“Everyone should be allowed to bribe”

I had an interesting discussion the other day at a Fundraising event. Sitting opposite me was a businessman who also does a tremendous amount of work for charity. We got into a discussion on corruption – specifically, bribery. The discussion centred on how “the Bribery Act was causing business a lot of trouble” and that the UK “as always” was taking it seriously whereas other countries would not. We would therefore be undermined and lose business.

I argued differently. Working for Global Witness since 2007 (I left in late 2011), I had played a small part in working to get the Bill into law, then to ensure the guidelines made sense and have since worked with organizations like the Chartered Institute of Management Accountants (CIMA) to provide guidance (I wrote their guidance on the Act) and chaired their Bribery Act conference at St Paul’s Cathedral in 2011.

The businessman, actually a very interesting, successful and intelligent individual, suggested that, to make it fair, “everyone should be allowed to bribe” as much as they liked.

It was a Fundraising event, so not the time for a row – nevertheless, it reminded me sharply about how the world works and how it is split between those who understand the chaos that endemic bribery causes and those that see only the micro-economy (through the eyes of individual businesses) rather than the macro-economic chaos and individual misery that bribery causes.

We live in a disjointed world

I have recently been involved in the filming of a documentary on corruption that will go out later this year. So, although I have left Global Witness (which campaigns against natural resource-related corruption and conflict), I have stayed in touch with the issue.

It is easy when involved within an NGO to forget how business folk (as I counted myself for many years) can disassociate themselves from wider issues. I spent most of my career in business and those who are very successful are completely focused – like an athlete focused on winning a gold medal at the Olympics. The best are relentlessly single-minded in the pursuit of gold – the best business people are similar. This means that they are completely focused on what benefits their business.

This is why the US Chambers of Commerce have been waging a war on the Foreign Corrupt Practices Act (FCPA) for some time. The USA has, since the FCPA was brought into being in 1977, been way ahead of the field in anti-bribery law. This has heated up recently as the US authorities have piled into those who are believed to have breached the Act and, mainly through out of court settlements, have gained hundreds of millions of $ in fines and caused real change in US companies and how they operate outside the US especially.

But, the Chambers of Commerce believe that this puts the US at a disadvantage as other countries don’t have similar laws, they believe, or flout them.

Of course, this is no longer the case in many parts of the world. The OECD Anti-Bribery Convention was signed up to by 39 countries and the Convention is a tough one. As a result, the UK was eventually shamed into all-party support for anti-bribery legislation and the Bribery Act was the outcome – which came into law in July, 2011. It is actually a tougher law than the FCPA – making facilitation payments illegal, for example, and making the bribery of anyone (including government officials) a criminal act if it affects a decision. However, if a company has good processes and trains its staff well (Adequate Procedures), Directors of the company are unlikely to be prosecuted. Let’s face it, the funding of prosecutions is also likely to mitigate against major cases being developed.

However, the Act has led to a large industry being developed in training and in new processes. I was on the working group in the UK that brought in guidance for the not-for-profits (charities and NGO’s) in the UK (under the auspices of Transparency International and Mango) so saw very clearly how every organization (business or not-for-profit) could be affected by the Act.

This new anti-bribery industry has seen a number of lawyers move from the Serious Fraud Office (SFO) to private industry – confirmation if needed for business people that the whole thing is a cash generator for law firms and those in them and nothing more.

The equivalent of the “revolving door” that has been denigrated for years when politicians or civil servants enact laws or make project decisions and then move to senior positions in companies, is now taken as a serious concern by business people who see the same situation used against them! There is an irony there somewhere.

Corruption hurts

Business people see anti-bribery legislation as a problem. It makes business (in their opinion) more difficult in the same way that early 20th Century business people saw health and safety legislation as a problem. I am sure that many business people in the 19th Century saw government money being used to build the sewer system in London as a huge drain on their wealth and a public use of funds that proved that their wealth creation was being used against them – even if for the public good.

So, it must be galling to see anti-bribery legislation (which is international in concept and which is aimed at benefitting the poor in the poorest countries) put into force. In the USA, business is working to erode the law that has been in place successfully for 35 years – a law that has led the world. In the UK, there is irritation (maybe mounting anger) at the Bribery Act. And its implementation costs.

