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Culture of Integrity and Level Playing Field

By Henry J. Schumacher

Leveling the playing field and building a culture of integrity.

With these objectives in mind, the Makati Business Club (MBC) and European Chamber of Commerce of the Philippines (ECCP) formed the Integrity Initiative in 2010. What started as a project has, meanwhile, resulted in the creation of the Integrity Initiative Inc. (II  Inc.) II Inc. is a nonprofit organization, with five founding shareholders: MBC, ECCP, American Chamber of Commerce, Management Association of the Philippines (MAP) and Finex. It is primarily engaged in a long-term private sector-led campaign to promote common ethical and acceptable integrity standards in the business community and among various

sectors of society.

II  Inc. aims to continue the activities that were initiated by the Siemens-funded Project SHINE that developed an Integrity Certification and Awards program where companies can be audited, accredited and certified based on compliance to ethical ways of doing business and strict integrity standards.

The following describes the key achievements of the II Inc. so far:

• Created an “Integrity Pledge” for both the public and private sector, which provides key measures and control activities intended to ensure transparency and integrity in business transactions. Signatories to the pledge commit themselves to the performance of these measures and controls by adopting a “Unified Code of Conduct” for doing business.

• The Integrity Pledge signatories today number over 3,000 and include 45 government agencies and 233 business and industry associations and professional organizations nationwide.  Five thousand new Certified Public Accountants (CPAs) also recited and signed the Integrity Pledge as of July 2016 as part of a new partnership with the Board of Accountancy (BOA).

• Developed an online integrity assessment tool for signatories to assess their level of compliance and gaps in their integrity management systems, policies and practices.  Out of more than 3,000-plus signatories to the Integrity Pledge, 256 have signed up for the online integrity self-assessment tool, while 33 companies with self-assessment ratings have been validated by the Integrity Initiative, 16 of which have achieved the highest “advanced” rating.

To help companies address gaps and achieve advanced status in their integrity assessment and validation, II Inc. has developed learning modules, conducted integrity planning workshops  and developed a system for third-party validation of company self-assessment.

• Established an Integrity Consortium (ICon) comprised of 233 organizations working with the private sector. These organizations encourage and/or require their members to sign the pledge and, together as a consortium for integrity, engage with other sectors of society to build a culture of integrity and promote the formation of Integrity Circles.   The ICon is also tapped for the annual Integrity Nation Now Summit and Campaign to spread the advocacy across sectors and regions, including the Asean.

The II Inc. has also established partnerships with other international, regional and local organizations, as well as enterprises to promote sharing of information and research capabilities, as well as sharing of financial and technical resources.

Since the Department of Public Works and Highways (DPWH) issued Department Order 86 on September 24, 2013, requiring all their project contractors to sign their own version of the Integrity Pledge, more than 800 companies have been complying with the directive on an annual basis. This yearly renewal of commitment serves as an initial mechanism for screening out contractors that are not willing to engage in ethical business with the DPWH and ensures that only compliant bidders join the procurement process.  It is trusted that the new management of the DPWH will continue enforcing the Integrity Pledge for companies wishing to deal with the department.

In partnership with the BoA, the Philippine Institute of Certified Public Accountants (Picpa) and the Association of Certified Public Accountants in Public Practice (Acpapp), II Inc. will provide a platform that will require accounting firms and professionals to declare a commitment to transparency and compliance to ethical business practices. The partnership will also enable CPAs to learn the integrity compliance standards and align their continuing education with the help of ethics and compliance experts.  The BoA will also incentivize the whole process to promote sustainability by giving continuing professional education (CPE)  credits to CPAs who will participate in the validation of Integrity Initiative signatory companies.

Six private-sector networks signed an MOU on regional cooperation on anticorruption in the Asean business community, paving the way for the establishment of the Regional Working Group on Business Integrity with the purpose of creating a culture of integrity in the Asean business community, moving toward a corruption-free Asean.

Another regional campaign to combat corruption is the “Integrity Has No Borders”—an advocacy campaign that aims to create an enabling environment for companies to say “No” to corruption and bribery, regardless of where they are in the Asean, to pave the way for shared growth and progress.

Further recognition of Project SHINE’s and II Inc.’s efforts is the inclusion of the II program in the Third Country Action Plan of the Philippines to the Open Government Partnership. The plan includes a commitment by the Integrity Initiative to get 10,000 signatories from Philippine-based companies by 2017 and a commitment by the government to establish a public-sector framework that will promote the II validation and certification system through an executive order (EO), and provide nonfiscal incentives to companies that make the import decision to commit to ethical business processes, sign the integrity pledge and live up to the commitments lined up in the pledge.

Given these achievements and commitments, much still needs to be done:

The business sector at large has to understand that unethical business practices cannot remain the norm if we truly want the Philippines to compete globally, attract more investments and achieve inclusive growth. The private sector, in partnership with the government and other sectors, must do their part in ensuring that the anticorruption efforts and current progress is firmly anchored on the principles of fair competition, good corporate governance and social responsibility.

The private sector may support institutionalizing anticorruption efforts by emphasizing the need among business people to conduct their business in an ethical manner.

Furthermore, we recommend that government incentivize compliance and recognize organizations that commit to improve their integrity systems.  As part of the Open Government Partnership, the Integrity Initiative will best deliver on its committed 10,000 signatories by the end of 2017 if an EO in support of ethical business practice will be signed by the President.  A draft EO has been submitted to both the Executive Secretary and the secretary of finance.

The Integrity Initiative is a nonpartisan organization whose sole purpose is to level the playing field for businesses through employing ethical business standards and practices. Our efforts will not only complement and supplement the current thrusts of the new administration to more aggressively address corruption but will also ensure that the private sector will do its part in cleaning up its own ranks and building a level playing field.

These ideas have been widely accepted by the Duterte administration, which encourages us in the Integrity Initiative to drive these ideas forward, in the Philippines and in Asean.

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