Anti-Bribery and Corruption Clauses: The Culture of Contractual Legality.

The contractual clauses of “Anti-Bribery and Corruption.” named in English in the title due to their international treatment, would constitute an effective contractual tool to implement the Culture of Legality in commercial contracts entered into between private parties. In the context of the outstanding campaign led by Dr. Pablo Alarcón Peña, Director of the Graduate School of Law of UEES, this paper will briefly analyze the conceptualization of such agreements based on private contract law, their practical use and their potential effects on the culture of legality reflected in private business activities.

Article 1454 of the Civil Code defines the Contract as a: “...act by which one party binds himself to another to give, to do or not to do something. Each party may be one or many persons.” These instruments are the main source of obligations. In the words of the Roman jurist Gaius: “obligatio velex ex contractu nascitur vel exdelicto”.” expression which, at the risk of being mistaken for a Harry Potter spell, explains that every obligation arises from contract or tort. For practical purposes, I invite you to view contracts as “producing machines”.” of obligations.

The Ecuadorian Commercial Code defines merchants as natural and juridical persons, nationals and foreigners who perform acts of commerce with different goods and who make commerce their habitual profession. Commercial acts are also executed by non-traders. We see this every day, for example, in the sale of goods or services in shopping malls, through social networks, informal trade, exports and imports at different scales and any other activity for profit. From these commercial activities arise the “Mercantile Contracts”, some of them nominated in our legislation and other unnamed ones that arise from the commercial exercise and that are not always instrumented in writing. It is logical to conclude that, from such commercial contracts, obligations of the same nature arise.

Dr. Pablo Alarcón Peña, in his article: “Culture of Legality: antidote to treat the metastasis of corruption in Ecuador”.” in addition to clearly conceptualizing “the culture of legality”, analyzes precisely that corruption is not limited to the public sphere, but also arises from the private sphere, from everyday acts that appear to be inconsequential, but which occur with high frequency, transcending the public sphere. Within such everyday private acts, we find acts of commerce, which have a private impact among their participants, since they would generate profit if successful or cause economic damage if they fail. These acts of commerce, like all human acts, would not be free of corruption risks, especially if they deal with goods, services and money. The International Chamber of Commerce (ICC), on acts of corruption in commerce has said that: “is concerned about the devastating effects of corrupt practices in the business world. It is clear that corruption represents an obstacle to establishing the level playing field that every business would like to see materialize, and runs counter to international public policy.”. It would be impossible not to agree with this concern, for which the ICC itself issued in 1977 the “Rules to combat corruption”, of mandatory review.

Imagine all the acts of corruption that could occur, for example and by way of illustration, in the international sale and purchase of Ecuadorian bananas, transported by sea from Puerto Bolivar in Ecuador to the Port of Novorossiysk in Russia. This could take place in the same farm producing the fruit, the land transit of the cargo in Ecuador, the customs of origin and arrival, the ports of loading and unloading, the transit by sea through different ports and then by land at the destination. Your imagination will be in charge of illustrating the above with examples in different acts of trade, with different types of goods or services, at different scales.

In every contract there are requirements inherent to its nature: a) the consent of the contracting parties; b) a specific object; and c) a lawful cause or object. These three requirements are reflected in the contracts by means of different clauses, which contain the obligations of the contracting parties and take the names that the parties deem convenient; to cite some clauses: participants, background, price, term, object, resolution of conflicts, penalties and some others. Among such clauses may be included the ones that are the main subject of this brief contribution, those related to agreements or policies. “Anti-Bribery and Corruption.” which basically prohibit the contracting parties from executing any act, during the development of the business, that violates the law and that may be considered as corrupt. Most of these agreements prohibit and sanction the granting or acceptance of bribes, gifts, gifts, or delivery of any goods or undue attention, for the purpose of obtaining advantages in the execution of the contract, among other forms of corruption. Here is a text suggested by the ICC for a fully incorporated clause of this nature:

“The parties undertake that, at the effective date of the contract, neither they, nor their directors, officers or employees will have offered, promised, given, given, authorized, solicited or accepted any undue advantage, financial or otherwise (or intimated that they will or might at any future time) in any way connected with the contract and that they will have taken reasonable steps to prevent subcontractors, agents or any other third party subject to their control or determining influence from doing so.”

The aforementioned referential text is only the starting point for the development of a clause with greater legal scope, being possible to address in it matters related to influence peddling, extortion, extortion, unfair competition, breach of business secrecy, disclosure of personal data or any other act or omission that may be related to corruption; in addition, it is possible to add financial penalties to the party that breaches such agreements. It is up to the traders and their legal advisors to design a clause that covers all possible corruption-related risks arising from their specific business activity.

In Ecuador, the use of this type of clauses in the exercise of commercial acts would be scarce. However, its application would be more frequent in the activities of transnational companies that operate under voluntarily adopted and standardized trade rules, such as ISO, BASC, CTPAT, among others. These standardized rules would not be applicable to the vast majority of traders or non-traders in the exercise of commercial activities, since their implementation would be costly and highly technical. The small independent farmer certainly does not use ISO standards for the marketing of his production, but he could well use a clause that protects him from acts of corruption, for example, from those who buy and then distribute his products. Nothing prevents him from doing so.

In the opinion of this author, the use of the clauses in the “Anti-Bribery and Corruption.” for all commercial contracts, it becomes essential and recommended, constituting a good business practice. No matter the scale of the business, this type of clauses should be incorporated into commercial contracts. It is advisable to seek the professional services of a lawyer specialized in business to draft customized contracts that incorporate such agreements; or, if applicable, to make use of standardized contracts from reliable sources of information that address these issues. It is up to you to decide whether, in the first case, “wears a tailor-made sartorial suit”.” o “if you buy a generic size suit”The important thing is to use “the suit”, contracts with clauses in the contract, i.e. “Anti-Bribery and Corruption.”.

The agreements “Anti-Bribery and Corruption.” In no way can they be considered as the absolute solution to corruption in business, since it ultimately depends on the decisions made by the contracting parties during the execution of their activities and other factors. However, these agreements would be an effective contractual tool to implement the culture of legality in commercial contracts entered into between private parties, motivating the legal actions of those who execute commercial acts and discouraging the execution of acts of corruption. What would be achieved is that this “machine” called a contract, whether “programmed” to produce obligations not to engage in acts of corruption, which would contribute to the common struggle for a culture of legality. I invite you to incorporate a clause in your next contract. “Anti-Bribery and Corruption.”and then tell me the results.

Bibliography

Alarcon, Pablo. 2024. Culture of legality: antidote to treat the metastasis of corruption in Ecuador. [Online] February 9, 2024. [Cited on: April 3, 2024.] https://uees.edu.ec/cultura-de-la-legalidad-remedio-para-tratar-la-metastasis-de-corrupcion-en-ecuador/.

International Chamber of Commerce (ICC). 2012. Anti-Corruption Clause. [Online] 2012. [Cited on: April 3, 2024.] https://www.icccostarica.com/images/Anticorrupcion/ICC_Clausula_Anticorrupcion.pdf. ICC Publication no. 740.