INITIATIVES TO IMPROVE BUSINESS ETHICS AND REDUCE CORRUPTION
INTRODUCTION
Improvement of business ethics is a common concern of everybody, It is imperative that all parties
involved - manufacturers, sellers, consumers, government and relevant organizations must
participate in improving business ethics. Unless there is a concerted effort on the part of everybody,
we cannot effectively remind businessmen and professional of their ethical responsibility to each
other, to their customers and clients.
Unethical practices are ever present. Even people who have not yet been victims of these practices
are vaguely aware that they exist and agree that something must be done to rid the world of them.
Accordingly, various approaches to improving business ethics have been brought forward not only
in the Philippines but also in other countries.
THE INTEGRITY INITIATIVE CAMPAIGN
In 2010, a private sector-led campaign aiming to strengthen ethical standards in business, the
Integrity Initiative was organized after the Philippines received a grant from Siemens. The Makati
Business Club (MBC) and the European Chamber of Commerce of the Philippines (ECCP) serve
as the Integrity Initiative Secretariat.
The Integrity Initiative is a multi-sectoral campaign that seeks to institutionalize integrity standards
among various sectors of society - business, government, judiciary, academe, youth, civil society,
church and media: Led by the private sector, the initiative aims to help in diminishing, if not fully
eradicating, the vicious cycle of corruption in the Philippines, which has not only exacerbated
poverty but also obstructed the development of a competitive business environment that operates
on a level playing field.
Ultimately, the Integrity Initiative hopes to build trust in government, a more equitable society and
fair market conditions. This will result in improved competitiveness and increased business
confidence, which will evident with the increase in domestic and foreign investments, and more
employment generated for Filipinos. Subsequently, with more Filipinos employed in a vibrant and
dynamic Philippine economy, the alleviation of poverty should become inevitability. Through the
initiative, the Philippines will become a benchmark in the transformation process of any country
regarded as highly corrupt to one that fosters an ethical and progressive business environment.
To achieve this goal, consultations, roundtable discussions and public forums involving business
leader compliance officers, corporate governance experts, academic and practitioners from small
and medium enterprises to Fortunate 500 companies. “An Integrity Compliance Handbook”
containing the key documents and toolkits in Integrity Initiatives was published for the use of
organizations to promote ethical business practices.
Since 2010, MBC and ECCP have been joined by various organizations and industry associations
in taking an active role in promoting honesty an transparency in Philippine business. As of 2018,
a number of the organizations and industry associations have been taking active participation in
this movement.
With the active participation of these organizations, is hoped that the problem of massive graft and
corruption in the Philippines will be minimized if not totally eliminated.
Corporate Values
The increasing scrutiny by regulators, lobbyist, non-government organizations, consumer groups
and the media have the potential to affect a business firm market perception and hence value. It is
therefore important that the organization’s values, and its code of conduct, address the legal and
other obligations owed to important stakeholders, including, for example, the trade practices laws,
privacy laws, employment laws, occupational health and safety, equal opportunity in the
workplace, superannuation and environmental regulations.
Managing, protecting and enhancing reputation has become one of the greatest challenges facing
today's board. The reputation of a business is a critical factor in the determination of its value. The
values and ethics of the organization need to be explicitly managed.
Need for a Code of Conduct
A code of conduct is a formal expression of the organization's values and ethics.
A code of conduct should:
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guide directors and senior executives, as a minimum, as to the practices necessary to
maintain confidence in the organization's integrity. Other members of staff should also
have a code of conduct relevant to them which may be the same as that for directors and
senior executives or may be a complementary version;
promote responsibility and accountability of individuals for reporting and investigating
reports of unethical practices; and
ensure compliance with legal and other obligations to legitimate stakeholders.
An organization's code of conduct recognizes the important role that business ethics play in the
success of today's business, encouraging the board to actively develop an organizational culture
that is established on transparency, accountability and integrity.
