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Corruption in Latin America and the Caribbean

Transparency International (TI) recently published its ‘People and Corruption: Latin America and the Caribbean‘ report as part of its Global Corruption Barometer series. When conducting the research, TI surveyed 22,302 people across 20 countries in Latin America and the Caribbean, with particular focus on their perceptions and experiences of corruption.  The results of the survey showed that in the 12 months prior to when they were questioned, 62% of respondents felt that the level of corruption had increased. In Brazil, Peru, Chile and Venezuela three quarters or more of respondents said that corruption was on the rise.

The report also looks into corruption within different institutions and groups in society, finding that 36% of those surveyed felt that all, or most, of business executives were corrupt. Of those that experienced corruption within organisations, the survey showed that only 1 in 10 reported a case of bribery to the authorities, and of those who did report to the authorities, 28% experienced a negative retaliation while only 21% said that any action was taken against the perpetrator.

Clare Petrovic in the Fraud Defence team says:

The findings contained within TI’s report are of great importance to UK-based businesses that have operations in and/or dealings with companies in Latin America and the Caribbean. In particular, the report highlights the importance of having proper systems in place to assess the risk of the kind of systematic “on the ground” corruption that appears to be prevalent in these jurisdictions. Having in place clear compliance and anti-corruption policies, including the adequate and regular training of staff and the primary communication of the organisation’s anti-bribery stance internally and externally, is likely to go some way to reducing the risk of corruption whilst the implementation of effective detection and reaction measures will help to mitigate any possible loss or reputational damage.

Hannah Blom-Cooper, a Legal Director in the Fraud Defence Team says:

It is important that businesses with operations in these jurisdictions ensure that they adhere to best practice when dealing with whistleblowing within their organisation. For example, they must ensure that they have clear whistleblowing policies in place and keep them under regular review. It is also important to ensure that they facilitate the reporting of wrongdoing and have sufficient protections in place to protect whistleblowers. For example, having an independent hotline managed by an external company which provides complete anonymity to whistleblowers will give comfort and is likely to significantly reduce the fear of reprisals or retaliation for having made a report of wrongdoing.

Martin Shobbrook, a partner in the Fraud Defence Team says:

A bribe essentially takes place where one person makes a payment of a secret commission to an agent of a person he is dealing with but fails to disclose that payment to, or get consent from, the agent’s principal. If a business finds itself the victim of a bribe, there are various courses of action that can be taken in order to seek to recover the money that forms the subject of the bribe. For example, there may be the possibility of bringing a civil claim against the agent and/or recipient of the funds. There may also be the possibility of claiming against the recipient of the payment. However, the decision on whether to seek to recover these sums in a civil context must be carefully balanced with the potential implications that could arise under the Bribery Act 2010.

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