International Anti-Corruption Commitments

Title of the document

OECD Recommendation of the Council on Guidelines on Anti-Corruption and Integrity in State-Owned Enterprises

(https://legalinstruments.oecd....)

Issuing body

OECD

Brief description

This is the first international instrument to offer the state, in its role as an enterprise owner, support in fighting corruption and promoting integrity in SOEs. The Guidelines can help states to ensure that owners exemplify integrity in their conduct, that ownership arrangements are conducive to integrity, that SOEs adhere to good practices at the SOE level and that accountability mechanisms are integral to SOE sectors

Relevant excerpts

II.RECOMMENDS that all Member and non-Member governments having adhered to this Recommendation (hereafter the “Adherents”) bear in mind that state-owned enterprises are autonomous legal entities overseen by governments and high-level public officials and subject to the general rule of law in their countries of operation. Adherents should establish and adhere fully to good practices and high standards of behaviour, on which integrity in SOEs is contingent. To this effect, Adherents, as appropriate acting via their ownership entities, should take the following action:

-Apply high standards of conduct to the state

-Establish ownership arrangements that are conducive to integrity

-Ensure clarity in the legal and regulatory framework and in the State’s expectations for anti-corruption and integrity

III.RECOMMENDS that Adherents act as active and engaged owners, holding SOEs to high standards of performance and integrity, while also refraining from unduly intervening in the operations of SOEs or directly controlling their management. Ownership entities should have the legal backing, the capacity and the information necessary to hold SOEs to high standards of performance and integrity. Adherents should make their expectations regarding anti-corruption and integrity clear.

To this effect, Adherents, as appropriate acting via their ownership entities, should take the following action:

-Ensure clarity in the legal and regulatory framework and in the State’s expectations for anti-corruption and integrity

II.RECOMMENDS that all Member and non-Member governments having adhered to this Recommendation (hereafter the “Adherents”) bear in mind that state-owned enterprises are autonomous legal entities overseen by governments and high-level public officials and subject to the general rule of law in their countries of operation. Adherents should establish and adhere fully to good practices and high standards of behaviour, on which integrity in SOEs is contingent.

To this effect, Adherents, as appropriate acting via their ownership entities, should take the following action:

-Apply high standards of conduct to the state

-Establish ownership arrangements that are conducive to integrity

-Ensure clarity in the legal and regulatory framework and in the State’s expectations for anti-corruption and integrity

III.RECOMMENDS that Adherents act as active and engaged owners, holding SOEs to high standards of performance and integrity, while also refraining from unduly intervening in the operations of SOEs or directly controlling their management. Ownership entities should have the legal backing, the capacity and the information necessary to hold SOEs to high standards of performance and integrity. Adherents should make their expectations regarding anti-corruption and integrity clear.

To this effect, Adherents, as appropriate acting via their ownership entities, should take the following action:

-Ensure clarity in the legal and regulatory framework and in the State’s expectations for anti-corruption and integrity

-Act as an active and informed owner with regards to anti-corruption and integrity in state-owned enterprises

V.RECOMMENDS that Adherents ensure proper detection of corruption, as well as investigation and enforcement, and that key processes are entrusted to institutions that are insulated from influence or suppression of said processes or dissemination of public information regarding their conduct. Strong, transparent and independent external auditing procedures are means of ensuring financial probity, informing shareholders about overall company performance and engaging stakeholders.

To this effect, Adherents, as appropriate acting via their ownership entities, should take the following action:

-Establish accountability and review mechanisms for state-owned enterprises

-Take action and respect due process for investigations and prosecutions

VIII.INVITES non-Adherents to take due account of this Recommendation and, where appropriate, adhere to it subject to a review by the Working Party on State Ownership and Privatisation Practices.