Turbocam India: A Stand Against Corruption

The Beginnings

Like many small business stories, the story of Turbocam India involves the spark of opportunity, mixed in with a great deal of perseverance and one or two major breakthroughs that have set the course of the company. But perhaps the most important ingredient of all has been a firmly held belief from its inception that Turbocam was to be a ‘Kingdom company’, existing as a business for the purpose of honouring God.

Turbocam International was founded by Indian Marian Noronha in New Hampshire, USA in 1985. Turbocam’s core business revolves around manufacturing specialised machine parts for turbines and turbochargers, using sophisticated software to machine very high-precision, delicately balanced parts. Right from its earliest days Marian envisioned the company would be used in the service of God. The ideas of creating jobs and generating wealth, supporting Christian service and manufacturing high quality turbo machinery products have all been integral to the mission of the company from the beginning. Read more

Guidelines for Cross-Cultural Business Ethics

By Larry Sharp

This article is designed to help with decision making for business owners working cross-culturally in developing countries. It recognises that there are few absolute standards which apply to all contexts all the time and thus hopefully these guidelines will assist business owners in making tough decisions on matters related to ethics, corruption, morality, bribery and similar themes.

Some would like to believe that the Bible gives a single definitive perspective for all situations. While this is not true, the Bible does give us principles for decision making, thus in preparing for decisions it is important to understand Biblical absolutes in the light of:

  • Biblical culture
  • Our own culture of socialization
  • Our host culture of doing business

Ethics may be defined as the moral philosophy of knowing the difference between what is right and wrong and acting accordingly. It includes a moral duty and obligation to do good, a statement which seems straightforward but which is complex in light of diverse cultures. Ethics has its root in the Greek word “ethos” which means character; therefore an ethical framework is a systematic set of concepts which provides guidelines for correct behaviour that demonstrates ideal individual and corporate character.

It is important that we treat these guidelines as just that – “guidelines” that are a means to guide our customization in the application of God’s principles to contextual situations in our modern world. Read more

Corruption Cheat Sheet

BAM Cheat Sheet Corruption

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 With thanks to Larry Sharp and Dwight Nordstrom.

25 Years of Business in China: Interview on Tackling Corruption

Interview with Dwight Nordstrom

Dwight, you have been in business for 25 years in China, and not just any business, you’ve been involved in manufacturing in big industries, like chemicals and telecommunications, regularly importing supplies and exporting products. How big has the issue of corruption been?

Well let me just start by saying: This is real! This is not hypothetical stuff, it’s a big issue for us. I would say I have to deal with about 25 cases a year of substantial corruption-related situations. To put that in perspective with other common issues faced by businesses, in last 20 years, across our operations of about 5000 people in Asia, I have had zero illegal drug issues, a couple of alcohol related issues, I have had two sexual harassment issues of a serious nature to deal with, but the major issue by a long way is corruption which I have had to deal with at least twice a month. Corruption is a big issue.

Can you give us an example where you’ve had to deal with someone trying to bribe you?

We’ve had situations where we’ve lost business over refusing to pay a bribe. We had a speciality chemical and the representative in a wholly-owned German company asked for a 5% kickback, with 1% going into a personal account. That was a million dollar plus account per year and I don’t even know now six years later if we’ve ever recovered the value of the account. Read more

Doing Business in Kazakhstan: Economic Implications of Worldview

by Kevin White

Kazakhstan is one of the top ten fastest growing economies in the world. This multicultural developing nation is home to 140 various ethnicities and 17 religious groups. The capital city Astana is slated to host the Expo 2017. Kazakhstan’s ambitious 2050 plan is to become one of the top thirty most developed economies in the world. In this vein, Kazakhstan is engaging in unprecedented efforts to attract foreign investment. Recent legislation is offering investors 30% government subsidies on their investment and up to ten years tax free. This offer has been marketed to Western audiences through canny ad campaigns in popular media venues such as Euronews.

