Wednesday, July 27, 2011

On Bribery And Corruption

I was perusing one of these business magazines the other day and came to a lengthy and informative article about the new bribery and corruption laws that have been introduced here in the UK from around July this year.

The article went into detail about the impact of the legislation on business owners and company directors and I read it with fascination, horror, dismay and not a little pride, a good eclectic mix if ever there was one.

If I've understood things correctly, a big "if" I know, then there are some key points to be gleaned from this information and the impact it has on business leaders. My own personal connection to Sri Lanka also made me think of how the law here, and expected behaviour in business, compares and contrasts with the same in the motherland, as well as other countries.

The big points are that:

1. Bribery is defined as occurring when a person "offers, gives or promises to give a "financial or other advantage" to another individual in exchange for "improperly" performing a "relevant function or activity"". Sorry for the multiple quotation marks there!

2. The other side of the coin is that of a person requesting a bribe. It fundamentally says that if you request, accept or agree to accept a gift (pretty much of any sort) in exchange for not performing your function or activity properly, for not acting with impartiality, then you're fucked. It doesn't actually use the word "fucked" though.

3. As a company, company director or business owner you can be held liable if an employee bribes someone, even if you didn't know about it. Ignorance is no defence here. You have to show that you had procedures in place to prevent your people acting improperly.

4. Bribery of foreign public officials is a specific and serious offence. We (Brits) cannot do it, regardless whether it's acceptable practice in the foreign country or not.

Like I said, I was amazed by this. It's serious business, with positives and negatives for UK business people. The bribery act has been universally acclaimed as the toughest in the world, above and beyond the equivalent in the US.

It means, as an example, if my company was competing with a Spanish company for some business in India and the buyer wanted a bribe, the Spanish company might comply and face no punishment in any way, very possibly winning the business, (though I know nothing about the specifics of the equivalent Spanish law), whereas I, as a UK business person, simply wouldn't be able to do same.

Many feel that this reduces the ability of British business to compete with its foreign competitors. They have a point, yet others argue that it levels the playing field for British businesses, also valid.

Another interpretation of it is that actually it's fine to give gifts, money, prostitutes or whatever to your buyer, as long as it can be seen that the buyer still acted "properly", which is where it gets dodgy.

The current fiasco with News Corp and the Government here is very much about whether various people, from the Prime Minister to the former Police Commissioner acted improperly. It's well documented that Sir Paul Stephenson stayed at Champneys, an expensive and exclusive health farm, free of charge. Of course the point here is that Sir Paul Stephenson, (of course!) didn't act improperly in any way as a result of this. Champneys has strong links to Rebekah Brooks and News Corp.

My feelings of pride arose because the legislation is something that the British are leading the way in. Give it time, possibly many, many years, and other countries will certainly follow this. Equally the horror cropped up because of my realisation that it will in effect prevent British companies from acting in ways that are wholly acceptable, even expected, in many countries, Sri Lanka included.

My own company does no business in Sri Lanka, something I don't see changing. But if we did, should I be prosecuted or punished for bribing someone to get something done for me there, or for giving a fellow a nice flat screen TV as a "thank you" for giving me the business, when it's just the way things are done?

What do you think?

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