 Good afternoon everyone and a warm welcome to our audience also on the live stream Which is webcast on we form org This is the issue briefing on corruption and anti-corruption an issue. That's very close to the forms agenda it's actually one of our 10 global challenges and As you know the form is concerned with issues like competitiveness and growth and corruption place an important role here it's a it's a big hurdle to growth and I'll with that I'll pass on Oh, no, let me first introduce the panel of course because we have a very very distinct panel here today And true to the forum's multi stakeholder approach. We do have all important sectors represented to my immediate left is Elaine Desenski she is a senior director with the World Economic Forum and Has been heading the efforts of the World Economic Forum in anti-corruption for several years in particular the partnering against corruption initiative patchy To her left is Steven Allmond Who is the global chairman after of Deloitte who will share the the business perspective on corruption here? Further to the left is dr. Cobas de Svart who's the managing director of transparency international who will share the view from the civil sector perspective and All the way to the left is mr. Anchor who is the secretary general of the OECD the organization for economic cooperation and development and Without further ado, I'll hand over to my colleague Elaine Desenski. Thank you very much I thought I would start with a bit of the context around the corruption conversation here in Davos I think when we talk about corruption from the forum perspective We see it as one of the key elements to unlocking global growth and this is really a good place to start It's it's about corruption as a Moral issue, but it's also about corruption as an impediment And as I think about the the many topics that come up over the course of this this week in Davos whether it's trust in leadership What to do about fragile states? Thinking about geopolitical risk and the uncertainty right now in the economic system Inevitably there is some sort of link back to corruption as a core driver of this instability And I think that's an important element of where we go around this conversation in the future We have a very interesting opportunity during this week in Davos to meet with CEOs from all over the world 25 of whom came together yesterday as part of our patchy vanguard community to talk about what corruption means to them dealing with it proactively within their industry sectors within their organizations in some cases and what they can do collectively to start changing the Dynamics in the marketplace to bring about something closer to a transparent and level playing field And so this is really the core of the conversation with the business community Which also drives a conversation with our international partners with governments with NGOs around a Real collaboration and as George mentioned this idea of having a global Challenge a list of global challenges within the forum Including corruption is is quite important and signifies that in fact This is an institutional priority, but it reflects the membership of the forum as well And the need to really be thinking about some creative solutions in this space So one of the key issues that that will be moving on in the next year as we further develop the anti-corruption agenda is a partnership to really put forward some strong recommendations and implementation based on the agenda of the v20 and the g20 dialogues on the anti-corruption and this is important because the g20 v20 process is what we think is the closest to Achieving an aligned global agenda across business government including civil society and in fact the partners here on the press Diast have all been involved in this process of creating a set of recommendations that we think will have great impact around the anti-corruption arena It includes topics like beneficial ownership collective action Working with small and medium-sized enterprises and really building out the capacity in both the public sector in the private sector To deal with some pretty thorny issues. So as we move forward this year, we're going to be launching this partnership Around this b20 process and we think that that's going to lead to some really interesting opportunities to implement a very strong agenda around anti-corruption Thank you Elaine Steven over to you. Thank you. Thanks very much as I'm here to represent the business community Let me start with a very simple Statement which is this in the fight against corruption Government and business are on the same side or they certainly should be because for companies Corruption adds hugely to the cost of doing business in enhancing systems and controls recruiting staff with subject matter expertise Encountering corruption and in training other staff for governments Corruption has a massively negative impact on really key investment programs in areas like infrastructure health Education all of which should drive social prosperity and social progress Whereas corruption actually drives exactly the opposite social inequality and instability as Elaine just alluded to and and governments need business to Get involved in those major investment programs. The risk is that business Where they feel that the risk where they're dealing in markets where corruption is rife Are likely to reduce their investment and look elsewhere for business opportunities and job creation opportunities Where they are concerned that the risk of Sanctions or even worse the risk to their reputation their most valuable single asset Outweigh the potential economic benefits of investing in that particular market So I think we're all agreed that corruption is is bad for business is bad for Governments is certainly very very bad for society as a whole So we do need business and government to get on the same side and be very vocal about it Elaine just alluded to the G20 B20 effort. I was on the B20 effort in 2014 and we did