Activities through 2011
This section includes everything published on this website through 2011, when Founding Chair Matthew Murray left for a position with the Obama Administration and Patricia Dowden was named President.
RECA’s summer Research Interns Alina Shlyapochnik and Cameron Hood began an educational and research-oriented dimension to the Alliance’s work focusing primarily on RECA’s Module 2 for collective action – sharing best practices of anti-corruption in public procurement with government agencies and officials. The Research Project Team’s work furthered CFBE’s program objectives to establish a paradigm for increasing transparency and competition in public procurement for energy efficiency technologies.
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
On March 16, U.S. Ambassador to Russia John Beyrle made a speech to the “3rd Russia and CIS Anti-Corruption Summit” in Moscow. The Ambassador provided a balanced discourse on bilateral cooperation between the United States and Russia to counter the transnational threat of official corruption. He discussed how governments, business and civil society each have a special role to play. After discussing steps that both the U.S. and Russian governments are taking to counter corruption, Ambassador Beyrle expressed strong support for civil society organizations, including Center for Business Ethics and Corporate Governance, which are taking initiative to work with the governments. He cited the Center’s participation in the “U.S.-Russia Working Group on Anti-Corruption and Institutional Integrity” under the auspices of the “U.S.-Russia Bilateral Presidential Commission”.
Since being formed in July 2009, the U.S.-Russia Working Group has met six times to discuss how to facilitate implementation of the “UN Convention against Corruption”, which has been ratified by both the United States and Russia. The Working Group is focused in particular on development of freedom of information, protection of whistleblowers and public procurement reform.
Ambassador Beyrle also cited the Center’s work with leaders of the U.S. and Russian business community to create the Russian Energy Compliance Alliance, a public-private initiative to improve competition in the market for energy efficiency technologies.
On February 17, 2011, the “Russian Energy Compliance Alliance” held its second meeting at the offices of Baker & McKenzie in Moscow. Participants included representatives of ABB, Alstom, ENEL/OGK-5, GE, Siemens, CFBE and Baker & McKenzie. They discussed how to apply global best practices to improve compliance in the Russian market for power generation technologies and services. Participants defined different “modules” for collective action. They agreed that the first module would be to work with members of their Russian partner chains, including customers and suppliers, to increase the level of voluntary compliance in the power industry.
Participants in the February 17 RECA meeting agreed that a second module would be to engage Russian government agencies and officials in an exchange of best practices for state tendering and procurement. The timing for this engagement is appropriate as Russian federal government agencies, including the Federal Anti-Monopoly Service and Ministry of Economic Development, are planning to introduce new laws and regulations to govern procurement. Under the UN Convention Against Corruption, both business and civil society organizations operating in Russia have the right to provide input and expertise on such issues.
The participants also discussed and agreed on a third module for collective action in the power generation industry, which is to increase business and civil society know-how regarding how international and Russian law enforcement authorities treaty commercial bribery cases. RECA is a useful, neutral forum to invite law enforcement officials to speak.
At the conclusion of the February 17 meeting, the parties discussed how the RECA initiative should continue according to a deliberate strategy to build confidence and trust among all participants and stakeholders.
In February 2011, the GE Foundation and Eurasia Foundation agreed to support the Russian Energy Compliance Alliance (RECA), a forum for collective action of business and civil society to improve compliance in the power generation industry. The Russian government recently initiated a $140 billion program to increase efficiency of Russia’s national energy grid by 40 percent by 2020. However, in his state of the union address in November 2010, Russian President Dmitry Medvedev stated that the Russian Federation loses over 1 trillion rubles ($35 billion) each year to leakage in state procurement. This leakage is detrimental to Russian businesses, consumers and other stakeholders and could undermine to 2020 objective.
The goal of RECA is to strengthen rule-of-law in the power sector and increase local capacity of business and civil society to prevent official corruption in the Russian Federation. RECA seeks to work with government agencies to improve conditions for market competition by and introducing a new layer of accountability in state procurement of energy technology and equipment.
The “Center for Business Ethics & Corporate Governance” is acting as an “Associate Partner” in support of the American Conference Institute’s third annual “Russia and CIS Summit on Anti-Corruption”, which will take place on March 16-17 in Moscow. Once again, this Summit brings together an exceptional faculty of senior corporate ethics and compliance executives, attorneys, and government officials to help business address their most pressing anticorruption compliance challenges in Russia and the CIS. To register for the “Anti-Corruption Summit” on-line, please click here. To obtain a 10% discount, please contact us.
On December 17, 2010, the “Summary Report on the US-Russia Civil Society to Civil Society Summit” (C2C) was released. During the June 2010 U.S.-Russia Presidential Summit in Washington, D.C., more than 40 Russian and American thought leaders met to debate the common challenges and best practices on 10 issues of critical importance to civil society development. The Center for Business Ethics & Corporate Governance was selected to participate in this C2C Summit and co-chaired the “US-Russia Working Group on Anti-Corruption and Institutional Integrity”. Other members of this Working Group include: Transparency International-USA, the Sunlight Foundation and Transparency International Russia. The Working Group met again in Moscow on October 10, 2010 and agreed on a plan of action for civil society leaders in both nations to counter the transnational threat of corruption. For a discussion of the Working Group’s recommendations and plan, please see the Report on the C2C Summit in both English and Russian at http://www.irex.org/c2cReport2010.
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.
- October 2010 Meeting of U.S-Russia Anti-Corruption Working Group
- June 2010 US-Russia C2C Summit in Washington, D.C.
- August 22, 2010 Matthew Murray in Moscow News
- April 2010 CFBE Advisor Philip Nichols and Board Member Patricia Dowden make a series of presentations in Moscow and St. Petersburg on the role of professional civility in creating "generalized trust".