May 06, 2009
The International Bar Association held its annual anti-corruption conference in Prague last week. Late on the final day of the conference, there was a panel devoted to facilitating payments, particularly with respect to corrupt customs officials. The panelists and audience spent much of the allotted time acknowledging the difficulties that this issue presents and trying to develop some creative alternatives.
In-house and firm lawyers who believe they can tackle traditional, grand bribery head-on, still fret over this issue. There remains a lively debate in the compliance community about whether it’s possible to avoid facilitating payments and whether it’s even worth the effort.
After the panel, a Nigerian woman approached the podium. She reminded us that this issue remains the greatest compliance division between employees of multinationals and the local communities in the countries in which they operate. She asked why it is that companies that are often the largest employers and the most powerful players in African communities admit defeat so easily on this issue. “These companies can do anything and yet they are utterly defeated by junior customs officials.”
In response to the defense that it’s “local practice”, one participant from a major oil and gas company responded that “pumping effluent directly into the water supply may also be local practice, but that doesn’t make it a good idea … or something I want my company to do.”
Many companies have embraced high standards of corporate social responsibility. They support, at least nominally, efforts to address climate change, antiquated labor practices and human rights violations. They position themselves as a force for positive change. Why, then, do they fuel these extortionate pyramid schemes by meekly offering up their payments? Surely the international compliance community can do better.