come up with three well a number of very simple Recommendations for the G20 Three of which I'll just elucidate which is designed to level the playing field for business investment And that was one simply harmonize the existing legislation and provide incentives to business to self report when they try and transgress when they fail to comply second Get all the G20 companies to sign up to the principles Adopted by the G8 relating to beneficial ownership and transparency about shell companies, which perhaps Cobis will Pick up on and thirdly Similarly get all the G20 company countries to sign up to either the OECD Anti bribery convention or the UN's equivalent the convention against corruption but it's not just about adequate legislation and Enforcement although that is very important and it's not just about Companies complying although that equally is very important. I think we need a new approach to combatting corruption where the relationship between business and government moves from one that is often seen as Being adversarial to one that is very much rooted in working together and this needs real commitment You know we've set out recommendations for government, but it also needs real commitment from the business community We need more CEOs to take personal ownership of this issue really be passionate about it engage their executive teams and be passionate about in their communications with all of their own people which says quite simply that any any corrupt activity is simply incompatible with their company's values and will not be tolerated now business leaders also need help from government and civil society in in Getting getting ahead of this, but they can help each other, which is why I think the Forums partnership against corruption vanguard initiative is really so timely and so important bringing together CEOs to exchange knowledge share best practices just come together Collectively and with their supply chains to help build capacity Level the playing field as I said and establish hopefully fair market conditions for all stakeholders Thank you Stephen for sharing these insights from the business perspective Over to you Cobus. What do you say? What are the main issues from a civil society perspective? What's trend and strengths parents international most worried about at this point? Thank you very much. I'll share three remarks with you firstly To significantly deal with the majority of national level corruption around the world will take many years if not many decades However to deal Significantly with the majority of all international corruption around the world is something that's achievable within a few years It is exactly the technology that today facilitate corruption Internationally worldwide that are also the kind of technologies that can be used to fight that corruption That's a very different world that we were in ten years ago And that's why on an international level It is the lack of political will that remains the major obstacle in fighting corruption the technologies that allow the illicit flow of illicit financial flows that prevent the exchange of tax information that make public registers of Beneficial ownership difficult are also the technologies that facilitate them So it's in this context that I go to my second point Where the work of the B20 and a G20 become particularly important because those are currently The strongest instruments that we have to move these issues on international corruption and let me talk briefly on beneficial ownership the secrecy that accompanies The hiding of the real owners of companies around the world is indeed a massive problem if you look at the World Bank They studied three hundred and two hundred and thirteen biggest anti-corruption a grand corruption cases over the last 30 years in the absolute majority of those Secret companies was the vehicle used to facilitate corruption Financial action task force looked at 32 biggest cases 28 of those used Secret companies to facilitate corruption the problem is massive and if you think about it There's nobody I believe in this room today That will get on a commercial airline if there's no list of the passengers and if there's not basic security on the luggage and Yet, we allow secret companies to undermine our economies To bring instability to our economies around the world without doing any basic due diligence on that It seems ludicrous, but that is the situation. We still find ourselves in Currently this brings Economic benefits to some of the rich world, but it brings economic Instability to them in the medium to long run and its impact on the developing world is devastating indeed It has to be tackled lastly What are the things that can immediately be done particularly in terms of beneficial ownership three points firstly? International cooperation and exchange of information there. I think the B20 and a G20 are moving Secondly, it should become a requirement across the world that all companies that bid for public contracts Must have public registers of their beneficial owners this will arguably on my continent Africa deal with a Very large section of public contracts that are either under suspicion of corruption or suffer from corruption in an instant way and thirdly We would like to see public registers of beneficial ownership across the world It has been shown that this is possible This is much more cost-effective and there are no reason for any company That is looking for a level playing field to not support that so hopefully We've seen some movements over the last 18 months with governments Moving in that direction. It is not good enough to have Registers of beneficial ownership of all them being in the public domain and will continue to push for that Thank you very much. Thank you very much for this powerful call for action. Mr. Do you share copas to Swartz optimism on the on the B20 and G20 agenda? Yes, and also it's not about optimism or pessimism. It's about activism We just got to get on with it, you know and and