Technology for the prevention of corruption

A few days ago the news broke that a former director of Coca-Cola Enterprises in the UK had admitted to accepting 1.7 million pounds in bribes in exchange for helping companies to obtain important contracts with Coca Cola.

Specifically, Noel Corry, 56, acknowledged having provided confidential and secret information to different companies between 2004 and 2013, in such a way that it gave them a competitive advantage over other potential suppliers in the contract tenders.

In Spain, although acts of corruption are mainly associated with the public sector (embezzlement, bribery or influence peddling), since 2010 our Penal Code has also punished acts of private corruption, which carry prison sentences of up to four years, special disqualification for the exercise of industry or commerce for a period of up to six years and a fine of up to three times the value of the benefit or advantage obtained.

With the incorporation of the crime of corruption in business to our legal system, our legislator responded to the international requirements regarding private corruption provided for in the Criminal Convention of the Council of Europe on corruption of January 27, 1999; and Framework Decision 2003/568/JHA of the Council, of July 22, 2003, regarding the fight against corruption in the private sector. According to the Statement of Motives of LO 5/2010, with the classification of this crime, the aim was to protect “fair and honest competition” since bribes “break the rules of the proper functioning of the market”.

However, there is still a long way to go in our country with regard to the existence of real controls that allow identifying and punishing this type of corrupt practices that prevent fair competition and equal conditions. In fact, there is still the social perception that commissions in the private sector are always legal, without even entering into an in-depth assessment of whether they are justified and respond to a legal commercial obligation. Well, if what is hidden behind the payment of a commission is the obtaining of an unjustified advantageous position in the market, that commission can only be called in one way: corruption.

In Spain, although acts of corruption are mainly associated with the public sector, since 2010 our Penal Code also sanctions acts of private corruption

In fact, despite the fact that 12 years have passed since the crime of corruption in business exists, there are very few existing convictions under this criminal type. In my opinion, this does not mean that there are no corrupt acts in the private sector, but rather that there are not enough controls to detect them, nor is there a culture of zero tolerance for corruption in business.

In fact, although public corruption does provoke practically unanimous social rejection, the consequences do not seem very negative for those who obtain illicit benefits charged to public funds. According to data provided by the Ministry of the Interior, as of January 1, 2022, a total of 28 people were imprisoned throughout Spain for crimes of public corruption for bribery and 44 for embezzlement, insignificant figures compared to almost any other type. penal.

The implementation of real controls in public tenders and in private contracting processes is a necessity that must be solved urgently if we really want to reduce corruption. In the previous sense, this type of control, in order to be effective, will necessarily entail the use of technology:

1. The evaluation of potential bidders, suppliers and business partners through due diligence processes that automatically evaluate different risk indicators from the point of view of business ethics and corruption prevention.

2. The generalized use of data mining tools that allow knowing relevant information of the third parties with whom commercial relations are established: the identity of the ultimate beneficiaries or beneficial owners of the commercial companies, the existence of publicly exposed persons among their directors or of sanctions and adverse news that can help identify possible risks.

3. The implementation of complaint channels that allow the anonymity of the complainant. And no, an email does not guarantee the confidentiality of the complainant’s identity.

If our companies limit themselves to publishing Codes of Ethics and institutional declarations but do not renounce certain businesses contrary to their own principles, competition will never be achieved in a fair market and under equal conditions.

By the way, in United Kingdom, Corry from Lymm, Cheshire, was sentenced to 20 months suspension and had to sell his house to repay Coca-Cola the 1.7 million pounds collected in commissions. The rest of the companies that participated in the bribery were also fined since “they should have applied compliance measures that would have prevented the payments.”

César Zárate, partner of ECIJA