INTERNATIONAL BUSINESS LAW

International Business Law: Bribery and Corruption



International Business Law: Bribery and Corruption

Thesis Statement

In recent years, the attention of the political establishment in many countries and the international development communities including many of the major international financial institutions has come to focus on the problem of corruption and bribery in the international business.

Introduction

For many people, this new priority is long overdue; organizations such as the World Bank for most of its existence adopted an official posture that addressing corruption would be too intrusive, too sensitive, and too political. Although the legal prosecution of corruption—fraud, extortion, and other permutations of activities in which people improperly exploit their positions of trust to generate a self-interested benefit has been a component of the legal environment for decades, the attention now being placed on corruption and bribery as a policy and development issue is relatively new.

Corruption is a complex and broad topic. In a sign that regulators are clamping down on bribery and corruption in international business, from April 2011 the UK will implement what legal experts are describing as "one of the strictest anti-bribery regimes in the world." According to Neill Blundell, head of fraud at law firm Eversheds, the UK Bribery Act 2010 is even more far-reaching than the US Foreign Corrupt Practices Act of 1977. If you commit any form of bribery or corruption anywhere in the world, it can hold you to account even if you only have part of your business in the UK.

There are criticisms of multinational corporations (MNC's) for exploiting natural and human resources in the countries in which they operate. Some of the MNC's, such as Wal-Mart, earn significantly more revenues than the gross domestic product of entire countries, such as Pakistan, Israel, and Romania. Often these MNC's are criticized for using their power to manipulate the governments of these countries to gain special privileges. To avoid controversy, many MNC's' are adopting codes of corporate social responsibility to foster labor rights, protect the environment, and work against corruption, bribery, and other similar issues. However, whether such codes are genuine or part of corporate green-washing is important to ascertain.

A challenge for business professionals operating internationally across markets is negotiating differences in the application of moral values in regulations and legislation of different countries and/or trading blocs. The United States has led the campaign against international bribery, whereas European firms and institutions are putting effort and money into the promotion of “corporate social responsibility.” A study in Europe, in cooperation with the European Institute of Business Administration, found that there is a strong link between firms' social responsibility and European investors' choices for equity investments.

Corporate scandals involving companies such as Enron, Global Crossing, WorldCom, and many others have caused concern and suspicion among consumers about business ethics and corporate social responsibilities. However, business behavior is not always independent of consumers' own immoral, unethical behavior and acceptance of dishonesty. A holistic approach of shared responsibility of business and consumers on issues such as Fair Trade and social and environmental ...