FCPAméricas Blog
What Brazil’s Protests Suggest About the FCPA
6.28.2013
FCPA practitioners are often asked “Isn’t corruption just part of the culture of some countries?” “Doesn’t the FCPA conflict with how people want to do business in other places?” The recent national protests in Brazil, where over one million people in more than one hundred cities have taken to the streets, serve as a resounding “no”.
The protests started as a response to bus fare increases. They ultimately became demonstrations of popular discontent with political corruption. Last week, Datafolha, a leading Brazilian survey agency, found that the “fight against corruption” was the leading motivation of the protestors in Sao Paulo, where the survey was conducted.
Protests like Brazil’s and those of the Arab Spring show broad-based dissatisfaction with abuses of public office. This is quite the opposite of tolerance or preference for corruption. The Arab Spring protests started with a corrupt act — the Tunisian street merchant who lit himself on fire did so after being shaken down by a corrupt low-level official. They spread for complicated reasons, but frustration with the corrupt political systems of the region was a common thread. (Reuters explains the many ways that Brazil’s protests are unlike the Arab Spring.) The Brazilian protests show that corruption is not accepted in Brazil. They remind us that corruption persists when there are not adequate means to fight it – and that suppressed frustrations can be explosive when finally given a voice.
Protests and U.S. Business Interests
The Brazilian protests also provide a response to another common complaint about the FCPA – that it undermines U.S. business interests. The FCPA’s preamble notes that allowing companies to bribe foreign officials “lend[s] credence to the suspicions sown by foreign opponents of the United States that American enterprises exert a corrupting influence on the political processes of their nations.” The law is intended to bolster faith in both U.S. companies and domestic political institutions, and to avoid protests like those disrupting business across Brazil.
Companies need stable and predictable markets for business to grow. When corruption flourishes, it undermines government institutions and faith in the political and economic order. When left unaddressed, these frustrations can erupt, as they have in Brazil and the Arab world, creating instability and disruption.
How is all of this relevant to the FCPA practitioner? When asked to make the case for the day-to-day work of compliance, practitioners can point to the Brazil protests and the Arab Spring to give relevance to their compliance efforts. They can note how social media has empowered people in new ways, and that an apparent tolerance for corruption could be hiding an explosive resentment. They can also argue that by countering corruption, they make markets fairer, more stable, and ultimately more profitable. By framing the FCPA in this larger context, FCPA practitioners can better convey the importance of their work.
Where Things Stand
As FCPAméricas has previously reported, Brazil is in the midst of a struggle against corruption. It is considering new laws prohibiting bribery, enforced corruption-related laws against powerful politicians and business people, and joined international anti-corruption conventions. But the recent widespread protests suggest that change is not happening fast enough on the ground. It remains to be seen whether Brazil will find new ways to respond to this clear desire for cleaner, more responsible government.
The FCPAméricas blog is not intended to provide legal advice to its readers. The blog entries and posts include only the thoughts, ideas, and impressions of its authors and contributors, and should be considered general information only about the Americas, anti-corruption laws including the U.S. Foreign Corrupt Practices Act, issues related to anti-corruption compliance, and any other matters addressed. Nothing in this publication should be interpreted to constitute legal advice or services of any kind. Furthermore, information found on this blog should not be used as the basis for decisions or actions that may affect your business; instead, companies and businesspeople should seek legal counsel from qualified lawyers regarding anti-corruption laws or any other legal issue. The Editor and the contributors to this blog shall not be responsible for any losses incurred by a reader or a company as a result of information provided in this publication. For more information, please contact Info@MattesonEllisLaw.com.
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@2013 Matteson Ellis Law, PLLC
Post authored by Matteson Ellis, FCPAméricas Founder & Editor
Comments
June 29th, 2013 at 8:02 pm
The environment arisen out of the protests created a good opportunity to speed up Projet of Law nº 6.826/2010 (which aims to meet international commitments, more specifically, those described at the OCDE anti-corruption Convention) approval through Congress.
July 1st, 2013 at 2:00 pm
[…] original article can be found at mattesonellislaw.com Tags: abuses of public office, Brazil, bribery, corrupt low-level official, Corruption, […]