Bribery? A Fact of Life or Absolutely Wrong?

Since late 2012, Rolls Royce has been at the centre of a long running investigation about its actions in China and Indonesia in the early 1990s. In December 2013, the Serious Fraud Office moved their investigation on from 'cause for concern' to criminal proceedings with a £12m emergency fund coming from the UK Treasury to escalate their actions. This Wednesday (12 Feb 2014) a father and son were arrested by the SFO with charges of acting as the intermediary between Rolls Royce and the son of the ex-dictator of Indonesia. The claims against Rolls Royce, levied by former employee Dick Taylor, are that it gave $20m and a blue Rolls Royce car to the dictator's son to secure favourable results for its bid to supply engines to the country's main airline, as well as over $2b worth of bribes paid out to Chinese officials.

This criminal investigation by the SFO comes on the back of the 2010 Bribery Act. The Act has been described as the 'toughest in the world' and has greatly expanded the UK's courts jurisdiction over matters concerning bribery. Quite controversially, the Act allows the SFO to prosecute corporate bodies that operate in the UK market if they pay bribes abroad and completely separately from their UK operations. It further allows the SFO to investigate historical claims against firms that pre-date the 2010 legislation.

Rolls Royce and the UK Government is now squaring up for a costly legal battle over these allegations. Rolls Royce has already began to investigate these allegations in house by bringing in ex-UK Attorney General, Lord Goldsmith. This all comes at a time when Rolls Royce is facing the greatest plummet in its share prices in 13 years thanks to the UK Government's defence cuts, and as the UK Government tries to cut down on its spending.

Considering these allegations of wrong doing took place in 1990 and the SFO has already acknowledged that it believes most key players have already left the company, is it right for the SFO to be pursuing the firm? Does it make good business/economic sense on the part of the UK Government? Should we allow clemency for historic misdemeanours and 'start afresh' by applying the 2010 legislation only to acts of corruption post-2010?

To get started, I believe that although it is morally right to be pursuing Rolls Royce, it doesn't make much sense. One of the biggest problems facing corruption is that both sides of the transaction is very much illegal. There is therefore little incentive for either side to break the transaction and report their actions to the authorities. If, like with price-fixing, the side that blows the whistle gets clemency then I think this will help to break the cycle. As for historic grievances, like the Rolls Royce case, I think it is better to acknowledge that this was simply how business was done in these countries and draw a line in the sand today. We can now recognise it was wrong and insist from this point onwards corporations must reform their behaviour or face very severe repercussions. This will help to cut the cost to the UK Government and allow for the building of renewed trust.

(edited 10 years ago)

Reply 1

tehforum

interesting thread

i'll comment later

Reply 2

Alfissti

Only wrong when you get caught :smile:

It is a fact of life in many parts of the world and you are stupid if you don't pay the bribe as someone else will and that person will get the deal.

Isn't a single country in this world where it doesn't happen, it is just a matter of the degree to it and whether it is a direct or indirect payment.

Bribery? A Fact of Life or Absolutely Wrong?

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