Probe of GSK has foreign firms in China worried
Risk consultancy says clients fear attention from Beijing will feed back into US and UK dragnet
The continuing investigation of British drug giant GlaxoSmithKline (GSK) and China National Petroleum Corp (CNPC) along with its subsidiary PetroChina has added to worries that companies in China lack adequate protection against corruption investigations, says British risk consultancy Control Risks.
Companies operating in China had always feared being investigated under the US Foreign Corrupt Practices Act (FCPA) or Britain's Bribery Act, said Ben Wootliff, the Hong Kong head of Control Risks.
"What's new is companies now see the Chinese authorities are willing to act against multinationals and local companies over corruption in their home territory, as demonstrated with GSK and PetroChina.
"The new fear is the Chinese authorities have a greater willingness to investigate corruption, which will feed back into the FCPA and possibly the UK Bribery Act, which will expand the corruption investigation across the border beyond China," he said.
"We've seen a strong increase in companies asking us for anti-corruption management in China, prompted by the investigations of GSK and PetroChina. We've been extremely busy, talking all day to companies about China corruption."
A Control Risks report based on a survey of senior executives of 316 companies around the world, including 109 companies in Asia-Pacific, found 35 per cent of the companies do not have formal policy statements forbidding bribes. Companies operating in China accounted for the fourth-largest number of respondents in the report.