Ethical business in Kenya needs to be more than a dream

In 1995, I was invited to dinner by an American doing business in Nairobi. He was an older, experienced man.

He picked my brain about studies, business and politics. 

We spoke a lot about studies, a little about business and almost nothing about politics. In those post-Ouko days, the topic of politics was better avoided.

At one point, when dealing with business, he firmly declared, “Ethics and business are incompatible in Kenya. If you study and teach Ethics you become a Martian, an extra-terrestrial being. You are fixing yourself to fail.”

Perhaps thanks to my family upbringing, I knew he was wrong. I tried to tell him so, but he wouldn't listen.

This conversation and this man's powerful statement got stuck in my mind. He had said that it was impossible to do business in Kenya ethically.

I didn’t agree, but I wondered whether I was a romantic Venusian, or maybe somebody from Mars or a farther planet.

Certainly, ethical business is not an easy option. Many who have tried have failed as business people and lost it all, even though they have probably succeeded as human beings, as good family people, good spouses, parents or simply friends.

The conflict of interest every civil servant in Kenya faces is truly an uphill task. In the late 60s, it was clear that civil servants were not being properly paid in Kenya, and President Kenyatta appointed a commission to look into the structure and remuneration of civil servants in the country.

WATERED DOWN

The Ndegwa Commission, in its report of 1971, recommended that civil servants be allowed to own private property and run business of any kind only if they met five strict conditions.

Over the years, these conditions were watered down, until they evaporated in their totality. The death of these restrictions implicitly declared the sanctity of conflicts of interest, where the regulator and the regulated could be one and the same person, and it was seen as something good.

Gado, the cartoonist, has the rare gift of expressing many ideas through simple, witty cartoons. Yesterday, once again, he hit the nail on the head.

He drew the funeral rite of Chapter Six of the Constitution. Chapter Six of the Constitution was inside a coffin, a corpse being taken for burial. It was dead.

Chapter Six of the Constitution deals with leadership and integrity. This chapter focuses on state officers, their oath, their conduct and their financial probity.

This chapter also directs Parliament to establish the Ethics and Anti-Corruption Commission and pass legislation on leadership. Parliament effectively did so, and two bills were passed. Paradoxically, these two bills ended up emptying Chapter Six of its beauty and meaning.

PRIVATE SECTOR THE TRIGGER

There is a serious integrity problem in the country, which is more visible in the public sector but far more pernicious in the private sector. It is a cancer, slowly eating up the nation from within.

Ernst & Young conducted a survey in 59 countries on corruption in the private sector. Kenya’s performance was dismally poor. We have one of the most corrupt private sectors in the world.

This situation is simply unsustainable and the trend needs to be reversed. Truth be told, the private sector is the trigger for public corruption. Most bribes are paid by the private sector.

Betty Maina, a great Kenyan and amazingly enterprising woman, took upon herself to foster ethical practices and fair competition within the Kenyan private sector. Ms Maina has rallied everyone in the Kenya Association of Manufacturers (KAM) to join the UN Global Compact (UNGC).

The UN Global Compact is a platform created by private corporations who commit themselves, individually and corporately, to take environmental, social and governance ethical responsibility to the next level and set a new benchmark for corporate sustainability.

‘BEAUTIFULLY STRIKING’

Any corporation that joins the Global Compact is bound to follow ten ethical principles. They must disclose and report periodically on their performance in areas related to human rights, labour, anti-corruption and care of the environment.

These corporations are struggling to address these critical issues in order to enhance business competitiveness in local and international markets. They have realised that unless they come together and raise the standards they will perish; it is just a matter of time.

Two days ago, I was fortunate to moderate a panel organised by KAM. Betty Maina was the convener and Chris Turner was a key supporter. Bob Collymore of Safaricom, Vimal Shah of Bidco, Marc Engel of Unilever and Carles Amengual of BASF made startling interventions. There were many CEOs in the room.

It was beautifully striking to hear these very successful CEOs say that their corporations, some larger than many government ministries put together, have come to the realisation that there is no choice; once a bribe is given the road is downhill and slippery, because once you bribe you are "engaged".  Once a bribe is given, one becomes the bride of the bribe, without the choice of divorce.

REVIVE NDEGWA REPORT

Our situation became complicated by the marriage between the public and private sector, after the Ndegwa Report. David Apol, director of the United States Office of Government Ethics, told my students a few weeks ago that the most common crime against work ethics in the US Government is related to conflict of interest.

In Kenya, the regulators and the regulated are intermingled; they live together, they are one and the same people. For Kenyan civil servants, conflict of interest is both a good neighbour and an enemy.

Unless the government revives the five restrictions suggested by the Ndegwa Report for public servants, and unless the private sector comes together under some umbrella pressure group like the UN Global Compact, only dreamers will be able to do business in Kenya ethically.

Dr Franceschi is the dean of Strathmore Law School. [email protected], Twitter:@lgfranceschi