Bribery and Corruption: Definitions and Implications

Bribery and corruption are interrelated terms that have had a significant influence on all aspects of life. These anti-social, anti-political and anti-economic activities obstruct the progress of a country. However, it is important to note that the rate of bribery and corruption varies according to different countries. It has been observed that the developing nations are more involved in such practices than the developed ones (Heath, Richards & de Graaf, 2016). In fact, many developing nations have accepted these practices as a way of life, which is a major concern for the governments in these countries.

The essay will provide an elaborate analysis of bribery and corruption with the help of different theories. In doing so, it will first define and explain bribery and corruption and the ethical implications related to it. Further, the essay will explain these two concepts using the ethical relativism theory and try to understand if these practices are part of national culture. In addition, the essay will also explain the implications of associating such practices to national culture. The essay will then use theories like consequentialism, deontology and virtue ethics to contrast bribery and corruption. Lastly, the essay will contrast the Australian legislation on bribery by foreign officials with that of a developing country namely India.

The most common definition of bribery is the act of giving or receiving favor in the form of money or other valuable item to influence the individual or the party offering or taking the bribe. It is an illegal practice and those involved are liable to be punished for jail under law. Corruption on the other hand, is the act of dishonesty performed by those in higher positions or holds any power like politicians, managers and government officials (Lin, Huang & Chuang, 2017). Bribery is one form of corruption and others might include doing under-the-table transactions, money laundering, manipulating elections and so on. Although bribery and corruption occur mostly within the political field, business organizations are also affected by it. It could be said that bribery and corruption taking place within the business sphere are related to those happening within the political sphere. It has been observed on several occasions that governments favor one particular business group as they receive illicit funds from those groups. Likewise, some business organizations promote the interests of a particular political party because the party holds significant powers that could help the business hide its illicit practices. Bribery and corruption within the business sphere lead to unethical practices that harm the reputation of the company as well as the country.

Ethics and Bribery and Corruption

Ethics refer to the principles that govern an individual or organization’s behavior. It is the concept that decides the right and wrong actions performed by the individuals or organizations. Although the moral principles that constitute ethics are different in different countries, some universal principles are there that govern the daily practices. Hence, within the business sphere as well, some principles have to be followed by managers to ensure adherence to ethics. Bribery is one issue that is increasingly becoming a concern for businesses because it breaks the ethics and harms the company’s reputation. Krammer (2017) talks about the history of bribery and states that it has been going on since the ancient times when gifts were given as a way of showing gratitude. However, when it comes to business giving or receiving gifts become conditional. The person receiving the gift becomes indebted to the giver and the one giving the gift expects some favor in return.  Therefore, bribery is considered as an unethical practice as it gives undue advantage to the business. Corruption, which includes bribery as well is also unethical because it favors the powerful against the powerless, the strong against the weak that is not accepted as per ethics.

Prior to explaining bribery and corruption from the Ethical Relativism perspective, it is first important to understand the theory. Ethical Relativism holds that moral principles are relative one’s own culture and that the right and wrong about an action depends on the moral principles practiced in that culture (Horak, 2018). Here, it is also important to understand the ethical absolutism, which is opposed to ethical relativism. Ethical absolutism claims that every action is or must be aligned with the moral principles accepted universally.

Bribery and corruption are also explained in terms of ethical relativism and absolutism. In this section, bribery and corruption shall be explained in terms of ethical relativism. Bribery, as has been discussed above, was not illegal or unethical in its ancient form where giving gifts was an expression of gratitude (Love, Salinas & Rotman, 2018). However, as generations passed, it took the shape of bribery especially in countries where giving and receiving gifts was a common practice.   Bribery, when defined from the point of view of ethical relativism reveals that many consider it as an exceptional case for example, surviving economic pressure (West, 2016). A simpler explanation could be that many people relate bribery to the cultural norms followed in some countries and hence, do not see it as unethical. In many Asian countries especially China and Indonesia, the tradition of receiving and offering gifts is prevalent since ancient times and those involved in bribery and corruption use this tradition as an excuse to come out clean from the fraudulent activities (Post, 2018). It is thus evident that explaining bribery and corruption from the perspective of ethical relativism provides undue advantage to those involved in such practices, those who justify their act stating that it is the accepted cultural norm in the particular country.  As Dion (2010) observes, “corruption serves both to sway people away from their moral duties and to favor self-interest and hence it cannot be considered to be only a cultural phenomenon”.

Bribery and Corruption from an Ethical Relativism Perspective

The above discussion clearly shows that when bribery and corruption are described from the ethical relativism view, it harms the reputation of a country and the company as well (Niazi, Bernardi & Bosco, 2017). Bribery is a corrupt practice and corruption cannot and must not be considered a part of a country’s culture. In doing so, one gives away easy paths for the offenders to escape from moral duties and principles.

