What Should a Firm Do When an Accepted Practice in one Country Is Illegal in It's Own?

Published: 2021-06-29 07:00:38
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Category: Business

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We disagree that work should be performed in a country that's in accordance with another country's laws. It would become a very tricky question if you're working in a country with an unstable government for instance. We believe that firms should execute work in accordance with local laws (even if it's illegal in its own country), but work should not be conducted that's against the organization's ethical standards.
As an example, one member of our group works for a US company on a construction project in Abu Dhabi, UAE and since he has a US passport he gets compensated more than his Pakistani counterpart. This practice is illegal in the US, but standard in the UAE. It's not unethical from the company's perspective because people are paid from their base rate and given an equal incentive (percentage-wise) for working outside of their home country. In contrast, when it comes to the safety of the employees his firm won't stray from the organization's safety standards. There are several corners that could be cut that would put the employees at risk and the company would still be legal. But the firm implements their stringent safety policy versus the local requirements because it is one of the core values of the organization. The same could be said for instance of an environmental policy that the company maintained above the local law to maintain its ethical and corporate responsibility level.
A company is put in a "no-win" situation when they are faced with doing business in another country that has conflicting laws as related to their direct business practices. In some countries, it is not only acceptable, but also expected, that local governmental leaders are given bribes (contributions, donations, other other things that mean the same thing) in order for a company to do business in their location. These bribes often extend beyond governmental officals and include requirements regarding who can do the work or who can be hired to work in the company. In the United States, the Foreign Corrupt Practices Act of 1977 and revised in 1998 (FCPA) make it illegal for US citizens to conduct business in a foreign country in such a manner that would be illegal in the United States. In essence, the FCPA extends the laws of the United States to all countries where US citizens may do business. As such, a US citizen could be faced with crimial charges if they do something in the course of business in another country that is considered legal there, but not in the United States. Because of the severe possible consequences, a firm looking to do business in another country should protect their best interests and obtain legal counsel that is well versed in international business andf contract law. A firm that would proceed with normal business transactions in another country without legal advice and representation would be doing themselves and their investors a serious disservice and subjecting

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