Corruption likely as crisis bites

By Kylie MacLellan

LONDON (Reuters) - Companies and their employees are more likely to resort to poor business practices, cutting corners and corruption to try and survive the global economic crisis, watchdog Transparency International warns.

Business leaders will focus less on issues of corporate responsibility and integrity as their companies struggle to keep afloat, with worries such as job cuts more pressing said Jermyn Brooks, Director of TI's private sector programme.

"For the business world, when the economic parameters get tight there is a much stronger temptation to focus on survival ... regardless of what that means in terms of perhaps cutting corners," Brooks told Reuters in a telephone interview.

"In conflict situations where there is either a civil disturbance or a breakdown in government that nearly always goes hand in hand with increased levels of corruption and so lesser breakdowns like an economic crisis by analogy will probably involve a greater level of corruption," he said on Tuesday.

A report by Berlin-based Transparency in December into leading international exporting countries said firms from emerging economic powers Russia and China were most likely to use bribes when doing business abroad, but Brooks said nowhere was immune to dubious practices.

Brooks said some firms might also unwittingly encourage corrupt practices among their employees by providing them with the wrong incentives.

"If you are only concerned to remunerate your employees based on sales effectiveness or perhaps the lowest possible prices on the purchasing side, but you don't bother about whether they are really concerned to conduct that business in line with your standards and values, then you can be buying problems," he said.

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