minimizing corruption in specific projects, such as procurement for a major infrastructure project. The rest were for longer term approaches that seek to strengthen the institutions and regulatory frameworks against corruption. The session focused on real life examples. Demand for Bribes/ Exhortation- This include bribe/facilitation payment, influence/political contributions, opaque payments via agents/intermediaries, gifts/scholarship/employment opportunities and other advantages. This however resulted in denial of goods, denial of services, problem of access to utilities, problem of access to licenses, legal sanction, physical threats and lost opportunities. The World of Bribes- Although Companies are confronted with the dilemma of bribery at individual level, but this challenge will be better solved at a collective level because different kinds of risks need different kinds of solutions. Key issues in opposing corruption- This involves time, vulnerability, alternatives, and possibility of escalation. This will require a joint action taken by businesses, and assistance from others. Different types of Collective Action This could include Ethical Commitment which is an anticorruption declaration on the short term, Project- Based Agreement and Principle-Based Initiative on the long-term initiative or external enforcement. It is Integrity Pact on the short-term, project based agreement and certifying business coalition on long- term initiative. Tanzania Experience Exhortation - This is a help desk at business organization that deals with irregular tax collection, gathering of facts to be presented to government and it was initiated by confederation of Tanzanian Industries Supply chain problems - This is very difficult to tackle because of typical issues such as who bears the responsibility. The question is what is the limit of responsibility and cost-sharing (for instance in Tanzania, bribery is a criminal act)? Russia Experience A typical example is tracing wood from Russia, initiated by Axel Springer Verlag A/G.Pressure from NGOs traced the main source of paper to Stora Enzo. The NGOs organized a coalition (Springer, Enzo, Time Warner, Random House, Tetra) with the purpose of uniting and supporting the Russian provider. The main issues were stated as irregular bidding for new concessions, no facilitation payments and ultimately better revenue. 5

Wining, Dining and Gifts These are unethical behaviors at sector level. For instance the pharmaceutical companies were accused of bribing doctors to prescribe their products. In a situation like this, sector solutions should be proffered after external pressure has been applied, such as Code of Conduct (detailed rules for hospitality, travel, meals and training). Independent monitoring which include reporting mechanism; retirement of ticket and reimbursements, Again Internal Sanctions which are internationally binding should also be considered. This was initiated by the Government and Business Association. Market Access Using your own Code of Conduct as a market access instrument requires Uniting a group of minded companies with the purpose of introducing level play is field Dialoguing with government on rewarding clean companies. Independent monitoring This was initiated by individual companies thus creating level playing field in which business lobbying are practiced for better regulation. Questions and Answers/Comments It is important to know at what level lobbying or an act of facilitation becomes bribery. 4. CASE STUDIES: (a) Columbia Collective Action related to procurement law reform in Columbia- This reform became necessary because of: High level of corruption Public pressure for greater transparency in government Outdated legal mechanism Inefficient use of public resources

The key partners involved in the Collective Action related to procurement law reform in Columbia were Colombian Confederation of Chambers of Commerce Political Science Institute Business Association and National Congress and various contracting agencies.

The following lessons were learnt from this reform programme a. The need for on-going follow up on draft laws with various stakeholders b. Government willingness to participate, accept feedback helps, but if absent still advocate for change c. Establishment of open channels of communication to engage broader public d. Plan sufficient resources to study the impact of the new law on national and local level. e. Consensus and leadership among business groups which helps move business forward. 6

Benefits derived from the reform to the engaged parties Included: Introduction of more transparent procurement practices Greater competition among companies Increased involvement of international participants in procurement Greater assurances for the public and evaluation of investments.

General Experience from the reform: a. Collective Action is not an easy thing to do b. Collective Action might be appropriate tool for fighting corruption and creates integrity c. Collective Action involving business, government and civil society might be remarkable alternatives to obsolete legislation (b). NEPAD (APRM) and Collective Action It was observed that available network/opportunity for engagement existed but a lot of stakeholders were not seizing the opportunity. Discussants sought to know how many of the participants were involved in the NEPAD/APRM process. It cited two key models/experiences that enhance this process of engagement and collective actions to include: Political will- the President of Malawi personally endorses the anticorruption actions Mo Ibrahim Foundation experience was also cited.

It underscored the need to look at specific cases in each country and continue to see them as a crosscutting issue. It was also realized that CSO involvement was weak. Therefore, they could not be at par with the private sector. (c). BAAC & CBi Case Studies The Experience of Business Action Against Corruption and the Convention on Business Integrity initiatives in West Africa and Nigeria This session studied two initiatives namely: Business Action Against Corruption (BAAC) (a private-public initiative to tackle corruption in 15 African countries) and Convention on Business Integrity, a Nigerian initiative for maintenance of ethical conduct, competence, transparency and accountability by private sector operators. The session also explored lesson that could be learnt from these collective action initiatives. Value added was discussed in-depth for a set up or strengthening of similar initiatives elsewhere. CONVENTION ON BUSINESS INTEGRITY SOJI APAMPA The Business Context Anti -corruption campaigns were usually seen as Anti Government in Nigeria even as corruption remained a moral or survival issue. The connection between Democracy and Development gave rise to such concepts as inadequate voice, inadequate participation, ineffective and inefficient service delivery and diminishing standards of living. The impact of corruption was evidenced in the level of playing field because it blurs commonly agreed standards and shared ideals, ineffective sanctions and brought about insufficient rewards. Also the impact on the search for power, wealth and prestige gave rise to poor access to finance, poor access to markets and poor access to know how well to interact with market and consumers, workforce and supply chain, as well as trade partners and Investors etc. 7

Improving Governance Towards improving governance, a series of questions need to be asked before this can be fulfilled. These are: Why would you do right? Is it to avoid punishment, take advantage of rewards, impress circle of friends, to be seen as law abiding, for the common good of the majority, or to ensure justice for all? This was asked considering, the fact that we still have weak institutions, weak enforcement and negative incentives. Compliance Issues Compliance was said to depend on the answers to a number of questions including but not limited to; Focus of the standard regime Locus of control Control Mechanism

Focus on value and standard include Goals, Means and Access and they incorporate Shared Beliefs, Norms, Behavior and Character. They are strongly emphasized by society. (a) Locus of Control seeks to identify where regulation is effected such as: 1. Business- Self regulation, Strong Motivating Force, Benchmarks 2. Government Regulations, Effective Monitoring, Effective Control, Effective Sanctions 3. Civil Society- Activism, Incentives/ Agenda, Leverage, Plenty of Social Capital (b) Control Mechanism is about 1. Market Mechanism which involves Norm of Reciprocity and Prices depending on the information 2. Bureaucratic Mechanism which involves Norm of Reciprocity, agreement on appropriate Authority, Rules depend on enforcement 3. Clan Mechanism which involves Norm of Reciprocity, Agreement on Appropriate Authority, Shared values and Beliefs, Traditions depend on socialization, Alignment of incentives (sanctions and rewards) with appropriate behaviours Fighting Corruption The different stages in corruption act include 1. Willing and Uncompromising 2. Willing but Compromising 3. The compromised and Unwilling 4. A good number of Nigerians feel trapped by the system and helpless unable to resist corruption on their own including regulators, companies and stakeholders. 5. Coalition of the willing it involves Social Consensus, Immediacy, Proximity, Magnitude of impact, Concentration of effect, Probability of impact, Political will, voice& space and timing So What Works? Strategy not just Responsibility 8

Bias for Action not Rhetoric Removal of Barriers Avoid Moral Posturing Homegrown approach and not simply imported Collective Action not Unilaterism CBi Collective Action The framework is built around the traditional African System. it is a system of Shared Incentives Pooling of Credibility, reduced Business Risk, Improved terms of trade, Mutual Accountability Network of Peer Review, Peer Pressure and Appeals. The Road Map to this involve, Accreditation and Attestation while the Code is a System of Shared Values.He cited that CBi for instance is both a Certifying and Principle Based initiative with compliance related prerequisite for membership. The requirements for adoption of membership is checked by external assessment and members get certified or eventually get excluded as ethical principles bind signatories to not engage in corruption in their daily businesses.

Rating System The Credential factor for rating performance is based on a. Value System- it has to be Articulated, Ethical, and Acceptable b. Accountability-This requires appropriate disclosure of activities to anti-corruption principles, process and actions tolerance for appropriate scrutiny, not acting ultra vires, as well as appropriate oversight in decision making c. Commitment- to anti-corruption principles, process and actions d. Track Record Strong Brands The need to build Global kite- mark for business integrity. This is required for: (a) Affecting Competitiveness through the following such as Access to affordable finance and to markets by corporate players which influences. It provides alternative credibility verification schemes It is a means of Mentoring, Certification and Sponsorship in the corporate area It enables the reduction of transaction costs in businesses

Development of a shared value system Setting up of commonly agreed standards Effective Compliance monitoring control mechanism Reducing Vulnerabilities 9

- Business Envoy Services- This involves taking up advocacy on behalf of an individual company, group of companies or entire industry on generic issues that allows corruption to flourish. For example telecom companies probably have a few issues they would like a business envoy to sort out with NCC on their behalf which if they tried to address directly might prejudice them. Other related risks reduction areas include; - Consumer Protection - Public feedback and Complaint Handling businesses

Managing Risk Reputation Risk Management This is a tool that helps map stakeholders of a company and their own stakeholder relationships in turn, in order to identify areas of corporate reputation risks and suggest ways of minimizing them Improving brand reputation Deriving Value from Investment in Ethics The primary aim of CBi current fund raising is to be able to intensify its deviation of value from its investment in ethnics. This is to ensure that companies investing in integrity effectively convert this into equity. Further comments Collective Action participants are from previously independent CSO initiatives It is built around alliances between government, business and civil society. It sought to ensure buy-in of Presidency (achieved in Nigeria under Obasanjo and now being redone with the current government) and in Cameroon with the blessings of president? Ephraim Inoni. Its future focus is still on- Business, Government and Civil Society with the aid of the CIVITAS model (a, Voice, SMS, Mail and Data processing system).

