[00:00.00]Lesson Fifteen Text
[00:04.88]Bribery — An Inevitable Evil? David Cotton
[00:12.75]Students taking business courses
[00:17.48]are sometimes a little surprised to find that lectures on business ethics
[00:25.84]have been included in their syllabuses of study.
[00:31.11]They often do not realize that,later in their careers,
[00:37.28]they may be tempted to bend their principles to get what they want;
[00:44.04]perhaps also they are not fully aware that bribery in various forms
[00:51.98]is on the increase in many countries,
[00:56.56]and in some,this type of corruption has been a way of life for centuries.
[01:05.31]In dealing with the topic of business ethics,
[01:10.06]some lecturers ask students how they would act in the following situation:
[01:18.11]suppose you were head of a major soft-drinks company
[01:24.35]and you want to break into a certain overseas market
[01:29.99]where the growth potential for your company is likely to be very great indeed.
[01:38.77]During negotiations with government officials of this country,
[01:45.01]the Minister of Trade makes it clear to you
[01:50.47]that if you offer him a substantial bribe,
[01:55.51]you will find it much easier to get an import licence for your goods,
[02:02.46]and you are also likely to avoid "bureaucratic delays",as he puts it.
[02:10.51]Now, the question is:do you pay up or stand by your principles?
[02:18.37]It is easy to talk about having high moral standards
[02:24.14]but in practice,what would one really do in such a situation?
[02:32.29]Some time ago the British car manufacturer,
[02:37.47]British Leyland,was accused of operating a "slush fund",
[02:44.91]and of other questionable practices such as paying agents and purchasers
[02:53.09]with padded commission,offering additional discounts
[02:59.93]and making payments to numbered bank accounts in Switzerland.
[03:06.31]The company rejected these allegations and they were later withdrawn.
[03:12.84]Nevertheless,at this time,there were people in the motor industry in Britain
[03:20.78]who were prepared to say in private:
[03:25.32]"Look,we're in a wheeling-dealing business.
[03:31.80]Every year we're selling more than a ￡ 1,000 million worth of cars abroad.
[03:41.83]If we spend a few million greasing the palms of some of the buyers,who's hurt?
[03:49.77]If we didn't do it,someone else would. "
[03:55.02]It is difficult to resist the impression
[03:59.88]that bribery and other questionable payments are on the increase.
[04:07.35]Indeed,they seem to have become a fact of commercial life.
[04:13.81]To take just one example,
[04:17.36]the Chrysler Corporation,third largest of the U.S.motor manufacturers,
[04:25.90]disclosed that it made questionable payments
[04:32.27]of more than $2.5 million between 1971 and 1976.
[04:45.13]By making this revelation,it joined more than 300 U.S.companies
[04:55.00]that had admitted to the U.S.Securities and Exchange Commission
[05:03.46]that they had made dubious payments of one kindor another
[05:10.41]— bribes,facilitating payments,extra discounts,etc.
[05:18.59]in recent years.
[05:21.75]For discussion purposes,
[05:25.41]we can divide these payments into three broad categories
[05:33.35]The first category consists of substantial payments
[05:40.01]made for political purposes or to secure major contracts.
[05:47.09]For example, the U. S. conglomerate ITT
[05:54.46](International Telephoneand Telegraph Corporation)
[05:59.81]offered a large sum of money in support of a U.S. presidential candidate
[06:07.96]at a time when it was under investigation
[06:12.82]for possible violations of the U. S.anti-trust law.
[06:19.48]This same company, it was revealed ,
[06:23.74]was ready to finance efforts to overthrow the Marxist government of Chilewhose
[06:32.28]President was Salvadore Allende.
[06:37.32]In this category,we may also include large payments made to ruling families
[06:45.58]or their close advisers in order to secure arms sales
[06:52.42]or major petrochemical and construction contracts.
