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Business ethics in Latin America

Álvaro E. Pezoa

For the nations of Latin America, corruption is and will remain the largest political and economic concern. With few exceptions, it is deeply entrenched and reaches into both politics and business and the relations between them. Among the citizens of the continent, the common perception is that a significant level of ethical failures exist in Latin American business activity, albeit with relevant differences among distinct countries. Is there any basis for this perception? Within too many nations there is a corruption of the public political sphere, sometimes involving private or corporate actions. The media tend to focus on this sort of public corruption, especially since the ethical violations committed between and among private individuals, firms, and corporations are often relegated to less important pages in the print media.

A consideration of business ethics in Latin America must take into account both the private realm and the public, as well as the status of the academic study of business ethics, and the role of non-profit and non-governmental organizations (NGOs). This chapter seeks to provide such an overview. It addresses the question of private corruption by summarizing information in the press over the five years spanning 2011 to 2015. In the next section, the chapter offers a comparative assessment of public (governmental) corruption in Latin America in relation to other nations throughout the world. The third section shifts from the practical to the academic and addresses business ethics in terms of pedagogy and research. A final section sheds light on the efforts of NGOs as well as corporations and governments to confront corruption.

Business ethics in Latin America: an approach to reality through the press

It is not easy to gain a view on the status of business ethics as a matter of practice rather than academic study. Within Latin America, few studies chronicle the state of conduct within commerce. This paucity of academic studies on actual business ethics suggested to this author the necessity of an investigation as to the extent and kinds of ethical problems experienced within business in Latin America (Pezoa 2016). The sources of this study were cases reported in the press, mainly during the five years from 2011 to 2015, for six selected countries: Argentina, Brazil, Chile, Colombia, Mexico and Peru. This study, which offers an up-to-date, panoramic, and representative vision of the state of business ethics in the region, is the foundation for the remarks that follow.

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The study assumes that the news reports of ethical problems, as published in articles and columns, provide a picture about the everyday morality of business conduct. Such a picture, or panorama, is not exact and reflects a qualitative rather than quantitative assessment. The media chosen for the study were business newspapers or business sections of the main newspapers in each of six countries (Argentina, Brazil, Chile, Colombia, Mexico, and Peru). These media had to meet two minimal characteristics: each had to be representative of the business journalism in that country and each must allow an easy access to complete information (e.g., through public access of web pages). Moreover, the study surveyed all articles about business ethics that appeared within the pages of these media during the defined period. Even as a qualitative assessment, this study has two additional limitations: first, it does not capture information that has not become public knowledge; second, it almost certainly exaggerates the dominance of ethical lapses, since there are virtually no references in the media during the five-year period that describe positive or ethically uplifting news, quite possibly because these stories are not attractive for newspapers editors or readers.

As conducted, the study intentionally omitted any information related to corruption cases having to do with collusion between political powers and business, a subject we leave for the next section. Ethical failures of this nature—sometimes referred to as influence trafficking, bribery, rent seeking—are recurrent in the countries of the region and normally attract the most attention of the media and public opinion today. This so-called “public–private” corruption is intimately related to the funding of political parties (and their candidates) with money from private businesses; such corruption is not simply due to the improper use of political power more generally. In many cases corruption also takes place between the public–governmental sector and state enterprises. As an example of the latter, the worldwide scandal that recently came to light between the Brazilian government and Petrobras, the giant Brazilian state oil company, comes to mind. This affair led to the impeachment and ultimate removal of President Dilma Rousseff by Congress in 2016.

Beyond news reporting dedicated to the cases mentioned in the previous paragraph—of which cases there were many—the focus of the investigation was the information in the press associated with ethical issues surrounding business conducted by and between private individuals and firms (whether corporations or not). In light of the aforementioned, the main findings can be summarized as follows.¹