sometimes we'll get it right Sometimes we won't we just got to get on with it just persevere And and well was it the classic said try it try again, you know if at first you don't succeed so And this is this is a learning curve. This is not a science. It's an art And you know OECD foreign bribery report analysis of the crime of bribery of foreign public officials Well, we just put this one out. It's 15 years of the anti-bribery convention which I'm the depository at the OECD with the and So 427 concluded cases of bribery against foreign public officials It shows the companies are still engaged in corrupt transactions at the highest level interesting in more than half of the cases Corporate management was involved. So the myth of the rogue Employee is debunked, you know, that means this is goes up all the way The report highlights we cannot take a one-dimensional approach to combat in corruption Focusing just on companies or just on government and here I'd like to say that the Stephen Almond's comment about this is you know takes two to tango as absolutely both to create the problem, but also to resolve it therefore now and now The focusing here that it's the supply and the demand, you know The the whole logic of the anti-bribery convention was created on the basis that supply will you know You deal with supply or take care of the thing now Every single country in the world has at least one company that is doing transnational business and Therefore everybody subject to the same temptations to the same problem. So everybody should participate on both sides of the of the aisle And also, you know, if we had to focus on one issue because we don't have the manpower We don't have the knowledge or we don't have the body. What do you do with it? Well two-thirds of the case this corruption occurred in public procurement Opportunities so it's not the only case, you know permits licensing all sorts of interactions between governments and Authorities and the public May lead to some kind of corruption, but it's in public procurement where it happens The most or at least where we've identified it the most so focus on that We're also putting enforcement and implementation at the heart of the work on anti-corruption We will launch an OECD trust in business project Precisely focusing on how to close the implementation gap between the actual conduct of business and The governments and the the rules and standards that we put forward. So how do you make it happen? These rules and standards include among others Our anti bribery convention, but also the work of the G20 and the B20 here We have invited our Sherpa who is the one in charge of taking the message to the G20 But also working with the B20 with all our directorates so that We can support the B20 to then the B20 input into the G20 on this particular issue The next round of country reviews by our working group on bribery will focus on enforcement not just on the Legal framework, but whether this is actually happening First the legal framework fine, then you got you know best practices But then are you working on sanctions? And of course we still have Many countries that we have found to be chemically pure because they are you know nothing happens there Or maybe they don't have the political will then if they are chemically pure We should clone them But if it doesn't happen that they're chemically pure that just don't have the political will we should push them by the way There's a lot of emphasis on Naming and shaming, but there was a suggestion in one of our meetings that we should also have naming and flaming because we should encourage a proper Best practices and best behaviors and we should you know Reward the companies that actually have these best practices that have Compliance officers and that are worried about this and the governments that are doing it Like like the Colombians who have this ombudsman about corruption, you know this this this should become best practices and we should take a look at that and then Somebody said like instead of whistleblowers trumpet blowers Because you know whistleblowers for the bad things trumpet blowers for the good things, you know, so again stress the positive incentives also, but also I say also the other the bad stuff also we have to keep in the books so The question of beneficial ownership Well, I think Cobas made the point very well and so did everybody else about why this is very critical Well, let me tell you another dimension with beneficial ownership. We'll never know who pays taxes doesn't pay taxes Multinationals don't pay taxes among other things because nobody knows who owns them or who should be asked to pay the taxes And we still have beneficial ownership black holes and some of the most developed of our own countries, okay? In the United States in the UK, etc. We have problems of beneficial ownership And we should address those first before we are going around Demanding from third parties or third countries or developing countries to come and you know to join the fray We should preach by example and we should be a you know in that sense impeccable Now in terms of joining the convention. We've been trying to encourage You know the of the large emerging economies China is not yet a member India is not yet a member Indonesia is not yet a member, but many of the others are members already and we of course Welcome them to to join but beneficial ownership absolutely. It's only critical And let me just finish with one more Area where Transparency and where the combat against corruption is already starting to produce results on the tax area We have 124 countries on a global forum on Exchange of information. We're now moving to automatic exchange of information and lo and behold 37 billion euros have already been received in the coffers of the countries That would not be there were it not for this effort to go for the transparency And last but not least the BEPS project base erosion and profit shifting Where we already said beneficial ownership