Financial Times

Tackling corporate corruption

Transparency International, the non-profit, non-governmental organization working to counter corrupt international business and government practices, has given some good advice to the business community. "Thou shall not bribe," we quote Jermyn P. Brooks, a senior official of Transparency International as telling a group of business leaders at a forum on 'Business Principles for Countering Bribery' organised by TI and the Ceylon Chamber of Commerce.

The advice is timely given that in the run-up to the general election politicians of all hues are demanding campaign contributions from friendly businessmen. These contributions, as is well known, are an indirect form of bribery as politicians who become beholden to businessmen in this manner would be more inclined once in power to bend or break the rules to help their supporters.

Corruption is not necessarily a poor country syndrome. Some of the world's biggest and well-regarded multinational corporations have been caught giving bribes, and not only in Third World countries but in the developed world as well, as some of the scandals unfolding in the West reveal.

Media Minister Lakshman Kadirgamar made a forceful point at the first meeting of the PA-JVP alliance with senior business executives last month. Giving a broad outline of the new alliance's economic policy, he said it would not tolerate corruption and sternly told the assembled corporate leaders: "It takes two to make a corrupt transaction - be not one of them."

Kadirgamar was perfectly accurate in drawing attention to the fact that there are at least two sides to a corrupt transaction. Attention is usually focussed only on one - those who take bribes. These are generally ruling party politicians, bureaucrats and other government functionaries. Rarely, if at all, is the role of the bribe giver - usually a businessman - highlighted. But in a transaction involving bribery both the giver and the taker are equally guilty and should be punished.

There is much glib talk of corporate good governance these days but the apex body of corporate leadership, the Joint Business Forum, is not even willing to make a call to its members not to fund politicians and their parties. J-Biz chairman Mahendra Amarasuriya said the forum had rejected as impractical suggestions for it to issue a call for a ban on businessmen and their companies making contributions to politicians.

While it may certainly be true that it is impractical to expect our businessmen to stop bribing their favourite politicians, in the hope of winning lucrative contracts when they are elected, the fact that a body which styles itself as representing the organised business community is reluctant to even make such a gesture is disappointing.

TI is promoting the adoption of a code of conduct to fight corporate corruption and help companies improve accountability and maintain sound business practices.

However, no code or lengthy set of regulations would work if there were no practical way of preventing corruption, or at the very least, in exposing it. This is where transparency is important. Both the main political parties that have ruled this country have promised greater transparency and even laws to guarantee freedom of information. But once in power, nothing more is heard of these promises. The UNP promised a Freedom of Information Act but was unable to get it done even after two years in office. Meanwhile, the gag on public servants continues and information remains difficult to access. It is the same in the private sector.

Transparency, in fact, can be an ideal antidote for corruption. But for it to work governments and corporations should stop merely paying lip service to the concept and actually make information more accessible to the public.

Back to Business