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The Role of the Private Sector in Promoting Good Governance
Ramon R. del Rosario Jr.
Chairman, Integrity Initiative and Makati Business Club
15 July 2013, Monday


Good morning, ladies and gentlemen.

I have been tasked this morning to speak about the private sector’s role in promoting good governance, specifically in the public sector. But as I will explain further on in this discussion, I would also like to speak about our efforts to advance the cause of good governance in the private sector.

CORRUPTION STILL A PROBLEM
In the Philippines, the promotion of good governance is intrinsically tied to the fight against corruption. This is probably because our country is still plagued by the ills of corruption and the culture of greed and dishonesty that have festered not just in government but in other sectors of society as well.

Certainly, we have made significant strides with the strong anti-corruption drive of the Aquino administration. To cite one outstanding example, consider the difference in the quality of service being provided by the Department of Public Works and Highways compared to just three years ago. If, before, we faulted the Bureau of Internal Revenue for turning a blind eye, whether deliberately or not, to tax evasion, today the complaint is that they are too overzealous in their tax collection efforts.

According to the results of the Global Corruption Barometer 2013 released by Transparency International just last week, the Philippines was among just 11 nations, out of 107 nations covered by the report, where there were more respondents who believed that the level of corruption decreased in the past two years than those who think it increased. In terms of government efforts to fight corruption, 40% of the 1000 respondents from the Philippines said the efforts have been effective, a substantial jump from the 28% who gave the same response in the 2010/2011 report. Those who said that government efforts are ineffective dropped to 28% of respondents from 48% two years ago.

However, let us not delude ourselves into believing that we are anywhere near to licking this problem. In fact, the same Transparency International report revealed that as much as 64% of Philippine respondents expressed that corruption remains a serious problem, and another 19% said it is a problem, versus only 17% who said it is just a slight problem to not a problem at all.

CAC AND BANTAY.PH
Clearly, we cannot expect the government, no matter how well-meaning and committed to good governance, to solve this problem by itself. If we are to make a bigger dent in the fight against corruption, we, in the private sector, realize that we must also do our part in harnessing our resources and expertise towards strengthening our institutions of governance and policing mechanisms.

Two laudable private sector efforts that directly address the promotion of good governance in the public sector are the Coalition Against Corruption and the Bantay.ph.

The Coalition Against Corruption is a broad multisectoral alliance that includes the Makati Business Club, Ateneo School of Government, Barug Pilipino, Bishops-Businessmen’s Conference for Human Development, CBCP-NASSA, CBCP-Laiko, CODE-NGO, Integrated Bar of the Philippines, Management Association of the Philippines, NAMFREL, and Transparency and Accountability Network. Since 2004, the CAC has been using volunteerism, monitoring, and constructive engagement as effective strategies for promoting public participation in governance and ensuring the proper use of public funds.

Through the support of the Makati Business Club and the Partnership for Transparency Fund, the coalition has been able to implement projects that focus on reforms in government procurement and the delivery of essential public services. CAC volunteers have served as observers in government biddings and monitored the delivery of textbooks by the Department of Education, the procurement and delivery of medicines by the Department of Health, the usage of the internal revenue allotment by barangays, the use of pork barrel funds by congressmen, and the implementation of the conditional cash transfer program.

Meanwhile, Bantay.ph, which is set to have its full launch this coming Thursday, is an educational and volunteer platform supervised by the CAC. Similar to the CAC, it promotes youth and citizen engagement in monitoring frontline government services and upholding good government service.

The first phase of Bantay.ph is focused on Anti-Red Tape Act, or ARTA, education and monitoring. Bantay.ph taps information and communications technology and the energy of our youth in solving the problem of bureaucratic red tape. Its website, www.bantay.ph, contains user-friendly information about the ARTA and frontline government services in the form of posters, artwork, videos, and blogs.

The Civil Service Commission deputizes Bantay.ph’s student volunteers to go to different government agencies to monitor ARTA compliance, report violations, and do advocacy work in their schools and chosen communities. These volunteers come from Bantay.ph’s official school partners, such as the University of the Philippines–National College of Public Administration and Governance, De La Salle University, and the Ateneo de Manila University. By engaging these students, who may someday take on positions of influence in government, business, and society, Bantay.ph hopes to give the youth an opportunity to take an active role in governance as early as now and to appreciate what constitutes good governance. The vision of Bantay.ph is a Philippines where citizens choose to not pay bribes and where civil society is actively engaged in monitoring government agencies and demanding accountability from them.