In the spring of 2016 the Argentine government decided to analyze whether there is a dominant firm in eleven distinct economic sectors. The justification for the inquiry is that a dominant firm could violate free competition. Only two months prior to the start of this inquiry, the head of the Argentine Chamber of Meat Industry and Trade (CICCRA) reported that supermarkets were very eager to maximize profits, charging a very high 50 percent margin on the price of meat. Meanwhile, in Chile, in late 2015, a case of collusion in the “tissue paper” market was brought to light between Compañía Manufacturera de Papeles y Cartones (CMPC) and the Swedish firm Svenska Cellulosa (or SCA, which itself had previously acquired a Chilean firm, PISA). This revelation followed the voluntary admission of collusion by officials of CMPC. Three years earlier, the chicken market (in Chile) was the object of controversy as the result of the accusation, launched by the National Economic Prosecutor (FNE), of collusion among the Agrosuper, Ariztía and Don Pollo companies; previously three large pharmacy chains were in the news for similar reasons. Other industries that have been investigated for such malfeasances, but without receiving convictions or sanctions, include supermarkets, airlines, buses, and the fishing industry. Of course, the fact of an investigation does not entail guilt and in some of these cases there were, in fact, no findings of ethical or legal improprieties. In Colombia, the situation of the so-called “toilet paper” cartel merits a highlight: commencing as early as 1998, there appears to have been a restrictive and continuous agreement, until 2013, among the companies and economic groups of Kimberly, Familia, Risaralda Cardboard and Paper, and National Paper to set the price for napkins, paper hand towels, kitchen roll paper and toilet paper. The result was to imperil competition and to force Colombians to pay more for these soft paper products. In Peru, the so-called “sugar” cartel found itself paying a fine levied by the Superintendency of Industry and Commerce (SIC) against a trade union, fourteen companies and an equal number of executives working within the sugar sector. Similarly, abuses of economic power and acts in violation of free trade were observed in the television, mobile telephone, and engineering industries, and prior to these, in the power utilities. In Mexico, meanwhile, the companies that sell corn tortillas, along with the telecommunications sector, pharmaceutical laboratories, and the chief producer of cement, among others, have made news for their monopolistic practices. In Peru, the phone industry has been exposed to allegations of anti-competitive practices, as well as the cement and freight sectors. Most of these cases have resulted in the companies having to pay fines for their acts.

In Argentina the international company Procter & Gamble (P&G) was subject to a suspension of operations by the Federal Public Revenue Administration (AFIP) for an alleged tax fraud relating to imports from Brazil invoiced through a subsidiary based in Switzerland. Previously, in 2014, P&G faced investigations by the Mexican authorities for alleged tax evasion. Another international company, the Spanish firm Telefónica, faced challenges in Brazil in relation to the value added tax levied on telecommunications services, while also having to deal with tax disputes in Peru. Additionally, companies and business leaders in the mining sector caught the attention of Brazilian news agencies for tax fraud. In Mexico, anomalies were found in the tax returns of two large tobacco companies, Philip Morris and British American Tobacco, and the semi-public company, Pemex. In Peru, Telefónica was the focus of special interest in tax disputes, while various economic and business sectors were placed under special monitoring by the tax regulator.

Of particular relevance for its size and scope was the financial scandal of La Polar, a Chilean retailer implicated for abusive lending practices in which hundreds of thousands of customers were subject to changes in the conditions of their loans without due notice. Moreover, in the case of Peru, it is noteworthy how often companies in the telecommunications sector are mentioned for actions that seem to damage their customers.

Overall, the impression remains that there is a high level of unethical behavior in the private business practices of Latin America; however, at the same time, significant differences can be detected among various countries of the region. Among the six major Latin American economies, that of Chile arguably gives evidence of a comparatively better ethical climate, although people perceive a deterioration to have taken place in recent years. Moreover, public corruption and its relationship with the private sector is high throughout the region and in some countries accounts for the bulk of the media stories regarding corruption. This would seem to be the situation in Argentina, Brazil and Mexico. Even if private ethical failures are still overshadowed by the enormous importance that public corruption has acquired, it does not seem wise to infer that private lapses are necessarily infrequent or of minor importance. Nonetheless, the extent of public corruption looms large, as we see in the next section.

Comparative data on public corruption

In what follows, comparative data on public (governmental) corruption among the countries of the region is presented. This exposition of the ethical vagaries of the public sector should complement the information in the previous section on corruption in the private sector. We shall utilize the most recent (2013) Global Corruption Barometer (GCB) developed and published by Transparency International, the global organization leading the fight against corruption. This report examines how corruption features in people’s lives around the world. The Transparency International survey of more than 114,000 respondents in 107 countries addresses people’s direct experiences with bribery and details their views on corruption in the main public institutions in their countries.

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The Transparency International report provides evidence of the overall picture of corruption in the world and allows us to contrast the Latin American nations with the rest of the world. The 2013 Global Corruption Barometer concludes, “Bribery worldwide is widespread: overall, more than one in four people (27 per cent) report having paid a bribe in the last 12 months when interacting with key public institutions and services” (Transparency International 2013 GCB: 3). When the data are broken down according to the percentage of people who, over the past twelve months, have paid bribes (when interacting with public officials or institutions), the following distribution is observed: less than 10 percent—Uruguay; 10–14.9 percent—Argentina, Chile, El Salvador and Jamaica; 20–29.9 percent—Colombia, Paraguay, Peru and Venezuela; and 30–39.9 percent—Bolivia and Mexico (these are the countries of Latin America included in the study).

