Curbing Bribery With a Global Workforce

There are a number of challenges that multinational employers face when employing staff in more than one country, including widely varied antidiscrimination laws, training requirements, termination processes and health and safety legislation.

One especially troublesome issue for multinational employers is bribery. A seemingly innocent act of giving a gift or paying for someone’s entertainment may be considered a bribe in some countries if it induced a certain outcome or led an employee to gain an advantage in his or her business dealings.

This could also happen in reverse, where your employee is given a financial advantage or other reward that aims to induce a certain outcome. The tricky part for a global employer is that the definition of bribery differs from country to country and attitudes about it vary across the globe.

Matthew Howse heads the labor and employment practice group at the London office of Morgan, Lewis & Bockius. In order to avoid violating a country’s anti-bribery laws,  Howse recommends that employers:

  • Be aware of and comply with any industry-specific guidance on bribery and corruption, and any anti-corruption guidance published by national authorities.
  • Undertake thorough due diligence so that, prior to establishing operations in a new location, they understand local attitudes towards bribery.
  • Conduct risk assessment to identify and evaluate the bribery risks to which their activities could expose them to bribery charges in each of the countries in which they operate.
  • Take a zero-tolerance approach towards bribery in all of the countries in which they conduct business and adopt an organization-wide strategy on bribery, with anti-bribery measures extended to every branch of the business, such as by adopting policies and providing anti-bribery training to their employees.

Organizations such as Transparency International can be a valuable resource for a global employer assessing its bribery risks abroad. Transparency International is the world’s leading non-governmental anti-corruption organization, which analyses corruption in 100 countries across a wide range of industry sectors and publishes risk advice.

Its Bribe Payers Index (BPI) is designed to evaluate the supply side of corruption, and ranks the 28 leading exporting countries according to the likelihood that their companies will bribe foreign officials. In the 2011 BPI, Russia was identified as the country whose companies were most likely to bribe, followed by China and Mexico. On the other hand, The Netherlands, Switzerland and Belgium were identified as the three countries whose businesses were least likely to bribe.

As a result, global employers must be proactive in conducting their risk assessments as well as providing anti-bribery to training their employees. The failure to do so can not only cause reputational harm to the business, but also cause it to face criminal charges and financial sanctions amounting, in the most serious cases, to millions of US dollars.

No company is immune from possible bribery charges. For instance, the US Securities and Exchange Commission’s enforcement actions have resulted in the settlement of bribery claims against Johnson & Johnson, Ralph Lauren and Maxwell Technologies, just to name a few.

What’s more, individual employees (usually senior directors) may also be fined or imprisoned, even if they were not aware of the bribery or did nothing personally to encourage it. Therefore, it is critical for employers to take the following steps:

  • Conduct risk assessments prior to conducting business in a particular country;
  • Undertake due diligence prior to hiring senior staff; and
  • Adopt high standards across their organizations to minimize bribery.

Concerned? Check out XpertHR’s 11 Key Employment Challenges for the Global Employer, for some practical guidance on how to address bribery and other workplace issues with a global workforce.