In the concluding part of our series, we advise how to deal with corruption lawfully, in countries where a backhander is customary.
It is possible to cope with corruption by understanding the political situation in the target country and operating accordingly.
How do you conduct business there? Very carefully, of course. Compliance means the implementation of policies that prohibit payments that are customary in the country, but actual forbidden by law. If companies are to enforce such policies, having a local legal advisor to vet third parties and comply with the law is most useful. Such representation is extremely valuable if a dispute occurs. Litigation can be lengthy, unpredictable, and frustrating.
If you seek to enter an emerging market, take Proelium Law with you. The rules for doing business in high-risk jurisdictions are never the same.
Government officials are occasionally underpaid, and sometimes corrupt; tactics for dealing with them can depend upon:
- Building Strong Local Representation
Protect against ethical dilemmas, by being clear that any requests for ‘political contributions’, commissions and the like would be referred back to the board for approval.
- Compete Ethically
The supply of products and expertise that can help emerging economies develop is limited. Deploy your business not simply where markets are attractive but also where business can be done in an ethical manner.
- Transparency
Paying full taxes and being transparent is a radical approach that government officials may not be used to. Openly illustrating the revenue being generated and how much is being driven back into the local economy is a positive action in creating security.
- Dealing with Locals
Business in many developing economies can be done one tribe or village at a time. Manage business transactions ethically, fund communities, not overlords.
- Dealing with Customs
Because it will be necessary to import equipment into developing economies, it is easy for customs to hold company property to ransom for under-the-table payments. The ethical solution is to let it wait! Typically, a corrupt customs official will clear the shipment when it is discovered that the company will not pay, to free space for other incoming shipments that might be lucrative. Letting it wait, often does not mean waiting very long. Alternatively, if local security permits, create a media event, and invite local officials and the press.
Managing ethically is under the control of local partners and managers. Building ethical teams is never a trivial task.
Barry ET Harris MBE is a consultant for Proelium Law LLP. He is also a British Army veteran who combines operational experience with extensive commercial consulting, executive, and management expertise gained in complex environments and high-risk jurisdictions worldwide.
If you seek to enter an emerging market, take Proelium Law with you. The rules for doing business in high-risk jurisdictions are never the same. For a no-obligation discussion please contact us at [email protected] or call us 020 3875 7422.
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