Address of Hon D Sesungkur at the Workshop on Anti-Corruption Compliance for Enterprises
- Sandra Uwera, CEO of the COMESA Business Council
- Navin Beekarry, Director General of the Independent Commission Against Corruption
- Barlen Pillay, Acting Secretary General of the MCCI
- Lola Adekanye, representative of Center for International Private Enterprise (CIPE)
- Members of the Business Community
- Representatives of public and private sector organisations
- Representatives of the National Committee on Corporate Governance
- Members of the press
- Distinguished guests
- Ladies and Gentlemen
Good morning
I am privileged to be here this morning and I wish to start by thanking the MCCI for inviting me to speak on a theme which crowns the list of exigencies at my Ministry. In fact, earlier this week, I launched a 3-day National Capacity Building Workshop organised jointly by the United Nations Office of Counter-Terrorism and my Ministry.
Ladies and gentlemen, as Minister of Financial Services and Good Governance, I make it a point to be present and contribute to all such engagements where the public or private sector is engaged in a battle against corruption and terrorism.
Ladies and gentlemen,
We are here this morning to share knowledge with enterprises on effective anti-corruption practices. I take this opportunity to thank the COMESA Business Council and the Centre for International Private Enterprise for having included Mauritius among 3 other countries to participate in a pilot project covering 200 enterprises aimed at the development of the regional model code on anti-corruption compliance. The Project includes the elaboration of a regional guide for anti-corruption compliance amongst enterprises within the COMESA region. I understand that at the end of the training programme, participants will better understand how to develop effective compliance programmes and operationalise anti-corruption ethics within the organisation.
Ladies and gentlemen,
Anti-corruption compliance is no longer an option. It is a basic standard for businesses. I wish to assure all distinguished guests from the COMESA Business Council and the Centre for International Private Enterprise that Mauritius is fully committed to this Project and we are well on board to ensure timely implementation of its recommendations. We are hopeful that the measures of the regional model code will help protect our economies, increase competitiveness and attract foreign direct investment, supporting our international standing as a good place to do business.
Ladies and gentlemen
Corruption is a cause for concern around the world. According to a report prepared by the World Economic forum in association with the International Chamber of Commerce,
- The cost of corruption is estimated to equal more than 5% of global GDP (US$2.6 trillion), with over US$1 trillion paid in bribes each year; and
- Corruption adds up to 10% to the total cost of doing business globally, and up to 25% to the cost of procurement contracts in developing countries.
These figures are mind-boggling. Despite progress made in the global fight against corruption, economies and businesses continue to be blighted by the corruption scourge. The negative effects of corruption on economic growth are undeniable. Beyond economic and financial consequences, the trust in our country and our institutions gets a serious beating. There is a drain on investor confidence. The economy suffers. Eventually, it is our people who suffer.
So, we need to do everything we can to eradicate corruption. And I must say that on the homefront we have made significant progress. Our country has some of the best policies and legislation and has also established proper structures to prevent and combat corruption. Furthermore, we are a signatory to various international conventions and treaties that commit the country to implementing a range of interventions aimed at reducing corruption. Mauritius is ranked among the least corrupt countries in Africa, with Transparency International’s 2017 Corruption Perception Index (CPI) putting the country among Africa’s five least corrupt nations and 54th in the world. It has consistently been cited as the most business-friendly country in Africa. The government maintains sustained anti-corruption efforts also highlighted in the Doing Business Index.
Mauritius has also recently joined the International Anti-Corruption Academy (IACA), benefitting from specialised training to prevent and combat corruption. I take this opportunity to announce that my Ministry in collaboration with the African Peer Review Mechanism (APRM) will launch the Africa Network on Corporate Governance of State Owned Enterprises on 8th and 9th November 2018 in Mauritius.
You would be aware, ladies and gentlemen, that amendments were brought to the Financial Intelligence and Anti-Money Laundering Act (FIAMLA) by the Finance (Miscellaneous Provisions) Act 2018 and the promulgation of a new set of Regulations have addressed a number of the technical compliance deficiencies identified in the ESAAMLG Mutual Evaluation Report of Mauritius, which was published on 21 September 2018. The new set of Regulations issued under the FIAMLA came into force on 1st October 2018 with the objective of ensuring compliance with the Financial Action Task Force (FATF) standards.
However, despite best intents some cases of corruption have been reported in the past few years. Graft, facilitation payments and nepotism are some of the forms of corruption. The offshore sector has also been under attack for some corrupt activities thereby demanding greater oversight from the Regulator.
