Academic journal article Indian Social Science Journal

United Nation Convention for Anti-Corruption and the Relevance to the Indian Private Sector in Light of New Company's Act 2013

Academic journal article Indian Social Science Journal

United Nation Convention for Anti-Corruption and the Relevance to the Indian Private Sector in Light of New Company's Act 2013

Article excerpt

"Corruption afflicts all countries, undermining social progress and breeding inequality and injustice. When desperately needed development funds are stolen by corrupt individuals and institutions, poor and vulnerable people are robbed of education, health care and other essential services." .... UN Secretary General, Mr Ban Ki-Moon on December 9, 2011.

INTRODUCTION

The World Bank recognises any act which is "the abuse of public office for private gains" as corruption. After the World Bank's definition which recognises corruption as an activity restricted to public sector, Transparency International, an international civil society, attempted to broaden the outlook. Transparency International defined corruption as "the abuse of entrusted power for private gains". Gains should not be limited to financial, any kind of non-financial gain also fall under this definition. Another definition of corruption was framed by OECD which was not very different from the definition of World Bank which restricted corruption to a public sector activity. OECD went ahead and talked about active (giving) and passion (taking) corruption. United Nation Global Compact (UNGC) has adopted the definition of corruption as laid down by Transparency International.

Corruption comes in various forms; bribery, extortion, fraud, nepotism, graft, speed money, pilferage, theft, embezzlement, falsification of records, kickbacks, influence peddling, and campaign contributions (Klitgaard). Corruption is not limited to public sector; it exists in all forms of governance which include private sector and NGOs. Klitgaard (1998) has coined a formula to lay out the reasons of corruption. He considers monopoly of power, when combined with discretion and absence of accountability, results in corruption.

C=M+D-A, where C is corruption, M is monopoly, D is discretion and A is accountability, United Nations Development Programme (UNDP) modified Klitgaard's formula and added two more dimensions to it, integrity and transparency. So, the modified formula stands.

C= (M+D)-(A+I+T), where C is corruption, M is monopoly, D is discretion, A is accountability, I is integrity and T is transparency. The formula show cases that weak governance, absence of accountability, integrity and transparency, is the core factor for corruption. Corruption, thus, creates a cycle which tends to benefit a small section of the population.

UNCAC: IT'S MAKING

Over the past three decades several initiatives were undertaken by international organizations in framing numerous trans-national instruments aiming to address corruption as a whole with special target on the role of the private sector in corrupt practices. One of the first major initiatives by OECD in 1997 was introduction of Convention on Combating Bribery of Foreign Public Officials in International Business Transactions. The European Union (EU) also laid down guidelines to tackle corruption in the private sector. Further, the United Nations Declaration against Corruption and Bribery in international commercial transactions has put forward guidelines wherein the employees are required to comply with regulatory frameworks to ensure transparency in business activities.

Apart from broad guidelines for the private sector, some international organisation has formulated guidelines for specific industries. In 2000, Wolfsberg Anti-Money-Laundering Principles for Private Banking was framed for commercial banks wherein the code of conduct of the framework and the principal of due diligence are adopted by such banks. This enabled the private banks to comply with the international anti-money laundering standards. In 2002, the Extractive Industries Transparency Initiative aimed to bring about transparency in payments made by private companies in the extractive industries and the revenues collected by the state through the same. In 2005, the Equator Principles were introduced for financial institutions which could assist in assessing the environmental and social risks in project financing. …

Search by... Author
Show... All Results Primary Sources Peer-reviewed

Oops!

An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.