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Harry Cassin
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Andy Spalding
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Jessica Tillipman
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Bill Steinman
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Richard L. Cassin
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Elizabeth K. Spahn
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Cody Worthington
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Julie DiMauro
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Thomas Fox
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Marc Alain Bohn
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Bill Waite
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Russell A. Stamets
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Richard Bistrong
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Eric Carlson
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Will Wal-Mart change India?

Of the four BRIC nations, all but one have enacted major anti-corruption reforms in the last several years. When will India step up? And might Wal-Mart help?

Brazil, Russia, and China have each, to varying degrees, made important strides of late. Brazil is of course in the midst of a rapidly expanding anti-corruption enforcement action concerning its state-owned oil company, Petrobras. The story there is not the revelations of bribery at the highest levels of business and government; rather, it’s the emergence of a credible enforcement arsenal that is exposing the corruption that everybody knew was there.

Russia has made strides in enacting formal laws, if not yet enforcing them. It signed onto the OECD Convention Against Bribery and adopted an FCPA-like prohibition on foreign bribery, a crucial first step. And China, perhaps most famously, is engaged in an aggressive anti-corruption campaign that by all accounts has made a major dent in official corruption there.

But what of India? Recall that in 2011 and 2012, an anti-corruption movement lead by Anna Hazare staged a number of non-violent protests demanding reforms. In response, India passed the Lokpal Act, which created a new enforcement agency (called the Lokpal or, sometimes, an “ombudsman”) to investigate official corruption. The details are here (pdf). However, the Lokpal has yet to establish a track record of rigorous enforcement.

So too has a bill of particular interest to the Blog’s readership previously stalled in parliament. In 2011, in the midst of the Hazare movement, India’s parliament considered, but did not enact, a bill that would have created a foreign bribery prohibition styled after the FCPA and UK Bribery Act. This leaves India as the only BRIC nation without a law specifically prohibiting foreign bribery.

Perhaps the Wal-Mart enforcement action will provide added stimulus. Though reportedly the DOJ found less incriminating evidence in Mexico than widely expected, the final settlement may well focus on misconduct in India. Stories of a U.S. mega-retailer abusing its power to out-compete the culturally cherished mom-and-pop stores will certainly generate press.

Perhaps it will also help to generate meaningful reform. Given the incremental steps India has already taken, and its rising levels of foreign investment, the time for enacting meaningful legislation seems to have come.


Andy Spalding is a Senior Editor of the FCPA Blog and Associate Professor at the University of Richmond School of Law.

Sundar Narayanan is a forensic accountant from India. He currently leads the forensic services of SKP Business Consulting LLP. He can be reached at [email protected].

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