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Colombia debate: Investors should look for real compliance programs

Yesterday’s post by Jose Da Silva about progress in Colombia against graft is a welcome push back to the out of date stereotype that corruption is just how business is done there. To paraphrase a senior executive at Siemens, there are honest, decent people everywhere who want to do business the right way. You find them and then you can do bribe-free business.

When business is done using bribes, it entrenches the bribe takers and obstructs the honest people. It also cheats on the international business consensus to resist it through collective actions. In another post it would be great to learn the details of how collective action is working in Colombia: “And at the start of this year, a new anti-corruption initiative began that promotes cooperation between the government and the private sector to improve compliance standard.”

In a comment to Jose Da Silva’s post, Joe Murphy, a top compliance expert for the SCCE, said: “I think it is also true that there is a growing awareness of the importance of compliance and ethics programs in South America, including Colombia. Companies looking to do business [there] should be asking about such programs in their potential partner-companies and helping those who are interested to develop and improve them. We would all benefit from this.”

Joe is quite right to focus on real compliance programs staffed by compliance officers trained for the work.

Investors should ask hard questions on what compliance programs are in place. For example: Is the board involved and are compliance officers protected from retaliation. (Joe Murphy has written many outstanding guides to the right questions to ask.) As he notes, actual compliance officers empowered to run a compliance program demonstrate the commitment.


Michael Scher is a senior editor of the FCPA Blog. He has over three decades of experience as a senior compliance officer and attorney for international transactions. He can be contacted here.

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1 Comment

  1. I have been previously presented nation wide in New Zealand on the approach to doing business in China with a specific emphasis on avoiding corruption. I am glad to hear one of my key presentation points echoed in your post from a senior executive of Siemens. Bravo.

    In every population of humans there is a proportion of individuals willing to work honestly and with integrity. If you are dealing with another country and cultural parameters it just depends on the percentage (or mass) of such people to determine how long it takes to set up the right relationships for progressing your business.

    Unfortunately, in many countries the percentages may be smaller than than the average for various reasons. These may be caused by historical and often social developments. As in the example of Colombia, many years of internal conflict, the narcotics business and even older historical drivers have affected the independence and functioning of the state administration, This has historically forced the nation's individuals to adapt in ways they might not themselves be happy to, in order to survive. It takes a strong backbone and value system to go against the accepted practice of the day, and to accept the negative impact that can have on one's safety, family, career, financial and physical well being,

    I think it is also reasonable to accept that a country's path towards a new normal in business practices, greater transparency, and effective anti corrupt policies, will take the same or similar periods of time as the time it took to create the previously negative situation.

    There was a recent example of a stumble on that path when a radio journalist in Colombia, the second in a few years, was assassinated for apparently agitating too strongly against the established corrupt cabals that find their roots in Colombia's tumultuous past.

    So while I believe it is good to accentuate the positive, one needs to also be realistic. Weeds with deep and established roots take time to remove from a patch of land. While there will be nice plants and flowers to enjoy among them it takes time to find these among the overgrowth, and to nurture the land back to a normal equilibrium.

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