Innocence abroad for Wal-Mart, Apple, and all Americans

A federal probe of alleged bribery in Mexico by Wal-Mart, along with Apple's lax workplace standards in China, indicate a need for Americans to take their ethical standards with them when operating overseas.

Edgard Garrido/Reuters
Shoppers leave a Wal-Mart store in Mexico City. Wal-Mart faces an investigation into allegations it engaged in a multi-year campaign of bribery to open stores in Mexico quickly.

When Americans work overseas, should they be models of what America stands for?

It’s a question worth asking in light of a US investigation into allegations that Wal-Mart paid $24 million in bribes to Mexican officials to open stores in that country at a fast clip. Did Wal-Mart really believe it could act contrary to a US antigraft law outside the United States?

Other recent incidents point to Americans behaving badly overseas.

US Marines in Afghanistan were caught on film holding up body parts of dead Taliban fighters. Hollywood’s biggest movie studios are under a federal probe for allegedly making illegal payments to Chinese officials to make and show movies in China. US Secret Service agents in Colombia to protect the American president engage in lewd behavior. Apple has come under scrutiny for unsafe working conditions at one of its supplier’s factories in China – conditions that Apple wouldn’t allow in the US.

It’s enough to revisit Mark Twain’s famous book “The Innocents Abroad,” which was one of the first accounts of the foibles of Americans in foreign lands.

Ethical standards practiced in the US are not like a peculiar American custom that can be dropped while in another country, especially poor or dictatorial nations where ethics can often be most challenged.

“That behavior that was depicted in those photos,” said Defense Secretary Leon Panetta about the incident with the marines, “absolutely violates both our regulations and, more importantly, our core values.” The incident has led to US Marine officer Gen. James Amos visiting Marine commands to reinforce the need for integrity by soldiers operating overseas.

One American value put into law is a demand for integrity in business – anywhere in the world. Wal-Mart could face serious penalties if it is found to have violated the 1977 Foreign Corrupt Practices Act, which bars American companies and their agents from offering bribes to foreign officials.

The law is not just a way to instill ethical behavior in US companies. It is also a hope that all global commerce may one day be based on honest and open competition and not under-the-table bribery. Naive as it may sound (Britain has a similar law), the act assumes that honesty is, and should be, the natural state of mankind.

Dozens of US companies are under investigation by the Securities and Exchange Commission for possibly violating the antibribery law. Even Wal-Mart is now playing catch-up. Soon after The New York Times revealed Sunday that the retailer may have covered up a campaign of bribery in Mexico, the company decided to appoint a global compliance officer to ensure it follows the law.

Many American businesspeople find the anticorruption law provides them the moral freedom to reject suggestions or demands for bribes in other countries. While companies may lose contracts, the example set by a large US presence around the world has helped drive a global campaign for tougher antigraft laws and better enforcement of them.

Still, the US Chamber of Commerce is trying to persuade Congress to alter the law because of the restrictions it imposes on overseas business. That effort, however, faces wide opposition, starting with Secretary of State Hillary Rodham Clinton.

 “We don’t need to lower our standards,” she said. “We need to work with other countries to raise theirs. I actually think a race to the bottom would probably disadvantage us.”

Globalization has forced the issue of which standards will prevail in dealings between people of different cultures with varying ethics. For Americans, staying true to one’s highest standards may sometimes mean not doing in Rome as the Romans do.

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