ISIS Asset Management is supporting a new guide aiming at abolishing the practice of offering small ...
ISIS Asset Management is supporting a new guide aiming at abolishing the practice of offering small bribes, recognised as "grease" payments, to overseas government officials.
This comes as TRACE - an organisation dedicated to supporting business in its struggle to eliminate corrupt practices - today launches the guide: 'The High Cost of Small Bribes'.
"Grease" payments are illegal under new UK legislation, but permitted under US law, as well as in most developing countries.
However, outlining the steps that multinational companies can take, the guide aims to put a stop to these kinds of payments pestering businesses operating internationally.
"Facilitation payments are a hotly debated topic, but while the debate rages, corporate practice remains riddled with contradictions. Of course it is a huge challenge to do away with them - they are deeply rooted in local business practice and social norms. But simply throwing up one's hands on the grounds that 'this is just the way things are and always have been done' is no answer," says Karina Litvack, director at Head of Governance and Socially Responsible Investment at ISIS.
"Grease payments harm local people, who are pressed on a daily basis to make payments they can ill afford, and they harm business by perpetuating a climate of 'entrepreneurial extortion' - bribe-takers who know that foreign companies are easy pickings."
"Worst of all, from our point of view as investors, grease payments foster a culture of permissiveness that is simply too risky and open to abuse: how can companies claim, on the one hand, to be serious about combating corruption, yet, on the other hand, condone breaking local law and keeping dual sets of books?
The guide is being launched after lengthy research and consultation with companies both in Europe and the US.
According to Litvack, it offers realistic and practical direction based on the experiences of companies that are committed themselves to eliminating all forms of bribery in their practices.
"Now that different countries are adopting different laws regarding the legality of facilitation payments, what are companies to say to staff? 'You're American, so you can pay? Sorry, you're a Brit, so forget about it?' It's a headache for compliance officers."
"On the other hand, simplicity has shown itself to pay dividends, based on the research that TRACE has done: by now, many companies have experimented with a strict no-bribes policy, and have lived perfectly well to tell the tale. Their ranks are growing - we now see Shell, BP, and others unequivocally committing themselves to rooting out this practice," she said.
This is not the first time ISIS is taking an anti-corruption stance as it previously published a research highlighting weaknesses in corporate anti-bribery practices.
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