Recent quantum of FCPA (US ‘Foreign Corrupt Practices Act, 1977’) settlements reveal eye-popping numbers. It has brought to light that superficial anti-bribery enforcement mechanisms are still being deployed as order of the day across many large enterprises. It seems that even after a decade of balance-sheet busting Deferred Prosecution Agreements, Non- Prosecution Agreements and other resolutions, corporations are still taking anti-bribery enforcement efforts lightly. The FCPA compliance industry is a multi-billion-dollar industry and is growing in leaps and bounds, and there is a wide variety of expertise available at all price-bands; that being so, how is it that codes of conduct and anti-bribery policies fail to prevent and/or detect misconduct for years before it spirals out of control?
In this article, I will be going over a few select elements of drafting and enforcing an effective code of conduct, which under ‘normal’ operating protocols may be perceived to be too ‘tight’ for well-lubed enterprises, but the tried and tested methods will ensure that the corporation is combat ready in the event of a breach. I will be focusing on FCPA compliant codes but will also cross-refer other legislation like the UKBA (‘Bribery Act 2010ʹ). The fact that conduct enforcers are faced with the fact that extra-territorial laws lack public assent in most low- and middle-income countries is something that I will assess in significant detail. I will be covering behavioural dynamics influenced by socio-cultural and socio-economic parameters of employees and institutions, and how pre-conceived notions of what ‘misconduct’ is, impact actual compliance efforts. Whilst the focus will be on using an effective code of conduct which works in practice, I will draw in other issues like hotline distrust, procurement integrity, economic disruption stemming from anti-bribery investigations, merits of self-reporting violations and perceptions about compliance enforcers, and how they impact organizational behaviour and institutional culture. I will be drawing cues from select high-profile resolutions like Airbus, Rolls-Royce, Odebrecht and Ericsson.
I will be talking about the usual suspects inside institutions, who suddenly become sensitive to issues of compliance after a regulator has expressed interest in a subject company. I will also look at pressure points after it is imminent that there would be enforcement action, or an investigation has already begun. A lot of my content will be focussing on the Asian strand but the observations and intrinsic assessments, albeit picked up from actual conduct in emerging markets in Asia, will apply to a universal set of problems in most low- and middle-income countries.Business Law Review