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"Business Integrity Country Agenda -BICA"

Corruption is like cancer! In the initial stage, it spreads imperceptibly and when the first noticeable symptoms appear, it is usually already too late. Therefore, corruption is so highly dan­gerous: for the state, for the economy and for society as a whole. Corruption destroys the “social capital” that means a form of economic and culture capital in which social networks are central, transactions are characterized by reciprocity, trust, and cooperation, and market agents produce goods and services not mainly for themselves but for common goods.

The publication of the first Mongolian BICA report is an important milestone - perhaps even the most important - in the fight against corruption, as it is the first comprehensive review of its current status. It not only provides detailed information on the state of corruption and the fight against it in the public and business sector and the related civil society’s awareness, but also emphasizes where more urgent future actions are needed - such as in anti-corruption legislation, in investigative journalism of the media towards the public or in creating transparency and traceability for domestic and foreign investors. For example, the public sector completely lacks legal regulations concerning whistleblowing and disclosure of lobbying. In the business sector this applies to the introduction of voluntary anti-corruption programs and the responsibility of the board of directors for their implementation. Even the awareness of the civil society concerning corruption leaves much to be desired.

The poor performance of Mongolia in the BICA report and the deterioration in perceived corruption are also illustrated by the “Corruption Perception Index – CPI” published by TI for each past year. The position of Mongolia has worsened from 87th rank in 2016 to 103rd rank in 2017, concerning a total population of about 180 registered countries worldwide. These alarming results must and should be understood as a “wake-up call”. This is not only about closing the loopholes, but – much more importantly - consistently implementing and applying the existing anti-corruption laws and regulations and prosecuting them ruthless in case of violations.

Corruption occurs in practice in many forms. Therefore, for reasons of systematization, nine major study areas have been formed for the public sector assessment: (1) bribery of public officials, (2) commercial bribery, (3) laundering proceeds of crime, (4) collusion, (5) whistleblowing, (6) accounting, auditing and disclosure, (7) undue influence, (8) public procurement, and (9) taxes and customs. In none of these areas was the cross-border standardized indicator used by TI higher than 50 percent, which corresponds to the assessment "to some extent".

The result for the business sector assessment looks even worse. Of the total of five study areas (1) integrity management, (2) auditing and assurance, (3) transparency and disclosure, (4) stakeholder engagement, and (5) board of directors, only the second and the fourth achieved the 50 percent indicator. The remaining three were only 25 percent, which corresponds to the standardized TI-rating "to a limited extent".

Similarly, this finding also applies to the civil society sector assessment concerning “broader checks and balances” with a total of three scoring questions but not study areas: (1) independent media, (2) civil society engagement in business integrity, and (3) civil society monitoring of business integrity. Only the latter reached the 50 percent indicator, while the first two questions only came to a value of 25 percent.

Considering the results for the three survey areas mentioned above, it becomes clear that there is a lot of catching up. This concerns above all the business sector and the civil society.

The public sector's primary concern is to fill existing legal gaps in anti-corruption legislation, and to consistently apply existing laws and to rigorously prosecute violations. As far as this area is regarded, Mongolia is on the right track. For example, in January “2007, the Independent Authority against Corruption – IAAC” was established, which has far-reaching competen­ces in the fight against corruption at the public level. However, IAAC should become even more independent and be financially and personally better equipped.

In the business sector, it would be particularly desirable for companies to focus more on corruption issues and to develop, introduce and consistently apply business integrity concepts as part of their voluntary self-obligations. Whether additional general obligatory legislative measures must be taken here, one should wait for the moment. However, strict adherence to corporate ethical principles creates competitive advantages in the medium and long term, such as concerning domestic and foreign investors, government procurement, and business partners and customers.

The involvement of civil society is the least influential. Here, the information obligations of the mass media are of paramount importance which is not possible without freedom of press. However, appropriate engagement and corresponding initiatives by citizens in the fight against corruption are also needed that can only be achieved with the help of creating public consciousness of corruption. At the same time, civil society could be actively supported by appropriate educational work by domestic and foreign non-governmental organizations and development aid donors, such as the World Bank Group, the European Union (EU) or the Asian Development Bank (ADB).

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