Ladies and gentlemen,
The State cannot win this fight alone. Companies clearly have a critical role to play as allies in this combat. I am happy to say that some of the larger corporates have implemented anti-bribery policies. Small to Medium Enterprises may not have the policies and capacity to implement or institute specific anti-corruption compliance within their respective business and your presence this morning shows your interest to rapidly close the gap.
Ladies and gentlemen,
Countries around the world are very much alive to the threats of corruption which stems well beyond mere unethical business practices such as bribery to a range of fraudulent financial schemes including money laundering. A corrupt environment raises the costs of doing business, encourages proliferation of the informal sector, discourages foreign investments, distorts financial markets and affects public trust. So, Governments are on their toes around the world putting in place an arsenal of legal, regulatory, institutional and operational frameworks to protect their economies and the safety of their citizens. However, the threat of corruption is continuing to gain momentum like never before. We are now focused on assessing how effective countries and businesses are in dealing with these threats. Ladies and gentlemen, it is not enough to pass laws. It suffices not to sign up to treaties and international conventions. It is not enough to just plaster the wound. It is important for public sector agencies and businesses to have the human capacity to understand the threats which are becoming more and more sophisticated and deal with them.
Yes, we can have the best laws and regulations backed by the very best of Government support and commitment but if the people manning the systems and processes are not well versed, needless to say that the writing is on the wall. Because of weak processes and weak capacity, corporate scandals have rocked the best of financial markets and undermined investor confidence. Such incidents have received enormous media attention and dented the reputations of many economies and corporations. Once corrupt activities are identified within an organisation, time and resources are spent on crisis management activities rather than business development. Members of the Board of Directors, senior management and heads of departments will have their focus deflected from the business to investigating the corrupt activities, calling in specialised investigation and audit teams, liaising with authorities, regulators, press and consumers. The effect on reputation can sometimes have the most significant impact.
Ladies and gentlemen, in a few words, it is important for us to keep our businesses clean. Accordingly, there have been demands for greater private sector accountability which have led many businesses to implement anti-corruption compliance programmes to protect the company’s reputation, image as well as the interests of investors, staff and customers. And you are in the right place this morning to learn more about the implementation of such a compliance programme.
Ladies and gentlemen, to the business community assembled here this morning, I wish to underscore two features of an Anti-Corruption Compliance Programme which I personally consider important as we wage war against corruption and instil a zero-tolerance policy. Firstly, the importance for corporations to set a Top Down Approach, and Secondly, the need to ensure that employees regularly follow capacity building and continuous improvement programmes.
- Allow me to share some thoughts on the first sinequanon: The Commitment of the Board and Senior Managements of companies, big and small alike. There is increasing evidence and consensus among companies that fighting corruption makes good business sense and that a well-executed anti-corruption compliance programme leads to superior value over time.
I am sure that you have taken time from your respective enterprises, because like me, you also believe that bribery and other corrupt practices put at risk shareholder value. You will agree with me that bribery makes the business weak and vulnerable. Very often, senior management and board members are kept in the dark, affecting their ability to make informed decisions about the business.
You have been witness to front page headlines of major corporate corruption cases from all corners of the world, such as FIFA, Volkswagen or Toshiba. I tell you, my 25-years of experience as an accountant and insolvency practitioner has shown me that no organisation, or finance professional, can be complacent about the risk of corruption. A company which loses its moral compass will eventually hit the rocks and capsize. Once we allow corruption and corrupt practices to settle, the corrosive consequences would be lethal to any business.
It is thus imperative that the “tone from the top” should demonstrate ownership of the anti-corruption programme. Directors, in particular, need to wear their ethical lenses and take a genuine responsibility in maintaining corporate oversight of the compliance programmes. Without any doubt, even the world’s best anti-corruption compliance programme will fail to reduce the risk of corruption if employees feel that the Board and senior management are not committed and not Walking the Talk.
It is thus important for Management to show its commitment to a comprehensive anti-corruption policy, including a policy for the giving and receipt of gifts to ensure that such transactions are not tricks for bribery, a policy on hospitality, a policy on potential conflicts of interest. Such commitments play a critical role in establishing a culture which is based on fundamental values such as integrity, transparency and accountability. These assurances will go a long way in comforting business partners and investors.
Furthermore, management should be ever-ready to modify their company’s anti-corruption compliance efforts to forestall internal and external threat. Risks are ongoing and ever-changing made more complex with developments in technology, and the increasing number of associates in a supply chain. Compliance Programmes if left unchecked and unmonitored will soon become outdated.