[06:58.77]In a court case involving an arms deal with Iran,
[07:04.54]a witness claimed that $1 million
[07:10.00]had been paid by a British company to a "go-between"
[07:16.45]who helped clinch a deal for supply of tanks to that country.
[07:22.49]Other countries have also been known to put pressure on foreign companies
[07:29.72]to make donations to party funds.
[07:34.27]The second category covers payments made
[07:39.13]to obtain quicker official approval of some project,
[07:44.69]to speed up the wheels of bureaucracy.
[07:48.85]An interesting example of this kind of payment
[07:53.89]is provided by the story of a sales manager
[07:59.45]who had been trying for some months to sell road machinery
[08:05.38]to the Minister of Works of a Caribbean country.
[08:10.42]Finally,he hit upon the answer.
[08:14.58]Discovering that the minister was a bibliophile,
[08:19.44]he bought a rare edition of a book,
[08:23.69]slipped $ 20,000 within its pages,
[08:30.04]then presented it to the minister.
[08:33.88]This man examined its contents, then said:
[08:38.84]"I understand there is a two-volume edition of this work."
[08:45.19]The sales manager,who was quick-witted,replied:
[08:50.36]"My company cannot afford a two-volume edition, sir,
[08:56.11]but we could offer you a copy with an appendix!"
[09:01.68]A short time later,the deal was approved.
[09:07.03]The third category involves payments made in countries where it is traditional
[09:14.68]to pay people to facilitate the passage of a business deal.
[09:20.93]Some Middle East countries would be included on this list,
[09:26.80]as well as certain Far Eastern countries.
[09:32.08]The payment may be made by a foreign company
[09:37.41]to ensure that a tender is put on a selective contract list
[09:44.54]or the company may pay
[09:48.30]so that an import licence for essential equipment is approved.
[09:55.15]Sometimes an expensive gift may be necessary
[10:00.71]to soften up a government official.
[10:04.79]A common type in this category is the "facilitating payment"
[10:11.45]usually a smaller sum of money
[10:15.89]— made to certain customs officials to clear cargoes.
[10:21.77]One businessman has told the story of a delivery of 10,000 bottles
[10:30.10]of sterile penicillin at the airport of a Far Eastern country.
[10:37.65]It was apparently customary to pay customs officials about
[10:44.31]$ 250 upon arrivalof each shipment to "get them out of the sun".
[10:54.16]In this case,the company was not prepared to make such a payment,
[11:01.00]so no money changed hands.
[11:05.26]The Minister of Health of that nation
[11:09.70]then ordered that each phial be opened for inspection,
[11:16.36]thereby destroying the whole shipment.
[11:21.12]Is it possible to formulate a code of rules for companies
[11:27.28]which would outlaw bribery in all its forms?
[11:32.85]The International Chambers of Commerce (ICC) favours a code of conduct
[11:41.62]which would ban the giving and seeking of bribes.
[11:47.58]This code would try to distinguish between commissions
[11:54.53]paid for real services and padded fees.
[12:00.69]A council has been proposed to administer the code.
[12:06.57]Unfortunately, opinions differ among members of the ICC
[12:12.94]concerning how to enforce the code.
[12:17.38]The British members,led by Lord Shawcross,
[12:22.74]would like the system to have enough legal teeth
[12:28.59]to make companies behave themselves.
[12:32.82]"It's no use having a dog without teeth," they argue.
[12:38.67]However, the French delegates think
[12:43.64]it is the business of governments to makeand impose law;
[12:49.59]the job of a business community like the ICC
[12:54.95]is to say what is right and wrong, but not to impose anything.
[13:02.89]In a well-known British newspaper, a writer argued recently
[13:09.73]that "industry is caught in a web of bribery"
[13:16.37]and that everyone is "on the take".
[13:21.20]This is probably an exaggeration.
[13:25.25]However, today's businessman, selling in overseas markets,
[13:32.62]will frequently meet situations where it is difficult
[13:39.17]to square his business interests with his moral conscience.
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