Ewan SutherlandLINK Centre, Wits UniversityCRIDS, University of NamurInternational Association for Media & Communication R...
 Talking about corruption A framework of treaties A lack of transparency Examples of TeliaSonera and Kenya Possible a...
 First requirement is just to talk Make clear it will not be tolerated Bribery Cronyism Nepotism Licensing of operat...
 National and extraterritorial provisions OECD Convention on Combating Bribery ofForeign Public Officials in Internation...
 Ownership is often incomplete:◦ Someone owns 2.7% of Orange Moldova Purchase and sale is often not mentioned infinancia...
 Merger of two incumbent operators Still partially owned by:◦ Government of Sweden◦ Government of Finland TV investigat...
Ewan Sutherland, June 2013, IAMCR, Dublin 7Who is the Visor Group?Who owns 20% of Spice Nepal?Government of Finland11.7%Go...
 In 2012, initiated a dialogue withTransparency International (TI) regarding thecompanys internal anti-corruption work. ...
 Strange patterns of ownership:◦ Safaricom◦ Telkom Kenya Alcatel admitted being asked to add USD 20million to an equipme...
Ewan Sutherland, June 2013, IAMCR, Dublin 10Safaricom LtdVodafone KenyaLtdGovernment ofKenya40%60%Vodafone GroupplcMobitel...
Ewan Sutherland, June 2013, IAMCR, Dublin 11Telkom Kenya LtdGovernment ofKenyaAlcazar Capital LtdUAEOrangeParticipationsOr...
 National licensing framework:◦ Licensor to require full disclosure of beneficialownership Extraterritorial provisions:◦...
 Liberalisation was extremely loosely defined Licences issued to:◦ Highest briber◦ Relatives◦ Heads of state themselves...
 Ewan Sutherland sutherla [at] gmail.com http://anti-corruption-telecoms.blogspot.com/ http://www.ssrn.com/author=9270...
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Bribery and corruption in telecoms: New approaches to licensing

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Presentation made today to the IAMCR 2013 Conference in Dublin

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Bribery and corruption in telecoms: New approaches to licensing

  1. 1. Ewan SutherlandLINK Centre, Wits UniversityCRIDS, University of NamurInternational Association for Media & Communication Research25-29 June Dublin
  2. 2.  Talking about corruption A framework of treaties A lack of transparency Examples of TeliaSonera and Kenya Possible actions to identify beneficial ownersEwan Sutherland, June 2013, IAMCR, Dublin 2
  3. 3.  First requirement is just to talk Make clear it will not be tolerated Bribery Cronyism Nepotism Licensing of operators:◦ Global best practice to open market to new players◦ Very vague on who can be licensed: Cousin of President Son-in-law of President The King himselfEwan Sutherland, June 2013, IAMCR, Dublin 3
  4. 4.  National and extraterritorial provisions OECD Convention on Combating Bribery ofForeign Public Officials in InternationalBusiness Transactions United Nations Convention againstCorruption (UNCAC) Regional anti-corruption treaties:◦ Organisation of American States◦ African Union◦ Council of Europe: Criminal Law Convention Civil Law ConventionEwan Sutherland, June 2013, IAMCR, Dublin 4
  5. 5.  Ownership is often incomplete:◦ Someone owns 2.7% of Orange Moldova Purchase and sale is often not mentioned infinancial reports Shares held through offshore tax havens: e.g., Chinese govt owns shares in China Mobile viasubsidiary in British Virgin Islands Operator groups:◦ Do not disclose all holdings◦ Have undisclosed “local partners” Manufacturers:◦ Hold shares in some operatorsEwan Sutherland, June 2013, IAMCR, Dublin 5
  6. 6.  Merger of two incumbent operators Still partially owned by:◦ Government of Sweden◦ Government of Finland TV investigative journalism Independent lawyers investigated◦ Devastating report◦ Management had not asked questions◦ Board had not been told Lost group CEO in January 2013 Uzbekistan partner could not be identified Allegedly bought 3G licence from friend of thedaughter of the PresidentEwan Sutherland, June 2013, IAMCR, Dublin 6
  7. 7. Ewan Sutherland, June 2013, IAMCR, Dublin 7Who is the Visor Group?Who owns 20% of Spice Nepal?Government of Finland11.7%Government of Sweden37.3%
  8. 8.  In 2012, initiated a dialogue withTransparency International (TI) regarding thecompanys internal anti-corruption work. The dialogue will continue in 2013. Prepared a new Group Anti-CorruptionPolicy, which was finalized in February 2013 To further ensure compliance with Code ofEthics and Conduct created an e-learning toolEwan Sutherland, June 2013, IAMCR, Dublin 8
  9. 9.  Strange patterns of ownership:◦ Safaricom◦ Telkom Kenya Alcatel admitted being asked to add USD 20million to an equipment invoice for Kencell◦ Paid USD 20 million into an account in MauritiusEwan Sutherland, June 2013, IAMCR, Dublin 9
  10. 10. Ewan Sutherland, June 2013, IAMCR, Dublin 10Safaricom LtdVodafone KenyaLtdGovernment ofKenya40%60%Vodafone GroupplcMobitelea VenturesLtdGuernsey87.5%12.5%Cabot LtdAntiguaAnson LtdAnguillaVodafone has since bought out Mobitelea.
  11. 11. Ewan Sutherland, June 2013, IAMCR, Dublin 11Telkom Kenya LtdGovernment ofKenyaAlcazar Capital LtdUAEOrangeParticipationsOrange East AfricaFrance Telecom51%78.5%49%21.5%Agility LogisticsUAE100%
  12. 12.  National licensing framework:◦ Licensor to require full disclosure of beneficialownership Extraterritorial provisions:◦ Voluntary corporate disclosure through: UN Global Compact WEF Partnership against corruption initiative (PACI)◦ Home country registry to require firms to disclose: Foreign holdings Foreign business partnersEwan Sutherland, June 2013, IAMCR, Dublin 12
  13. 13.  Liberalisation was extremely loosely defined Licences issued to:◦ Highest briber◦ Relatives◦ Heads of state themselves Need to set tone against corruption Need to identify beneficial owners:◦ Extraterritorial actions needed since high levelpoliticians involved in many countriesEwan Sutherland, June 2013, IAMCR, Dublin 13
  14. 14.  Ewan Sutherland sutherla [at] gmail.com http://anti-corruption-telecoms.blogspot.com/ http://www.ssrn.com/author=927092 +44 141 649 4040 skype://sutherlaEwan Sutherland, June 2013, IAMCR, Dublin 14
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