If the rule of law is not adequately enforced, it will be impossible to stanch corruption. In turn, it is not by chance that multinational companies face the most problems with bribery in countries with debased governments.

The most common bribery-related risk facing multinational companies and their third-party vendors is unadulterated extortion by government officials.

Simply put, in high-risk countries, it is either pay bribes or do not plan on doing business in that country. Therefore, the simplistic anti-bribery efforts many companies have implemented over the years are not effective. The reason, all but invariably overlooked, is the fact that in high-risk countries it is corrupt officials who are calling the shots, not a multinational company’s management or its local vendors.

Often, company employees pay off corrupt officials not just to ‘speed up the process’ but also because these same employees often do not feel confident that they can successfully pursue legal courses of action, are afraid that going ‘against the grain’ will jeopardise operations – or both. One example of a problem is when ‘clearance by customs’ is not provided in a timely manner – deadlines are missed or perishable goods may be lost.

Another and often dangerous scenario occurs when bribes are ‘requested’ by members of law enforcement, who are supposed to be protecting people and assets from crime. Foreign company personnel quickly come to realise that reaching out to local law enforcement for assistance is not only all but useless, and doing so only encourages even more ‘requests’ for bribes.

Such practices flourish in countries where the rule of law is not adequately enforced and thus corruption is widespread throughout such a country’s governmental operations – and, typically, up to the highest levels. The collector of an extortion payment usually only keeps a percentage of the money received, with the remainder of the bribe money passed up the food chain for others’ consumption. Further, money extorted by corrupt officials is often used to keep these same corrupt officials in power, fund other nefarious activities – or both.

In fact, the degree of extortion perpetrated by public officials in a high-risk country is symptomatic of how endemic, tolerated and accepted is corruption as a cultural norm. Therefore, in low-integrity countries, it is all but impossible to work around corrupt officials as the flow of extorted money up the food chain invariably short-circuits investigation and prosecution of corrupt officials.

Source: ethicalboardroom.com

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