“Corruption undermines human development. It diverts public resources away from the provision of essential services. It increases inequality and hinders national and local economic development by distorting markets for goods and services. It corrodes rule of law and destroys public trust in governments and leaders”
Fraud and corruption are substantial global issues with enormous financial and economic costs i.e. US$1 trillion are paid in bribes per year (The World Bank Institute) and there were US$1.8 trillion in illicit financial flows from Africa between 1970 and 2008 (Global Financial Integrity, 2010).
Anti-corruption is therefore one of four cross-cutting priorities in Norwegian Development Assistance. Furthermore, target 16.5 under the Sustainable Development Goals (SDGs) is to substantially reduce corruption and bribery in all their forms by 2030. Norfund has zero-tolerance for corruption which is integrated in all levels and activities – from project assessments, internal policies and systems, investment monitoring and reporting.
are paid in bribes every year
in illicit financial flows from Africa between 1970 and 2008
Through Business Support Norfund has supported numerous initiatives aiming at awareness and competence building and improving information systems. In 2018 Norfund took this one step further and set up a business integrity intervention together with Hibis AS. This initiative was extended in 2019.
Hibis is an advisory organization that aims to significantly raise awareness of fraud and corruption. They use innovative tools and techniques and work together with the company to identify, investigate and interpret red flags of potential malpractice at an early stage. Then they analyse the possible root causes, suggest mitigating actions and follow-up activities which contribute to the internal competence building on how to tackle these red flags. In this extended intervention covering the coming years, Hibis’s early detection methodology will be applied to assess company specific weaknesses and exposure to the risk of fraud and corruption and identify red flags and early warning signs of improper business behavior.
“The Mission of Hibis has always been early detection, constructive investigation and effective prevention of fraud and corruption. We believe in the need to dramatically raise awareness, and in the power that lies in anyone being able to spot malpractice early, provided she or he is given the confidence and right skills to do it. The role of Hibis is to share our experience and support those people who wish to take a stand against fraud and corruption”Hibis.com
Hibis AS pilot phase was successfully concluded in 2019 and portfolio companies that ware part of the pilot reported that the assessment gave them improved corporate governance, hereunder strengthen their business integrity and anti-corruption strategy. The approach helped the companies identify weakness and loopholes in their systems, processes and routines both internally and towards external shareholders.
Based on the experience from the pilot, Norfund decided to extend the intervention and enter into a new project to ensure Business Integrity remains a focus for the Business Support Program.
The aim is that Hibis AS will be one of several assessments and tools in Norfund’s Business Support work with Business Integrity in the coming years.