This document summarizes the key topics that will be discussed at the Africa Forum 2019 conference on business ethics and reducing corruption in global health supply chains. Some of the main points covered include: - Why business ethics and anti-corruption measures are important for health outcomes and supply chain sustainability. - Examples of how corruption can negatively impact health systems, including loss of funds, reduced access to healthcare, and dangerous counterfeit drugs. - Strategies for organizations to strengthen ethical practices, such as demonstrating leadership, transparency, accountability and stakeholder engagement. - Tools and resources provided by organizations like Transparency International to help combat corruption, including monitoring of procurement and guidance for companies. - Warning signs

1. Africa Forum 2019: 18-19 July 2019, Dar es Salaam,Tanzania I #AfricaForum2019
Whyareethicalconsiderationsandthe
anti-corruptionagendaimportantfor
globalhealthsupplychains?

2. Africa Forum 2019: 18-19 July 2019, Dar es Salaam,Tanzania I #AfricaForum2019
How do business ethics
contribute to good
health outcomes?

3. Africa Forum 2019: 18-19 July 2019, Dar es Salaam,Tanzania I #AfricaForum2019
Business ethics
are an integral
component of
business
processes in the
sustainability
agenda
Why?
An ethically operated organisation:
- Demonstrates ethical leadership
- Adopts organisational values at all levels
- Uses resources effectively
- Is transparent about its decision-making
- Is accountable to its stakeholders
- Attracts ‘investment’
- Attracts a higher calibre of employee
- Pays its suppliers on time
- Manages supplier relationships to optimise supplier performance
- Renders optimal services to its customers
- Understands the impact of its actions and mitigates for
detrimental outcomes

4. Africa Forum 2019: 18-19 July 2019, Dar es Salaam,Tanzania I #AfricaForum2019
Sound too
good to be
true?
Lentegeur Psychiatric Hospital
 Large grounds: vegetable
gardens
 Pest control: cats
 Specialised furniture: local
content
 Leadership challenges
entrenched stereotypes
regarding mental health
through community awareness
campaigns & involvement
projects
 One supplier onsite managing
all facilities services to ensure
consistency & accountability
 Happy clinical staff = happy
patients
This Photo by Unknown Author is licensed under CC BY-ND

5. Africa Forum 2019: 18-19 July 2019, Dar es Salaam,Tanzania I #AfricaForum2019
What is at
stake?
 Total global spend on healthcare >$7 trillion per annum
 Best estimates are that between 10% and 25% of global spend on
public procurement of health is lost through corruption
Global Health Spend 10% lost 25% lost
7,000,000,000,000.00$ 700,000,000,000.00$ 1,750,000,000,000.00$
6,244,574,772,100.00€ 624,457,477,210.00$ 1,561,143,693,025.00$
5,610,947,831,300.00£ 561,094,783,130.00£ 1,402,736,957,825.00£
16,092,551,456,409,400.00TZS 1,609,255,145,640,940.00TZS 4,023,137,864,102,350.00TZS
98,098,143,757,600.00R 9,809,814,375,760.00R 24,524,535,939,400.00R
 $7 trillion = 3x Africa’s nominal GDP
($2.16 trillion (2017))

6. Africa Forum 2019: 18-19 July 2019, Dar es Salaam,Tanzania I #AfricaForum2019
What happens
when ethical
leadership
and
management
is not in place?
An unethically operated organisation:
- Demonstrates poor, little or no leadership
- Pays lip service to organisational values or has not identified any
- Uses resources ineffectively
- Is not transparent about its decision-making
- Does not hold itself accountable to its stakeholders
- Often under-funded due to unattractiveness to investors
- Many vacancies and/or cannot find suitable candidates
- Pays late and has accrued a large amount of aged debt
- Supplier relationships are subject to manipulation and suppliers
perform poorly
- Significant customer dissatisfaction or apathy/resignation
- Takes decisions in isolation without consideration of further
impact

7. Africa Forum 2019: 18-19 July 2019, Dar es Salaam,Tanzania I #AfricaForum2019
Why is corruption in
health procurement a
problem?

