Siemens AG recently announced the first anti-corruption projects that will receive financing from the US$100 million integrity initiative to promote clean markets. This initiative is part of the World Bank-Siemens AG comprehensive settlement that was agreed on July 2, 2009.
An initial tranche of US$40 million will be distributed to 30 initiatives including “Integrity and Transparency in Business Initiative for Vietnam” (ITBI) implemented by Vietnam Chamber of Commerce and Industry (VCCI).
Vietnam Business Forum had an interview with Mr Erdal Elver, President and CEO of Siemens Ltd. Vietnam to learn about its integrity initiative.
Why does Siemens spend US$100 million for this initiative?
Together with the World Bank we want to promote integrity and fair competition worldwide. With the selection of the projects for the Siemens Integrity Initiative we have taken the first important step in this direction.
The Siemens-World Bank Settlement Agreement was concluded on July 2, 2009. As part of the Settlement, Siemens agreed to pay US$100millionover the next 15 years to support organizations and projects combating corruption and fraud through collective action, training and education.
The World Bank Group will have audit rights over the use of these funds and veto rights over the selection of anti-corruption groups or programs receiving funds.
What kind of projects are you looking for to support?
The Siemens Integrity Initiative is focused on the fight against corruption and fraud in the following 2 project categories namely Collective Action, and Education & Training. The focus must be on clear business impact in Siemens markets and sectors, with the objective of creating fair market conditions for all market participants.
How neutral and fair was the selection process?
Our selection process has been solid as a rock, fair and transparent. The due diligence process involved some 150 Siemens experts, from regions, tax, legal, corporate finance - and we presented the concept and our selection to the World Bank in personal meetings.
The World Bank exercised its Veto Right on some of the projects, because they thought the deal would be to close to either Siemens or the World Bank.
How many applications did you receive?
Reaction to first funding round was by far above expectations regarding number, quality and relevance of applications (almost 300 projects with a financial volume of more than US$600 million were submitted. If that had been an IPO we would have been oversubscribed by factor 15). Many reputable as well as recognized global and local organizations and institutions also applied.
We had a good regional and country balance: applications from more than 66 countries; high-risk countries, BRIC and MENA are well covered. Both main categories were addressed: 60 percent Collective Action vs. 37 percent Training & Education.
You spend US$40 million in the first tranche. What about the remaining US$60 million?
The next funding round is expected to be started not before 2012 with follow-on financings and new financings. Details and the announcement will be made public on the Siemens website and through a press release.
Why is Collective Action important for Siemens?
Collective Action is about building alliances against corruption. It is an important lever for clean markets. It levels the playing field for all market participants to ensure fair competition.
Siemens - a leader in sustainability and compliance – is one of the main forces behind Collective Action.
Collective Action has achieved breakthroughs in the growth markets of the BRIC states.
Countries such as Italy will in future only undertake large public projects with integrity pacts.
Reported by Lan Anh
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Mr Nguyen Quang Vinh, SDforB's Director General
Integrity and Transparency in Business Initiative for Vietnam (ITBI) is the programme implemented by Office for Business Sustainable Development (SDforB) of Vietnam Chamber of Commerce and Industry (VCCI). ITBI has received support from all relevant stakeholders including the governmental agencies, Embassies of Sweden and the , international organizations and a group of multinational companies. It has received the most recent financial support of US$ 0.5 million from Siemens Integrity Initiative.
ITBI aims to bring companies operating in together to work towards improving integrity and transparency in the way business is conducted. It is expected that the key objective will be achieved by focusing on three main activities. Initially, the project emphasizes implementing the research and development of technical and communication tools to raise awareness and understanding of transparency as a concept and the need for improved business practices. In parallel with raising awareness, it encourages enforcement of reforms through promoting multi-stakeholder consultation and dialogue and policy advice on transparency and integrity. Finally, it promotes positive change in business practice through the development and implementation of training programs.
Mr Nguyen Quang Vinh, SDforB’s Director General, said in nearly a year of operation, ITBI has delivered practical activities such as workshops, development of publications and technical tools and on-going research to raise awareness of the need to improve business standards. What is more important is to identify priorities and key areas that the programme should focus on i.e. research, development and inventorying technical and training tools.
The results of the first year will provide momentum for the programme to develop practical activities that will deliver real value to companies as the base for sustainable improvement of transparency and integrity in doing business in.
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Vietnamese
