Working Paper 34: Local certification through Collective Action: an innovative approach to anti-corruption compliance and due diligence
How can local certification of small and mid-sized enterprises (SMEs) help to alleviate anti-corruption due diligence for SMEs as well as multinational corporations (MNC) seeking to work with them. This Working Paper by the Basel Institute's Collective Action team attempts to answer that question based on discussions and analysis of current local certification initiatives in different countries and sectors.
Local certification in this context means the assessment of a company’s anti-corruption compliance standards according to a method devised through a Collective Action and developed within a domestic (local) market. The local component also involves verification (certification) by a reputable organisation based in the same country as the entity that is being certified.
The paper explores:
- Due diligence dilemmas faced by both SMEs and MNCs.
- How local certification can help SMEs develop and demonstrate robust anti-corruption compliance procedures.
- How a trusted certification programme can help alleviate due diligence on third parties by MNCs, using a risk-based approach.
- Wider benefits, including raising standards of compliance across the board.
- How a Collective Action approach boosts the potential of local certification to achieve these wins.
- Special considerations and six practical recommendations for practitioners seeking to raise levels of anti-corruption compliance through a local certification scheme.
About this Working Paper
This paper is part of the Basel Institute on Governance Working Paper Series, ISSN: 2624-9650.
The paper was funded by the KBA-NotaSys Integrity Fund of Koenig & Bauer Banknote Solutions. It is part of the Basel Institute’s local certification project, which aims to support innovative approaches to anti-corruption compliance and due diligence through Collective Action. .
The views and opinions expressed in this report are those of the authors and do not reflect the position of the KBA NotaSys Integrity Fund, Koenig & Bauer Banknote Solutions, any affiliates or any persons acting on their behalf.
This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License (CC BY-NC-ND 4.0).
Citation: Hans, V., Wannenwetsch, S. and Aiolfi, G. (2020). Local certification through Collective Action: an innovative approach to anti-corruption compliance and due diligence. Working Paper 34, Basel Institute on Governance.
Links and other languages
Case Study 8: Windward Trading: Charging a shelf company with money laundering and returning confiscated funds to Kenyan citizens
This case study describes how authorities in Kenya and Jersey worked together to unlock progress…
Quick Guide 28: Money laundering through the gambling industry
This quick guide sets out how criminals abuse the gambling industry to launder illicit funds. It…