Jordan Strategy Forum calls for establishing ‘well-designed’ code of conduct to fight corruption

AMMAN — The Jordan Strategy Forum (JSF) has recently published a study titled “Code of Conduct: Gateway to Anti-Corruption”. 

The study indicated that corruption is considered one of the main problems to sustainable economic, political and social development worldwide, according to a statement from the JSF on Wednesday.

It is estimated that the cost of corruption equals more than 5 per cent of global GDP or $2.6 trillion, with over $1 trillion paid in bribes each year, and if unrestrained, corruption will affect societies in a multitude of ways, the statement said citing Organisation for Economic Co-operation and Development and World Bank figures.

The study divided the cost of corruption into four main categories: economic, environmental, political and social, according to the IMF and Transparency International.  

The possible effects of corruption according to the study include: A decrease in the efficiency of aid, exposure of the country to currency crises, greater inequality and high incidence of poverty, loss of government’s legitimacy and public trust, lower investment, natural resource depletion and destruction of ecological systems, lesser economic growth, and shift of government spending from more productive to less productive activities.

It was also indicated within that if corruption is unchecked, private business could also turn into a “force that undermines fair competition, stifles economic growth and ultimately undercuts its own existence”. 

The statement also cited the World Economic Forum which stated that corruption increases costs by up to   10 per cent on average worldwide. According to the World Bank, 53.2 per cent of companies in the MENA region found corruption to be a major obstacle to doing business. 

According to the study, corruption disproportionally affects innovation for start-ups, as they are subject to more regulations than established business. This in turn affects productivity negatively, which leads to less profit. 

JSF’s study also indicated that businesses profit from anti-corruption measures and corporate transparency, as this will attract customers, investors, employees and suppliers who are concerned about risk as well as those who value ethical practices. 

These two commitments convert into three main tangible benefits: cost savings, risk reduction and sustainable growth, according to the study.

As per JSF analysis, the Corruption Perception Index’s (CPI) top five countries are Denmark, New Zealand, Finland, Sweden and Switzerland. 

Higher-ranked countries tend to have greater degrees of access to information, press freedom, strong standards of integrity for public officials and independent judicial systems. 

For the MENA region, some of the top ranking countries in the CPI 2016 are the UAE (#24), Qatar (#31), Jordan (#57) and Saudi Arabia (#62). 

The failure to fight corruption explains the sharp drop of most Arab countries in the index with 90 per cent of them having scored below 50, which is a failing grade, including Jordan which scored 48 for CPI 2016.

The JSF study showed that in Jordan’s case, the United Nations Convention against Corruption  was ratified in the year 2005, and the Kingdom implemented laws to address corruption. These laws include the Penal/Criminal Code (#16, 1960), Integrity and Anti-Corruption Act (#13, 2016), Anti-Money Laundering Act (#46, 2007), Right to Access Information Law, Economic Crimes Act (#11, 1993), and the Law of Illicit Enrichment (#21, 2014).

JSF said that Jordan has made “progress” in setting up a legal and institutional framework to combat corruption. Nevertheless, an effective anti-corruption programme for Jordan requires co-operation between the public and private sectors. 

The American Chamber of Commerce published in 2016 a framework code of conduct for the private sector to be approved by the Jordan Integrity and Anti-Corruption Commission. Unfortunately, these initiatives have not been enough in significantly reducing corruption, according to the JSF. 

The study attributed the failure of reform efforts in Jordan to: Cultural resistance; lack of professionalism in HR management; lack of services and auditors that can help companies adopt a code of conduct, and lack of knowledge and awareness for the process of certification; lack of stakeholder involvement to help promote the code (E.g. media, business, academic, NGO); and the lack of a uniform ethical code.

The study suggested a holistic approach to addressing corruption by: Building transparent systems of governance, strengthening the capacity of civil society and the media, improving public integrity, strengthening the personal ethics of individuals, and challenging social norms that encourage corruption.

The study concluded that creating and establishing a well-designed code of conduct is vital to fight corruption by creating an “inclusive culture”. 

It also helps companies enforce and implement legal as well ethical policies and procedures for all kinds of decision-making, the study noted. 

The research also pointed out a “growing need” for certified compliance programmes in Jordan. These will not only benefit businesses locally but will also be greatly beneficial for local companies that intend to work with international businesses, the study suggested.