Michelle Ntab- African Institute of Corporate Citizenship (AICC) The effectiveness of the BAAC Model in Malawi was realized through trust, leadership and commitment as well as strategic country approach combined with a multi-sectoral implementation approach. For action against corruption to be effective it needs Political will and Commitment from government, a commitment for profound governance reform and transparency, very reliable sources of information and statistics and a platform for actions bringing together Private and Public Sectors, anti corruption bodies and Civil Society. Defining the role of each Actor; Private Sector- Commitment and Financial Support is its expected role value. Anti-Corruption body- prepares and implements public policies, while Civil society facilitates dialogue and collective initiatives with support from development partners Successes achieved from the initiative include that it has become a: 1. Permanent platform for discussions to facilitate policy reforms which has also transformed into a monitoring taskforce 2. Code of conduct for private sector and public enterprise endorsed by all parties at management level

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3. An independent rating system to access systemic action of companies and SOEs procurement process/activities. 4. National framework on competition launched in February, 2009 with permanent awareness raising activities for the next 3 years. Challenges Getting accurate information from the public is problematic compled with and changing governance orientation Getting Companies to regularly use the self evaluation and raising tools Long term commitment from government and private sectors (deep rooted commitments)IS not forth coming Leadership from the NGO sector Working the Talk Building a movement which has a life cycle such as in-Collective Action Getting Organizations to respond to social responsibilities is very difficult unless it is made clear that it will affect the core interest of their businesses

Reactions/Comments Legislation should be made available to back up the fight against corruption What is integrity to business, government and civil society? It is important to codify this. The possibility of making succeeding governments accept the idea of Integrity Pact propounded by CBi is necessary so that there will be no need to refresh each government on this principle Building Trust- regular meeting, individual networking most especially with Civil Society and Private Sectors is necessary. Scenario Exercise (1) Corruption dilemmas in Multi-Stakeholder Situation Jens Berthelsen, Global Advice Network The Business of Collective Action The session was based on real life collective action initiatives. The objective of the interactive scenario session was to illuminate on the kind of problems that decision makers may face in high risk operations and to discuss on how they can be addressed through Collective Action. This initiative was supported and adopted by the World Bank Institute, the Global Compact, Center for International Private Enterprise CIPE, Grant Thornton, Siemens, Global Advice Network, and Transparency International. Two types of anti- corruption efforts from the private sector included setting up internal mechanism to prevent corruption and reforming internal operating environment to reduce corruption opportunities. He said that Fighting Corruption collectively with all stakeholders increases the impact of individual action therefore endorsing the strategy of Collective Action, which enhances values as it: a. Is a collaborative and sustained process of cooperating between stakeholders 11

b. Increases the impact and credibility of individual action c. Brings vulnerable individual players into alliance of like-minded organizations d. Levels the playing field among competitors e. May complement, or temporarily substitute for and strengthen, weak local laws and anti corruption practices However Collective Action is not easy or quick, and requires patience, hard work and expertise Benefits All stakeholders benefit from anticorruption Collective Action through the following medium 1. Bidding Companies get increased chances of fair selection as a supplier and enhanced access to markets, protection from legal penalties, economization of finances formerly paid as bribes, enhanced reputation, and the assurance of ethically and responsibly behaved employees and competitors. 2. Government provision of incentives are transparent. There is the benefit of strengthened rule of law, increased credibility, political and stability, higher investment levels from domestic and foreign investors. These create improved image of country on effective governance mechanism and more effective procurement 3. Civil Society/ Non Governmental Organizations get improved access to essential resources, such as healthcare and education, and other better social development if money/taxes are used for social projects instead of bribery it creates increased trust and confidence in business, consistent and fair enforcement of regulations it also enables a greater traction for the objective of a more transparent environment and attention to corrupt practices. 4. Customer there is consequently enhanced competition in bidding processes which becomes most efficient openness such that not the best connected bidder wins it also enhances, reputation, makes for the avoidance of time-consuming law suits/blocking point after decision on supplier company, focused business relationships on quality and reliability of goods and services The future for Collective Action Each Participant in the core group has accepted to promote Collective Action However, the widespread attention is supported with little knowledge of best practices These is a growing understanding of Collective Action as a business development tool There is a further development of the tool to include best practices Group work Participants were divided into 3 task teams to discuss the subject area 1. Trust among Competitors 2. Trust in Business-Government relations 3. Trust between Business & CSOs Group A- Trust among Competitors 12

The question was how could free riding be prevented? In providing answers, the team said that in order to build trust there is need to take initiatives provides leadership and nurture advocacy. There is need to be transparent, committed and result oriented and minimized corruption. The group furthermore believes the following should also be considered critical a. The creation of affiliates to enhance trust b. Minimizing corruption through business listing c. Global compact Communication on Progress (COP) will aid more openness and trust among competitors d. Blacklisting of companies that refused to comply will help to enforce compliance e. Reporting back to the society on how they are responding to the community/ society

Another question was should there be internal/ external monitoring? The group said yes, it is internal in the sense of business monitoring businesses and external when government will be monitoring business How? a. By developing clusters where business talks freely among its members b. Through Peer Review in order to encourage business abide by the law or get blacklisted as a group on account of one bad member. c. There should be provision for code of conduct, audited by local community shareholders, and establishments such as Environmental & Human Right Commission

Should there be Sanctions?

Yes, provision of code of ethics that enforces Naming and Shaming, alongside with Penal Code to ensure that law breaking leads to exclusion from Business Associations/Club Global compact compliments already existing efforts of business compliance with laid down regulations Group B Trust in relation between business and governments. It was observed that government often suspects Collective Action to be an expression of collusion. So the question was what could be done to overcome this barrier? The following were considered of significance: a. Better enforcement will ultimately lead to Better Government b. Formulation and effective implementation of appropriate policies It was also noted that business often experiences being punished for staying clean. What kind of rewarding systems can be invented to overcome the paradox? a. The needs for SMEs involvement was stressed

b. Credit Reference Bureau (CRB) was agreed to be useful in resolving the global economic crunch 13

Group C Trust in relations between business and CSOs: This became necessary as a lot of mistrust is considered to be on both sides The critical questions addressed included: What competences will business be looking for in search for partners in collective action What kind of risk exist in dealing with business as seen from a CSO perspective

There are lots of misgivings by business when relating with CSOs because business sees the former as; a. Self interest propelled groups b. Threats to business, conservatives that have non-profit making oriented attitude

c. Too many, but because of endless public issues that are of societal interest, which create business suspicions. d. Being Extortionists especially given the experience of some considered as portfolio NGOs e. f. Given to proliferation of CSO without clear aims and objectives Having differing interest as against the Profit making objective of businesses

CSO perception of Business, on the other hand include that 1. CSO believes that businesses are not returning enough back to the society. CSO seeks to find out how much businesses pay back to the environment in which they operate. 2. CSO wants to find out the extent to which the companies are committed or socially responsible to the community in which they operate Competencies-The competency factors expected of CSO to meet the expectation and trust of both government and business include that each organization: a. Must be duly registered b. Must have properly defined objectives c. Must have Audited Financial Statement d. Good track record e. Integrity of the members must not be in question f. Brand value g. Trust h. Networking Strength and Capabilities Risk Involved in trust arises between business and CSOs include The likelihood of reputation hazards resulting from doing business Capture of CSO arising from compromise/ Business Capture Trust. 14

Communiqu- A communiqu was developed and communicated to the media on the UN event. DAY TWO 17TH MARCH, 2009 The day continues with another workshop. A recap of the previous days workshop was made. Workshop II Presentations by Oliver Stolpe , UNODC Mr. Osita, Transparency Nigeria How to improve Transparency in Procurement- Oliver Stolpe This session looked at voluntary transparency pacts that involve bidders and the government and how they can help restrict opportunities for corruption in a particular project. It considered the procurement process as being highly exposed to corruption and exposed how both public and private actors in the procurement process could be tempted to divert goods and services or public funds for their personal use. It further examines the different forms and applications of transparency pacts and how to implement them. Corruption as experienced by business in Nigeria From the experience and perception of the private sector, it was gathered that; Out of 2203 businesses interviewed, 9.4% admitted having paid a bribe in 2006 even as 14.3% preferred not to respond 76.7% indicated that they did not know what the bribe had been paid (10% for a better treatment, 4.6% for access to information, 4% to speed up the process) 24.4% indicated that paying a bribe to a public official to do his/her job is very or fairly frequent. 21.6% said the same for paying a bribe to public official to make him/her not to do his job. Some of the reasons why corruption is an obstacle to doing business include that it further leads to Crime and Insecurity, more Corruption, Tax, Inflation, Political Instability, Complicated business registration, Unclear Law Corruption in Public Procurement involve; for instance clearing goods through the Customs, obtaining Road Worthy certificates, Procurement for/by government, Procurement for Private Sector, Business License and permits, Traffic Offences, Contact with the courts, Police investigation,

Corruption in Public Procurement comes in the following forms: 1. Bribery to influence the planning or selection process or the contract execution 2. Fraud i.e. misrepresentation or omission of facts in the selection process or contract execution 3. Collusion between several companies with or without the knowledge of the procuring entity, aimed to inflate prices at non-competitive level 15