The Latin American nations together show a dispersion in terms of a declared practice of paying bribes. For example, if the percentages obtained by Uruguay, as opposed to those of Bolivia or Mexico, are compared with the scores of most European and North American nations, then Uruguay clearly performs better in terms of honesty (GCB: 10). Considered on average, the Uruguayan results are also better than many Asian, and especially African states, where, according to the survey, the declared payment of bribes by citizens reaches its highest levels (GCB: 10).

Data from across the globe, including Latin America, suggests that, “Governments are not thought to be doing enough to hold the corrupt to account: the majority of people around the world believe that their government is ineffective at fighting corruption and corruption in their country is getting worse” (GCB: 3). It is interesting to know the public’s views on whether corruption in their country has increased, stayed the same or decreased over the last two years at the time of responding. But when asked, “Do you think that corruption has increased in your country?” it was found that all Latin American countries included in the field research conducted for the 2013 Global Corruption Barometer are without exception among those that believed corruption had increased over the past two years, regardless of the level of corruption perceived in each country compared to the group of countries included in the study.

In Latin America, as throughout the world, “The democratic pillars of societies are viewed as the most corrupt . . . institutions” (GCB: 3). It is striking that the study found that the sector of society considered most corrupt is the public sphere—political parties, congress or parliament, police and judicial system. The private business sector is perceived as less corrupt than the public sphere. Although a wide variability of percentages is evidenced—following the trajectory of results produced by successive Global Corruption Barometers from 2003 to 2013—this hierarchy is consistent with a relatively homogeneous trend among countries and regions, including Latin America, as well as over time: a tendency towards an increasingly stronger perception of private–business corruption, yet still below the perception of public corruption. One could argue tentatively, therefore, that “political ethics” is evaluated as worse than “business ethics,” a conclusion that would in no case mean that serious moral flaws are not recognized in the sphere of business.

Throughout the world, “Personal connections are seen as corrupting the public administration: . . . almost two out of three people believe that personal contacts and relationships help to get things done in the public sector in their country” (GCB: 3–4); in addition, it is held that “powerful groups rather than the public good are . . . driving government actions: more than one in two people (54 per cent) think their government is largely or entirely run by groups acting in their own interests rather than for the benefit of the citizens” (GCB: 4). These last two findings—relating the power of personal relationships and group interests—suggest that people believe that particular factions of society have a decisive influence on the decisions made within the public sphere, all to the detriment of the common good of society. These findings should lead to a greater understanding of the complex interrelationship between the actions of those in the limelight in the public sector (politicians and senior public administration officers) and members of the private sector (business owners and senior managers of businesses). Social corruption would have its source primarily in political agents willing to sacrifice the public for their private good and, to a lesser extent, in business persons, all of whom conduct themselves as role models for ordinary citizens who then practice their own forms of so-called “petty corruption.”

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Connected to the above findings are the responses to this question, “To what extent is this country’s government run by a few big interests looking out for themselves?” Among the respondents in the Latin American countries belonging to the relatively exclusive group of OECD nations and included in the 2013 GCB survey—Mexico and Chile—one finds the following statistics: that 62 percent of Mexican and 63 percent of Chilean respondents believe that their governments are oriented towards satisfying a few big interests rather than serving the public good. However, and interestingly enough, nations as developed as the United States (64 percent), Spain (66 percent), Belgium (70 percent), and Italy (70 percent) receive even worse evaluations on this item than Mexico or Chile, a fact that does not detract from the seriousness of the situation in these countries, but highlights the great difficulties that still exist for governments to truly be guided by the search for the common good and not to give in to the particular interests of groups exercising power or influence, including large business corporations.

Is reform possible? “People [worldwide] state they are ready to change this status-quo [levels of corruption]: nearly 9 in 10 surveyed say they would act against corruption” (GCB: 4). Moreover, a significant percentage (54 percent) of respondents declared to be willing to pay a premium for a product from a company whose ethical conduct is upright. Obviously, this is a declaration of intent and not of actual behavior. However, it does reflect the importance that individuals place on political reform and on business ethics, and it reflects how a genuine ethics of commercial conduct produces respect.

In the absence of the publication of a Global Corruption Barometer since 2013, it is helpful to emphasize that the most recent (2014) Corruption Perceptions Index, a measurement instrument created in 1995 by Transparency International to register “expert” opinion on corruption in the public sector, also shows no significant movement in the scores of the countries in the Americas. A country or territory’s score, from 0 (highly corrupt) to 100 (very clean), demonstrates a perceived level of public sector corruption. The 2014 Index included 175 countries and territories.

