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2016
BASSESSMENT REPORT MOZAMBIQUE
EXECUTIVE SUMMARYFebruary
222
[ MAP - Consult, Ltd.] [ CPI]JosÉ Jaime Macuane Lazaro Mabunda AnastÁcio Bibiane
3[ MAP - Consult, Ltd.] [ CPI]JosÉ Jaime Macuane Lazaro Mabunda AnastÁcio Bibiane
ThisreportwasproducedbytheCentrodeIntegridadePúblicaaspartofaprojectled by theTransparency International Secretariat with funding from the SiemensIntegrityInitiative.FinancialsupportforthereportwasalsoprovidedbytheTonyElumeluFoundation.
Researchers:JoséJaimeMacuane,LázaroMabunda,AnastácioBibiane
Consultant:CarlitosZunguene(AccountingandAudit)
Copyright:CentreforPublicIntegrityMaputo,Mozambique
February2016
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ACKNOWLEDGEMENTSThe Centre for Public Integrity and the research team would like to acknowledge the contribution of the following entities and individuals who made this research report possible:
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• TransparencyInternationalSecretariat,especiallyKatjaBechtel,SanthoshSriva-nasanandSusanCote-Freemanfortheirguidance,supportandinputsfromthebeginningoftheBICAprocessandthroughouttheresearch,uptotheproductionofthisreport.
• Mr.CarlitosZungueneforhisassistanceincollectingdataandprovidinginputsonreviewingaccountingandauditmatters.
• ThevaluablecontributionsbymembersoftheNationalAdvisoryGroup,repre-sentativesofvariousorganizations,namely:MariaRitaFreitas(MinistryofIndustryandCommerce/DirectorateofSupport tothePrivateSector),CarlosHenriques(AssociationofCommerce, IndustryandServices–ACIS),AntónioSouto(GAPI),Confederation of Business Associations (CTA), Adriano Boane (Attorney-GeneralOffice – PGR), Plínio Fonseca (Institute of Directors of Mozambique – IoDmz),OdeteTsamba (StateShareholdersManagement Institute– IGEPE), JoséMacar-ingueandElisaSamuel(TheMozambicanAssociationofJudges),DiasPereira(TheNationalAssociationofLegalExperts),theTaxAuthority,theEmbassyofGermany,ItalianCooperation,theEmbassyofPortugalandtheAssociationofAccountantsandAuditors.
• Ms.CatherineHindsandMrs.PamelaRebelofortheirreviewofdraftreportsandtheirvaluableinputsandsuggestionsforimprovement.
• Alltheintervieweesandinstitutionsvisitedfortheirvaluablecontributionsandpatiencewhen interactingwiththeresearchteam,someofwhompreferredtoremainanonymousbutcontributedequallyimportantinputsandinsights.
• Finally,theCIPmanagement,especiallyDr.AdrianoNuvungaandMr.StélioBila,andtheadministrativeteam(Ms.NéliaNhancumeandAidaMacuácua)fortheirsupportandassistancethroughoutthelongresearchprocess,providingthenec-essaryworkingconditionsthatmadethisstudypossible.
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The Business Integrity Country Agenda (BICA) is a new initiative developed byTransparency International (TI) that seeks to reduce corruption in the businessenvironment.TheBICAinitiativecomprisestwostages:first,anassessmentofthebusinessintegrityenvironmentinthecountry,resultingintheBICAAssessmentReportand,second,thetranslationoftheassessment’skeyfindingsintoanopera-tionalreformagendatobeimplementedthroughcollectiveaction.BICAisbasedontheideathatcollectiveaction,involvinggovernment,thebusinesssectorandcivilsocietyismoreeffectiveinpromotingbusinessintegritythanactionsbyindi-vidualstakeholdersorstakeholdergroupsactingalone.Theinvolvementofthesethreestakeholdergroupsisthuscrucialinbothstages.
TheBICAAssessment,thefocusofthisreport,isorganisedaccordingtothethreemainstakeholderareasthatformacountry’sbusinessintegrityenvironment:thepublicsector,thebusinesssectorandcivilsociety.Thesearedividedinto15the-maticareas,comprisingatotalof51indicators.Theassessmentinvolvesscoringandattributingacolourcodetoeachindicator,basedoncompliancewiththere-quirementsofthequestions.Thescorerangeisasfollows:0orredfornopositiveanswer;25ororangewhenfewrequirementsaremet;50oryellowwhenhalfoftheanswersarepositive;75oryellow-greenwhenmostoftherequirementsarepresent;and100orgreenwhenallrequirementsaremet.
