‘Bribe culture is not limited to India’

NEW DELHI: Some Indian corporate lawyers have rubbished Transparency International’s report that due to the all-pervasive bribe culture in our flourishing economy, major foreign investments are not forthcoming.

“Corruption could be a factor, but that’s not limited to India, it’s an acceptable form of transaction in many countries such as US,” says Diljeet Titus, whose law firm is finalising about 2 billion dollars of direct foreign investments in India. The indirect foreign stake could be four billion dollars, he concedes.

TI’s Bribe Payers Index indicates underhand money exchange is most prevalent in India, China and Russia.

Forbes magazine quoted John Bray, consultant at Control Risks, as saying: “Corruption does deter good companies from going to certain markets.” He also says Hong Kong companies may suffer disproportionately because they do a lot of business in Asia.

“It (corruption) seems to deter the British the most,” he says.

But Titus feels that “corruption and bribe are more of a cultural problem than a law and order issue. Many countries accept it as a part of business deal.” “In fact, Indian Prevention of Corruption Act is harsher than America’s Foreign Corrupt Practices Act,” says Titus.

He also rejects TI’s finding that British corporates were reluctant to invest in India. Another noted corporate lawyer Lalit Bhasin, who also heads a society of law firms in India, feels that unlike many developed countries “corruption is more visible here”.

During frequent deliberations between the Indian law firms, engaged in drafting major foreign direct and indirect investment deals, with their counterparts abroad corruption has never been an issue, he adds.

“In fact, majority of foreign investors appreciate that at least India believes in the principle of ‘rule of law’,” adds Bhasin.

But the misconception about the Indian investment scenario could be allayed if the Union government ratifies the UN Convention against Corruption.

Parliamentary Affairs minister Suresh Pachouri has told Parliament that the government signed the Convention but not ratified it. It would be possible only receiving responses from various departments, he said.

The Convention prescribes a series of measures for preventing corruption and mandates parties to consider criminalising certain conducts in their domestic law such as bribery of national public officials, foreign public officials and officials of public international organisations.

It also covers embezzlement by a public official, abuse of functions by public officials, bribery and embezzlement of property in the private sector; laundering of proceeds of crime, obstruction of justice, and participation in an offence.

The convention also requires cooperation between national authorities and private sector in investigation and prosecution of offences and mechanism to overcome obstacles of bank secrecy laws.

The Convention also provides for extensive international cooperation.