12.12.2022

A high-level event “Business Integrity in Wartime: Realities and Prospects” was held

UKR

On December 8, as part of the Anti-Corruption Week 2022, the UN Global Compact Ukraine held a high-level event “Business Integrity in Wartime: realities and prospects”. It was attended by representatives of Ukrainian business, government, and non-governmental organizations. They discussed the role of business in the transparent reconstruction of Ukraine and the best practices of compliance risk management during martial law.

During the opening of the event, Tetiana Sakharuk, Executive Director of the UN Global Compact Network Ukraine, emphasized the importance of the anti-corruption direction of the organization’s activities during the war, because overcoming corruption is the key to effective cooperation of Ukrainian business with international partners and donors:

“The topic of anti-corruption is extremely relevant now and will be in demand after the war. Only those private sector representatives who provide transparency within the company now will have access to finance for recovery. When participating in international events, we always raise the topic of business transparency and integrity as the basis of the country’s recovery. It is very important to report to foreign colleagues about our achievements in this direction. Because donors won’t learn about our strengths if we don’t tell them about them through the channels they trust. The UN Global Compact is one of them.”

UNDP has been working in Ukraine since 1993. One of the directions of her work is the fight against corruption. Jaco Cilliers,  Interim UNDP Resident Representative, emphasized:

“If business does not participate in the development of the country, you will never have a sustainable society. Business should work not only on sustainable development, but also on ethical practices.”

Among the main components of business work in the direction of integrity, Jako Silje includes the following: attention to integrity within his company, joining the dialogue with society, as well as highlighting corruption violations of those with whom the business comes into contact.

Ivan Lakhtionov, Director of the Innovative Projects Program of Transparency International Ukraine, asked the question of what is virtuous during the war and how business today, by its actions, affects the understanding of the very concept of integrity. During the opening of the event, he spoke about the achievements of Transparency International Ukraine, namely, the creation of ProZorro, ProZoro. Sale” and “eHealth”.

“The creation of these projects would be impossible without the cooperation of all players – business, state and public organizations. This triangle of partnership must be inseparable in the fight against corruption,” noted Ivan Lakhtionov.

After the opening of the event, a solemn signing of the Memorandum on joint anti-corruption actions in Ukraine with Ukrainian companies, state bodies, non-governmental organizations, and associations took place. The memorandum was previously signed by 36 companies and organizations. Currently, 15 more businesses have joined the initiative: Sandoz, Arzinger, Vodafone Ukraine, TOLK Group (LLC Augusta, LLC Zakarpattiaenergozbut, LLC VEZ), Sayenko Kharenko, Senate agency, Uklon, SE Medical Procurement of Ukraine, Asters, Darnytskyi Wagon Repair Plant ” joint-stock company “Ukrainian Railway”, LLC “Maniveo quick financial assistance” and AEQUO Law Firm.

The challenges of martial law in the fight against corruption in business were discussed during the panel discussion “The role of Ukrainian business in the transparent reconstruction of Ukraine.” It was moderated by Dmytro Denkov, Editor of the Economic Truth publication. He emphasized the uniqueness of Ukraine’s experience and the incredible ability of all sectors of society to unite and work harmoniously to achieve a common goal. He also emphasized the reduction of tolerance to corruption in society, to which businesses must respond now and which cannot be lost after the end of the war.

Ukrainian companies hoping for financial support from European institutions must prove their integrity to them. Kyrylo Bondar, partner, CFO of Unit.City, an ecosystem that passed all checks to receive financial support from Europe, shared his experience in this regard. Kyrylo considers digitization and the development of technologies that minimize the human factor in bureaucratic and financial operations to be the most effective way to fight corruption.

The Director of Sustainable Development of Parimatch Tech, Maryna Hrytsenko, also believes that technology can prevent the implementation of corruption schemes. She described the ethical and compliance risks faced by Parimatch after Russia’s full-scale invasion of Ukraine:

“War is a test of whether business has a human face. We withdrew the franchise from Russia and closed the representative office in Belarus. This led to financial losses, but it is an ethical decision. In order to adapt the business to new realities and diversify, we strengthened our presence in the countries where we were before and opened new representative offices. We are still paying compensation to employees who were affected by the optimization in the spring, and we are supporting those who suffered losses as a result of Russian aggression.”

Serhii Sinchenko, CEO of Maniveo, explained what mechanisms help to maintain integrity in his company:

“We have built a clear and transparent structure for making financial decisions. All purchases and contracts with customers undergo extensive control. At the same time, we understand that a business cannot be based on control alone. That is why we build transparent relations in the company and cultivate zero tolerance for corruption. The company’s team must share common values, one of which is a life without corruption.”

Serhii Sinchenko also emphasized that the basis of Maniveo’s work is security for both business and customers. That’s why the company invests heavily in its cyber security.