The BICA Assessment Report Mozambiqueisthefirstofitskind.Itwascarriedout by theTI national chapter, the Centre for Public Integrity (CIP).The assess-ment is based on evidence gathered from multiple sources: legislation, officialdocuments,studies,primarydata,stakeholdersandinterviewswithexperts.Theprocess includedtheselectionofaNationalAdvisoryGroup(NAG),comprisingrepresentativesofallthestakeholdergroupsanddonors,whowereresponsibleforvalidatingtheresearchfindingsandpresentingrecommendationsoncollec-
THE BUSINESS INTEGRITY COUNTRY AGENDA (BICA) Initiative
EXECUTIVE SUMMARY
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RESULTS of the BICA
Assessment Report Mozambique
Public Sector
Mozambiquehassignedandratifiedthemaininternationalandregionalanti-cor-ruptionconventions:theUnitedNationsConventionAgainstCorruption(UNCAC),theAfricanUnionConventiononPreventingandCombatingCorruptionandtheSouthern Africa Development Community (SADC) Protocol Against Corruption,andhasmadeaconsiderableefforttoincorporatetheseinstrumentsintoitslegalframework.However,enforcementisstillproblematic,duetoweakimplementa-tioncapacityandweakincentivesforthepromotionofbusinessintegrity.Public sector thematic areas related to business integrity cover issues such asbribingpublicofficials,commercialbribery,money laundering,economiccom-petition, accounting and audit, undue influence, public tendering, and tax ad-ministration.Inmostoftheseareasthecountryhasalegalframeworkinlinewithinternationalstandards.
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Scores are represented graphically below.
1
1.1
1.1.1
1.1.2
1.1.3
1.2
1.2.1
1.2.2
1.2.3
1.3
1.3.1
1.3.2
1.3.3
1.4
1.4.1
1.4.2
1.4.3
1.5
1.5.1
1.5.2
1.6
1.6.1
1.6.2
1.6.3
1.7
1.7.1
1.7.2
1.7.3
1.7.5
1.7.6
1.8
1.8.1
1.8.2
1.8.3
1.8.4
1.9
1.9.1
1.9.2
1.9.3
Public Sector
Prohibiting commercial bribery
Lows prohibiting commercial bribery
Enforcement of Laws prohibiting bribery commercial bribery
Capacities to Laws prohibiting commercial bribery
Prohibiting laundering of proceeds of crime
Laws prohibiting laundering of process of crime
Enforcement of laws prohibiting laundering
Capacities to enforce laws prohibiting laundering
Prohibiting collsion
Laws prohibiting collsion
.Enforcement of laws prohibiting collusion
Enforcement of laws prohibiting collusion
Whistleblowing
Whistleblower laws
Enforcement of whistleblower laws
Accounting,auditing & disclosure
Accounting and auditing standards
Enforcement of accounting and auditing standards
Professional Service Providers
Laws on Political contributions
Enforcement &Public disclosure on politica
Laws on lobbying
Public Procurement
Operating environment
Integrity of contracting authorities
External safeguards
Regulations for the Business Sector
Taxes and Customs
Operating Environment
Integrity Tax Administration Authorities
External safeguards
1007550250
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Publicsector legislation prohibits the bribery of national public offi cialsanduseoftheirposition forundueadvantage (e.g.PublicEthicsLaw–16/2012),but it isnotex-plicitaboutforeignpublicofficialsdealingwiththecountry.Commercial bribery is also prohibited,andgoesbeyondfinancialtransactionstoincludeeconomicparticipationinbusinesses.Inbothcases,thereisnoevidenceofeffectiveness.Theperceptionthatcor-ruptionishighinthecountryhasremainedstableoverthelasttwoyears,andthejusticesystem’sperformancewithregardtocorruptioncaseshasnotimproved,despitethefactthatthecapacityofthecentralandprovincialAnti-CorruptionOfficeshasimproved,withrising human resources and budget allocation over the last four years.Thus, between2010and2014,theratioofcasesperpublicattorneyintheAnti-CorruptionOfficeswas6to10timesfewerthanthoseoftheordinarypublicprosecutors.Nevertheless,thenum-berofcorruptioncasestakentocourtisstilllow:only11%ofthecasesdisclosedin2014.Thesedatacouldsuggest three things: i) that resources in theAnti-CorruptionOfficesarenotbeingusedefficiently;ii)thatthebacklogofcasesinthejudicialsystemmightbeaffectingthenumberofcorruptioncasestakentocourt;iii)thatdespitetheincreasedre-sourcesallocatedtoanti-corruptionagencies,politicalwillcouldhindertheenforcementofcorruptionlegislation.Anadditionalelementisthat,althoughtheinformationoncor-ruptioncaseshasimproved,thedatapresentedintheAttorneyGeneral’sReportsdonotdifferentiatebetweenthetypesofcorruptiondefinedinthelegislation,makingitdifficulttoidentifythekindofcasesbeingheard.
