New research into corruption shows: one in three Swiss companies pays bribes

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Swiss company ABB had to pay a fine of 327 million francs for bribing a high-ranking representative of South African energy giant Eskom between 2014 and 2017. ABB paid at least R1.3 million in bribes to supply parts to the world’s fourth largest coal mine, Kulise in South Africa.

It is a spectacular case that has recently taken a turn, but ABB is far from the only corrupt Swiss company. On the contrary: according to a study by the Graubünden University of Applied Sciences and Transparency International, one in three Swiss companies doing business abroad has already paid bribes there. This is especially true in countries where corruption is widespread.

“On the way to lunch”

FH and Transparency surveyed a total of 539 Swiss companies with relevant foreign operations – from SMEs with five employees to global companies with 50,000, from all sectors from mining to transport. Every second company said it had faced claims of corruption.

Study director Christian Hauser (49), who has been researching the subject for years at the Graubünden University of Applied Sciences, explains how this works using an example. “On the way to lunch at a negotiation meeting, the buyer of the client company casually mentions that the competition was there last week and personally offered him several thousand dollars… That’s what’s in the room and you need to respond appropriately,” says he. says the expert.

However, it is a naive idea that dollar items in briefcases change hands, says Martin Hilti (50), Managing Director of Transparency International Switzerland. “Today, very sophisticated methods are used to cover up the bribery.” For example, from incorrect contractual agreements to banks that do not take things so seriously.

In total, almost 40 percent affected

Of the 52 percent of Swiss companies asked to commit corruption, 63 percent pay. “This means that a third of Swiss exporting companies make corruption payments abroad,” Hilti said. “In addition, there are approximately seven percent where local partners act corruptly.”

This means that almost 40 percent of Swiss companies doing business abroad pay bribes and commit other corruption crimes. For example, to sell their products, get orders, acquire licenses or pay taxes. According to the research, the companies surveyed use 5.6 percent of their turnover for such illegal payments.

The size of the company doesn’t matter – SMEs are just as affected as corporations. And there are hardly any outliers between the sectors. Although industrial companies are less likely to be asked for bribes, they pay just as often as other sectors. It is striking that transport companies pay less often.

“Systemic failure”

“Given the shocking number of almost 40 percent of companies making informal payments directly or indirectly, we unfortunately have to assume that we are also dealing with system failure, so corruption is part of the business model,” says Hilti.

To him, this is a sign that for many companies short-term profits are more important than complying with the law. The director of Transparency International Switzerland also points out that the general terms and conditions in Switzerland encourage corruption. The fact that in twenty years only eleven companies have been legally convicted for not taking the necessary precautions to prevent corruption speaks volumes to him. “We have an enforcement problem – so few judgments are hardly an incentive for companies to avoid bribery.”

Source:Blick