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21 Apr, 2010 10:27

Zero-tolerance for bribery in Russia declared by multinationals

Zero-tolerance for bribery in Russia declared by multinationals

More than 50 foreign companies operating in Russia, including multinational giants like Siemens, signed a framework document on the fundamental rejection of involvement in corruption schemes in the country on Wednesday.

The companies have done this on their own initiative, but the Kremlin has welcomed their decision:

“We are pleased that foreign companies are willing to help us in countering corruption. It would be appreciated if all companies performing business activity in the country took this commitment to fight corruption. We shouldn’t forget that a bribe has two sides: on the one it is given and on the other it is received,” said Arkady Dvorkovich, presidential aide, to the Vedomosti newspaper.

This document comes just in time to support the Kremlin-backed effort to improve the situation with the corruption and business climate in the country. Now, when the corruption problems are widely discussed and recognized by the government, the new Corporate Ethics Initiative for Business will definitely help President Dmitry Medvedev’s anti-graft legislation to become more efficient. According to the Moscow-based Information Science for Democracy foundation, a non-government organization, more than $300 billion is paid in bribes each year in Russia, more than a quarter of the country's GDP in 2009.

The pact was initiated by German-Russian Chamber of Commerce in Moscow. It was supported by the majority of companies now working in Russia.

According to Mr. Harms, executive director of the Chamber, the initiative to formulate the principles against bribery was presented by several German companies that are interested in integrating anti-corruption mechanisms in the daily business practice in the country.

It was decided by the members of the Chamber that one of the most effective steps would be a commitment not to pay bribes.

The agreement is based on a World Economic Forum initiative from 2004, and obliges each signatory to implement or improve existing anti-bribery and anti-corruption practices.

"Multinational companies are particularly challenged in emerging markets, since they have to abide by more stringently applied regulation in their home countries, while trying to compete in rapidly growing, but inconsistently regulated markets such as Russia,"
said Brook Horowitz, IBLF's executive director for Russia to Vedomosti newspaper.

Companies will identify areas with the greatest corruption risk. Also they refuse to use any hidden forms of bribes, for example in the form of donations in support of political parties, charities, etc. CEOs are committed to following the policy of intolerance towards all kinds of bribery and not violating any of the principles of the agreement.