An organization’s perspective, there are many potential
adverse consequences if it gets involved in bribery, and which therefore justify
the organization taking adequate steps to prevent bribery in relation to the
organization’s activities.
a) Ethical factors: From an international and
national perspective, bribery is now widely regarded as unethical and
unacceptable. It is one of the greatest obstacles to good government and the development
of safe and adequate infrastructure. Funds which could be used for schools,
roads, hospitals etc. are diverted by corrupt people for their private use.
Safety and environmental procedures can be corruptly avoided, resulting in
dangerous infrastructure and living conditions.
Ethical organizations which are unwilling to bribe lose
work to unethical organizations, which is unfair on ethical organizations, and
may provide lower quality and higher cost solutions.
b) Legal risk: The international and national legal environment is rapidly changing, reflecting the increasing desire of people worldwide to prevent bribery.
1) Many international treaties have been signed during
the last 20 years requiring member states to implement anti-bribery laws and
procedures. The most internationally significant of these are the United
Nations Convention against Corruption (2003) and the OECD Convention on
Combating Bribery (1999).
2) Most countries have changed their laws in accordance
with treaty requirements. Bribery and other corruption offences are therefore
crimes worldwide. All OECD countries have now made it a crime for their
nationals and organizations to bribe overseas. As a result, a person or
organization may be liable for bribery both in the country where the bribery
took place, and in the person or organization’s home country.
3) Individuals and organizations can be held liable for
bribery under both criminal law and civil law. The type and extent of liability
will depend on the laws of each country.
-Criminal laws can result in fines and imprisonment for
individuals, and fines and debarment for organizations. Prosecution agencies in
many countries are now starting to investigate and prosecute organizations and
individuals for bribery. There have been many recent major cases. An
organization may also incur criminal liability in several jurisdictions as
result of new laws passed which make the organization responsible for bribes
paid on its behalf or for its benefit by joint venture partners, suppliers,
contractors etc. It may be a defense or mitigate liability in some cases for
the organization to show that it had implemented effective controls designed to
prevent the relevant act of bribery.
-Civil laws can result in contracts being terminated in the event of bribery, and individuals and organizations being required to pay compensation to parties affected by the bribery.
C) Safety and quality risk: From an organization’s
perspective, bribery can adversely impact on its safety and quality management.
A bribe paid by the organization’s sub-contractor to the organization’s site
supervisor to overlook poor safety management on site can result in death or personal
injury. A bribe paid by a supplier to the organization’s procurement manager
can result in the organization buying poor quality products which need repair
or replacing. Therefore, effective safety and quality management also requires
effective anti-bribery controls.
d) Financial risk: Involvement in bribery can
result in financial risk to the organization:
- Fines levied by prosecutors or
regulators.
- Compensation paid to other parties
affected by the bribery.
-The internal management costs and
external legal costs of investigating and dealing with the bribery and
any consequent legal actions.
-The costs of dealing with claims for
death or personal injury resulting from bribery.
- The costs of purchasing products which
are over-expensive due to bribery, or of rectifying defective products.
e) Reputational risk: Involvement in bribery can result in reputational risk for an organization and its employees. The press frequently carries articles on individuals and organizations implicated in or being prosecuted for bribery. An individual implicated in bribery may be unable to obtain employment. Customers may be unwilling to do business with an organization implicated in bribery. Ethical employees may be unwilling to work for an organization which is believed to be unethical.
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