Mozambiquehasenactedstronglegislationprohibiting laundering of the proceeds of crime (Laws 14/2007; 14/2013), and international conventions have also informedenactmentof theanti-corruption legislativepackage,which includes theVictims and Whistle-blowers Protection Law(Law15/2012).
LegislationoncapitallaunderingincludesthecreationoftheOfficeforFinancialInforma-tion(GIFIM),whichisaninvestigativebody,andamulti-sectoralcommission,comprisingtheCentralBankandtheMinistriesofFinance,JusticeandInterior,amongothers.WhilstGIFIMhasgoodinvestigativecapacity,follow-upofitsworkishamperedbytheweaknessofotherbodies,namelytheCriminalInvestigationPolice.
The whistle-blower protection legislation only focuses on protecting victims and wit-nessesinabroadsense,anddoesnotaddresssituationsthatcanoccurinthebusinessenvironment.Forexample, itdoesnotprovideguidanceor instructionsonorganizinganeffectivesystemofwhistle-blowerprotectionwithintheorganizationalenvironment.ThelawincludesthecreationofaCentralOfficeforVictimProtection,notyetestablished,which is responsible forenforcingandcontrolling the implementationofmeasures toprotectvictimsandwhistle-blowers,andprepareimplementationreports.
Thus,theabsenceofregulationsfortheabove-mentionedlawsandtheweakcapacityofenforcingagencies,suchasthejudicialsystem,limittheireffectiveness.
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Thecountryadheres to international accounting and auditing standards, and therelatedlegislation(Decree70/2009)is inlinewiththeInternationalFinancialReportingStandards (IFRS). However, their application is still limited to a few companies, amongthemthoselistedinthestockmarket,financialsectorcompaniesandpublicenterprises.The MozambiqueTax Authority (ATM) is responsible for licensing and the professionaloversightofcompaniesandindividualprofessionals.TheregulatoryenvironmentinthisareahasbenefittedfromtherecentcreationoftheAccountantsandAuditorsAssociation(OCAM),whichcertifiesandexertssomeoversightoverprofessionalconductinthisfield.Thisishelpingtoimprovetheprofessionalismofauditorsandaccountants.Nevertheless,theTaxAuthoritydoesnothavethenecessarycapacitytoauditandinspectcompaniesandtocarryoutitsprofessionaloversightrole.Withitslimitedcapacity,theTaxAuthor-ity’sinspectionandauditactivitieshavetodatefocussedmoreonfindingviolationsoftaxlegislationtoimprovetaxcollection,thancheckingcompliancewithaccountingandauditregulations.Consequently,despitetheirmandateinthisarea,publicentitiesarenotcontributingtocreatingincentivesforcompaniestocomplywithinternationalaccount-ingandauditstandards.
Procurement(Decree15/2010)andcompetition legislation(Law10/2013)prohibits and creates restrictions on collusion,withtheobjectiveofpromotingfaircompetitioninpublictenderingandtheefficientuseofpublicresources,aswellasthedevelopmentofasoundmarketeconomy.Legislationonprocurementspecificallyprohibitscollusionandthecompetitionlawprohibitstheconcentrationofcompaniesthroughmergersandacquisitionstoinfluencepricesandoutputsartificiallyinspecificeconomicareas.Italsomakesmandatorytheinclusionofananti-corruptionclauseinpubliccontracts,includesheavy sanctions, suchasbanningcontractswithpubliccompanies, and incentives forcompaniestodisclosecasesofviolationofprocurementrules,suchasreducedpenalties.
