Russian Energy Compliance Alliance
The Russian Compliance Alliance goal is to create a private-sector certification process that defines ethics compliance standards for Russian supply chains of multinational companies operating in Russia. The process is analogous to the ISO Quality Management Certification process, where standards are set by industry specialists, and certification is required by purchasers and obtained by vendors on a voluntary basis.
This certification concept is based on four principles:
- Global Legal Principles: The Foreign Corrupt Practices Act, UK Bribery Act, and others require that multinationals be responsible for the behavior of their vendors and agents. Compliance standards tailored to Russian conditions will reduce multinationals' liability.
- Market Incentives: Russian vendors wishing to do business with multinationals will improve their opportunities by obtaining certification.
- Collective Action: Consensus on standards and a process for disseminating compliance information will create 1) market pressure for change and 2) economies of scale for training and demonstrating compliance with anti-corruption clauses now included in most business contacts.
- Performance Measurement: In the spirit of "you manage what you measure", a scoring system will help to define what is important and ensure management focus.
The 2013 Russia-hosted B20 Anti-Corruption Working Group has endorsed the multinational supply chain as an ethics standards distribution system:
"We recommend that, from 2013, B20 companies and business organizations should regularly exchange best practices in devising training for SMEs in their supply chains."
This section will document the Center's progress in implementing a private-sector compliance certification process.
On December 1, 2010 CFBE hosted the first roundtable of the “Russian Energy Compliance Alliance” (RECA). Attendees included representatives of GE, ENEL-OGK 5, Renova, Baker & McKenzie, the Institute for Development of Freedom of Information, U.S. Russia Center for Entrepreneurship, U.S.-Russia Business Council and U.S.-Russia Foundation. RECA aims to help business and civil society leaders in the Russian energy sector take collective action to improve transparency in state procurement of new power generation and energy efficiency systems. During the December 1 roundtable, RECA members discussed strategies for engaging the Russian government in the development of best practices of state procurement and enhancing the participation of small business and civil society in the tendering process. For information on how to participate in RECA, please contact us.
A company operating in an environment where corrupt practices are perceived to be the norm may fear “going alone” on an ethical path and losing business. The perception often exists that all other companies take part in bribery and other corrupt practices, such that there is nothing to be gained by acting ethically. When companies choose to work together, however, they can dramatically reduce the opportunities for official corruption and create a more transparent, fair and stable environment for competition. Since 2000, the Center for Business Ethics & Corporate Governance (CFBE) has led Russian and foreign companies to undertake such collective action.