Oleksandr Nikolaychyk, Partner of the Sayenko Kharenko law firm, presented the legal field in the discussion:

“Any synergy begins with an audit. Potential partners objectively assess the company in terms of whether it is suitable for cooperation. Currently, there is a wave of new requests from investors to enter Ukraine. When it comes to external financial contributions to reconstruction, a distinction must be made between charitable aid and investment. It is futile to hope that funds will be given for the reconstruction of Ukraine just like that. Investors are ready to invest money in Ukraine, which will then bring them profits, and move us forward.”

Representative of Sayenko Kharenko sees positive developments in the fight against corruption in Ukraine in recent years but emphasizes that all initiatives that have been started must be completed.

After the first panel discussion, a teaser presentation of the anti-corruption course for small and medium-sized businesses, which the UN Global Compact Ukraine has been working on for two years, took place. Project partners: Ministry of Digital Transformation of Ukraine, “Diia. Business” and “Diia. Digital education”. Senate Agency and Morph studios worked on the creative implementation of the course and video shooting. Already in February, the course will be available to the general public on the online platforms “Diia. Business” and “Diia. Digital education”. Daria Ruban, Coordinator of the Anti-Corruption Collective Action program of the UN Global Compact Ukraine, emphasized:

“The uniqueness of the project lies in the fact that this program was developed by entrepreneurs, guided by problems and challenges that are important to them. The introductory course is the first stage of the implementation of the anti-corruption collective action project. This is a product for mass use. After that, the topic of anti-corruption should be further developed and knowledge of global standards of business conduct and the opportunities that open up for honest business should be deepened.

 

The anti-corruption event ended with a discussion about the role of compliance during the war. Starting the discussion, its moderator Lana Sinichkina, Partner of the Arzinger law firm, head of the anti-corruption compliance practice, and member of the UNIC, emphasized that the fight against corruption is timely, especially during wartime. This is confirmed by the fact that, since February 24, five new members have joined UNIC, an initiative to promote ethical business, and 110 companies have applied for a special program that helps to establish compliance.

Serhii Derkach, Head of the Department of Prevention and Detection of Corruption of NAPC, supported this thesis. He noted that since the beginning of the full-scale invasion of Russia, NAPC has not stopped a single project. In addition, the work of the anti-corruption body has increased, because new corruption risks have appeared, such as crossing the border during martial law, humanitarian aid, operations with funds for the reconstruction of Ukraine, detection of Russian influence, etc.

“During the war, quick decisions must be made. All of them are related to the fact that the procedures that were prescribed in the law are either shortened, transformed, or simplified. This leads to risks. Yes, Ukraine now has to quickly rebuild and develop, so it is impossible to delay. And NAPC becomes the bridge that helps to balance quick decisions and corruption risks associated with them. This year, more than 3,000 acts of projects that were adopted by the Government passed through NAPC. We found corruption risks in a hundred acts. In most cases, the Government took into account our recommendations for their improvement.”

Olena Makarenko, Partner, Head of KPMG’s forensics group in Ukraine, believes that the fight against corruption in Ukraine during martial law increases the country’s reputation on the international stage and proves that we are consistent in our European aspirations.

“There are now more people who use war as an opportunity to optimize cash flows, because they are not sure about their future. Therefore, many of our clients, who in the first months of the war distributed their charitable aid, not taking into account the threats of corruption and the threat of fraud, have now become more attentive to risk control. This means that Ukrainian business is coming back to life,” Olena is convinced.

Svitlana Malinovska, Head of the legal department and compliance at Servier, noted that in her company the field of security has become a non-traditional field of compliance. Separate prescribed procedures in conditions of aerial threats and power outages had to be reviewed and changed.

Hlib Bakalov, Compliance Officer, authorized to implement the Anti-corruption program of NEC «Ukrenergo», told about how compliance is built in the energy sector of Ukraine today. The company’s offices and substations are the targets of attacks from Russia, and Ukrenergo employees risk their lives to provide Ukrainians with energy.

“Corruption has a direct impact on the country’s defense capability. The lack of normal regulation in this area harms us as a company that needs equipment and support from foreign partners. Russia uses rhetoric about the high level of corruption in Ukraine in negotiations with those whose help we need to harm us,” said Hlib Bakanov.

He is convinced that effective corporate governance helps the company to work in difficult circumstances.

Artem Petroschuk, Acting Director of ethics and compliance of Naftogaz of Ukraine, told about the difficult work of reducing compliance risks during the war:

“In our company, compliance goes hand in hand with ethics. We all failed to cope with the challenges that fell upon us, including at the national level. The feat of our Armed Forces shows that challenges are not met by systems, but by people who change their ethical paradigm. As a country, we have just completed a thirty-year process of breaking away from the wrong paradigm. And now we are ready to play by the clear rules of compliance that the state will build.”

The anti-corruption event was moderated by Alina Konovalchenko, Director of Operations of the UN Global Compact Ukraine.

You can watch the recording of the broadcast of the event HERE.

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