SA among Walmart’s five countries posing high risk of corruption

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Walmart recommends that its employees in “certain countries” make payments to police officers if they feel threatened by the officer’s behaviour.

But the employee must first say that they are prepared to pay “an official a recorded fine” if the law has been broken and ask for a ticket or receipt. However: “If the police officer becomes angry, aggressive or you feel threatened by the police officer’s behaviour, as your health and safety is our priority, you may make the payment.”

This exception to an otherwise strict policy on bribery and corruption is contained in a 14-page statement of ethics, which was updated in February and issued by Walmart’s wholly owned subsidiary, International Produce Limited.

The 14 pages contain detailed procedures, which are intended to “reinforce our stance on bribery and corruption and to help our colleagues and business partners to do the right thing when they are carrying out our business”.

In what is understood to possibly be a reference to South Africa and maybe China, Brazil, Mexico and India, the code notes: “Police in certain countries stop our colleagues, mainly when driving, and ask for personal payments. In some circumstances our colleagues have been threatened with being locked in a cell if a payment is not made.”

The code recommends that to reduce risk, the “colleagues” should ensure the vehicles are in good working order and properly licensed and they should keep to the speed limit.

Walmart has had difficulty shaking off the topic of corruption since April when the New York Times published damning allegations that the group’s Mexican division had extensively used bribes to speed up its store-opening process.

Earlier this week it emerged, from a letter written by members of a US Congressional committee that has been tasked with investigating the “Mexican bribes”, that Walmart’s legal advisers had identified five countries that posed the greatest risk of corruption. The five first-tier countries are Mexico, China, Brazil, India and South Africa.

The lawyers had been retained in 2011 “to conduct a broad review of your anti-corruption policies and operations in Mexico, Brazil and China”, stated the letter, which was addressed to Walmart’s chief executive Michael Duke. As a result of the review, the lawyers recommended that Walmart also evaluate its operations in India and South Africa.

The committee is investigating to determine whether or not Walmart has contravened the Foreign Corrupt Practices Act (FCPA), which makes it illegal for American companies and individuals to pay bribes in foreign countries.

It is evident from the letter that the committee is frustrated by Walmart’s unwillingness to co-operate with the inquiry. “You have provided us with no documents, you have declined to allow any Walmart employees to brief our staff about the allegations.”

Commenting on the references to South Africa, a Walmart spokesperson told Business Report yesterday that Massmart “has always maintained a robust risk control environment… within the King 3 governance framework.”

The spokesperson said since the merger’s implementation last June, a review of Massmart’s internal controls had been initiated to ensure they were compliant with the FCPA.

Letter to Wal-Mart Stores chief executive Michael Duke.


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