Draft:Export of bribery

Export of bribery refers to the Illegal activities of multinational companies offering, giving, receiving, or soliciting in order to sway the decisions of foreign officials or powerful people.

Bribery has been a common issue, especially in developing countries where corruption is prevalent and the salaries of the government officials are low. Bribes are the main tools of corruption, they help gain access government contracts and resources.

There are three common answers as to why MNCs engage in corruption. First, is when a company is not able to operate or engage in business transactions without offering a bribe. Second, is when legal institutions in the host country are weak. Third, is when the company is already involved in corruption in it's home country.

In 2018, The Water Conglomerate Inassa was given a fine of 5 billion Colombian pesos (US$1.8 million) on the charges of foreign bribery.

In 2020, the largest yet foreign bribery resolution has taken place, when Airbus, agreed to pay nearly US$4 billion in total penalties, to the U.S., France, and United Kingdom to mitigate foreign bribery charges.

Globalization

Multinational companies started to put more emphasis on their brand image in the middle of the 1980s rather than just producing goods. Globalization in the business sector began with this. Manufacturing was once considered the main objective, but by the 1980s, new companies with different approaches emerged, including Tommy Hilfiger, Intel, Microsoft, Nike, and Tommy Hilfiger. They prioritized marketing and branding while contracting out production, frequently to foreign companies. Reducing staff and strengthening brand power were the goals of this change.

Market-driven globalization tends to homogenize rather than celebrate diversity, despite claims to the contrary. As a result, local customs and brands frequently suffer. Business financial decisions are dynamic, with marketing and production taking precedence over one another all the time. Spending on branding and advertising increased significantly in the 1990s, but production investments were hesitant. Levi's shift to become a marketing-focused company, which resulted in thousands of jobs being lost in favor of foreign contractors, is an example of how this led to lower wages and widespread layoffs.

Modern Tragedies

Impact of the large multinational corporations, on the lives of the locals, can sometimes be devastating. As there's been a long history of human rights violations by extractive companies shielded by overseas subsidiaries.

Mrs. Caal's case shows the great degree of tragedy, as she was evicted from her own home and raped by the men that've come to do so, the reason being - the land belonged to the Canadian mining company. They ate the food she made for her family, afterwards burned the house down. Even after leaving Guatemala, she say's she still fears, all the time. Although she has filed a lawsuit in Canada, doing so in Guatemala, does not bear any success for the common villagers like her.

Negligence case of Mrs. Caal, and 10 other women, stating they were gang raped that day, has already passed some legal procedures, and can mean that Canadian companies may face more scrutiny for their overseas operations. The ruling in this case will help determine, what constitutes proper corporate behavior.

Team of Canadian lawyers filed civil lawsuits, state that parent company acquired by Hudbay, was negligent towards the actions of the overseas subsidiary. The Guatemalan women travelled to Canada for the case's discovery phase. They've answered questions for the lawyers of the company, during which Choc Cac fainted, because the memories she had to remember were too harsh. Two other women link the 2009 death of the local activist Adolfo Ich Chamán, and the shooting that left the 28-year-old man paralyzed. None of the allegations have yet been proved in court.

Control measures

As globalization has increased, many studies have been conducted to address related issues and offer solutions, enabling multinational corporations to take advantage of new market opportunities.

In order to comprehend the relationship between production, marketing, and consumption and globalization, researchers such as Rugman and Li have reviewed a great deal of literature. They have emphasized the necessity for multinational corporations to increase their efficiency and social responsibility.

ISO 26000 is a set of guidelines designed to encourage corporate social responsibility (CSR) within organizations. Human rights, the environment, ethical business conduct, governance, labor practices, community development and participation, and consumer protection are its seven main concerns. Adherence to these guidelines seeks to advance moral conduct and sustainability in commercial dealings.

Subsidiary Control in MNCs

MNCs use two different subsidiary control mechanisms: direct trough HQ, and indirect trough key positions in subsidiary management. Based on the data from 617 subsidiaries, US MNCs opt for the first option, second mechanism is more widespread in Japanese, and the German take the middle position.

Battle with Corruption

In order to combat corruption that goes beyond bribery, the EU is revising its anti-corruption framework. The suggested actions include increasing awareness, defining offenses more broadly, establishing minimum sentences, prolonging the time frames for prosecution, and improving the resources available to law enforcement. The objective of these modifications is to fulfill international commitments and update the EU's disjointed framework. A proposed Directive on combating corruption by criminal law, a new EU sanction regime, and a communication on anti-corruption efforts are important components. The 1997 Convention, the 2003 Council Framework Decision, and the 2008 Council Decision are examples of anti-corruption laws in effect until the Directive is adopted. For relevant EU Member States, the new Directive will take the place of these laws.

Historical precedence

EIC's corporate coup to subjugate southern Asia, as one of the most blatant cases of corporate violence in world history, can showcase this principle as one of many illicit acts the company has committed. In the Battle of Plassey, Mir Jafar was persuaded to side with Robert Clive, and the vast majority of the Nawab's army were bought off to surrender.

The Permanent Settlement Agreement of 1793 and other reforms to the judiciary were presented as attempts to "improve" Indian society during the colonial era in India. Through the rhetoric of a "civilizing mission," the East India Company (EIC) defended its presence in India by emphasizing social reforms such as the outlawing of sati (widow-burning). Nevertheless, these reforms' actual effects on regional economies and societies frequently deviated from their intended goals. Rather, by keeping rival European powers out of the area, these actions mainly supported British economic interests, strengthened EIC control, and preserved strategic domination.

Hicky's Bengal Gazette has helped to see the corruption, bribery and human rights violations of the most powerful men in India during that time. One of many accusations, was that the ruler of British India Governor General Warren Hastings bribed the chief of justice in the India's Supreme Court. It also stated that Hastings and his allies taxed people with no representation and suppressed the freedom of speech. EIC funded a rival company, that called the newspaper "insolent" and referred to the writers as "pitiful scoundrels". Hicky was repeatedly sued by Hastings for libel. However, these allegations have made their way back to England and led to impeachment of Hastings and Chief Justice of India at the time.

in the 1770s: North’s Regulating Act (1773) and Pitt’s India Act (1784), were filed and were aimed to regulate EIC's activities, and bring the company under the close parliamentary supervision.

In December 1772 government found evidence of major cases of company greed and corruption in Bengal, how EIC had bribed MPs and ministers at Westminster to pass legislation. Clive was vilified and satirists referred to him as ‘Lord Vulture’ and ‘The Madras Tyrant’. In 1773, Clive was cleared by a parliamentary vote (95 to 155), on account of the ‘great and meritorial services to his country’. But this was inevitable as the quarter of MP's had major investments in EIC.

It can be evidently seen that due to great extraction of resources, and wealth from the host countries, corporations can pass legislations and bribe the officials even in their home countries, sometimes leading them facing no consequences for the human right violations and other devastating actions in the host countries.

Conclusion

There are many more examples to foreign bribery in the recent and past history, and although new standards, motions and regulations appear to tackle this issue, it's still taking place. However, people in developed countries start to get aware of this situation and demand better supervision of the MNCs operations in host countries.