Background And Legislative Framework : Australia

In today’s ever changing and competitive modern world of business, it is critical for the companies to have activities internationally. In order to prohibit frauds and illegal activities, several acts and documents have been elaborated. One of the documents is Foreign Corrupt Practices Act that has been enacted in the 1970’s, as a result of SEC investigation of several U.S. companies that made illegal payments to foreign governmental officials, politicians, and political parties (Barnes 73). The FCPA had a critical impact on the way U.S. firms do business. Companies that did not comply with FCPA have been subject of criminal and civil enforcement actions that later resulted in huge fines and sentences for

Establishing corporate policies and addressing issues of corruption within the organization that set an example for all employees to follow is important. Canada may prosecute the individual and the business involved in bribery.

This case portrays the widely propagated and accepted phenomena of bribes and corruption in developing countries. Specifically how it affects every sector of the Ukrainian society, therefore making it difficult for the American investors to establish companies there and to prosper solely on doing good business. The case describes the types of obstacles and ethical dilemmas being created for the investors as a result of bribery and extortion.

It is clear from the case study that Alistair knows the contract is unorthodox. The problem he faces is whether he should overlook the bribe or report it to the board. The board of directors expects Alistair to tell the truth and report the bribe because of: his position as Chief Legal Officer, the board has a very strong ethics policy and they are wary of unethical activities.

OECD published Convention on Combating Bribery of Foreign Public Officials in International Business Transactions and Related Documents to prevent bribery and corruption. The aim of this convention was making the bribery of a foreign public official a crime under their laws (International Monetary Fund, OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions, 2001). This document recommends to member countries that:

3. Australian International Law – Australia’s legal system and effectiveness. Peter Greste - Australian Government Department of Foreign Affairs and Trade.

Bribery weakens competition and diminishes free trade which can affect companies, shareholders, and stakeholders. Jacob Franklin knowingly extended bribes to governments and contractors while knowing it was against company policy. Jacob engaged in bribery even though he knew it was wrong because he was advised that it was common practice at Richard Drilling. “In 1977, President Carter signed the Foreign Corrupt Practices Act (FCPA). The law made it illegal to bribe foreign officials. The maximum punishments for violators were set at $100,000 and 5 years in jail. Companies can be fined millions” (Bredeson, 2012, p.301). Not only was extending the bribe against company policy, it was against law and could cost Jacob and Richardson Drilling money and freedom.

Apart from it, the business law in Australia has their own Guidelines and effective and consistent decision. The aim of government regarding to the Guidelines is to give a positive impact to the business conduct for companies in Australia (Australian Government 2011). Similar with German, Australia also categorized as one of the world least corruption by 2012 (Transparancy International 2012). Australian Government is concerned about corruption. Moreover, people in Australia also considered corruption as a harmful action for the environment (Bowman and Gilligan 2009, 438-452)

6. Evaluate whether the changes in Exhibits 4 and 5 are likely to stop future foreign corrupt practices at Baker Hughes.

Looking at bribes from the perspective of Pastin and Hooker (1980), prosecution of the one paying a bribe does very little to address the issue of corruption since the payer is the one subject to legislation. As long as the one demanding the bribe is not subject to prosecution, the request for bribes will not diminish and organizations will simply not

“The Foreign Corrupt Practices Act” was first proposed in 1977 a time when there was rampant corruption among foreign officials and companies in the United States. At that time, there was a need to clean the messes committed between businesses and the governments gave that mega-scandal such as the Watergate Syndrome, which was exposed to the general public and was still fresh in their minds. Additionally, the issue that has prompted the adoption of the Act, the more was the Wal-Mart bribery claims in its Mexican subsidiary. Regarding this case, more debate has been witnessed over the application of the Act. There is an evident tug of war or stand-off that lies between federal agencies and business

Even though some European countries held that bribing officials was legal, in fact, an expense that could be reported and deducted on corporate tax returns, the Congress of the United States passed, in 1977, the Foreign Corrupt Practices Act (FCPA)(1). This act was intended to stop the bribing of foreign officials in order to obtain or retain business and reached all U.S. publicly traded companies, along with their directors, officers, managers, employees, agents, and stockholders (2). Amendments

The Convention on Combating Bribery of Foreign Public Officials in International Business Transactions was in November 1997 and it was ratified and implemented through the Act No. 300 of 29.9.2000 in October 2000. Additionally, the OECD introduced Article 322-bis which made it illegal for any individual to bribe a foreign public official. This included the act that will benefit the individual or their organization/business. This issue is that the government has not been able to complete subdue the acts of bribery and corruption. Their attempts have been ineffective as it is integrated in their culture.

Mr. Chong knows about recent cases of corporate bribery in Malaysia and in the retail industry. There had been scandals regarding foreign investors who bribed public officials or financed government programs to obtain business privileges or competitive advantage (Inkpen, 2010). Moreover, there was a recent case of bribery involving a Jextra’s country manager in the Philippines. More likely, this manager also encountered similar ethical dilemmas like Mr. Chong. Some individual factors that may have driven him to act unethically in the Philippines could have been pressure from the company to expand and gain competitive advantage in the region. Alternatively, he might have simply wanted to advance his career as a country manager, lacked of ethics or did not know the local laws regarding bribery. Additionally, he might not have received or requested support from the top management regarding the social and ethical issues raised in the Philippines. Mr. Chong, as an experienced manager, should have anticipated that he would encounter legal and ethical risks in Malaysia.

This does not set a good example for the employees and can be harmful to the future of the company. Ensuring that bribery stops can solve many of the problems discussed above. Some feasible solutions are being recommended to help the company in both short term and long term. First of all, all employees including managers should be given training and education about bribery, corruption and what’s deemed illegal according to the law. Explicit measures should be suggested on how they can avoid supporting corruption and also where they can report to in case a situation where dishonesty is involved arises.