one of the elements transfer pricing etc. In order again to make it possible For multinational companies to pay their fair share. So all invited 23rd of March OECD annual integrity week where we're gonna get all Representatives of all of society all the stakeholders to join us To take the effort further. Thank you. Okay, wonderful. Thank you I think this was a wonderful overview of the different perspectives on the matter And I think there's a lot of common ground as we learned we'll open the floor for questions now for the benefit of our Online audience if you could state your name in the organization that we have a microphone available. So please John John Halpern Associated Press this question has to do with international organizations Which do business by procuring the services or goods of Companies businesses work with governments etc and the organizations themselves enjoy some privileges and immunities I'm just wondering on the one hand They're under pressure to appear to be transparent on the other hand airing their dairy Their dirty laundry is bad for business in the sense of dampening donor donations Can lead to political complications when you need deals made etc in terms of political deal-making I'm just wondering in that situation. What do you see as the levers for improving that situation? And getting the more than it just seems like there's only maybe a few governments out there that truly have the the wherewithal or the The desire or the ability to pressure the organizations to be more transparent to truly be more transparent and reveal what they found What kind of leverage if you agree with that assessment when what kind of leverage do you think there is to improve that? Dynamic, thank you. Thank you, John. And if you could just pass the microphone on I think we have a second question from the gentleman there David Sarota with international business times. I have really two questions one is the question of how you define corruption in Is corruption defined as large campaign contributions? That are disclosed in a place like the United States in exchange for public contracts For instance, does that count as corruption? If not, why not? And my second question is about transparency There's an issue in the United States about transparency in a particular form of public contracting around pensions private equity firms say that they will not want they don't want to release the terms of their Deals with state governments. I know KKR is works with for instance transparency international KKR has threatened state governments if state governments disclose the terms of their agreements with Private equity companies and there have been allegations of corruption in awarding of those contracts I'd be curious transparent what about transparency international's work with KKR and also the general idea of how can there be? transparency to fight corruption When companies say that they need a lack of transparency to protect trade secrets and so-called commercial secrets Thank You David Shall I ever go at the the first and the last comment? about Companies efforts and barriers around transparency, which I think are really good Questions and it is very complex But I think there are some very good examples of collective action From the business community in fact, I think the partnership against corruption initiative that I Reference to my comments actually had his origins in the extractive industries that originally got together and said this is not something We should be competing about because it's a shared problem and So I think and there are a lot of other sectoral efforts where Leading CEOs have just come together and said let's let's work together to find solutions to dealing with these issues about Transparency I said this is not something we should compete on but it does come that equally you do get to pressures where those same companies Get to Get to concerns that are we being so transparent that actually we're going into areas where we do compete And and where do you strike that balance? So there's no easy answer to that But I think there I think collective action is a good way forward to find a way find a path as I said earlier for for companies to learn from each other and also from the government point of view We touched on it one or two of us touched on this idea of providing incentives to companies to reward good behavior to provide so to provide some mitigation where companies do Acknowledge their shortcomings and do self-report that there is some recognition not not Absolving them from the the their wrongdoings But some recognition for their willing for the strength of their compliance programs in the first place that I'll enable them to find The issues and then the strength of their character in coming forward and and answering another idea So there were some references to public procurement programs. So another idea that came out of the B20 was perhaps Cobas talked about the beneficial ownership side, but also making it a condition of Any company that wants to bid for either for a major infrastructure project to to demonstrate and Meet a sort of kite mark standard for their compliance programs or Alternatively, if they don't have such a program actually they get docked Marks in there in the assessor in the evaluation of their bids But these are all short steps on you know what is going to be a marathon So they're good questions, but those are some some suggestions of steps towards solutions Thank you very much Steven and I think there were questions about the campaign contributions I think co was this one was directed at you so please if you could answer that one Maybe a two-fold answer firstly starting with definition Broadly speaking corruptions the abuse of entrusted power for private gain But what we've seen over the last couple of years in particular is that the forms that corruption Can take are indeed much more varied And particularly when you look at the financial crisis and you look at a whole global financial