TheFunctionalUnitfortheSupervisionofAcquisitions(UFSA),theoversightbodyforthisarea,publishesonitswebsiteablacklistofcompaniesinvolvedinwrongdoing.However,itsweakcapacityingeneral,andsupervisorycapacityinparticular,allowforabusivere-coursetodirectcontractingintheoverallpublicsectorandnon-transparentpractices.
Contractingunitsinpublicagenciesinvolveofficialswhoarealsoengagedinplanningandevendecision-makingonpublicexpenditure,andtherearedeficienciesinthedraft-ingofsoundbiddingdocuments,suchastechnicalspecificationsfortheprocurementofgoodsandservices.Thissettingunderminestransparencyandtheefficientfunctioningofpublicprocurement.Businessassociations,amongthemtheBuildingContractorsAs-sociation(whichdidsopublicly inameetingwiththegovernment),acknowledgethatcorruption in public procure ment is high. Combined with the delay in setting up theCompetitionAuthoritytosuperviseeconomiccompetition,thismeansthatenforcementofthislegislationisweak.
Regardingundue infl uence through political funding, sponsorships, lobbying and confl ict of interest, political contributions are regulated through the political parties(Law7/91)andtheelectorallaws.Thislegislationincludestheobligationofpublicdisclo-sureandreportingonpoliticalcontributionsbythepublicandprivatesectors.Neverthe-less,themonitoringofpoliticalfundinghasbeenlimitedtoreportingonthepublicfundsallocatedtoelectoralcampaigns. ThePublicEthicsLawdefinesandplacesrestrictionsonconflictsofinterestforpublicservantsintheirrelationwiththebusinesssector,suchasquarantineor“cooling-off”periods.Nevertheless,enforcementhasbeenweak,andex-amplesofpublicofficialsinvolvedinbusinessesthatimplyconflictofinteresthavenotbeenpunished.PublicEthicsCommissions,entitiesresponsibleforoverseeingconflictofinterestinthepublicsectorhavebeencreated,butarenotyetoperational.AsaboutonethirdofpublicofficialswhoshouldpresenttheirDeclarationofAssetshavenotyetdoneso,thisreducesthepossibilityofverifying,preventingorimposingsanctionsonpotentialcasesofconflictofinterest.LobbyingactivitiesarenotregulatedinMozambicanlegisla-tion.
Finally, taxes and customsweremerged intotheMozambiqueTaxAuthority (ATM) in2006aspartofreformsinthisarea(Law2/2006), inlinewiththeinternationaltrendofcentralizing tax administration for efficiency purposes. ATM is an autonomous agencyandhasasetofinternalcontrolmechanismsandchannels
for thepublic todenouncecorruptioncases,and itsexternalchecksandbalancesarethose of the public administration, such as the Administrative Court, whose oversightcapacity is relativelyweak.ATMannualreportsshowthat internalcontrolentitieshavebeen active in investigating internal corruption and tax evasion cases, some of which
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have been referred to the judiciary for follow-up. However, this does not prevent cus-tomsfrombeingconsideredanareapronetocorruption.Thus,despiteinternalcontrolmechanisms,giventhatpublicadministrationexternalcontrolmechanismsliketheAd-ministrativeCourtare relativelyweak, thisentitystilloperateswithouteffectivechecksandbalancesandsafeguards.
Mozambique’slegalframeworkisinlinewithinternationalgoodpractices.However,itsineffectivenessderivesfromacombinationofmultiplefactors,amongthem:noregula-toryframeworktomakethelawsoperational,weakcapacitytoenforceregulations,duetoinadequatemandates,poorchecksandbalances/safeguardsforautonomousinstitu-tions,weakorabsentadministrativestructuresforimplementationandlackofresources(financialandhuman),andinsomecaseslackofpoliticalwilltodealwithsensitiveissues,likecombatingcorruption.
Moreover,giventhecountry’srelativelyrecentsocialistpast,theMozambicanbusinesssectorhasverystrongandhistoricallinkageswiththepublicsector.Politicalconnectionsplayanimportantrole,andstate-ownedenterprisesarestillimportantintheeconomy,inacontextofaverynarrowproductionbase.Thismeans that there is limited incen-tiveforcompaniestopromotepublicintegritythroughrestrictionsonconflictofinter-est,transparentpublicprocurementandtheadoptionofsounddisclosureandreportingstandards.However,thereisgrowingawarenessthatcorruptionharmsbusiness.Inthisregard,businessassociationsareadoptingbusinessintegritycodesofconduct,althoughstillwithlowadherencebycompanies.Thedialoguebetweenthegovernmentandcivilsocietyisalsoresonatingthisincreasingawarenessoftheneedtofightcorruption,andinAugust2015bothsidesagreed to include in theprivatesectoractionplana setofactivities related to this area, among them the commitment of the business sector todenouncecorruptioncasesandcompaniesthatabandonpublicworks.Thiscontextpro-videsentrypointsfortherecommendationsbelow.
