The new OECD Recommendation brings nuance and reason to debarment

I was delighted to read the OECD’s recent Recommendation for further combating the bribery of foreign officials. As Nicola Bonucci and Nathaniel Edmonds noted in their timely FCPA Blog post, the provisions of the Recommendation “could result in a dramatic shift in the enforcement environment.” I certainly hope so and commend the OECD on its balanced approach to addressing the gaps in countries’ current approaches to addressing foreign bribery. 

I particularly applaud the section in the OECD’s Recommendation related to debarment — a tool that, when used effectively, protects governments from doing business with companies that are unethical and grossly incompetent. However, some countries have taken a draconian approach to debarment in response to foreign bribery — giving little or no weight to a company’s remediation and compliance enhancements in response to the company’s transgressions. 

Which is why I am thrilled that the OECD has recommended a balanced (and frankly, more workable) approach to debarment. Specifically, the OECD recommends that countries consider mitigating factors and remediation when making debarment decisions. Although this recommendation appears modest, its implications are profound. 

For too long, many anti-corruption and good governance experts have viewed debarment as a sledgehammer — to be used as a means to rid countries of any companies that may have engaged in misconduct. Not only is this punitive approach unworkable, but it can also severely hinder countries from effectively serving the populations they govern. 

In contrast, the OECD’s nuanced and reasonable approach induces ethical transformations in contractors by rewarding them for their mitigation and remediation (rather than blindly cutting off government revenue streams regardless of compliance enhancements). In turn, this approach more effectively protects taxpayer dollars and enables governments to continue working with companies that have demonstrated their commitment to ethics and compliance moving forward. 

I am hopeful that the OECD’s Recommendation will inspire governments to reassess their approach to this critical tool.