The UK’s Bizarre Mixed Signals on Its Commitment to Fighting Transnational Corruption

Is the fight against corruption in the developing world a key foreign policy priority for the British government? Or has the attention the Cameron government has been paying to this issue mostly just lip service? I’ve been mulling that question in light of two headlines that caught my eye in last week’s news:

  • First, during his visit to Southeast Asia, Prime Minister Cameron has repeatedly pressed for more aggressive action against corruption, first giving a speech in Singapore in which he denounced the scourge of international corruption and unveiled new policy proposals to limit the flow of dirty money into the UK real estate and financial institutions, and then directly confronting Prime Minister Najib Razak of Malaysia about the deepening corruption scandal in the Malaysian government (a fascinating and troubling story that deserves a separate post at some point).
  • Second, back in London – apparently right around the same time that PM Cameron was delivering his stern remarks about the evils of corruption to his Southeast Asian audiences – UK Business Secretary Sajid Javid invited British industry representatives to submit comments on whether the 2010 UK Bribery Act (which prohibits UK firms from bribing foreign officials) is “a problem” that has had an adverse impact on British exports.

These near-simultaneous headlines make the Cameron government look at best inept, and at worst hypocritical, on its treatment of anticorruption as a foreign policy issue. What is the British government thinking?

Here’s the main thing I don’t get: Even if we put the substantive policy questions to one side, as a matter of political “messaging” (one thing I’d expect professional politicians to be good at), this just looks terrible. We have a cabinet secretary invite business leaders to criticize—and presumably to propose weakening—the key law that prohibits British firms from attempting to corrupt foreign officials, during the very same week that the Prime Minister has declared to a foreign audience that corruption is “one of the greatest enemies of progress in our time” and that the international community “cannot afford to side-step … or make excuses for corruption any more.” Indeed, the PM emphasized that acting to stop bribery “as we did in Britain with our Bribery Act in 2010 … shouldn’t have to damage business, jobs and growth”; cracking down on bribery, he explained, is actually good for business, because

[c]ompanies that become complicit in paying bribes find that they face higher costs, then embark on contracts that may never be honoured, they operate in a false environment that can change suddenly and dramatically, and they incur reputational damage for being complicit in a corrupt system.

If that’s what the PM believes, why is the Business Secretary simultaneously reaching out to British business leaders and saying, in essence, “Can you please share with us your sob stories about how the Big Bad Bribery Act has reduced your profits?” Maybe this isn’t actually rank hypocrisy (more on that in a moment), but it sure looks like it, and I imagine that’s how it will appear so to many foreign audiences (including foreign leaders like Prime Minister Najib Razak). How can one lecture foreign leaders in developing countries on the need to summon up the “political will” to take action against corruption (action that may entail for them not only political risk but also enormous personal sacrifices and possibly physical danger) if leaders in countries like the UK seem cowed by firms grumbling about lost export trade?

Again, even if there’s no necessary inconsistency in the positions, the messaging and symbolism seems to have been badly mishandled. Even if the Cameron government were convinced on the merits that the Bribery Act needed review and potential revision, why not time the release of the message differently, and frame it in a different way? Why not, for example, broadly solicit views on how effectively and efficiently the Bribery Act is achieving its goals, inviting comment not only from business leaders, but also from civil society groups, the general public, and even citizens in other countries as well? That would allow business groups to make their arguments about lost exports, but in a broader context that doesn’t make it look like the government is deliberately laying the groundwork to push for a weakening of the act. I just don’t get it.

Now, to be clear, the fact that these near-simultaneous signals from the British government appear hypocritical does not mean that they in fact are hypocritical. It’s possible, for example, that the UK government has no real intention of watering down the Bribery Act, and Secretary Javid’s solicitation of comments about the adverse impact on UK exports was just an attempt to appease British industry groups, so they feel like their voices are heard. Even putting that possibility to one side, the view that the Bribery Act (or its associated guidance) imposes unnecessary costs on British firms is not inherently inconsistent with a deep, sincere commitment to fighting corruption. If the Bribery Act is in fact needlessly hurting British business, and there may be ways to achieve the Act’s anticorruption goals as effectively without imposing such high costs, then the government should of course explore those alternatives. So maybe that’s what’s going on.

Maybe, but I tend to doubt it. The fact of the matter is that although the UK Bribery Act is quite tough on paper, enforcement so far has been spotty and inconsistent. There are encouraging signs that may be starting to change, but it’s not like we’ve seen a surge of aggressive prosecutions that would make credible an assertion that the Act has just gone too far. And the sorts of measures firms would need to undertake to achieve compliance with the Act do not seem terribly onerous or out of line with the standard measures to avoid violations of similar laws, most notably the US Foreign Corrupt Practices Act (FCPA).

What’s really going on here? I’ve no idea, though my best guess is that this is another example of the left hand not knowing what the right hand is doing – and more specifically, that the Cameron government hasn’t really given sufficient thought to how enforcement of the UK Bribery Act fits into its larger anticorruption theme (in contrast, say, to how the White House plays up aggressive FCPA enforcement as a key element of its commitment to fighting corruption). Perhaps some additional evidence consistent with this hypothesis is the odd fact that although PM Cameron’s Singapore speech played up the UK’s new laws on corporate transparency, he mentioned the Bribery Act only once and in passing (the brief reference quoted above). Whatever the reason, the UK’s mixed messages on its commitment to fighting foreign bribery — more specifically, the degree to which the UK government is willing to incur some political costs of its own — are frustrating, to say the least.

2 thoughts on “The UK’s Bizarre Mixed Signals on Its Commitment to Fighting Transnational Corruption

  1. If this looks odd to you, imagine how it seems to us here in the UK. Last year’s UK Anti-Corruption Plan was noticeably light on initiatives to support clean business overseas, but this is a strange way to remedy that gap.

    My inside-baseball comment is to note that the Business Secretary is a close ally of the Chancellor, who was recently credited with ousting the head of the UK’s Financial Conduct Agency for being overly aggressive in pursuing white collar crime, and is currently on manoeuvres for the future leadership of the Conservative Party.

    Otherwise I think you say it all; probably more cock-up than conspiracy.

  2. May reflect two schools of thought in the one government. Cameron very anti; others not so much. Government does not always speak with one voice.

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