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Business ethicsApril 10 www.bus-ex.com 27organisations more accountable for their actions, both in Britain and abroad. As a result, they will face far more serious consequences if found guilty. I've often been asked, or had it put to me, that bribery is a perfectly normal way to do business in the Middle East and there is for some a perception that bribery and other types of fraudulent activity in business are normal. And of course there are many cases where this perception has proved to be reality, even among highly reputable businesses whose origins are firmly in British soil. However, the increasing recognition that bribing is not good for business was brought home recently in Saudi Arabia. A businessman told me that the BAE Systems case had not only tainted a famous international company, but the whole episode had cast a slur on good Saudi businesses, making it more difficult in some cases to do business both at home and abroad. It had heightened an expectation that bribes were the norm.Combined with tighter regulation across MENA on money laundering to prevent the movement of terrorist and criminal funds, bribery and the perception of how widespread it is in the Middle East is a formidable PR and enforcement task to be taken in hand by business and governments respectively. The World Bank estimates that some $1 trillion of the world's GDP is lost in corrupt payments. A small portion of that would have a massive impact in the poorer parts of the Arab world such as Yemen and Palestine.In a modern corporation, wherever in the world it is situated, business ethics is not an aspirational goal, it is a necessity which builds integrity, reputation and the financial bottom line. And in a world that appears to have become more dangerous from a terrorist and organised crime perspective, smaller companies in particular need to be more than ever aware of the risks they run of unethical behaviour and how that might lead to their inadvertent association or infiltration by criminal elements. Furthermore, there is a growing international recognition and concern of the significant social, economic and political cost of these crimes. Bribery is no longer seen as a victimless crime.Problems most often occur when companies do not have adequate procedures in place to prevent bribery and fraudulent activity taking place. It may be they fail to properly conduct due diligence on agents and other parties, or have no codes of conduct in place to provide guidance to their employees. So, often, they don't try saying 'no' when a bribe payment is demanded or implied. Perhaps the boss simply said: "do what it takes to win the A new UK Bribery Bill is likely to become law in 2010, making it illegal for a British domiciled individual to bribe a foreign official to obtain or retain business. This Bill is in some respects tougher than the US Foreign and Corrupt Practices Act; for example, making illegal even small facilitation payments. The Bill will bring added pressure on British companies exporting to the Middle East to pay more attention to business ethics, especially their interaction with agents and how they conduct their business in the region. Under the proposed new law, not only would an employee of a British company be prosecuted for either private bribery or the bribery of a public official, it will also be a corporate offence for businesses failing to prevent a bribe being paid by their employees or by other firms on their behalf. Of course, British people along with all other expatriates and their companies are subject to local laws too. Such a case is that of the two Australian businessmen charged last year in Dubai on suspicion of bribery when working on a development project for the Nakheel Group.With much of the global economy feeling the recessionary pain, businesses may take ethical shortcuts to secure contracts, especially in areas where they believe that baksheesh is the only way of doing business and there are larger contract opportunities outside the UK.Over the past decade Middle East and North African (MENA) governments have made vigorous efforts to prevent the bribery of their own officials, according to the OECD based in Paris. There is growing recognition, as elsewhere, that corruption undermines the rule of law, sits alongside money laundering and fraud, and damages a country's international reputation to the extent that it adversely affects trade and investment; and worse, while lining the pockets of a few, impoverishes many others.The UK Bribery Bill is important because it will bring into force measures which will hold individuals and favour

28 www.bus-ex.com April 10