Financial Times FT.com

Cost of turning a blind eye to graft

By Michael Peel

Published: April 9 2008 20:28 | Last updated: April 9 2008 20:28

It takes an inspector to catch an inspector – so staff working in China for SGS, the customs audit company, must themselves be monitored. It is a wise precaution, says Jean-Pierre Méan, the Geneva-based group’s general counsel, in an environment where staff are frequently offered a goodwill gesture of an envelope containing $10 or $20, either directly or tucked discreetly into piles of papers. Any cash taken inadvertently is returned to the giver with an explanation. Mr Méan says: “The instruction is that staff should never accept.”

The gifts – which people familiar with Chinese business say are not normal practice domestically – highlight the myriad and multiplying corruption problems facing multinational companies. As businesses expand internationally to take advantage of new financial and trade hot spots, chief legal officers such as Mr Méan face increasing difficulties in dealing with ever-growing variations in rules, customs and regulatory zeal.

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