Lord N (2015) ‘Establishing enforcement legitimacy in the pursuit of rule-breaking ‘global elites’: The case of transnational corporate bribery’ Theoretical Criminology, OnlineFirst
Nicholas Lord
University of Manchester, UK
Abstract
This article develops an analytical framework for analysing the legitimacy of law enforcement responses towards rule-breaking ‘global elites’, in particular multi-national corporations implicated in transnational corporate bribery. While international anti-bribery laws and norms converge cross-jurisdictionally, enforcement contexts and responses can diverge formally creating dilemmas over how to establish the relative legitimacy of different enforcement frameworks. This article draws on a threefold framework proposed by David Beetham for understanding legitimacy (i.e. legality, normative validity, legitimation) which it considers in relation to the contingent cultural contexts of enforcement of two jurisdictions, Germany and the UK, before identifying key necessary minimum requirements of legitimate enforcement that can inform cross-cultural analysis. The article suggests the proposed framework provides an alternative to current evaluative measures used by international anti-corruption organizations.
Keywords
Comparative criminology, corporate bribery, corruption, enforcement, legitimacy, transnational crime
Introduction
This article develops an analytical framework for examining the legitimacy of law enforcement responses towards rule-breaking ‘global elites’, in particular multi-national corporations implicated in cases of ‘transnational corporate bribery’. Transnational corporate bribery involves the bribing of foreign (public) officials by corporations operating in international business in order to win or maintain contracts in foreign jurisdictions. Such bribery is organised across jurisdictional boundaries (e.g. via intermediaries or third parties; money laundering) and is characterized by different forms of inducements ranging from monetary payments (potentially in the £millions) to more indirect, and sometimes ambiguous, hospitalities (including attendance at conferences in exotic locations, shopping trips, tickets for sports events, exchange of legitimate services etc.) or non-monetary favours such as the provision of prostitutes or current/future employment for self, family or social network. The intention is to clandestinely ensure the commission or omission of certain acts that breach an individual’s duties for the benefit of the corporation (though individual gain usually accompanies this either directly, as a ‘cut’, or indirectly, via promotion or job retention). There are few direct, identifiable victims although there are substantial political, social, economic and environmental harms (see Lord and Doig, 2014; Lord, 2014c).
Historically, the primary focus of establishing (political) legitimacy has been to do so at the national level. However, the importance of establishing legitimacy at the international level has always been recognized (Coicaud, 2010a), particularly where there are interdependencies between national and international actors (state and non-state) and processes (see Clark, 2007). For example, nation-states are required to respond to transnational corporate bribery using international frameworks for enforcement created by intergovernmental and international non-governmental organizations1 (see Lord 2014a). The Organization for Economic Cooperation and Development’s (OECD) Anti-Bribery Convention 1997 and the United Nations’ Convention against Corruption 2003 (UNCAC) both grappled with broad normative principles that once implemented significantly shaped future conceptions of anti-corruption and associated actions (see Clark, 2007: 2). The subsequent political and economic pressure to sign, ratify and enforce such Conventions means it is important for nation-states to demonstrate and communicate a legitimate enforcement response. For instance, rigorous peer-review monitoring and expert evaluations coordinated by intergovernmental organizations (GRECO, 2007; OECD, 2012) and the evaluative reports of (inter)national non-governmental organizations (Transparency International, 2015) place nation-states under notable scrutiny.
Transnational corporate bribery is a phenomenon that is now almost universally prohibited. Laws and norms across jurisdictions have converged, although a model of ‘functional equivalence’2 is permitted by international organizations, meaning that enforcement responses can and do diverge formally. Significantly, such legal and normative convergence is mostly evident in those countries with the largest share of world exports (this is important given the focus on transnational bribery) although the G20 countries of China, India, Indonesia and Saudi Arabia are notable non-signatories of the OECD’s Anti-Bribery Convention, while Japan has yet to ratify the UNCAC (see Lord, 2014a for analysis of the domestic impact of these international frameworks).
In this context, an important question to ask is how we might go about establishing the relative legitimacy of different enforcement responses as nation-states seek to demonstrate that they are adequately pursuing ‘global corporate elites’ engaged in transnational bribery. What, for instance, is the meaning of the concept or conceptions of legitimacy in each place? Relatedly, what does legitimacy, or illegitimacy look like in relation to the enforcement of anti-bribery norms, rules and standards? What are the minimum substantive requirements needed for this to be co-produced under different contingent conditions? While finally, for whom do enforcement responses need to be seen as legitimate and how might they be legitimated? Given the need of intergovernmental organizations to determine the extent to which their conventions are adequately implemented and thus respond to corruption, such questions are urgent. So, too, they may assist us in understanding ‘what works’, when and why.