8. Africa Forum 2019: 18-19 July 2019, Dar es Salaam,Tanzania I #AfricaForum2019
Why is
corruption in
health
procurement a
problem?
CORRUPTION BECOMES EMBEDDED
IN CULTURE
When corruption becomes the norm, health procurement outcomes are likely to
become corrupt themselves:
 the corrupt benefit at the expense of others
 resources are wasted
 societies suffer
10th edition of the Global Corruption Barometer (GCB) –
Africa 2019
• More than 1 in 4 people paid a bribe to access public services in the
previous year
• This is equivalent to approximately 130 million people
• Corruption disproportionately affects the most vulnerable:
• poorest paying bribes twice as often as the richest
• Young people pay more bribes than those over 55 years old
• 14% of the 47,000 citizens across 35 countries paid bribes to access
healthcare services

9. Africa Forum 2019: 18-19 July 2019, Dar es Salaam,Tanzania I #AfricaForum2019
Impacts of
corruption in
the health
sector
 Reduced access: denying citizens their healthcare rights and
entitlements without financial hardship
 Negative healthcare outcomes: less effective healthcare, due to
the interplay between public & private sector and weak systems
 Economic inefficiency: less money for healthcare due to e.g. theft
or misallocation of public resources; increased health burden as a
result of poor health outcomes.

10. Africa Forum 2019: 18-19 July 2019, Dar es Salaam,Tanzania I #AfricaForum2019
Why must the
health sector
integrate anti-
corruption
measures in its
supply chain?
 Corruption in the health sector can be a matter of life and death,
especially for poor people in developing countries.
 In China, an estimated 192,000 people died of fake drugs in 2001
alone.
 Globally 10% of all drugs are believed to be fake.
 Counterfeit drugs can lead to increased disease resistance and
death.
 An IMF study across 71 countries showed that countries with high
incidences of corruption have higher infant mortality rates, even
after adjusting for income, female education, health spend and
urbanisation.
 Corruption scandals lead to the freezing of donor funding and
interrupt life saving services

11. Africa Forum 2019: 18-19 July 2019, Dar es Salaam,Tanzania I #AfricaForum2019
How do we entrench
ethical practice in our
organisations?

12. Africa Forum 2019: 18-19 July 2019, Dar es Salaam,Tanzania I #AfricaForum2019
Take a firm
stance and
enforce it
Eliminate these (& any other!) contributory factors …
 opportunity to engage in corrupt practices;
 pressure felt by officials; and
 a culture that rationalises and accepts corruption.
… by means of a firm stance on corruption at all levels of society
 An anti-corruption strategy based on good governance,
transparency, and zero tolerance
 Changes must be implemented in society at large for reform to be
sustained
 Better governance requires rigorous legislation and functioning
administrative mechanisms (policy) to provide fiscal oversight
 Ethical standards of conduct must be explicitly established and all
actors held accountable for their performance
 Punitive measures should be available to serve as a deterrent
 Honest behaviour must be rewarded

13. Africa Forum 2019: 18-19 July 2019, Dar es Salaam,Tanzania I #AfricaForum2019
Get help
Transparency International
 Develop and promote practical tools that reduce the opportunities
for corruption and enhance the ability of people and organisations
to resist it.
 Work with experts from companies, universities and other NGOs
to create tools, for example:
 Monitor public procurement processes
 concrete guidance for companies on avoiding extortion and
curtailing bribery
 reliable diagnostics for measuring and mapping corruption
https://www.transparency.org/whatwedo/tools
https://www.transparency.org/whatwedo/tools/resources_about_in
tegrity_pacts/3

14. Africa Forum 2019: 18-19 July 2019, Dar es Salaam,Tanzania I #AfricaForum2019
Example of
successful
intervention
 In 2013,Transparency International's partner in Honduras exposed
massive corruption in the purchase, sales and distribution of medicines to state
hospitals that was endangering the lives of many Hondurans.
 Medicine worth $Millions was being siphoned off from the state Central
Medicines Warehouse, possibly to be sold on the black market.
 Counterfeit and expired drugs were making their way into hospitals
undetected.
 The Minister of Health ordered a raid on the warehouse:
 Military control prevented employees or other actors from removing or
destroying evidence.
 Six people were arrested (warehouse employees, pharmaceutical suppliers
and civil servants).
 One pharmaceutical supplier was found hiding 200 boxes of stolen medicine
in her home.
 An Integrity Pact between the Ministry of Health and major pharmaceutical
companies came into force in 2017 to monitor the purchase and supply of
medicines in the country.
 The IP has lead to increased access to information, and increased compliance with
open data principles.