- Ladies and gentlemen,
I now move to the second important feature of a Compliance Progamme, Training and Continuous Improvement. Employees at all levels within an organisation must not only be aware about the company’s anti-corruption policies and procedures, but they must fully understand them and be in a state of preparedness.
Very often, corporates tend to overlook this function and think that the need to deepen capabilities and enhance capacity applies more to regulators and to law enforcement agencies.
It is a fact that the frontline in fighting fraud and corruption lies with employees. They are the closest to observing wrongdoings and delinquency. Creating an environment that enables early detection and escalation is essential. People must have trust in seniors for whistleblowing. One of any organisation’s most effective tools against corruption is well-trained staff sensitive to the risk of corruption, who can identify the red flags and who can also address them.
I know that many of you, in your respective firms, are already tapping on technology tools to improve your ability to detect fraud. Some of you are aware of the ongoing discussions in Mauritius to develop a system that can streamline “KYC” processes and uplift the overall quality and consistency of such checks. However, I wish to underscore the fact that your human capability is irreplaceable. Computers can sift data as programmed but they cannot think. Computers cannot put themselves in the shoes of corruptors. The fact remains that despite enhanced technological means, bribery and corruption remains a live issue. Incidents involving the giving or receiving of secret commissions, kick-backs, under-the-table payments (“enbas la table” as we call it here), and favours are being reported. For many companies, it will only be a matter of time before a shady offer or demand is made and someone gives in to the temptation. There is also a heightened risk of being caught with events being increasingly brought to attention by whistle-blowers. One of the most effective bribery and corruption detection device remain employees. So, companies should invest time and resources in their people.
Ladies and gentlemen,
Developing a corporate culture that is intolerant to corruption is key to reducing corrupt activities. Inculcating a strong culture of vigilance and watchfulness among employees will go a long way in earning the business success in the long run and thus, well worth the investment. The antidote to corruption is sleepless vigilance. Every company, ladies and gentlemen, has a responsibility to shape and influence its culture and its business environment on the path of truth and righteous behaviour.
Ladies and gentlemen,
I wish to add that I find much hope in today’s platform. This august assembly bears testimony to our common agenda to operate with the right compliance mindset. Your presence shows that you attach as much importance as I do to the fight against corruption and to good governance. I see a strong nucleus of public and private sector people who have come together in the shared pursuit of a financial system that benefits honest competitors, promotes integrity, transparency and accountability and drives prosperity for our people. We all benefit when we are able to limit corruption. There will always be excuses for corrupt practices. There will always be excuses as to why it was important to give in to “greasy palms” for prompt award of a licence. There will always be excuses as to why it was important to get undue advantage from a public official in the company’s best interest. Let us also not lose sight of the fact that intended corruption is as wrong as actually executing it. The United Nations Convention against Corruption clearly states that offering or demanding an undue advantage counts as corruption, as much as the actual transfer of such advantages.
The right path can be strewn with difficulties and feels like a soapy ladder but in the long run, honesty will pay dividends.
Ladies and gentlemen, Barry Jordan, Lead Partner, Deloitte Forensic New Zealand said that (and I quote):
“Making excuses for paying a bribe or engaging in corrupt activity is easy. Doing the right thing isn’t so easy.”
The efforts we are putting in bear much importance to protect our financial systems and contribute to the safety and security of our nations. I make an appeal to all of you to maintain your participation in our joint endeavours to propel our country to meet the highest standards of integrity and accountability. I am certain that the collective commitment we bring today will help build a better corruption-free world for our children.
It is important that we do not give in to any form of complacency or indifference. I would like to share with you some thought-provoking words from Mahatma Gandhi who said (and I quote):
“Corruption has now become worse than before. Restraint from it has practically gone. Corruption will go when the large number of persons given unworthily to it realizes that the nation does not exist for them to exploit but that they exist to serve the nation. This requires morals, and extreme vigilance on the part of those who are free of the taint. Indifference will be criminal…” – 27 January 1948. From the pages of The Hindu.
Ladies and gentlemen,
I leave you to reflect on these few words. Indifference will be criminal.
Thank you for the opportunity to address you today. I wish our foreign delegates a pleasant stay on the island and a safe trip back home.
I wish you all an informative, effective and fruitful workshop.
Hon D Sesungkur
Minister of Financial Services and Good Governance
31st October 2018
Posted by Minority Voice
on Oct 31 2018. Filed under Economie, Featured.
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