Corruption and compliance: preventive legislations and policies in international business projects

Author:Harsh Pathak
Position:Advocate Supreme Court of India, New Delhi, India

This article seeks to provide an insight on the international phenomenon of corruption, dealing with its existence, and whether compliance is higher with Anti- Corruption laws or with corruption itself, resulting in anti-corruption laws being much less effective than the legislators intended it to be and the reasons for increasing demand worldwide for new governance standards and higher... (see full summary)

Corruption and compliance: preventive legislations and policies
in international business projects
This article seeks to provide a n insight on the inter national phenomenon of
corruptio n, dealing with its existence, a nd whether compliance is higher with Anti-
Corruption laws or with corruption itself, re sulting in anti-corr uption laws being much less
effective than the legislator s intend ed it to be and the reasons for increa sing demand
worldwide for new governa nce standar ds and h igher compliance contr ols and other
effective anti-corruption laws and policies in light of rapid increase in cor ruption every
year. This a rticle further deals with the diagnosis and measures to deal with th e cause of
corruptio n the shor t-comings in anti-corruption law the reasons why corpor ations ar e
willing to face continuing legal risks and adverse publicity but still indulge in corrupt
practices and the extent of negative impact the prevailing levels of corruption ultimately
have on international business and trade. Strict compliance controls are being introduced
with increa sing enforcement of anti-cor ruption la ws interna tionally and nations have also
started to focus on individua l and corpora te liability in cases of violation of a nti-corruption
laws, for both government and private or ganisations. In this context of far -reaching
developments, whether European a nd South-east Asian Countries like India and
Interna tional Business Organisa tions ca n act in ig norance or buck up a nd accept this
trend, slowly and steadily moving towards a less corr upt nation and International business
projects if not towar ds a tota lly corruption free one, keeping in mind the growth of
internatio nal trade and Commerce and its sustaina bility.
Keywords: Corrup tion, Corr uption-Causes, Consequences and Measures ,
Corrupt practices Inter national Business, Inter national Business Pr ojects, Anti-Corr uption
Laws, Internationa l Legislation, India n Laws.
JEL Classification: K14, K22, K33
“..Just as fish moving under water cannot possibly be found out
either as dr inking or not drinking water, so government servants employed in the
government work cannot be found out (while) taking money (for themselves).”
'Kautilya' / Chanakya in Arthashastra (Economics) ,
Chapter IX. 370 -283 BCE
“.. It’s Interesting that these themes of crime and political
corruption are always relevant.” Martin Scorsese
In light of the ever increasing international trade and business, one major
concern is corruption growing alongside it. In a race to be at a leading position,
1 Harsh Pathak - Advocate Supreme Court of India, New Delhi, India,
Juridical Tribune Volume 3, Issue 2, December 2013
ethics and morals take a backseat and the hunger for power and money lead to
invention of newer ways almost everyday to pay and receive bribes so as to put the
person bribing in a position better than those not doing so, whether such a person is
more capable or not is a question paid no attention to. As corporations and business
entities grow larger, sometimes with a monetary turnover many times that of small
countries, the threat of corruption in the business world, within the organization, in
dealings with other organisations and in dealings with the government is a looming
and growing threat. So is it that capability has little relevance as a qualifying factor
in today’s time and the race is only monetarily driven, the winner predetermined,
on basis of the highest payer? It would certainly seem so.
Definition and meaning of corruption
Corruption has been defined as
Per Oxford Dictionary: “Dishonest or fraudulent conduct by those in
power, typically involving bribery.
Per Black’s Law Dictionary (2nd Edition): Illegality; a vicious and
fraudulent intention to evade the prohibitions of the law. The act of an official or
fiduciary person who unlawfully and wrongfully uses his station or character to
procure some benefit for himself or for another person, contrary to duty and the
rights of others.
As per Dictiona The word corrupt (Middle English, from
Latin corruptus, past participle of corrumpere, to abuse or destroy: com, intensive
pref. and rumpere, to break) when used as an adjective literally means "perverted,
made inferior, affected, tainted, decayed".3
Earlier corruption was believed to be prevalent only in public offices,
giving corruption the meaning of use of public office for private gain4 but such a
narrow meaning does not hold in today’s time where corruption is prevalent in
public offices, private offices and commercial spheres of business and one does not
need any analysis or study in support of such contentions. One of the most popular
of the definitions of corruption, namely, ‘Corruption is the abuse of power by a
public official for private gain’ is too limited to be able to include the levels and
spheres corruption and corrupt persons have invaded. Therefore, corruption maybe
political, personal/private or commercial.
The basic difference is in the office, power and position, which are abused,
and aim of abuses. Politica l corruption may include bribery, use of governmental
offices for private enrichment and substitution by particularistic for universalistic
2 U. S. v. Johnson (C. C.) 20 Fed. 082; State v. Ragsdale. 59 Mo. App. 003; Wight v. Rindskopf, 43
Wis. 351; Worsham v. Murchison, 00 Ga. 719; U. S. v. Edwards (C. C.) 43 Fed. 07.
3 Retrived on 14.10.2013
4 As defined in Maria Dakolias and Kim Thachuk, The P roblem of Eradicating Corruption from the
Judiciar y: Attacking Corruption in the Judiciary: A Cr itical P rocess In Judicial Reform, 18 Wis.
Int'l L.J. 353, 355 (2000).

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