4. Coercion to discourage participation in a procurement process, or affect the execution of a contract. Public Sector Action Article 9, UN Convention against Corruption established appropriate systems of procurement based on transparency, competition and objective criteria in decision making, that are effective in preventing corruption. It explains Public distribution of information on procurement procedures and tenders, Adequate time for bidding, Objective and predetermined for selection of procurement method, conditions of participation and award criteria, Effective and independent review/appeal mechanism, Oversight, accountability and training of procurement personnel. Long Term Strategies; 1. Advocacy to reduce vulnerabilities include legislative advisory programmes to influence the national and regional business agenda, regular dialogue on corruption at company level, association level as well as private sector level and public-private sector level, corruption risk analysis. 2. Joint Training of procurement Officers and Company Staff 3. Training of the supply chain 4. Joint development of principle of business ethics on the following a) Gifts, gratuities, honorariums, entertainment, hospitality b) Conflict of interest c) Political contributions d) HR policies (Post-employment restrictions) e) Charitable contributions and sponsorships f) Facilitation payments g) Use of Agents, subsidiaries, joint ventures, contractors. Short term (Ad-hoc) Strategies; here, the Integrity Pact is necessary It is a formal agreement between a government office and enterprise intending to participate in a fully transparent and legal way in the binding process and contract execution. The pact content may include that there is a) No bribe to offer, solicit or accept a bribe; b) No other inducements; c) Limit to payment to agents to reasonable compensations; d) No collusion with other bidders; e) No other unfair practices contrary to free competition Short- Term Strategies; Integrity Pacts (Consequences) 16

a). Predetermined arbitrator equipped with powers to investigate violations, to involve or engage third parties in the investigation, and issue sanctions b). There will be full cooperation in any investigation c). Pre-approved sanctions could require I. Handing over of all relevant information to national or foreign law enforcement bodies II. Termination of contract III. Penalties IV. Naming and Shaming V. Banning from future government procurements Project on Enhancing Ethics and Transparency in Business Transactions This project is meant to supporting the development and promotion of principle of business ethics and help to design a governance infrastructure that will ensure a) Monitoring of compliance b) Regular Dialogue and advocacy c) Research and analysis d) Receipt and follow up on complaints It will also involve awareness raising and training of participants especially on corruption Risk Assessment Methodology 2. Engaging Partners in Anti-corruption efforts; the experience of Transparency International by Mr. Osita, Transparency Nigeria He spoke about the public Procurement Act of 1997 which emphasis the procurement, tendering and process for review etc He also observed that deployment of personnel is based on political consideration, federalism/ federal character which are ways that encourage corruption. He also enumerated the intervention efforts of Transparency Nigeria to include the introduction of a) Integrity pact- which brought government and private sector together the presence of witness, b) Appointment of monitors who serve as social witness Questions 1. What are the specific challenges companies are facing in the context of public procurement? 2. What do you expect from the government in terms of addressing these challenges 3. What can businesses do to address this challenges Answers Some of the things expected from government are to address the following challenges And condition below 17

a) To address the situation of lack of clear rules and procedures which encourages non transparency b) Political appointments (Lack of independence) creates strogism c) Indigenous lineage (Favoritism and nepotism breeds corruption) d) Independent procurement officers need to be recruited e) Tampering after biddings has been concluded must be stopped f) Nepotism g) Absence of uniform rules breeds favoritism h) Development issues must be centrally mainstreamed in processes and procedures i) Enforcement and proper implementation of rules is very necessary j) Awareness creation about procurement process need to be carried out down to grass roots k) Sincerity of purpose on the part of the government is extremely necessary l) CSO which should act as whistle blowers, should be enabled or allowed to do so m) Absence of Information Law- the Freedom of Information law need to be enacted immediately n) Development of code of Ethics on the part of businesses is necessary for confidence among stakeholders o) Capacity building on the part of the procurement officers should be undertaken p) Simplified and available procurement guidelines should be made accessible to users q) Procurement boards should be independent and the need for government to adopt and involve in e-governance is here emphasized r) Conflict of interest people in government owning and influencing decisions on contracts present a crisis of confidence situation s) Undue advantage example is Nigeria and PDP t) Sanctions should be put in place for people who negate the code of ethics of business u) Sale of approved tender to third party FOCUS GROUP INTERVIEWS Enhancing Ethics and Transparency conduct of Business in Nigeria This interactive session provided the unique opportunity to explore jointly, the value system as relevant to the conduct of businesses in Nigeria. The objective of this dialogue was to develop a set 18

of business-owned ethical principles for doing business in Nigeria, drawing from relevant international standards. It is necessary Supporting the development and promotion of principle of business ethics Helping to design a governance infrastructure to ensure

e) Monitoring of compliance f) Regular dialogue and advocacy g) Research and Analysis h) Receipt and follow up on complaints Awareness and Training

Corruption Risk Assessment Methodology

Presentation from Transparency Morocco and the Francophones coalition against corruption with over 15 countries and 23 CSO working on the issue of corruption showed that information tools are vital instrument to their success story. However the challenge of daily access to internet still subsist Issues Where do we go from here? 1. Corruption; the Corporate Affairs Commission should be empowered to make checklist the registration of companies and CSOs, then follow up and ensure they comply with the laid down rules and regulations. 2. The constitutional clause of resignation from present office while contesting for an elective post should be reviewed because it encourages corruption in a way. For instance an office holder will be tempted to acquire illicit wealth while serving because he was not sure of returning to his/her source of livelihood after the tenure. 3. Developing pressure groups right from the communities through proper capacity building and raising the awareness level of the citizen is also very important 4. There is lack of communication in the continent on general issues or is it an African problem? BRAINSTORMING SESSION STARTING/STRENGTHENING INITIATIVE This interactive session gave the opportunity for fellow participants, experts and collective action practitioners to brainstorm over Collective Action opportunities in markets and projects. It was a great session structured for discussions and networking. Generate statistical data on corruption Advocacy from the CSO to eradicate PR and facilitation in Business Access to Information tax payers and EFCC Records Transparency and Monitoring Techniques/Mechanism Welfare Packages of Law Enforcement Agents should be reviewed from time to time.

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 Entrepreneurship Development on the part of CSOs and Private sector to address issue of poverty Anticorruption Law and Access to Information Act should be promulgated using the South Africa Experience CSO Monitoring. Professional Associations Formidable Regional Network using the countrys Local Network Awareness Strategy/ Popularising UNGC Constant Peer review and Information Sharing Engage Regional bodies- influence SADC, AU, NEPAD.

DAY THREE; 18TH MARCH 2009 The third day was the general conference involving all economic stakeholders both public and private. The programme was jointly organised by the World Bank Institute, United Nations Global Compact, United Nations Office on drugs and Crime and Global Compact Network Nigeria. The opening ceremony was followed by technical sessions and discussions. Opening Ceremony Speakers: Frank Nweke Jr., DG, NESG Mr. Soren Petersen, Head, Global Compact Networks Welcome Address Mr. Frank Nweke Jr., Director General NESG The welcome Address was smoothly delivered by Mr. Frank Nweke Jr., Director General of Nigeria Economic Summit Group, NESG and he urged all other organizations, CSOs Public and Private Sector that has not joinED the Global Compact to do so. He enumerated the 10 principles of the Global Compact and the need to incorporate it into the daily activities of ones organization. He welcomed all participants (especially those from outside Nigeria) to the event on behalf of the local network while apologizing for the absence of the Chairman of NESG, Mazi. Sam Ohuabunwa. He further stated that NESG had played an important role in the formation of the UNGC network in Nigeria and that the theme of this years regional conference Business taking a stand in the fight against Corruption happened to be in sync with the ideals of NESG. Corruption according to him certainly did involve at least two parties (the giver and the taker); and that it was therefore reasonable to assume that when one party takes a firm stance against corruption, the corruption process may be aborted. He further noted that corruption happened to be rife in African countries; most times focused on the public sector therefore that is was time for the private sector to take a bold stand on this critical matter. He thanked the United Nations leadership for initiating the Global Compact and it was his believe that if all countries in Africa were to subscribe to the ten principles centered on human rights, labour, environment, and anti-corruption, Africa would quickly rise from poverty. According to him, it was NESGs hope that countries that were yet to subscribe to the Global Compact would take a stand to do so. He concluded by once more welcoming all present on behalf of the UN Global compact Nigeria local network, and prayed for fruitful and useful deliberations of the gathering. 20

Opening Address Mr. Soren Petersen, Head, Global Compact Networks - The Head of Global Compact Networks welcomed everyone present at the conference and sent out his special thanks to his friends, teams, partners and especially the local networks for making the conference happen. He noted that while the UNGC was a laudable initiative, the conference would have not been possible without the cooperation and commitment of the local network. He then briefly went back ten years in time to recapture the birth of the UNGC which according to him was initiated by the former UN Secretary General, Mr. Kofi Anan. He stated that the then Secretary General launched the initiative against the back drop that globalization was headed in the wrong direction. Hes vision was for the private sector and globalization to be a part of the initiative and one year later, the Global compact was established. He further noted that the Global compact started off with nine principles and in 2004 the tenth principle (the anti corruption principle) was added. The fight against corruption according to him should be a part of the integrated package when companies accept responsibility. He added that when the UNGC started to talk about environmental, social, and governance (ESG) issues, no one had any idea of what they were talking about then but that today, that concept is becoming part and parcel of what companies are doing. He explained that the UNGC started with 50 companies singing off in 2000, and more than 5,000 companies globally have signed onto the Global compact presently. In addition to this, he noted that another 1500 non company participants, NGOs, and academic institutions were on the list totaling 6500 participants from all around the world. Expositing on networks, he confirmed the establishment of local networks in 90 countries of the world including Nigeria while over 130 countries are members of the global compact. . Highlighting on the operational areas of the UNGC, Mr. Petersen identified four basic areas namley: Human rights, Labour, Environment/development, and Anti-corruption. While commenting on the current global financial crisis he asked: What now happens to corporate responsibility are we now going to forget about it and go back to the ways we used to run things? In conclusion he noted that there is always a price to pay for corruption and it is only the companies that stay clean that would survive the current crisis. With these words he ended his remarks. He explained the Global Compact 10 principles which is subdivided into four (4) main sector namely; Environment, anti-corruption, Labour and Human Right. Session I: Corporate Governance as a tool to fight corruption Moderator: Mr. Olumide Ajayi, Deputy Director, Africa Leadership Forum Speakers: (i) Mrs. Ito Ugbana, Company Secretary, MTN Nigeria, (ii) Mrs. Deji Delana, Chief Compliant Officer, Onado Plc, (iii) Mr. Oliver Stolpe, UNODC Abuja The session was moderated by Dr Olumide Ajayi, Deputy Director of Africa Leadership Forum. In a brief introduction, he explained that the session was, among other things, to find linkages between governance and corruption, how corporate governance can be effectively used as a tool in fighting corruption. 1st Presentation: MTN Perspective - Mrs. Uto Ukpana, Company Secretary, MTN Nigeria The address was delivered by Mrs. Ugbanna, the company secretary of MTN Nigeria, she stated that corruption is the abuse of entrusted power for private gain. She further explain that the cost of corruption is equal to more than 5% of global GDP (US $ 2.6 trillion), and over US$1 Trillion paid in bribe each year. She 21

