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Ian Beers
May 15 2024

In an era where global interconnectedness has elevated the fight against corruption to a forefront concern, the necessity for stringent anti-bribery measures in international reconstruction projects is more critical than ever. In this post, Ian Beers from MSS Global delves into the importance of collective action and the adoption of international standards like ISO 37001 in combating bribery, particularly in contexts such as Ukraine’s anticipated reconstruction. Corruption continues to be a significant issue in the private security industry. To address this, ICoCA actively ensures compliance by implementing certification, monitoring, and providing capacity building within the expanding private security sector. Using lessons from Iraq and Afghanistan, Ian Beers underscores the importance of due diligence mechanisms. As the world becomes increasingly intolerant to the far-reaching human impacts of corruption, it is imperative that organisations and nations unite to uphold ethical practices, ensuring responsible, fair, and transparent operations.



The Global Context of Anti-Bribery Efforts

In the global battle against corruption, international standards and laws play a pivotal role, transcending national boundaries to establish unified ethical practices. Key legislations, such as the French Sapin II, the UK Bribery Act, and the US Foreign Corrupt Practices Act (FCPA), exemplify this global commitment. These laws, while rooted in their respective countries, possess extensive extraterritorial reach, holding entities accountable for corrupt practices regardless of geographical location. For instance, the French Sapin II law extends to corruption involving French citizens and companies worldwide, while the UK Bribery Act applies to UK entities, irrespective of where they occur.

Similarly, the US FCPA has been a trailblazer in the field, targeting both American and foreign entities involved in corrupt practices that affect the United States. This collective legal framework is sending an increasingly clear message: corruption is a global concern, and ethical conduct is a non-negotiable standard in international business operations.

Amidst these legal developments, ISO 37001 emerges as an essential tool. It provides a comprehensive framework for organisations to establish and improve their Anti-Bribery Management Systems, shifting the focus from mere legal compliance to fostering a culture where bribery is fundamentally unacceptable. ISO 37001’s influence extends beyond aligning with anti-bribery laws; it propels organisations towards proactive stances against corruption, ensuring that compliance programs are not only robust and effective but also adaptable to diverse global challenges.

Case Study: Ukraine’s Reconstruction

Ukraine’s current situation provides a poignant example of the challenges and opportunities in post-conflict reconstruction. The nation stands at a critical juncture, grappling with the dual realities of ongoing conflict and the nascent stages of reconstruction. Current estimates suggest a staggering economic impact to Ukraine ranging from $543 billion to $600 billion including damage, impacting infrastructure, housing, and businesses. According to the World Bank, the rebuilding process over the next decade could require an investment of $486 billion. This monumental endeavour encompasses not only the physical rebuilding of infrastructure, housing, and businesses but also the crucial aspect of addressing and overcoming entrenched corruption.

Ranked as one of the most corrupt countries in Europe by Transparency International’s Corruption Perception Index, Ukraine’s situation underscores the need for transparent governance and stringent anti-corruption measures in its reconstruction efforts. The sheer scale of the anticipated reconstruction – potentially the largest economic project since World War II – presents both an opportunity and a challenge: to rebuild a nation based on principles of integrity and transparency, ensuring that vast resources are not compromised by corruption.

In this context, the implementation of best practices in compliance programs and adherence to international standards like ISO 37001 becomes critically important. These standards are not merely procedural necessities but foundational steps towards creating an even playing field and ensuring a thorough, effective rebuilding process. Additionally, the international community’s role in supporting Ukraine, extending beyond financial and logistical aid to embedding a culture of anti-corruption from the outset, is vital. Such support can set new standards for post-conflict recovery, characterised by ethical practices, accountability, and a steadfast commitment to combating corruption.

Lessons from Iraq and Afghanistan

Reflecting on the reconstruction experiences of Iraq and Afghanistan offers crucial insights into the consequences of inadequate anti-bribery measures. These cases serve as stark reminders of how corruption can severely undermine development efforts, regardless of the amount of aid or investment involved.

In Iraq, the post-war reconstruction was marred by significant challenges, including instances of egregious financial mismanagement and fraud. For example, a Middle Eastern-based firm, despite accusations of substantial overcharging, retained around $4 billion in Pentagon construction contracts. This firm was reported to mark up prices of basic items by 12,000%, illustrating not just financial exploitation but a glaring lapse in oversight and accountability.

Afghanistan’s reconstruction efforts also encountered numerous incidents of corruption. Notable among these was the misuse of U.S. funds intended for opium eradication by the then governor of Helmand Province, who targeted the fields of his political opponentsix. Additionally, the phenomenon of “ghost soldiers” – fictitious personnel created by corrupt officials to embezzle their salaries – further exemplified systemic corruption.

