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Business and Bribery

The Major Concerns of International Bribery

Bribery in general is a highly destructive practice. In government, it undermines the most basic systems and values and decreases public trust in government officials. In medicine, it can lead to dangerous endorsements and prescriptions of unnecessary medications.

In business, however, it can lead to an overall decrease in economic growth and the overturn of fundamental systems of capitalism, as competition becomes utterly unbalanced by bribery. This last consequence of bribery is especially significant to international bribery, as the world becomes smaller each day.

Foreign trade is becoming more and more important to the overall financial success of any given company, as foreign markets offer large areas to be tapped for additional economic growth. Some of the largest markets also lie in developing nations, with major populations in need of any number of manufactured products. But one of the unfortunate consequences of these markets being located in developing nations is simply that international business ethics standards do not necessarily carry over.

Between businesses of two developed nations, international bribery is very unlikely to occur, not least because both nations likely have similar principles and laws concerning bribery and will likely share a similar code of international business ethics. Should a business of one developed nation attempt to bribe an official of another for a contract, then someone in either the foreign nation or the home nation would be likely to find out about the transaction and would then be likely to punish those parties involved.

But in a business dealing between a business of a developed nation and the government of an undeveloped nation, none of the above is necessarily true. It is entirely possible for the government of the undeveloped nation to have no restrictions against such international bribery, or even if it does have such restrictions, it might not enforce them.

Businesses then often have two sets of international practices, one for developed nations and one for undeveloped nations. For developed nations, businesses will obey the tenets of international business ethics. But for undeveloped nations, businesses will often have no ethical difficulty with stooping to international bribery in order to secure contracts.

As was mentioned earlier, however, when one business shirks the tenets of international business ethics, it significantly affects the nature of competition under the capitalist system. That one company will then be at a significant advantage as opposed to other companies which still attempt to maintain appropriate, ethical business practices. In order for the other businesses to remain competitive, then they too must indulge in international bribery and completely step outside of the boundaries of international business ethics.

This is the primary concern facing international bribery. Any given nation can outlaw bribery practices, and it can furthermore outlaw bribery practices towards foreign nations. But there are many nations which, either de facto or de jure, have not outlawed such practices.

In such markets, a heavy advantage may always be gained by resorting to international bribery, which will then require the other companies to adopt similarly unethical practices in order to remain in the game, as it were. Without a code of international business ethics that is binding on all participants in global trade, this problem will likely always remain.

What are Some Anti-Bribery Laws

In order to combat bribery and all the
trouble it can bring, many nations have implemented anti–bribery laws, either for their own internal business
practices or for foreign business practices. The success of these laws is under
some contention, as some sources believe that anti–bribery laws are slowly but surely leading to a reduction
in the damage wrought by bribery in the world, while others believe that the anti–bribery laws so far have not done all that much to combat
bribery, whether because the laws themselves are anemic or because the
enforcement of those laws is not strong enough to make a genuine difference.

The United States has played a major role in
the overall anti–bribery struggle, having been one of the
first nations to incorporate a law against foreign bribery in
business practices. Of course, when it did first implement the Foreign Corrupt
Practices Act in 1977, America met with pleas from a number of its businesses
as to how the law was actually hurting them.

No longer could American
businesses legally bribe foreign officials for more work, but other nations’
businesses were more than capable of doing just that without facing penalty of
law. As a result, American businesses were not able to compete with those
foreign businesses.

To rectify the problem and push America’s trading partners towards adopting
their own anti–bribery stance, America began to push the
Organization for Economic Cooperation and Development to act, and in 1997, it
did. The OECD passed an anti-bribery convention, disallowing bribery of foreign
officials, and other nations have passed similar laws since.

But the problem remains that America is one
of the strongest enforcers of such bribery laws, while other nations’ support
has been weak at best. Some of those countries that have been weak in their
enforcement of anti–bribery laws include the United Kingdom,
France, and Italy.

Many claim that the problem is not improving, but is in fact
growing worse as a result of the failure of these attempts to stem the tide of
bribery. Furthermore, the imbalance between more regulated American companies
and less regulated companies from other nations remains and continues to hinder
American companies economically.

The United Nations has passed its own anti–bribery convention in 2005, which should hopefully
bolster the strength of the overall movement towards more and stronger bribery
laws. But most of the responsibility for enacting strong anti–bribery laws lies with member nations themselves, as
opposed to any international body. Unless these member nations can both create
such laws and then enforce them, the overall problem of bribery will likely
remain.

Even with strong anti–bribery laws, bribery will remain, to some extent, as it
has in the United States. But the major strides in anti–bribery regulation that are necessary for truly moving
towards a reduction in the detrimental effect of bribery upon the world’s
economy still remain to be taken.