Walmart Bribery and the Importance of Anti-Bribery Management Systems

The piece linked below is useful for illustrating to students (and others not familiar with this point) that companies can sometimes be blamed not just for engaging in bribery, but for failing to put adequate management systems in place to prevent bribery from happening. Senior managers don’t merely have an obligation not to engage in bribery: they need to organize their business in such a way as to minimize the chance that someone else in their organization will do so. This means things like laying out clear guidelines for employees, providing training, avoiding incentive systems that tacitly encourage bribery, and carefully screening the business partners it works with and the agents it hires.


LINK: Walmart will pay $282 million in penalties to resolve 7-year probe into foreign bribes (by Tom Schoenberg for LA Times)

…Walmart disclosed possible violations in Mexico to the Justice Department and SEC in November 2011. The following year, the New York Times outlined details of allegations that the retailer paid some $24 million to Mexican officials to win quick zoning changes, sidestep licenses and environmental permits and deflect opposition to open stores, turning Walmart into that country’s largest private-sector employer.

The Times article set off a resurgence of foreign bribery investigations, which had begun to accumulate court losses and gain corporate enemies who were pushing Congress to rein in prosecutors.

But the Walmart case posed challenges for investigators. Much of the conduct uncovered in Mexico, for example, couldn’t be used as evidence because it was too old, according to the people familiar with the matter. So the government sought to build stronger cases in other countries. In Brazil and India, investigators found more recent examples of what they believed were improper payments, yet struggled to find examples of rampant misconduct in China, the people said…..

What do you think?

See also: “Bribery is still a challenge for international business,” by Chris MacDonald

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