Armenia: Anti-corruption compliance catches the interest of local companies
Photo Credit: Gleb Garanich, Reuters
Last year’s election of Prime Minister Nikol Pashinyan and his pledge to curb corruption in the public and private spheres has brought about a shift in the Armenian business community’s attitude towards anti-corruption compliance. This new government openness has encouraged businesses to look towards transparent business practices and anti-corruption reform in order to attract foreign investment and revive the national economy.
But compliance is still a new issue for Armenia’s business community, one with no current legal or regulatory requirements. According to Mariam Zadoyan of the Armenian Lawyers Association, while Armenia’s National Anti-corruption Strategy “introduces key anti-corruption mechanisms in general, the document needs drastic changes” for it to be effective. Public awareness of anti-corruption risks and how to mitigate them is also low. A survey conducted by CIPE and its partners in early 2019 showed that two thirds of businesses had never evaluated their anti-corruption risks and did not even have a code of conduct. However, 82 percent of respondents indicated they felt anti-corruption compliance programs could be effective, and half expressed plans to implement their own programs within the next year.
Beyond implementing their own, firm-level standards, businesses can play a critical role in pushing for improvements to the current regulatory environment that will make anti-corruption regulations enforceable. The private sector’s willingness to speak out about reforms and think through other options is reflective of their growing awareness of the benefits anti-corruption compliance gives them in regional and international markets. While these advantages are clear, the challenge facing the Armenian business community is demonstrating credibly to potential investors that its companies are ready to do business with integrity. As businesses weigh options to give them an advantage in the market, CIPE has observed some businesses voice support for making visible public statements, unifying business led movements on reform, and learning more about implementing anti-corruption compliance programs.
The shift in approach by companies towards demonstrating compliance has become increasingly apparent since CIPE’s engagement in Armenia. As CIPE and its partners supported companies through trainings, seminars, and mentorships, they have seen promising improvements to participants’ knowledge and attitude towards compliance. CIPE is now working to create a dialogue between the public and private sectors on how to make compliance an effective part of Armenian businesses strategy and not just a box-checking exercise. There is a clear need for compliance programs within the business community that will help them connect to global markets and push for further government reforms. To that end, CIPE will continue to support companies as they implement their own programs and encourage public-private partnerships on compliance efforts.
Tappan Parker is a Program Associate for Eurasia at CIPE.