12th Global Fraud Survey Growing Beyond: a place for integrity
Regional insights: Brazil
84% of Brazil respondents think that bribery and corruption happen widely in the country.
Fraud, bribery and corruption are significant issues in Brazil.
A recent study by the Federation of Industries of São Paulo found that corruption costs Brazil between 1.4% and 2.3% of its GDP each year, roughly US$146 billion. In the Transparency International Corruption Perceptions Index 2011, Brazil was ranked 73rd of 182 countries.
Possibly as a result of increased media coverage, the public has demanded that more be done to address corruption in public life. A series of anti-corruption marches took place in 2011. There is evidence to suggest that the current administration is seeking to address the problem. The recent resignation of several ministers in connection with corruption allegations suggests a tougher approach in government.
Furthermore, in 2011, Brazil allowed the OECD to review public sector integrity in the country, the first such report into a G20 country. The report praised Brazil for its progress over the past decade, acknowledging its public sector reforms.
The National Congress is also considering a draft bill that would create direct liability for individuals and other entities caught trying to bribe foreign public officials.
The corporate penalties could include fines of up to 20% of annual revenues and a ban on participation in bidding for government contracts.
Brazil was also one of eight founding members of the Open Government Partnership. In September 2011, members issued a declaration which made a series of commitments in relation to public integrity including:
- Implementing robust anti-corruption policies
- Releasing information on the income and assets of high-ranking public officials
- Enacting and implementing rules that protect whistleblowers
Call for greater action by regulators
The 2011 Transparency International Progress Report into enforcement of the OECD Anti-Bribery Convention found that the country had "little or no" anti-bribery enforcement, with significant inadequacies in the legal framework and the enforcement system.
Respondents to our survey agreed, with 90% saying that there should be more supervision by regulators. A further 96% think that senior management should receive criminal penalties if it is shown that they have not done enough to prevent fraud, bribery or corruption.
Stick to your standards
- 84% of Brazil respondents think that bribery and corruption happen widely in the country
- The percentage of executives that believe misstating a company's financial performance can be justified is 10% — twice the global average
- The proportion of respondents that believe cash payments to win or retain business is justifiable has doubled since 2010 (to 12%)
With such a challenging market, it is essential that parent companies carefully consider how they will ensure that their local operations actively address fraud, bribery and corruption risks. Training remains a key part of this process.