GoodCorporation becomes accredited validator for EITI

One of the greatest injustices of the modern world must be the on-going poverty that exists in developing countries rich in oil, gas and minerals. Not only are they poor, despite these highly valued, natural resources, they have a higher incidence of conflict and many also suffer from poor governance.

Among the causes of this disparity is the lack of transparency concerning the payments made by extractive industries to these developing countries. In 2002, the Extractive Industries Transparency Initiative (EITI) was founded, aiming to encourage greater transparency, stronger accountability and improved governance in order to promote greater economic and political stability in resource-rich parts of the world.

The EITI is currently working with 28 countries that are seeking to achieve Compliant Country Status. To do this, they must register to become an EITI Candidate Country and meet the four sign-up indicators stipulated by the EITI. A workplan towards transparency is then agreed and a two-year framework imposed. Within two years a Candidate Country must undergo validation by one of the EITI accredited validators. Once a country is compliant it must undergo validation every five years. Validation is an essential element of the EITI as an international standard. It provides an independent assessment of countries implementing the programme and the measures they have taken to achieve compliant status.

GoodCorporation has just become an accredited validator for the EITI a move that endorses our expertise in non-financial auditing and our in depth knowledge of the extractive industry. GoodCorporation achieved one of the highest scores for our application and has become one of only 14 companies worldwide to be accredited as an EITI validator.

We fully endorse and support the EITI. Transparency is essential for businesses wishing to trade with developing countries and sadly, in many parts of the world this has been hard to achieve. Aid, such as the £50bn paid each year by the OECD into developing countries is a great sticking plaster, but it will not lift these countries out of poverty. We firmly believe that the EITI is the next major step towards the eradication of world poverty as it is a tangible means of ensuring that developing countries, rich in resources, can become economically self-sufficient. We look forward to working with countries around the world to help them achieve this.

Translating is not enough: explaining corporate Codes of Conduct to employees

It’s not just marketing campaigns and brand names that need careful translation. Corporate Codes of Conduct and ethical principles have a universal vocation, so making sure they are correctly understood in each international market is essential. A quick read of any CEO’s foreword leaves no doubt as to the fact that every single employee must abide strictly by the organisation’s principles.

Most Codes are also based on - or refer to - widely accepted international norms, such as the 1948 Universal Declaration of Human Rights, or the Universal Copyright Convention of 1952.

But in order to ensure that a Code applies to all employees across the world, careful explanation is needed. However clearly stated, rules and guidelines don’t mean the same thing to everyone, or in every country.

While assessing a company’s middle-eastern operations last year, GoodCorporation came across a startling example. Our client had a clear policy of tendering out most contracts, selecting suppliers and contractors on the merit of their technical, safety and financial records. Yet, a conversation with local procurement officers went something like this:

- Employee: “We were given the Code of Conduct, translated into Arabic. The booklet is lovely, but I don’t understand what it means.”

- GC assessor: “What is it you think the Code is not clear about?”

- Employee: “Well, surely I shouldn’t refrain from buying equipment from my cousin, a local supplier? We’re supposed to look out for family, here.”

No manager had ever taken time to explain why being one’s cousin wasn’t the quality most valued in a supplier. And given the strength of local kinship ties, the clarification was necessary.

For Companies’ Codes of Conduct to be respected, they must be explained. Employees need to understand how principles apply to their particular position or tasks, and managers must show that they own and value these guidelines.

Cultural differences are not the only obstacle to factor in. GoodCorporation assessors frequently hear head office employees brush away basic questions about their company’s Code of Ethics, most often because “it’s simply common sense".

But ask them how respecting competition law affects their job, or what they think would constitute a discriminatory recruitment practice, and they will regularly look blank. Without concrete examples and scenarios, the Code will not produce the results it sets out to achieve.