Today, U.S. Deputy Secretary of Commerce Bruce Andrews underscored the importance of combating corruption in APEC economies during a keynote address at a forum hosted by the U.S.-APEC Business Council. Deputy Secretary Andrews is in Manila until Wednesday for the Asia Pacific Economic Cooperation (APEC) CEO Summit.
During the forum titled “Creating Ethical Cultures through APEC Cooperation: Lessons from the Philippines,” leaders from across the public and privates sectors exchanged ideas about how to best eliminate corruption and strengthen rule of law.
Remarks as Prepared for Delivery Thank you, Greg, for the kind introduction. I also want to thank Deloitte and the U.S.-APEC Business coalition for hosting this morning’s event. Both of your organizations truly understand how important governance, transparency, and fighting corruption are to sustained economic growth in the APEC region.
Forums like APEC provide a valuable venue for governments and business leaders to communicate and collaborate on the most pressing issues facing our private sectors.
When I attended the CEO Summit last year in Beijing, I saw firsthand how this forum can promote stronger U.S. economic and commercial ties in the Asia-Pacific region. APEC’s member economies are among the world’s most dynamic. Together, they account for 44 percent of global trade and 56 percent of global economic output.
This means that the prosperity of the global economy depends on our success – and that all of us have a shared responsibility to address threats to the long-term competiveness of our region. To that end, there are few threats as significant as corruption.
The statistics on the impact of corruption are staggering, with the World Bank estimating the global cost at approximately $1 trillion annually, and nearly 40 percent of all business executives report that they have been asked to pay a bribe when dealing with a public institution.
It is clear that corruption erodes public trust and hinders global economic growth – and the international community has tolerated it for far too long. In too many parts of the world, corruption is accepted as a necessary – if not somewhat distasteful – cost of doing business. This attitude is unacceptable, and we must do better.
As President Obama said earlier this year, “corruption is not simply immoral… It siphons off billions of dollars from the public and private sectors that could be used to feed children or build schools, or build infrastructure that promotes development. It promotes economic inequality, facilitates human rights abuses, and fuels organized crime, terrorism, and ultimately instability.” This devastating effect on both economies and businesses is why the United States continues to combat corruption in every corner of the world.
APEC is just one example of where the United States has stepped up to promote open and transparent business environments. For example, during our host year in 2011, the Anti-Corruption and Transparency Task Force was established as a permanent APEC working group.
Two years ago, my colleagues at the U.S. State Department were integral in establishing the APEC Network of Anti-Corruption Authorities and Law Enforcement Agencies, or ACT-NET. This network enhances informal cross-border cooperation between agencies responsible for investigations and prosecutions of corruption, bribery, money laundering, and illicit trade. It also facilitates the identification and return of the proceeds of those crimes.
At the Department of Commerce, we are fighting corruption through the APEC SME Working Group – which recently launched a business ethics initiative in the medical device, biopharmaceuticals, and construction-engineering sectors. This initiative is doing critical and important work, because smaller companies are the most harmed by corruption.
SMEs are critical links in the global supply chain, and many of them are forced to pay huge bribes to get a seat in the contracting process. Simply put: we can’t afford to keep SMEs on the sidelines, because they are unable to pay the price of entry.
As part of public-private partnership, our Department led the drafting of three sets of ethics principles. These principles now form the foundation of each new code of ethics established in APEC economies.
Since 2010, this initiative has enabled more than 1,000 individuals from all 21 APEC economies to participate in thirteen separate business ethics programs. For example, the construction-engineering sector held a large workshop in Manila last year and drafted a number of recommendations for moving its work forward.
One of our biggest successes to date has been in the healthcare sector. The first APEC SME Ethics Forum last year in Nanjing brought together more than 200 stakeholders from private companies, government agencies, healthcare and hospital associations, and consumer healthcare groups. Participants drafted the “Nanjing Declaration,” which charted a clear path forward for harmonizing APEC healthcare codes by 2020. They also agreed to double the number of healthcare associations with new codes by the end of this year.
Today, I am pleased to report that we have reached our goal ahead of schedule. The number of associations with new and formally adopted codes has grown from 33 to 67. These codes represent not only thousands of SMEs, but also more than 8,000 large companies. Several additional associations are expected to complete their codes by the end of the year.
By monitoring our progress through quarterly surveys, we are tracking which associations have more work to do on transparency. We also have an active network of mentors from companies of all sizes – and from across the entire APEC region – that have been working directly with local associations on code drafting and implementation.
But even with this progress, there is still more work to do. During the second SME Business Ethics Forum held here in Manila earlier this year, one of the participants said “the road to a code is never easy.” Few countries understand this better than the Philippines. Stakeholders from across the public and private sectors put in the hard work necessary to draft a new code of ethics for both the medical device and biopharmaceutical sectors. The process to develop this code was difficult, but the efforts of the Philippines have paid off. The country received this year’s Lighthouse Award for serving as a “beacon of ethical light to others.” Slowly but surely, APEC economies are learning from the example of the Philippines. Today, the APEC region is creating more open and more transparent business environments that offer the potential for heightened economic growth across the region.
Together, we are beating back corruption through judicial and law enforcement training; through sharing of best practices on prosecutions; and through capacity building, code writing, and code implementation.
We have two significant upcoming opportunities to build on that progress: at a Chinese healthcare forum for domestic stakeholders next summer, and then Third SME Business Ethics Forum in Peru next fall. I look forward to seeing how our collaboration through APEC enables us to level the playing field for companies of all sizes.
APEC has proven to be one of the best vehicles for overcoming commercial obstacles and moving us toward successful economic integration across the Asia-Pacific region.
Together – as leaders from business, government, and multilateral organizations – we can make real strides toward putting an end to corruption and bribery. Together, we can protect the integrity of our economies and strengthen the rules that govern our trade. Together, with our APEC partners, we can create a seamless, sustainable, regional economy across the Asia-Pacific.
Thank you. And now, we would like to show you a short video that pays tribute to all the APEC economies that joined the United States in combating corruption for SMEs.
Source: U.S. Department of Commerce
