No one knows better than oil and gas companies, operating as they do in some of the most challenging markets, that bribery is bad for business. A willingness to pay bribes damages a company’s reputation with the local community, undermines employee confidence in management and attracts unwanted attention from prosecutors at home and abroad. Bribes are expensive and can lead to other, more egregious crimes.

Most survey respondents in major companies around the world feel it is possible to do business without paying bribes. (Graphic courtesy of Trace International)



Why then do we still hear of well-run, sophisticated companies paying bribes? The most common answer to that question seems to be: we didn’t have a choice. They wouldn’t approve our visas. Our drilling equipment lay dormant until we agreed to pay. Our Chinese and Russian competitors paid. Local officials were beginning to threaten us. We didn’t have a choice.


But companies do have a choice. Most of the companies with which we work have shown not only that it is possible to avoid bribery schemes, but that it’s much less difficult than they once believed. This is true even in very challenging countries and in communities in which the company has paid bribes previously without resistance.


Listed below are some of the strategies that oil and gas companies have recounted. Most are surprising only because they’re employed so infrequently. It should be noted at the outset that not all strategies will succeed in all circumstances. Some countries are more challenging than others; some are more inclined to resort to near-terrorist tactics. And, of course, not all companies are similarly situated. The relative bargaining power of a supermajor or a company that provides a niche service lends itself to strategies that may not work for smaller or more fungible companies.


Say “no.” At a recent anti-bribery compliance conference, the compliance officer for a supermajor dismissed much of the discussion of resisting bribes with the suggestion that people should simply say “no” to such demands. While a simple “no” will not work in all, or even most, cases, it should be tried more often. A demand for a bribe is a request that the employee become an accomplice to a crime. Employees that would otherwise recoil from such a suggestion are often surprisingly willing to participate with the excuse of necessity or local custom or with the conviction that this is how sophisticated businessmen operate.


Fail to hear. This tactic is underused, but great success is reported by those who try it. Few bribe-takers thrust out their hand and state their demands clearly. Instead, there is a language used between bribe-payers and bribe-takers that is understood by both. Bribe-takers ask if you’re going to “take care of them,” “smile on them,” or buy them “dinner” or “tea.” Sophisticated businessmen may pride themselves on understanding this language, when it would be more useful if they failed to understand. The bribe-taker hopes to avoid stating his demand clearly and many businessmen are willing to accommodate this preference. If, on the other hand, the response is a blank stare and clear failure to understand, the official must decide either to speak more plainly or to let this opportunity pass. Most choose the latter path. One woman with whom we spoke has used this technique with great success. Whenever she is in a situation that she knows might lead to a request for an inappropriate payment, she acts first: “I tell the officials with whom I am meeting what a pleasure it is to be in a country where one isn’t constantly shaken-down for bribes. It is very difficult for them to raise the issue after that.”


Blame the lawyers. When employees interacting with local officials on a regular basis decide to or are required to stop paying bribes, the change in policy can be difficult to explain to the beneficiaries of past largesse. As they must maintain good relations with many of these officials, it can be useful to have someone else to blame for the new policy. Employees can accurately attribute to those at headquarters the company’s decision to stop all illegal payments. This position is given even greater weight when the employee is able to cite recent record-breaking fines for companies and extended prison sentences for executives that have been prosecuted for paying bribes.


Shine light on the problem. Although most companies are unwilling to draw much attention to demands for bribes, even to demands they resist, one very effective tactic is to have several companies report collectively on bribery “flashpoints.” They may report through an embassy if they have confidence that the information will be conveyed anonymously, or they may report through a neutral third party. The goal is to keep the companies’ names out of any report to minimize soured relations — or even retaliation — while alerting the government officials that their behavior is being monitored. Most bribe-takers are risk-averse. If they believe someone is paying attention, they will be far less brazen in their approach. Driving demands underground can be an effective strategy in itself as it is easier to “fail to hear” demands that are very vague.


Send the bill to your local partner. One company in a joint venture with the state-owned oil company in a particularly challenging African country began sending the bill to its JV partner for any delays resulting from a refusal to pay bribes. There were no accusations; there was no discussion of bribes at all. The bill simply stated that it was for expenses incurred as a result of delays in moving equipment. The equipment was delivered within 2 days and there were no future delays. It’s important to note that bribe-taking government officials want to avoid embarrassment and confrontation. They’ll stop stealing with their left hands if they must pay for it with their right.


Pay for additional services. Some executives have expressed concern that bribes are just a form of corporate tax and, after all, companies often strain local security and other services. This is true in many cases, but payments for legitimate services (overtime, work during local holidays, additional work generated by the company’s need for expedited service) should not be funneled through inappropriate channels. If real additional value is being provided, the company might consider proposing a formal arrangement whereby some of the expense is offset by the company under the terms of a documented agreement. Companies pay more for overnight delivery than they pay for regular mail. The key distinction is that the additional fee is not slipped to the delivery man, but is part of a published fee-for-service schedule.


When not to resist. Employees of oil and gas companies are often asked to live and work in countries where the standard of living is lower and the risks to health and safety are higher. When faced with a demand for payment in exchange for a vital service — medical care or emergency evacuation — or upon finding themselves in imminent jeopardy at the hands of corrupt police or military, employees should, of course, act swiftly and prudently to ensure their own safety.



Most companies with which we work have acted decisively to adopt strong policies against the payment of bribes of any kind. The consensus amongst these companies has been that the transition has been simpler, faster and less painful than was expected. By comparison, companies that send an equivocal message — paying in some situations and resisting in others — find themselves mired in perpetual negotiations with officials on the take. Companies willing to act decisively to end the payment of bribes will reap the benefits: increased employee confidence, reduced legal risk and enhanced reputation both at home and in the communities plagued by the corrupt officials.