In the short term:
• PublicAttorneyOfficesshouldimprovetheinformationoncorruptionintheiran-nualreporting,identifyingthetypeofcorruptioncasespresentedandtakentocourt,accordingtothetypologypresentedinlegislation.Thiswillallowforabetterunder-standingofthetypeofcorruptionsubjecttosanctionsandthechallengeslyingahead,forfurtheraction;
13
• Inthecontextoftheongoingpublicandprivatesectordialogue,identifycriticalareasandincludeinannualplansmeasurestoimprovepublicintegrity,particularlyinareasofinterfacewithbusiness.Examplesoftheseareasare:publicprocurement(es-peciallydirectcontracting)andconflictofinterest(monitoringofcooling-offperiodsforpublicservants);
• PublicEthicsCommissionsincludeintheirmonitoringandreportingprioritiescas-esofconflictofinterestinvolvingtheinterfacebetweenpublicsectorandbusiness,initiallytoraiseawarenessaboutthisproblem,andsubsequentlyforsanctions.
In the medium term:
• Regulate the Public Ethics and theWhistle-blower Protection laws, to allow formoreclarityintheenforcementofconflictofinterestandwhistle-blowerprotectioninthepublicandbusinesssectors;
• Revise procurement legislation to improve the existing framework for internalchecksandbalancesandincludeexternalchecksandbalances(e.g.civilsocietypar-ticipationinoversightandmonitoringpublicprocurement);
• Improvetheorganizationalcapacityofbusinessandpublicintegrityenforcementagencies in the areas of procurement (UFSA), contracting units in public agencies,conflictof interest (PublicEthicsCommissions),protectionofwhistle-blowers (Cen-tralOfficeforWhistle-blowerProtection),applicationoftheIFRSs(TaxAuthority),andpunishing illicitbusinesspractices (thePublicAttorneyOfficesandthe judicial sys-tem);
• ImprovethecapacityoftheCriminalInvestigationPolice,thePublicAttorneyOf-ficesandtheJudicialSystemtofollowupGIFIMinvestigations;
• Government,civilsocietyanddonorsupportforspecialisttrainingforjudgesandthecreation(implyinglegalrevision)ofspecificsub-sectionsincriminalcourtstodealwithcorruptioncases.
14
The scores are represented graphically below.
Business Sector
Unlikethepublicsector,localenterprisesdonothavethesameexposure,stimulusandability toadoptpoliciesandpractices in linewith international standards.Some fac-torsthathaveplayedaroleinfosteringpoorstandardsofbusinessintegrity,include:i)theconcentrationofexportsandthefewopportunitiesforlinkageswithmultination-alsandmegaprojectsinafewenterprises;ii)aweakmarketwithlimitedbusiness-to-businessrelations;andiii)weakenforcementofintegritystandardsinthepublicsectorinMozambique. Inthiscontext, relatively fewcompaniesoperate inanenvironmentthatcreatespositiveincentivesforgoodmanagementstandardsandthepromotionofbusinessintegrity.
Thisstakeholderareaassessesbusinessintegritybasedonthefollowing:integrityman-agement, auditing and assurance, transparency and disclosure, stakeholder engage-ment,andtheroleoftheBoardofDirectors.
2.
2.1.
2.1.1.
2.1.2
2.1.3
2.1.4.
2.2.