One of the most significant accomplishments of the Integrity Initiative is the preparation of the
"Unified Code of Conduct for Business". The Code's purpose is two-fold.
First, it harmonizes existing ethical standards among business operating in the Philippines. It
ensures that different market players adhere to the same rules of the game in order to create
fair market conditions and promote transparency in doing business.
Second, the Code formally communicates the signatories' commitment to upholding high
standards of ethics in all business transactions. It articulates the belief that securing profit at
the expense of integrity is an unacceptable and unsustainable way of conducting business and
that measures have been taken to enforce and cultivate integrity habits within the signatories'
respective organizations.
Unified Code of Conduct for Business
As a signatory of the Integrity Pledge, we are committed to upholding the highest standards of
ethics in all our transactions. We firmly believe that securing profit at the expense of integrity is
an unacceptable and unsustainable way of conducting business. Now is the time to drive the
momentum towards the creation of fair market conditions in the Philippines. We express this
collective commitment by adopting the Unified Code of Conduct for Business (UCC). We aim to
institutionalize and promote honesty, transparency, and fairness in the business community by
adhering to this Code.
Top Management
 Our top management leads by example by consistently demonstrating the value of
conducting business with integrity.
 Our officers strongly communicate our organization’s position against bribery, corruption,
and unethical business practices within the company and the broader public; comply with
all the requirements of government regulatory bodies; and prohibit cover-ups and falsified
reports that conceal improper transactions.
 Management strongly supports integrity practices and allocates sufficient resources for
their implementation.
Human Resources
 We strive to instill a culture of integrity among our employees. The management maintains
open lines of communication with employees, particularly on matters relating to honesty,
transparency, and integrity in business transactions.
 In the spirit of fairness and due process, all employees have the right to file and respond to
complaints against practices suspected to be illegal or unethical.
 We have appropriate tools to confidentially receive, monitor, and act on internal and
external complaints.
 Employees filing complaints will be protected from all types of retaliation, while those
involved in unethical practices will be subject to commensurate disciplinary actions.
 We have instituted training programs on business ethics covering all levels of the
organization.
Sales and Marketing
 We clearly communicate rules and guidelines on giving/receiving gifts, entertainment,
tokens of hospitality, and contributions to/from public and private organizations and their
representatives.
 Employees and all third parties engaged by our company to act as our intermediaries,
agents, or representatives are not permitted to offer, promise, or give, as well as demand or
accept concessions— directly or indirectly—in order to obtain, retain, or secure any undue
advantage in the conduct of business.
 We abide by existing laws when transacting with government agencies (as stipulated under
RA 6713 – Code of Conduct and Ethical Standards for Public Officials and Employees and
RA 3019 – Anti-Graft and Corrupt Practices Act).
Finance and Accounting
 We require all our employees to ensure that all books and records they create or are
responsible for are complete and accurate.
 Our financial records conform to standard accounting principles, comply with Securities
and Exchange Commission requirements on disclosure and transparency, and abide by
anti-money laundering laws (RA 9160) and international conventions.
 We pay taxes in compliance with all laws.
Procurement
 A track record of integrity and compliance with existing laws is a prerequisite when we vet
third party consultants, suppliers, intermediaries, and agents. Our company has transparent
procurement procedures, provides equal opportunities for all suppliers, and prohibits
collusion between and among our employees and suppliers.
 Recognizing that the Integrity Initiative is sustained through widely shared ethical practices
within the business community, we enter into integrity pact with our suppliers and ensure
that they comply with the provisions of our pact.
 Contracting a third party to bribe or commit corrupt practices on behalf of the company is
strictly prohibited.
Logistics
 We comply with laws and regulations pertaining to supply chain management.
 We do not tolerate any breaches in existing laws in exchange for undue advantage and
unethical concessions or favors. We pay correct duties and taxes based on transparent
assessments of goods and services.
