PREAMBLE

The Pacific Basin Economic Council (PBEC) is an association of senior business leaders representing more than 1,200 businesses in 20 economies around the Pacific. PBEC members account for more than US$4.25 trillion in global sales and employ more than 10.9 million people. The unprecedented scope and leverage of PBEC’s membership ensures that its recommendations and policy positions are drawn from a broad and balanced reservoir of international business knowledge. As the oldest regional private sector organization encompassing the Pacific Rim, PBEC serves as a forum through which business leaders can create new business relationships, exchange views with government officials, and produce recommendations on key business issues.

PBEC advocates the rapid and effective liberalization of trade and investment in the Pacific economies, as the key to maintaining growth, promoting development and increasing living standards in the region. Experience has demonstrated that the benefits of trade and investment liberalization can be fully realized if transactions between business and government are consistently honest and transparent.

Integrity, transparency, and accountability in the awarding of government contracts and permits, in tax matters, in environmental and other regulatory matters, and in judicial and legislative proceedings are necessary elements for a productive economy and an open and predictable trade and investment climate. Integrity, transparency and accountability strengthen the efficient management of enterprises, facilitate the operation of open, competitive markets, and bolster consumer welfare.

Moreover, achieving these goals will improve the efficient allocation of scarce investment capital, augment support for international financial institutions and aid programs that are vital sources of development funding, and increase public confidence in, and support for, the procedures and institutions of both business and government.

Recognizing the strong linkage between good governance and economic growth and the need for prompt and effective action, PBEC advocates zero tolerance for infringements on transparency in business-government transactions with a view to eliminating corruption in all its forms. PBEC is heartened by the support for this stance on the part of the many governments, international organizations and business corporations which have taken meaningful steps to promote integrity, transparency, and accountability in business transactions with government, as follows;

The United Nations General Assembly demonstrated the political will to meet this challenge in its 1996 Declaration Against Corruption and Bribery in International Commercial Transactions, wherein Member States commit themselves to take effective and concrete action to combat all forms of corruption, bribery and related illicit practices.

The World Bank revised its procurement rules with explicit requirements for a high standard of ethics in procurement and execution of contracts.

The Organization of American States’ InterAmerican Convention Against Corruption entered into force in 1997 and recognizes the primary role of national governments in ensuring enforcement of relevant domestic laws and promoting regional cooperation including curbing transnational bribery.

The Organization for Economic Co-operation and Development (OECD) members plus five non-OECD members signed a convention in December 1997 agreeing to criminalize the bribery of foreign public officials and agreed to implement this convention by the end of 1998. OECD members have also agreed to eliminate tax deductions for bribes.

PBEC calls upon governments to re-double their efforts to ensure complete integrity, transparency and accountability in all business-government transactions, and to vigorously enforce their anti-corruption statutes. Governments must recognize that transparency is an important building block for economic growth and development.

Specifically PBEC urges each member economy to:

consider means to enhance transparency in procurement, including adherence to a regional or WTO Agreement on Transparency in Procurement

ensure that the highest standards of honesty and efficiency are practiced by public officials and that each member economy strengthen the enforcement of domestic laws to achieve this goal.

sign on and implement the OECD convention

PBEC believes that these important public sector initiatives should be complemented by a corresponding private sector undertaking. It notes the contribution of the International Chamber of Commerce, which in 1996 issued Revisions to its Rules of Conduct on Extortion and Bribery in International Business Transactions, calling for mutually supportive action by governments and the business community; Transparency International, which promotes Standards of Conduct and has encouraged private sector cooperation with governments in combating corruption in international business transactions; and the VIIIth International Conference Against Corruption, which issued the Lima Declaration in 1997, calling for action at the international, national and local levels.

Encouraged by the public sector commitments and guided by the private sector initiatives, PBEC articulates the following Charter on Standards for Transactions between Business and Governments. To promote integrity, transparency and accountability in transactions between enterprises and public bodies, PBEC adopts this Charter of Transactions Standards and encourages member companies to adopt and conform to it.

1. Respect for Laws and Standards

All business enterprises should conform to the relevant laws and regulations of the countries in which they are established and in which they operate.

2. Improper Inducements

a) No business enterprise should directly or indirectly offer, promise or make a gift, or extend any other advantage or benefit, whether or not monetary, to any public official or his relatives or business associates to induce any actions or inaction by that official or other officials of the government for express intention of offering or soliciting a business advantage. Demands for such improper inducements should be rejected. However nothing here is intended to prevent bona fide and reasonable expenditures for ordinary marketing and promotion of goods and services.

b) No business enterprises should utilize techniques, such as sub-contracts, purchase orders or consulting agreements, to channel, directly or indirectly payments or other benefits to government officials, with decision-making responsibility or influence, or to their relatives or business associates for the express intention of offering or soliciting a business advantage.

3. Agents

Business enterprises should take reasonable measures to ensure:

a) that any payment made to any agent represents no more than an appropriate remuneration for legitimate services rendered by that agent;

b) that no part of any such payment is passed on by the agent as an improper inducement or otherwise in contravention of the principles of this Charter; and

c) that they maintain a record of the names and terms of employment of all agents who are retained by them in connection with transactions with public bodies or State enterprises.

4. Financial Recording and Auditing

Business enterprises should:

a) assure that financial transactions be properly and accurately recorded in appropriate books of account available for inspection by their boards of directors, if applicable, or a corresponding body, as well as auditors;

b) assure that there are no "off the books" or secret accounts, nor may any documents be issued which do not properly and accurately record the transaction to which they relate; and

c) establish independent systems of auditing in order to bring to light any transactions which contravene the principles of this Charter. Appropriate corrective action must then be taken by senior corporate management of the business enterprise.

5. Responsibilities of Enterprises

The board of directors or other body with ultimate responsibility for the business enterprise should:

a) take reasonable steps, including the establishment and maintenance of proper systems of control aimed at discovering and preventing any payments being made by or on behalf of the enterprise which contravene the principles of this Charter;

b) periodically review compliance with these principles and establish procedures for obtaining appropriate reports for the purposes of such review; and

c) take appropriate corrective action against any director or employee contravening these principles.

6. Political Contributions

Contributions to political parties or committees or to individual politicians may only be made in accordance with the applicable law, and all requirements for public disclosure of such contributions shall be fully complied with. All contributions of corporate funds for political purposes must be reported to senior corporate management.

7. Company Codes

Business enterprises should develop and implement their own codes of conduct consistent with this Charter and with applicable laws in their economy. Such codes may usefully include examples and should enjoin employees or agents who find themselves subjected to or pressured for improper inducements immediately to report the same to senior corporate management. Companies should develop clear policies, guidelines, and training programmes for implementing and enforcing the provisions of their codes.

Endorsed by the PBEC Steering Committee 05/24/98
Adopted by the PBEC Board of Directors 05/24/98