[1]Despite more than three-quarters of businesspeople indicating that their country’s anti-corruption laws are ineffective, the 2016 Latin America Corruption Survey [2] released by Miller & Chevalier Chartered and 13 partner firms shows marked signs of regionwide improvement in corporate compliance measures.
In April and May 2016, Miller & Chevalier and 13 Latin American partner firms distributed the survey to corporate executives based in 19 countries working in a broad cross-section of industries. 637 individuals completed the survey, which was made available in English, Spanish and Portuguese.
Highlights of Miller & Chevalier’s 2016 Latin America Corruption Survey include:
- Anti-Corruption Laws Generally Perceived to be Ineffective: More than three-quarters (77%) of respondents believe their country’s anti-corruption laws are ineffective, and about half (48%) say corruption is a significant obstacle to doing business. More than half (52%) believe they have lost business to corrupt competitors; of those, most (89%) say they did not report such misconduct to the authorities. 71% of those who did make reports say the government failed to investigate. These results are highly consistent with responses to the same questions in 2008 and 2012.
- Increased Familiarity with the FCPA: Almost three-quarters of respondents (72%) in the region are familiar with the U.S. Foreign Corrupt Practices Act (“FCPA”), up from 65% in 2012. 58% of respondents from local/regional companies are somewhat or very familiar with the FCPA, up from 47% in 2012. Even among respondents whose companies do not appear to be subject to the FCPA, almost three-quarters are very familiar or somewhat familiar with the FCPA, suggesting the law is having a broad impact in the region.
- Nearly All Respondents Feel State-Owned Enterprises and Political Parties Are Corrupt: Unlike in years past, this year’s survey analyzes respondents’ perceptions of corruption among political parties and in state-owned enterprises, such as national oil companies and public hospitals. 92% of respondents associate moderate or significant corruption with political parties, and 93% of respondents say the same about state-owned companies.
- Argentina, Brazil, Mexico and Venezuela Seen as Most Corrupt Large Economies: Of the major economies (over US$100 billion in GDP), Argentina, Brazil, Mexico and Venezuela are seen as the most corrupt in the region, a finding that is consistent with attitudes in 2012, where Argentina, Mexico and Venezuela were rated the most corrupt. Brazil has joined this group, unsurprisingly given the major bribery schemes exposed there in recent years.
- Companies Increasingly Adopting Tools to Mitigate Third-Party Bribery Risks: Efforts by regional and multinational companies to manage corruption risks in third-party relationships, traditionally one of the highest areas of bribery risk under the FCPA and similar anti-corruption laws, have notably increased in the region. More companies are implementing due diligence and monitoring practices and incorporating contractual safeguards into their third-party agreements.
- Divergence in Countries Embracing International Compliance Efforts: The survey shows exceptional growth in anti-corruption compliance efforts in certain key markets (Brazil, Colombia, Mexico and the United States), while other markets lag behind in engaging in international compliance best practices (Bolivia, Dominican Republic, El Salvador, Guatemala, Honduras, Nicaragua, Panama, Paraguay, Venezuela), signaling the emergence of a diverse array of compliance climates throughout the region.
A full copy of the survey results and analysis are available here [2]. A link to the survey results infographic is available here [3].
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