 Employees are not penalized for refusing to pay bribes or facilitation payments even if it
results in failure to meet deadlines or loss of revenue.
Implementation and Monitoring
 We will continually strive to align our operations to the principles contained in this Code
and periodically assess and monitor our compliance to it. We will continue to share best
practices with the business community to strengthen ethical business processes in the
Philippines.
BISHOPS-BUSINESSMEN’S CONFERENCE PHILIPPINES-CODE OF ETHICS FOR
THE PHILIPPINE BUSINESS
The Code of Ethics for the Philippine Business issued by the Bishops- Businessmen's Conference
Philippines is reproduced in this chapter for reasons of continuing applicability, relevance and
significance to entities doing business in the Philippines.
Preamble
This Code of Ethics has been formulated impelled by the belief that man has a dignity that must
be respected, and that all the resource of the earth has been created for his growth and development.
As here presented, this Code is considered a major step in the on-going and changing process of
understanding the growing role of business activity in the development of man and, as much, is
open to further improvement.
The Code seeks to express systematically and coherently the principles of business practices
accepted and professed by Philippine business at its best, and seeks to apply these to current and
changing needs.
It is the hope that this Code will serve as a general stimulus to renew and develop or amend existing
standards, and that individual entities will expand and adopt it to the specific needs of their own
organizations.
It is general Code intended to be influential rather than coercive. It is hoped that individual entities
will consciously adopt and embrace it as a statement of principles and, having done so, will be
unwilling to incur the sanction of adverse public opinion through failure to live up to the Code.
Finally, it is Code for all people, formulated on the premise that the modern manager must be a
strategist for human development, and that the business of business is to build an enterprise
oriented to the development of man.
The Concepts
Business which embraces commerce and industry is not an accidental human activity but an
integral element of the social order. Its primary purpose is to meet society's human needs by
providing goods and services as efficiently as possible. Those engaged in business should,
therefore, recognize the following basic concepts:
 All business is essentially an expression of human relationships; not only with those who
work in the enterprise, but also with those who own and provide financial resources, with
those who supply it with materials and services, with those who buy its products or
services, with the government, and with the wider public whose lives are affected by the
business activity. The interest of all those members of society must be taken into account
in formulating business policy. These interests, in themselves legitimate, will at times
conflict. While conflict and tension can be themselves being constructive, the aim of
business must always be to reconcile opposing interests in a balance of justice and mutual
concern.
 The owners, management, the work force, the suppliers and subcontractors, the customers,
and government contribute to the performance of the business enterprise, and are therefore
entitled to receive the proper worth of their contributions.
 The resources employed by a business enterprise are financial, technological and human.
The human resources have a unique quality and should be employed in a manner consistent
with personal dignity. The individual should be given opportunity to use and develop his
faculties in his work. His contribution to the success of the enterprise should be properly
recognized and rewarded.
 Business enterprise has a public responsibility to use all its resources efficiently. Profit in
a system of free enterprise is recognized as a fundamental incentive, and is necessary for
the maintenance and growth of the enterprise, for raising the quality or life, and for helping
meet the broader needs of society.
 Competition and incentives are essential for the maintenance and continuing improvement
of the quality of goods and services for growth and for technological progress. However,
to guard against unfair forms of competition, a consistent standard of business behavior
must be established and observed.
 In business, as in any other institution of society, any right or authority enjoyed by or
entrusted to business presupposes, and is justified by, corresponding duties, responsibilities
and performance.
Some Principles for the Conduct of Business
Those responsible for business policy should consider not only the interest of the owners of the
business, but also the interest of those affected by the activities of the business.
