Jean-Pierre Méan – Taking the High Road
- Hiking with his wife Roberta
Jean-Pierre Méan was raised amidst the ups and downs of the Swiss city of Lausanne, and faced all the temptations of a lawyer working in a country ripe with rewards for those willing to bend the rules, however gently. However, an incident early in his career helped him decide to take the high road, and he hasn’t looked back since. This ethical stance started him on a journey through legal positions with various multinational companies in Switzerland and Canada, to becoming Chief Compliance Officer for both SGS, a leading verification, inspection and certification company, and then the European Bank for Development and Reconstruction.
Jean-Pierre is now considered an anti-corruption expert, and is currently representing Ethic Intelligence in Switzerland, an anti-corruption certification agency, is Vice President of the Swiss Chapter of Transparency International, a member of the Anticorruption Commission of the International Chamber of Commerce, and of the Board of Trustees of Caux Initiatives of Change.
Jean-Pierre is married to Roberta Méan (with whom he enjoys taking the high road in the Swiss Alps!), and has three adult children from a former marriage living in Switzerland and in Canada. A fan of history, he also enjoys singing in the “Cercle Bach” of Geneva.
In this interview Jean-Pierre talks about his experience fighting corruption, about the scope of the problem, and about how companies are now honing in on the importance of individual ethics as a way to tear up corruption from its very roots.
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EBBF: So how did you get involved with anti-corruption work?
Jean-Pierre: Let me first give you a little context. The business of fighting corruption has emerged in the last 30 years. The first attack on international corruption was in the USA in 1977, when it introduced the Foreign Corrupt Practices Act. Until then it was illegal to bribe civil servants from one’s own country, but not civil servants from other countries. So we had Americans paying bribes in Korea and other countries—as were the Swiss and other Europeans—and this was not considered illegal in their country. In the 1970s there were a number of scandals in the US, and Congress passed a law that made giving bribes to foreign civil servants illegal.
I was then working as a legal officer for a Canadian company subject to US law because it was quoted on the US stock exchange. This was my first contact with anti-corruption work. I had to check all European and Middle Eastern contracts to make sure there wasn’t any funny business going on. And frankly, I was quite impressed. The work was being taken very seriously by the company; they were very intent on complying with the law. And it was more than just complying, it was also an attitude, an ethical attitude.
Then in the mid 1980s I started my own legal practice in Switzerland, and I was confronted with people coming to Switzerland to put money into Swiss banks in order to avoid paying taxes in their own country. Any lawyer in Switzerland is called to advise such people, and this was an occasional part of my practice for some time.
- Jean-Pierre (left) on a hike with EBBF founder George Starcher
EBBF: So wait a minute. People were coming to you with a lot of money that they made or acquired somehow, and they would ask you, “How do I get this into a Swiss account without risking being caught for tax evasion at home?” What was that like for you to having to deal with that kind of situation?
Jean-Pierre: At first, I did not see a problem as long as the money had been made legally. But then came a turning point. One client came to me and said, “I have a tax problem in my country. I need you to make me an invoice for a million francs, and date it back to last year.” I was shocked. I had not studied law to do things as stupid as this. It was not directly corruption, but tax evasion, but it was equally morally reprehensible and unacceptable. I did not want to continue in a practice where I was exposed to such situations.
So in the early 90s I left my practice and joined a Swiss company. I was called to put in place a code of conduct, prohibiting corruption. This was an enriching experience. But when providing training on the code, I was faced with various attitudes. Some divisional managers had no problem accepting very strict rules, while others—those involved in dealing with the public sector—complained about a lack of flexibility. This gave me some insight into people’s motivations and attitudes.
In ‘96 I was hired by SGS as chief legal officer. Immediately after joining, SGS got caught in a scandal which I had no idea about when I joined the company. So suddenly I had to fight off a huge corruption scandal, and conduct my own investigation into SGS practices to make sure that there were no other skeletons in the closet. It was a very intense experience as the company could have been destroyed by what had happened. I then put into place a code of conduct for the company in order to demonstrate that the company had done its homework.
