Reg Hinckley, BP’s group vice president and general auditor made the admission before a Commons’ select committee hearing investigating corruption.
He was one of six leading company executives, including Stephen Williams the joint secretary and general counsel for Unilever, who suggested in that such payments were in line with local business customs and were ‘tolerated, rather than encourage’.
But Hinckley denied this was the beginning of a decline into full-scale corruption. He defended the behaviour saying the payments were made to prevent delays rather than gain an unfair advantage over competitors.
He added: ‘It is not something we like doing.’
Williams said Unilever did not record such payments in their accounts because they were ‘so small they did not even register’.
According to international law, small payments made to officials are not necessarily illegal, provided the company includes them in their accounts. In addition the payment must only speed up something that would happen in any event and must be done in a manner which does not try and hide the transaction in any way.
Many countries have changed their international laws in line with OECD conventions outlawing the bribing of foreign public officials.
Tom Niles, president of the US Council for International Business told the committee that the US was one of the leading backers of OECD rules. However the UK has fallen behind other countries in implementing proposals covering bribery offences committed beyond its own borders.
Ian White a director of Crown Agent said companies sometimes labelled such payments in their accounts as ‘petty dispersals’ in the ‘customs clearance’ section.
He added that while he was a little shocked at the companies’ admissions Crown Agents would advise their clients to blow the whistle on officials demanding such payments.
The committee hopes to get witnesses from Nigeria to testify about how corrupt western companies has brought about near bankruptcy to oil-rich African state.
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