The Contributions of Multinational Corporations

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Accountancy Business and the Public Interest 2012

A Critical Examination of the Multinational Companies’ Anti-Corruption Policy in Nigeria by *Olatunde Julius Otusanya Department of Accounting, University of Lagos, Nigeria Sarah Lauwo Kent Business School, University of Kent, UK Gbadegesin Babatunde Adeyeye Department of Accounting, University of Lagos, Nigeria

*Address for Correspondence: Department of Accounting Faculty of Business Administration University of Lagos P. O. Box 354, Unilag Akoka, Yaba Lagos State, Nigeria Tel: 234 (0) 7051827072 Email: jotusanya@unilag.edu.ng; sanyaoj@yahoo.ac.uk

Abstract In contemporary enterprise and organisational culture, many companies are increasingly willing to increase their profits and to gain competitive advantages through indulgence in bribery, corruption, money laundering and other anti-social practices that shows little regard for social obligations and even laws. Companies cemented their social relations by claims of socially responsible and of ethical conduct, but the evidence in practice proves otherwise. The bourgeoning corporate social responsibility literature rarely examines predatory practices of MNCs even though the practices affect a variety of stakeholders. This paper draws attention to the gaps between corporate anti-corruption policy and acts. The paper used publicly available evidence to provide case studies to show that companies engaged in bribery, corruption and money laundering as against their claims of responsible social conduct. The paper argued that MNCs have used the political elite in developing countries to seek to advance their global earnings and competitive advantages by offering bribes and other inducements to secure government contracts in Nigeria. It also encourages reflections on endemic corrupt practices and offers some suggestions for reform.

Keywords: Corruption, CSR, Code of Conduct, Corporate policy, Bribery, Multinational   1

Accountancy Business and the Public Interest 2012

1. Introduction The rapid pace of globalisation and the concomitant increase in the volume of international trade and investment, coupled with recent corporate scandals, have heightened the importance of issues relating to politics, corruption and corporate social responsibility (CSR) (Rodriguez et al, 2006). As foreign firms expanded into, and new firms were born within, developing and transition economies governments, managers and scholars grew more aware of the magnitude of corruption and the need to understand and address it. The contemporary literature, often from the Western World, offers a variety of competing and overlapping definitions of corruption, its causes and solutions. For example, the literature identifies varieties of corruption covering political, social, economic, legal, electoral, institutional and other scenarios (Rose-Ackerman, 1978; Johnston, 1983; Tanzi, 1994; Mbaku, 1996; Gyimah-Boadi, 2004). In general, corruption is considered to be a negative activity, in other words something which undermines social welfare (Amundsen, 2006; Olurode, 2005; Obayelu, 2007; Bakre, 2007; Otusanya, 2011b). Its destructive capacities have been captured by metaphors such as ‘cancer’ (Wolfensohn, 1996, González de Aragόn, 2004), ‘virus’ (Elliot, 1997, Hao and Johnston, 2002; Underkuffler, 2005) and ‘disease’ (Klitgaard, 2000; Underkuffler, 2005, Neutze and Karatnycky, 2007). Some writers associate corruption with the recurring misuse of public office for private financial gain (Rose-Ackerman, 1978; Zakiuddin and Haque, 2002; Klitgaard, 2002; Olurode, 2005), but this is not exclusively so because corruption also exist in both (small and large) private enterprises (Klitgaard, MacLean-Abaroa and Parris, 1996; Tanzi, 2002; AAPPG, 2006; Akindele, 2005). Their gains arise because of fraud, bribery, exploitation, embezzlement, and abuses and conflicts of interest (Sikka, 2008). Corruption is frequently associated with the activities of politicians,...
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