1 International Anti-Corruption Conference Seoul, 25.5.2003 The Struggle Against Corruption Requires an Ethical Framework Common values on integrity and accountability endorsed by the world's religions Hans Küng Mr. Chairman, Excellencies, distinguished participants, ladies and gentlemen, It is an extraordinary honour for which I am deeply grateful to the organizers and to the kind Korean hosts of this congress, but it is at the same time a heavy responsibility to address such an august audience of experts and to speak about common values, a fundamental issue in our societies. A couple of years ago, when I would speak on ethical aspects in economics, I felt often like a voice calling in the desert. But at the latest with the scandals around Enron, Arthur Andersen, WorldCom, Xerox, Halliburton and the following crisis of Wall Street and the stock market it has become much easier for me to address this issue. Even President George W. Bush who has himself some ambivalent experiences in this field, in his famous speech in Wall Street on July 9th, 2002, called for»higher ethical standards«and»a new era of integrity in the American economy«. It is not surprising that more and more people realize that also the struggle for integrity and against corruption has to do with common ethical values. Of course, the struggle against corruption requires all provisions of the law. But laws are not enough. As you know the political will to fight corruption is often weak, because it is not supported by an ethical will. Laws without morality cannot endure, and no legal provision against corruption can be implemented without moral consciousness based on elementary ethical standards. This is not just an issue of individual morality, but also of corporate morality and concerns the global market economy as a whole. Hence my first reflection: 1. Necessity for an ethical framework The very latest experiences have proved that the sustainability of the market economy is by
2 no means guaranteed. The Asian financial crisis of the 90s clearly demonstrated that a free market economy is not without its costs, and the continuing crisis in Russia's economy is an excellent, albeit an unfortunate example of how a transformation to a market based system is not without its problems. Indeed, one cannot escape the fact that the emergence of global capitalism brings with it an entirely new set of risks. Trying to find a single reason for, or solution to the challenges of the global market economy in a particular country or in a particular region is unlikely to be successful. In fact, what we often observe is that, in such a situation, mutual recriminations occur: economists accuse politicians and politicians accuse economists; while the average citizen frequently sees the moral defects of both protagonists. In any case, it is already sufficient that if one of the three elements, whether it be economics, politics, or morality, does not work, it can cause serious difficulties for the market economy. In seeking to present my own views on this issue, I am heartened to find that my analyses are largely confirmed by the views and explanations of the British economist John Dunning ( Global Capitalism at Bay, 2001). He distinguishes between three types of failures of the capitalist system. 1. A failure of markets: moral hazard, inappropriate macroeconomic politics, excessive speculation (property and stock market), an inappropriately valued currency, manipulated exchange rates, cross-border and intra-firm transfer prices, bad timing of short-term debts, presence of a strong black market and the abuse of monopoly power. 2. A failure of the institutions: inefficient functioning of the regulatory and supervisory systems, an inadequate legal and financial infrastructure, shortcomings in the protection of ownership rights, lack of accountability and/or transparency and inadequate standards in financial reporting. 3. A failure of moral virtues, which lies at the core of the failure of the markets and institutions. Such failures include crony- and Mafia-capitalism, bribery and corruption, lack of truthfulness, trust and social responsibility, and excessive greed of the investors or institutions. Dunning investigated these different factors as they affected the recent economic crises in seven countries (Japan, Korea, Indonesia, Thailand, Hong Kong, Malaysia and Russia). He was able to identify the following relationships. The inadequate infrastructure for international commercial transactions is often associated with bribery and corruption and with excessive self-interest and greed; bad functioning on the level of macro-organisations is often correlated with dishonesty and fraud, a lack of trust, or the ability to compromise, and inadequate group loyalty;
3 inadequacies in the legal system, e.g. regarding crime prevention, are frequently related to Mafia- and casino-capitalism; an insufficient banking, finance and accountability system can sometimes be a nesting ground for opportunism, slackness and lack of discipline; an inadequate social architecture with indifference towards the needs of others can encourage a lack of personal sense of duty and social responsibility; the shortcomings in the protection of the rights of ownership is often associated with a carelessly irresponsible attitude. All this leads us to conclude that ethic is not marginal or artificially put on features in shaping global market economy, but that it is justified to talk of a moral framework which is both interactive and interdependent with the economic function of the main institutions of the economic system: markets, governments, civil society and supranational organisations. One conclusion we draw is that ethic does not only denote moral appeals, but moral action. Nevertheless a strain is often present in the economy, as within the contemporary stock market, in order to create the pressure to reform which can turn into a political agenda. Meanwhile, the recent protests against globalisation have raised the question of the social acceptability of the new globalised economic system. This acceptance would still not be guaranteed even if the global companies and markets, the national governments, national institutions and intermediate organisations worked efficiently. For today, it is the ethical framework on which they are based which is being increasingly questioned. We strongly believe that in the long run, the global market economy will only be accepted if it is socially acceptable. After all, in a democratic society the majority of the electorate has to be repeatedly convinced that a strong ethical framework supports both the operation and effects of the global markets and the extramarket institutions, and that this framework influences the behaviour and the decisions of those who are directly involved in the process of production and distribution. But what could be elements of this ethical framework? Is a global consensus possible? My second reflection on: 2. Cross-cultural ethical values and standards Every word can be understood and every term defined in different ways. One should not then be surprised that morally loaded terms like»integrity«may have various meanings depending on the cultural context in which they are used. It is generally known that the word»integrity«stems from the Latin»tangere«=»to touch«. The Latin»integer«means»untouched«,»unscathed«,»respectable«,»unharmed«,»whole«. Integrity can therefore be
