National News: Unilever and BP Admit 'Paying to Facilitate'
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National News: Unilever and BP Admit 'Paying to Facilitate'
Published By: Financial Times
Jimmy Burns, Andrew Parker and Richard Tomkins
January 10, 2001


Highlights of the Article:

(...) Harry "Skip" Brandon, co-founder of Smith Brandon International, a risk advisory firm, said: "US companies can make payments to local officials abroad if they are in return for expediting services they would normally perform." (...)

For the full article see below.




Unilever and BP Amoco told MPs yesterday that they had made "facilitating payments" in developing countries.

Stephen Williams, joint secretary and general counsel for Unilever, the consumer products group, told the Commons international development select committee that such payments were "tolerated, not encouraged" as long as they met several conditions. These were that the payment was small, was used to facilitate something that would happen anyway, and was in line with local practice, transparent and in public.

Reg Hinkley, group vice-president and general auditor of BP Amoco, the oil company, said such payments had to be made sometimes to prevent delays, rather than to gain an unfair advantage over competitors. However, Ian White, a director of Crown Agents, the development company, who also gave evidence to MPs, said he was a "little shocked" to hear that the companies had tolerated such payments.

The company advises its clients to expose officials demanding such payments it considers to be not far removed from bribery.

Under international law, "facilitating payments" are not always illegal, although companies should clearly label them in their accounts.

Many states have changed their national laws to fit in with the Organisation for Economic Co-operation and Development convention outlawing the bribing of foreign public officials.

The US has been one of the leading backers of OECD rules to prevent corruption abroad. Tom Niles, president of the US Council for International Business, pointed out that the US Foreign Corrupt Practices Act made chief executives and other corporate officers liable if the company was found to have bribed foreign officials.

However, Harry "Skip" Brandon, co-founder of Smith Brandon International, a risk advisory firm, said: "US companies can make payments to local officials abroad if they are in return for expediting services they would normally perform."

The UK had lagged behind other countries, failing to generate public debate about the OECD convention and so far failing to implement proposals that would extend bribery laws to cover offences committed abroad.

Unilever said last night it was strongly opposed to bribery and corruption but in some developing countries made "facilitating payments" amounting to "no more than a few pounds here or there".

These were not itemised in its annual report and accounts because they were "so small they would not even register. .. we actively discourage them, but.., in some circumstances they cannot be avoided."

Additional reporting by Andrew Hill and Andrew Edgecliffe-Johnson in New York

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