APPENDIX 2
Memorandum submitted by Worldaware
Worldaware is grateful for the opportunity to
submit evidence to the Committee on this important subject. As
an organisation committed to promoting greater understanding of
global development issues, we welcome the initiatives being taken
by the Committee.
Worldaware has long recognised that corruption
is the biggest single inhibiting factor against FDI in developing
countries, and has consistently argued that action to reduce corruption
will make a significant contribution to achieving poverty reduction
goals.
As part of the work which Worldaware has undertaken
recently, we enclose with this note:
— A set of three reports published
by Worldaware (in conjunction with the Commonwealth Business Council)
in 1998 and 1999. As well as providing evidence that corruption
is the greatest barrier to investment, the final report goes on
to suggest a range of initiatives which may be suitable for further
expansion as part of a concerted campaign to eliminate corruption.
This report was launched by our Chairman, Sir Jim Lester, at the
Commonwealth Heads of Government Meeting in Durban last November.
It was warmly received, including by the UK Government (not printed).
— A report of a 1998 Worldaware conference
on "Overcoming Law-related Obstacles to Investment in Developing
Countries", which touches on aspects of corruption and the
case for legal and judicial reforms (not printed).
In addition to these reports, which we hope
will help the Committee in its inquiry, we would offer two observations
based on our work within our Business Group, which represents
over 60 companies ranging from multi-nationals to the very small.
— First, the opportunity to overcome
corruption in obtaining new business in some developing countries
is greater for multi-nationals than for SMEs. This is a factor
of the negotiating strength of individual companies, not just
the determination of the leaders of those companies to combat
corrupt practices. This points to the urgent need to provide assistance
for SMEs—whether codes of practice or more practical support
on the ground—so that all businesses can compete more equally
for business which will assist the long-term health of developing
countries.
— Secondly, there is no "one size
fits all" solution. Each country, and often specific sectors
within each country, will pose different challenges. The approach
should be to generate a partnership approach for each country
which will see a common purpose, and consistent practices adopted
by all the stakeholders—Government, NGO, private sector—who
are involved in investment and trade-related activities.
The Worldaware Business Group would be happy
to give further evidence to the Committee if desired on its experiences
and proposals for reducing levels of corruption.
Tony Boardman
Director, Worldaware
July 2000
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