The Wall Street Journal shows today why tackling bribery is, and should be, increasingly on the corporate agenda, at least in the most vulnerable sectors.
The article “Settlements Near In Bribery Case” concerns Panalpina, an oil services firm, Shell and others.
There’s also a useful graphic that shows, with a slight dip in the recession, how FCPA prosecutions are rising dramatically in the US, and the big jump in corporate settlement costs, boosted hugely by Siemens in 2008.
The WSJ notes that:
“Panalpina has set aside around $133 million, according to securities filings, to resolve legal problems with the U.S. that have dogged it for several years and, it says, cost it business. On Sept. 30, it pleaded guilty to criminal price-fixing charges with five other freight forwarders and paid nearly $12 million to resolve the U.S. charges.
The foreign-bribery investigation has been by far the most damaging for the company, dragging its clients into the legal spotlight and resulting in a shareholder suit. Panalpina shuttered its operations in Nigeria and took a $42 million hit as a result, according to company filings.”
So the costs to date for the company look to be some $175 million. And that does not even begin to take into account the cost to the company of good people leaving as a result. Panalpina is now owned by Transocean, which has its own reputation problems of course.
We’re holding a meeting with some of the leading figures in the field of global anti-corruption in a couple of weeks here in London. More on that at this link.
Some useful reading from Ethical Corporation:
Ethics training: Protect more than reputation
Companies that train employees how to implement ethics codes outperform their peers, argues Simon Webley, research director at the UK Institute of Business Ethics