What is the ethical issue?
Some may view bribery and corruption as financial crimes, with no apparent victims. But corruption means that public money may be diverted from helping the most vulnerable in society, power is abused and infrastructure suffers.
Business relationships rely on trust. Bribery and corruption abuses that trust, and goods and services are not procured in a clear, ethical or transparent way. For this reason, an organisation or its employees should never accept or pay bribes, including facilitation payments.
However, while organisations need to comply with relevant legislation on bribery and corruption in the countries in which they operate, because there are varying standards of regulations throughout the world, this becomes a regulatory grey area. Organisations need to be aware that the UK Bribery Act 2010, and the US Foreign Corrupt Practices Act 1977 are both extraterritorial in their application.
In some countries, corruption can be so endemic as to be 'socially acceptable', for example, with requests from officials for 'facilitation payments' in order to get things done. A facilitation payment is a small sum of money paid to secure or expedite the performance of a routine or necessary action to which the payer has legal or other entitlement.
A summary of good practice
- In the UK, the 2010 Bribery Act requires that an organisation has adequate procedures in place to prevent bribery and corruption. Similar legislation also exists in other countries, such as Sapin II in France.
- The key is to ensure your organisation’s culture promotes doing business with integrity - encouraging the right behaviour, discouraging the wrong behaviour and rewarding those who speak up about breaches of your code of ethics. Only by aligning it with a strong culture will your company’s anti-corruption efforts be truly "adequate”.
- Organisations will need to take a zero tolerance stand and undertake not to pursue business that will require them or any group companies to engage in unethical or illegal practices, and refuse to accept business if it requires giving or receiving a bribe or kickback. Third parties need also to be able to demonstrate that they comply with this policy.
- In some jurisdictions, in addition to the UK, guidance is given on what is expected of an organisation to demonstrate it has adequate procedures.