also stated that corruption added up to 10% of the total cost of doing business globally and in the developing world sometimes up to 25% of the cost of procurement contracts and these realities underscored the need for businesses to take a stand against corruption. She expatiate on the five brand value in which her organization MTN deals with corruption, which are Integrity, Leadership, Relationship, Innovation and Can-Do. And also explained the ways in which her organization fights corruption through Principle, Practices and Progress, principles upheld by the board and regularly reviewed in line with business terrain. She also explained the mechanisms such as provision of Code of Ethics, Whistle blowing Policy, Document Retention Policy, Corporate Social Responsibility, Zero tolerance for fraud and Gift & Donation policy and ultimately, they provided a guideline in the conduct of Government Affairs which assist the organization in putting checks and balances to corruption pandemic. MTN Nigeria is signatory to Convention on Business Integrity (CBi) and the United Nations Global Compact (UNGC). And as a practice, MTN Nigeria always submits the UNGC Communication on Progress (COP), the online publication that is required to communicate the activities of member organization. PROGRESS In further efforts to fight corruption, she shed a bit of light on the various initiatives and activities that MTN Nigeria is involved in alongside the progress they have made so far as follows: It contributed to the RESIST Project which is also an initiative of the UNGC. It contributed to The Business Case Against Corruption which is a joint publication of the International chamber of commerce, Transparency International, the UNGC and the World Economic Forum Initiative against corruption. In terms of progress, MTN Nigeria was one of the first Nigerian companies to complete COP 2008,. She said MTN Nigerias efforts have been recognised locally such as the Federal Inland Revenue Services Best Corporate Tax Payer (2007). 22 MTN had completed the 2008 COP and COP 2009 is on course for submission this month. It is one of the few companies that has communication on progress (COP) to show case what it has done internally in the fight against corruption. MTN won the FIRS award for Best Corporate Tax Payer in 2007. Award of Commendation by Lagos State Government at Lagos State Taxation Shareholders Conference in 2008 Notified that MTN will be showcased in the UNGC 2008 Annual Review MTN is a signatory to Convention on Business Integrity CBI, and UN Global Compact UNGC.

MTN Nigeria, she also reported, received notification that it will be positively featured in the Global Compacts 2008 Annual Review for its practices in the area of Anti-Corruption. Finally, she ended her presentation by reiterated her organizations support for the fight against corruption despite all odds. 2nd Presentation: OANDO Perspective Mrs. Deji Delana, Chief Compliant Officer, Onado Plc This was presented by Mrs. Oredeji Delano, the Group Company Secretary & Chief Compliance Officer. She told the participants that as an organization, they strongly believe that Corporate Governance can help in the fight against corruption. As an organization, they have a Corporate Governance Committee formed in 2006 comprising of Non- Executive Directors. She enumerated some of the best practices that the company embarked on as an organization leading the fight against corruption, she explained that OANDO among other things was listed on Johannesburg Stock Exchange which ensures that within 12 months, they must have 50% compliance with best practices around the world such as the Kings Code (King II and any revisions). She also stated that the company has just established the OANDO Foundation which will take care of part of the companys Corporate Social Responsibility (CSR). They also formulated and implemented Gift policies, Related Transaction Policies for the Employees and Directors, Whistle Blowing Policies and Ethics Hotline. The whistle blowing policy as emphasized by her is just in the process of being implemented. The board established a Compliance & Ethics Office on March 14, 2007 as part of Oandos corporate governance practices and formulated, approved and implemented a Code of Business Conduct & Ethics for the employees, directors and business partners of the Company. On the Ethics Hotline, the organization have started training members of staff with the assistance of independent consultants, also they have Ethics Watch, a monthly bulletin, keeping track of records of best practices and drumming warnings to all staff from time to time. In addition to this, Oando has embarked on business partner training in order to address corruption from all business angles. In taking the fight against corruption a step further, Oando made a public commitment in terms of became a Signatory to the Partnering Against Corruption Initiative (PACI) and floated a monthly publication called the Ethics Watch to sensitize staff on the importance of ethical conduct. In conclusion she stated that Oando would not have grown to what it is today if its management had not sat down and thought and taken appropriate measures to ensure that structures were put in place to achieve sustainability. She expressed the confidence that Oando would stay forever given the structures and policies put in place and the monitoring and compliance and their undertaking to be ethical in all things. 3rd Presentation: Global Perspective Oliver Stolpe, Mr. Oliver Stolpe, United Nations Office on Drugs and Crime (UNODC) Abuja 23

He emphasizes the need to systematically tackle the Syndrome Corruption that has eaten deep into the fabrics of our society. In 2007 UNODC conducted a study in collaboration with EFCC on how corruption and Related Practices have impacted the Markets and Business in Nigeria and they came up with findings such as; 10% admitted that they paid bribe at one time or the other 15% refused to answer the question 20% agree that it is very frequent to bribe when conducting business in Nigeria. 75% rated corruption and insecurity as the most serious obstacle to doing business in Nigeria. 40% admitted its advantageous for their business to survive in this decayed economy. Mr. Stolpe noted that for more than a decade, the public enterprise sector had acknowledged the negative impact of corruption on business and economic development, and that both corporate leaders and policy makers alike have come to realize the risks of corruption which impacts on competition and the rules of free market economy. He stressed the fact that while corruption is detrimental to all types of companies, the smaller companies especially the SMEs often feel the impact more. He therefore emphasized the need to systematically tackle the Syndrome Corruption that has eaten deep into the fabrics of our society. According to him a study was conducted in 2007 by the United Nations Office on Drugs and Crime in collaboration with the National Bureau of Statistics, the EFCC and supporting partners (the European Union) on how corruption and crime related practices have impacted the markets and businesses in Nigeria and they came up with the following findings: 10% admitted that they had paid bribe within the 12months prior to the study. 15% refused to answer the bribe related question. 20% agreed that it was needful to bribe when conducting business in Nigeria. 75% rated crime and insecurity as the most serious obstacles to doing business in Nigeria. 8% of the businesses interviewed admitted no refraining from making new investments because of the fear of corruption. He therefore posited that addressing the issue of crime, corruption and insecurity might be among the issues that Nigerian law makes would need to tackle in the country in order to promote economic development. 4th Presentation: Mr. Jose Cruz- Osorio, Corporate governance consultant, World Bank/IFC The issue of corruption according to Mr. Osorio could be put into perspective on a global scale in line with the current global financial crisis. In his words he noted that the World Bank had estimated that for every 1% decrease in world growth, 20million people were put into poverty which implied that with the current down turn, already 58billion more people have been put into poverty. In trying to do a comparative analysis, he looked at the positive and the negative sides of the equation, and noted that on the negative side; the problem of corruption is a problem of global proportions and that there really are no simple answers and no simple solutions to fighting it. But on the positive side of the equation, he thought that there were many developments that really do paint a promising future for making a difference. One of the key things according to him is the fact that the private sector is really taking charge as within a decade of fighting corruption, various corporate governance tools have emerged and that this trend happened to be significant as before now the private sector was seen as the problem. He therefore noted that the framework for collective action was beginning to pay off in providing solutions to the phenomenon of corruption. 24

Another thing of significance according to him is the fact that there is now a foreign international legal framework that can really help to drive forward the process of fighting corruption; the OECD convention against bribery, and the UN convention against corruption amongst others. In capping up his presentation he shed a bit of light on the activities of his own organization. He stated that they did have a new publication called the The moral compass of companies: Business aspects of corporate governance as anti-corruption tools. The publication deals with various collective effort tools at fighting corruption and how to look forward and become an industry leader in leading the collective action effort as a recent study proves that investors are willing to pay a premium for companies that are willing to demonstrate high governance standards ranging from 15% to 30% depending on the region. He concluded by noting that institutionalization of best practices, leadership, and organizational commitment to ethics are the only ways to walk the talk. COMMENTS, QUESTION AND ANSWER SESSION 1. Comment: Henry Egbiki, Country Managing Partner, Ernst & Young- In 2008 Ernst & Young did a review of the top global business risks and reputational risk moved from number 22 in 2008 to number 10 this year. That is to show the importance of empirical nature of reputational risk to survival of our businesses. Looking at the environment, I feel part of your responsibility of corporate leadership is how we build a culture for our people to recognize that they have to do the right thing in the right season. I feel this is a challenge in this environment and the time to start looking at the system, the processes and the procedures we have in place is not when the whole world is knocking at the your door steps looking for the answers when something has gone wrong. It is therefore critical that business leaders should continue to evaluate our processes and our qualities to ensure that we are building a right culture in our people. Further more, there should be a reporting culture for things that are done right. 2. Question: Ms Yemisi Ransome Kuti, Executive Director, Nigerian Network of NGOs- It is good to talk about whistle blowing and hotline systems for fighting corruption. It might be working for Oando, but there is no visible kind of difference in the society at large and there is the question of whether your whistle blowing activities have resulted in you connecting with EFCC or the police because it is important for the institutionalization of the process to be connected in a way that makes a difference in the society. 3. Question: Mr. Kola, Pan African Labor and Industrial Magazine- (I) What can the UNGC do to help Africa as a whole on the issue of Multiple taxation? (II) How can businesses stand against corruption in a nation where law and legislative frameworks are weak? 4. Question: Dr. Igbenedion,Faculty of Law,University of Lagos- My question relates to the legitimacy of some of the organizers of this conference. I feel that Siemens that had been indicted for corruption should not be a part of the organizers of this conference on corruption. 5. Question: Mr. Wale Adeleke, Chartered Account- How corporate is the governance of most organizations in Nigeria? Take for instance the Banking sector; they usually have inflated profits and financial statements. 6. Question: Bolanle Olafumiloye, Company Secretary, Pronatura International I would like to direct my question to Oando and MTN: Which major areas of your processes are corruption highly pronounced and what are you doing to curb it? 7. Comment: Emeka Ibe, Legal Practitioner- The effort to sanitize the corporate environment is a very lofty ideal, but Id like to bring back all the theories here in Nigeria because Nigeria is a very peculiar nation. You all will agree with me that in fact so many lofty political and economic theories that have worked wonders elsewhere did not work in this country. An example is Structural Adjustment Programme (SAP) which transformed many Asian 25

