We live in a world it seems in which certain assumptions become narratives and narratives are often accepted as “fact.”
However, when subjected to a closer analysis, certain assumptions are often wrong, which means the narrative is wrong, which means the “facts” are not the “facts.”
Recently, the House Foreign Affairs Subcommittee on Global Health, Global Human Rights, and International Organizations held a hearing titled “Implementation of the Trafficking Victims Protection Act (TVPA).”
During the hearing, the President of The Human Trafficking Legal Center testified about ways to improve the TVPA.
“In the 1970s, bribery was ubiquitous, just as forced labor in global supply chains is today. Enforcement of the Foreign Corrupt Practices Act against corporate actors fundamentally changed the understanding of risk. Potential liability under the FCPA sparked corporate due diligence. And that shift propelled the creation of a compliance industry to prevent bribery in corporate America.”
There are many assumptions – spun as narratives – in this short paragraph.
But is any of it factual?
The FCPA was passed in 1977. Did “potential liability under the FCPA spark corporate due diligence? If so, when?
Can it truly be said that for the FCPA’s first 25 years that corporate due diligence was a common activity? When did corporate due diligence become a common activity? 2000? 2015? 2020?
If corporate due diligence is a common modern activity, then why do several modern FCPA enforcement actions concern deficient due diligence (often as to third parties or in connection with M&A activity)?
Has the emergence of a “compliance industry” “prevented bribery in corporate America?
There are ups and downs in yearly FCPA enforcement statistics, but there has been more FCPA enforcement in the law’s fourth decade compared to its third decade; more FCPA enforcement in the law’s third decade compared to its second decade; and more FCPA enforcement in the law’s second decade compared to its first decade.
Granted there are several practical (as well as provocative) reasons for the general increase in FCPA enforcement, but the assumption / narrative that the creation of a compliance industry has somehow prevented bribery in corporate America” is not accurate.