Corruption is generally defined as the abuse of entrusted power for private gain. It can take many forms that vary in degree, ranging from the minor use of influence, to institutionalized bribery. According to Transparency International, the regions with the most corruption as of 2017 are Sub-Saharan Africa, Eastern Europe and Central Asia. The Organisation for Economic Co-operation and Development (OECD) also notes that corruption can harm democratic institutions, undermine attempts by citizens to achieve higher levels of economic, social and environmental welfare, and impede efforts to reduce poverty, while the UN Guiding Principles also recognize that corruption can undermine access to remedy for victims of human rights abuse.

Businesses may cause, contribute or be directly linked to adverse human rights impacts through corruption in a number of ways. For example, in 2017, the UK Serious Fraud Office confirmed its investigation of claims that British American Tobacco (BAT) was involved in bribery and corruption in East Africa to obstruct the passing and implementation of tobacco control legislation that helped save millions of lives in the Global North. In Thailand, an International Labour Organization report on the country’s fishing sector documented allegations that corruption and complicity by government officials have enabled a human trafficking gang to routinely torture and execute migrant workers who attempt to flee.

In this context, investors should expect companies to demonstrate their commitment to respecting human rights by, for example, defining benchmarks and indicators regarding its anti-corruption initiatives and report these to the public (e.g. in its annual Sustainability report); evaluate the risk of corruption when workers, agents, intermediaries or consultants deal with public officials; and provide regular anti-corruption training for all relevant workers within the organization including procurement and sales staff.

Featured Resources: