Will new corporate ethics code put a stop to corruption in Kenya’s private sector?

NAIROBI: A global code of ethics to address graft in the private sector is gaining currency as more local corporates sign up to it.

The code, inspired by the United Nations Global Compact, driven by the private sector and endorsed by President Uhuru Kenyatta at a recent event in Nairobi, has been touted as a promising cure against corruption in the private sector.

The initiative is aimed at encouraging businesses across the world to mainstream 10 principles that tackle human rights, labour, environment and, more recently, corruption in support of the Sustainable Development Goals.

However, stakeholders have questioned how effective the code can be in combating corruption in business, particularly for firms that lack the capacity to adequately seal graft loopholes.

The Kenya Bankers Association (KBA) is one of the latest organisations to commit to the initiative amid increased incidents of fraud in the banking sector.

So far, at least 400 local firms have signed up to the code, including Safaricom, Airtel, Strathmore University and Pathologists Lancet Kenya. Globally, 8,610 firms in 163 countries are part of the initiative.

Kenya’s representative at the UN Global Compact, Phyllis Wakiaga — who is also the CEO of the Kenya Association of Manufacturers, which is co-ordinating the initiative locally — believes the code can tackle corruption.

She said since the code was launched, it has successfully mobilised the private sector to collectively do something about graft. The CEO added that before the introduction of the code, there was no co-ordinated initiative to fight extortion and bribery in business.

“By recruiting more Kenyan firms to join the initiative, we are achieving the critical mass needed in turning the tide against graft in the private sector,” Ms Wakiaga said.

REGULAR REPORTS

She added that firms that commit to the code have to make regular reports on their progress in compliance, which includes setting up anti-corruption systems.

She said some companies that are advanced in implementing the code are allowing independent third-party verification of their reports, a scenario she hopes will become standard practice.

“We are currently training all signatories to set up effective anti-graft systems in their firms,” she said.

Pathologists Lancet Group Managing Director Ahmed Kalebi said the code challenges private firms to enhance their business operations in a concrete way.

The private medical laboratory service provider has just published an anti-corruption and anti-bribery policy and code of conduct in line with its obligations to Global Compact. The policies are aimed at detecting and preventing graft in the firm in its dealings with suppliers, clients and shareholders.

“The reporting of progress in upholding the Global Compact code has kept us on our toes, making us a better organisation,” Dr Kalebi said.

Institute of Economic Affairs CEO Kwame Owino said the UN initiative is a good start, as it is the first time the private sector has publicly admitted to graft in its ranks, and acknowledged the need to tackle it together.

He said the private sector has contributed to corruption in the economy, especially through businesses seeking to influence lucrative Government tenders and contracts, or evade taxes.

“The first step in solving a problem is to recognise that there is one. If all private sector firms were roped in to uphold the global code of ethics, it would go a long way towards minimising graft. The key is robust enforcement of the code, otherwise everything will remain on paper,” he said.

DELISTED ORGANISATIONS

Mr Owino also called for the strengthening of independent mechanisms to ensure reporting by businesses on compliance with the code is accurate.

Locally, businesses that do not adhere to the code and engage in unscrupulous behaviour face the possibility of public censure from their colleagues and/or expulsion from the Global Compact network.

Already, according to the initiative’s website, at least 35 organisations in Kenya have been delisted from the code for non-reporting on their progress in implementing the code.

The code inspired the formulation of anti-bribery legislation that has been approved by the Cabinet and is expected to tackle the drivers of corruption between the private and public sectors.

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