This article analyses these issues in the light of research (see Lord, 2014) into the enforcement of transnational corporate bribery in two jurisdictions, Germany and the UK. Germany and the UK are particularly apposite cases as ‘active’ enforcers of the OECD Anti-Bribery Convention with modes of enforcement to analyse. They are both key economic players, as members of the G8 with the largest share of world exports in the EU. At the same time, there are notable differences in their approaches as well.
The article begins by discussing the meaning of legitimacy before analysing current measures (and why they are insufficient) for determining the legitimacy of enforcement responses to transnational corporate bribery. The article then draws upon a threefold framework proposed by Beetham (2013) for understanding legitimacy which it considers in relation to the contingent cultural contexts of enforcement in the two jurisdictions before analysing the minimum necessary requirements of legitimate enforcement for comparative research. The proposed framework provides an alternative to current evaluative measures used by international anti-corruption organizations.
The meaning of legitimacy: A concept(ion), process and practice
Etymologically, the concept of legitimacy derives from the Latin legitimus, meaning ‘lawful’, ‘appropriate’ or ‘just’ (Tankebe and Liebling, 2013: 1). It has been referred to as both a ‘“slippery” concept to handle’ (Hough et al., 2013: 330) and ‘fragile’ (Jefferson, 2013: 249). As Hinsch (2008: 39) notes, it is useful to distinguish between concepts and conceptions of legitimacy: the former provides the basic meaning of the term ‘legitimate’ (e.g. it tells us what we say about a particular anti-bribery enforcement policy and whether we call it ‘legitimate’); the latter specifies the criteria that have to be met by a rule or decision in order to actually be legitimate in the relevant sense (e.g. there may be competing normative conceptions over whether a ‘regulation’ or ‘crime-control’ model of enforcement reflects legitimate norms). Furthermore, Hinsch distinguishes between two different concepts of legitimacy—the empirical (as used in the social sciences) and the normative (as used in political philosophy):
For the political philosopher, power is legitimate if it meets certain standards of the right and the good, and the philosopher’s concern is to clarify these standards and show how they can be justified. For the social or political scientist, in contrast, power is legitimate if it is acknowledged as rightful by those involved in a given power relation, even if it does not meet standards which he or she would not personally endorse. (Beetham, 2013: x, emphasis in original)
In understanding legitimacy there is a clear interdependency between both normative and empirical approaches and analysing both is needed to understand the legitimacy of enforcement authorities and their responses (see Bottoms and Tankebe, 2012). For Hinsch (2008), ‘normative legitimacy’ is a value-laden term that involves developing ‘objective’ criteria for assessing legitimacy. For example, it might be investigated whether a given institutional arrangement such as a responsible anti-corruption enforcement institution or system like the UK’s Serious Fraud Office (SFO) and their policies, meet certain substantive requirements of ‘legitimacy’, irrespective of whether people believe they meet them or not. To state that an enforcement institution/system, such as the SFO, is normatively legitimate is to recognize publicly that it has moral standing and not simply report (empirically) that there are individuals/groups that believe it has moral standing. In contrast, ‘empirical legitimacy’ reflects the subjective beliefs of relevant stakeholders that evidence approval of a given institutional arrangement, such as the SFO and their enforcement approach, and it does not imply any evaluative or normative commitment on behalf of those observers who use it to describe social order3 (Hinsch, 2008: 40). There are, however, normative limits as to what we, as social scientists, should empirically describe as legitimate (Bottoms and Tankebe, 2012).
Legitimacy also comprises both ‘the process of justification, and the outcome as “justified”’ (Karstedt, 2013: 132, emphases in original). However, establishing and justifying the processes and outcomes of ‘legitimate’ enforcement is diverse and complex given legitimacy
… is both an output—in the sense that it is the result of multifarious influences including ideology, inequality, material interests, life experiences and social conformism—and an input, in that although it is an analytical construct rather than a human/institutional actor, legitimacy has an effect on how we behave, and what we support. (Levi, 2013: 157)
‘Dialogic’, ‘relational’ and ‘interactive’ processes are central to establishing legitimacy (Bottoms and Tankebe, 2012), or how different stakeholders perceive who or what is legitimate, or illegitimate, and how related perceptions may legitimate or de-legitimate enforcement responses. These issues must be understood in relation to their legal and normative context. As Jefferson (2013: 249, emphasis in original) argues, ‘[t]o speak of the situated production of legitimacy is to speak of a constitutive process featuring a context (the situation) and an action or process (production)’. Claim–response interactions, as above, are shaped by the tensions between law and morality in any ‘institutional normative order’ (see Bottoms and Tankebe, 2012: 156–159; MacCormick, 2007).
