Local Businesses can Bolster Moldova’s Anti-Corruption Efforts

Photo Credit: CIPE

In 2014, Moldova suffered a massive corruption scandal involving dubious loans that led to the disappearance of $1 billion, or 12% of the country’s GDP, from its banking system. The scandal forced the central bank to issue $870 million in emergency loans to the three implicated banks in order to prevent economic collapse. Prominent politicians and business people were involved. The scandal ignited popular anger and triggered street protests. While it may be difficult to see a silver lining in this bleak turn of events, one positive outcome may be this: the scandal of this magnitude was a wake-up call for Moldovans to build better safeguards against future abuses and renew commitment to address corruption at all levels.

Although Moldova has adopted laws to align its anti-money laundering legislation with the European Union rules, other major reforms must still take place at the national level. Importantly, though, efforts to combat corruption must extend beyond the public sector and involve building integrity mechanisms in the private sector as well. To that end, CIPE and the European Bank for Reconstruction and Development (EBRD) have been working together to spread awareness of best practices in good governance and anti-corruption compliance among local business associations and their members.

Strengthening the capacity of the Moldovan private sector to combat corruption is one of the pillars of the National Integrity and Anticorruption Strategy 2017-2020 adopted earlier this year. The Strategy calls for the development and promotion of corporate governance and codes of ethics among businesses, and supports the dissemination of international standards – notably the new ISO 37001:2016 standard on anti-bribery management systems. In October, CIPE and its local partner the Institute for Development and Social Initiatives (IDIS) Viitorul conducted two 2-day workshops in Chisinau for local business associations and companies that aimed to do precisely that.

A total of 40 participants attended, representing various business associations, commercial banks, and other firms interested in implementing and promoting anti-corruption compliance programs in Moldova. I had the pleasure of co-facilitating this workshop together with CIPE partner Alexander Okunev, head of the Ukrainian Corporate Governance Professional Association. We covered key elements of good governance and anti-corruption compliance as well as practical examples of how companies are implementing such internal reforms in countries ranging from Ukraine to Thailand and Kenya. We also discussed challenges facing local businesses that want to operate with greater integrity and how to overcome them.

For Moldovan businesses, it is not just a matter of doing the right thing. There is a strong business case for them to invest in anti-corruption measures to become attractive partners for multinational corporations as they expand their value chains in the country. At the end of these workshops, the participants reported much better understanding of key compliance concepts such as risk assessment, code of ethics, or the need for integrity training. Crucially, they also formulated concrete action plans to share this knowledge with other Moldovan businesses through the associations they belong to. Leveraging the convening power of associations has been an important strategy in CIPE’s work, recognizing that there is strength in numbers and associations can support their members to achieve compliance goals. “Fighting with corruption must be a common goal,” one of the participants summed up. “We are the first who generate changes, and we must start with ourselves.”

Anna Kompanek is Director of Global Programs at CIPE