Dare to say no!

"For major companies good ethical conduct assumes greater importance, and is more demanding, the more international they become. I would urge Hydro to make more active use of our expertise and the advice we can give in connection with its engagements and projects in specific countries," says Jan Borgen, who heads TI Norway.

Borgen emphasizes that TI's role is not to tell industrial companies whether it is right or wrong to operate in countries that do not respect internationally recognized human rights, or where corruption is rife.

"We do not issue any standard answer regarding who companies can enter into contracts with and when, but neither do we relent as far as the requirements for clarity and consistency are concerned. Hydro's ethical guidelines must be followed precisely, and that means that Hydro should probably say no more often to agreements with companies and authorities. In certain situations, the risk of breaching ethics and legislation is simply too high."

Firm internal discipline required

"As operations grow it is also increasingly important to have unequivocal ethical principles, greater capacity and a robust apparatus for assessing corruption risk and human rights breaches. The possibility of mistakes being made will only increase, while the media and shareholder focus becomes keener. This requires a firm internal discipline.

"We note that Hydro has put a lot of serious effort into their integrity program.

The program is an important tool, and must be used actively," continues Borgen.

"Our best advice for enabling such programs to function in the best possible way, is to ensure that management in the company is trained and demonstrates its practical use of the program. This will have a much greater signal effect in the organization. Ethical rules can often be perceived as sheer moralizing. If they are to be more than that, then management needs to get engaged."

Follow-up locally and at partners

"We often see that big companies have sound principles on paper, but that representatives of companies out in the field are much more pragmatic. And it is the daily activities out there that are the most important," he adds.

In implementing its integrity program, Hydro has also begun to set requirements for its suppliers and business partners when it comes to following up employees'  working conditions. Jan Borgen describes this as necessary if one really wants to help improve matters.

"I welcome the fact that Hydro is now attaching more emphasis to this aspect of  ethical business conduct. It is imperative that requirements are set as this helps to safeguard the rights of employees," he states.

Hydro makes a financial contribution to the running of TI's office in Norway. No conditions are attached to this subsidy. TI does not perform any direct supervision of Hydro's operations.