Bribery

Sarah Simon

9 min Read Time | August 10th 2021

Key Takeaways

Good corporate governance is crucial in avoiding bribery, a form of petty corruption that has adverse social externalities.

A clear ruling or fine must be given to avoid defamation. Older (before 2018) bribery cases may be discussed only if it can be proven that the company in question is still engaging in fraudulent activities.

Assess how likely the bribes are likely to repeat themselves.

What is it?

Transparency International defines bribery as “the offering, promising, giving, accepting or soliciting of an advantage as an inducement for an action which is illegal, unethical or a breach of trust. Inducements can take the form of gifts, loans, fees, rewards or other advantages (taxes, services, donations, etc.)".

Petty corruption, in the form of bribery, has deep negative social and economic externalities by destabilising a country’s social order, slowing down or halting social progress, and exacerbating poverty. The causes of corruption and bribery can be attributed to companies and people’s greed for money, where there is greater political monopolisation, lower levels of democracy, weak institutions and citizen participation, and a lack of political transparency, amongst others.

One of the SDG 16 targets is to “Substantially reduce corruption and bribery in all their forms”.

You have to ensure that your analysis is not an ethical or moral assessment. Be objective, what is the impact of the company's bribery case(s)?

Sources

https://www.transparency.org/en/news/holding-politicians-to-account-asset-declarations
https://www.un.org/sustainabledevelopment/peace-justice/
https://www.ncbi.nlm.nih.gov/pmc/articles/PMC6014157/
https://onlinelibrary.wiley.com/doi/abs/10.1111/joes.12198

E SDG PRINT 16

SDG Choice

Impact assessment

In your analysis about bribery, consider the following analysis flow that is in alignment with the IMP framework:

To write a strong introduction, you should explain why good corporate governance is crucial and disclose the impact and consequences that bribery has on society. This would help the readers make an educated assumption about the company's impact, even if it is not directly linked to the company.

Ideally, the geopolitical context of the country the company is having an impact in should be reported.

In the core analysis, the main point should be whether the issue is likely to repeat itself. If the company was fined last year for corruption and bribery that occurred 5-10 years ago, but in the meantime, it has changed its management and internal processes, such as by training employees adequately and implementing policies and procedures to ensure employees are not the perpetrators/beneficiaries of bribery, then the topic is deemed irrelevant. In other words, there is no impact today. However, if there are reports that suggest that the bad practices are continuing, showing a poor track record of unlawful behavior, then there is still an impact today.

Note
: We ask for clear rulings from lawsuits or fines when discussing bribery cases. However, because the lawsuits often take years to complete, the 'scandal' is deemed outdated (before 2018). However, if reports claim that these bad practices are continuing, then the analysis can be published.


Be sure to link back to the introduction by explaining how governance failure has led to concrete issues such as bribery, clearly describing the social impacts of the company’s bribery case(s).

You must provide quantitative and qualitative data to substantiate the negative impact. For example, bribery could lower social security standards for employees, circumvent environmental regulation, depriving local communities of exploiting their natural resources, putting on the market unsafe products, etc.

What social security standards and environmental regulations were bypassed?



If possible, quantify the impact, such as:
  • The number of employees that were affected by the lack of social security.

  • The amount of environmental damage caused.

  • The population of the communities that were displaced or experienced a loss of natural resources.

  • The additional social or governmental costs that occurred as a consequence of the briber? For example, “By offering these bribes, the company was able to win the construction contract for the city's main highway for 30% more than the original budget, costing the government an additional $50Mn".

The scale can be shown by how large and influential the company is and how significant the bribery case is, i.e., “TechnipFMC is the 10th largest engineering & construction company globally5 [...] The London-based company was involved in one of the top ten bribery and corruption scandals reported in 20197.


The impact can be disclosed by:
  • Clearly showing what actions the company took in regards to the issues, and how much was paid in bribes, i.e., “Between 2003 and 2013, TechnipFMC conspired with a Singapore-based company and paid $75 million in bribes for obtaining an improper business advantage in the state-owned Brazilian multinational company Petrobras8.

  • The bribes were paid to how many government officials?

  • When and for how long?

  • How did they manage this?

  • How did the company benefit?

  • Are there additional reports showing that this corruption practice is continuing?


Caution: An analysis that reports on a corruption case is only acceptable if details are provided about the impact of that type of corruption. You can link studies that have quantified this type of corruption and reported its impact on society or the environment.

Ensure in your analysis that you do not make an ethical assessment of the company but rather an impact assessment. Read our article “Golden Rule #3: Differentiate ethics from impact” if you are unsure about the difference between the two.

Also, ask yourselves the following questions:

1/ The breadth of the impact

  • Is the impact local, national, or global?

  • How many people are concerned?

2/ The depth of the impact

  • Are the people concerned deeply affected, or does the issue just marginally impact them?

  • Are the changes brought by the issue profoundly changing society or the planet?

3/ The persistence of the impact

  • How long would the impact described last for? Months? Years? Decades?

  • How reversible is the impact described in the impact analysis? Can it be easily stopped/extended?

Find more about evaluating the scale of the impact in Step 5: Assess scale and value.

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