Corruption as a Root Cause of Human Rights Impacts in Business 

Agni Mentaki Tripodi 

13 August  2022

On June 30-July 1 2022, I had the opportunity to attend the 4th International Anti- Corruption Collective Action Conference in Basel, Switzerland, organised by the Basel Institute on Governance. Leading anti-corruption professionals from the public and private sectors, civil society and academia came together with the goal to “add momentum to the growing global recognition that Collective Action needs to be a central element of corruption prevention”. 

This conference gave me inspiration to write about the impact of corruption in the context of Business and Human Rights. 

Corruption in the global Business Environment

Corruption represents a major threat to rule of law and sustainable development, has a disproportionate, destructive impact on the poor and most vulnerable and has negative impact also on business. It stifles economic growth, distorts competition and presents serious legal and reputational risks for business (UN Office on Drugs and Crime).

Companies in a globalized market are engaging in a particular legislative, economic and cultural context. Global supply chains are highly complex webs of business and trading relationships spread across numerous countries, drawing upon human and other resources that come from diverse regions with varying cultures, standards, and government regulations. Many companies have hundreds of customers and thousands of suppliers, and suppliers typically provide services to more than one industry sector. Many of the issues and conditions that lead to human rights abuses result from deep-rooted and underlying developmental challenges as well as lack of adequate human rights implementation from governments. 

Corrupt practices are detrimental to all businesses that operate in a multinational or local environment and can equally harm small and large sized companies. In many cases corporate scandals have rocked financial markets and undermined considerably the confidence of investors and customers.

States alone are unable to fight corruption and it is evident that companies should play a critical role towards the anti-corruption agenda. Calls for greater private sector accountability have led many businesses to take actions against corruption to protect their reputation, interests and also the impacted rights of their stakeholders including their workers and communities where they operate.

How is Corruption related to Business and Human Rights?

Corruption is identified as one of the most important barriers for the protection of Human Rights in business. Corruption may take over the fundamental values of the human related dignity as well as how it affects the diverse economical, social, cultural, political ethics as well as equality of the citizens who are getting affected by such corrupt practices.

Labour and Human Rights abuses in business are more likely to occur and prevail in countries with high corruption rate, low political stability, and government effectiveness. In general, countries with poor governance are more susceptible to corruption from officials, have weaker regulatory measures in place, and may have barriers to upholding the rule of law. Many serious Human Rights abuses involving business often have corruption as an underlying factor, where workers and communities are seriously harmed by it. In most of such cases, the victims of Human Rights violations have no access to effective remedy.

Based on a study from the Environmental Justice Foundation (EJF) on Human Rights violations in the Global Seafood Industry, Forced labour, Slavery, Human Trafficking and abusive living and working conditions are among the most common Human Rights abuses in the Global Seafood and fisheries industry. Corruption, that exists at every stage of the seafood companies supply chain and the human trafficking process (recruitment, transfer and exploitation)[1]was identified as the most important cause of the adverse Human Rights impacts.

Corrupt practices can happen at sea but have also been exposed at the highest political levels and on both international and national scales.

“Corruption can take many forms including the favourable negotiation of access agreements, influence peddling, conflicts of interest between related parties, and the use of bribes and undisclosed payments to circumvent regulations or fishing sanctions. The negotiation of fisheries access agreements is often shrouded in secrecy. There are serious concerns of corruption surrounding the negotiation process – including bribes, kickbacks and foreign countries using donor and development funds or threats of their removal to ensure favourable terms. Bribery – such as illegal payments or gifts to port officials, observers, field-level law enforcement officers and senior civil servants – is a major form of corruption. In fisheries, it is used to: Obtain fishing licences, overlook irregularities, facilitate human trafficking, bypass labour and security regulations (overlooking cases of forced labour), avoid inspections, avoid, or reduce penalties and prosecutions (for example, paying a judge to drop human trafficking charges or reduce IUU fishing fines)[2]”

According to Interpol, bribery of civil servants “is a significant issue for all types of law enforcement in many countries where pay is low and/or sporadic and personnel are poorly trained and equipped for their jobs”. Fishing observers can sometimes become reliant on gifts or illegal payments to supplement low pay and they can also be threatened not to report wrongdoings.[3]

Anti-corruption initiatives

International Human Rights mechanisms, including the Human Rights Council, have paid increasing attention to the negative impact of corruption on the enjoyment of Human Rights.

