March 15, 2011 Meeting of Russian Energy Compliance Alliance

on 28 April 2011. Posted in Russian Energy Compliance Alliance

On March 15, 2011, the Center for Business Ethics and Corporate Governance hosted the third meeting of the Russian Energy Compliance Alliance (RECA) on the threshold of the «Russia and CIS Summit on Anti-Corruption» in Moscow. The meeting was key-noted by U.S. Assistant Attorney General Lanny Breuer who came from Washington, D.C. for these events. As reported by the U.S.-Russia Bilateral Presidential Commission, Mr. Breuer called the Alliance an “innovative effort to promote voluntary compliance in a difficult environment”.

We were privileged that the Russian government sent Sergey Belyakov from the Ministry of Economic Development to address the March 15 meeting of RECA. Mr. Belyakov is the Head of the Ministry’s Department of Investment Policy and Private-Public Partnerships, which is crucial to Russia’s economic growth strategy. Mr. Belyakov made a dynamic presentation on several new initiatives underway, which was very well-received by business executives. Antonina Firsova, Chief Specialist of Strategic Development at the Russian Energy Agency, also provided remarks on Russia’s energy efficiency goals. The Government of the Kaluga region sent a delegation of three officials to discuss its plans to attract investment in the power sector.

The RECA meeting was attended by representatives from more then 10 leading companies in the Russian power generation industry. The Center of Business Ethics and Corporate Governance facilitated discussions around enforcement of Russian domestic and international law and increasing the level of cooperation of all stakeholders in power generation industry.

Mr. Breuer opened the meeting by giving the participants of the meeting an overview on the importance of internal anti-corruption compliance programs in companies and their supply chains. Mr. Breuer emphasized that RECA is the type of initiative that can make a free market system work. He noted that the environment in which RECA members are doing their business is very challenging and that leaders in their industry should take this opportunity of collective action.

The Russian federal government speakers emphasized that they are ready for an open dialog with business leaders in RECA on improving transparency in procurement and stimulating responsible investment in Russia’s national energy grid. Experts from the Kaluga regional government introduced their program on increasing energy efficiency and investment into the region based on transparent procurement processes.

Matthew Murray, Chair of CFBE, provided an update on “4 Modules for Collective Action” that RECA is developing. These include:

Module 1: Increase Compliance in Power Generation Industry Partner Chain

Module 2: Exchange Best Practices with Government for Public Procurement

Module 3: Dialogue with Law Enforcement Authorities

Module 4: Integrity Pact for Specific Public Tender for Equipment

This review was followed by presentations from Elena Zheltovskaya of General Electric, Ilsur Akhmetshin of ABB and Andrei Shpilenko of Technopark Sistema-Sarov. These speakers discussed steps for implementing Module 1, including a proposal for a conference in which multinational companies would present their global best practices of compliance to Russian partners in the power generation industry. The meeting concluded with a group discussion that generated many practical ideas including an initiative under Module 2 to cooperate with Russian government agencies to support reform of public procurement laws.