Steve Coll is the author of Private Empire: ExxonMobil and American Power, a painstakingly researched account of how the world’s most profitable corporation built its global influence.
In an interview with Foreign Policy magazine, when asked how ExxonMobil approaches competition in countries susceptible to corruption, Mr. Coll answered with the following:
…the way they win these deals in a place like Chad or Papua New Guinea or Angola is, in effect, they go to the host country and say: “Look, we recognize that you can deal with the Chinese, and you’ll get soft loans and guns and things that you think are more valuable than what we can offer you, but what you’ll also get is . . . less oil pumped, you’ll get less royalties, you’ll get less taxes, so you’ll end up net poorer. Why not come work with us under our rule of law? . . . You’ll end up with more cash faster — and then you can buy whatever guns you want . . .”
Putting aside whether ExxonMobil really is better or more ethical, the idea is intriguing — that corruption is a crutch used by businesses that cannot maximize competency or efficiency, and that the answer is to simply be that much better than the competition.
Mark Friedman is a Contributing Editor of the FCPA Blog. He’s a U.S.-qualified attorney and a graduate of NYU Law. He was an intern at the U.S. Attorney’s Office in Manhattan and previously worked in Thailand. Mark was an inaugural fellow of Fellowships at Auschwitz for the Study of Professional Ethics. He can be contacted here.
This is a very good observation that questions the perspective that corrupt companies have competitive advantages. I've always found this notion that private companies should be able to bribe because competitors do to be dishonest and lazy. Corrupt companies have far higher costs with the expectation of continuous bribery.
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