countries but did not in the case of Nigeria. Before we impose these anticorruption theories on ourselves in Nigeria, what have we done to ensure that the foundation is right? Id like to dwell on motivation for instance. The average Nigerian today is not properly motivated as their employers are not comfortable enough to pay them appropriately. What motivational models are we therefore propounding to ensure that companies in our environment are comfortable enough to propagate corporate governance? ANSWERS Mrs. Ito Ugbana, Company Secretary, MTN Nigeria- Responding to Miss. Ransome Kutis question she explained that there are internal and external mechanisms in place when referring to the whistle blowing policy. She further clarified that MTN does collaborate with relevant law enforcement agencies namely; the EFCC and the Nigerian police which is a part of the external mechanisms in place. With respect to pointing out evidence of the policy being operational, she said she could not readily recall any incident but was sure that the fraud department of MTN did keep such records. While she confirmed that whistle blowing is a useful tool that can be replicated in the larger society she cautioned that it should not be used as an avenue to witch-hunt people, and therefore guidelines and set parameters would need to be put in place. Mrs. Deji Delana, Chief Compliant Officer, Onado Plc- Also responding to Miss. Ransome Kutis question on whistle blowing, she noted that the whistle blowing policy in Oando is still in its infancy stage, but the staff of Oando are not left in doubt as to the fact that they would be handed over to the appropriate authorities should they be caught in the act of corruption. Also reacting to the poser from Pronatura International, she noted that corruption usually stood out whenever there was the need to get approvals e.g. renewal of licenses which manifested either as missing files or the very slow progress of other files. They dealt with it by requesting for official receipts. Mrs. Ito Ugbana, Company Secretary, MTN Nigeria- In response to the Pronatura question, MTN shared their own experience that corruption is usually prevalent especially in the area of double taxation, laying of fibers (where people would want to extort money from them before they lay the fiber), site acquisition and that they dealt with it by not compromising their stand after duly paying the legally stipulated fees and dues howbeit, according to her it usually delays the progress of work pace. She however, attested to the fact that these practices have reduced their cost of doing business. Mr. Oliver Stolpe, United Nations Office on Drugs and Crime (UNODC) Abuja- while trying to address the issue of the legitimacy of Siemens and its role in convening a conference on corruption noted that companies just like human beings do not display constant and unchanging behaviors. He stated that what was however important was what an individual or company does once the aberration is noticed. He confirmed that at present he could attest to the fact that Siemens now has instituted one of the most comprehensive compliance systems that any corporation could have. Responding to the question that touched on the survival of companies in an environment of weak legal structures, he reiterated that the collective action framework spoken of by Mr. Osorio in the fourth presentation is one avenue by which this could be tackled. 26

Mr. Jose Cruz- Osorio, Corporate governance consultant, World Bank/IFC- Mr. Osorio also addressed the issue of business survival in the face of weal legal systems and noted that the issue of weak legal structure calls for collective efforts on the part of stakeholders (the private and public stakeholders). He said that this would be necessary as a whole variety of issues needed to be synergized before things like hotlines/whistle blowing can be effective. Such things according to him include having a credible complaints system, a credible review system, and effective training of staff in ethical competence. Mr. Frank Nweke Jr., Director-General NESG In his own reactions noted that the essence of the days gathering was not for the reason of pointing accusing fingers, but for dialogue. He stressed that it was not about what an individual or corporation had done wrong, but about what such an individual or corporation had been able to do afterwards to correct the said wrong doing and according to him, that is what Siemens as a corporation had succeeded in doing so far. Commenting on Mr. Wale Adelekes question that touched on the issue of so called corporate organizations falsifying and inflating their financial statements, he pointed out that it would require that more be done on the part of the appropriate regulatory bodies in charge. Also on MTN Nigeria and Oando Plc, he noted that the two corporations had done well and were worthy of emulation. Finally, he attested to the fact that he had been in government and could tell that most of the time that it was the private sector that came up with the shortcuts that government buys into.

Session ll: The Role of Financial Institutions: Risks and Challenges of Corruption Chairman: Olusoji O. Apampa, Executive Director, Convention on Business Integrity (CBI). Speakers (i) Mr. Afiz Bakare, Head of Corporate Planning, (representing Dr. Lamido Sanusi, MD/CEO) First Bank of Nigeria; (ii) Mr. Lawal Hakeem, Independent Corrupt Practices Commission (ICPC); (iii) Mr. Solomon Omorokewe representative of Mr. Francis Atuche, MD/CEO, Bank PHB (iv) Mr. N.S Wokoma, Director, Nigerian Financial Intelligence Unit. (v) Mr. Akin Atalu, Deputy Director, Oceanic Bank represented Chief Mrs. Celia Ibru. Mr. Apampa, chairman of the session in a remark appealed that the presentations at this session should not be limited to Nigeria alone but to other African countries, noting that about 19 African countries were represented. The Role of Financial Institutions: Risks & Challenges of Corruption First Bank Perspective Dr. Lamido Sanusi represented by Mr. Afiz Bakare spoke on the FirstBank Experience in dealing with corruption. The thrust of the presentation hinged on Financial Institutions (FIs) in Nigeria, what is corruption, FIs and corrupt practices, FirstBanks experience and policy response The main Financial Institutions (FIs) according to Dr. Lamido Sanusi include: Banks, Insurance, Capital Market Operators, Pension Custodian and administrator. He explained that financial institutions generally allow trade in financial securities, commodities, and other fungible items of value noting that efficient financial markets ensure that prices reflect available levels of competition and low transaction costs. Furthermore, he noted that financial services sector is vital to economic development of the nation because of its significant role which includes generator of domestic savings, provider of investible fund as well as allocation of financial resources to profitable sectors/entities. Until recently, the 27

financial institutions was characterized mainly by the banking industry because of its operations with the public in the area of deposits and access to credit, however, the recent reforms of the sector as witnessed in other part of the world (like Kenya for example) has changed this perspective with the introduction of new products/services and diversity of delivery channels. Continuing, Dr. Sanusi noted that intensity of competition has invited attention to the moral dimensions of the industry. Furthermore, the series of reforms in the sector have raised the industrys profile. He gave an example with the pension industry with assets under management in excess of N800bn (Dec. 2007) which has become a key player in the sector. The stock market according to him witnessed growth up to mid 2008, and also in 2007, the insurance sector rivaled the banking sector as one of the most actively traded stocks on the NSE. Corruption he said endangers the ongoing efforts to deepen the industry which also threatens the industrys ability to act as driver and catalyst of economic growth/development. Quoting from Wikipedia and Webster dictionary, Dr. Sanusi gave two definitions of corruption as the dishonest exploitation of power for personal gain and any organised interdependent system in which part of the system is either not performing duties it was originally intended to or performing them in an improper way to the detriment to the systems original purpose Emphasising on the negative effect of corruption, Dr. Sanusi noted that NEPAD document made five references to the word corruption and its adverse effect on the African continent while the NEEDS document, referred to corruption sixty (60) times which seemed to buttress the fact that corruption is indeed a key factor hindering development of the African economy. Continuing, he said The corruption quagmire in Nigeria is rooted in the failure and virtual collapse of governance, the contamination of democratic values, the erosion of procedures for accountability, and the prevalence of bad leadership Thereafter, he highlighted some of the negative impact of corruption in the development of the economy as follows: 1. Corruption constricts the economys capacity to meet the peoples most basic needs; 2. It adds to the domestic cost of doing business, without bringing any additional benefits; 3. The personal gains that lie at the heart of corrupt conduct are the nutritive medium for the tensions in the social fabric, whose very promise of random violence is the biggest threat to those who have made it. On Financial Institutions (FIs) & Corrupt Practices the paper raised the following questions Did the froth in stock prices conduce to a subversion of processes? Was there a relationship between financial leverage and the talking up of share prices on the floor of the exchange? Was unfair advantage taken of near-term share price gains? How complicit are the financial institutions in the recent indictments by the anti-corruption agencies of serving officers of the state? Concerning Banks: How useful are the statutory requirements (KYC, anti-money laundering, etc.)? Are they compliant? How strong are the existing enforcement protocols? Continuing, he gave the following as the most blatant unethical practice in the banking sector: 1. Insider-related lending which he said included Pervasive influence of family and related party affiliations that result in huge levels of insider abuses and connected lending 28

Resources allocated via insider-related transactions which distort the efficient working of the entire system, leading to massive levels of sub-optimization; Higher credit risks resulting from the subversion of proper credit allocation processes; Loan defaulter 2. Rendition of false returns to the regulatory authorities and concealment of information from bank examiners; 3. Fraud and forgeries: Obvious increase in cases of fraud & forgeries are witnessed and as well as increase in staff involvement in the act of fraud and forgeries. Corruption according to him has the following negative effects on the financial market terms: Threatens the rule of law; Erodes public confidence in the markets price discovery function; Loss of confidence precipitates market seizures and Leads to a contraction in domestic output growth Given First Banks experience, he informed the participant that it falls under corporate governance and improved internal control. First Banks Corporate Governance Practice according to the paper included pioneering industry best practices and delivering long-term value to its shareholders. First Bank did pioneered new industry disclosure standards in its 2002/2003 annual accounts and has topped the Johnston Irving Consulting (JIC) Governanceplus Ratings since 2003; it has set up the Board Audit & Risk Assessment Committee. This committee is responsible for the internal audit/control function and risk assessment and compliance functions. The paper noted that First Banks Internal Control Practice included good recruitment policy; welldefined responsibilities, segregation of duties; effective supervision, rotation of staff/prevention of key-man risks, authorization& approval, adequate training, continuous monitoring of integrity and institution of a sound disciplinary policy. Others include institution of a fraud policy whistleblowing policy; adequate documentation; physical control; regular process review; spot checks; strict compliance with known your customer (KYC); institution of a sound Corporate Governance framework; regular audits; and effective prosecution of fraudsters. Looking at policy response, the paper noted that the task in Financial Market terms involves the following: Strengthening of regulatory infrastructure; Strengthened board of directors (better corporate governance practices); Increased shareholder activism , shareholders should begin to ask question about their shares Enhancement of information flows, especially bottom-up communication and Improved audits In conclusion the paper noted that the mechanisms for greater transparency across the financial market required that the regulatory infrastructure focus on anti - competitive behaviour, market misconduct, asymmetric information, systemic instability and market failure rather than on the health of individual institutions. 29