Business folk (and I was one for many years) see the short term and their bottom line. They find it hard to associate themselves with the wider questions about how corruption transfers wealth from the mass of people to a few – as, say, in Angola; how it ensures that money is spent on items that are not needed – very expensive air traffic control systems  in Tanzania, for example; how it adds to the price that poor nations pay; how nations like Nigeria are completely beholden to corruption as was England in the 18th Century – a nation where every job, every hospital appointment, every legal decision is likely to be subject to payment / bribes. Look at Greece and its current malaise – not paying tax is a symptom of a society corrupted – so much of the economy is bribery-induced – the black market is a corrupt market and leads to short-term benefits and long-term disaster.

Values are not for sale

The Bribery Act is now in place in the UK; the FCPA has been tried and tested in the USA for 35 years; 39 countries have signed up to the OECD convention. Yet, we probably face a bigger problem. The growth of nations such as China, India and Russia face us with enormous challenges as each nation is, in its own way, a centre of corruption.

China has adopted a Confucian posture – hit hard at home to rid itself of the endemic corruption that is at the centre of its totalitarian heart while allowing corruption to exist where it trades – such as in Africa. The Confucian spirit allows it to leave alone the nations with which it does business at the same time as Western nations attempt to apply governance to aid budgets. This is a time of real challenge and western countries should be working more than ever to instill values not just trying to compete for short-term gains. It used to be “if we don’t bribe, the French will”;  now the same phrase is directed at China, Russia and India (the home of www.Ipaidabribe.com).

We should not allow our values to be for sale for short-term benefits even in times of economic stress.

Is Bribery good for Business?

There are examples of businesses that have high values and most do not engage in bribery. Usually, those with the highest values are large businesses that know their CSR will be shaken by reputational problems. It makes business sense not to take the risk – bribery is bad for business.

Medium to small businesses, where the main opportunity for employment growth exists in most countries, are less concerned with CSR – which most think of as meaningless nonsense. Societal issues are way down the list of priorities – international issues are nowhere.

Hemmed in (in their view) by unjust legislation on all sides that seeks to choke off the spirit of enterprise, small businesses fight to survive daily. To them, bribery may be a necessary part of life. So what if people overseas suffer as a result – jobs are created for British firms and if we don’t do it, someone else (like the Chinese) will.

Globalisation in this context means nothing but cheap supply chains, cheap overseas labour and opportunities for exports. Globalisation does not mean we should take account of international problems.

Like 19th mill owners who fought sanitation bills as bad for business, who (in the main) were not interested in the health of their workers, who were only constrained by legal changes, many business people will only react to changes in the law because they are focused on their business and anything that adversely affects that business is bad – by its very nature. Bribery may allow business to take place – if a British company is not allowed to do it, business may well be lost.

Is bribery good for business? Of course not – just like the death of a worker because of shoddy safety systems, just like the gradual reduction in bullying at work because most acknowledge it is not needed – we inherently know that bribery (the corruption of people to make decisions go our way) is abhorrent. The impact is grotesque and cannot be justified even for a few extra short-term jobs.

Relentlessly focused business leaders know that bribery is wrong (at least most do) and, apart from the most extreme libertarians, understand that globalization means that the rules of business engagement are going to be made international. We cannot for long assume that developing countries will, for long, expect to be treated as the working class of 19th Century England. The class structure of international business will, over time, lessen just as we have made changes to our own class structure in Europe and North America and elsewhere.

Good business cannot “allow everyone to be bribed”. It is not just an ethical position, but a business one. Business should be undertaken on a level playing field where no-one bribes – we should be striving to ensure that bribery is minimized not allowed everywhere. Rules or norms are basic for societies to function. In a global society, the norms need to be widely applied. Bribery is bad – we all know it. Business leaders, here and in the USA, should be leading the fight – not over-reacting and running in the opposite direction.

15 thoughts on ““Everyone should be allowed to bribe”

  1. It is sad that the topic “Everyone should be allowed to bribe” has been the subject of debate. Those who have greediness for profit will choose this topic and try to get answer. Let us not waste our time in debating this subject.