Since then I’ve remained involved in various initiatives in fighting corruption for the past 10 years, spending two years with the European Bank for Reconstruction and Development, where I also helped implement an ethical code of conduct, and working in various private enterprises as well. I’ve also been involved in various other initiatives, such as with Transparency International, where we’ve developed a set of business principles for countering bribery, which became a model for corporate codes of conduct in fighting corruption. I am also involved in the International Chamber of Commerce, and helped to rewrite their rules on fighting bribery.
EBBF: Could you explain a little what is meant when we talk about ‘corruption’ in business?
Jean-Pierre: Let me give you a few examples. Zaire [now the DRC]: By the time president Mobutu Sese Seko was overthrown in 1997, he had diverted five billion dollars, which was about equivalent to the whole debt of Zaire towards the international community.
EBBF: And ‘diverted’ is a euphemism for ‘stolen’, I suppose?
Jean-Pierre: Yes, and for a country like Zaire that’s a huge amount of money. It means that while the very poor people of the DRC were working hard to repay this money, their president was accumulating that much money for himself.
Indonesia’s Suharto is thought to have diverted between 15 and 35 billion dollars. Marcos in the Philippines another 5 to 10 billion. The World Bank made an estimate that for 2001-2 worldwide the amount of bribes paid was a trillion dollars. The whole GDP of the world is 30 trillion—so it’s one thirtieth of the world’s GDP in bribes. If you extrapolate that figure to today’s value it would be 1.8 trillion. There are only 6 countries whose GDP is more than that. The US, whose GDP is about 14 trillion, Japan, the UK, Germany, China, and France. So you see 1.8 trillion is the GDP of a large country.
Another example is a recent estimate by a US senate committee that says that the World Bank has since 1946 lost about 20% of its lending portfolio to corruption. Although the World Bank is disputing this figure, experts estimate that between 5 and 25% of development money goes into corruption—that is 15% on average, which is not so far from the 20% estimate.
- Lausanne, Swizterland: Jean-Pierre's hometown
EBBF: All of these examples are from the “Third World”, and there seems to be a generalized perception that corruption is found ‘outside’—outside Europe, in particular, and that it is rather a problem in the so-called developing countries—and especially in Africa. How accurate is this perception?
Jean-Pierre: Transparency International publishes a corruption perception index; it isn’t rocket science, but it does show African and Asian nations at the bottom of the list. Out of the 180 countries listed, Iraq and Afghanistan, where we are supposedly ‘creating new democracies’, are among the worst. Somalia, Haiti, Sudan, Guinea, Chad are pretty far down there too. The idea of Italy being the most corrupt in Europe is supported by the transparency list as well. The US is 18th, France 23rd, while the best are Denmark, New Zealand, Sweden, and Singapore.
Quite at the bottom of the list you have Somalia. The government there is really weak, and this gives us a clue as to one of the root causes of corruption, weak government. Europe and, if you like, the ‘developed world’, have strong legal systems. These other countries don’t.
Another reason is that corruption is more likely to occur on a large scale where there are large projects, for example infrastructure projects, or the extraction of natural resources. There is a lot of money involved. This is the case in Sudan, which has a lot of oil.
There are also reasons for small scale corruption. One often hears that civil servants are not well remunerated. In some countries police and soldiers go several months without being paid. So they understandably take the money when and where they can.
But corruption is widespread. There have been a few shocking instances in the US. Everyone has read about the governor in Illinois selling the government seat that was previously occupied by Obama. There is also a recent case where two judges—in Pennsylvania, I believe—had a deal with a private company that was running a prison. The judges were getting a kick back for each youth they sent to prison. The longer the period the higher the kick back. So you had sentences that were ridiculously high for young men from disadvantaged backgrounds in a poor area of the Alleghany Mountains. In many cases, they shouldn’t have even been sent to prison. And the judges made 2.5 million dollars from this. So I think the other reason I would mention for corruption being so rampant is greed. It’s difficult to fight against corruption as long as money is the measure of all things for so many people.