These examples from Iraq and Afghanistan underscore the necessity of robust anti-bribery measures as fundamental safeguards. Without stringent oversight, transparency, and accountability, even well-funded initiatives can become prey to corruption, significantly undermining their effectiveness and the trust of the beneficiary communities.

The lessons from these countries emphasise the importance of adopting rigorous anti-corruption standards, like ISO 37001, in reconstruction efforts. While not legally enforceable, these standards can become essential contractual requirements, as seen in the growing trend of customers requiring or favouring companies holding certifications like ISO 37001 or ICOCA Certification.

The Importance of Collective Action and Industry Standards

The success in combating corruption, particularly in large-scale reconstruction projects, hinges significantly on collective action and the adoption of industry-wide standards. Individual efforts, while commendable, are often insufficient in the face of systemic corruption. It is through unified efforts and commitment to established standards that we can maintain a level playing field and ensure fairness for all stakeholders involved.

The International Code of Conduct for Private Security Providers (ICoCA) and initiatives like the Ukraine Business Compact, launched in June 2023, are prime examples of such collective action. The Ukraine Business Compact, a multilateral initiative, aims to mobilise international business support for Ukraine’s recovery. It embodies principles like implementing best practice corporate governance and promoting a principled approach to recovery. This initiative is not just a collection of aspirations but a framework for real impact and accountability, ensuring that reconstruction efforts are ethical, transparent, and effective.

In this landscape, the adoption of ISO 37001, an internationally recognised standard for Anti-Bribery Management Systems, becomes instrumental. It transforms the Compact from a set of goals into a tangible framework, guiding organisations towards ethical operations. Such standards ensure that taxpayer money is well spent, and the Ukrainian people receive the infrastructure they deserve.

Moreover, industry standards like ISO 37001, while not legally enforceable, can become essential contractual requirements. This adoption echoes the effectiveness of collective action as seen in the International Code of Conduct for Private Security Providers. When organisations commit to upholding shared standards, they create a ripple effect that elevates industry practices and fosters a culture of ethical business operations.

The Legal Aspect: “Failure to Prevent Bribery” and Proactive Measures

The concept of ‘Failure to Prevent Bribery’ holds a significant place in international law and emphasises the need for proactive measures in organisational governance. Laws such as the UK Bribery Act, France’s Sapin II, the Brazilian Clean Companies Act, and the US Foreign Corrupt Practices Act (FCPA) mandate or encourage organisations to maintain robust compliance programs. This legal framework shifts the focus from merely reacting to corruption incidents to preventing them through proactive measures.

Organisations can meet these requirements by implementing comprehensive compliance programs. These involve conducting risk assessments, establishing clear anti-bribery policies, providing employee training, performing due diligence on third parties, and setting up effective monitoring systems. Such measures not only ensure legal compliance but also foster a culture of ethical business practices, which is crucial for international entities operating in diverse legal landscapes.

ISO 37001’s role in this context is vital. It operates at the level of ‘intended outcome’, aligning with various regional laws and providing a universal framework for Anti-Bribery Management Systems. Organisations can evaluate their systems using guidance like the DOJ’s Evaluation of Compliance Programs, ensuring alignment with international standards.

The importance of these measures is amplified in the context of small and medium-sised enterprises (SMEs). SMEs, while often perceiving themselves as below the radar of regulatory scrutiny, represent a significant component of the supply chain and thus carry inherent bribery risks. Larger organisations, in their efforts to mitigate bribery risks in their supply chain, may require or favour suppliers with certifications like ISO 37001, as part of their due diligence processes.

Conclusion and Call to Action

In the quest to combat bribery and corruption in international reconstruction and beyond, it is clear that declarations of intent are not sufficient. Effective action necessitates tangible, proactive measures, underpinned by a collective commitment to high ethical standards and robust governance frameworks. The adoption of standards like ISO 37001 is crucial in creating a level playing field, not just in theory but in practical application across global reconstruction efforts.

The lessons from past reconstruction projects, such as in Iraq and Afghanistan, combined with the ongoing challenges in Ukraine, underscore the urgency of this task. The global trend towards heightened accountability, as seen in the US DOJ’s new Merger and Acquisitions Corporate Enforcement Policy, signals a closing net around unethical practice. The risk of corruption in pursuit of lucrative contracts is a persistent threat, one that can only be effectively countered through a unified approach to upholding strict anti-bribery standards.

As we move forward, it is imperative for all stakeholders – governments, international organisations, private entities, and civil society – to collectively commit to these rigorous best practices. By doing so, we not only avert a race to the bottom but also establish a norm of ethical practices that benefit everyone involved. The path ahead is clear: to ensure fairness, transparency, and integrity in all our endeavours, and in doing so, build a more just and accountable society.





The views and opinions presented in this article belong solely to the author(s) and do not necessarily represent the stance of the International Code of Conduct Association (ICoCA).