Behind the scenes: Promoting business integrity in East Africa
20th Nov 2024 | Leave a comment | By Gabriel Inzoberi
I recently joined some of our investee companies in Kenya as they celebrated securing the Blue Company certification.[i] The celebrations mark an important milestone for each company’s journey to embed best practice around anti-bribery and corruption measures across their business. I would like to explore the significance of the Blue Company certification and what it means for our wider efforts to promote business integrity across the PIDG portfolio.
Why does business integrity matter?
The cost of doing business in the wrong way can be high – either through the payment of bribes, the cost of incurring regulatory fines, damage to a company’s reputation, or through disincentivising new investment. Bribery and corruption can also have dangerous consequences. If, for example, a bribe is paid to enable a project to circumvent key safety procedures, or environmental safeguards, the project can cause harm to those it was intended to benefit. Corrupt hiring practices have the potential to place poorly qualified individuals in positions of influence, undermining the safety and success of a project.
At PIDG, we know that embedding ethical business practises is fundamental if we are to mobilise private sector finance and expertise into our projects and investments, a key pillar of the PIDG mandate. With the support of our Owners, PIDG provides catalytic capital to support our investee companies to grow and flourish as profitable businesses, attracting future investment to meet the infrastructure needs of communities across Africa, south and southeast Asia.
Embedding high standards of business integrity ensures that these companies are sustainable and can offer services that are safe, and that deliver the intended positive impacts for people and planet. We are extremely proud that the PIDG project development offering, InfraCo, holds ISO37001 certification in both Africa and Asia, testament to the importance we attach to business integrity within our own business.
Where does the Blue Company Project fit in?
Established in Kenya in 2018, the Blue Company Project was set up to encourage companies in East Africa to fight corruption in all its forms. Its Certification scheme enables businesses to commit to the Blue Company principles: that they and their employees will not take or give bribes, that they will declare any gifts received, and will operate without any bias in their hiring practices around race, gender, disability, tribe, or any other criteria other than merit. The initiative is now a dynamic network of 487 corporations and institutions united by a shared vision of transparency, integrity, and accountability.
What does Blue Company certification involve?
A standard certification process is applied for companies across various industries, sectors, and company sizes. To achieve Blue Company certification, companies have to put in place adequate policies and procedures to prevent corruption. This is closely aligned to our work in Business Integrity. For several years, we have been working to ensure that companies we invest into have policies in place to prevent corruption and that – through our bespoke training – all staff are aware of these policies and know how to implement them in practice.
To secure Blue Company certification, companies are required to demonstrate a commitment to ethical business practices by taking the following steps:
- The CEO or Managing Director (MD) is required to write to each employee of his or her Company and its subsidiaries, informing them that henceforth, no employee is allowed to give or take bribes in any form and that contravening this condition of employment will be treated as gross misconduct and liable to summary dismissal.
- The CEO or MD will also declare that all donations, gifts, and favors given or received by the Company or any employee to a customer or potential customer, supplier or potential supplier, government official or representative should be transparent, that is, declared and official. Any non-branded gifts accepted by any employee or given to anyone shall not exceed an agreed amount, and if of higher amount it shall be declined and/or returned.
- The Company, through its CEO or MD, shall have a declared policy of being free from favoritism on the grounds of Tribe, Gender, Religion, Color or Creed etc.[ii]
Crucially for smaller, growing businesses, there is no cost associated with Blue Company certification. Being part of the scheme gives companies an opportunity to network and collaborate with other members who uphold similar values. The Blue Company provides learning opportunities to its members, and it also provides positive brand equity as members are permitted to use the Blue Company logo in their marketing. As numbers swell, it is anticipated that the scheme will send a positive message to East African markets that it is possible to do business ethically, and that there is no room for bribery or corrupt business practices in the region.
PIDG portfolio companies in Kenya are going blue!
In 2023, Waterbus became the first company in our portfolio to receive Blue Company certification. With InfraCo support, Waterbus is growing its fleet of safe, reliable passenger ferries on Lake Victoria. This year (2024), we have received two additional certifications – for KUDURA, a rural mini-grid business in Kenya – and for Acorn which provides high quality, affordable student accommodation in Nairobi.
We are proud to have been a part of each company’s journey towards certification. The PIDG Business Integrity team began by introducing each portfolio company to the scheme, we then supported them in putting together the documentation required for certification. We also played a liaison role between our portfolio company and Blue Company, from collating and submitting the application, to following up until final certification was secured.
The Business Integrity team works to foster an environment of integrity and transparency in organisations supported by PIDG across the project lifecycle. We regularly undertake in-person training sessions for our companies. Most recently, members of the team have been in Kenya, Cambodia, and Vietnam, supporting our investee companies to examine their policies and procedures and to embed the principles of business integrity at all levels of the business. To ensure that teams are confident in their ability to turn down bribes and call out corruption they may witness in their work, we also undertake refresher training and provide ad hoc support remotely.
The tone of a business is often set at the top, with the board and executives being responsible for ensuring that the business has appropriate policies in place and that those policies work effectively, with staff understanding and subscribing to their principles. To this end, we recently ran a three-day PIDG Institute Effective Company Direction Training session in Nairobi, covering a range of topics around effective leadership. These sessions provided an opportunity for us to better understand the perspective of directors and aspiring directors in our investee companies, and to help them to appreciate the importance of their efforts in spearheading a culture of business integrity in their businesses. This training will shortly be rolled out in Singapore.
Where do we go from here?
We have only just begun! We continue to work with all of our portfolio companies with a view to helping them to secure local or international certification. In addition to the Blue Company certifications achieved by Waterbus, Acorn, and KUDURA, we have also supported InfraCredit Nigeria – a PIDG-supported credit enhancement facility – to achieve ISO37001 certification. In Kenya, we are looking to get Blue Company certification for other companies in our portfolio.
Of course, certification is not an end in itself, it does, however, provide important recognition of a company’s commitment to ethical business practises. With annual recertification required, it also raises the bar, encouraging them to maintain best practice and to aspire to hold a leadership role in the area of governance and business integrity in their specific sector or geography, something which forms a vital part of wider efforts to make bribery and corruption a thing of the past.
[ii] the-blue-company-letter-official-invitation-letter.pdf
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