Financial Times

Business must maintain high standards of integrity-TI official
By Natasha Gunaratne

A senior Transparency International (TI) official this week rejected allegations against the 'integrity' of panelists at the TI seminar on Wednesday, saying that the speakers are experts in their field of specialisation.

TI Director Jermyn Brooks was responding to issues raised over panelists - Deva Rodrigo, Ronnie Peiris and Ms. Anusha Coomaraswamy – who are either present or former directors of John Keells Holdings (JKH) -- and the ethics of having them speaking on a 'Building Integrity and Transparency in Business Relationships' when the company has been slated in the irregular privatisation of Lanka Marine Services Ltd.

Mr Brooks received emails on the 'credibility' of these panelists from a member of the public Amrit Muttukumaru but in an interview with The Sunday Times FT, he said this 'is clearly his (Muttukumaru's) personal view'.

He added that the whole focus of the seminar which was planned before the recent case which triggered these emails, is to bring good corporate governance and good anti-corruption standards to business here. "That's why I was asked to talk here, based on the work I am doing globally for Transparency International," Mr. Brooks said. "The other speakers as far as I understand have been asked to talk because they are experts in that particular area, corporate governance and they are good speakers. The criteria by which the seminar was put together and what it is trying to achieve is perfectly legitimate.

It has coincided with accusations and some counter accusations, which is never very helpful, but it doesn't have to do much with the seminar which is focused on helping businesses do a better job and have clean businesses."He said TI does not investigate individual businesses but instead makes recommendations to governments, businesses and civil society on how to avoid making the same mistakes over again. It is up to law enforcement to conduct the investigations. "If there are processes within institutes or government agencies to look into these accusations, then that's what needs to happen and needs to be made public."

It was also pointed out to Mr. Brooks, a former senior partner of PricewaterhouseCoopers (PwC), that the Sri Lankan affiliates of PwC and Ernst & Young have allegedly been involved in professional misconduct in the Sri Lanka Insurance Corporation (SLIC) privatization, causing massive losses to the state. To date, neither the Sri Lankan Auditing and Accounting Standards Monitoring Board (SLAASMB) or the Institute of Chartered Accountants of Sri Lanka (ICASL) has taken any disciplinary action against either firm, particularly after an ICASL ethics committee found that a prima-facie case of professional misconduct had been established against PwC and Ernst & Young and recommended that a Disciplinary Committee be appointed to resolve the matter. No such committee was ever formed.

Mr. Brooks said this is a Sri Lankan matter but that there are very strong feelings on different sides of the case. "It's always better if situations are investigated transparently and results are published," he said. "Some aspects have been investigated by institutions like the World Bank. All of this needs to be made public and it's up to the public to see if they're right or wrong. If there are mechanisms that are not being used, they should be used."

He advocated that every society needs a separation of the legislative, executive and judiciary so they have a large degree of independence and establish checks and balances. "Then you need an independent media and you need a fairly forceful civil society," he said. "Some countries also have ombudsmen or anti corruption agencies to help deal with the problem of bribery and corruption both in the public and private sector. You need a separation of the different functions within the state so that people can rely on the Rule of Law."

From a business perspective, Mr. Brooks said countries that do not do well on the TI Corruption Perception Index (CPI) need predictable circumstances and environments. "I want to know that laws will be enforced and will be respected by other people I'm doing business with. That's what businesses are looking for. What I'd like to say to all countries that aren't doing well on the CPI is that if you can have even small improvements, you will begin to attract more business investing in the country. Business will then see, for their planning purposes, that the environment becomes more predictable. Greater investment might bring more tourism and enhance the economy at large."

Given the context of the seminar, Mr. Brooks said it is essential that individual companies do what they can but can find it hard to fight a system. "We hope that groups of companies will agree to work together in what we call collective action to help each other deal with the problem. If you have groups of companies working with each other and they're not fighting with each other or competing with each other on who can bribe the most because they've agreed that's not what they are going to do, they can talk to the government or government agencies about these particular areas.

That's a way of working together which is quite effective but it's a hard road. It's rather like having quality control in a business environment. You actually have to work at maintaining that quality all the time. If you're a business, you have to maintain high standards of integrity all the time and that your people and employees also know about it."

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