'Thrown Under a Bus' — Corporate Employees Exposed to Corruption
Corruption is a 'chronic risk" that business employees have to face when they operate abroad.
Dominic French* has barely been outside for over two years. The world that he occupies with his Filipino wife and three children is a house with a small garden in a remote region of the Philippines. "We've become pretty good at hiding," he told DW via a video call.
The house is registered in his wife's name, their children only attend online classes, and the family's only trip beyond the gates in the last few months was a dash to get booster vaccinations in May, when they wore masks and rode in a car with tinted windows. Depression and exhaustion have set in. One psychologist has diagnosed his wife and children with post-traumatic stress disorder. "We can't continue to live this way," French said. "It is not living."
A complex story has led him here, but the main reason for these precautions is simple: French is convinced his life is in danger because he is the only witness to a bribe his former employer, the Australian mining giant BHP Billiton, allegedly offered in 2008.
That crime could implicate a well-connected Filipino politician and a powerful businessman. Both of these people were named by French to DW, but are not mentioned here to protect his safety. French also provided corroborating evidence that other associates feared this particular businessman, and though contacted for comment, none were willing to go on the record for this article. The politician, meanwhile, has gained a national profile in the country.
The gift to the politician, which was brokered by the businessman, consisted of a luxury hospitality trip to the 2008 Beijing Olympics. The bribe potentially gave BHP an advantage in a legal dispute over a mining license. The company eventually retracted the bribe, but not until after it had been accepted and the court decision had been made in the company's favor.
French has good reason to be scared. During his work at BHP in 2007, he was called in by an Australian embassy security advisor, who told him there had been credible "kidnap for ransom" threats against him and other BHP expats — possibly orchestrated by a rival company. He personally knew a Canadian mining executive, John Ridsdel, who was kidnapped and murdered in the country in 2016. So it was unsurprising that after the bribery scheme became public in 2015, French became worried when suspicious white vans and unfamiliar motorcyclists appeared at his gate.
Exposure to corruption
Such dangers remain well-known in the Philippines to this day. The US government's 2021 human rights report on the country says kidnappings are "common and predominantly for criminal purposes."
BHP says it is well aware of these concerns and insists that the safety of its employees is its "highest priority."
"We have dedicated compliance, safety and security teams across our global operations that support all of our employees, providing advice and guidance across a multitude of issues including bribery and corruption," the company told DW in a statement. "We also have multiple channels in place — including an anonymous reporting line — that encourage and help raise any concerns."
But according to Serena Lillywhite, CEO of Transparency International Australia, executives like French are often poorly equipped to deal with these issues. "There's a disconnect between: 'Oh, we want to protect our staff, but we don't necessarily want to talk about the fact that we're being tapped on the shoulder to pay bribes in so many countries where we operate'," she told DW. "They don't want that out there. So it's always easier to throw an individual under the bus."
Multinational corporations like BHP often work in jurisdictions that are prone to corruption.
French believes he is one of those employees thrown under a bus. He describes corruption as a "chronic" risk that all multinationals have to face if they operate in certain countries. "Corporations have dealt with the management of the threat in a hit and miss style, perhaps because they don't understand what is required to mitigate or manage the risk," he said.
In this kind of environment, Lillywhite added, there is an unspoken reality that everyone knows: "Bribes are paid."
"They are often hidden through expenses that look legitimate — such as consultancy fees," she added.
Western companies are caught in a dilemma: They maintain compliance standards and must — if they also want to operate in the US — refrain from bribery in foreign countries, under the Foreign Corrupt Practices Act. But on the other hand, companies also want to do business in certain countries where corruption is an endemic reality. And executives like French are often left on the front line of that gap, because of their day-to-day challenges.
"This is where it's a very, very murky area," said Lillywhite. "Often, just one or two executives are left to go into a country to secure a license to operate."
Inexperience often leaves Western company executives reliant on a third-party agent, or fixer, and these are likely to be people with political connections. That makes companies particularly vulnerable to facilitating bribery. "Companies are not providing enough information to their staff to protect them from the risks of bribery," she said.
Old crime with new consequences
French's story began in 2007, when he had to undertake due diligence on one such fixer in the Philippines — the above-mentioned businessman who conveyed one of the Olympics bribes that BHP was allegedly engaged in. "He specifically said to me, in a very stern voice: People get killed in the Philippines for asking the kind of questions you're asking," French remembers. "He wasn't joking around. He was very frustrated."
French said he did not know at the time that BHP was involved in an alleged continent-wide bribery scheme of government officials in the whole Southeast Asian region — by gifting them hospitality packages for the 2008 Beijing Olympics. Those gifts would eventually be investigated by the United States Security and Exchange Commission (SEC), which implemented cease-and-desist proceedings in 2015.
"BHP Billiton footed the bill for foreign government officials to attend the Olympics while they were in a position to help the company with its business or regulatory endeavors," Andrew Ceresney, director of the SEC's Division of Enforcement, said at the time. In the ensuing settlement, when the company paid the SEC a $25 million (€24.4 million) penalty, BHP neither admitted nor denied the findings.
French believes that the accompanying news reports put him at risk — the bribery scheme was now known publicly, which meant Philippine prosecutors could decide at any time to begin investigating both the fixer and the politician. It was time to leave the country.
Though he was no longer employed by BHP, the firm took his concerns seriously and offered him an evacuation deal in July 2019. This stated that the company would provide "assistance with obtaining the necessary visas and immigration permits including payment for associated costs." That, according to French, meant a "golden visa," including the required €500,000 ($511,400) investment in the country they chose, which was Spain.
But a few months later, in September 2019, while French and his family were already in transit and had little choice but to continue, BHP altered the deal, and instead of offering him its help, the company gave him $45,000 as a lump sum payment. With that, the matter would be over — at least that's how the company saw it.
But it left French in a bind: Though he says he did not sign the second agreement, he did take the $45,000, which he needed to cover the several months' cost of moving for his family. On arrival in Spain, the changed deal meant he was left effectively as an illegal immigrant, with no way to attain the visas that had initially been promised. The upshot was: he felt he had no choice but to take his family back to the Philippines and go into hiding.
BHP disputes that any help was retracted, and claims that French's decision was his own: "BHP did not renege on any agreement with Mr [French]. Together, we agreed on a package to provide immigration and relocation assistance for Mr [French] and his family — that assistance was delivered in full," the company said in a statement. "When Mr [French] chose to take on direct responsibility for his and his family's relocation, we also provided an additional lump sum payment to assist with his decision."
Prone to corruption
Whatever happens to French now, this issue, in general, is not going away. As BHP and other mining companies pivot away from fossil fuels to rare metals essential for renewable energy, they are increasingly finding themselves contending with countries where bribery is the price of doing business. The Democratic Republic of Congo, to name one example, supplies 70% of the world's cobalt, necessary for the batteries in electric cars.
"Most of the world's critical minerals needed for the energy transition are located in corrupt jurisdictions," said Lillywhite. "You've got 34% of lithium, which is going to be needed for batteries, in corruption-prone jurisdictions. 94% of all rare earth deposits that we currently know of are in a corruption-prone jurisdiction."
This trend, she concluded, "raises questions about how well the CEOs of those companies are at preparing and protecting their staff to operate in high-risk jurisdictions."
*Dominic French is the person's legal name in Australia, though not the one he is generally known by. At his request, that name has not been used in this article to protect his safety.
Edited by: Uwe Hessler
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