Fighting corruption in India: corporate collective actions could make the difference

India is a country where business is often faced with complex administrative obstacles that can lead to bribery solicitations. However, over the past ten years while working with companies in India on the subject of corruption prevention, I have noticed encouraging developments.

The progress came to my attention recently during a presentation I made to the American Chamber of Commerce in India and through several working sessions I led for companies operating in Chennai, Delhi and Hyderabad.

These are some of my observations on the evolution of corruption prevention on the frontlines in India:

• public opinion has become extremely vocal when it comes to condemning corruption in all its forms: from wide scale to petty corruption. Fifteen years ago, people tended to consider corruption as an inevitable disease. It is clearly no longer the case.
• Journalists are no longer reluctant to investigate allegations of corruption or to disclose their findings publicly. They echo the concerns of the public forcing politicians to address the issue.
• Politicians and government at all levels are talking openly about the problem of corruption and are communicating their willingness to combat bribery with new legislation. India is an active participant of the G20 meetings on anti-corruption.
• There are large, multinational Indian companies involved in the work of the B20 and the Indian business leaders invited to speak and participate are demonstrating their commitment to banning corruption.
• Subsidiaries of American and European companies operating in India are more often well equipped with robust, well-funded anti-corruption programs managed by experienced staff; evidence that the work of the Anticorruption (FCPA) Compliance Committee of the American Chamber of Commerce in India chaired by Anand S. Dayal of Koura & Company, Advocates is significant.

There is apprehension, however, from business, the public and public officials over the fact that:

• Visible, positive results of the fight lag and do not correspond to public expectations.
• The public bodies responsible for the fight against corruption are not adequately funded (ex : the recent “Lokpal” law which created an  “ombudsman” in each state is an excellent step  provided it has sufficient resources to carry out its mission );
• important anti-corruption bills are still pending in parliament on: whistleblower protection; bribery of foreign public officials… etc., which prevents an efficient transposition of the UN Convention into national law;
• too many corruption prosecutions fail to result in convictions a fact which is highlighted almost weekly in the national press.

Given the context, I believe that the ball is now in the court of business who have every reason to actively promote a transparent and corruption-free economic environment with fewer obstacles from public institutions.

I am convinced that Indian companies have the power to curb corruption if they decide to work collectively to fight it, either at a state or sectoral level.

Collective actions are particularly efficient when they have strong support from different stakeholders: public opinion, public administration and business, which is exactly the situation in India. Collective actions create a momentum, which forces those who continue to engage in corrupt practices to change their behavior and adopt transparent business conduct.

The collective actions can take different forms - from identifying administrative obstacles that provoke extortion solicitations - to proposing administrative simplification including e-administration processes or selection of a neutral third party to guarantee transparency in calls for tender.

The International Center for Collective Action, hosted by the Basel Institute on Governance and chaired by Mark Pieth, is an extremely valuable resource center and can provide successful examples of Collective Actions for any country or business community engaged in the fight against corruption.

In 2014, India was rated 85th on the Transparency International Corruption Perceptions Index a significant improvement over the previous year’s ranking of 94. I am very optimistic that India, the world’s largest democracy and already an economic powerhouse, will succeed in its fight to ensure transparent business practices thanks to the commitment and hard work of its business leaders on the issue of anti-corruption compliance.