Closing remarks delivered at the State-Owned Enterprise Anti-Corruption Day hosted at the OECD headquarters in Paris, France on 16 October 2019.
Ambassadors, Committee Chairs, distinguished guests,
I would like to begin by thanking you for joining us for the OECD State-Owned Enterprises Anti-Corruption day. The Recommendation of the Council on Guidelines on Anti-Corruption and Integrity in State-Owned Enterprises (or ‘ACI Guidelines’ as we call them) was adopted by Ministers in May. We are here to advance the all-important process of ensuring successful implementation.
Now is when the work really begins, because as our Secretary-General likes to say, agreements make the headlines, but implementation is what changes people’s lives.
SOEs are critical for our economies and societies – they are the main channel for states to exercise their roles as economic actors, and in many instances they help deliver essential services to the public.
They are often concentrated in sectors of strategic importance for government and society, like energy, water and transport.
Today SOEs account for over a fifth of the world’s largest companies and many are increasingly being operated like private firms. Their role as global competitors is growing as the boundaries of markets extend beyond geographic borders.
Unfortunately, the presence of SOEs in the global marketplace has also been marked by certain high-profile scandals and some instances of corruption. As we heard earlier today, the majority of bribes promised or given to foreign public officials between 1999 and 2014 were destined for SOE officials.
But it’s not only an issue of cross-border activity. The challenge is also at the regional, national and local levels.
A recent report by Transparency International shows that almost a fifth of citizens in 18 Latin American counties had to pay a bribe to utility services in the last year (second only to the police force). And we know that SOEs are big players in utilities sectors.
When mismanagement, abuse or corruption occurs in SOEs, the costs to society and to trust in both the private and public sectors can be great. We have seen how some SOE-related scandals can lead to democratic unrest and slides in the corruption perceptions’ index.
the latest stock-take in years of exploration on what makes SOEs susceptible to
corruption and how policy makers can act to raise their integrity.
The Guidelines will help address this challenge. For example, to help insulate SOEs from undue influence in their operations, the Guidelines recommend safeguards for the autonomy of boards and merit-based appointment of SOE decision-makers (including CEOs). To avoid impunity of SOEs and bring accountability, the Guidelines expect SOEs to have annual external audits and that auditors report on any irregularities.
Integrity is an ethical imperative and a key driver of trust, but it is also an economic case, since integrity is vital to ensure high performing productivity and returns on public investments.
The Guidelines, which complement the OECD Guidelines on Corporate Governance of State-Owned Enterprises, are rooted in the idea that no state owner or company can fully succeed in improving SOE integrity by ‘going it alone’. A broad range of actors need to be on board, and their incentives aligned.
This is why the ACI Guidelines were developed by three Working Parties: the Working Party on State Ownership and Privatisation Practices in collaboration with the Working Group on Bribery in International Business Transactions and the Working Party of Senior Public Integrity Officials.
All three are represented here today, in addition to a broad range of participants from private firms, from governments, including OECD national delegations, from academia, from civil society, and of course from TUAC and BIAC.
This meeting is all about ‘kicking-off’ the implementation process, and you have brought very good insights and examples to nourish the discussion and chart the path forward:
- We have heard this morning directly from various branches of government on how owners can and should lead by example on integrity;
- We have shared our challenges, our best practices and reforms on getting ownership and governance arrangements right;
- We have learnt from both private firms and SOEs which company-internal structures and mechanisms best promote integrity and prevent corruption;
- We have explored how accountability is maintained and what to do if things go wrong;
- We have taken a deep dive into the particular challenges of high-risk areas like the extractives sector; and;
- Last but not least, we have gathered new partners to help put into practice all of what we have shared, with exciting new initiatives like the piloting of an expert secondment programme: Compliance Without Borders [the idea was born in the B20].
The most important thing is that we continue to advance together in the collaborative and multilateral spirit in which the Guidelines were conceived.
As the OECD’s Sherpa to the G20, I am proud that the ACI Guidelines were elaborated from a G20 consensus. Under last year’s Argentinian Presidency, the G20 Anti-Corruption Working Group adopted a set of High-Level Principles on Preventing Corruption and Ensuring Integrity in State-Owned Enterprises, to which the OECD was a key contributor.
We are there to work together with states to identify quick wins but also to accompany you for the long road ahead. We invite you to tap into our regional networks where governments identify common challenges and good practices in promoting corporate governance and integrity in the companies they own.
Today was an
important gathering to take stock and strengthen implementation capacity, but we
will continue providing opportunities to exchange on these important topics.
I ask you to pencil in the next key data – the OECD’s Global Anti-Corruption and Integrity Forum on 25-26 March. The subject is “Public, private and beyond”, which is the perfect platform to take this work forward.
Ladies and gentlemen,
Your presence here demonstrates that we have the commitments necessary to drive progress. And thanks to today’s meeting, we have a host of good practices and consultation partners that can help feed into an accompanying ‘Implementation Guide’ planned for 2021.
So let’s keep up the momentum and the commitment as together we embark on the implementation phase of this critical tool for integrity and for the public good.
 See Transparency International’s Global Corruption Barometer survey of over 17,000 people across 18 countries, conducted between January and March 2019. Available at: https://www.transparency.org/files/content/pages/2019_GCB_LatinAmerica_Caribbean_Full_Report.pdf.