Ed. Note-today we conclude a two-part series by our colleague, Mary Shaddock Jones on corruption in India.

Yesterday I reported on an article published in Current Intelligence Magazine written by Eric Randolph entitled “Delhi’s Battle Against Bribery”.   As indicated, the state government of Delhi recently enacted a law designed to bring about changes to the pervasive corruption in India by addressing the demand side of the equation.  According to an article published in the Times of India newspaper by Ambika Pandit, the law named the “Right of Citizen to Time Bound Delivery of Services Act, 2011.  Delhittes are “now empowered to get compensation for delays in services rendered by 32 city departments and agencies.

My question is this:  Did the Delhi government just try to pacify the people demanding reforms or are is it really willing to make a serious attempt to reduce corruption by attacking the demand side of the equation?   There have been numerous articles written about the two “Lokpal Bills” floating through the Delhi government (“Jan Lokpal Bill”).  The original Lokpat Bill produced by the Delhi government was deemed way too inadequate- as it failed to allow the prosecution of some people in important positions.  As a result, the activist prepared their own bill that had more teeth in it.

From what I can tell, the” Right of Citizen to Time Bound Delivery of Services Act, 2011” is only a small part of the Lokpal package.  I thought one comment published in response to the passing of the “Right of Citizens” was especially poignant:

“Common People now have to pay double bribes. Instead of Terminating Corrupt Government Employee, they are asking for fines. That means Government is supporting Corruptions to increase their income! These Fines will be Recover from Common People. Common People have to pay for their Salary Cut. If Common People don’t pay their Fine then they will not Deliver their Service in Time. More harassment will increase. Termination of Service is the best Solution; otherwise Common People are in Great Danger.”

In many third world countries, civil servants are paid extremely low salaries.  In Nigeria, for instance, the accepted method of increasing the salaries was through the demand of small bribes in order to process paperwork.  The person who wrote the comment above in India obviously believes that the passage of the “Right of Citizens bill” will only exacerbate this problem in India.  It is a vicious cycle.

What the activists want in India is much bigger than what is reflected in the “Right of Citizens to Time Bound Delivery of Services Act, 2011.  Perhaps it is time for our government to put political pressure on countries which profess to want an end to corruption, but fail to enact strong legislation and enforcement of that legislation to bring about change.  We must, as individuals and as companies, continue to push for reforms from the demand side of the equation.  It is simple economics- “Supply = Demand”.  But unless the salaries of civil servants are addressed, people will continue to do what they believe is necessary to feed their family.  The type of money discussed in the “Right of Citizens to Time Bound Delivery of Services Act, 2011” isn’t going to make any civil servant rich.  It may simply compound the problem as predicted by the commentator above.

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Mary Shaddock Jones, Attorney at Law and former Assistant General Counsel and Director of Compliance at Global Industries, Ltd. can be reached via email at  msjones@msjllc.com or via phone at 337-515-8527 .

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This Week in FCPA, ep #17, is UP! wp.me/p1qOzv-23. Howard Sklar and I talk about News Corp, Alcatel (again), and more!

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Please join Mike Volkov, Stephen Martin, Jim Feltman and myself on Oct. 6 in NYC for a presentation on ” The Gathering Storm: Anti-Corruption Compliance for Private Equity and Hedge Funds”. The presentation is hosted by World Check and Ethisphere and the event is complimentary. More information and registration details can be found at http://ethisphere.site-ym.com/events/event_details.asp?id=179863. If you are in the NYC area I hope you can attend.

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This publication contains general information only and is based on the experiences and research of the author. The author is not, by means of this publication, rendering business, legal advice, or other professional advice or services. This publication is not a substitute for such legal advice or services, nor should it be used as a basis for any decision or action that may affect your business. Before making any decision or taking any action that may affect your business, you should consult a qualified legal advisor. The author, his affiliates, and related entities shall not be responsible for any loss sustained by any person or entity that relies on this publication. 

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