In an article (2014) on corruption in the Americas, Alejandro Salas comments on the degree of continuity in the level of corruption assigned by experts to Latin American countries in the Corruption Perceptions Index.² He notes,

For the more cynical among us, this [continuity] is a good sign as there is always the possibility of worsening. But the reality is that stagnation is not good news. Each year that passes without things improving is a lost year for the process of strengthening state institutions and the improvement of quality of life of people. This is well exemplified by Brazil (score of 43 . . .) and Mexico (35). The case of Petrobras in Brazil, where corrupt officials and their private sector cronies siphoned billions of dollars from the country’s largest company into political parties’ coffers and private hands . . . [is just a recent example that serves as a reminder of the lack of significant progress in the region].

(Salas 2014)

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These two countries—instead of making positive use of their influence as geopolitical leaders—show signs of stagnation and even retrogression by allowing the abuse of power and the looting of the citizens’ resources for the benefit of the few.

The case of Chile, a nation that (along with Uruguay) remains one of the Latin American societies that has consistently demonstrated a greater degree of rectitude in the conduct of its public officials, also provides new examples of ethical decadence in the political and business classes. In the three-year period of 2014–2016, Chile has endured an escalation of moral scandals that have reached into the government and have implicated politicians of all stripes, as well as recognized members of the business community. Things have developed to the point that the president of Chile entered the international arena to remind other nations that, “we are not a country worthy of little respect; we are not populists.” The president added subsequently that reforms would be necessary to eradicate ethical malfeasance in politics between business enterprises.³

Teaching and research

Turning from the practices of politics and business to the province of academe, one encounters another crucial yet underdeveloped aspect of business ethics in Latin America: teaching and research. A previous study (Pezoa and Riumalló 2012a), which has subsequently appeared in a shortened version (Pezoa and Riumalló 2012b), may serve as a starting point. (Prior to this study, there was but one investigation on the status of business ethics in Latin America: Arruda and Enderle 2006.) Based on a survey of academics and professionals, the study reveals that both inquiry and activity are growing in the areas of teaching, training, and research.

In the universities, courses and academic programs are still aimed almost exclusively at undergraduate and postgraduate students in business administration (specifically MBA students) and, in some instances, to the education of executives and managers in the corporate world. Almost no other university disciplines include business ethics courses, though such areas of study as engineering, accounting, or economics could also include them in their curricula. In university curricula, the field of business ethics remains underdeveloped. There are but a small number of individuals and institutions, including business schools, dedicated to this subject.

There exists, therefore, a need for more business schools (or NGOs) with dedication to supporting and funding business ethics courses or programs. Throughout the continent the need is glaring and the opportunities enormous. One means of encouraging a more robust study of business ethics is by developing stronger networks of academics and business professionals both within Latin America and with the wider world. One aid to the development of such networks would be systematized information on the teaching of business ethics. However, since the study noted above (Pezoa and Riumalló 2012a) there is little systematized information on teaching business ethics in the universities of the region. However, the author’s informal consultation among Latin American professors recognized as experts in the field⁴ seems to indicate that no substantial changes have occurred since the publication of the study noted above (Pezoa and Riumalló 2012a). With that said, there is one obvious difference among the nations of Latin America. Without doubt, Brazil is, comparatively speaking, the country in which business ethics is more developed: The nation of Brazil has a larger cohort of academics who study business ethics and who publish their research. Even so, there is still room in Brazil and the rest of Latin America for growth and diversification in education and, as we see below, scholarly research.

Most of the research on business ethics is local and not of the most rigorous quality. The studies that manifest high academic standards are published in national journals or in books published in the countries of origin, and almost always in the native language (Spanish or Portuguese). There has been little scholarly work published in prestigious international journals or by publishers with worldwide coverage and recognition. For example, during the period 2011–2015, articles on business ethics published in various non-specialized academic journals within the continent have been few but of very diverse nature (Pezoa and Pezoa 2015). A recent search of the databases of major international journals devoted to business ethics gives evidence of the persistence of the trend first shown in the study noted above (Pezoa and Riumalló 2012a) that publications in these journals by Latin American authors remain scarce. With that said, however, there is an emergent trend to push university scholars to engage in more formal academic research, with publications in recognized international journals or chapters in books published in English and available to a broader audience. Within the context of academic production, it is worth pointing out that one positive contribution has emerged from the periodic conferences held by the Latin American Association of Ethics, Business and Economics (ALENE: see the website www.alene.org), an organization that brings together (mainly) professors but also business leaders from the region interested in promoting ethical values in business.

