Definition
According to TI: The offering, promising, giving, accepting or soliciting of an advantage as an inducement for an action which is illegal, unethical or a breach of trust. Inducements can take the form of money, gifts, loans, fees, rewards or other advantages (taxes, services, donations, favours etc.).
Examples
When a person offers, promises or gives a bribe, it is called ‘active bribery’ and when a person requests, receives, or accepts a bribe, it is called ‘passive bribery’.
- Examples of active bribery
a) Bribing a public official in order to:
Be awarded a contract in the briber’s favour.
Obtain an inspection report or to be awarded a license.
Circumvent planning or safety controls.
Channelling bribes to win public contracts through a consultant.
Payment of small bribes to customs officials to expedite passage of goods through a port. Employing a public official’s son to influence the award of contracts.
Providing sponsorship fees and excessive travel expenses for doctors to influence them to prescribe a pharmaceutical company’s products.
- Examples of passive bribery
a) Security: A security officer in a company accepts a bribe from criminals to allow access for theft.
b) Purchasing and procurement: A procurement executive demands a ‘kickback’ to award a contract. This involves a portion of the contract fee being given back to the individual who made the decision to award the contract. The consequences of such bribery can include financial loss through overpaying for goods, projects or services and purchase of substandard, counterfeit or otherwise non-compliant goods or services.
c) Allocation of goods and services: An employee favours a customer by expediting delivery at the expense of other customers or giving preferential allocation of goods or services.
d) Recruitment: An executive demands a bribe to appoint or promote a person who would otherwise not have been selected. A senior buyer awards a contract on the strength of promise of a lucrative appointment with the supplier after a suitable interval.
e) Insider fraud: A bank employee accepts a bribe to provide details of the bank’s customers. f) Illegal information brokering: An executive accepts a bribe to provide contract specifications to be used in a tender ahead of time. Bribery might also be accepted to alter the specification in favour of a bidder.
Effects
- Individual
a) disciplinary action
b) termination of employment
c) criminal charges
d) may affect relationships with family, friends and colleagues.
- Organisational
a) financial loss
b) damage to employee morale
c) damage to organisation’s reputation
d) organisational focus and resources diverted away from delivering core business and services to the community
e) increased scrutiny, oversight and regulation.
- Community
a) wasted taxpayer funds
b) loss of goods and services
c) lower community confidence in public authorities
d) disadvantage to honest business that miss out on government contracts.