EBBF: How serious a problem is corruption in the world right now? Has it changed in the last few decades?
Jean-Pierre: Well, on the one hand, over the last 20 years, there have been a lot of developments. Legal developments, for example: the law has changed and tightened in most countries to include as corruption payments made to foreign officials. There are also lots of efforts by civil organizations to fight corruption. On the other hand, there is a lot of money flowing. To take one example, the privatisation of companies in eastern Europe—lots of money! So there are these two forces going in divergent directions. One the one side, money, greed, and materialism. And on the other, more legal constraints, and the development of business ethics.
EBBF: Are there things companies can do to build up integrity among their workers and business partners? I mean, if you have a company, what do you do?
Jean-Pierre: Well, you know there are programs to fight corruption, which businesses can put into place. These have different building blocks: First, you have to decide how you want your company to behave. You make clear statements, like “It is our policy not to pay any bribes”. And then you have to explain what that means—bribery doesn’t only involve money, but also giving undue advantages, or entertaining people lavishly. And then you have your employees sign an agreement agreeing to these rules.
But this isn’t sufficient. Not many people who sign the document will even read it! So you have to train people to show them what these rules mean in their daily doings. For example, not only what they shouldn’t give, but what they might be tempted to receive. We had a company employee being invited to a two-day seminar in South Africa with his wife or girlfriend, followed by a several day safari. He was invited by a travel agency, and he was the person responsible for booking travel for our company. So it wasn’t really an invitation to a seminar, but to a safari! This case was quite clear but some cases aren’t that clear. So you have to have training where you look at these types of situations and talk about them.
Then you have to have someone at a rather high level of the organization who is responsible for the program. You can’t delegate responsibility for ethical behaviour to a single person, but you can have someone who will take initiatives in this area, to whom reports can be made, someone who has direct access to the board and CEO. You create a reporting system so that people can report their concerns when they think somebody is not acting according to company policy. And you need to set up a hotline, some confidential avenue of communication.
You also have to be careful with business partners, because it is easy for you to be ethical, and then have subcontractors or agents give bribes on your behalf. So you have to make sure they follow your line as well. And finally, if something happens, you have to investigate and sanction the behaviour of people who don’t comply.
It takes about one year to implement this whole program.
- Speaking at a Caux conference on Trust and Integrity in the Global Economy
EBBF: Do these programs work, and in general are we winning the battle? Is the anti-corruption work working?
Jean-Pierre: I wouldn’t say that corruption has diminished in the last 20 years, but rather increased. However, if there hadn’t been these efforts, it would probably be much worse.
There is a debate among people in the area, but what is becoming clear is that it is not a matter of techniques. The techniques to do this have all been developed, and are now quite sophisticated, but you can’t just go around with a checklist and tick off various points and say we now have an upright company. You have to change people’s attitudes, which you can’t do with techniques; you have to do this with values. You need to infuse values into your corporation for it to become transparent and ethical.
You know, I’ve just been participating in the creation of an association of European integrity and compliance professionals, and this is the line that we are taking. We are sending out letters to companies and other professionals in the field saying just this, that anti-corruption work must stress values over techniques. This realization is the new trend in compliance.
EBBF: You serve on the Board of Caux Initiatives of Change, which is trying to get businesses engaged in ethical issues, thinking about their impact on a larger whole. What have you learned through this experience about the challenge of bringing ethics into business? Are people seeing the relevance?
Jean-Pierre: My work with Caux really goes in the same direction I mentioned earlier. One initiative launched by Caux (and now leading a life of its own) is called the “Roundtable Principles”. If you go on their web site you will find a list of principles for business to follow, which are really ‘values’, which should take precedence over profit. It was developed several years ago and is quite well-known. One of the principles is on corruption and integrity.
Every summer there are conferences in Caux. This year I will be participating in a workgroup on helping reshape business around core values. So this is where we are now. Last summer we already had a workshop of business men that reached a consensus that we are not only in a financial/economic crisis, but in a systemic crisis of values. A crisis in the architecture of the system, in its very drivers.