2.2.1
2.2.2
2.2.3
2.3
2.3.1
2.3.2
2.3.3
2.3.4
2.4
2.4.1
2.4.2
2.4.3
2.5
2.5.1
2.5.2
2.5.3
Business Sector
Integrity management
Provision of policies
Implementation of practices
Whistleblowing
Business partner management
Auditing and Assurance
Internal control & monitoring structures
External Audit
Independent assurance
Transparency & Disclosure
Diclosaure on organizational structures
Disclosure on organizational structures
Contributions, sponsorships & lobbying activities
Stakeholder Engagement
.Stakeholder relations
Business-driven anti-corruption initiatives
Business associations
Board of directors
Executive remuneration
1007550250
15
Business integrity management mechanismsaremorefrequentinsubsidiariesofmultinationalcompanies,whichareexposedtoamoredemandingandrig-orousenvironmentthatincludesoperatingindiversemarkets,accountabilitytoshareholdersandtheavailabilityofreliableandattractiveinformationforpotentialinvestors.Somecompaniesinthisgrouphavethemostvisibleandsoundsetofanti-corruptionpoliciesandprogrammesthatareapplicablealsototheirsuppli-ersandbusinesspartners. IGEPE, theStateShareholdersManagement Institute,initsdocumentsstimulatesstate-ownedcompaniestoadoptbusinesscodesofconductandsoundcorporategovernancepractices.
However,inpracticeIGEPE’srecommendationsarenotadoptedbythepublicly-ownedcompanies.Somebusinessassociationsandorganizationshaveadoptedandpromotebusinessintegritytools,butstillwithlowadherencebytheirmem-bership.Whistle-blowingmechanismsarenotexplicitinmostofthecompanieswith integrity programmes, for example, how to handle information on illicitpractices and protect whistle-blowers. Broadly, business integrity managementisweak.Whereitexists,asinmultinationalsubsidiaries,attemptstoextenditsap-plicationtobusinesspartnersandsuppliersisnotcontributingtodisseminatingthesepractices,asitsadoptionislimitedtodirecttransactionsbetweenbothpar-ties.Moreover,inthesamecases,follow-uponimplementationisalsoveryweakandthereisnopubliclyavailablereportingonintegritymanagement.
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Audit and certification practicesinMozambicancompaniesfollowinternationalstandards(IFRS),notnecessarilybecausefirmschoosetodoso,butbecauseregu-lationsarealignedwithinternationalpractices.PublicLimitedcompanies(thosewhosesharesaretradedinthestockmarket),shouldhavetheirfinancialreport-ingcheckedbyexternalauditors.UnderLaw6/2012publicly-ownedcompanies,musthavetheirfinancialstatementscheckedbytheirAuditBoards,aswellasbyinternalandexternalauditors.Onthewhole,allthepublishedannualandfinancialstatementsofpublicandbigprivatecompaniesarecheckedbyexternalaudits.Theavailablefinancialreportsofmultinationalsusuallycovertheirglobalopera-tions,andinformationontheirnationalsubsidiaries isvery limited.Thebankingsector isprobablytheareawiththemostconsolidatedfinancialreportingprac-tices, and with easily accessible documents.Weak enforcement capacity in thepublicsectorconstrainsthewidespreadapplicationofthesepracticesinthebusi-nesssectorandacontributiontobusinessintegrity.
Transparency and disclosure on anti-corruption programmes contribute tomaking companies more accountable. Reports on the implementation of anti-corruptionprogrammesarenotavailableoreasilyaccessibletothepublic.Noneofthesamplecompanieshadareportonthe implementationoftheir integrityprogrammesontheirwebsites.Charitablecontributionsandsponsorshipsarenotincludedinmostfinancialreports.Somemultinationalspresentthistypeofcon-tributionintheir“sustainabilityreports”,butwithoutdetails. InMozambiqueit ismandatoryforcompaniestopresentallrelevantinformationtotheirshareholders(CommercialCode,Law2/2009).Theyarealsosupposedtoprovidefinancialinfor-mationtotheemployeerepresentatives,tobeusedintheannualtripartite(gov-ernment-tradeunion-businesssector)annualsalarynegotiations.Insomecases,theannualgeneralmeetingsofcompaniescanincludeemployeerepresentatives.Nevertheless, this does not guarantee that the company information is madeavailabletotheemployees,asemployeerepresentativesareco-optedandhideinformationfromtheirpeers.UndertheRighttoInformationLaw(34/2014),publicentities,includingpublicly-ownedenterprisesorcompanieswherethestateisashareholderandprivateentitiescontractedbythestateorbenefittingfrompublicresources,mustpublishinformationconsideredofpublicinterestormakeitavail-ablewhenrequested.However,theregulationsofthislawwereonlyapprovedinDecember2015.Thislegislationbroadenstherangeofcompaniesthatcancomeunderpublicscrutiny,suchasthoseinvolvedinpublic-privatepartnerships,publicconcessions and contracts.Taking into account the historical close relation be-tweenthepublicsectorandnationalcompanies,thisisabigopportunitystilltobe(andworthbeing)explored.
