Case 13.1: Bribery or the Cost of Doing Business?
You are starting a new business in a suburb of Jakarta, Indonesia, located next to a major university. It’s a coffee house with WiFi, a place for students to study, relax, and congregate. You have secured the location, signed the lease for the building, and are ready to begin remodeling the site. You will need your utilities, such as electricity, water, internet connection, and gas, before you can officially begin renovating the location. When you approach the technicians to have them initiate these services, they inform you that if you want to have them turned on in a timely way, an additional “service charge” of $1,000/utility is required. When you offer to pay it by making out a check to the utility company, the technician informs you that is a “cash only” transaction. You are reasonably certain that the respective technician will pocket the cash in exchange for giving you the service in a timely way. If you refuse to pay, he informs you that you could wait anywhere from six to nine months for these services to be started. You realize that would be very harmful to your business its opening for so long. It feels like you are being asked to pay a bribe, and you know that it is illegal for US companies to pay bribes to officials in other countries. You have reservations but are told by reliable sources that this is a customary way of doing business in Indonesia and that you really have no choice but to pay the people involved.
1. What decision will you make—to pay what is demanded or refuse? Be sure to spell out the reasons for your decision thoroughly.
2. How does the Bible’s teaching on bribery impact your thinking on this decision?
3. Imagine that the situation was a bit different, that you were leading a mission trip for your church. You and a group of twenty adults and high school students are attempting to get audio equipment into the country to facilitate translation of the “Jesus film” into several languages in that country. You are held up by a customs official who demands a payment of $500 cash to let the equipment through customs. Would you be morally justified in making this payment? Why or why not?
The ethical issue of bribery in business as it relates to cross-cultural contexts is a deeply relevant concern. This paper attempts to analyze Case Study 13.1 in terms of guiding ethical principles as well as virtues. John Frame uses a "tri-perspectivalist" approach to ethics that can be fruitfully applied to this ethical case study. Frame speaks about three perspectives:
· Normative perspective which considers deontological categories.
· Situational perspective which analyzes the nature of the situation and possible consequences flowing from various choices.
· Existential (personal) perspective which emphasizes the character (virtues) of the moral agent.
Thus, any ethical judgment involves the application of a norm to a situation by a person.[1] Consider the following analysis using Frame’s approach.
Normative Perspective
The key norms will come from an accurate understanding of God’s Word and the ethical stipulations that naturally and logically flow from its commandments.[2] The Christian Scriptures—particularly the Old Testament—are replete with ethical stipulations and examples that forbid bribery. Across the full spectrum of Old Testament genres, bribery is consistently portrayed as an act of injustice: Torah (Exodus 18.21; 23.8; Deuteronomy 16.18-20), Historical (1 Samuel 12.3-4), Wisdom (Psalm 26.10; Proverbs 15.27; 17.23; 24.23; Ecclesiastes 7.7), and Prophets (Isaiah 1.23; 33.15; Ezekiel 22.12). Most of these references are specifically dealing with a legal, judicial context where a judge or witness is tempted to thwart the cause of justice for a price. The general principle of upholding justice is secure and can be applied outside the judicial context to other social contexts (i.e., the economic realm).
Although the New Testament does not have a great deal of direct teaching on bribery, Scott Turow, in his essay “What’s Wrong with Bribery,” has an especially apt allusion to the teaching of Jesus. He writes:
Mail fraud/bribery is predicated on the theory that someone—the bribee’s governmental or private employer—is deprived, by a bribe, of the recipient’s undivided loyalties. The bribee comes to serve to two masters and as such is an ‘unfaithful servant’.[3]
Turow goes on to note that the equality of humans and their fundamental dignity “demands that each stand as an equal before the government they have joined to create.”[4] Turow argues that what makes bribery so morally repugnant is that, “Bribery asks that that principal (sic) be violated, that some persons be allowed to stand ahead of others, that like cases not be treated alike, and that some persons be preferred.”[5]
Situational Perspective
This perspective asks one to define and delimit, as much as possible, the nature of the act under consideration. The situational perspective also asks one to consider potential consequences that may flow from the act.[6] In order to properly understand the nature of bribery so as to apply that definition to this case-study it will be helpful to distinguish bribery from extortion.
