Can Improving Business Ethics Reduce Human Suffering?

scott-moritzBy Scott Moritz, Managing Director
Protiviti Forensic

 

 

 

Tomorrow, December 9, is International Anti-Corruption Day, a United Nations’ observance celebrated not with cake, but with a public awareness campaign to stop crooked officials from carving off a slice of the global relief pie.

There is a common misperception that bribery is a “victimless crime.” That’s simply not true. The news is filled with buildings that collapse that should not have, killing thousands due to use of substandard building materials, inaction on the part of corrupt building inspectors and morally bankrupt construction companies. There is corruption in pharmaceutical drugs, food safety, product safety, environmental pollution. Wherever there is lax government oversight of products and other commercial activity and corruption on the part of government inspectors and the companies responsible for the unsafe products, there is the very real possibility of tragedy.

While there are no direct corruption-related death toll statistics, credible research shows that 83 percent of all deaths from building collapses in earthquakes in the last three decades occurred in countries with high corruption.

UNICEF lists Angola as the number-one country in the world where children die before the age of five — one out of every six. Angola is also considered among the most corrupt countries in the world, ranking 161st out of 174 countries and territories rated by Transparency International’s Corruption Perceptions Index and scoring just 19 out of a possible 100, with 100 being the least corrupt.

Angola is rich with natural resources, including oil and diamonds. Its ruler, President Dos Santos, has ruled for 35 years, and his daughter’s wealth is estimated at $3 billion. Her wealth is widely believed to have been accumulated through the President’s having strong-armed companies that want to do business in Angola into payments to his family through his control over the country’s oil, banking, cement, diamonds and telecom industries. The country with the worst child mortality rate spends three times as much money on its military as it does on public health. There is insufficient food, lack of access to clean water, shortage of medicine or medical treatment, but the political elite, the small group of families who are allied with Dos Santos, accumulate more and more wealth.

Whether it’s buildings that collapse during earthquakes in Haiti, Turkey or Nepal, or relief supplies for natural disasters stolen in full view of the police and the military charged with ensuring they are delivered to the victims, the fact that one out of nine people in the world is starving and many millions of people don’t have access to clean water and lifesaving medical care means one thing: corruption kills.

What do these tragedies have to do with us? Given that the wealth of corrupt public officials is derived from companies seeking to curry favor, companies have an obligation to do careful due diligence to make sure they don’t contribute to the cycle of corruption. Acquisition due diligence, strong anti-corruption compliance programs and hiring practices, continuous oversight of how money in foreign markets is spent, and a tone at the top that promotes ethics and integrity throughout the organization are key.

From a consumer standpoint, much can be done also. We are increasingly seeing boycotts of companies that are revealed to use child or slave labor, or that have irresponsible environmental practices. If similar “consumer penalties,” in addition to fines and criminal penalties, are applied to companies that actively practice or simply turn a blind eye to corruption, and if these companies begin to lose market share and shareholder value as a result, maybe we’ll see the cultural change we as corruption investigators are advocating for, and the refrain “that’s the way business is done here” will become a relic of the past.

One thought on “Can Improving Business Ethics Reduce Human Suffering?

  1. Pingback: Internal Controls and Anti-Corruption Culture Are Still the Best Deterrents to Bribery | The Protiviti View

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