Turkey’s private sector, a fast learner on fighting corruption

Turkey’s private sector, a fast learner on fighting corruption

International organizations like the United Nations and the Organization for Economic Co-operation and Development (OECD) are state-focused institutions working to make our world better. But they have long realized that working with states and governments alone is not enough. While governments drag their feet on taking critical decisions due to political considerations, there is increasing awareness that civil society and the private sector can play an effective role in addressing current problems and become a mobilizing power for reform.

One of the panels of the World Humanitarian Summit, to be held in Istanbul next week, will be on business responses to humanitarian crises. Many see little connection between the humanitarian aid system and business, with the exception of corporate charitable donations.

But private sector actors have much to offer in terms of improving humanitarian responses, from the use of new technologies, to expanding distribution networks, to more cost efficient delivery mechanisms. I am looking forward to hearing more, as I will be moderating the panel.

Losing hope on democratic governance

Indeed, representatives of civil society and the private sector will play a crucial role for Turkey, especially at a time when serious parts of Turkish society are losing hope of democratic governance. There is a considerable loss of trust on the main tenets of democratic governance, which should be based on an effective checks and balance system. As President Recep Tayyip Erdoğan consolidates his one-man rule, the legislative, the executive and the judiciary are no longer considered separate power centers in Turkey. For the parts of society that value democracy, it is difficult to be hopeful these days, as the country fast drifts toward authoritarian rule.

If I were to ask whether there is anything that I cling to for hope amid this darkening picture, I’d say civil society organizations and the private sector. There is certainly a lot of pressure on NGOs and private businesses and they are afraid of voicing criticism about the way things are going. Nevertheless, their contribution cannot be solely judged by the degree to which they voice criticism.

Fighting fraud in Turkey

Take the case of the Ethics and Reputation Society (TEİD). The TEİD was established in 2010 and its main field of activity is combatting corruption and fraud.

In a country where a serious portion of society believes that the Dec. 17-25 corruption allegations were not properly investigated, this may sound odd. But the TEİD does not deal with corruption allegations within the state; rather, it is involved in targeting corruption in the private sector.

Surveys show that businesses around the world lose an estimated 5 percent of their annual revenue to fraud. So it is not only a question of ethics; there is also the waste dimension to consider.

The TEİD advises private sector companies on compliance and risk management. “Our focus is not about finding fraud cases and punishing them, but building barriers to prevent fraud. Our job is not about extinguishing fires but preventing fires in the first place,” TEİD Secretary General Tayfun Zaman told me.

Turkey has a solid legal framework in terms of fighting corruption, said Zaman, but the implementation is weak. However, Turkish companies seeking partnerships with foreign companies or wishing to become part of their supply chain need to have ethics code and compliance policies, according to Zaman. Although the Turkish private sector is still in the early stages of endorsing an ethics code and compliance policies, it is learning fast, he added. The TEİD is also expanding and now has more than 130 members, whose annual revenue amounts to 14 percent of Turkey’s GDP. 

“I am receiving questions that I was not getting five years ago. This is only natural. Companies that want to work in the international arena are facing problems if they are not equipped with an ethics code and compliance policies,” he said.

Customs are globally the most risky sector in terms of fighting corruption. The TEİD has taken a collective action initiative and prepared a declaration against fighting corruption in customs, signed by 250 customs brokers.

It will soon open a certification program together with Istanbul’s Bilgi University, and in June it will host an international conference including a panel dedicated to the question of ethics in sports.

Perhaps staying connected to the world through such initiatives can slow Turkey’s slide into authoritarianism.

The private sector could play a critical role in keeping Turkey connected.