Mr. Lawal Hakeem, Head Independent Corrupt Practices Commission (ICPC) Lagos, representing the Chairman explained that ICPC is basically meant to control the incidence of corruption in the public sector noting that some of the ICPC Acts has things to do with incidence of certain happening in the financial sector. ICPC according to him actually regulates corporate governance issues, and also has the authority to carry out any investigation on the financial institutions. In addition, he explained that should any of the officials of the financial institution involved in a case of bribery with respect to concessionary or in case of staff manipulation, ICPC has the power to investigate that official. Apart from investigating financial entities, Mr. Hakeem informed the participants that ICPC also handles issues relating to other sectors. With regards to crimes, he explained that section 15 of the Act allowed them to carry out an investigation on any suspected organization/person and all information required regarding the crime must be disclosed to them failure to abide by this will lead to ICPC suing the organization/person separately. There is also a provision under the law that gives ICPC power to carry out studies and reviews of any corporate body in order to know the level of compliance within the corporate body. Continuing, he noted that corruption always occurs when the parties involved are looking for concessions, and upon such event it can only bring the succession of corruption. He further explained that no organization or structure is isolated even while practicing Social Corporate Responsibility. He remarked that the public sector might demand for bribe but it is the duty for corporate entities to say No to their demands adding that there is corruption in the private sector because the public sector encouraged it. The public sector he said will always make demand and since there is competition among the private sector, they will always give in to this demand. He advice that individual/organization should shun corruption together, this he said was possible through collective action than fighting corruption in isolation. He emphasized the need for synergy and this he believed will go a long way in the performance of Social Governance. Nigerian Financial Intelligence Unit (NFIU) Perspective- Mr. Norman S. Wokoma Mr. Wokoma stated that his organization served as a national repository for financial crime data. Giving a brief run down of the duties of the Financial Intelligence Unit, he noted that they received information from financial institutions which enables his organization to monitor the activities of financial transactions in a bid to fight corruption that has to do with money laundering. He further noted that his organization did work in collaboration with other agencies and institutions such as the immigration, customs, ministry of finance, and corporate affairs commission that have tracks of information which impact positively on the operations of the financial intelligence unit. He stated that corruption usually does defy country boarders and that concerted efforts needed to be made on a global scale to fight the menace. He however noted that in spite of the synergy between other institutions and his organization, the arrangement was not water tight as it was very easy for perpetrators of financial crimes to spot the weakest link and work on that link to carry out their financial crimes. In closing, he stressed that collective action was the only way by which corruption could be tackled. Bank PHB Perspective- Mr. Solomon Omorokewe, Representing Francis Atuche Mr. Omorokewe said Nigeria is a country that has potential to be great but is not growing because of the corruption. The issue of corruption he said was very critical in the society stressing that our resources are not optimize because of corruption. He emphasized that removing corruption from our system will not change the destiny of our nation, adding that it will still not be the solution because of the existence of a decayed society. Continuing he posed the following questions Are there corruptions in other societies? If yes, what is the level of corruption in these societies? 30

 Has corruption affected the ability of these societies to advance to where they should be? What do our society recognized as failure or achievement? What do we celebrate and what do we reward? What do we sanction as a people and how do we sanction it? Is there a purpose for a collective interest? The focus he said should be more in cleaning up our value system. Further, he advised that the institutional framework should be reviewed and the structures should be empowered as well as functioning properly. He stated that corruption should be first treated by checking the human makeup, for instance in corporate organizations, peoples values and goals should align with the organizations mission and vision, although, as individuals we are prone to selfishness and self centeredness. He recommended that issues should be treated in an enlightened self-interest and individual objective should meet collective objectives noting that if as an individual we all take a stand against issue of corruption, we will reap the benefits in the nearest future. COMMENTS, QUESTIONS and ANSWERS Comment: The development of cashless system will further reduce corruption; also there should be a limit to the amount of cash withdrawals from the banks so that fraudulent and corrupt practices can be traced. Comment: Nina (Malawi) - In establishing audit, ethic, code of conduct etc committee, we need to be mindful. The issue is not about establishing these committees as a box ticketing exercise, but ensuring that they are duly followed to the latter working the talking. It is wonderful and nice to set up rules, audit and compliance units, and investigation frameworks but if they are not properly integrated and enforced, it will amount to wasted efforts and resources. Question: Does your audit committee report in your annual reports any fraudulent act/activities that was not raveled during the reporting period? Question: What are the regulatory bodies doing to ensure corrupt free financial institutions such as money laundering? Comment: Global Compact Kenya: You will acknowledge that corruption has a lot to do with business. In Kenya, 10% of firms confirmed that corruption is one of the major cost of doing business, 1/3 of their profit goes to corruption, this in addition to paying taxes. Do we go out of this forum today without changing that attitude? We need to change the way we do things in our various countries. We need to set targets before the end of this forum for instance we should be able to say that in 2009 this was the level of corruption in our continent and when we meet again next time we should be able to compare the level to ascertain if corruption has fallen or it has increased. Question: What can United Nation Global Compact (UNGC) do to lobby our government to clean the system from corruption? Question: I would like to know what sort of data the Nigerian Financial Intelligence Unit compiles when we take into consideration the fact that we do not have social security system or numbers (national identity system) that can easily link an individual to a financial crime. Question: Banks are in the business of making money, how do financial institutions react when they discover that one of their esteemed customer has been bringing unclean deposit, how do they manage the conflicting interest of making profits and at the same time protecting the interest of the customer thereby boycotting the laws and regulations.

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Question: What is the moral justification in the recruitment of young ladies by banks to market with ridiculous target which must be met, in most financial institutions? Also what are the moral responsibilities of these banks especially looking at the future of these ladies? Question: Is there a concrete statistical data relating to reporting financial fraud within the society, so that it can be traced and monitored? On the issue of gift, where do you categorize Obasanjos library? If you say it is for the public, will you say that the whole N7bn was actually spent for the library? Question: Is it possible to have a self regulation if you dont have some underlying motivational force that will keep you focused on that objective? Question: What can be done about corruption that emanates from examinations malpractices because most of the people involved in this act can never fight corruption truthfully? Comment: The solution to our entire problem is reorientation. There is a disconnect here as the grass root people have been disconnected from the government and the private sector. We have to go back to the grass root level and reconnect them with the government and the private sector. If you are interested in reconnecting the grass root with the others it is necessary that you join the Coalition for Issues-based Politics and Good Government (CIPOGG). We have been organizing local government town hall meetings to re-educate the grass root about their civic rights and responsibilities thereby closing the gap between them, the government and private sector. Question: How do we tackle the problem of pilfering of customers money through unauthorized bank charges? This is another form of corruption in the financial institutions and how effectively do they do Know your customer (KYC)? First Bank Response: On the issue about the audit committee, it is not about box ticking. These are committees of the board which help in the areas of corporate governance. The statutory audit committee can be equated to box ticking because it is statutory; it is the shareholders of the banks that have to vote for a particular committee. Other committees cannot and should not be equated to box ticking. It was necessary for us to have more above what is statutory that was how the audit committee such as KPMG was created. All their findings (the Audit Committee) during any period under review are always stated in the annual report. Mr. Wokoma, Nigerian Finance Intelligence Unit (NFIU), Abuja- Responding to the question concerning the type of data his organization collects vis-a-viz social security numbers, explained that they had several identification mechanisms in place amongst which are the national drivers license, international passport which were of course fraught with manipulations and forgery. He however stressed that the short comings of these types of identification systems was what necessitated the need to have other mechanisms in place such as signatures and passport photographs when carrying out certain financial transactions. Shedding light on the type of data that his organization collects, he mentioned the following: currency transaction report and suspicion transaction report. He further noted that his organization was in collaboration with other agencies such as the Immigration, Customs, Ministry of Finance, and Corporate Affairs Commission that have tracks of information that add value to their own operations. Such value, according to him, can be illustrated as follows: When a person uses a forged passport or drivers license it becomes a bit easy to track down such an 32

individual as a result of access to the database of the other organizations that the NFIU is in partnership with. More responses to some of the questions: i) The bribe that comes is mostly in cash form and not cheques, but at the same time corruption issues is also at the local level. In addition the issue of gifts cannot be underemphasized because when people do such, they do so in response to a favour or in anticipation of one yet to come. Furthermore, the development of Share Transfer and Electronic transfers makes it pretty difficult to trace corruption. The corruption in the Public Sector is endemic because of lack of transparency and accountability of whatsoever and it started during the military regime in Nigeria, when people in authority could not be held responsible or accountable to their citizenry for the actions. j) This corruption issues boils down to our value system, integrity and personality involved and that is the reason we should all go back to the drawing board and start reorientation from the grassroots. Topics on attitude building and values should be incorporated into the educational curriculum of the right from the primary school level.

k) It was established that there are penalties, fines, requirements for sack, and revocation of banking license. But the sanctions can only be founded when there is a political will and mechanism to implement them. l) Money Laundering issues should be reported to the Central Bank of Nigeria, regardless of the person involved (being a worker within the financial institution or not) and the Chief Compliance Officer must be charged with the responsibility of ensuring that all members of staff comply with laid down rules. And all financial institutions must clearly separate Internal Control from Internal Audit. On the issue of bank charges, the CBN is really doing its work. It has asked the banks to publish their various charges and rates so that there will be a common knowledge to all their customers. Please note that once you are over charged, you have the right to report to the appropriate authority because there is a policy on this. m) Self regulation is good but must have a minimum standard.

Session III: The Political Economy of Corruption and Collective Action as a Tool to Fight Corruption. Moderator: Dr. Chibuzo Nwoke, Director, Nigerian Institute of International Affairs Speakers: (i) Mr. Muazu, Lagos Head, Economic & Financial Crimes Commission (EFCC), (ii) Mr. Soji Apampa, Executive Director, Convention on Business Integrity (CBI), (iii) Chief J. Schroeter, Chief compliance Officer, Siemens Nigeria Ltd, (iv) Dr. Demola Ajayi, First Deputy President, NACCIMA (v) Ms. Michelle Ntab, Business Action against Corruption Africa, (vi) Michael Jarvis, World Bank Institute, (vii) Mr. Norman Wokoma, Director, Nigerian Financial Intelligence Unit (NFIU) Abuja.

