Facilitation payments – small payments to government officials to facilitate action on their part – are the grey area of corruption. In the eys of some they are a bribe, in the eyes of others they are not. Foreign Corrupt Practices Act has long made an exception on facilitation payments, allowing companies to make small payments to government officials as long as such payments are properly recorded and reported.
I remember working on TI Business Principles for Countering Bribery, which took a tough stance on facilitation payments, and the fascinating discussions that would take place in working group meetings over the issue. Eventually, the working group drafting the principles took a tough stance of recommending not accepting facilitation payments (only in extreme cases of a threat to a person’s life).
But the tide is changing. As the WSJ notes, the new OECD recommendations call for banning facilitation payments.
“There should be no kind of payments that should be allowed whether they are big or small,” Angel Gurría, secretary-general of the OECD, said in an interview.
Another interesting fact mentioned in the WSJ article has to do with prosecution of anti-corruption cases under FCPA…Yesterday, I attended Transparency International’s event tied to the international anti-corruption day and the 10th anniversary of the OECD anti-bribery convention. Secretary General of the OECD made a point that we should both recognize the successes we’ve made over the past 10 years and the limitations (namely lack of teeth in many of the anti-corruption initiatives).
In fact, Daniel Kaufmann, over at his Governance Post, compains about lack of success in fighting corruption. The WSJ piece notes that 58 FCPA cases have been initiated by the Justice Department in the past four years, which is more than the total number of cases initiated in the previous 28 years of FCPA being in place.
I wonder, however, whether the increasing number of prosecutions is a signal that anti-corruption work is gaining momentum? Whatever the opinion is, outlawing facilitation payments is a good step forward.
Published Date: December 10, 2009