BulletProofBlog the blog on crisis communications

Each Monday, Bulletproof Blog now features exclusive interviews with thought leaders on issues of critical importance to companies and countries. As a follow-up to last week' s discussion of the Foreign Corrupt Practices Act, we interviewed PricewaterhouseCoopers' David Jansen and Glenn Ware to discuss PwC' s new Anti-Corruption Centre for Excellence. Mr. Jansen, a PwC partner, is one of the leaders  of PwC' s Anti-Corruption Services Group, while Mr. Ware serves as a Managing Director within the group. As experts in ensuring compliance with global anti-corruption regulations and statutory regimes, they shared their insights with us:

                                

Tell us about PricewaterhouseCoopers' new Anti-Corruption Centre of Excellence - What it will do, why was it formed, and who is involved?

David Jansen and Glenn Ware: PwC has always been concerned about corruption and its negative impacts on public and private sector entities around the world. For quite a while now, we' ve been working with organizations like Transparency International, the United Nations, and the World Economic Forum to identify, develop and publicize leading solutions to the most significant corruption challenges.

Simply put, the Anti-Corruption Centre of Excellence is a formalization of PwC' s commitment to use our thought leadership resources in this field to help the private sector as well as governments and international organizations confront the corruption challenges they are facing. At a time of global economic crisis, there is a much higher risk that these entities are encountering corruption in a very vivid fashion - so it really is more important than ever to highlight leading practices and see that they are implemented in as far-reaching and efficient a way as possible.

PwC has an enormous footprint in the professional services arena. We are in more than 140 countries, with literally thousands of professionals helping private and public sector clients confront corruption challenges. With the Centre, we' re able to focus and consolidate that specialty to assist our clients by bringing the best strategically aligned specialists to the global anti-corruption problem.

That may be helping companies establish or improve compliance programs, assessing anti-corruption programs, or it could be dealing with one specific issue, such as an allegation being brought under the Foreign Corrupt Practice Act (FCPA). On the other hand, it could be bringing our vast international resources to help a government establish an entire national architecture of anti-corruption programs and controls. Because PwC has the bandwidth to address problems ranging from the small individual incident to the large complex sovereign issues, we stand ready to assist on just about any corruption issue imaginable.

How should companies deal with competitive pressures in countries where it' s difficult to conduct business above the board? Don' t anti-corruption measures put responsible companies at a competitive disadvantage in these environments?

David Jansen and Glenn Ware: That uneven playing field has been one of the main drivers behind the OECD Treaty and the UNCAC Treaty, both of which are designed to encourage all countries to build an effective anti-corruption infrastructure. At the macro level, these treaties are the main vehicles for ensuring that responsible companies don' t end up on the short end of the stick - and we are now beginning to see that these treaties are working. It' s very encouraging to see how many countries are making the fight against corruption a top priority - the German prosecution of one of its largest companies is a prime example.

On the contract-by-contract level, we obviously advise clients that bending to corruption is a very short-term game to play. Ultimately, it' s going to catch up with you. It' s a slippery slope. Once you start down it, you eventually get hit up for more and more money and in the end, it costs the company more. A well-designed compliance program, coupled with top quality goods, can enable a company to do business in even the most challenging environments without having to pay the "corruption tax" - a fact that will make their bid prices lower and ultimately more competitive in the long run. The war is not over, however, and it can only be won if companies and executives never let their guard down.

What' s next on the anti-corruption front? Are there issues emerging on the horizon that will further challenge companies' and governments' anti-corruption efforts?

David Jansen and Glenn Ware: The major issue emerging on the horizon is that governments are really starting to get serious about coming down hard on those companies and individuals who engage in corrupt practices. In just the last year, we' ve seen Siemens hit with a record multi-hundred-million-dollar fine in Europe. And in just the last month, we' ve seen penalties against an American defense contractor shatter the U.S. record for FCPA fines. FCPA investigations more than doubled between 2006 and 2007 - and they were up again in 2008. The World Bank and International Monetary fund estimate that there' s $2.2 billion worth of corruption taking place around the world each day - so we are really entering an environment where corrupt behavior is being targeted like never before.

At the same time, however, governments are starting to be far more lenient with companies that make a strong, credible commitment to establishing an anti-corruption infrastructure after a violation has come to light. That' s why it' s so very important for people in both the public and private sectors to know that there are solutions and best practices out there - which is really what PwC' s Anti-Corruption Centre of Excellence is all about.