17
Thereissomestakeholder engagement in anti-corruption initiatives,drivenbymembersofbusinessassociations.Nostakeholdersoutsidethebusinesssec-torareinvolved.Thetwomainbusinessassociationsinthecountryhavedifferentsituations.TheCommercial,IndustrialandServicesAssociation(ACIS)hasaCodeofBusinessConduct,withsomememberssignedup,whereastheConfederationofBusiness/TradeAssociations(CTA),isstillintheprocessofapprovingthisinstru-ment.The Institute of Directors of Mozambique (IoDmz) a business entity con-cernedwithcorporategovernanceandbusinessintegrityissues,hasdevelopedaBusinessCodeofConduct,andaBusinessPactAgainstCorruption(BIPAC)forPublicProcurementandPoliticalFinancing,butstillwithverylowadherencebyitsmembers.
AccordingtotheCommercialCode,theBoard of DirectorsofpubliccompaniesandofprivateandpubliclimitedcompaniesareaccountabletotheAnnualGen-eralMeetingor,inthecaseoftheformer,totheAuditBoardandtotherelevantstateentities.Salariesofmanagersareestablishedonanindividualbasis,result-ing from negotiations with the company. This means that in most companiesneither thesalariesnorthecriteria forestablishingthemarepublic.CompanieswithaCodeofConductusuallyhaveconflicts of interest definedandregulat-ed.Publicly-ownedenterprisesaretheoreticallygovernedbytheGuideonGoodPracticesof theCorporateGovernanceCode,adoptedby IGEPEand thePublicEthicsLaw(16/2012),whichincludeprovisionsonconflictofinterest.Thisguiderecommendsthedefinitionofclearcriteriafortheremunerationofexecutiveandnon-executivemembersoftheBoardofDirectors.Italsorecommendsthepubli-cation,atleastinaggregateterms,oftheboardmembers’remuneration.However,inthepublicsectortheenforcementoftheseinstrumentsisweak.Disclosureofsalariesofmanagersintheprivatesectorisalsonotcommon.
Generally,companieshavemanygapsinbusinessintegrityindicators.Thesitua-tionismorecriticalamongnationalcompanies.Publicly-ownedcompanieshave
18
bettertransparencyanddisclosurepracticesthanprivateones,althoughthisdoesnotmeanthattheyarebetterintermsofbusinessintegrity.Actually,itisimportanttobearinmindthatdisclosureofthesecompanies’financialreportsismandatory.Thepointspresentedhereleadtotwoinsights.Thefirst isthatthetendencyofmultinational enterprises and their subsidiaries to perform better is due to themoreheavilyscrutinizedcontextinwhichtheyoperate.Thesecondinsightisthattherelativelybetterperformanceofpublic-ownedcompaniesstemsfromthele-galobligations,andthecountry’shistory,whentheseenterprisesweredominant,andthenationalbusinessclass isstillnew,undercapitalized,andstill succumbstothewoesofthemarket,includingcompetingtoparticipateinthestate’ssup-plychain,withaweakrecordofintegritymanagement.Despitetherelativebetterperformanceofpublic-ownedenterprisesinsomeaspects,theystillperformpoorlywithregardtoaccountabilitytocitizens,theirmainshareholders.Politicalinfluenceandacultureoflackoftransparencyinthepublicsectorplayaroleinthisperfor-mance, but weak enforcement of existing legislation also has considerable influ-ence.Forexample,publicly-ownedcompaniesaresupposedtoreporttoParliamentthroughtheinclusionoftheiraccountsintheannualGeneralStateAccountsthatareformallyapprovedbythelegislature.TheiraccountsaresubjecttoexternalauditbytheAdministrativeCourtand,bylaw,auditreportsmustbepublished.
Thus,theseinsightsleadtothefollowingrecommendationsforthisstakeholderarea:
In the short term:
• Businessassociationsshouldworkwithcompanieswithbusinessintegritymanagement mechanisms to encourage them to report and share publiclytheirexperiencesofimplementinganti-corruptionpoliciesandprogrammes;
• Asthereisawidespreadunderstandingamongbusinessassociationsthatlocalcompaniesdonothavestrongincentivestohaveintegritymanagementprogrammes,donors,governmentandcivilsocietyshouldsupportthebusi-nesssectoringeneral,andassociationsinparticular,inidentifyingopportuni-tiesandrisksforcompaniesandpromotingbusinessintegrityprinciples.Thisexercisewillinformthedefinitionoffurtherandmoresector-specificinterven-tionsinthisarea.
