Social Responsibility Towards the

Contractors, Suppliers, and Government

Is the government the closest partner of business?

• The government is the closest partner of

business when it comes to good
governance, transparency, and human
development. This partnership,
nonetheless, has always been open to
corruption, fraud, bribery, and graft.
 BRIBERY

• It is committed when a company or an

individual gives a gift or makes a promise
to any person in authority for the purpose
of infuencing that official. To be convicted
of bribery it is necessary to have direct
proof that the accused sought to be
favored by an official.
 Is there a bribery in the mobile phone industry?
• Alcatel, the French multinational company, best known for its
wireless and internet equipment, has been linked to bribery
charges in Costa Rica.
• Alcatel transferred $15 million to a consulting firm between
2000 and 2003 to obtain cellular network contracts with Costa
Rica's national carrier, ICE, and some of this money was used
to pay bribes. Alcatel reportedly paid politicians in Costa Rica
while it was negotiating a $149 million cellular phone contract
in 2001, and another $109 million fixed telephone line contract
in 2002.
 What is IMPSA case in the Philippines?
• In the Philippines, the Argentinian company Industrias
Metallurgicas Pescarmona Sociedad Anonima (IMPSA) is
alleged to have made pay-offs totalling $14 million to secure
the $470 million build-rehabilitate-operate-transfer contract
for the Caliraya-Botocan-Kalayaan hydroelectric power
plant, which was awarded in 2001. The irony is that the
IMPSA is a member of the World Economic Forum's
Partnering against Corruption Initiative (PACI) and Argentina
is a signatory to the OECD Antibribery Convention.
 Is bribery legal and moral?
• Bribes generally involve payments to someone
to pervert the course of business by taking
improper or illegal action.
• It is a form of political corruption and is
generally considered immoral. In Spanish,
bribes are referred to as "la mordida" which
means "the bite", in the middle East they are
bakshish.
 EXTORTION
• It is any form of taking or obtaining property
from another person by means of illegal
compulsion or oppresive exaction.
• The term is also used synonymously with
blackmail.
 Moral Accountability of the Briber and Extortionist

Bribery Extortion

Initiated by the payer or giver Initiated by the payee or

receiver.
Businessperson Public Official/ Government
Agent
Voluntary Threat of force
 Unhappy Consequences of Bribery and Extortion

• Bribery can destroy or taint the company's reputation and

undermine its license to operate.
• Bribes get built into the cost of goods and services, thus
hurting the consumers and taxpayers. The cost of
government services is unusually high because of the
extraordinary amounts diverted to paying bribes, kick-
backs or facilitation fees. (Asian Economic Survey of
1996, Urban C. Lehner.)
 Why is the Philippines one of the most corrupt nations
in Asia?
• Poorer countries are more inclined to corruption, fraud,
bribery, and extortion.
– the 10 cleanest countries in the world are all developed countries
with annual per capita income of more than $15,000.
– the 10 most corrupt have annual per capita income of less than
$1,500.
• Singapore is the cleanest country in Asia.
-its public officials are paid better than private executives.
-has a strong and efficient government that can attract the best and
the brightest of its citizens to its rank and file.
 Avoid Conflict of Interest
• Say no to giving or receiving gifts, payments,
entertainment or benefits.
• Do not offer gifts, benefits, or hospitality to officials.
• Do not differentiate between the giving and
receiving of gifts, payments, entertainments or
benefits in your private capacity as an employee of
your company.
 Avoid Conflict of Interest
• Prevent gifts, payments, entertainment or benefits
from making you dependent on those involved.
• Immerse yourself in the local customs to better
understand the acceptable way of giving or
receiving gifts, payments, entertainment, or
benefits.
Training the Staff and Rank-and-File Employees

• Only gifts or entertainment of little value

should be used to support a working
relationship.
• In contact with new business partners,
discuss possible problems whenever conflicts
could arise.
 What are the drivers of bribery?

• Bribery is the act of giving someone

money or something of value to persuade
that person to do something you want.
How does bribery happen in the real estate business?

• Real estate developers usually allocate some

kind of "representation" budget for the various
government agencies involved for the release
of clearances and permits to expedite the
processing of an application.
How can socially responsibility blend with culture?

1.There are universal values.

2.Don't confuse bad practice with culture.
3.Respect culture without sacrificing value.
4.People want those companies with strong
CSR policy.
 Is bribery socially responsible?
• Bribery is immoral and socially irresponsible because of several
reasons:
-it corrupts the economic system
-bribery treats people as commodities
-it disturbs the commitment of the company to the development of
good social environment
-bribery upsets the orderly course of the industry
-bribery can also prevent other sellers to enter the market
-it impairs fair and better judgment
-conflict of interest