A standard definition of bribery is offered by Stephen Unger when he writes:
[B]ribery is the act of making payments, usually secretly, intended to induce the recipient to act in a manner that is illegal, or favorable to the payer, at the expense of the recipient’s employer, of the payer’s competitors, or of other parties, including the general public.[7]
Michael Pritchard draws attention to the intentionality of the briber as another key consideration in defining bribery. He writes, “Bribery explicitly includes the notion of an inducement to violate a duty or obligation as an essential element: the briber’s intent is to get the bribee to violate a special duty or obligation.”[8]
Extortion, in contradistinction to bribery, as some unique elements that set it apart. Pritchard helpfully lays out some of the key distinctions:
Extortion is the attempt to coerce someone into making payment by threatening harm. Both extortionists and bribers take the initiative; however, extortionists seek payment, whereas bribers offer payment. In contrast to extortion, successful bribery is best viewed as a mutual exchange, a voluntary relationship.[9]
Thus, the person who is paying in the extortion example is being coerced into this payment under some level of duress. Power differentials are being leveraged to induce the person to pay.
With these distinctions in view, it might be argued that the case study under review is actually an example of extortion. The payee is being coerced, or, at the very least induced, to make a payment to keep the project moving at a reasonable pace so as not to hurt the prospects of the business. This case study is not one in which the payee (the “briber”) is seeking to subvert the normal processes by secret and illegal means. Rather, the payee is being pressured to pay to have some rightfully expected service rendered. In other words, the service is being held hostage and only the payee’s monetary payment will release the service. This type of payment situation is typically called “facilitating payments.”[10] Antonio Argandona articulates the nature of these facilitating payments:
The main distinction between facilitating payments and ordinary bribery and extortion is that facilitating payments tend to be mad to obtain something to which the payer is entitled: what the payer wants the corrupt official or employer to do is not something illegitimate, improper or immoral—something that exceeds their authority such that the normal course of business would be perverted through dishonest or unlawful behavior—but rather to do what it is their duty to do in the procedure for resolving a particular manner.[11]
As is evident, the case-study fits the definition of facilitating payments as articulated above. Does this shift of terminology and the “lower level” of corruption justify the paying of facilitation payments? Not necessarily.
Antonio Argandona states that “facilitating payments involve a set of questionable behaviours.”[12] After listing out the prerequisite actions needed to engage in facilitating payments, Argandona argues that such payments “will always be extortion, which is immoral because it forces the company to make a payment that is not included in the terms and conditions attaching to the service, for the exclusive benefit of the official.”[13]
Although the case study may not have the traditional and defining marks of bribery and, instead, look more like extortion, it would be too hasty to justify the morality of payment in the case under review. Scott Turow brings nuance to the bribery/extortion dichotomy. He writes:
Interestingly, the law does not regard extortion and bribery as mutually exclusive; extortion requires an apprehension of harm, bribery as desire to influence. Often, in fact, the two are coincident. Morally—and legally, perhaps—it would seem that bribery can be justified only if the bribe-giver is truly without alternatives, including the alternative of refusing payment and going to the authorities. Moreover, the briber should be able to show not merely that it was convenient or profitable to pay the bribe, but that the situation presented a choice of evils in which the bribe somehow avoided a greater evil.[14]
Turow raises the issue of moral alternatives. Often those who are being pressured into facilitating payments do not fully consider all the options available to them. Since “facilitating payments may represent a step towards a culture of corruption in society,” it is incumbent upon the business to consider all other options available before making the payment.[15] This may require “moral imagination [which] can suggest alternatives to capitulation.”[16]
Existential Perspective
This perspective asks one to consider the motives and character of the moral agent. In this case there is seemingly no malicious or evil intent in the moral agent being pressured to offer payment; there is not a “heart that devises wicked plans” (Proverbs 6.16-19). Nevertheless, there may be other virtues that are lacking or may be compromised if the payment is made.
