Facilitating Payment - Business Ethics

Business Ethics

While being legal, facilitating payments are still considered to be questionable from the point of view of business ethics. The following arguments have been made:

• Unfair competition: smaller business have fewer opportunities and less financial possibilities to "grease" foreign officials.
• sustaining questionable business practices.
• dependence on irregular payments creates additional risk and hence discourages investment

Many companies therefore restrict or severely limit making facilitating payments in their policies, however this practice is not yet widespread. For example, as of 2006, in Australia, among the S&P ASX 100 only 24 companies control facilitating payments and only 15 are reported to prohibit them.