This section shall contrast bribery and corruption using ethical theories such as consequentialism, deontology and virtue ethics. Thus, in order to proceed, it is important to understand the norms of these theories. Consequentialism dictates that the consequences of an individual’s actions are the ultimate ground to judge the rightness and wrongness of that action (Voliotis, 2017). Therefore, the theory states that the morally right act is the one that results in good or positive outcomes. Deontology, on the other hand, states that actions of an individual are the basis for deciding the right and wrong aspect of any action. Deontology does not give importance to consequences but to actions (Laczniak & Murphy, 2018). Virtue ethics is the theory that lays stress on the virtues of an individual’s character and mind. Virtue is a positive trait possessed by an individual that makes him or she, a good human being and those without virtues are considered unethical (Kaptein, 2017). While consequentialism would consider bribery and corruption as a moral act if it produces positive outcomes, deontology would consider these practices as immoral since the actions are themselves right or wrong. Virtue ethics, in contrast to consequentialism would consider bribery and corruption as immoral acts as it negates the good traits of an individual.

Managers in large or small corporations utilize these theories to defend their acts of bribery or corruption. Bribery, from the consequentialism perspective is not an ethical issue unless it does not result in negative outcomes. Managers might use this theory to justify their act of bribery as an act of donating money or giving gifts for a good cause that resulted in a positive consequence. The deontology perspective however, does not allow managers to justify their actions because actions are in themselves right or wrong irrespective of the consequence. However, managers still use this theory to explain that they had to involve in such practice because their bosses pressurized them (Tipu, 2015). Virtue ethics on the other hand, provide managers with the excuse that they are good human beings, they were not involved in any act of corruption, and that it was just a noble gesture from their behalf. Further, they might use this theory to refute the allegations stating that their virtues would not allow them to commit such illicit practices.

Contrasting Bribery and Corruption Using Different Ethical Theories

Bribery and corruption, as discussed in the above sections, are punishable offences and those involved could face serious criminal charges. Different countries have different legislations to address bribery and corruption especially by foreign officials. This section shall contrast the legislative measures of Australia and India to understand the level of severity given to such practices in the two countries.

The legislation for bribery in Australia if very strong, which is evident from the fact that it has sanctioned the Organization for Economic Cooperation and Development (OECD) Convention on Combating Bribery of Foreign Public officials in international Business Transactions. In addition to that, Australia is also a member to the United Nations Convention against Corruption (UNCAC) of 2003 (Ag.gov.au, 2018).  Owing to the treaty obligations, the Australian government has made its legislation strong by incorporating the Division 70 of the Criminal Code Act 1995 where Section 70.2 (1) defines bribery as an offence. The punishment for bribery in Australia is strict, as those foreign officials convicted for bribery will face minimum of 10 years imprisonment and AU $1.8 million as fine (Ag.gov.au, 2018). Apart from that, Section 70.1 (1A) ensures that the act of bribery is punishable irrespective of the fact whether the act has yielded benefits for the ones involved or not. Further, if a corporation is found guilty of bribe, it would be fined maximum of AU$18 million or thrice the value of the benefit collected from bribery or 10 per cent of the annual turnover in cases where total value of the bribe cannot be estimated (Ag.gov.au, 2018).  .

In India however, the laws governing bribery of foreign officials differ significantly from that of Australia. However, like Australia, India too adheres to the UNCAC Conventions. The punishment for bribery of foreign officials in India amounts to 7-years jail (Cvc.nic.in, 2018). It is however important to note that India does not any defined legislation against bribery of foreign officials like Australia has. The Prevention of Corruption Act 1988 only explains the penalties for accepting bribes by domestic public officials. The Prevention of Money Laundering Act 2002 further criminalizes the prohibited surge of money through attachment and abstraction of property (Cvc.nic.in, 2018). The recent amendments in legislations concerning bribery and corruption have included criminalization of passive bribery dealing with the acceptance of bribes by foreign officials making India only the third country to do this after Switzerland and Malaysia.

Contrasting the legislations of Australia and India, it is evident that both countries consider these practices severely offensive. However, on one hand where Australia already had clear rules and regulations defining punishments against bribery, India lacked such clear definitions (Tran-Nam, 2015). It is only in recent years that the Indian government is implementing sterner legislations against bribery and corruption.

Australian and Indian Legislation on Bribery by Foreign Officials

Conclusion

It is therefore correct to state that bribery and corruption are unethical practices irrespective of the reasons for which these are committed. The above discussion justifies this statement. As evident from the discussion above, bribery and corruption cause much harm to the country and the company involved in such practices. In the essay, bribery and corruption has been clearly explained and links to ethics has been established. Further, the essay has also examined bribery and corruption from the perspective of Ethical Relativism and demonstrated contrast using other theories like consequentialism, deontology and virtue ethics. Apart from that, the essay has also explained the way managers use these theories to explain, defend and refute the practices of bribery and corruption. In addition, the essay has provided contrast between the legislative measures taken by Australia and India to address bribery and corruption.

References:

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