Private Kenyan firms sign code of ethics

EABL Group Corporate Relations Director Brenda Mbathi (right) and Kenya Association of Manufacturers chairman Jaswinder Bedi during the signing of a business code of conduct at the Intercontinental Hotel March 16, 2012. ANTHONY OMUYA

Kenya’s private businesses on Friday endorsed a code of ethics that is expected to address issues of corruption and governance in the corporate industry.

More than 30 companies from the banking, manufacturing, media, telecommunications and hospitality industries signed the Code of Ethics for Businesses in Kenya.

“The cost of being unethical is enormous. It’s time businesses took a pro-active role in fighting corruption in this country,” Kenya Association of Manufacturers CEO Betty Maina said.

The initiative is organised by the United Nations Global Compact Initiative in partnership with the Kenya Association of Manufacturers (KAM) and the Kenya Private Sector Alliance (Kepsa).

The regulation addresses how businesses interact with various stakeholders including suppliers, consumers, shareholders and employees.

Further, it outlines responsibilities that companies shall fulfil to the state, society and the natural environment.

The move comes at a time when the country’s corporate realm is rocked by various business scandals.

The boards of car dealer CMC Motors and cement manufacturer East African Portland Cement are currently locked in internal wrangles that revolve around murky trade deals.

“Once more companies adopt the code, these issues will start disappearing,” Ms Maina said.

There has also been dwindling investor confidence as the country slides in international business environment rankings.

According to Transparency International, most corruption cases involve import and export procedures, business licensing, and payment of facilitation fees to police or procurement officers.

Despite this, the private sector has previously remained passive in the fight against corruption.

Although voluntary, Ms Maina is confident that companies will adhere to the code without the necessity of legally binding enforcement measures, if only to safeguard their images.
Annual audits on company practices will be carried out by third parties to assess the progress in each of the areas addressed by the code. Subsequent reports will be made public.

Non-adherence to the code will result in censure from fellow signatories and public exposure.

Government regulators will also be invited to adopt the code as a litmus test for best practices in the business world.

Gichugu MP Martha Karua, who spoke at the event, drew parallels between the ideals of the code and the new Constitution.

“We cannot reform the public sector without input from the private businesses,” she said.

Companies that signed onto the code on Friday include Safaricom, East African Breweries Ltd., Bidco, Athi River Mining and the Serena Hotels.

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