Companies can no longer afford to turn blind eye to bribery practices

by Benny Tabalujan for The Sydney Morning Herald, July 5th, 2011.

Proper measures are essential, writes Benny Tabalujan.

BRIBERY – the word sounds dirty, feels dirty, is dirty. It’s a topic polite business people would rather not talk about. However, the arrests on Friday of some former executives of Securency and Note Printing Australia (NPA) on bribery charges have again shifted the spotlight onto a subject we’d prefer to skirt around.

Yet the truth is that bribery in international business won’t go away. Some estimate that leakage in the form of corrupt payments accounts for between 15 and 30 per cent of global trade and investment flows. If so, this raises substantial ethical, legal and corporate governance problems for Australian companies that do business in the emerging markets of Asia, Africa and Latin America.

Interestingly, international bribery hasn’t always been a crime in Australia. Before 1999, if a sales manager of an Australian company paid a bribe to a government official in, say, China, that person could be prosecuted in China under Chinese anti-bribery laws. But that person couldn’t be prosecuted in Australia. The reason is that bribery laws, like most other laws, applied only within the territorial limits of that country.

But this changed with the 1997 OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions. Australia signed this OECD Convention on December 7, 1998. Subsequently, Federal Parliament amended the Criminal Code Act in order to comply with the OECD convention. The amendments, which came into effect on December 18, 1999, apply to individuals and companies. They introduced a new offence of bribing foreign public officials overseas. The result is that if an Australian company pays a bribe in, say, Indonesia to obtain a mining concession, then it is potentially subject to criminal prosecution not only in Indonesia (under Indonesian anti-corruption laws) but also in Australia under the Criminal Code Act. (continue reading… )

 

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