AMCHAM ANTI CORRUPTION COMMITEE

Anand Dayal, Chairman

New Delhi, 18 November 2009

MEETING AGENDA

INTRODUCTION OF COMMITTEE MEMBERS ANTI CORRUPTION LANDSCAPE IN INDIA COMMITTEE GOALS

SHORT TERM LONG TERM

PLAN OF ACTION

LOGISTICS FOR CONDUCTING MEETING

ANTI CORRUPTION LANDSCAPE IN INDIA

Nature and causes of corruption in India Areas of risk for US companies FCPA proceedings involving bribery in India Trends in India Anti-corruption laws Investigation agencies dealing with corruption

Efforts to curb corruption

Dealing with extortionist government officials
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NATURE OF CORRUPTION IN INDIA

Encountered by public in day to day dealings Reported demands:

50% (under $ 100) 84% (under $ 5000)

General Mindset: bribe giver is victim Motivation: avoid harm or disadvantage, rather than for gaining an advantage
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CAUSES OF CORRUPTION IN INDIA

As identified by Santhanam Committee

Administrative delays Excessive burden of regulatory functions on government Government officials vested with personal discretion

Complex procedures in matters of importance to citizens

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CAUSES contd
As identified by Scholarly Literature

Political patronage. Corruption in the political leadership Administrative labyrinth. Cumbersome and dilatory administrative procedures Lack of punishment. Corruption cases handled in a casual and clumsy manner Social environment. Corruption accepted in the social psyche and behavior
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AREAS OF RISK FOR U S COMPANIES

Culture of acceptance of corruption

Excessive discretion in exercise of governmental authority

Pervasiveness of public sector in commerce Compliance challenges due to legal and regulatory ambiguity and inconsistencies Cash oriented economy

FCPA PROCEEDINGS IN INDIA

Ten cases involving bribery in India

4 by DOJ Fraud Section 6 by the SEC

Many involve conduct of an Indian subsidiary Highest monetary penalty, $ 10 million Disgorgement of profits and interest Imprisonment (5 yrs) sought in one case
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TRENDS IN INDIA

Transparency in government Increased public awareness of rights Emphasis on legal and regulatory compliance Movement away from business model relying on undue influence Increased use of technology in dealing with government (e-governance) Contract focus vs. relationship focus in business Implementation of global best practices
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ANTI CORRUPTION LAWS

Prevention of Corruption Act, 1988

Prohibits the taking of a bribe or other gratification by a public servant public servant expansively defined Central Vigilance Commission (CVC) charged with inquiring into and investigating offenses Prosecution requires prior government approval Imprisonment and monetary fines

State Lokayukta Acts and Rules

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INVESTIGATION AGENCIES

Central Vigilance Commission (CVC) Central Vigilance Officer (CVO) at undertaking level Central Bureau of Investigation (CBI) Enforcement Directorate

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INITIATIVES TO CURB CORRUPTION

Right to Information Act, 2005 Government Whistleblower Resolution National e-Governance Plan, May 2006 Transparency Efforts in Public Procurement

Integrity pact between government department and each bidder E-procurement, listed as initiatives under National eGovernance Plan CVC guidelines Preventive Vigilance in Public Procurement Defence Procurement Policy
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DEALING WITH EXTORTIONIST DEMAND

Positive Deviance Approach

Have the courage to say NO and stand by it Written policy not to engage in bribery Strict compliance with legal and regulatory requirements Make representation to higher authorities Encourage and implement E-governance Reward ethical behavior within government

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GOALS TO ACHIEVE
Help US companies manage legal compliance challenges Create a level playing field vis-vis local (domestic) companies & other foreign MNCs

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THANK YOU
ANAND S. DAYAL KOURA & CO, ADVOCATES

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