Oiconomy Pricing

Corruption & Conflict


Conflict, war, corruption and crime are great dangers to sustainability.
Therefore the O.S. includes criteria on both situations where the activities of an organization may contribute to situations of conflict, violence or corruption, and situations where the transparency and reliability of the organization and its communication may be questioned by the presence of situations of conflict or corruption.

Corruption is an economic issue, detrimental by itself and in addition heavily affecting all other aspects. Most detrimental is corruption of governmental level and by large international companies.
Assessment of ESCU’s for corruption is an absolute necessity. However, for smaller companies, corruption often is more an unavoidable burden than a revenue model. International companies always have the choice to abandon business and renounce the made profit in a corrupt country and take the risk of cooperation with competitors in avoiding bribes, where small local companies don’t.

Measuring involvement in corruption by a specific organization or case is by nature almost impossible. The most recognized indicator on the level of corruption by country is the yearly updated Transparency International Corruption Perception Index (https://www.transparency.org/).

Considered Sustainable Development Goals

16: Promote peaceful and inclusive societies for sustainable development, provide access to justice for all and build effective, accountable and inclusive institutions at all levels.
17: Strengthen the means of implementation and revitalize the global partnership for sustainable development.




The indicator is the maximum costs to stop corruption, multiplied with a reducing factor for the governance of corruption.
The maximum costs to stop corruption is to make corruption-based business unprofitable and therefore equal to the net operating margin.
The reducing multiplication factor (RMF) is determined by assessment to a set of PDCA divided criteria. One of these criteria is an 8 year accountant switch. The EU proposes a maximum 10 year period but leaves legislation and choices to the member countries. In 2013, The Netherlands implemented a mandatory 8 year accountant switch (Gold et al., 2013).

Background calculations

Reliably measuring corruption is almost by definition impossible, because corruption tries to be hidden. However, it is possible to assess the quality of governance against corruption.
The O.P.T. first excludes some demonstrable situations for assessment: risk of partiality by shareholders, company size, countries’ Corruption Perception Index score and existing certificates.
For the remaining organizations, the calculation formula is:

ESCU’s = PP x BNOM x RMF, where:
PP is the product price.
BNOM is the Average Background Net operating margin of the sector, because taking away the profit is taken as the maximum preventative costs.
RMF is the Reducing Multiplication Factor, determined by measuring the governance level on corruption and conflict.

Foreground calculations

For foreground calculations, the following formula is used:
ESCU’s = PP x FNOM x RMF x M%, where:
FNOM is the foreground 5 year average net operating margin of the company, and the other variables the same as for background calculations.
M% is the issue mitigation percentage. For the remaining percentage, the background ESCU’s are calculated and added.