In a recently published handbook, Transparency International, the world’s leading non-governmental anti-corruption organisation, provides practical guidance to companies on how to refute requests for small bribes and facilitation or “grease” payments. The guidance is part of a series of publications produced by Transparency International which provide advice on good practice in countering bribery and corruption. The handbook provides detailed guidance to companies on how to minimise the risk of paying small bribes and facilitation payments in their dealings with both the public and private sectors. It will provide a useful tool for companies operating in international and emerging markets where such payments are all too regularly considered to be an everyday part of doing business. The guidance is timely due to the increasing international focus on bribery and corruption issues.

Small bribes and facilitation payments

A facilitation payment is a small payment or benefit made to secure or expedite the performance of a routine government action of a minor nature to which the payer is entitled. Under Australian law, facilitation payments are allowed if certain record keeping requirements are met. They are, however, illegal in many other jurisdictions including the United Kingdom and Canada and there is a growing recognition that they should be discouraged.

In its Report on the Implementation of the OECD’s Anti-Bribery Convention in Australia, the OECD commented on the prevalent practice of Australian companies making facilitation payments in their international dealings, at least in certain regions. Notwithstanding this practice, there is a general confusion about the “facilitation payments” defence and in recognising the difference between a facilitation payment and a bribe. As a result, dealing with the risk of facilitation payments and small bribes is a difficult corruption-related problem faced by many companies.

In addition to facilitation payments which involve dealings with officials in the public sector, the handbook covers small payments made to induce improper action in the private sector.

The Guidance

The handbook sets out 10 principles for countering small bribes, includes a section on carrying out risk assessments, and explains steps that can be taken in order to resist bribes.

Principles endorsed by the handbook include ensuring a corporate culture that demonstrates a commitment to ethical behaviour in business dealings and the elimination of small bribes and facilitation payments; identifying and assessing areas of the business where requests for small bribes are likely to occur and ensuring that employees have adequate information on how to anticipate and resist these requests.

Practical steps that can be taken to counter bribery include:

  • identify risk areas specific to your company by talking to employees and holding group sessions to come up with practical solutions that address your employees’ exposure (extend discussions to agents and other external parties who may be providing services on your behalf);
  • research the local laws of the jurisdictions in which your company operates and learn about the local practices and expectations of officials and business associates so that you can take steps to work around any likely requests for bribes in advance;
  • educate and equip your employees:
    • provide them with wallet cards which, in the local language, explain the company’s strict approach to refusing requests for payment;
    • ensure that employees are aware of the knowledge gained from your research on local laws and practices so that they can draw on this to resist payment;
    • employees should be confident to:
      • clarify what is being asked for;
      • question the legitimacy of the request (e.g. ask the official where the requirement for the ‘fee’ is stated) and, subject to any concerns they may have for their safety, refuse to pay if the official cannot provide evidence of the requirement;
      • explain that they do not have authority to make upfront payments and ask for an invoice;
      • alternatively, explain that payment can only be made if a fulsome receipt is issued identifying the purpose of the payment and the official to whom it is made to which may discourage the official from pursuing the request;
      • ask to speak to the official’s supervisor;
      • telephone the local embassy and make clear to the official that this is being done.

Relevance for companies

Dealing with requests for small bribes and facilitation payments can be a difficult issue for companies to address. Requests generally arise at inopportune moments in relation to processes that involve personal interactions. By contrast, the risk of exposure to bribery is lower for automated, online processes that do not involve the human factor.

A common example is the customs or immigration official who requests a small fee before allowing an employee to enter a country, even though the payment is not legally required. This places the employee in a vulnerable position: travelling to a foreign country, conducting business which is often time sensitive; not having the ability to obtain advice and having to make a snap decision. When compared with what could be a substantial cost for the business, should the request be resisted, paying the small amount of money may be seen as the easier, commercially viable option.

The more companies can do to support their employees by providing clear guidance on how to practically respond to requests for small bribes and facilitation payments, the less likely it is that the payments will be made.