SCENARIO 8

I am starting a biscuit manufacturing company in Mangalore. A local government agency has to

inspect and approve equipment & plants and biscuit factory infrastructure. With their permission
only I can run the factory. I spend all my earnings to start this business. But when the officials came
to inspect the factory & equipment, they directly asked me to bribe them.

Demand prevention: How to reduce the probability of the demand being made?

Inform your management in advance that logistical and other company support for obtaining the
approval will be necessary
Include in contracts the maximum amount of lead time to allow permits to be issued
Implement a company policy and guidelines
prohibiting bribery, including how to reject demands for facilitation payments whenever
possible, and communicate these to employees
Lstablish and implement systems allowing employees to report demands for bribes and/or
facilitation payments
Provide anti-corruption training, which includes definition of extortion and facilitation payments
and what to do when they are demanded
Establish good relations with relevant government bodies, licensing agencies and local and
traditional authorities where you operate
Discuss with authorities the problems that employees face with payment demands from local
officials and ways to prevent such situations from occurring
Work with local commercial associations to document and publish the offiial procedures,
time and lees involved for technical approval of the equipment
Prohibit payment of non-documented expenses not compliant with laws or contractual
provisions and establish guidelines requiring that all expenses are documented to include at least
the amount, date and identities of persons making and receiving payment

Response to bribery demand: How to react if the demand is made?

Refuse to pay
Immediately report the incident to management and obtain authority to take appropriate
action
Inform the official that making the payment as requested is prohibited by your company and
explain that the demand is illegal and could also lead to the termination of the employee
making the payment
Take the name of the person and state that all fees must be paid directly to the government
office in return for an official receipt that includes all payment details, including the identity
of officials receiving payment
If it is logistically impossible to make direct payment to a government office, request that the
official provide a receipt on government letterhead
Make use of existing relationships to identify a more senior person in the licensing body
whom you can approach instead, in order to explain the dilemma

Seek the assistance of other companies and trade or including contractors, and of other
officials within the licensing body with whom the pre-existing relationships exist
Explain to the relevant parties within the licensing body that the project/operation is in
jeopardy and will fail if the demand is maintained
Take proactive and cooperative action with relevant authorities and business groups (e.g.
chambers of commerce and other importers and industry organizations, the relevant embassy)
aimed at stopping future demands for such payments