Collective Action Agreement in the Electrical Power Transmission Industry in Argentina
ABB S.A., Alstom Grid Argentina S.A., Arteche S.A., Lago Electromecánica S.A., Siemens S.A., Tubos Trans Electric S.A., Center for Governance and Transparency - IAE Business School (Facilitator)
This initiative addresses anti-corruption and integrity standards in Argentina’s power generation and transmission industry. The Collective Action agreement includes ten principles to which members must adhere, and also features the services of a neutral facilitator.
In late 2011, one of the main power generation and transmission industry players approached the Center for Governance and Transparency in order to explore the possibility of starting a partnership with other competitors, whom they regarded as sharing similar concerns with regards to integrity problems. The Center accepted the challenge, extending an invitation to attend a first exploratory meeting with the CEOs of the five main companies present in the sector, which accounted for a sizeable share of the market, large and small multinational enterprises, and a local company. There was consensus amongst the companies present that joint action was needed if things were to change.
The membership of the initiative is formalized in a written document, which was signed on 01 June 2012. An additional company, Tubos Trans Electric S.A., became part of the agreement after the first version was signed. The initiative is open to the participation of other companies, who may join upon invitation from one of the participating members or from the facilitator (Center for Governance and Transparency).
Anti-corruption, anti-bribery, and integrity standards in the power transmission industry in Argentina
The goals of this Collective Action agreement include respecting the following ten corporate integrity standards:
- Conducting their business operations in a fair, honest, transparent manner, strictly abiding by all current Argentine laws, as well as the principles laid out by the UN Convention Against Corruption and the Inter-American Convention Against Corruption
- Refraining from paying any kind of bribe (direct or indirect bribery)
- Refusing to accept bribes or to let others accept bribes on their behalf
- Avoiding bid tampering or engaging in any form of bid or technical, commercial, and/or financial specification tampering
- Refraining from making local contributions to political campaigns
- Maintaining clear, transparent sponsoring, giving and charitable contribution policies, recording all donations accurately in their financial statements
- Maintaining or establishing effective internal processes to prevent direct or indirect bribery
- Ensuring that their employees, business partners, and third parties embrace these principles, providing adequate training to that end
- Trying to avoid doing business with others who do not abide by these principles or who may jeopardize these companies’ reputations
- Actively promoting transparency in their industry by engaging in coordinated communication and training efforts to disseminate this Collective Action agreement, so that others become aware of its provisions and align their behaviour with them.
- Strong interest in concept/approach from the participants
- Companies involved hold a market share of more than 70%
- CEOs involvement from the beginning
- Process towards signature: approximately 6 months
- Commitment increased during meeting rounds
- Changing motivation: from the economic to the human
- Neutral facilitator (Center for Governance and Transparency)
- Different sectors, different priorities
- Multinational enterprises and local companies with different “languages”
- Commitment: agreement is just a first step; there is a need to follow-up and monitor the agreement further
- Different environments with different speeds
- Anticipate and accompany during the transition
- Scale up the initiative towards more complex agreements
Whereas the positive reception of the initiative and its growth in the form of a new member attest to its practical impact, the initiative has another important and lasting effect: it creates and progressively increases trust among participating companies, creating a community of like-minded “partners.” If, during the first steps, there were concerns, and to some extent, mistrust about the different sizes and business styles of the participating members (e.g., multinationals vs. national companies, large vs. medium/small enterprises, etc.), on-going discussions allow for a more in-depth knowledge of the values and principles of the competitors, understanding the extent to which they share the same integrity problems.