The UN Convention against Corruption 2004, the world’s strongest and most comprehensive legal instrument in the fight against corruption recognizes the responsibility of states and businesses against corruption. The 167 signatory state parties have pledged to take measures to fight and prevent corruption in the public and private sector, enhance accounting and auditing standards and provide penalties in case of failure to comply. (UNODC)

In 2013, the UN office on Drugs and Crime (UNODC) published a the Anti-Corruption Ethics and Compliance Programme for Business a practical guide on the various steps companies may take to prevent corruption in their operations by establishing an effective anti-corruption ethics and compliance program.

According to the UN Office of the High Commissioner for Human Rights, the importance of strong rights-based approaches to tackling corruption is also a central element for the realization of the Sustainable Development Goals (SDGs). In particular, SDG 16 aims to substantially reduce corruption and bribery in all their forms (16.5), reduce illicit financial flows (16.4), promote effective, accountable and transparent institutions (16.6), and promote inclusive, participatory and representative decision-making (16.7). (UN OHCHR).

The UN Working Group on Business and Human Rights, building on its previous work and findings on how states address corruption in law enforcement practices in the context of cross-border crimes, is now undertaking additional work to explore how implementation of the “Protect, Respect and Remedy” pillars of the UN Guiding Principles on Business and Human Rights and the anti-corruption agendas intersect, and how efforts in both areas can be mutually reinforcing.

The Basel Institute on Governance is an independent not-for-profit organisation dedicated to countering corruption and other financial crimes and to improving standards of governance.

Headquartered in Basel, Switzerland, since 2003,  works worldwide with the public and private sectors and civil society and maintain field operations in Africa, Eastern Europe, Latin America and Southeast Asia.

The institute has promoted Collective Action as an effective tool to prevent and combat corruption since its foundation in 2003. Collective Action is a collaborative approach to address corruption challenges and raise standards of integrity and fair competition in business. The institute provides advice and resources on Collective Action to companies, business associations, NGOs and multi-stakeholder groups around the world.

The OECD Anti-Bribery Convention is the first and only international anti-corruption instrument focused on the ‘supply side’ of the bribery transaction.

The OECD Anti-Bribery Convention establishes legally binding standards to criminalise bribery of foreign public officials in international business transactions and provides for a host of related measures that make this effective.

 In 2009, Parties to the Convention agreed to put in place new measures to reinforce their efforts to prevent, detect and investigate foreign bribery with the adoption of the OECD Anti-Bribery Recommendation. The Recommendation contains provisions for combating small facilitation payments, protecting whistleblowers, improving communication between public officials and law enforcement authorities, and includes the OECD Good Practice Guidance on Internal Controls, Ethics and Compliance.

 The 2021 Recommendation for Further Combating Bribery of Foreign Public Officials in International Business Transactions  complements the Anti-Bribery Convention with a view to further strengthening and supporting its implementation. 

A remarkable initiative coming from the private sector is The Maritime Anti-Corruption Network (MACN) .

It is a global business network working towards the vision of a maritime industry free of corruption that enables fair trade to the benefit of society at large. Established in 2011 by a small group of committed maritime companies, MACN has grown to include over 165 companies globally, and has become one of the pre-eminent examples of collective action to tackle corruption.

MACN and its members work towards the elimination of all forms of maritime corruption by: raising awareness of the challenges faced; implementing the MACN Anti-Corruption Principles and co-developing and sharing best practices; collaborating with governments, non-governmental organizations, and civil society to identify and mitigate the root causes of corruption; and creating a culture of integrity within the maritime community.

MACN recently launched a new tool called The Global Port Integrity Platform (GPIP). The site showcases MACN’s incident data collected since 2011 at the global level, country level and port level, and measures integrity in ports worldwide.

Conclusion

Systemic challenges as corruption, need to be tackled through systemic approaches. Addressing the root causes of Human Rights impacts, such as corruption in a systemic way, involving all relevant actors in seeking solutions through collective action initiatives, is key to promote sustainable and responsible business and moving the Business and human-rights agenda forward.

An adequate and well-functioning ecosystem needs to be in place for Human Rights to be protected and fulfilled.

[1] UNODC (Office on Drugs and crimes) 2011. The Role of Corruption in Trafficking in Persons
[2] Environmental Justice Foundation (EJF), 2019. Blood and Water. Human Rights abuse in the Global Seafood industry
[3] Martini, M. (2013) Illegal, unreported and unregulated fishing and corruption, U4 Expert Answer 392