With this in mind, Beetham (2013) provides a useful threefold framework that reinforces the necessary connections between empirical and normative conceptions of legitimacy and which underpins legitimacy in different countries irrespective of their varying geographical and historical developments. In other words, at a general level, this framework indicates essential dimensions of legitimacy across cultures. Applying this framework to transnational corporate bribery, a combination of the following qualities informs the production of legitimate ‘power’, or legitimate enforcement, in various anti-corruption contexts:
(1) Legality (rule conformity): the acquiring (rightful authority) and exercising (due performance) of power in line with established anti-bribery rules, legislation and standards that permeate from the international level (i.e. international anti-corruption conventions) to the domestic level (i.e. implementing legislation);
(2) Normative validity: the justifiability of established rules and the enforcing of these by responsible anti-corruption authorities that meet societally accepted standards of rightful authorization and due performance in line with certain shared moral, ethical and just values and standards; and
(3) Legitimation (through performative actions): the (empirically evidenced) actions of relevant groups (i.e. businesses involved in international commerce, international anti-corruption actors, the ‘regulated’) which recognize, acknowledge and serve to confirm the authority of those in power (i.e. the anti-corruption enforcement authorities).
Furthermore, we might argue that within Beetham’s framework, a variety of more specific structures, practices and processes that constitute legitimacy exist. At this level, we might seek to understand what the minimum necessary requirements for legitimacy are, how these relate to cultural contingencies and how they enable us to interpret enforcement responses as having more or less legitimacy, that is, legitimacy is not a binary, but a linear, construct, better understood as a spectrum where the lines between specific dimensions are blurred and entangled. Analysing these minimum requirements provides scope for cross-cultural research to establish ‘normative’ criteria for assessing and evaluating legitimate enforcement.
However, arguing in favour of identifying minimum necessary requirements makes two fundamental assumptions: (1) that commonalities or common referents in concepts exist across diverse cultures and groups/communities; and (2) that consensus or agreement is evident over the nature and characteristics of minimum requirements across these diverse cultures. For example, it is plausible that differences may exist over whether enforcement strategies are more legitimate when organized around compliance and self-regulation rather than criminal prosecution and sanctioning, or over whether legal or natural persons, or both, should be criminally liable. This may particularly be the case in non-democratic regimes where legitimacy may look different. It cannot be presumed that such concepts mean the same across or even within different countries.
In other words, a normative framework for understanding legitimacy should be empirically informed through deliberative methodologies that sample informed experts from different cultures to establish common understandings of norms, standards, values and principles. Such research in turn creates shared normative limits for an empirical formation of conceptions of legitimacy.4 I make no claims here to have uncovered the totality of common, shared variables that shape enforcement legitimacy, or to have produced representative insights to all jurisdictions. Instead, I draw upon my empirical insights and experience in researching enforcement responses in Germany and the UK to present a useful framework for analysing enforcement legitimacy.
Current measures to determining ‘legitimate’ enforcement in the pursuit of rule-breaking ‘global elites’
There are currently no valid or sophisticated indicators for determining ‘legitimate’ enforcement in the pursuit of rule-breaking ‘global elites’ involved in transnational corporate corruption. The most prominent mechanism for a comparative understanding of enforcement is that of Transparency International’s (TI) annual progress review of those countries required to enforce the OECD’s Anti-Bribery Convention. TI’s progress report in 2015 identified four jurisdictions as ‘active enforcers’ of the Convention: Germany, Switzerland, the UK and the USA. Progress is determined by a points-based ranking system that uses arbitrary thresholds in considering a combination of country’s share of world exports along with the number of investigations, (major) cases and (substantial) sanctions of foreign bribery during a four-year period.
According to TI, a major case involves the bribing of senior5 public officials by major companies, including state-owned enterprises. Additional factors, such as the total amount of the bribes paid, the size of the contracts and whether the bribes were part of a scheme involving multiple payments can also influence the categorization of cases as major. Major and minor cases and investigations include both civil and criminal proceedings brought under laws dealing with corruption, money laundering, tax evasion, fraud or violations of accounting and disclosure requirements. No clear, measurable criteria are provided by TI as to how these terms are conceptualized and TI acknowledges that the process is subjective.