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1st Presentation: Mr. Muazu, Lagos Head, Economic & Financial Crimes Commission (EFCC) He apologized for the absence of is chairman, Chief Mrs. Farida Waziri. He then thanked the organizers for the thoughtfulness of choosing this theme especially at a time as this when corruption had remained the greatest threat to the collective survival of Nigeria. On the socio-economic consequences of corruption, he stated that the effects of corruption in both the public and private sectors have the greatest negative repercussions on the growth and development of nations. In addition he added that it undermined democratic processes and threatened political stability, affected infrastructure, impacted negatively on public revenue, bred unemployment, insecurity, poverty, and disease which is currently prevalent in the Nigerian society. It was his opinion that the fight against corruption did certainly call for collaborative effort between Nations and such International agencies as the UN the EU, the World Bank and others. Touching on government efforts, he stressed that the government had no doubt demonstrated the needed political will and desire to fight corruption by establishing specialized agencies and empowering them with enabling laws to combat corruption. EFCC as one of such agencies according to him was in constant partnership with the United Nations Office on Drug and Crime and other agencies alike in the global fight against corruption. This in his own words is what collective effort is all about. In conclusion, he thanked the conveners of the forum and urged all and sundry to make the fight against corruption everybodys business. 2nd Presentation: Mr. Soji Apampa, Executive Director, Convention on Business Integrity (CBI) Separating the private from the public realm, he argued that the public realm of Nigeria typified the public realm in all of Africa; in which before the colonial era had only one public (our communities/primal public) and with the advent of the colonial era, two publics characterized into the public with western exposure (civic public) and the public without western exposure (primal public). The segregation of the publics brought along with it what is known today as corruption. He explained that the primal public during the colonial era had only one mission which was to sabotage the efforts of our then colonial masters, and after the colonial masters left the civic public took charge and the same attitude of sabotage on the part of the primal public continued; the gap between the two publics, as we know them today, kept on widening and has become institutionalized. This gap between the two publics sustained corruption over the years, and the advent of military rule further worsened it through the formation of mafias which only served to increase this disunity. This scenario, he explained, was the reason why the formal institutions in Nigeria and Africa as a whole are not as binding on the behavior of individuals as does that of the informal institutions. This was also the reason why the government has been seen as something that has power but no legitimacy, and as a result those in power have to continue to buy their place at the table of power for the control of ideology, control of resources, control of public policy and control of the use of force. He then sought the way to fight corruption by saying: lets have a whistle blowing frame work The solution to the fight against corruption in Mr. Apampas opinion laid in the fact that the objective of Collective Action should be to close the existing gap between the civic public and the primal public through re-orientation of our core value system. According to him, it would require collaboration between business, government, and civil society. He noted that these stakeholders would have to identify how to close the gap, and would need a socially constructed set of rules where it is through our behavior, our doing it, our working at it that we stand to create a new reality that becomes institutionalized. He advised that to do this the stakeholders involved would need something that is anchored in civil society (that space that is not occupied by government) and not in government to achieve this objective.

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3rd Presentation: Chief Jochen Schroeter, Regional Compliance Officer, Siemens Nigeria LtdChief Schroeter confirmed the fact that about two years ago, Siemens was shaken by corruption and a lot of the management staff were surprised because many of them had no idea whatsoever of what was going on or how it turned out to be so bad. This according to him prompted Siemens afterwards to adopt very stringent and tough measures to combat the menace. He stated that they had adopted two forms of collective action namely project-specific agreements and long-term initiatives in doing so. Under the project specific agreements he explained that all bidding companies were required to sign an Integrity Pact issued by the Public Sector customer with the tender involved. This he said made equal and fair anti-corruption standards possible, external monitoring of tender processes, and sanctions applicable in case of infringements, while the long-term initiatives on the other hand consists of components that pave the way for clean business in any country of Siemens operations. To shed more light on how these components of collective effort have been working in Siemens he did a breakdown of a project the company handled recently in Berlin as follows: The project was in Berlin airport, the volume was 2 million euros, and duration of 5years. The integrity pact was done together with the Mayor of Berlin in 2005 and a tender was issued. He noted that the integrity pact brought benefits of varying degrees to the three major stakeholders involved (customer, the city of Berlin, and the contract bidders), while Siemens enjoyed low costs as a result of the clean business that transpired among the parties involved. In conclusion, he stated that Siemens would continue to uphold and sustain the principle of collective effort through the application of Integrity Pact, Compliance Pact, and Independent 3rd Party. 4th Presentation: Dr. Demola Ajayi, First Deputy President, Nigerian Chamber of Commerce, Industtry, Mines and Agriculture (NACCIMA) While noting that corruption was a phenomenon unlimited by politics or geography, he stressed that a ready climate for corruption was usually fostered by lack of transparency at any level, coupled with lack of a free press and democratic systems devoid of checks and balances. Highlighting NACCIMAs effort so far, he stated that NACCIMA had established a Business Ethics and Arbitration Committee to monitor and ensure compliance by NACCIMA members to best practices and transparency in their dealings. He further noted that NACCIMA collaborated with Transparency in Nigeria (TIN) in 2000 to organize a workshop on Integrity Accord for Public- Private Sectors. He concluded by stressing the need for the leadership, political will, and public support components of collective effort to be upgraded for effective control and eradication of corruption in Nigeria. 5th Presentation: Ms. Michelle Ntab, Business Action against Corruption AfricaIn her short presentation, she stressed that it was important for multinationals to begin to learn to play by the laws and regulations of the African countries that they operate in. She noted that it was not enough collective action for these multi nationals to abide by the laws and regulations of other non-African countries that they operate in and do otherwise in African countries. She then called on African countries to rise up and ensure that these multinational do comply with regulations, because the companies in question had no reason not to comply. This according to her would help in stemming corruption. 6thPresentation: Michael Jarvis, World Bank Institute- Michael stated that the problem of corruption happened to be an overarching one that called for several approaches for it to be tackled. According to him the World Bank Institute happened to be in collaboration with several bodies in all sectors cutting across the globe in its fight against corruption. He then referred participants to the World Bank Institute website on corruption for more details- www.fightingcorruption.org . COMMENTS, QUESTION AND ANSWER SESSION 35

1. Comment: It will interest everyone here to know that NEPAD is an instrument that is supposed to drive the African Peer Review mechanism, and I am shocked to note that not even one of the speakers in this conference could link NEPAD with our discussions. This brings to bear the point that there seems to be that disconnect in terms of what is happening locally and internationally. 2. Comment: I observed throughout that none of the speakers mentioned a reward mechanism in place for corporate organizations that have been performing excellently in terms of corporate governance and anti corruption practices. 3. Question: Ghanaian Participant- Dont you think that our present form of governance is rather widening the gap between the two polities and also, do you agree with me that our traditional system is one of the best forms of collective action? 4. Comment: Ivorian Participant We need to critically look into how we can utilize the media (the television in particular) in our fight against corruption. 5. Comment: Nigerian Participant When the political spectrum is wrong, the economy will be wrong and vice versa. The inequalities of opportunities in the society breeds corruption. This is seen when a rich man steals money and a trial is started, what we see is that this trial goes into limbo and the man is walking about as a free man. The signal that this gives to others is that they are free to do the same thing. Therefore there is the urgent need to have a political equilibrium within society. Now we have been discussing all day and I am surprised that neither Lagos State government is officially represented here nor any of the other states of the federation. ANSWERS Mr. Soji Apampa, Executive Director, Convention on Business Integrity (CBI) - tried to address the question posed by the Ghanaian participant concerning if our present system of government does more to widen the gap between the publics. He thought that it had more to do with the present way in which we conducted our politics that widened the gap. On the issue of whether we should go back to our traditional systems, he noted that the traditional systems were not uniform and that not all aspects of our traditional systems happened to be useful and as a result should not be advocated. He thought it would however be nice if we could import some of the good parts of the traditional system into our present system of governance. Dr. Demola Ajayi, First deputy president, NACCIMA- Tackling the question that had to do with the African Peer Review Mechanism (APRM) and New Economic Partnership for African Development (NEPAD), noted that NACCIMA does play it part in NEPAD even though it was not officially represented. Touching on the subject of reward processes for companies that do not dabble into corruption, he noted that NACCIMA is hoping to begin to give such companies awards and publicize such companies. Vote of thanks- Mrs. Olajobi Makinwa, UN Global Compact- Mrs. Makinwa thanked all participants (especially those from outside Nigeria) for attending the conference. Her special thanks went to the following sponsor and supporting organizations: MTN Nigeria, Oando Plc, Siemens, Poise Nigeria, Neimeth International Pharmaceuticals Plc, Standards Organization of Nigeria (SON), and the Convention on Business Integrity (CBI). Words of appreciation were expressed to the event organizers and the UNGC secretariat Nigerian Economic Summit Group, resource persons, and the media. She stated that it was her hope and belief that the take out from this conference would chart a better course for the fight against corruption in Africa and the world at large. With these final comments she officially pronounced the close of the 2009 UN Global Compact Regional Conference in Africa.

