The Sunday Mail
Taurai Changwa Business Forum CAPITALISM has often been associated with greed and avarice as companies, especially big conglomerates, usually stop at nothing to ensure success. And success in business is defined as the ability to make money. It is in such pursuit for profits that the lines between morality and immorality, ethics and unethical behaviour are blurred.
In many capitalist societies, bribery and extortion become the stock-in-trade for some businesses. The ends (money) are always used to justify the means (bribery and extortion). While it is accepted that bribery and extortion are criminal acts that the world has to contend with, it is the tendency to sanitise and justify the vices that is not.
It would be grossly inaccurate to consider bribes as only illegal payments that are made by one part to gain an advantage as they also include gifts, discounts, free trips, sponsorships, promotions, and inflated sales. Not only do they affect individuals, but companies and countries as well.
Experts consider inflated prices and payments as one way bribes are paid by foreign companies to local individuals and companies, while, on the conversely, inflated external payments are used as the conduit to launder money. The economic impact of such illicit transactions is obviously huge.
But extortion involves obtaining items of value or services through the practice of forcing another party to act in an involuntary manner. So, the two co-exist; in fact, they are Siamese twins. A society where the vices are subtly accepted as the norm especially in business is bound to experience increased incidences of corporate misgovernance, including unethical business conduct.
German-based global civil society organisation Transparency International is of the opinion that no country in the world is corruption free. In essence, corruption has become a trillion-dollar industry and developing countries are often on the receiving end.
Zimbabwe is obviously a victim. The Auditor-General’s Office has played a significant role in exposing rot in state-controlled entities and parastatals. Equally, there have also been significant revelations of scandals in the private sector. Details are beginning to emerge of what was happening at Government-controlled mobile telecommunications company, NetOne.
Hardline stance on graft But one of the major impacts of corruption has been to inflate the value of local projects. Where, for example, a project is supposed to be quoted US$7 million, it ends up being completed for US$27 million. This is the reason why due diligence and extensive evaluation of project costs are very necessary.
Different jurisdictions treat such offences differently. In April this year, China’s Supreme People’s Court and the Supreme People’s Procuratorate said corruption involving bribes and embezzlement worth more than US$463 000 (three million yuan), which potentially have an “extremely vile impact”, now attract the death penalty under the revised criminal law.
Cases that are deemed “extremely serious” involving amounts between 1,5 million yuan and 3 million yuan can also attract the death sentence. Even though China’s 1997 criminal law imposes the death penalty on crimes involving amounts as low as 100 000 yuan, it has been implemented with discretion.
In fact, last year the number offences that attract the death penalty were reduced to 46. The new changes also expanded the definition of bribery to also include club memberships, debt forgiveness, paid trips and free home decoration. China’s former railways minister Mr Liu Zhijun was given a suspended death sentence in 2013 for taking a 60 million yuan bribe. It was, however, later commuted to life imprisonment in 2015.
In addition, former top security official Mr Zhou Yongkang was jailed for life in June this year for bribes worth 129 million yuan.
But in Zimbabwe it seems quite different. Shady businessmen assume rock star status overnight, and justice is seemingly slow to visit them. Corruption has been quite damaging to the mining sector.
It is, therefore, hardly surprising that many companies operating from offshore jurisdictions – largely viewed as havens for money laundering – have links to Zimbabwe’s mining sector. What makes corruption more potent is that offenders can always pay themselves out of scrutiny and arrests. Perpetrators are also usually said to be powerful figures whose stature and social standing is intimidating to investigators.
In societies where national incomes are below the poverty datum line, bribes and extortion thrive. The biggest question of our time is how to stop all this rot. It is undeniable that the commitment necessarily has to start from the top. While the media have tried to expose corruption, the onus is on statutory bodies and organisations to investigate those who might have been implicated.
Company board members and executives must always adhere to the tenets of good corporate governance. Enforcement of such crucial governance codes does not have to hinge on moral suasion; where offences happen, they must be reported to the police. Exposing corruption is futile if allegations are not investigated to their logical conclusion.
The import of non-action can be interpreted as impunity. The case of England’s former national team soccer manager Same Allardyce, who was fired 67 days into his term, is quite instructive. This is the definition of decisive action. In Zimbabwe there is a tendency for shady company executives, implicated in scandals in one company, to be appointed to senior posts in other companies. They are even elevated to join the board of directors.
Effective law enforcement involves punishing offenders and breaking the cycle of impunity. Transparency International claims that improving financial management and strengthening the role of auditing agencies have in many countries achieved greater impact than public sector reforms on curbing corruption.
Improving on disclosure and transparency is also helpful. Every organisation handling public funds in Zimbabwe should disclose their financial statements to the public. Access to information often increases the responsiveness of government bodies while simultaneously having a positive effect on the levels of public participation in a country.
Holding Government to account is a sustainable approach that helps to build mutual trust between citizens and Government.
Central Government and local authorities are there to serve the public, and the general public also deserve to know how their funds are being used.
Researchers have been able to prove that to a large extent there is a direct correlation between corruption and underdevelopment and there is need for Zimbabweans to recommit themselves to the elementary values of ethics and integrity.
Taurai Changwa is a member of the Institute of Chartered Accountants of Zimbabwe and an estate administrator. He has vast experience in tax, accounting, audit and corporate governance issues, and is MD of SAFIC Consultants. He writes in his personal capacity. Feedback: [email protected], Facebook page SAFIC Consultancy, abd WhatsApp +263772374784.
