SECTORAL AGREEMENTS

Corruption is recognized as one of the most critical problems in many countries, including Brazil. It has harmful effects on economic and social growth, as well as governability. It maintains and aggravates poverty, increases inequality, reduces social investments and affects government effectiveness.

A more solid, transparent and corruption free business environment is better for all parties: government, civil society and companies.

Bribery, for instance, has a detrimental effect on business: it increases the costs of transactions, creates unfair competition and lack of distrust in business relations. On the other hand, a market with clear competition rules for public procurements allows companies to go to court to fight for their proposals.

Based on international experiences, the Clean Games Project will invite companies from four economic sectors to create anticorruption agreements, seeking to develop patterns and clear rules of business transparency.

In 2011, agreements will be signed in the Health sector – especially with companies that manufacture and sell hospital equipment – and the Construction sector. In 2012, the Energy and Transportation sectors agreements will be negotiated. All these agreements will propose viable and effective rules to modify the business environment.

Each Sectoral Agreement will be managed by a Working Group with the signatory companies, in addition to an Ethics Committee that will be responsible for receiving and following through non-compliance reporting.

Transparency Colombia’s example

In the 1990s, the Colombian Chapter of Transparency International – a global civil society organization to counter corruption – created a methodology to work with competing companies in the pipes and fittings sector. The agreement aimed at preventing corruption practices and was signed by eleven large companies, some multinationals, which manufacture and sell tubes and pipes in that country.

Today, the Colombian government pays, on average, 20% less in bid contracts for basic sanitation works than before the agreement was signed. Companies in the sector have also increased by 25% their sales for infrastructure works.

Besides the Colombian experience, the Sectoral Agreement’s strategy has been successful in another 15 countries where it has been implemented.