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Corporate Social Responsibility (IVOR nr. 77) 2010/5.4
5.4 Transparency: part of responsible corporate conduct
Mr. T.E. Lambooy, datum 17-11-2010
- Datum
17-11-2010
- Auteur
Mr. T.E. Lambooy
- JCDI
JCDI:ADS367043:1
- Vakgebied(en)
Ondernemingsrecht (V)
Voetnoten
Voetnoten
Commission (EC), 'Promoting a European framework for Corporate Social Responsibility', Green Paper, COM(2001) 366 final, 18 July 2001, at: http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=COM:2001:0366:FIN:EN:PDF, accessed on 3 May 2010.
Report of the World Commission on Environment and Development (i.e. the Brundtland Commission), 11 December 1987, defines sustainable development as 'development that meets the needs of the present without compromising the ability of future generations to meet their own needs', at: http://www.un.org/documents/ga/res/42/ares42-187.htm, visited on 3 May 2010.
T.E. Lambooy, Sustainability reporting by companies is necessary for sustainable globalisation, in: E. Nieuwenhuys, Neo-Liberal Globalism and Social Sustainable Globalisation (Leiden: Koninklijke Brill NV 2006), pp. 220-221.
UN Global Compact, Principle 10, states as its objective: 'The adoption of the tenth principle commits UN Global Compact participants not only to avoid bribery, extortion and other forms of corruption, but also to develop policies and concrete programs to address corruption. Companies are challenged to join governments, UN agencies and civil society to realize a more transparent global economy', at: http://www.unglobalcompact.org/About-theGC/TheTenPrinciples/principle10.html, accessed on 3 May 2010.
These ICC rules recommend actions for governments, international organisations and enterprises to prevent corruption, available at: http://www.iccwbo.org/uploadedFiles/ICC/policy/anticorruption/Statements/ICC_Rules_of_Conduct_and_Recommendations% 20_2005%20Revision.pdf, accessed on 3 May 2010.
See: http://www.iccwbo.org/uploadedFiles/ICC%20Guidelines%20Whistleblowing%20% 20as%20adopted%204_08(2).pdf, accessed on 3 May 2010. Various anti-corruption conventions require whistleblower regulations to be implemented. ICC News release, 'ICC issues whistle-blowing guidelines', Paris 9 July 2008, states that according to a 2007 study by consultancy KPMG, 25 per cent of the incidents of fraud uncovered among 360 incidents analysed came to light thanks to a whistleblowing system put into place by companies. It also reads that the ICC guidelines, aimed at helping companies establish and implement internal whistleblowing programmes, recommend the following practical steps: create a whistleblowing programme as part of internal integrity practices; handle reports early on, in full confidentiality; appoint a high-level executive to manage the whistleblowing unit; communicate in as many languages as there are countries of operation; abide by external legal restrictions; allow reporting to be anonymous or disclosed, compulsory or voluntary; acknowledge, record and screen all reports; enable employees to report incidents without fear of retaliation, discrimination, or disciplinary action', available at: http://www.iccwbo.org/policy/anticorruption/iccccfee/index.html, accessed on 3 May 2009.
Earth Charter, Principle 13 states: 'strengthen democratic institutions at all levels, and provide transparency and accountability in governance, inclusive participation in decision making, and access to justice', states under (e): 'eliminate corruption in all public and private institutions', available at http://www.earthcharterinaction.org/invent/images/uploads/ echarter_english.pdf, accessed on 3 May 2009.
The GRI G3 Guidelines require the following disclosures: S02-Percentage and total number of business units analysed for risks related to corruption; S03-Percentage of employees trained in the organisation's anti-corruption policies and procedures; S04-Actions taken in response to incidents of corruption, p. 34, available at http://www.globalreporting.org/NR/rdonlyres/ED9E9B36-AB54-4DE1-BFF2-5F735235CA44/0/G3_GuidelinesENU.pdf, accessed on 3 May 2010.
UN Global Compact Principles, Principle 10 (Anti-Corruption) reads: 'Businesses should work against corruption in all its forms, including extortion and bribery', available at: http:// www.unglobalcompact.org/AboutTheGC/index.html, accessed on 3 May 2010.
OECD MNE Guidelines, Chapter VI Combating Bribery reads: 'Enterprises should not, directly or indirectly, offer, promise, give, or demand a bribe or other undue advantage to obtain or retain business or other improper advantage. Nor should enterprises be solicited or expected to render a bribe or other undue advantage [...]', available at: http://www.olis.oecd.org/olis/2000doc.nsf/LinkTo/NT00002F06/$FILE/JT00115758.PDF> accessed on 3 May 2010.
The TI Business Principles for Countering Bribery provide a framework for companies to develop comprehensive anti-bribery programmes. The tool reflects recent developments in anti-bribery practice worldwide and incorporates approaches by business, academia and civil society. The initial publication was in 2003; the 2009 edition charts new territory by placing greater emphasis on the public reporting of anti-bribery systems and in recommending that enterprises commission external verification or assurance of their anti-bribery programme; available at: http://www.transparency.org/global_priorities/private_sector/business_princi-ples, accessed on 3 May 2009.