INTEGRITY INITIATIVE
As chairman of the Makati Business Club, I can say that we are committed to supporting these projects and believe that we are making a meaningful contribution in the promotion of good governance in the public sector. At the same time, there has been a realization that we need to do more. When President Aquino came into office in 2010 and called on all Filipinos to help him in weeding out the roots of corruption that had become so embedded in our institutions, not just in the public sector but also in the private sector, we in the business community felt it was our obligation to heed this call. And more importantly, we felt it was time to do some house-cleaning of our own. The private sector needed to clean up its own ranks because, certainly, many acts of corruption in the public sector do involve, voluntarily or involuntarily, actors from the private sector. Furthermore, if we wanted our efforts to be truly effective and sustainable, we felt it had to be at a level of a cultural reorientation founded on the basic values of honesty, transparency, and fairness. Then harnessing the best practices of good corporate governance, we had to provide the concrete framework and practical systems that will nurture a culture of integrity in the private sector.

Thus was born the Integrity Initiative. Launched in December 2010, the campaign is being spearheaded by the Makati Business Club, the European Chamber of Commerce of the Philippines, the Management Association of the Philippines, the American Chamber of Commerce of the Philippines, the Asian Institute of Management, and the Financial Executives Institute of the Philippines. In addition, an Integrity Consortium, composed of more than 30 business and industry associations, local and foreign chambers of commerce, and other professional organizations, has been instrumental in the expansion of the campaign.

We started this project by getting companies to sign an Integrity Pledge. The pledge is an expression of the companies’ moral obligation to uphold ethical business practices and to support the collective effort to build a culture of integrity in the country. From 100 signatories at the start of the campaign in 2010, our ranks have grown to more than 1,700 signatories, including 32 heads of government agencies. And we are honored to claim the Development Bank of the Philippines as one our signatories.

After signing the pledge, the signatories adopt a Unified Code of Conduct for Business to guide them in operationalizing their Pledge commitments. A critical next step is the Integrity Self-Assessment process, where signatory companies evaluate their own integrity practices to gauge their areas of strength and identify the areas for improvement. Results of the self-assessment will then be validated by a third party in the Integrity Validation process. Looking ahead, we hope that this validation system can develop into a certification system for companies that operate cleanly and ethically.

At this point, on behalf of the Integrity Initiative, I would like to express our gratitude to the DBP for volunteering to be one of the government institutions to undergo the pilot testing of the Integrity Validation system last June. Moreover, let me congratulate you for getting an “Advanced” rating, which confirmed your Integrity Self-Assessment results that integrity practices have already been mainstreamed in your organization. Such efforts as DBP’s to uphold best practices and observe good corporate governance are the building blocks of the Integrity Initiative’s ultimate objective of a culture of integrity in the country.

We are not just an anti-corruption campaign; we advocate that our signatories commit not only to zero tolerance for corruption but also to pay the right taxes, follow labor laws, respect the environment, and favor long-term sustainable development over short-term goals. By striving to be clean and ethical in our organizations, and equally requiring our partners, clients, and suppliers to do the same, we hope to attain a critical mass of supporters and create a solid constituency for the integrity and good governance agenda not just in the private sector but in government as well.

This where organizations such as the DBP can make a big difference. As a government-owned and controlled corporation, you are able to easily bridge the gap between the private and public sectors. You are in a good position to take the best practices of the private sector and see how these can be applied in public governance. By pursuing your corporate governance reform programs and active participation in the Integrity Initiative, by showing that it is possible to have a well-managed government entity with good controls over financial, procurement, and project management decisions, by demonstrating that one can be effective in preventing corruption on a day-to-day basis by practicing good management, you are setting an excellent example that will hopefully inspire and push other public service organizations to do the same.

Thus, in closing, let me just express again my congratulations to the DBP for the high standards of governance that you have put in place, and on behalf of the Integrity Initiative, I look forward to continue working with you in making a culture of integrity and good governance the foundation of a strong economy and better future for our people.

 
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