By Jane Ellis
This post is based on the book Corruption, Social Sciences and the Law: Exploration Across the Disciplines. Edited by Jane Ellis, author of this week’s blog post and featuring a chapter by Cheyanne Scharbatke-Church and Diana Chigas of the Corruption, Justice and Legitimacy Program, this book seeks to answer interdisciplinary questions in the corruption field and to understand the phenomenon more comprehensively. It will be of value to researchers, academics, lawyers, legislators and students in the fields of law, anthropology, sociology, international affairs, and business.
When did the law and the legal profession start to dominate the international discourse on corruption and bribery and anti-bribery, in particular? When the international focus on corruption shifted from the demand side, which proved difficult to address, to the supply side, the enforcement of which was relatively easy. Indeed, organisations such as the OECD, the UNODC and Transparency International are strong advocates for increased enforcement of extra-territorial laws that prohibit the bribery of foreign public officials. This focus on the supply side, however, is a blunt instrument as it ignores the reasons why and / or the circumstances in which corruption in some countries may occur. Prosecuting a company for bribery in the United States while ignoring the officials who may have demanded bribes, is akin to prosecuting an assassin for murder but not the person who engaged him or her to commit the crime. Different and more nuanced approaches are required. In my view, this means more dialogue and teamwork across disciplines: in particular, between those who are experts on the causes of or reasons for corruption, those who purport to enforce anti-corruption laws in developed countries and those who purport to manage corruption risk.
Corruption dates back thousands of years. There are references of corrupt conduct and moves to address it in Egyptian, Grecian and Roman times, as explored in Anti-Corruption in History: From Antiquity to the Modern Era (editors Ronald Kroeze, André Vitória and Guy Geltner). In more recent times (ie, in the latter half of the 20th century), it was professionals working in areas such as development, economics and political studies, who started to most actively analyse and publish on the topic of corruption and its negative impacts on economies, societies and politics. For example, in 1978 Susan Rose-Ackerman produced her ground-breaking book Corruption: A Study in Political Economy, which explored on the corrosive relationship corruption has on government and politics as did Robert Klitgaard in his 1991 book Controlling Corruption.
This exploration, while long overdue, focused on the demand side of corruption. Scant attention was paid to the supply side until the 1990s when the OECD countries agreed the Convention on Combating Bribery of Foreign Public Officials in International Business Transactions (the United States Foreign Corrupt Practices Act 1977 was a precursor to this). This was a welcome development. It turned the focus and the responsibility for corrupt conduct, or more specifically bribery, onto those businesses with their headquarters in developed countries who paid the bribes. It also had the unexpected result of becoming a new profit centre for professional service providers – consultants, lawyers, accountants and the like.
I look back over my own experience as a practising lawyer with interest here. When I joined Transparency International in 1996, the legal sector was not interested in corruption (my own interest derived from academic studies in anthropology and an interest in the economics of development, as opposed to the law). Indeed the ‘need’ to pay bribes was deemed necessary if one wanted to conduct business ‘over there’ (and when I suggested to senior colleagues in the early 2000s that we expand our practice to include corruption, they informed me that corruption was only relevant to the public sector). Some 15 years later, it is big business. All major law firms (and accounting firms) had anti-bribery / anti-corruption experts, and the work derived from it now generates significant income for them (and the regulators who are successful in their prosecutions) to the point where corruption expertise is now recognised as a specialised legal topic. There is now (relatively speaking) quite active enforcement of laws that prohibit bribery, more vocal discussions by regulators and politicians about the need to address corruption (of which the Anti-Corruption Summit held in London in 2016 is but one example). The media too is taking a far closer interest in corruption by big business.
This is to be applauded. However, it also reflects a significant shift in the pendulum from the demand side to the supply side. The focus by regulators and service professionals on the law and compliance, and perhaps commercial incentives, and the media on shining a light on corrupt conduct is relatively easy. It remains focused on the supply side: that is, it focuses on what needs to be done to reduce the risk of a person – individual or company – paying a bribe to an anonymous public official to secure a contract or other benefit. However, prosecuting a company for paying bribes to secure contracts in a particular country (Rolls Royce, for example), or for employing the children of senior officials in order to curry favour (J.P. Morgan, for example), does little to address the fundamental reasons as to why bribes or favours were demanded or offered in the first place (the demand side).
There is a vested interest by the (western) legal profession to maintain close links between corruption, anti-corruption and the law. For example, while international development agencies work with governments in developing countries to address the demand side of corruption, many of these efforts focus on legal frameworks drawing on those in developed countries without understanding or appreciating the local context (see, for example, Germany’s approach to international development). Even as a legal professional, it seems to me this approach is too simplistic. Apart from anything else, it ignores the very genuine concerns raised by developed or western countries engaging in neo-colonialism through anti-corruption efforts (see, for example, this article on Neo-colonialism and the Millennium Development Goals by Anuoluwapo Abosede Durokifa and Edwin Chikata Ijeoma).
In short, the pendulum has swung too vigorously toward the supply side and western legal frameworks. This is not to excuse conduct that undermines and diminishes the lives of millions of people across the globe, be it through state capture by elites or organised crime or daily demands for bribes for ordinary services by ordinary people who in turn are seeking to survive. Instead, I argue, if we are sincere in our desire to address corruption and to do so effectively, it is time we took a more socially and culturally holistic approach to corruption, anti-corruption and its manifestations. That is, closely examine both the demand and supply sides. So, for example, when a regulator investigates allegations of bribery (say) by a company in a particular country, I would encourage them to also engage with experts of that country’s politics, culture and societal structures to understand the context in which bribes were demanded / offered. Is there an expectation that bribes be paid? If so, why? Is it possible to operate in that country without a bribe being demanded? If not, why not? What is the political structure of the country? Was it imposed through colonisation? Are there concerns about organised crime and state capture? How are indigenous political relationships reflected in that political structure? Is the country a fragile state and, if so, why? Likewise, when an international development organisation engages with a government which has problems with corruption, it needs a clear understanding of the context. What does corruption mean there? With whom do allegiances lie? Why? Is an approach that is effective in an (individualist) west relevant to a society that may be more collectivist? Recent moves by some international organisations suggest the need to understand the demand side is taking root (see, for example, the OECD).
Finally, businesses do not operate in a vacuum. If they wish to operate in a country that is known to be corrupt, it is incumbent on them to work with subject experts to better understand the environment in which they operate. A collective (but not anti-competitive) and a disciplinary collaborative approach are the best means by which to confront difficult issues.
About the Author
Jane Ellis is a strategic advisor with expertise in governance, corporate culture, trust in business and risk management. She is an Australian qualified lawyer, a former partner in competition law at the Sydney office of an international law firm, with additional expertise in anti-bribery and anti-corruption, whistleblower protection and a commitment to diversity in the workplace. Now based in the United Kingdom, she was the head of the International Bar Association’s Legal Policy & Research Unit overseeing projects such as business and human rights, whistleblower protection and judicial integrity. She is a trusted advisor with a keen sense of the strategic big picture, expert oversight and the ability to communicate clearly. She is a published author and editor of a book – Corruption, Social Sciences and the Law: Exploration across the disciplines (Routledge 2019) – that takes a multidisciplinary approach to bribery and corruption.
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