15. Africa Forum 2019: 18-19 July 2019, Dar es Salaam,Tanzania I #AfricaForum2019
Be aware
https://youtu.be/OXApeTYRYNQ
Introduction to the Corruption Perception Index 2018

16. Africa Forum 2019: 18-19 July 2019, Dar es Salaam,Tanzania I #AfricaForum2019
Corruption
Perception
Index 2018  CPI ranks 180 countries and territories by their perceived levels of
public sector corruption
 Scale of zero to 100, where 0= highly corrupt and 100 = very clean.
 More than 2/3 of countries scored <50 & the average score is 43
 Most countries are failing to make serious inroads against
corruption.

17. Africa Forum 2019: 18-19 July 2019, Dar es Salaam,Tanzania I #AfricaForum2019
CPI 2018
Top 10Scorers
Country
CPI Score
2018
Rank
Denmark 88 1
New Zealand 87 2
Finland 85 3
Singapore 85 3
Sweden 85 3
Switzerland 85 3
Norway 84 7
Netherlands 82 8
Canada 81 9
Luxembourg 81 9

18. Africa Forum 2019: 18-19 July 2019, Dar es Salaam,Tanzania I #AfricaForum2019
CPI 2018
SomeAfrican
States
Country
CPI Score
2018
Rank
Botswana 61 34
Rwanda 56 48
Senegal 45 67
South Africa 43 73
Ghana 41 78
Tanzania 36 99
Zambia 35 105
Ethiopia 34 114
Malawi 32 120
Kenya 27 144
Nigeria 27 144
Uganda 26 149
Zimbabwe 22 160
Cambodia 20 161
Democratic Republic of the Congo 20 161
Angola 19 165
Congo 19 165

19. Africa Forum 2019: 18-19 July 2019, Dar es Salaam,Tanzania I #AfricaForum2019
CPI:Sub-
SaharanAfrica
RECOMMENDATIONS
 Governments must intensify
efforts with focus on:
 Demonstrate visible
commitment to anti-
corruption from political
leaders
 Protect human rights
defenders, political analysts,
anti-corruption activists and
investigative journalists and
enable them to speak out on
corruption issues.
 Improve the health of
democratic institutions.This
includes supporting
participation, transparency and
trust, along with necessary
checks and balances.
https://www.transparency.org/news/feature/cpi2018-subsaharan-africa-regional-analysis

20. Africa Forum 2019: 18-19 July 2019, Dar es Salaam,Tanzania I #AfricaForum2019
CPI:
Middle East &
NorthAfrica
RECOMMENDATIONS
 Serious change in the way
countries approach institutions,
political rights, checks and
balances and other pillars of
democracy.
 Political freedoms to be secured,
with more space for accountability
and better protection for
whistleblowers, journalists and
activists.
 Electoral laws are reviewed to
ensure parliaments are strong and
effective, with a special focus on
transparent political campaign
financing.
 Oversight agencies and judicial
institutions are made
independent to help rebuild trust
between people and their
countries.
 Access to information laws are
implemented and effective.

21. Africa Forum 2019: 18-19 July 2019, Dar es Salaam,Tanzania I #AfricaForum2019
Know who’s
who in the zoo
… and what
they’re doing
when the lights
are off
Source: Savedoff and Hussmann, Chapter 1, The causes of corruption in the health
sector, in Transparency International (ed.), Global Corruption Report 2006. London:
Pluto Press, p. 7.

