Integrity System - What is it all about?

INTEGRITY SYSTEM What is it all about? UN Empowered lives. Resilient nations. WHAT IS AN 'INTEGRITY SYSTEM'? An integrity system is a comprehensive set of policies, measures and procedures established within an organization in order to strengthen the resistance of that organization to corruption. Integrity systems include structured guidelines detailing the processes for ensuring internal compliance with established regulations. The need for integrity systems to combat institutional corruption has become ever more widely recognized in recent years with the growing understanding that corruption is a problem with its roots in the ineffectiveness of institutions. Accordingly, the focus of anti-corruption efforts has shifted towards the development of internal 'integrity infrastructures'within organizations aimed at increasing their resistance to corruption. The concept of integrity systems reflects the importance of what happens within individual organizations. Developing an effective, corruption-resistant and sufficiently regulated structure is vital if the adoption of anti-corruption laws is to have any more than a negligible impact. THE BENEFITS OF INTEGRITY SYSTEMS - CORE ELEMENTS OF THE PROPOSED INTEGRITY MODEL WHY INTRODUCE INTEGRITY SYSTEMS? A CLEAR AND ACCESSIBLE ANTI-CORRUPTION POLICY Introducing integrity systerms will reap multiple benefits for the country, including increased greater institutional effectiveness, financial savings, and improved institutional reputation. Every organization should adopt a written anti-corruption policy, clearly stated and displayed so that every member of staff knows where the policy is and how it can be accessed. The anti-corruption policy should be concise and clear and shoukd reflect policy decisions. BENEFITS TO THE INTEGRITY OF THE PUBLIC SECTOR STANDARDS AND PROCEDURES IN SPECIFIC AREAS Introducing measures aimed at strengthening integrity in the conduct of business will contribute to overall integrity in the country and ensure the sustainability of the Govemment's anti-corruption efforts. Such measures recognize the fact that corruption invariably involves two parties and address the need for responsibility and accountability in the private sector. It is important to establish standards in an inclusive manner so that all staff are actively involved in the system. The standards and policies may be part of the organization's Code of Conduct. They may also be issued in separate policy statenents, procedures and standards. These standards and procedures must include the follaowing: a) Gifts, Hospitality, Entertainment, Travel. What happens with the received gifts? b) Where do you keep them? Do you donate them? c) Bribe offerings. How does the employee react when offered a bribe? d) Blackmail and threats from outside. How to resist? How to handle it? e) Political pressure. How to resist? How to inform, internally or externally? Corruption undemines the effectiveness of institutions. Reducing pressure from corruption in administration will thus result in a strengthening of organizational effectiveness. BENEFITS FOR THE INTEGRITY OF THE PRIVATE SECTOR A RISK-ASSESSMENT METHODOLOGY Introducing integrity systems inevitably entails certain costs. However, these costs will eventually be more than recuperated as a result of two important factors: It is important to have in place a risk-assessment methodology for identifying and addressing the risks of corruption within an organization. • Less losses due to internal fraud and private-to-private corruption • Greater access to foreign partners who would otherwise be hesitant to inrwest or partner with companies that present an internal regulatory risk. UPDATE AND ADAPTATION Regular reviews of the integrity system, based on hard facts and specific indicators. An annual review is the absolute minimum. BENEFITS FOR THE ECONOMY AT MACROECONOMIC LEVEL By reducing regulatory risks for foreign investors interested in doing business in the country, the introduction of integrity systems (or'compliance regimes) will be particularly encouraging to investors since none of the South-Eastem European countries or neighbouring new European Union member states have yet installed such a regime. In this sense, integrity systems constitute an important competitive advantage. STRENGTHENED EXISTING INTERNAL CONTROLS Public internal financial controls Given the current state of the world economy, lower costs for compliance, due diligence and lower regulatory risk will indeed make the country more attractive for foreign investments. DISCIPLINARY PROCEDURES REQUIRED INTEGRITY INFRASTRUCTURE All reports should be tracked, recorded and accounted for. A process should be in place for investigating every complaint. Disciplinary procedures are needed. Introducing an integrity system requires certain legal and institutional measures: · Legal measures to ensure that compliance with regulations is legally required of all compa hies • Institutional measures to ensure an effective framework for implementation in the public and private sectors • Measures to support the private sector and encourage voluntary compliance with anti-corruption law and thus increase accountability. TRAINING a. To make staff aware of specific risks and approaches to avoid and mitigate risks of corruption. b. The focus of training should be on how to comply with existing policies of the organization rather than on the law per se. c. Ethics training approaches: competency-based training to ensure that all staff know how to react in specific situations. People need help in how to recognize certain problems, how to propose solutions in line with existing organizational norms and policies, and how to explain why they adopted a certain position. THE LEGAL INFRASTRUCTURE Introducing integrity systems with legislation is the easiest and most effective solution, although self-regulation is also a possible approach. Self-regulation typically works best in professions or relatively small sectors in which members of a profession are known to each other and where there thus exists peer pressure to maintain integrity. INTERNAL REPORTING CHANNELS AND PROTECTION FOR WHISTLE-BLOWERS This country is curently considering introducing a legal obligation that may be carried out either through separate legislation or through amendments to existing laws. a. Guidance on reporting potential corruption online and a compliance officer with whom to talk to about the issue. b. Ethical advice to be provided by someone in the organization-possibly the compliance officer. c. Reporting shoukd always be confidential, never anonymous. d. Whistle-blower protection issues: - How to report to the compliance officer - Confidentiality (including not recording the name on paper) - The protection of whistle-blowers in smaller organizations is highly problematic and confidentiality is the only practical solution - Protection of whistle-blowers in larger organizations: possible relocation to another department, etc. Possibility of reporting to external bodies, including, if necessary, the media. THE INSTITUTIONAL INFRASTRUCTURE Implementation and monitoring are key factors in the success of any anti-corruption legislation. Effective enforcement of integrity systems will depend upon effective reviewing and monitoring of the integrity systems by competent central and local institutions. PRIVATE LEVEL PREREQUISITES REGULAR TESTING AND AUDITING OF THE INTEGRITY SYSTEM No law will achieve its goal if the majority of those to whom it applies are not convinced it is in their best interest to comply. This is why working with business associations, civil society and the media is such an important element of the overall strategy to introduce an effective framework for integrity. Business associations need to be c reasonable step needed to build the competitiveness of the country. The Internal Audit on should have responsibility to monitor the compliance policies/integrity system are implemented especially in terms of implementation of the risk assessment methodology. b. The State Commission for Prevention of Corruption, as a competent institution, should have a role of periodic monitoring and testing of the integrity system in place. ed that it is not an arbitrary decision by the state but a Nine municipalities fully committed to introduce integrity systems Veles, Gostivar, Strumica, Gevgelija, Aerodrom, Brvenica, Kratovo, Kocani and Petrovec This poster was produced in the frames of the'Strengthening National and Local Integrity Systems' project. The project is implemented by UNDP in cooperation with the State Commission for the Prevention of Corruption, the Ministry of Information Society and Administration and the Association of Units of Local Self-Government, with funding from the Government of Norway.