Towards the Employees
Business shall recognize the unique position of employees as individuals with a vital stake in their
work and at the same time with inherent obligations to their own families, and provide:
 for recognition that, although rates of pay may often be determined by union., economic
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and legal pressures, wages and salary policy should be based on the right of the employees
to a fair and improving standard of living, irrespective of race, sex, age and creed;
for fair recruitment practice that affords equal opportunity to all qualified job-seekers;
for job security, adequate compensation for employees in cases of separation and
retirement, and opportunities for fringe benefits;
for a safe and healthy atmosphere in the work environment conducive to the physical and
moral well-being and growth of the employees;
for conditions in which human potentials and relationships can be developed at all levels
of the work force, with a view to providing therein a sense of purpose and achievement;
and
for participative elements so that the knowledge, experience and creativity of all who work
in the enterprise may contribute to the decision-making process.
Towards the Customers
Business shall, in the production of goods and services:
 strive after a quality that will enable them to serve their purpose efficiently and effectively;
 avoid anything that would be detrimental to the health, safety or growth of the proper user
or beneficiary of such goods and services; and
 seek to apply or make use of the discoveries and inventions of science with adaptations
that will improve their products or services, thereby benefitting customers / users and
increasing their number.
In this marketing arrangement, business shall:
 driver the product or service in the quality, quantity, and time agreed upon, and at a
reasonable price, and avoid the creation of artificial shortages, price manipulation, and like
practices;
 establish an after-sales and complaints service commensurate with the kind of product or
service supplied and the price paid;
 ensure that all mass media, promotional, and packaging communications be informative
and true, and take into account the precepts of morality and the sound cultural values of
the community, and manifest for human dignity.
Towards the Suppliers
Business shall ensure:
 that the terms of all contracts be clearly stated and unambiguous, and honored in full unless
terminated or modified by mutual consent;
 that abuse of economic power in dealing with a smaller concern be avoided, and that, in all
cases, terms of payment be strictly and fully observed. In general, payment should always
be made promptly at the agreed time or, if no specific time is agreed upon, as quickly as
may be reasonable, given the circumstances; and
 that no supplier be encouraged to commit his resources for apparently long-term purposes
unless there are reasonable guarantees that the orders, he receives from the business
enterprise will not be terminated arbitrarily.
Towards the Owners and other Providers of Capital
In the interest of the Owners and other Providers of Capital, business shall:
 provide an adequate rate of return to those contributing capital to the enterprise and ensure
the security of their investment,
 use their financial resources to provide goods and services responsibly and efficiently;
 furnish the Owners and other Providers of Capital with such information as they may
reasonably require, provided that it does not adversely affect the security or efficiency of
the business; and
 pursue the specific objectives of the Owners and other Providers of Capital provided these
do not run contrary to any of the principles stated herein.
Towards the Local and National Government
Although it is the responsibility of government to enact legislation and formulate implementing
policies and programs, it is the duty of business:
 to participate in the discussion of proposed legislation and / or its implementation affecting
sectoral, regional, national and international interests; and
 to propose sound policies in the use of human and material resources.
Towards Society in General
Businessmen shall recognize in their decision-making the interest of the general public and,
realizing that they are utilizing to an important degree the nation's resource, shall:
 take regular stock of their response to the basic needs of society and thus ensure that these
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needs are taken into account in all policy-making decisions;
do their best to ensure that the way they deploy their resources benefits society in general
and does not conflict with the needs and reasonable aspirations of the communities in the
area where they operate;
pay proper regard to the environmental and social consequences of their business activity,
with special attention to the duty of renewing resources where possible and minimizing
waste and pollution, and not sacrifice safety or efficiency in the interest of short-term
profitability;
as corporation citizen make such contributions as their resources will allow, to research,
development and application of indigenous technology; and to the financing. of social
development projects;
consider the human and social costs of mechanization and technology.
establish a policy allowing employees, within reasonable limits, to contribute to the public
and community services during the work time;
establish a policy regarding conflicts of interest based on the principle
that decisions should be made in the best interest of the business enterprise, and decision
makers should be on their guard against allowing personal consideration to distort their
judgment; and
not tolerate any form of illegal data-gathering or nay form of inducement that tends to
distort normal commercial judgment.