22. Africa Forum 2019: 18-19 July 2019, Dar es Salaam,Tanzania I #AfricaForum2019
TheWorld Bank: https://www.worldbank.org/en/about/unit/sanctions-
system/osd/brief/common-red-flags-of-fraud-and-corruption-in-procurement
http://www.nextenders.co.uk/6-types-of-procurement-fraud-and-how-to-spot-them/
Lookforthe
signs

23. Africa Forum 2019: 18-19 July 2019, Dar es Salaam,Tanzania I #AfricaForum2019
Procurement
Red Flags
Part 1
1. Conflicts of Interest
2. Kickbacks & Corrupt Payments
 Payment brokering
 Unwarranted gifts
3. Collusion or manipulation by bidders
Collusion (bid-rigging) often accompanies kickbacks and involves groups
agreeing to submit complementary bids to win contracts, sometimes on a
rotation basis. Examples are leaking information from fellow bidders,
accepting late bids and re-bidding of the tender.
Warning signs:
 No public opening of bids
 Deadlines are not enforced, extended unnecessarily or bids are accepted late
 The late bidder is also the lowest bidder
 Project is subject to re-bidding
 Qualified or winning bidders are disqualified for unclear or questionable reasons
 Bids are “lost”.

24. Africa Forum 2019: 18-19 July 2019, Dar es Salaam,Tanzania I #AfricaForum2019
Procurement
Red Flags
Part 2
4. Eliminating or reducing competition
 Single tender: Engineering a situation whereby only one organisation is invited to bid.
 Extending contracts:Achieving a contract extension instead of a competitive process.
 Biased specifications
 Discouraging other bidders from competing: bribes or threats
5. Biased supplier selection: insider info, design of evaluation, biased evaluation
6. Corrupt contract negotiation or management
 Anti-competitiveTs & Cs: making contractual arrangements that are not in the buyer’s
best interest; or ignoring contract terms to suit.
 Contract change: agreeing changes to the contract that are not in the buyer’s best
interest
 Contract extension: scope, volume or time - against the best interests of the buyer.
7. Over- or false payment
 Over-billing quantity: invoicing for more than supplied, or for goods/services that were
not provided at all.
 Over-charging: Invoicing at prices higher than agreed in the contract.
 Over-buying: Collusion between internal staff and fraudster leads to over-buying and
invoicing of goods or services that were provided – but were not required.
 Fake invoices: Invoices submitted by an entity that is not a supplier to the buyer
 Payment diversion: Legitimate payment is diverted to a non-legitimate recipient

25. Africa Forum 2019: 18-19 July 2019, Dar es Salaam,Tanzania I #AfricaForum2019
Sources
 https://www.transparency.org/news/feature/exposing_health_sector_corruption_saves_lives_in_honduras
 https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/67659/How-to-Note-corruption-
health.pdf
 https://www.transparency.org/files/content/pages/TI_G20_position_paper_-_health_sector_procurement_transparency.pdf
 https://www.cipe.org/legacy/publication-docs/matechak.pdf
 http://thecommonwealth.org/sites/default/files/inline/2Sophie%20Peresson%20-%20Pharmaceuticals%20and%20Healthcare.pdf
 https://www2.deloitte.com/content/dam/Deloitte/xe/Documents/About-
Deloitte/mepovdocuments/mepov13/dtme_mepov13_Procurement%20fraud.pdf
 https://globalcompliancenews.com/eu-study-corruption-healthcare-20171114/
 https://ec.europa.eu/home-affairs/sites/homeaffairs/files/20170928_study_on_healthcare_corruption_en.pdf
 http://pbtindia.com/wp-content/uploads/2014/06/BMJ-Healthcare-Corruption-June-26-2014.pdf
 https://www.cips.org/en/supply-management/opinion/2013/december/10-ways-to-control-procurement-fraud/
 https://procurementandsupply.com/2016/07/common-types-fraud-procurement/
 http://www.bu.edu/actforhealth/pdf/Flyer%20-%20Anticorruption.pdf
 http://tiny.cc/137v9y
 https://www.oecd.org/gov/public-procurement/health/
 https://ec.europa.eu/home-affairs/sites/homeaffairs/files/20170928_study_on_healthcare_corruption_en.pdf
 https://www.transparency.org/news/pressrelease/one_in_four_people_in_africa_pay_bribes_survey_says
 https://www.ppra.go.tz/index.php/news-archive/304-procurement-malpractices-cost-the-public
 https://www.publicspendforum.net/blogs/peter-smith/2017/02/26/public-sector-procurement-fraud-the-four-common-types/