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How to Prevent Corruption in Government-Owned Enterprises

Posted  November 28, 2017

By the C|C Whistleblower Lawyer Team

In its just-released report, Transparency International has set forth its hit-list of how best to control for the never-ending corruption that exists in so-called state-owned enterprises (SOEs) operating across the globe. These are the entities in many countries that supply crucial public services such as energy, water, transportation and health care and which are controlled or partly-owned by the government. In many countries, especially those in emerging markets, they are among the largest employers and account for a sizeable portion of the country’s domestic output. See Transparency International press release.

According to Transparency International, “it is the most vulnerable in communities that suffer most when public services are poorly delivered or are tainted by corruption. This makes it crucial that these enterprises operate with integrity, transparency and accountability.” But Transparency International warns that the risks of corruption are particularly high with these entities because of “their closeness to governments and public officials, and the scale of the assets and services they control.” That is why it is not so surprising that several of the largest global corruption scandals have involved SOEs, including Brazilian state oil company Petrobras and Nordic telecom giant Telia just to name two recent examples.

With this reality in mind, Transparency International consulted with a broad grouping of academics and experts across the globe to create a guide “to encourage and help enterprises controlled by governments to implement anti-corruption programmes based on the highest standards of integrity and transparency.” Here is the Top-10 list of principles that came out of that effort and which Transparency International will be pushing to secure wide acceptance and make SOEs more accountable to the constituencies they are supposed to be serving:

  • Operate to the highest standards of ethics and integrity.
  • Ensure best practice governance and oversight of the anti-corruption programme.
  • Be accountable to stakeholders through transparency and public reporting.
  • Ensure human resources policies and procedures support the anti-corruption programme.
  • Design the anti-corruption programme based on thorough risk assessment.
  • Implement detailed policies and procedures to counter key corruption risks.
  • Manage relationships with third parties to ensure they perform to an anti-corruption standard equivalent to that of the SOE.
  • Use communication and training to embed the anti-corruption programme in the SOE.
  • Provide secure and accessible advice and whistleblowing channels.
  • Monitor, assess and continuously improve the implementation of the anti-corruption programme.

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2 Replies to How to Prevent Corruption in Government-Owned Enterprises

  • Anonymous says:

    to all of these honesty is required. it is the objective to put someone as head of any agency to make the agency earns the most. that is why someone would use the money on money markets to earn not for the agency but for themselves. the best approach to these is to give incentives or percentages to a scheme or plan that gives substantial return. these outside their monthly income.

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