4 interpreted as being free from moral or ethical misdemeanours and being respectable and incorruptible. However, most Americans tend to interpret the term integrity as keeping to given laws rather than interpreting it in the wider Latin sense. How can this difficulty be resolved? We may offer two suggestions. 1. It is not necessary to use such terms formally, but rather to fill them with meaning. In some European languages the meaning of the word»integrity«extends to being incorruptible, honest, and truthful, and to have a general agreement of the words and actions spoken or written. 2. It will be possible to interpret even a single expression like»integrity«unambiguously if it is not used in an absolute manner, but with respect to a specific situation. If people are reminded of»integrity«in the face of a particular event of corruption, it will be obvious in Europe as well as in America or Asia what integrity means. In this way, such terms can, and do express something like a bundle of elementary ethical values and standards, or core ethics. Nevertheless, abstract terms cannot suffice in the formulation of an operational global ethic; rather the ethical values and standards have to be filled with meaning. In this respect, the UN Global Compact, which was initiated by Secretary-General Kofi Annan in 1999 offers a valuable starting point. The claims it makes on the global economic system are three fold: (i) respect and support of human rights, (ii) the elimination of all forms of forced or child labour and (iii) a response to ecological challenges. These claims are based on the conviction that everywhere on earth - i.e. in all societies, cultures and religions - people need to recognise and accept comparable basic pillars which allow them to live together peacefully without compromise to their interests and concerns. In this respect, the contents of the UN Global Compact are very much in accord with the ideas of the Declaration Toward a Global Ethic of the Parliament of the World's Religions in Chicago in 1993. At this point also the OECD-guidelines for multinational enterprises (MNEs) (OECD 2000) deserve to be quoted. These contain very specific ethical standards, notably any claim for disclosure requires the will to truthfulness, honesty, transparency. any claim for environmental protection as well as public health and safety requires reverence for life, all life including that of animals and plants; any claim to refrain from slush corruption and bribery requires both a basic attitude towards justice and fairness and the will to encompass a just economic system; any claim to avoid any kind of sex, colour or age discrimination at the workplace, implies
5 the ethical conviction of the partnership of man and woman and the necessity for equal rights. Who assumes that these are only abstract and general statements should read the already mentioned Declaration Toward a Global Ethic; the text can be found on the homepage of the Global Ethic Foundation (www.global-ethic.org). There, principles stemming from all the major ethical and religious traditions are applied to contemporary situations. All this leads us to conclude that the question of cross-cultural global values and ethical standards which is crucial for the success of global market economy can, indeed, be answered. This leads me to my third reflection: 3. Which are the common human basic values and standards? A lot of what is proclaimed as God's commandment in the Hebrew Bible, in the New Testament and in the Koran can also be found in the religions and philosophies of Indian and Chinese origins and also in humanist philosophies not rooted in any religion. The Global Ethic Declaration has identified two basic values which underlie all other values: humanity (»ren«in Chinese) and reciprocity (»shu«). The principle of humanity means that»every human being man or woman, white or coloured, rich or poor, young or old must be treated humanely«. The principle of»reciprocity«is the Golden Rule which can be found already in the analects of Confucius, but also in the biblical, islamic and other traditions:»what you do not wish done to yourself, do not do to others.«based on these two fundamental principles one can find already in the writings of Patanjali, the founder of yoga, but also in the Buddhist Canon and in all major traditions the following core values and standards: 1. The ancient directive:»do not kiln«today: A commitment to a culture of non-violence and respect for life. 2.»Do not steal!«a commitment to a culture of solidarity and a just economic order. 3.»Do not lie!«a commitment to a culture of tolerance and a life of truthfulness. 4.»Do not abuse sexuality!«a commitment to a culture of equal rights and partnership between men and women. Conclusion Over the last decades most of us may have changed their minds about peace and
6 disarmament, about economy and ecology, and about the partnership between men and women. All these changes take a long time but are already the seeds of a global ethic. Many people can help to further a global ethic: especially Transparency International, but also other intellectual, spiritual and political pioneers, activists and groups, the numerous teachers and the mass of ordinary people of good will who already do what they can to promote and practice an understanding of a new global ethic. For the sake of a peaceful social existence on a local level (in innumerable»multicultural«and»multi-religious«towns and villages), as well as at a national and global level (in global communication, global economy, global ecology and global politics), the need for a shared global ethic is more important now than ever. Ladies and gentlemen, in its struggle against corruption Transparency International helps to implement the global ethic in the fields of politics and economics. On the other hand Transparency International is greatly helped in its struggle by a growing awareness of a global ethic. This is a sign of hope in rathertimes. But what happens in the narrow or wider areas of life largely depends on the individual persons and their motivations. The famous words of Mahatma Gandhi about the»seven social sins in today's world«are addressed to each one of us. They are: Wealth without work, Consumption without conscience, Knowledge without character, Business without morals, Science without humanity, Religion without sacrifice and Politics without principles. Bibliography: Dunning, J.H. Global Capitalism at Bay, London 2001.
7 Dunning, J.H. (ed.), Making Globalization Good. The Moral Challenges of Global Capitalism, Oxford 2003. Kung, Hans, Global Responsibility. In Search of a New World Ethic, New York 1991, London 1991. Kung, Hans (ed.), Yes to a Global Ethic, New York 1996, London 1996. Kung, Hans - Schmidt, Helmut (eds.), A Global Ethic and Global Responsibilities. Two Declarations, London 1998, New York 1999. Kung, Hans, A Global Ethic for Global Politics and Economics, London 1997, New York 1998. Kung, Hans (ed.), Globale Unternehmen globales Ethos. Der globale Markt erfordert neue Standards and eine globale Rahmenordnung, Frankfurt/M. 2001. Picco, Giandomenico; Kung, Hans; Weizsäcker, Richard von (a.o.), Crossing the Divide. Dialogue among Civilizations, South Orange, NJ, 2001.