Corruption is generally defined as the abuse of entrusted power for private gain. It can take many forms that vary in degree, ranging from the minor use of influence, to institutionalised bribery. The Organisation for Economic Co-operation and Development (OECD) notes that corruption can harm democratic institutions, undermine attempts by citizens to achieve higher levels of economic, social and environmental welfare, and impede efforts to reduce poverty. As a result, it has created a full chapter on the topic in its Guidelines for Multinational Corporations (MNCs), to remind enterprises that they have an important role to play in combating these practices.
The UN Guiding Principles recognise that corruption can undermine access to remedy for victims of human rights abuse. Accordingly, States should ensure that “Procedures for the provision of remedy should be impartial, protected from corruption and free from political or other attempts to influence the outcome”. [Commentary to UNGP 25].
Businesses may directly and indirectly adversely impact human rights through corruption in a number of ways. For example, the supply of counterfeit or expired drugs adversely impacts the right to health of vulnerable people (Fletcher and Herrmann; 2012). In 2017, the UK Serious Fraud Office confirmed its investigation of claims that British American Tobacco (BAT) was involved in bribery and corruption in East Africa to obstruct the passing and implementation of tobacco control legislation that helped save millions of lives in the Global North. In Thailand, an International Labour Office report on the country’s fishing sector documented allegations that corruption and complicity by government officials has enabled a human trafficking gang to routinely torture and execute migrant workers who attempt to flee.
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Corporate capture is another important aspect of the link between corruption, business, and human rights. Corporate capture is defined as “the undue influence that corporations exert over national and international public institutions, manipulating them to act according to their priorities, at the expense of the public interest and the integrity of the systems required to respect, protect and fulfil human rights, and safeguard the environment”. A report by ESCR-Net notes separate requests from extractive sector companies that the UK Government support their position in litigation before appellate courts in the United States over alleged extraterritorial human rights abuses. Notably, released emails show that one of the UK Government’s concerns about taking a position is that such intervention would contravene the State’s obligations with respect to the UN Guiding Principles. Ultimately, the UK Government did submit opinions in support of the two companies. The rulings in these cases set important precedents on the ability of victims to seek access to remedy for extraterritorial corporate-related human right abuse.
Therefore, the fight against corruption is central to the struggle for human rights, as a whole, and not only in a business and human rights context. [See e.g. International Council on Human Rights Policy, Corruption and Human Rights: Making the Connection, 2009].
States are implementing anti-corruption efforts as a means to promote responsible business. Initiatives to eliminate corruption include the Foreign Corrupt Practices Act (FCPA) in the United States, and the United Kingdom’s Bribery Act 2010 to criminalise corruption including for acts of corruption abroad. Examples of companies that the U.S. Securities and Exchange Commission has brought enforcement actions against for FCPA violations include: Teva Pharmaceutical, which agreed to pay $519 million to settle civil and criminal charges that it violated the FCPA by paying bribes to foreign officials in Russia, Ukraine, and Mexico; Halliburton, which paid $29.2 million to settle charges for falsifying accounting records as part of the efforts to secure lucrative oilfield services contracts in Angola; and SQM, a Chilean chemical and mining company, which paid more than $30 million to resolve parallel civil and criminal cases finding that it violated the FCPA by making improper payments to Chilean political figures and others. (SEC website).
The Publish What You Pay Coalition and the Extractive Industries Transparency Initiative (EITI) aim to promote and open and accountable extractive sector, so as to minimise corruption. Countries that sign up to EITI must publish what they received from extractive companies, and extractive companies within their jurisdiction must publish what they pay. In so doing, citizens are empowered to hold their governments accountable for public revenue, and civil society organizations can assess whether spending is going towards priority development areas. States such as Canada and Norway have implemented laws, namely the Extractive Sector Transparency Measures Act, and Regulations on reporting and reconciliation of cash flows from petroleum activities, respectively, that require compliance with EITI cash flow reporting standards. Furthermore, Principle 10 of the UN Global Compact on Anti-Corruption urges businesses to “work against corruption in all its forms, including extortion and bribery”. Finally, anti-corruption efforts also contribute substantially to SDG 16 target 5, which is to “16.5 Substantially reduce corruption and bribery in all their forms”.
Key laws & international principles addressing corruption include:
- United Nations: [PDF] United Nations Convention Against Corruption
- UN Global Compact: Principle 10
- OECD: Convention on Combating Bribery of Foreign Public Officials in International Business Transactions
- OECD Guidelines for Multinational Enterprises
- Inter-American Convention against Corruption
- Council of Europe Criminal Law Convention on Corruption
- Council of Europe Civil Law Convention on Corruption
- The PRI and UN Global Compact: Engaging on Anti-Bribery and Corruption. A Guide for Investors and Companies.
- Transparency International.: Business Principles for Countering Bribery
Corruption and Human rights
- UN HRC Resolution on the negative impact of corruption on the enjoyment of human rights of 13 June 2013 (A/HRC/RES/23/9)
- UN HRC, Final report of the Human Rights Council Advisory Committee on the issue of the negative impact of corruption on the enjoyment of human rights (A/HRC/28/73)
- Corruption and Human Rights: Making the Connection – Intl. Council on Human Rights Policy (ICHRP), 2009
- UN Office of the High Commissioner on Human Rights: Human Rights and Corruption http://www.ohchr.org/EN/Issues/Development/GoodGovernance/Pages/AntiCorruption.aspx
- T. Landman and C.J.W. Schudel, Corruption and Human Rights: Empirical Relationships and Policy Advice, International Council on Human Rights Policy, 2007.
- L. Cockroft, Business and Corruption: The Human Rights Dimension, Transparency International (UK), March 2006
- Olivier De Schutter, The International Corporate Accountability Roundtable (ICAR) and Global Witness (2016) Tainted Lands – Corruption in Large-Scale Land Deals
- Linking Human Rights to Anti-Corruption – Address by Ronald Barenbeim, Senior Fellow, the Conference Board, Delivered at the 7th meeting of the UN Global Compact Working Group, 10 December, 2010,
- A crucial link between corruption and violation of human rights – Harun ur Rashid, training Bangladesh Ambassador to the UN, Geneva, in Daily Star [Bangladesh], 18 Feb 2004
- Fletcher, M. C., & Herrmann, M. D. (2012). The internationalisation of corruption: Scale, impact and countermeasures. Gower Publishing, Ltd..
Private sector & corruption
- UN Global Compact
• Transparency and Anti-Corruption
• Business against Corruption – Case stories and examples
- ICC Commission on Corporate Responsibility and Anti-corruption
- ICC Anti-corruption Third Party Due Diligence: A Guide for Small- and Medium-sized Enterprises
- Anti-Corruption: The Enabling CSR Principle – Julio Bacio Terracino, Ph.D. candidate, Graduate Institute of International Studies, Geneva, Apr 2007
- OECD (2003), “Business Approaches to Combating Corrupt Practices”, OECD Working Papers on International Investment, 2003/02, OECD Publishing. http://dx.doi.org/10.1787/870734534651
- Transparency Intl .: Global priorities: Private sector
- World Economic Forum: Partnering Against Corruption Initiative (CITP)
Disclosure & use of government revenues from the private sector:
- Extractive Industries Transparency Initiative
- Publish What You Pay Coalition
- The Natural Resource Governance Institute
- Revenue Watch Institute
- IMF Guide on Resource Revenue Transparency 2007
- Global Witness Report, Time for transparency, 2004