The article in the url link below provides an update on the costs to Chiquita (Issues: Litigation, p245) resulting from the firm’s admission last year that it made protection payments to a Colombian paramilitary group:
“Although Chiquita voluntarily disclosed payments it made to a Colombian to the US Department of Justice in March 2007, the company paid a $25 million fine. It continues to face numerous cases in civil court from the families of victims allegedly murdered by the paramilitaries paid by Chiquita.”
Instead of being commended for their transparency, however, and in spite of being urged to come forward by the Department of Justice, it seems that the only prosecutions being made are against self-confessed transgressor firms. And, they are being hit hard:
“… the top five recent penalties levied in the US foreign corrupt practices act arena were in cases involving voluntary disclosure, including $44 million from Baker Hughes and $28.5 million from Titan Corporation.”
It is difficult to know what the ‘best’ course of action is. While it is fair to expect Chiquita to be punished for the bribes it paid, it is also clear that such punitive action by the government, compounded by the civil litigation Chiquita faces, will only serve to discourage others from coming forward. If the goal is to eradicate the practice (in this case, bribery), it is easy to see that this approach will likely result in less success, not more:
“But Alexandra Wrage, president of TRACE International, a non-profit membership association that specialises in anti-bribery due diligence reviews and compliance training, says many ultimately conclude it was the wrong decision to voluntarily disclose. Wrage says many self-reporters don’t believe they have received any kind of measurable benefit, while facing stiff downsides to the decision, including fines, remedial action and vast reputational damage.”
Take care
Dave
Bill Werther & David Chandler
Strategic Corporate Social Responsibility
© Sage Publications, 2006
Chiquita – Voluntary disclosure’s banana skin
Coming clean on bribes doesn’t seem to really pay off for US companies
Lisa Roner, North America Editor
July 16, 2008
http://www.ethicalcorp.com/content.asp?ContentID=6011