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DAY 4: 19th March, 2009. Africa Regional UNGC Meeting Meeting of UNGC Africa Focal Points The UN Global Compact convened its second Regional Meeting for Focal Points of Global Compact Local Networks in Africa as part of the Africa Regional meeting. Following the conference Business Taking a Stand in the Fight against Corruption, it brought together participants from 12 country networks to discuss the key issues and challenges in creating sustainable networks. The meeting featured some examples of focal point activities from Kenya, Malawi, Zambia, and Ghana. Despite some major challenges for networks in Africa, they all show commitment and drive to continue to expand and strengthen their networks even during the current financial and economic crises. The meeting started at exactly 10.00am, with each of the local network representatives introduce themselves while emphasizing the high points of their activities in the previous year. There were representative from Ghana, Malawi, Nigeria, Uganda, Kenya, Sudan, Morocco, South Africa, Cote d Ivoire, UNIDO and within the UNGC itself. Majority of the Local Network stated that the bulk of the challenge they faced last year was the problem of resources and how to report on the COP. The Zambian experience particularly indicated the need to organize another training on COP and how to write the report due to the fact that majority of the African focal points were not at the Mexico Meeting. Feedback on the Workshop and Conference Morocco delegates expectation was to learn how to create and implement the Collective Action as a way to moving forward from the position at the moment, and this was achieved at the end of the workshop and conference. The Senegal delegate complained that the conference was not interactive enough and the layout not lively. The Cote d Ivoire delegate commended the efforts of the Local Network in Nigeria by pulling the conference off and said it was a good step in the right direction. He was however concerned that the whole content was too Nigerian with a lot of speakers from Nigeria because it was hosted in Nigeria. Observing also that there was no enough statistical data about corruption in the presentations, he said that overall the workshop was an eye opener and a courageous move by the Nigerian Network which will remain a learning process for other Networks and an icebreaker for regional Meetings. The Nigerian Network explained the idea of the workshop was to address the issue of corruption as a collective enterprise and to learn from each other, further confirmed that the workshop was an eye opener because most of the organizations present at the meeting now see corruption in a brighter light as a very important menace. It argued that the Nigerian Network deserved to be praised considering the short time frame and most importantly discussing corruption openly is not an easy task. Mrs. Olajobi Makinwa, talked about the issue of funding because the organizers run with little or no funding. She further explained that there was supposed to be a regional representation but the other speakers from other regions refused to come citing Transparency International from Lebanon and Egypt as examples of those who declined their attendance at the 11th hour. 37

It was further discussed that Investment and Trade opportunities should be integral to the discussion of the meeting because corruption affects trade (and business) bottom line which is the concern of every business person. It was also agreed that we can diversify by sharing country experiences, narrowing down the gap between government, private sector and civil society. Importantly it was counseled that Global Compact should be seen as an opportunity for every organization to improve on its performance and that it is not strictly for the best or the champion companies. Nina from Malawi zeroed on the presentation of OANDO in driving the Anti-corruption strategy by setting up Ethics Office and appreciated the putting in place of appropriate operational structures by the company. Also, there was a suggestion about introducing the perspectives from SMEs instead of the big firms only and the introduction of a session on Resisting Extortion in International Business/Sales and Transactions. It was generally agreed that each country should reflect on the conference and see how they can improve on it in subsequent editions. The presence of both public and private sector discussing at the meeting was particularly considered the most important value added. Global Compact Local Network Africa, Management and COP Status There were a total of 16 networks in Africa, presenting different peculiarities in different African countries. The engagement of Civil Society in respective countries was agreed upon to demand a serious need for training of network members especially on the COP. Regret was expressed on the fact that the UNGC has not been able to determine what the minimum on the COP is and how to improve on it. Given that there are challenges of putting structures together within the local network, the use of the word delisting was considered too strong, sensitive and connoting anger. However, Peter explained that delisting happens after 2 yrs of non-submission of reports, 1 year of nonCommunicating on Progress and another 1 year of staying out of reach or touch, which amounts to the grace of 4 years. It was suggested that the example or template for writing a COP should be placed online since the format for the letter of application or request to join the Global Compact is online. Also it was considered that the previous policy should be revised so that focal points should be contacted at least 90 days before any organization within the network is delisted. It called for country-based reports to be championed by the leaders in the Network. Financing the local network steering committee was also discussed. It was advised that each network should engage multinational companies for this purpose. MOU Signing by Local Network - GCO Commitments Inform the GCLN on key development and issues related to the overall governance of the Global Compact Initiative. Regular update of the GCLN on the upcoming event and provide advance notice Communicate relevant information regularly. Requirement of Local Network The networks were required to: Commit to the 10 principles of the Global Compact. Hold a minimum number of events/ activities annually 38

Display a willingness to participate/ support activities of participation to develop a communication on Progress Proactively manage and protect the integrity of the Global Compact Initiative and develop the capacity to form solution to situation dilemmas among participants in the network Engage companies/ NGO on the local Network, by producing annual activities report Identify a person to liaise with GCO on day to day issues related to the running of a GCLN Nominate a person authorized by the GCLN to act on behalf of the LN at the Annual Local Network Forum and in the management of the Network Logo.

Going Forward (Other Issues) The next Annual Local Network Forum billed to hold in Istanbul June 9-10, 2009 was announced. Aalso announced was the Global Compact Leaders Summit to hold on 24-25 June 2010 in New York. There will also be the 2nd UN Private Sector forum; Climate Change in September, 2010 and the World Business Summit on Climate Change 24-26 May, 2010 in Copenhagen, Netherlands. It was agreed that in subsequent global meetings, developing countries should be involved in the knowledge fair and other engagement opportunities. Peter further explained that each organization will have to do reporting on the 4 thematic area of the Global Compact namely, Labour, Environment, Human Right and Anticorruption over a period of 5 years stating exactly what was done and the impact in terms of quality and other factors. He stated that COP is strictly for Private Companies. Group breakout Subsequently, members of the African Network broke into 2 groups to discuss the challenges, Way out, how the Global Compact can come to our rescue and ultimately what we can do to help each other. Challenges

The issue of sustainability was a m major challenge especially in Kenya which experiences lack of resources. How to establish a tripartite cohesion between the government, CSO and the private sector Commitment of the member organizations to the 4 thematic areas which must all be reported within 5 years Translating government willingness to fight corruption In Sudan, neglect of SMEs was a major challenge because most of the big companies belong to government officials. 39

Private sector capture by the public/government sector unlike the SMEs In Senegal, a total absence of support from the UNGC Headquarters was raised as the network concern Absence of formal linkage or relationship between the Local Network and other UN Agencies in each country was considered a big gap The need to start all over again and re-launch the Local Network in Senegal In Nigeria, there is the issue of resource scarcity to run the programme Development of Programmes for the implementation of the Initiative is critical The need to strike a balance in the Public and Private Sector participation and implementation of Compact initiatives. Creation of awareness and outreaches also presents some challenges. Language barriers in publications.

Strategy/Solution Resource mobilization could be carried out through partnerships, sponsorships and membership fees for sustainability. How to Help Each Other Peer Review Online Community for sharing of information and ideas Research and Surveys

Going forward, there was a consensus among African Local Networks to more closely coordinate their work especially with regards to the preparations for the 2010 Global Compact Leaders Summit, and to continue to share with each other lessons learned and tools and guidance materials in order to benefit from each others experiences in rooting the Global Compact in the African context.

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Appendices: Appendix 1: Business Against corruption (BAAC)- The Malawi initiative (PowerPoint) Appendix 2: Corporate Governance as a Tool to Fight Corruption: The MTN Perspective (PowerPoint) Appendix 3: Corporate Governance as a Tool to Fight Corruption: Oandos Perspective (PowerPoint) Appendix 4: The Role of Financial Institutions: Risks & Challenges of Corruption First Bank Perspective (PowerPoint) Appendix 5: Political Economy of Corruption and Collective Action as a Tool to Fight Corruption (PowerPoint) Appendix 6: Fighting corruption through Collective Action- What Siemens can do to drive fair market conditions (PowerPoint) Appendix 7: List of Participants (by organizations/ institutions)

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Appendix 7: List of Participants Name Mrs. Makinwa Olajobi Mr. Bello Azeez Miss Fatona Feyisayo Bello Abdul Stolpe Oliver Olanto Teju Dennis Florence Nwaiwu Fortune Agbebaku Uaboi G. Jide C. Chukwuemeka Kimilu Damaris Fundenga Rosano Zowan Gabriel Abdullahi Ahmeo Dr. Okereke Peter Ebrahim Haneif The Managing Director Isibor Mavi Marc-Danodu Modupe Njanji Susan Eriodu Buchi Soile Oluwayemisi Yemisi Ransome-Kuti Owofadeju Imoleayo Senge Miebi Gbadamosi Wumi d. Femi Okoruwa Harry Prof. Nwoke Chibuzo Nwanze Charles Diyaolu Kehinde Olagubu Olasunmbo Olaniyan Adenike Bassey Mathias Nwosu Chinenye Rosa Are Beauty Alfred Laura John Raji Kamar Peterson Soren Cruz-Osorio Jose Agbazue Tagbo Okiyi Robert

Designation Head Anti-Corruption Chief Inspector MD Snr.. Proj Coordinator Research Manager Executive Secretary Research Executive Legal Adviser Director Corporate Affairs Coordinator Consultant Head Compliance Executive Director Head of Corporate Affairs

CEO Manager Media Business Manager Administrator Executive Director Programme Officer Researchers Consultant Consultant Director Snr. Programme Officer Manager Corporate Secretary Trainee Researcher Researcher / Programme Officer Research/Executive Lawyer Head, Global Compact Consultant ADVISER Chief STD

Company/Address UNGC Kakawa Discount House NESG UAC Property Plc UNODC CBI Ghana Anti-Corruption Coalition NESG NB Plc Ethics Institute Kenya Association of Manufacturers Global Compact JWA/UNODC Bank PHB, Nigeria Save Visions Africa Deloitte Johawnes South Africa FAN Milk Plc Poise Nig Ltd Poise Nigeria Agence Trance Presce Poise Nig CBI NNNGO Africa Leadership Forum XLR & Consulting CIPE RMG XLRS NIIA NESG Oando Plc, V.I OANDO Lagos Nig Oando Plc, V/I S.O.N Oando Plc V.I, Lagos NESG NESG NESG Siemens UN GC Global Compact Governance Forum African Institute of Corporate Citizenship SON

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8. Nigeria Local Network Steering Committee 1. Nigerian Economic Summit 2. Nigerian Institute of International Affairs 3. Africa Leadership Forum 4. Coca-Cola Nigeria and Equatorial Africa Ltd 5. MTN Nigeria 6. Pro-Natura International Nigeria 7. Platinum Bank Limited (PHB) 8. Neimeth Int. Pharm. Plc 9. POISE NIGERIA 10. The Convention on Business Integrity (CBI)

9. Nigeria Focal Points

frica Leadership Forum

The Nigerian Economic Summit Group

RC: 303317

Secretariat

10. Organizing Sub-committee 1. MTN Nigeria Communications Ltd 2. Nigerian Institute of International Affairs 3. Coca-Cola Nigeria and Equatorial Africa Ltd 4. POISE NIGERIA 5. Pro-Natura International Nigeria 6. Siemens Nigeria Limited 7. Platinum Bank Limited (PHB) 8. Neimeth Int. Pharmaceuticals Plc 9. Nigerian Economic Summit Group (NESG) 10. Africa Leadership Forum (ALF) 11. The Convention on Business Integrity (CBI) 12. Oando Plc

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11. Sponsors

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