Business Principles

The development of the business principles is a first stage for developing and raising the standards of practice in countering bribery. The fair business principles provide a practical tool to which companies can look for a comprehensive reference to good practice to counter bribery. Business principles are becoming an essential tool in the future for businesses and the companies of today should encourage using them as a starting point for developing their own anti-bribery systems or as a benchmark.

I had heard and even observed how the Indian businesses add the extras to win export orders. For toting up luster to the evenings of the visiting business partners particularly from Gulf States, they fix up their visits to discotheques and nightspots. They also maintain luxury flats outfitted with floozy beauties for making the stay of the business guests a unique affair.

Unfortunately, such unethical practices have sneaked into our system via some (not all) Pakistani businesses. That’s what I personally experienced when once as member of a foreign business team visiting Pakistan and staying at a hotel in Karachi, a Pakistani knowing that a Pakistani was member of the importers group, tried unethical tricks to win business contracts. He called from the lobby and told about the undeserved and undesired gift he brought for me.

Years ago in a Lahore-Islamabad flight a passenger seated next to me told that he was visiting Islamabad about a tender business. He was confident that he would win the contract. When I asked about the source of his confidence he pointed to two girls seated in the rear and said, “Those butterflies (exquisite women) will make it happen.”

Most of Pakistan’s private sector contributes to election campaigns of this candidate or that. Interestingly sometimes some companies sponsor candidates of two opposing political parties. The idea is to get unjustifiable favors after the horse wins.

There can be endless list of such companies, which are ready to do anything to get business favors.

It is no mystery that a lapse in business ethics or even the appearance of one can significantly harm the reputation and business of a company. Once a company is suspected, accused, or found guilty of corporate wrongdoing, it often becomes subject to the scrutiny of governmental agencies, the corporate community and the general public.

Private sector organizations must now take account of increasingly stringent domestic and international regulatory frameworks. There is growing corporate awareness of the risks posed by bribery, particularly in the light of scandals, and the public is expecting greater accountability and probity from the corporate sector.

Emphasis needs to be laid on business principles for enterprises to prohibit bribery in any form whether direct or indirect. They should also commit to implementation of programs for countering bribery. These principles are based on a commitment to fundamental values of integrity, transparency and accountability. Firms should aim to create and maintain a trust-based and inclusive internal culture in which bribery is not tolerated.

Thus an enterprise’s anti-bribery efforts including values, policies, processes, training and guidance will become tools of future corporate governance and risk management strategies for countering bribery and unethical practices.

As part of civil society, at macro level, Federation of the Chambers of Commerce and Industry of Pakistan, should work out a framework reflecting size of the companies, business sectors, potential risks and locations of operations. This should, clearly and in reasonable detail, articulate values, policies and procedures for preventing bribery from occurring in all activities under their effective control.

Such programs should be consistent with all laws relevant to countering bribery in all the jurisdictions in which an enterprise operates, particularly laws that are directly relevant to specific business practices.

At micro level each enterprise should develop programs in consultation with its employees, trade unions or other employee representative bodies. It should ensure that it is informed of all matters material to the effective development of the program by communicating with relevant interested parties.

While developing its program for countering bribery, the companies should analyze which specific areas pose the greatest risks from bribery. The programs should address the most prevalent forms of bribery relevant to each firm but at a minimum should cover areas such as bribes, political contributions, facilitation payments, gifts, hospitality and expenses.

A company should prohibit the offer, gift, or acceptance of a bribe in any form, including kickbacks, on any portion of a contract payment, or the use of other routes or channels to provide improper benefits to customers, agents, contractors, suppliers or employees of any such party or government officials.

It should also prohibit an employee from arranging or accepting a bribe or kickback from customers, agents, contractors, suppliers, or employees of any such party or from government officials, for the employee’s benefit or that of the employee’s family, friends, associates or acquaintances.

The enterprise, its employees or agents should not make direct or indirect contributions to political parties, organizations or individuals engaged in politics, as a way of obtaining advantage in business transactions.

Each company should publicly disclose all its political contributions, charitable contributions and sponsorships. It should ensure that charitable contributions and sponsorships are not being used as a subterfuge for bribery.

The enterprise should prohibit the offer or receipt of gifts, hospitality or expenses whenever such arrangements could affect the outcome of business transactions and are not reasonable and bona fide expenditures.

The board of directors, CEOs and senior management should demonstrate visible and active commitment to the implementation of the business principles.

The business organizations should assert elimination of bribery; demonstrate their commitment to countering bribery; and make a positive contribution to improving business standards of integrity, transparency and accountability wherever they operate. Business principles are going to evolve reflection of changes in anti-bribery practice as well as the lessons learned from their use and application by business.