The shifting landscape of localized compliance risks

Culture is arguably' resistant to institutional changes. It can hardly be affected simply' by' changes in new laws. Anti-bribery' results depend upon the extent to which the company’s incentives are tied to its performance. There is need for a broader and multijurisdictional compliance scenario. Otherwise, foreign MNCs would be misled and further suffer without an adequate corresponding global anti-bribery' governance regime. Fostering a culture of compliance enables multinationals to

localize their global governance compatibly into Africa’s socio-legal and cultural settings and transform the anti-bribery system. Through fostering the culture that fuses high integrity, MNCs will be likely able to complete the process of such a transformation. Otherwise, there will be massive repercussions across significant international business.

The feasibility to foster a compliance culture against bribery

The enforcement agencies give meaningful credit to companies which implement in good faith a comprehensive and risk-based compliance programme. Assessment of risk is fundamental to developing a strong compliance programme,[1] which needs to be updated to ensure it accounts for anti-bribery risks on a global basis. Mere global compliance programs superimposed upon Africa’s regulatory environment are inadequate. MNCs must assess the bribery risk of each jurisdiction where they operate. Failure to take these steps will result in exposure to massive briber}' liability on a global scale. It is imperative for an MNC to enhance the due diligence process in dealing with the presence of any red flags. Although adequate compliance subjects a company to the least amount of exposure to criminal liability, the short-term commercial incentive renders it unattractive for the entity to adhere to such strategies. It is unlikely to inhibit ever}' employee from acting outside of the parameters of a company’s compliance policy.

It is highly feasible to design a set of anti-briber}’ compliance rules, which has far-reaching implications for MNCs with global presence. The cultural dimension is important to the implementation of a compliance program, given that cultures exert a powerful influence on the corporate behavior. The impact encompasses changes in both formal institutions and laws and MNCs’ legal behaviour. The strong tradition of gift giving creates a high-risk corrupt business environment. Globalising anti-bribery compliance efforts will mitigate the risks. However, delivering the anti-bribery culture is a challenging area and also difficult to quantify. It could contribute to briber}', while the cultural elements, to some extent, rationalize such behaviour. MNCs must understand the cultural uniqueness that shapes business transactions in Africa. Seeking to transform social norms, MNCs’ willingness to nurture a corporate culture of zero-tolerance for briber}' is in fact contrary to the African local customs and is thus doomed from the start. Differences in cultural values may increase likelihood of violations of antibribery law, but do not necessarily create practical problems in extraterritorial

Chinese multinational corporations 197 enforcement.[2] Overestimation of the cultural variable would not only compromise the institutional globalization of anti-bribery law, but also compromise the localization of MNCs’ global compliance efforts in Africa.

Convergence on a single set of cultural norms seems to be highly implausible. To achieve purportedly objective righteous conduct, hard law to criminalize bribing foreign officials can ultimately not only transcend the cultural distinctions, but also restrain certain cultural declination for unlawful behaviour. It is critical to make integrity and ethics a part of the overall evaluation scheme, which provides positive incentives for compliance. Foreign MNCs’ success will require more than simply developing greater cultural sensitivity. A policy of zero tolerance for bribery is the most effective way to comply on a global scale. Such a policy renders MNCs’ compliance exceedingly challenging. A high level of commitment is required to prevent persons acting on the firms’ behalf from engaging in bribery, and to foster a corporate culture in which briber}' is never tolerated. MNCs’ African subsidiaries and branches must show evidence of their commitment to a culture of compliance.

  • [1] Securities Exchange Commission and Department of Justice (n 23) 58. 2 SFO v. Standard Bank pic (Case No U20150854, 2015). 3 Peter Henning, ‘Be Careful What You Wish for: Thoughts on a Compliance Defence under the Foreign Corrupt Practices Act’ (2012) 73 (5) Ohio State Law Journal 883, 928.
  • [2] Michael Runnels and Adam Burton, ‘The Foreign Corrupt Practices Act & New Governance: Incentivizing Ethical Foreign Direct Investment in China and Other Emerging Economics’ (2012) 34 Cardozo Law Review 295, 327. 2 Nichols, ‘The Viability of Transplanted Law’ (n 105) 1271. 3 Lan Cao, Culture in Law and Development: Nurturing Positive Change (Oxford, OUP 2016) 145. 4 Coimbatore Krishnarao Prahalad and Kenneth Lieberthal, ‘The End of Corporate Imperialism’ (2003) 81 Harvard Business Review 109, 117. 5 SFO, Serious Economic Crime: A Boardroom Guide to Prevention and Compliance (White Page Ltd., 16 November 2011) 89.
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