  2. Having lived and worked in many countries around the world I have witnessed first hand the terrible effects of corruption. Companies, people, countries etc should gain contracts through merit NOT corruption at any level. Their are even many people in prison because the local police, judge etc were corrupt, this is horrendous!! Never ignore corruption, always fight against it!

  3. What an interesting article on a growing malaise! The context of the growing power and influence of the emerging economies brings home to me the scale of the issue.
    The FCPA in the USA has been a clear force for good and the emerging UK legislation will provide support. I have managed both UK and USA businesses in many parts of the world for many years and without the USA legislation would have been “rudderless” on several occasions.
    Corrupcion hurts!! – the economy, the people, businesses,
    If I have to pinpoint the most repulsive part, I would point to corrupt officials in public office.

    • It is quite surprising that I have read one article in today’s Hindu paper (India’s national news paper) i.e.28-05-2012. The article claims that in USA the big corporations which are funding for the elections in USA are preparing bills and handing over to the law makers and the law makers are putting their rubber stamps in it and passing the billls in order to suit the big corporations which are funding political parties. If this is true then it crossess all boundries and it is very difficult to change the course. The economy is being created by the big business and as and when the big business feels that the economy should go in to recession and sluggishness they will do it and claim huge subsidy in some or other form from the government and get back the donation given by them to reserve it for future elections.

      • Yes – you are right – we have to include both this ” tit for tat election jockeying”, plus the continual process of political “lobbying” in the corruption malaise under debate.
        Amazingly, both of these practices remain prominant and legal in the country which showed us the way with the FCPA.

        Good luck!!

  4. It is interesting that this is a problem around the world. I live in Zimbabwe, and we see the results of corruption everywhere. It is now a normal practice to expect to be asked to bribe at most Government departments and even by the police. Some businesses prosper because of corrupt practices, with easy access to bank loans and contracts to supply products. It is common talk among marketers that there is an incentive that one needs to leave to secure an order. This is to the detriment of more efficient organisations, or the poor as stated in the article. Those who refuse to bribe lose out. I think the major challenge in Africa is how we can fight the corruption scourge. You are seen as stupid when you follow ethical business practices and avoid corruption.
    Corruption and bribery is very bad! It should be stopped at all costs. We need a system that can follow up on those that engage in bribery. It is totally bad for business, especially the medium and small enterprises, because it is they who can least afford to bribe officials for these tenders and contracts.

    • Many thanks for this important contribution to the discussion. In my busniess career and then in my five years at Global Witness, I saw this from both sides – the suppliers of bribes and the impact of bribery on countries where is has become endemic. In so-called developed countries, we do have a duty to work with countries like Zimbabwe to eradicate bribery and corruption. Transparency International (where I also work and am a member) shows through its corruption index how prevalent bribery is in so many countries.

      I wish you well. It is not just hope that is important but a relentless drive on the part of those who can influence events to do so positively.

  5. Governments do not like corruption because they cannot stand competition from the business sector so they invent new laws to control. They of course force us to purchase GM crops; ensure that our cash is given to Banks at 0.50% interest so they can charge us up to 29% if we borrow our money; sign agreements without a referendum that takes away our hard fought for desire for democracy so we can be governed by an unelected group of dictators, so they can receive highly paid jobs when they leave office. Frankly, the real corruption lies in the hearts of Governments, especially those that profess to be against it.

    • This is what is exactly happens. Power corrupts human beings. The developing countries and the poor countries are at the mercy of the developed countries. There is no meaning of their elected governments, law making process and the parliaments. The instructions are coming from somewhere for these developing and poor countries.

  6. What a great article!..I’m visiting Jamaica, where corruption has almost brought the country to its knees. A rally of 150 young people yesterday spoke extraordinarily eloquently of the total damage that corruption is doing to them and their country. Jamaica is fighting back – a great initiative to get rid of corruption in the police seems to be working.
    Big business is sooo on the wrong side of this issue.
    Go Jeff!
    Mark Pyman

    • Mark – thanks and very good luck to you and TI in Jamaica. Business of all types and businessmen and women in all countries do need to “get” the problem. Some clearly have no idea what they are doing, some know and don’t care.

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