Yet in spite of these sincere efforts, corruption behind the scenes is still all too prevalent. A spokesman for the Dutch embassy, who wished to remain anonymous, stated that recently a Dutch company took Kazakhstan up on its attractive offer. However, shortly after completion of their new facility, Kazakhstan “inspectors” found a piece of machinery in violation to some obscure code. As a result the Dutch company had their investment subsidy rescinded and were fined 40% of their investment for a penalty. Similarly, a German businessman stated that German companies are still hesitant to invest substantially because of the routine problems of corruption and bureaucracy.    Read more

Lessons from the Edge: Dealing with Bribery in China

Insights from a BAM Practitioner

Dwight Nordstrom is a veteran of doing business in Asia for almost 30 years. He is on a continuing journey of learning how to deal with bribery and corruption as he leads Pacific Resources International, to expand manufacturing operations in China.

Don’t make blanket statements about bribery and corruption. 
This issue is simple, yet complex! It is good practice to talk about individual cases versus making unilateral statements. Brainstorm with others. Ask, What does this mean in this context?  Is there a different way we could do this? Is there a way we could still win this business? 

Have a zero tolerance approach in your top leadership. 
Within your own company leaders – especially in your purchasing and financial operations – you have got to have a zero tolerance for bribes. Have good frameworks in place to train, implement and evaluate that zero tolerance approach.

Be incredibly selective about what industry and type of business you get into. 
There are a lot of businesses I wouldn’t touch because it is such a corrupt industry. Select the type of industry very carefully since that will determine how much corruption you will face. Build your competency in an industry that is less corrupt before taking on business in more corrupt sectors.

 

The Challenge of Corruption

Corruption is defined as the misuse of power by someone to whom it has been entrusted, for their own private gain. The most common form of corruption is bribery, which is defined as the giving or receiving of money, a gift or other advantage as an inducement to do something that is dishonest, illegal or a breach of trust in the course of doing business.1

Corruption is one of the biggest issues that business people face globally today, and is a highly relevant topic for business as mission practitioners – Joseph Vijayam, Director of Olive Tech, a BAM company in India and the USA.

Bribery and corruption not only represent a significant risk for your company, but keep millions in poverty.

“[Corruption] constitutes a major obstacle to reducing poverty, inequality and infant mortality in emerging economies” according to Daniel Kaufmann, the World Bank Institute’s director for Governance.According to World Bank Institute (WBI) research, more than $1 trillion dollars (US$1,000 billion) is paid in bribes each year. This US$1 trillion figure is an estimate of actual bribes paid worldwide in both rich and developing countries and does not include embezzlement of public funds or theft of public assets. WBI research also shows that countries that tackle corruption and improve their rule of law can increase their national incomes by as much as four times in the long term, and child mortality can fall as much as 75 percent.2

Christian Aid predicted in 2008 that illegal, trade-related tax evasion alone will be responsible for some 5.6 million deaths of young children in the developing world between 2000 and 2015. That is almost 1,000 a day.3 However, corruption is not just happening in the developing world. Read more

Ask a BAM Mentor: Dealing with Corruption

Twice a month, our panel of mentors answer your practical business questions. Send us your questions!

Dear BAM Mentor,

My customs broker tells me I have to give a gift to the customs officials to get our materials out of customs. He said it’s standard, no big deal. I asked the pastor at our local church and he said it would be terrible to pay a bribe like that – it’s illegal and gives a very bad lesson to others.  I’m new in the business and to importing here, and our business may fold if I can’t get this out soon. Is this a time to die for my principles or should I go with “when in Rome, do as the Romans do”?

~ Contemplating Corruption

Dear Contemplating Corruption,

Over which principle are you considering ‘dying’?  Is it God’s call to honesty? Or is it obedience to the local church and, if so, is the church correct?  I suspect that untangling the issues will help.

It sounds like you live in one of the many countries where written law differs from applied law. That’s how speed laws work in the UK, incidentally – they are applied, but not strictly. Most western country laws against foreign bribery make an explicit exclusion for “expediting payment”, which morally can be classified as extortion by the official who is withholding your legal rights until he or she gets their bribe. That’s fundamentally different from bribing an official to get something for which you don’t have the right. Paying an extortionist is generally a bad idea, but it’s on a different moral level than bribery. I wouldn’t die over an extortionists demand. Read more