Wednesday, April 25, 2012


Corruption is supposed to be the "monopoly" of developing countries like India and if one looks at the global corruption index most of the top rankers are developing countries. Those rich countries and international mega investors never fail to complain about the difficulty in setting up business in these countries because of the never ending hassles in getting the necessary clearance from the bureaucratic machinery and it here that "speed money" is spent to hasten the process of approval. It is a never ending question whether bribery is a product of the investment environment or the rich investors tempt the administrative set up with liberal financial incentives in the form of bribes! According to jurisprudence both bribe giver as well as bribe taker are culpable from the law angle but the ground reality is that the administrative red tapism spawns corruption as those want to work honestly are not allowed to do so by the convoluted set up that exists in many countries. Here is a case of world's largest retailing company attempting to win over the bureaucracy in Mexico through surreptitious under the table payment for obtaining necessary license for operating in that country!

"The Times said that in September 2005, a senior Wal-Mart lawyer received an e-mail from Sergio Cicero Zapata, a former executive at the company's largest foreign unit, Wal-Mart de Mexico, describing how the subsidiary had paid bribes to obtain permits to build stores in the country. Wal-Mart sent investigators to Mexico City and found a paper trail of hundreds of suspect payments totaling more than $24 million, but the company's leaders then shut down the investigation and notified neither U.S. nor Mexican law enforcement officials, the Times reported. According to the Times, current Wal-Mart Chief Executive Mike Duke and former CEO Lee Scott, who now sits on the company's board, were among senior executives allegedly aware of the situation. Wal-Mart said in a statement on Saturday it was "deeply concerned" about the allegations in the Times report and began an investigation into its compliance with the U.S. Foreign Corrupt Practices Act (FCPA) last fall. The company also said it had disclosed the probe to the U.S. Department of Justice and the Securities and Exchange Commission. "Many of the alleged activities in The New York Times article are more than six years old. If these allegations are true, it is not a reflection of who we are or what we stand for," said David Tovar, vice president of corporate communications at Wal-Mart".

In the eyes of the law, giving bribes may be illegal but from the practical view if industry is hampered by putting unnecessary hurdles in the way by the working system in a country what is wrong in spending extra amount to overcome such hurdles? Who is responsible for it? Of course the country's government which does nothing to enforce transparency and expediency in its legal framework. Look at India how the governments, irrespective of the political color behaving over the last 44 years playing "hide and seek"with its citizens in enacting a law for punishing corrupt government officials! As recently as last year the politicians of all hue and color did not take up the Lokpal Bill seriously allowing it to die a natural death umpteenth time! Can a company like Walmart be blamed if they are forced to pay hefty sums to the political-bureaucratic mafia for allowing them to work without hiccups? It is time that such stories are not blown up out of proportion and the industry need not be apologetic about the same.


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