Promoting Ethical Business Practices: Insights from International Commission Discussions

1.       A pragmatic approach to Business Integrity.

ICC is synonym of neutrality, this is also the case in its new guidance on combating corruption. Not calling specific laws, but creating simple, easy to use tools to support organisations that want to do business with integrity.

Some of the key principles of the new guidelines are:

-          Cultivating a Culture of Compliance

True compliance begins with fostering psychological safety rather than relying solely on procedural frameworks. Embracing open dialogue, even provocatively, such as through roundtable discussions facilitated by ICC, is crucial for nurturing this culture. The ICC rules serve as foundational principles applicable to organizations of all sizes, particularly beneficial for those lacking dedicated compliance teams.

A robust compliance program commences with comprehensive risk assessment and awareness initiatives. Providing employees with adequate training to grasp the significance of rules and contractual clauses is essential.

-          Encouraging Speaking Up

Demonstrating the value of speaking up is paramount. Implementation and communication of lessons learned not only showcase commitment but also serve as a catalyst for success. Transparency in addressing issues is vital; organizations without visible concerns often raise suspicions. Efforts should be made to minimize the tendency to hide and cut communication when a complaint arise, ensuring a balanced approach.

Reports often reach untrained line managers, leading to silence, flawed investigations, and inaction, ultimately undermining the reporting system. Emphasizing the importance of reporting basic information and the subsequent mediation or solutions implemented is essential to foster best practices and organizational growth.

-          Transcending Departmental Silos

Avoid confining reporting solely to the compliance department, as this may lead to preaching to the converted. Instead, make Integrity everyone’s business and encourage all levels of the organization by facilitating comprehensive awareness and action.

2.       Responsible Market Disengagement

Market disengagement is  a painful decision that necessitates a thoughtful and responsible approach to uphold ethical standards and mitigate adverse impacts on stakeholders.

Trade plays a pivotal role in driving societal change, underlining the importance of remaining engaged in sensitive markets. However, strategic, politic or economic considerations can lead to a necessary exit of a market. In this case, prioritizing ethical and humanitarian concerns is key. ICC is developing a framework that will facilitates responsible disengagement, ensuring a seamless transition while minimizing adverse impacts on communities. By taking into account the broader societal implications, organizations can reach people that are often left behind and difficult to identify.  Responsible disengagement will enhance future reentry prospects.

Adopting a holistic supply chain perspective is paramount, accounting for not only the financial costs incurred by companies but also the broader societal and environmental impacts. These considerations extend beyond monetary concerns, encompassing the intricate human dimensions that are often challenging to quantify but profoundly significant in ethical decision-making.

3.       Supply chain responsibility

The Corporate Sustainability Due Diligence Directive (CSDDD) marks a pivotal shift towards addressing social and environmental concerns within supply chains. Upon adoption, a two-year transposition period ensues, with Q2 2026 as the best-case scenario for implementation.

Enforcement mechanisms are stringent, featuring substantial fines and liabilities for adverse impacts. Notably, director duties are excluded from this new version, focusing instead on upstream and end-of-life responsibilities rather than sales activities.

There is a clear overlap between the CSDD and the Corporate Sustainability Reporting Directive (CSRD), so elements already have to be implemented by large corporates. Despite concerns, it's crucial to note that the CSDD isn't driven by an anti-business agenda from the EU; rather, it stands as a beneficial initiative aimed at enhancing good corporate practices for the greater good of both companies and society.

4.       Human Rights in the realm of Artificial Intelligence

The United Nations has embarked on a decade-long process to draft a mandatory treaty on human rights and Artificial Intelligence, with robust representation from the International Chamber of Commerce (ICC). Under the stewardship of the High Commissioner, Lene Wendland, this initiative aims to address pressing human rights challenges in the digital era.

A significant project emerging from the UN is B-Tech (Business Human Rights in Technologies), focusing on the ethical use of technology and its potential impact on human rights. By examining downstream effects, particularly in terms of privacy rights and freedom of expression, B-Tech seeks to ensure that technological advancements uphold fundamental human rights principles.

Emphasizing the right to privacy and freedom of expression, B-Tech's work aligns with broader initiatives such as those facilitated by the Organisation for Economic Co-operation and Development (OECD). Through platforms like oecd.ai, stakeholders can engage in discussions and initiatives aimed at safeguarding human rights in the digital landscape.

5.       The World Bank, multilateral cooperation in combatting corruption

Integrity and compliance stand as cornerstone priorities for the World Bank, with a dedicated focus on entities prohibited from conducting business with the institution, overseen by the Integrity Compliance Office. To foster a culture of accountability and transparency, it's imperative to transition from a "speak up" to a "listen up" mindset, encouraging dialogue and demonstrating unwavering commitment.

This approach seamlessly aligns with the efforts of ICC Netherlands and the Week of Integrity, emphasizing transparency in reporting as a vital component. Protection for whistleblowers is paramount to ensure a safe reporting environment.

Discussions underscored the necessity for businesses to take ownership of compliance, moving beyond periodic audits to assume responsibility for their supply chains. Effective communication between companies and governments is essential to align interests and address integrity risks collaboratively.

Integrity should be approached from a risk-based perspective, recognizing that isolated incidents rather than systemic issues often drive breaches. Companies demonstrating transparency and proactive issue resolution should be prioritized over punitive measures.

Simplicity is key in establishing business rules: avoid bribery and emphasize reporting, while the rest remains grounded in risk assessment. This ethos, aligned with SDG 16 and the UN Global Compact, particularly benefits SMEs by streamlining compliance efforts.

Supply chain due diligence and human rights have long been risk factors for companies, often relegated to the back burner due to complexity. Organizations must adopt an integrated approach to due diligence, focusing on proactive identification and resolution of issues rather than mere avoidance.

With evolving regulations, especially in the EU, consumer and NGO expectations are high, necessitating a risk-based approach tailored to each organization's capabilities. ICC's expertise in ex ante risk mitigation, honed over a century, remains instrumental in facilitating international trade while ensuring ethical business practices.

Multilateral cooperation is paramount in the fight against corruption. Organizations like the OECD and the ICC collaborate to promote integrity and compliance globally, leveraging peer pressure and shared learning to combat corrupt practices. By uniting in this endeavor, businesses can uphold ethical standards across borders.

In conclusion, ethical business practices form the foundation of sustainable trade. By embracing simplicity, transparency, and collaboration, organizations can navigate the complexities of compliance while upholding their commitment to integrity and responsibility. As businesses strive to meet evolving regulatory expectations and societal demands, ethical conduct must remain at the forefront of their operations. By adhering to ethical principles, businesses can not only ensure compliance but also contribute to a more ethical and prosperous future for all stakeholders.