system a lot of this would not have been classified as corruption, but were actually practices that Buy their very nature Undermined the public good and and for that one needs to have a look at that again In terms of how and who we work with we've got an approach that we have a critical But constructive engagement with all stakeholders and that's very simple from the premise If we were to say we will only work with companies or governments that have no problems I think we will live in an island somewhere this this is indeed a journey of transparency and and here I can give you one example What would be a big game changer in the world is if we had a neutral Complete list of all political exposed persons in the public domain To get from where we are today where this is a highly politicized areas who's classified as peps who's not To where you have complete neutral list That road to transparency is indeed similar to what needs to be tackled when you look at Campaign financing when you look at issues of pension fund transparency What is very clear is that it is irreversible that we're gonna get there the question It's where we get there in five years in ten years in 20 years time one of the most critical ones is indeed the issue of how money in politics Have eroded public confidence in political systems, and that's why if you ask me is that one that I think is of particular Importance. Yes, and there the US example has shown that mere transparency is not enough on it either Thank you We've never been told by anybody not to publish anything. We know so I Just would like to say that we have published anything we we had intended to publish and The the only problem is we we wish we would have had more But so I'd like to start from there, but there are many many angles The question of trust here is critical And and and a lot of the loss of the trust comes precisely because there's this Perception that these things are not a level playing field the taxes. This is big. That's a big issue and it's a form of theft and Yeah, that means you take a few pennies from every single citizen Because they're gonna have to pay more taxes because you didn't or because a particular company didn't or All the all the small and medium enterprises of a company of a country are gonna have to pay more because the large Multinationals don't pay taxes. So when we're talking about beps is not about pointing fingers at anybody You want to encourage companies to invest you went but you want also everybody to put their fair share We are insisting as much on avoiding double taxation as an avoiding double-known taxation Okay, so, you know, it's it's very important that we make this clear This is not about you know Avoiding or not. It's about everybody doing, you know, what they have to do doing their fair share We created the system individuals avoid taxes at their own peril because they're violating the law Companies avoid taxes because they're using a system that we created over the last 80 years to avoid double taxation So what they do is legal meant not be right, but it's legal. So that is why this second challenge is much more difficult Because we have to change the rules not just, you know, change the practices. So Now bribes is a different question because, you know, say, how do you define, you know, corruption? Well, it's it's like, you know, in many it's difficult It's it's in many codes and practically every single code Both domestic corruption as well as foreign corruption But it's also one way where you see when there is Corruption is much more than just taking money home in your pocket For your own bank account You mentioned a case of at least distortions of You know campaign contributions. Copas mentioned you're talking about the last campaign cost with a billion or something like that And then the court the Supreme Court came up with Authorization that the packs and the super PACs could put up, you know, enormous amounts of money Not for a candidate for for cost. Therefore, you know, it allowed a new Crowd, you know, a new generation of monies to go into the campaigns And what is it about? It's a void of it's about avoiding capture It's about avoiding capture, which you just said it is not just about contracts It's about policy You know policy or policies that would favor a particular group That were generous, you know in the campaign So it's not just about taking money home. The other question is about financing democracies How many political giants, you know have fallen because they didn't take a penny home But they wanted to finance the campaigns. They wanted to finance their parties through, you know, some indirect inappropriate way In, you know, that's very important now Let me just I have to say also Every donation every penny of donation is public in the U.S. And every penny of contracts is public. Therefore, there it's at least a little, you know, easier to look at both sides And denounce it if there's something else The the the question of, you know, contracts and pensions are particular issues. I think the question is how does one With better information with greater transparency But also, you know with greater awareness of the question was going on and how that actually affects The public In the broadest sense And you know, I think this is what we're all yeah In fact, we won't be able to to cover all of these particular issues at this press conference Sorry to step in but I'm being told That we might have just time for one last question with brief answers So I understand the gentleman in the back has a question Has been answered that's even better. That means we can close on time. Thank you very much for for tuning in Thank you very much for for coming and thank you Particularly to to this great panel. I think it was a great discussion and you can you can go to w wwvforum.org to watch the live stream You can later download it and you can follow us on social media for additional information on patchy and the patchy vanguard Thank you very much