The EITI has established criteria which require mining and oil companies to publish their payments to host governments and those governments to be open and accountable as to how the funds are spent; available at: http://eitransparency.org/, accessed on 3 May 2009.
Many civil society groups around the world demand company and government transparency in resource-rich developing countries. Members of the PWYP initiative have mobilised to monitor and research their countries' extractive regimes and budget processes and reach out to governments, companies and international financial institutions to advocate for greater revenue and expenditure transparency. Local civil society's growing interest in domestic monitoring and activism has led to an enormous demand for training and capacity-building around EITI processes, contracting and taxation regimes, auditing and accounting processes, lending and disclosure policies, as well as a wide range of other issues, including more recently, expenditure-side work to track revenues from government coffers to their point of destination. Since the inception of PWYP in 2002, local and international actors have collaborated to conduct a series ofnational and regional training programmes to meet these increasing needs, see: http://www.publishwhatyoupay.org/en/activities, accessed on 3 May 2009.
See chapter 6 (Private regulation) and chapter 4 (Annual report), Table 4.2.
Council Directive (EC) 2003/51.
Companies not exceeding two of the following criteria: a balance sheet total of EUR 17.5 million, a net turnover of EUR 35 million and an average of 250 personnel during the book year (figures as amended by Council Directive (EC) 2006/46 amending Council Directives 78/660/EEC on the annual accounts of certain types of companies, 83/349/EEC on consolidated accounts, 86/635/EEC on the annual accounts and consolidated accounts of banks and other financial institutions and 91/674/EEC on the annual accounts and consolidated accounts of insurance undertakings [2006] OJ L 224/01-017).
This was reaffirmed by the resolution of the European Parliament, 'On Corporate Social Responsibility: A New Partnership', 2006/2133(INI); available at: http://www.europarl.europa.eu/sides/getDoc.do?pubRef=-//EP//TEXT+TA+P6-TA-2007-0062+0+DOC+XML+V0//EN, accessed on 3 May 2010.
See Chapter 4, Table 4.3.
Guideline 400 (Annual Accounts 2008), sub (c), and 'Guide to sustainability reporting (2003 version)', comments 5.29 and 5.48, see: http://www.rjnet.nl/readfile.aspx?ContentI-D=51535&ObjectID=492464&Type=1&File=0000025166_HandreikingMVO_Engels.pdf, accessed on 3 July 2010.
Corruption is not only a financial crime, it has also been addressed as a subject of CSR. Being socially responsible means not only fulfilling legal expectations, but also going beyond compliance and investing more in human capital, the environment and relations with stakeholders.1 Furthermore, CSR aims to include the power of business in achieving sustainable development2 by taking into account the ethical, social and environmental aspects of business decisions.3 As corruption is considered to be one of the greatest challenges to achieving sustainable development, creating a disproportionate impact on poor communities and damaging the essence of society, it is considered important that the private sector actively contributes in addressing this problem.4 For this reason, principles, guidelines and initiatives, enacted by international organisations or initiated by business or civil society organisations, explicitly identify the fight against corruption as being a part of CSR. Legislation and accounting guidelines support this trend, as has been demonstrated in the previous sections. Important CSR initiatives that refer to corruption are:
Combating Extortion and Bribery: International Chamber of Commerce (ICC) Rules of Conduct and Recommendations (2005 edition; hereafter: the ICC Rules on Bribery);5
The ICC Guidelines on Whistle-blowing (2008);6
The Earth Charter (Principle 13);7
The GRI G3 Reporting Guidelines 2006 (SO2, SO3,SO4);8
- The UN Global Compact (Principle 10);9
The OECD MNE Guidelines (2000) (Guideline VI);10
The Transparency International Business Principles for Countering Bribery (2009);11
Extractive Industries Transparency Initiative (EITI);12 and
Publish What You Pay Initiative (pWYP).13
There is an increasing trend for MNCs to participate in networks set up by the organisations that issue these principles and guidelines. Companies also endorse the guidelines or incorporate them in their own company codes of conduct. In addition, it can be observed that MNCs tend to voluntarily issue sustainability reports and thereby often follow the GRI Reporting Guidelines (that in turn contain references to corruption).14
Besides CSR codes of conducts, new European legislation on the subject of the transparency of corporate behaviour has been issued by virtue of the Modernisation Directive (see chapter 4).15 The annual reports of large companies in the EU16 must now provide information on 'non-financial indicators', and the annual report should provide a description of the material risks and uncertainties that the company faces. The background to this change was among others the development of CSR. Various EP resolutions have promoted transparency concerning corporate behaviour, especially as regards the company's behaviour in other countries.17 Th Modernisation Directive has been implemented by most EU Member States.18 In the Netherlands, article 2:391(1) DCC reflects these new requirements. The Dutch Council for Annual Reporting has issued a guideline on the content of the annual report, which describes the CSR subjects that should be included in the annual report. Corruption is one of them.19
Taking stock of the developments since 2000 in the field of anti-corruption conventions, legislation, the creation of international CSR networks, the promotion of CSR codes of conduct, reporting guidelines, and the EU Modernisation Directive demanding transparency on worldwide corporate behaviour, one can observe that all of these documents and initiatives push for the prohibition and avoidance of corruption, and prescribe that transparency be provided on this matter.