In the past five years with the breakdown of human rights, the international community has been challenged. We have been led to believe that the system is very economically efficient. Now we realize that the system has built a disastrous situation. When you see Alan Greenspan, former chairman of the US Federal Reserve, admitting in front of a senate committee that he has been working on the wrong assumption that the market would solve all problems, then you know there has been a significant shift in understanding.
I think what we are experiencing now is the fall of our system, whether we call it capitalism or whatever, that is similar to what we saw in 1989 and the fall of communism. We thought that when the Soviet Union collapsed, the Cold War had been won. Now 20 years later, the other system collapses as well! So another system has to be built, unlike any other existing system. We know communism doesn’t work. Nor will anything else that has already been tried. We have to reshape, redesign the system, for example by rediscovering the purpose beyond just making profit. There is emerging consensus on this.
EBBF: You mentioned before that one major contributor to the rampancy of corruption is greed. Do you think there are elements in the current economic framework that encourage this greed and corruption?
Jean-Pierre: The current economic framework, which is quickly and hopefully becoming the past economic framework, strongly encourages corruption (and other deviant activities), because it is focused exclusively on short-term financial profit. We seem to have forgotten that the purpose of companies is not to make profit. It is to produce goods and services which are useful for society as a whole and to do this at a price which covers costs, including a return on capital sufficient to attract the needed capital but no more.
EBBF: Where do the people you are in contact with think the values should come from?
Jean-Pierre: It’s interesting, some weeks ago a professor of economics who has a small institute sponsored by the financial community published a book called “Finance: Servant or Deceiver”. When the book came out in English, he invited the financial community of Geneva, mostly bankers and people in finance, for a lunch hour to talk about it. At one point, a financial person, who is an independent adviser, said: “We need new values. These new values will come from religion.” And in this meeting of financial people those present seemed to be in agreement. This may mean that some financial people are so desperate that they know no other recourse than prayer. But beyond that I think that many more recognize that we badly need to go back to core values. These values may not come from established religions (and there is some disagreement today about the ability of the church hierarchy to lead), but if you say today we have to find spiritual values, there will be a consensus, not only among people concerned with spirituality, but also in the financial and business communities.
EBBF: Is there any hope that we will adopt a new system of values?
Jean-Pierre: I think there is hope. The current crisis represents a tremendous opportunity. There is a risk, of course, that politicians will try to restart the system as is, and that the system will run again. If it does work, it will probably work for three, four, five years before collapsing again and that time for good. It is more likely, however, that it will not work. And so we will be forced to attack the real problems—problems with the environment, problems with inequality. If you look at the world over the last 50 years, the rich part of the world has basically been financing its lavish lifestyle on credit, just borrowing money. The total debt, public and private, in the UK is over 340% of its GDP. The UK, US and some other countries are especially doing this, but the party is now over and we will only be able to afford the lifestyle for which we can pay.
This was one point last summer in Caux where we agreed that the change needed in the system would mean a fall in living standards in the west. However, my colleagues didn’t want to include this in the statement which was issued because we didn’t want to turn people off. I think that we are today past being shy on this.
EBBF: You’ve mentioned that one step businesses need to take in this shift in values is to pursue a purpose beyond profit. One of the principles from the Caux declaration talks about focussing on all stakeholders, not just shareholder value. How do you see this happening, as doesn’t this imply helping people—stockholders, CEOs, employees—to be content with less?
Jean-Pierre: Studies have confirmed that beyond a rather low level at which essential needs are covered, earning more does not make you happier. Although we know this rationally, we do not believe it in our heart because we are in an environment that exalts consumption. However, consumption brings only immediate temporary satisfaction which very soon gives place to frustration and the desire to overcome this frustration by more consumption. We have to understand this process of alienation and break this vicious circle by reverting to looking for lasting satisfaction in spiritual values rather than in material goods.
