Lets Not Forget the Travails of Private Sector Corruption
“Though the bribe be small, yet the fault is great.”
-Edward Coke
IGB condemns corruption regardless of its source, the beneficiaries or victims involved. Corruption is multi-faceted and transcends mismanagement within the public sphere. Therefore, it is vital to consider also private sector corruption, especially since these types of corruption are interconnected and play a significant role in reinforcing each other. This necessitates the dedication of the corporate community to anti-corruption initiatives that take into account the interrelatedness. Honouring this commitment is a critical component of the broader pursuit in uprooting corruption.
Private sector corruption functions as a threat multiplier by destabilizing legitimate competition and harming private sector development, while simultaneously undermining the interests of businesses and consumers alike. Essentially, economic instability is exacerbated by the entrenchment of private sector corruption in small, open Caribbean states. Owing to this, leaders within the private sector must recognize the need for adopting a supportive role in promoting anti-corruption practices. In this regard, there ought to be a leadership role provided by the Chamber of Commerce. In its absence we must ponder the funding model of that critical organisation, a funding model which may well be overly dependent on the financial contribution of its individual members, making it difficult for this august body to engage in the kind of oversight and leadership that is required in the fight against corruption. We would readily agree based on our experience and observations that victimisation is not relegated to individuals alone but extends to organisations that may feel the wrath of sections of the private sector which have benefitted from the culture of corruption and hence the status quo.
Not only does corruption violate international standards of acceptable conduct, but its effects incapacitate the socio-economic fabric of the business environment. Moreover, long term consequences may include costly reputational rebuilding and the restoration of workplace morale and solidarity. However, depending on the severity of the corruption, these intangible qualities might prove to be essentially irreparable.
Bribery is one of the most common forms of corrupt soliciting. Businesses engage in bribery for the purpose of persuading an authoritative agent to make decisions or to perform actions that are favourable to a particular business enterprise. In fact, the Attorney General and Minister of Legal Affairs Dale Marshall has reported that several businesspeople in Barbados have disclosed privately that they have paid hundreds of thousands of dollars in bribes to public officials in 2019. However, since there were no revelations regarding the identities of the officials, the offences could not be further investigated. As Marshall indicated, although bribery is pervasive within the business community, these acts are sometimes enshrouded with a measure of secrecy that contributes to inadequate concrete evidence, which aids in protecting the identities of perpetrators. Marshall therefore argues that it would be difficult to apply appropriate sanctions and prosecutions that would assumably engender greater compliance. Unfortunately, those businesspersons deem it more beneficial to withhold this information, than to advance the public good. This speaks volumes about their morality or lack thereof.
Although the universality of corruption cannot be disregarded, even the cursory analysis of the private sector in the Caribbean have highlighted that bribery can be comparatively more pervasive. This is due in part to our small space and closely knitted social networks that compounds susceptibility and vulnerability. Familiarity and familial bonds mean that gift-giving, expediting, and other forms of preferential treatment are utilized. In addition, nepotism, while expected and even encouraged within some bureaucratic systems, can present opposition to legal criminalization provisions relating to corruption, and further generates instability in the business environment. In many cases, these acts are interpreted as petty corruption with small scale-stigma attached and are categorized as “necessary evils”. As a result, some corrupt practices fall outside the scope of societal judgement which presents increased challenges to anti-corruption programmes. These, unlawful acts in the private sector are thought to “grease the wheel” of economic development by circumventing administrative obstructions or delays.
Moreover, illicit enrichment erodes the prospect of fair competition since businesses that are more financially successful can maintain undue advantages over their competitors by utilizing ethical measures to maximize their operational capacities. Such inequality can create market distortion and ultimately lead to inflation of costs that lower the quality goods and services produced. Additionally, private sector corruption can facilitate organised transnational crime like money laundering and drug trafficking. This is because bribery and other forms of financial support serve as means of protection from being a target of law enforcement efforts to subdue corruption.
However, if stricter measures are implemented and enforced, partaking in corrupt practices can potentially expose executives, directors, and employees to the corresponding legal penalties in the form of fines. For example, CEO of Canadian company Kellogg Brown & Root Albert Jack Stanley reportedly paid 402 million dollars in fines for bribery in relation to securing a natural gas contract in 2012. It is significant to note that Stanley was not only required to pay these fines, but also served a two-and-a-half-year prison sentence, owing to the existence and the relevant pieces of legislation.
Therefore, institutionalized private sector corruption should not be examined within a vacuum since the effects perpetuate lasting societal and economic disparities by infiltrating all aspects of private and public life. Thus, strategies for subverting private sector corruption are necessary in ensuring socio-economic stability and a corrupt free environment. ÏGB is pleased to note that within Caribbean jurisdictions, regulatory frameworks have been instituted to facilitate reforms and to enhance existing business practices where necessary. Evidently, fostering and maintaining a corporate culture of integrity is multifaceted, and it involves the adoption of codes that reflect upstanding ethical principles. IGB will further weigh in on these principles in accordance with the struggle against all forms of corruption.