First, is the virtue of moral courage. Are there no alternatives available to the moral agent? It is granted that some alternatives besides paying the “fee” will cost more but sometimes the virtuous path requires risk and cost. Second, there is the preceding factors which led to the moral agent being in this situation. As the case study is written, the agent is seemingly unaware of the cultural corruption of facilitating payments. Does this lack of knowledge speak of a lack of wisdom (Proverbs 19.2)? Ought the person to have known that this situation might reasonably arise given readily available background knowledge? A quick Internet search quickly revealed that “a culture of bribery is deeply rooted with the Indonesian public sector.” This source furthered noted that, “many companies look at bribery as a necessary ‘cost of doing business’—whatever the potential penalties of breaking the law, they are seen as worth it to ensure that projects stay on track.”[17]
Putting It All Together
Considering the above tri-perspectivist analysis, I tend to think that the use of a facilitating payment in this situation is morally suspect. There may be situations where such facilitating payments are allowable, but these should be firmly circumscribed by key factors. Argandona writes:
Our opinion is that a blanket decision to make facilitating payments is ethically unacceptable because, as we said earlier, they can only be justified in certain circumstances (when there is genuine extortion, when the cost to the company of not making the payment is very high, or when the foreseeable indirect consequences—in terms of creating a culture of corruption in the company, fostering a corruption among public officials, setting a bad example for employees, etc.—are negligible.[18]
Argandona further notes that if a company does decide to offer a facilitating payment this should be done within a delineated set of rules which should be included in the company’s ethical code or code of conduct. He mentions the following considerations a company should note:[19]
· The company must specify the criteria being used to justify the payment in this situation.
· The company must specify its decision-making procedure (i.e., who in the company is authorized to approve such payments?).
· The company must specify the rules of disclosure (i.e., how will the payment be recorded? Who will see this? How will this be presented to the public?).
Mission Trip Extortion
I tend to think that making the $500.00 payment in the mission trip scenario would be morally justifiable. Some of the key differences in this scenario, in contradistinction to the business case study above, move me to make this moral judgment. First, the Christians are operating under a divine mandate to bring the message of Jesus to the nations (Matthew 28.18-20). There is no such mandate for a business. Second, in this scenario it truly seems as though the equipment is being held hostage. So, although it is immoral for the customs official to ask for the payment, it is not necessarily immoral for the payment to be made to release the equipment.
[1] John M. Frame, The Doctrine of the Christian Life (Phillipsburg, New Jersey: Presbyterian and Reformed, 2008), 33.
[2] This presupposes a Christian analysis, which is what is being offered here. For someone who rejects the ethical authority of the Christian Scriptures, the normative standards will have to have their deontological foundations elsewhere. See the thought of Scott Turow below for a way to flesh out these deontological claims.
[6] This does not entail that it is consequentialist categories that drive the ethical analysis; only that consequences are often a relevant factor to consider in any ethical analysis. As Old Testament specialist Christopher J. H. Wright notes, the Old Testament Wisdom literature often has a consequentialist view of ethical decision-making. He writes, “Much of the advice and guidance given in Proverbs is prudential.” He adds, “Moral rules and moral consequences actually reinforce one another in this way of thinking.” As set within a strong creation theology and robust view of God’s sovereign justice this consequentialism is “thoroughly personal and theistic. It is not impersonal fate, or karma… they are not a matter of mechanical cause and effect, but the outworking of God’s own order in his world.” Walking in the Ways of the Lord: The Ethical Authority of the Old Testament (Downers Grove, Ill.: Intervarsity Press, 1995), 121.
[7] Stephen H. Unger, “Ethical Aspects of Bribing People in Other Countries,” Science and Engineering Ethics 4 (1998), 289.
[8] Michael S. Pritchard, “Bribery: The Concept,” Science and Engineering Ethics 4 (1998), 282—emphasis in original.
[10] “Facilitating payments, also known by terms such as grease payments, speed money, expediting payments, tea money or democratic corruption, are a form of petty corruption.” Antonio Argandona, “Corruption and Companies: The Use of Facilitating Payments,” Journal of Business Ethics 60 (2005), 253.
[11] Antonio Argandona, “Corruption and Companies: The Use of Facilitating Payments,” Journal of Business Ethics 60 (2005), 254.
[12] Antonio Argandona, “Corruption and Companies: The Use of Facilitating Payments,” Journal of Business Ethics 60 (2005), 256.
[13] Antonio Argandona, “Corruption and Companies: The Use of Facilitating Payments,” Journal of Business Ethics 60 (2005), 256.
[15] Antonio Argandona, “Corruption and Companies: The Use of Facilitating Payments,” Journal of Business Ethics 60 (2005), 257. Robert Bailes quotes the Economist (February 28, 2002) in this line of thought, “Facilitation payments are the first move… in a chess game that leads to bribery.” Robert Bailes, “Facilitation Payments: Culturally Acceptable or Unacceptably Corrupt?” Business Ethics: A European Review 15.3 (2006), 297.
[17] Decky Windarto, “Getting Away with It: Bribery Culture in Indonesia,” Glass Lewis (March 20, 2019)—online: https://www.glasslewis.com/getting-away-with-it-bribery-culture-in-indonesia/.
