April 2011 RECA Holds Meeting with Russian Government Delegation in Washington, D.C.
On April 13, 2011, the Russian Energy Compliance Alliance met with a delegation of senior Russian government officials in Washington, D.C. to discuss reform of the Russian public procurement system. The roundtable was held at the Carnegie Endowment for International Peace and organized by the Center for Business Ethics & Corporate Governance (CFBE) in cooperation with Carnegie and the Eurasia Foundation.
The Russian delegation included officials from the Federal Anti-Monopoly Service (FAS), Ministry of Economic Development, Ministry of Internal Affairs and Investigative Committee. The U.S. Department of State and U.S. Department of Justice sponsored the delegation’s visit as part of a bilateral program to exchange know-how for ensuring integrity in public procurement, with a focus on the prevention, investigation and prosecution of fraud and collusion. For further reference, please see the report FAS posted on the April 13 meeting with RECA.
The meeting was opened by Matt Rojansky, the Deputy Director of Russia and Eurasia program at the Carnegie Endowment. CFBE Chair Matthew Murray then introduced the Russian Energy Compliance Alliance (RECA). He discussed RECA’s goal to work in a public-private partnership with the Russian government to increase transparency of competition in the market for power generation technology and services. Mr. Murray emphasized that RECA is comprised of business and civil society who seek an open dialogue with government officials regarding how to increase voluntary compliance in public procurement. He noted that April 13th meeting is an important milestone in RECA’s program to promote the exchange of best practices between business and government in the Russian power industry.
Three officials from the Russian delegation summarized the goals of the government’s new public procurement reform and the results of their trip to Washington. Sergey Puzyrevsky, Head of the Department for Legal Affairs of FAS presented the agency’s mission to stop cartels, protect small companies from large companies and prohibit officials from abuse their power. Mr. Puzyrevsky stressed that FAS protects Russian, American and any other foreign company from abuse by officials. Mikhail Evraev, Head of Control of Public Procurement for FAS, presented new reforms that Russian government is making, and discussed the type of best practices he is seeking from RECA. Mr. Evraev was particularly interested in discussing how to reduce official corruption by conducting electronic auctions through a web portal.
Sergey Shamin, Chief of the Serious Economic Crimes Division of the Ministry of Internal Affairs, discussed how the visit to the U.S. is a vital form of collaboration with U.S. law enforcement colleagues. The Ministry seeks to gain know-how and experience that could be applied at home. He spoke of the Ministry’s mission to protect all businesses, domestic and foreign, small and large. Mr. Shamin indicated that while Russia has a number of laws to prohibit corruption and fraud, the difficult question is implementation. Three business executives from the Russian Energy Compliance Alliance presented global best practices of business ethics that their companies follow in connection with public procurement.
Sandy Merber , Senior Manager for Regulatory Affairs for General Electric summarized the company’s code, called the “The Spirit and the Letter”. Mr. Merber stressed that a company cannot have a culture of compliance without both. The letter is the strict execution of rules while the spirit is putting beliefs into practice, putting value into action. Mr. Merber emphasized the GE’s compliance system is based on leadership engagement, risk assessment, and detection.
Kevin Rogan, Senior Compliance Officer for Siemens North America discussed his company’s approach to ethics and compliance. Mr. Rogan stressed how important it is to implement compliance rules through employee trainings, due diligence and in dealings with third parties. Siemens has become leading advocate and supporter of collective action initiatives such as RECA in several global markets. Mr. Rogan discussed how in Russia, such action can help strengthen overall market conditions for honest competition in public procurement.
William Schoelwer, CFO of Alstom in the United States, talked about the importance of establishment of ethical culture from top to bottom in a company. He emphasized that collaborative effort is required by all lines of management in order integrate compliance with business goals. He expressed strong support for the Russian Energy Compliance Alliance as a way of helping government officials understand the pressures that business face.
Two officials from the World Bank, Knut Liepold and Michael Jarvis, were also present to share their know-how on public procurement with the Russian government delegation. Mr. Liepold, an expert on e-governance, provided a summary of how electronic auctions work in different global markets. Michael Jarvis provided a summary of recent global trends in industry collective action.
During closing remarks, Mr. Murray emphasized the fact that the Russian officials were leading an important trend in Russia focused on implementation of the law. Their deep commitment to making the procurement process work transparently and efficiently in Russia was evident from the dialogue that took place at Carnegie. Representatives of the multinational corporations, the World Bank, Eurasia Foundation, Carnegie Endowment and all other stakeholders present share the Russian delegation’s objective to increase transparency not only in Russian but in the U.S. and other global markets.
*The photos are courtesy of The Carnegie Endowment for International Peace