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Cross-fertilization of integrity principles – Anticorruption experts: Fighting corruption and bribery

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By Francesco Clementucci*
Published on Tuesday November 5, 2019

 

Integrity principles do circulate and fertilize other actors and sectors. This inter-models fertilization takes place through processes that are entirely domestic to the Italian legal system. The anti-corruption measures established under the “Severino Law” are clearly inspired by the compliance programmes system set under Legislative Decree n. 231/2001. This instance of “horizontal fertilization” within the Italian legal system is further exemplified by observing how the programme strategy first originated in the banking and finance sector, later spreading to other fields of private economic activity until it was finally generalised by decree 231 of 2001.

Concerning “vertical cross-fertilization”, we know how national anti-corruption strategies are developed based on principles originating in the international context. This vertical communication operates bi-directionally: from the national stage towards international fora, through the many working groups attended by national representatives; and by the circulation of best practices at the international level that tends to develop a process of harmonisation of national strategies, with remarkable levels of fertilization. Good national practices, once elevated to the international level, migrate back into the domestic contexts in an enriched (verified) form. This is a self-reinvigorating process of cross-fertilization. ISO 37001 certainly belongs to this type of « bidirectional fertilization » model. It enshrines good national standards whose main features, through a complex process of filtration, have been embraced and enshrined at the international level, and then descend into the national context through recognition by national ISO agencies (i.e. UNI in Italy).

Cross-fertilization occurs among private actors too. Any instrument that can improve trade (in terms of the size, openness, speed, ease or depth of commerce) facilitates “integrity cross-fertilization”. Global markets reduce distance among different actors and increase the range and reach of cross-integration. Similarly, the market facilitates the circulation of positive integrity standards and, at the same time, appreciation and penetration into other legal systems and organizations. Internally (i.e. inside the organization), the size, impact and speed of fertilization will depend on the number, type of activities and interference level with other departments. Therefore, “endo-fertilization” will depend on the number (quantity) and openness (quality) of interactions among offices of one and the same organization. Externally, one organization may spread effects outward, to the economic actors that consult for, cooperate with, and supply to the (integrity compliant) organization. Here cross-fertilization develops towards non-compliant actors (i.e. consultants, partners, suppliers or service providers) having to fear the termination of their business relationship, unless they accept to comply with the compliant organization’s standard. Outwardly, integrity standards push partners towards compliance under the threat of aggressive de-risking (meaning termination of business relations). In other words, each organization that decides to be certified ISO 37001 automatically becomes a (positive) fertilizer to other organizations or terminates relations with non-compliant entities.

Concerning the direction of the fertilization, the organization spreads positive standards outward, in a by-directional manner between peers, only from best to worst (but not from worst to best). In other words, horizontally the good standard of integrity goes from one company to the other, and vice-versa. However, vertically the standard only goes from the top (strong compliant) towards the bottom (weak non-compliant), and not the other way round. This is because, in a process of de-risking, the integrity-compliant entity will not seek new business relations  (or will terminate ongoing ones) with non-compliant companies. Understanding the sense and type of circulation is very important in order to fully assess and appreciate the true importance of the corruption prevention mechanism. It is unquestionable that ISO 37001 has been conceived, from the start, in a way to trigger positive fertilization effects. ISO 37001 addresses bribery concerns both within the organization (either horizontally – among functions and departments – and vertically – among its employees) and outside the entity (to and from its business partners at large, including consultants, suppliers and clients). The opportunities of fertilization are represented by the contacts with other departments. The size and speed of fertilization, as well as its impact, will depend on the number, type of activities as well as interference rate with other departments. Indeed, the fertilization range and depth are directly proportional to the number and openness rate of the exchanges (in terms of communications, collaborations or influence) among departments. It is equally noteworthy that the movement of ISO 37001 (and its cross-fertilization effect), is greatly facilitated by its “regulatory independence” and completeness: like other new-generation ISO standards, 37001 is self-sustained, i.e. it makes no reference to other subsidiary regulations. This lightness is a remarkable improvement and a boost to the free move of the standard, through simple contract clauses.

Concerning the reasons and drivers for cross-fertilization, they are closely linked to self-defence and survival. Distorted competition represents a dysfunction of the market, which brings uncertainty of risks and rules and therefore higher costs. Economic actors must be able to foresee the consequences of their investment, and they cannot survive long-term uncertainty. They can mitigate the risk by either “conquering” the market (meaning developing dominant size entities) or creating a level-playing field (by engaging and promoting corruption-adverse rules and models). In this latter case, actors are strongly interested in having all other competitors follow the same rules as they do. They may choose to lobby  decision and policy-makers in passing regulations that increase market integrity. Also, they can develop peer pressure aimed at promoting, supporting and rewarding integrity-strong partners or (on the other hand) demote, marginalise and discriminate integrity-weak actors. The driver for cross-fertilization is thus not altruism but rather the contrary: economic actors hold a strong interest for the creation of an integrity-compliant market, in order to reach certainty, mitigate the risk and, ultimately, reduce the cost of doing business. In this way, the pursuit of selfish individual economic interests will have the (unexpected but necessary) honourable effect to establish a clean, integrity-strong economic space.

 

*This blog reflects the view of its author only. For a more extended description of cross-fertilization, including its functioning in the public sector, see « Assessment of the Effectiveness of Anti-Corruption Measures for the Public Sector and for Private Entities », in: Italian Journal of Public Law, Volume 11, Issue 1(2019, pp. 268-301, available at:
http://www.ijpl.eu/assets/files/pdf/2019_volume_1/10_Parisi.pdf .

 

 

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