The social and economic costs of corruption and bribery are well documented and have become a major focus of attention internationally. As important players in social and economic activity, companies are paying a high price for participation in systems and relationships that are in urgent need of overhaul. Such participation increases company expenditure, eats into profits and damages reputation, undermining a company's ability to obtain customers, high calibre staff, capital and a social 'license to operate'.  In April 2002, The Prince of Wales International Business Leaders Forum (IBLF) launched a two-year program to promote the role that business can play in tackling corruption, within the business community and between business and other sectors. With support from the UK Department for International Development (DFID) and fund managers ISIS Asset Management, and working closely with Transparency International (TI), IBLF documents and profiles emerging international good practices, and stimulates and supports corporate-led business transparency initiatives around the world. IBLF also collaborates with other companies such as Control Risks Group, NGOs and organizations, such as Global Witness, as well as the UN and World Bank. To date IBLF has been working with the private sector on the issue of corruption in Russia, Poland, Philippines, Indonesia, the Czech Republic, Hungary and Kenya by way of workshops, surveys and publications.

  With China's increasing importance to the global economy, IBLF first conducted an in-depth fact finding mission to Beijing in March 2003 to identify the main forms of corruption affecting the private sector and to gauge levels of interest of Beijing-based company representatives in taking part in a collaborative initiative to combat corruption.

  In March 2004, IBLF officially launched the initiative in Beijing with two well-attended meetings:
> First, a large conference jointly hosted with the American and the British Chambers on "Global and Chinese Trends in Business Transparency" with senior staff of both foreign and domestic companies in order to raise the overall awareness on corruption and to introduce the initiative.
> Second, a small confidential roundtable jointly hosted with the Renmin University of China on "Practical Implications for Business Transparency" with a selected group of senior executives of foreign and domestic companies in order to further identify key issues, to develop possible solutions and to decide on next steps moving the initiative forward. The group concluded that collective action is needed to address the complex issue of business transparency.

  The opportunity to share knowledge and exchange information between the multinational and domestic companies in a safe haven was warmly welcomed by all participants in the roundtable and it was agreed that facilitating this important dialogue should continue to be a priority. This paper sets out the Confirmed Action Program to establish an informal group called the China Business Leaders Forum (CBLF), taking account of the recommendations from the group.

MISSION

  To enable companies operating in China to work as partners to ensure sustainable improvement in the standards by which business is conducted.

KEY OBJECTIVES

  To improve the business conditions for all companies (both foreign and domestic) operating in China by:

> raising awareness of the changing national and international legal environment and the importance of business transparency issues;

> expanding the number of Chinese and international companies participating in the program;

> providing a framework for the exchange of knowledge and information on business transparency standards and practices between participants in CBLF;

> strengthening the capacity to assist the Chinese government in formulating and implementing the country's business laws and to reflect the continuous development in international standards; and

> developing tools to assist company managers in the implementation of business transparency standards.

KEY PRINCIPLES

  CBLF will be developed, managed and implemented:

> as a corporate-led initiative;

> by the collective action of all companies and organizations who have been identified as having a valid contribution to make and who have committed themselves to supporting the initiative;

> to provide long-term continuous improvement in business conditions; and

> in a manner that will ensure its long-term sustainability.

PROGRAM CONTENT

The program will initially have three key components which can be modified according to interest or direction from the participants:

1) Knowledge Exchange

  An opportunity will be provided to all participants to share knowledge and exchange information (especially between the multinational and domestic companies) through:

> regular meetings of CBLF (i.e., at least semi annually); and

> informal direct communication between participants.

2) Research & Information

  This will be progressed by:

> identifying the information needed to support the program effectively, which will include:

- key issues of concern on corruption within the local business community

- examples of good practices;

> identifying relevant research and information currently available and where it can be found;

> identifying any key gaps in the research and information available and drawing up a program of research to be put in order of priority;

> collecting regular data on the current state of business transparency practices;

> determining the impact the current business conditions on companies, the effect of improvements and documenting the business case for action,

> keeping abreast of international standards and local development; and

> keeping all participants in the program fully informed of the results of research and information collected.

