Recently, former President of South Korea, Park Geun-hye, was sentenced to 24 years in prison for her involvement in a corruption scandal. The year before, former president Luiz Inácio Lula da Silva, of Brazil, was sentenced to 12 years for corruption. He was convicted of receiving a renovated beachfront apartment worth some 3.7m reais ($1.1 million), as a bribe from an engineering firm. Former President of France, Nicolas Sarkozy, is facing charges of corruption and influence peddling. Sarkozy is already under investigation for alleged bribe-taking from Libyan sources in the 2007 French general election. The world is changing, and it is changing fast.
When I started in compliance over a decade ago, people would routinely say, “that’s how it’s done overseas,” or, “everyone knows the only way to get government business is to give bribes.” The tipping point has come, and anyone not noticing will get swept up in the change.
What’s happened? For starters:
The Rise of Social Media and the Internet
The so-called “Arab Spring” of 2010 marked a turning point, when the internet and social media spread information about protesting, marching, and requesting change in government. Websites such as, “I Paid a Bribe,” in Kenya and India, brought corruption into the light, sharing what was happening on the ground. No longer could corruption sit in the dark – the light shone on it. When citizens are empowered to speak their mind, rally together, and share their experiences, they are emboldened to require change from their government officials.
The Power of the OECD Convention
The OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions came into force in 1997. In the two decades that followed, all 35 OECD countries have signed onto the treaty, as well as 8 non-member countries. Each year the OECD Working Group on Bribery publishes its evaluation of how well countries have enforced anti-bribery laws and fulfilled their commitments under the Convention.
Countries like Russia, Turkey, and Mexico have all joined the Convention. The public nature of the OECD’s reports has meant that signatories have to walk the walk – not just talk the talk – or risk public censure.
The Rise of Transparency International’s Corruption Perception Index
Transparency International’s Corruption Perception Index (CPI) changed the way risk assessments are done. Since the list was first published in 1995, the list’s popularity and importance have grown exponentially. No longer do companies have to guess at whether a request for a bribe is likely during public tender – the industry reports its experiences and perceptions to a single NGO. The growing reliance on the CPI has changed the way people do business, and like the OECD reports, have named and shamed countries in which corruption is endemic. Countries have worked hard to improve their score and the perception of corruption before the watching world.
The Power of FCPA and UK Bribery Act Enforcement
It is nearly impossible to overstate the importance of the enforcement of the US Foreign Corrupt Practices Act (FCPA) and the UK Bribery Act 2010. As fines have risen and individual liability has come into focus, companies have become vitally aware of their potential liability. This sea change came about because the most controversial parts of the laws – the extra-territorial effect of both statutes. Ever since a bribe in Mozambique could come back to haunt the parent company in the US, behavior has changed dramatically.
The Rise of the Compliance and Ethics Officer
The combination of (1) FCPA / UK Bribery Act enforcement, (2) Transparency International’s CPI, (3) the OECD Convention and (4) the US Federal Sentencing Guidelines have created a new profession: compliance and ethics. Fear and social changes require a measured and pragmatic approach that protects the company and its employees by giving them processes and procedures to avoid wrongdoing. The response has been a dedicated new function, and the employment of people to create and uphold these procedures. Compliance has come into its own.
People are sick and tired of corrupt officials running things the way they always have. In January of this year, in Romania, an estimated 50,000 people took to the streets of Bucharest in protest against a judicial reform bill which, the protestors claim, weakens the ability to prosecute high-level officials. The protestors carried banners reading “Thieves.” Likewise – just a few days ago, former South African President Jacob Zuma was charged with corruption linked to a 1990s arms deal.
We’re seeing an amazing occurrence – politicians are being removed from office and frequently jailed for corruption. Not in America or Britain for violations of their extra-territorial laws, but by the very people they represented. The time of oligarchs and kleptocrats may not yet have come to an end, but the writing is not only on the wall, it’s everywhere.
Kristy Grant-Hart the author of the book “How to be a Wildly Effective Compliance Officer.” She is CEO of Spark Compliance Consulting. She can be found at www.ComplianceKristy.com, @KristyGrantHart and emailed at KristyGH@SparkCompliance.com.