Your company intends to operate in a lucrative, new foreign market. Market regulation demands that you operate with a local partner under a joint venture. It is expected that both companies will have an equal share in such ventures.
Cultural differences have made negotiations with the local partner difficult, including different views on aspects of good governance. As your company is eager to enter this new market, it is eventually agreed that your company handles the production, sales and distribution of products and services, while the local partner takes care of administration, including securing of regulatory approvals, tax matters and permits.
Not every corruption-related activity is as easily recognised as a luggage stuffed with cash to bribe a public official. Corruption can be far more subtle, making it difficult for employees to recognise it unequivocally for what it is. That is especially the case for business practices that are legal, but can be abused to disguise corruption.
Companies must address joint ventures, where they have effective control, in their anti-corruption programme.
In cases where a company is part of a joint venture over which it does not have effective control, it should encourage other members of the joint venture to adopt anti-corruption programmes consistent with its own.
Additional, practical safeguards should be considered to mitigate the corruption risk from membership of joint ventures, including:
Example 1 & Example 2
[TI UK HTB, Page 33]
“How To Bribe – A Typology Of Bribe-Paying And How To Stop It”, Section 2.5
"The 2010 UK Bribery Act Adequate Procedures – Guidance on good practice procedures for corporate anti-bribery programmes”, Chapter 7.7
“An Anti-Corruption Ethics and Compliance Programme for Business: A Practical Guide”, Chapter F