International - Written by Barry & Richard on Tuesday, September 18, 2012 13:08 - 1 Comment
Opinion: An encouraging start but could do more – UK government intervenes on behalf of UK plc facing corruption challenges
On Monday we were quoted in the FT about the report that the UK government has begun to intervene with overseas governments on behalf of UK businesses reporting problems with local corruption.
Since the passing of the Bribery Act in July 2010 there have been four cases where UK embassies have made official interventions with governments in the former USSR and the Gulf states* regarding UK businesses’ corruption concerns.
This is against a backdrop of a total of six complaints of corruption made by UK businesses in the Gulf and former USSR between July 2010 and August 2012.
It’s a positive sign that businesses are using this channel to whistleblow on overseas corruption. It’s also very positive that the UK government is applying pressure on foreign governments on behalf of UK business. The Government needs to keep this up.
Earlier this year William Hague told business to work harder and get on planes to sell UK PLC. The other side of the coin is that government has to be there to back UK businesses up when they get off the plane and face corrupt demands.
However, UK businesses abroad are not making full use of the Government’s ability to help when they encounter corruption overseas. While this is an encouraging start, let’s face it, it’s unlikely that there were just six cases of corruption in the former USSR and the Gulf in the last two years.
Embassies and agencies like UK Trade & Investment can raise corruption concerns with local regulators and governments to help ensure UK businesses can operate on a level playing field. While global conglomerates can probably look after themselves, the fact is SME’s and companies outside the exclusive FTSE 100 or Fortune 500 club need a leg up.
On the face of it this is happening. Two years ago William Hague announced a shake up of the Foreign Office and UKTI. The FT at the time reported “Diplomats to become UK plc’s salesmen” and said that the job for the UK’s ambassadors is to be rewritten to include tough targets for trade promotion.
Yet against this back drop sadly the Foreign Office, which is responsible for UK Embassies, Consulates and diplomatic missions overseas, has seen swinging budget cuts. These have a negative impact on embassies’ ability to help UK PLC deal with the overseas bribery and corruption problems and comply with UK law obligations.
In the summer we spoke to Embassy sources who told us of lack of resource on the ground and the cuts that in practice they are being asked to implement.
Assisting UK PLC in exporting overseas with initiatives like this is a sound investment which will pay dividends.
Businesses need to be confident that reporting corruption to a UK embassy will result in action. Embassies need to have the right resources in terms of staffing and budget to intervene effectively.
The Government and the Serious Fraud Office have already put a lot of work into informing businesses about their obligations under the Bribery Act. It’s a complex piece of legislation, and it’s important that the education process continues.
More hands on help for businesses overseas and secure embassy resourcing could encourage more businesses to report cases of corruption they come across. The UK government needs to put its money where its mouth is when it comes to helping UK PLC.
*States of the Gulf Co-operation Council, including the UAE, Bahrain, Saudi Arabia, Oman, Qatar, and Kuwait; period covered is July 2010 to August 2012