The New Corruption Tax

A few yesterdays ago, the UK’s chemical firm, Innospec, exposed itself to a fine of over £8 million by admitting to a UK court in Southwark that it had been bribing officials of the Indonesian government. The offence? Using banned lead-based fuel additives.

Interesting the way this breaks down: via fatter dividends, UK shareholders get the fiscal benefits of a decade of the illicit business, and, following the bust, the UK government gets over £8 million in fines from the prosecution.

This is of course part of a growing trend of deficit-busting prosecutions that enlarge the coffers of the West. Not too long ago, the US treasury earned over $600 miliion in fines on the back of corrupt practices in Nigeria in the Halliburton cases. It is almost a new windfall tax on business that corrupt companies are lining up to pay.

Corruption-based causes of action seem to be a new, valuable, ‘natural’ resource that is sadly, prevalent in the South. Indonesia – and other cess-pools of corruption – really must get their act together. If they are to get anything from this double-edged, intangible asset – beyond bugetary holes and the environmental degradation from tons of poisonous lead, they must learn to launch their own pre-emptive prosecutions…