Connecting the anti-corruption and human rights agendas: A guide for business and employers’ organisations September 2020 1 INTRODUCTION Business contributes to our societies, generating innovation, providing employment and fostering growth. Business fully recognises the importance of engaging in responsible business conduct, including the fight against corruption and the respect of human rights, and seeking to prevent and mitigate potential adverse impacts in line with legal requirements, where applicable, and expectations set out in internationally recognised frameworks, such as the UN Guiding Principles on Business and Human Rights (UNGPs) and the OECD Guidelines for Multinational Enterprises (OECD Guidelines). The anti-corruption and human rights agendas have much in common. Corrupt practices and human rights abuses share many of the same root causes, frequently occur in areas in which there is weak governance and pose similar risks to companies (reputational, financial, legal, operational, etc.). Moreover, there often exist interlinkages between the two areas. However, while the two agendas exist in parallel, they also have important differences. Corruption and human rights issues often involve different actors, laws, regulatory considerations, business standards and practices. As a result the agendas drive different (and often siloed) government and company approaches to understanding and responding to these potentially interrelated and significant societal challenges. As experience of companies with widely recognized global standards on responsible business conduct (RBC) and human rights increases, there is growing recognition of the potential value of a more coordinated approach to anti-corruption and human rights where appropriate. Thus, this guide has the following aims: (1) To compare and analyse the anti-corruption and human rights agendas to help businesses and business/employers’ organizations understand the synergies and differences in standards, policies and approaches. (2) To contribute to emerging policy discussions that seek to broaden and deepen company action on anti-corruption and human rights, recognizing that there are linkages between the two fields. (3) To support those working on corruption risk and those working on human rights risk in companies with practical tips, strategies and business experiences on how they can learn from each other and join forces where suitable by proposing a number of practical questions for self-assessment. (4) To provide users of this guide with an overview of the vast array of resources that exist in the fields of anti-corruption and human rights. 2 However, under no circumstances is this guide intended as a basis or reference point for any legislative initiative or binding legislation. In effect, the purpose of this guide is to provide companies with ideas on how synergies between the human rights and corruption agendas could potentially be linked but not to develop into yet another prescriptive area of expectations imposed on business. Structure of the guide: Part I: Description of the topic and landscape Part II: Practical questions for consideration to foster a coordinated approach 1. Initial risk assessment 2. Embedding human rights and anti-corruption in the corporate culture 3. Building on experiences and existing structures 4. Using synergies in due diligence assessments 5. Establishing coordinated training programs 6. Considering joint reporting mechanisms where practical and appropriate 7. Supporting internal reporting mechanisms 8. Reporting to external stakeholders 9. Engaging in cooperation and collective action Annex I: Key resources and guidance Annex II: Company experiences This document is a living document. The intention is to regularly update it to reflect ongoing policy developments and learnings from company approaches to manage corruption and human rights risks. Contact us: To share any comments, updates or insights, please email Business at OECD (BIAC) ([email protected]) and the International Organisation of Employers (humanrights@ioe- emp.com) 3 PART I: DESCRIPTION OF THE TOPICS AND LANDSCAPE Links between corruption and human rights Corruption, in all its forms, and adverse human rights impacts have several features in common. Both can have disastrous effects on people, the overall business environment and the rule of law. There is thus a common interest in having programs in place that foster and incentivize RBC in business activities and partnerships. More explicitly, corruption damages economies and the provision of essential public services, hampers the fight against poverty, undermines the rule of law and erodes peoples' trust in institutions. It is a major disincentive to investment, it distorts markets and creates an unconducive business environment. Corruption also severely hurts people's standard of living, equal opportunities and the quality of public goods on offer. Furthermore, corruption has a disproportionate impact on the poor and most vulnerable as it can result in increased costs and reduced access to services in health, education and justice. Last but not least, corruption may also create an environment that is permissive of human rights abuses. Corruption is a crime that can also undermine human rights as unsafe working conditions are often facilitated by bribery and other corrupt practices. The 2013 Rana Plaza tragedy in Bangladesh, for instance, was, amongst other factors, caused by corruption in the building inspection process. Illegal logging for the extraction of palm-oil is another instance where corruption can cause significant damage to communities in addition to reinforcing environmental degradation, deforestation and threatening endangered species. Corruption, human rights’ abuses, poverty and weak institutions often share similar root causes and thrive in similar environments. This generates a correlation between human rights challenges and corruption so that countries with high rates of corruption (or perception of corruption) are often associated with particularly weak human rights records.1 Global convergence on the anti-corruption and human rights agendas All around the world, companies are subject to a number of expectations in relation to their activities and business relationships. These expectations are set out in globally relevant, government-backed frameworks such as the OECD Guidelines for Multinational Enterprises (OECD Guidelines), the UN Guiding Principles on Business and Human Rights (UNGPs) and the ILO MNE Declaration on Fundamental Principles and Rights at Work - which have been developed through extensive, global dialogue and have influenced a wide array of measures, standards, and principles. Efforts to fight corruption and respect human rights also come together under the “umbrella” of the 2030 Agenda for Sustainable Development and its 17 Sustainable Development Goals (SDGs). The SDGs strive to enable a world in which “no one is left behind” and are comprised 1 For example, the countries ranked at the bottom of Transparency International’s “2019 Corruption Perception Index”, Venezuela, Yemen, Syria, South Sudan and Somalia, are also known to perform poorly in the human rights dimension. 4 of explicit targets, such as eradicating hunger, ensuring good healthcare, gender equality, decent work and “substantially reducing corruption and bribery”. Differences between the anti-corruption and human rights agendas Both human rights and anti-corruption are important aspects of the RBC agenda. At the same time, the following differences between the anti-corruption and human rights agendas explain why they are often looked at using different policy approaches and separate company governance processes. Corruption does not have a universal definition but is defined by different laws applicable to respective jurisdictions. Commonly recognized actions include “active or passive misuse of the powers of public officials (appointed or elected) for private financial or other benefits”.2 Corruption can be classified as “grand”, “petty” and “political” and it can take many forms including: bribery, extortion, nepotism, embezzlement and fraud. Corruption is also a precursor of money laundering. Grand, petty and political corruption: Grand corruption consists of high-level government acts that distort policies or the central functioning of the State, enabling leaders to benefit at the expense of the public good. Petty corruption refers to everyday abuse of entrusted power by low- and mid-level public officials in their interactions with ordinary citizens, who are often trying to access basic goods or services in places like hospitals, schools, police departments and other agencies. Political corruption is a manipulation of policies, institutions and rules of procedure in the allocation of resources and financing by political decision makers, who abuse their position to sustain their power, status and wealth. Some expanded characterizations of corruption: Bribery: The offering, promising, giving, accepting or soliciting of an advantage as an inducement for an action which is illegal or a breach of a legal obligation. Inducements can take the form of gifts, loans, fees, rewards or other advantages (taxes, services, donations, favours etc.). There is a ‘supply’ side to bribery (the act of offering, promising or giving a bribe) and a ‘demand’ side to bribery (which relates to accepting, receiving or demanding bribes). Extortion: A public official threatening to use (or abuse) State power to induce the payment