How To Resist A Bribe In International Transactions

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Compliance programmes covering corruption and anti bribery among companies doing business in Sub Sahara Africa are becoming common. A problem still exists, however, when bidding for projects or conducting daily business.  Solicitation from foreign public officials and business people is rife and unfortunately, existing international anti-bribery conventions do not deal with these scenarios which affects international investment and commercial transactions.

corruption and bribery

According to the 2011 Corruption Perceptions Index, which ranks countries based on how corrupt their public sector is perceived to be on a scale of 0 – 10, (where 0 means that a country is perceived as highly corrupt and 10 means that a country is perceived as very clean ) Botswana scored the highest of  all Sub Sahara African countries. A good number of Sub Sahara African countries scored between 2 and 2.9.

The dilemma faced by companies  confronted with solicitation is this: if they refuse the request for a bribe they risk the direct loss of the business opportunity;  if they consider compromising with the solicitation request, there is a risk of severe reputation and legal consequences. In a commentary by Africa News this was said, ”…the general notion that  bribery and corruption is part of the way African business is done is a deadly killer to any business’ image even though such businesses may be very clean and ethical. It’s just human nature to lump the image about your business with everybody else, and especially to international clients who generally haven’t known your business for many years and who have a split moment to make decisions on whether to do business with you or not. It’s not the default psychological business disposition.”

How then can bribery be resisted in international transactions? Resisting Extortion and Solicitation in International Transactions (RESIST) is a practical tool to help companies train employees to respond appropriately to a variety of solicitations. RESIST presents 22 scenarios which discuss solicitation of bribes in the context of project implementation and in day-to-day project operations. Each scenario presented is designed to respond to two basic questions with real world facts and responses:

Demand Prevention – How can the company prevent the demand from being made in the first place?  

Scenario: “Your company’s goods, some of which are perishable or have limited shelf life, have been stuck in customs for a prolonged period awaiting clearance. A customs official has informed you that the only way to prevent further delay is to provide him/her with a cash payment. Your company’s legal counsel has informed you that expediting payments are illegal in this country.

(1)If practicable purchase goods locally.

(2) Determine the cause for the backlogs in customs clearance – if potential delays are a result of it being a traditionally busy part of the week, month or year, then try, to the extent possible, to schedule the shipment of your company’s goods during periods when the customs office experiences less volume.

(3) Build your company’s reputation for refusing to pay facilitation payments as a matter of corporate policy. ” Resisting Extortion and Solicitation in International Transactions  p 18

In other scenarios, follow these suggestions:

(1)Have general company anti-corruption polices;

(2) Have policies on facilitation payments;

(3) Have policies for company representatives who may be exposed to solicitation of bribes;

(4) Teach techniques for dealing with specific risks;

(5) Conduct due diligence of agents and intermediaries;

(6) Manage agents and intermediaries;

(7) Implement additional control procedures;

(8)  Have transparency in the procurement process;

(9) Initiate  collective action to improve overall business integrity;

(10) Implement  legal and financial precautions.

Demand Response – How should the company react if such a demand is made?

Scenario “ Your company is about to receive the equipment necessary for connecting a project site to the electrical grid when an employee of the state electricity company approaches your project manager explaining to him/her that the connectionto the grid will be delayed for days or weekly, if not indefinitely, for some obscure reason. An immediate cash payment to the employee would, of course, accelerate the connection and therefore facilitate the timely completion of your project.

(1)Refuse to pay

(2) Explain your company’s legal concerns/obligations and programme commitment to fight corruption

(3)Develop an action plan to deal with the project demands for connecting to the power grid

(4)Report the demand to the supervisor of the person making the demand

(5) If the demand persists, explain that any payment must be recorded in your company files, including the name and other identifying details of the employee making the demand

(6) Report such demands to the employee’s superiors in the electricity company and work with them to ensure that future demands for illegitimate payments will not occur

(7) Consider working with your own power generators in the meantime, if feasible”  Resisting Extortion and Solicitation in International Transactions p16

In other scenarios follow these suggestions:

(1)  Train on what is the  immediate response;

(2) Have  internal company reporting;

(3) Conduct company investigation, including discussion with the relevant persons;

(4) Disclose to the appropriate external source, if appropriate; and ultimately

(5) Withdrawal from the situation, whether it is the project or the entire country.

This article originally appeared on goglobalafrica