In the medium term:
• Supportandstrengthentheroleofbusinessassociationsinpromotingin-tegrity, transparency, reporting and disclosure standards among their mem-bers,byreallyimplementingexistinganti-corruptioninstrumentsandadopt-ingIFRSs;
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• Improvetheresponsivenessandaccountabilityofpublic-ownedenterpris-estocitizensthroughstrongerinterventionbytheAdministrativeCourtandParliamenttoguaranteecompliancewiththeexistinglegalframework;
• Supportthedevelopmentofnationalcompanies’capacityforgeneralandintegritymanagement.Thisimpliessupportingtheadoptionofmanagementandreportingstandards(accountingandauditing)byabroadersetofcompa-nies,inlinewithexistinglegislation;
• Civilsocietyandgovernmentshould identifyandlistcompaniesanden-tities(publicandprivate)subjecttothedisclosureof informationobligationundertheRighttoInformationAct.
Civil Society
CivilSocietycancontributetopreventing, reducingandrespondingtocorrup-tion in the business sector providing broad societal checks and balances, suchastheexistenceandeffectivenessof independentmediaandtheengagementofcivilsociety inpromotingandmonitoringbusiness integrity-related issues incompanies.
20
Historically,civilsocietyinMozambiquehasplayedtheroleofoversightandwatch-doginrelationtothepublicsector,andnotsomuchthebusinesssector.
Mozambiquecombinessmallvibrantprivately-owned independent mediaandapublicmediasectorwithawidecoverage(mostlyradioandtelevision)through-outthecountry,butsubjecttostrongpoliticalcontrol,whichreducesitsautono-my.Inthecaseoftheprivatemedia,inaneconomyheavilydependentonthestateandcontrolledbypoliticalelites, independentmediafaceseriouschallengesof
The scores of this stakeholder’s area are presented below.
3.
3.1.
3.1.1.
3.1.2
3.1.3
Civil Society
Civil Society broad checks and balances
Independent media
Civil society engagement on business integrity
Civil Society monitoring of business integrity
1007550250
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financialsustainabilityandprofessionalization.Thereisnoconsistentandsys-tematicreportingoncorruptionintheprivatesectorbythemediathat,alliedwiththeirweakprofessionalism, limits theircapacity to reporthighly techni-callydemandingissuesthattheysometimesdonotfullyunderstand.
Civilsociety involvement inbusiness integrity ismorevisible intheprocure-mentareaandtheextractiveindustries.Intheprocurementbusiness,profes-sionalassociations(AssociationofProcurementProfessionals)andNGOshavetakensomeinitiatives.Forexample,businessassociationsincludetherevisionofprocurementregulationsintheirdialoguewiththegovernment.CIPhasaresearchlineonprocurementandhasresearchedandwrittenonpublic-privatepartnerships.CivilsocietyparticipatesintheExtractiveIndustriesTransparencyInitiative (EITI)anddoes research.Organizationssuchas the InstituteofEco-nomicandSocialStudies(IESE),CIP,CentroTerraViva(CTV)workonextractiveindustryfiscalissuesandresettlementprocesses,andhavebeenabletoinflu-encegovernmentandcompanydecisions.Themediahaverecentlyreportedonsporadiccasesofcorruptioninpublicenterprises,althoughnotnecessarilycombinedwithasystematicfollow-up.
Ifcivilsocietyistoplayabroaderroleinchecksandbalancesinthebusinessfield,twosubstantialchangesshouldoccur:
• Train journalists to report on business integrity issues, to increase thefrequencyandtechnicalqualityofmediacoverage;
• Promote a more systematic and informed monitoring of the businesssectorbycivilsocietyorganizations.Thiscanbedoneby improvingtheircapacitytodealwithbusinessissuesandbyfosteringstrategicalliancesorcoalition-building among relevant actors, civil society organizations withexperienceingovernancemonitoringandtradeunions,whichhavemoreexperienceindealingwiththebusinesssector.
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[ MAP - Consult, Ltd.] [ CPI]JosÉ Jaime Macuane Lazaro Mabunda AnastÁcio Bibiane
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