3) Training

  Once CBLF has identified the key issues for companies on business transparency and brought together the necessary research and information, there will be the opportunity to create a suite of practical training aimed at improving the capacity to take policy to practice. Such a training program could focus on the following groups of audiences:

> managers of participating companies and organizations;

> managers of participant's joint venture partners;

> appropriate government department representatives; and

> university students.

  The training program would be designed to include a number of distinct modules, each representing a key element of business transparency, to be determined in consultation with the participating companies and organisations. For example key elements of the training component of the program might be:

> understanding the importance of business transparency and associated risks and benefits;

> development and implementation of business transparency strategies and policies;

> applicable laws and regulations and the changing international legal environment; and

> development of general management skills, including communication and the proper management of breaches of business transparency codes and practices.

Training materials would be drawn from those participating companies and organizations that have well established training programs and specialist business transparency or anti-corruption organizations.

MANAGING THE PROGRAM

In order to ensure that CBLF meets the real needs of the participating companies and organisations and to provide continuity to its activities, it is suggested that the following should be the key elements of the management of the program:

> a Steering Committee should be formed with a representative from each of the participating companies or organizations to oversee the progress of the initiative and to determine its priorities. IBLF would continue to be an advisor and facilitator of the program;

> the Steering Committee should meet as necessary (but at least semi annually) to consider the progress of the program implementation and to review reports from the Program Coordinator;

> each of the participants would agree to support the Confirmed Action Program and to assist in achieving its common objectives by voluntarily contributing knowledge and information and an appropriate amount of staff time to attend meetings of the Steering Committee and roundtables;

> IBLF would discuss and agree with each current participant the extent and nature of the contribution his or her company or organization can and should make to the program;

> there should be a Beijing-based Program Coordinator to ensure that progress is maintained. Suggested arrangements for this are set out separately in this paper; and

> it would be necessary to raise some funding to cover the costs of the program and IBLF will assist with identifying potential external sources of support. Additional support from participating companies and organizations would be welcome. The financial management arrangements of the program would be agreed between any donor, the Steering Committee and IBLF.

ROLE OF THE PROGRAM COORDINATOR

  IBLF suggests that the Renmin University of China, under the supervision of Professor Keyong Dong, Dean of School of Public Administration, would be a most appropriate organisation to act as the Program Coordinator. A Program Coordinator would normally be required to:

> draw up a detailed Schedule of Implementation of the program;

> develop and supervise the implementation of the program by way of a schedule of activity agreed with the Steering Committee;

> supervise the research activities;

> draft the training programs in cooperation with appropriate participants;

> provide regular communication on the implementation of the program to participants;

> arrange and administer the meetings of the Steering Committee and roundtables;

> liaise with domestic enterprises to help ensure their participation in the program;

> develop relationships with relevant government agencies and related organizations to achieve effective implementation of the program; and

> report regularly to the Steering Committee on the program activities.

ROLE OF PARTICIPATING COMPANIES/ORGANIZATIONS

It is envisioned that the initiative will involve initially representatives from the businesses, organizations (i.e., NGOs, local academic institutions) and eventually also the local government. Detailed discussion will take place with each of the participating companies or organizations as part of the program implementation process to identify the precise contribution that each can and should be made to the program. The intention is that the outcome should be along the following lines:

Companies

> ensure the participation of the Steering Committee meeting and roundtables;

> share codes of conduct, principles of best practices and existing management and employee training materials;

> participate in research activities; and

> assist with training by releasing an appropriate amount of skilled staff time.

Organizations

> ensure the participation of the Steering Committee meeting and roundtables;

> provide clarification on law and regulation and guidance on the government's policy framework, particularly in the area of business transparency and anti-corruption;

> share existing research and information on business transparency and anti-corruption issues;

> make available existing training materials;

> assist with identifying and implementing additional research requirements;

> provide access to domestic enterprises to help ensure their participation in the program;

> assist with training by releasing an appropriate amount of skilled staff time; and

> assist in the dissemination of information.