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There are interesting developments in the study of topics related to business ethics. These include various investigations that can plausibly be included in a broad category that could be called business and society (Ogliastri and Reficco 2009). In addition, a variety of studies have appeared on the balance between work and family (Las Heras 2010; Destéfano 2011; Pezoa etal. 2011; Bosch and Riumalló 2012; Debeljuh and Destéfano 2013; Estol 2011; Destéfano 2013; Bosch etal. 2015).

The new developments also include scholarly work on corporate social responsibility (Cardoso etal. 2010). For many readers, it might be assumed that a study on corporate social responsibility lies at the heart of business ethics. However, within Latin America the theme of “corporate social responsibility” is traditionally treated as a field of action and research distinct from business ethics, even though it bears a relation to it. Corporate social responsibility has been seen as an area concerned, theoretically and practically, with the social activities that companies must consider and manage, as well as with the firm’s relations with its stakeholders. These subjects have often been treated without consideration of the way in which ethics, or business ethics, might be involved in such activities and relations. In this way, the study of business ethics and corporate social responsibility have been running along parallel rails. Although this distinction has been well-entrenched in Latin America, there have always been a minority of academics and practitioners who understood that corporate social responsibility had ethical roots and constituted a social ethics dimension of business.

Corporate practices, Non-Governmental Organizations (NGOs) and government initiatives

In the twenty-first century, with the globalization of business, there has been an increasing demand for corporate transparency and corporate involvement in society. These global developments, along with the high levels of public–private corruption existing in most Latin American countries, have brought about new endeavors to encourage good business practices, greater corporate social responsibility, and attention to environmental sustainability. The positive effects are starting to be visible and may be greater in the near future. These endeavors include the establishment of declarations of business principles, codes of company ethics, and the distribution of manuals of good moral practices—all of these have become more common during the past decade. In addition, the number of companies that have established departments of ethics and corporate compliance have been increasing, along with the announcements of strategies and concrete actions to fulfill corporate social responsibility.

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Similar to what has been happening with business activity, the last fifteen to twenty years have been marked by the founding of NGOs and voluntary associations of different types whose explicit purpose is to promote initiatives in corporate ethics. In general, they have performed an important task by putting these issues on the public agenda, raising the consciousness of society, and increasing the felt urgency within the business firms themselves. Some of these organizations have also focused on generating various indices and other support material to help businesses carry out their own programs and actions for improving corporate ethics. Organizations associated with the Latin American chapter of the International Christian Union of Business Executives (Union Internationale des Associations Patronales Catholiques—UNIAPAC) deserve special mention in this area. Their active presence in ten countries on the continent helps to spread the ideas associated with Catholic social teaching on economic and business life and, for a significant number of business leaders, has inspired an ethic of social responsibility founded on Christian principles. In fact, in recent years this group has made a concerted effort to put into the hands of business leaders a document prepared by the Pontifical Council for Justice and Peace, The Vocation of the Business Leader, A Reflection (Pontificio Consejo Justicia y Paz 2014). In like fashion, and whether motivated by religious, humanistic or pragmatic-professional aspirations, institutions of various stripes⁵ have deployed in each country to convey to business leaders the importance of the moral dimension in all commercial work and the responsibilities to society that all of us share. These groups often share common goals—such as the promotion of moral values, sustainable development, and the social and ecological management of businesses—but they also formulate their research and programs in accordance with local and regional circumstances and concerns.

It is notable that there are virtually no government initiatives worthy of mention that seek to improve the ethics of commercial life. Of course, there are the ad hoc committees, created or sponsored by legislative bodies, to study how to reduce corruption and its consequences. Sometimes there is an enactment of legal regulations to combat and ensure ethical behavior, especially within the public sector. In a number of countries of the region initiatives of greater or lesser scope have been carried out in this regard. The fate of these projects has been irregular, although in most cases the results have been meager. These initiatives have pertained more to the political and legal order, a fact which, at the least, helps to increase awareness among the population (and between companies and their managers) of the social and economic value of ethical behavior in economic affairs. Moreover, if such commissions and standards prove effective, then, given the punitive character that laws possess, they may manage to have a deterrent effect on bad moral conduct in business. However, many such measures fall more within the framework of compliance to law and regulation than to an ethical outlook per se.

Concluding remarks

An analysis of information in the press for the five-year period of 2011 to 2015 in the six major economies of Latin America (Argentina, Brazil, Chile, Colombia, Mexico, and Peru) demonstrates a high degree of ethical failures in Latin American business activity (even taking into account significant differences among countries). As a whole, the misconduct associated with collusion, cartels and unfair competition are the first to stand out, followed by tax fraud, and, third, consumer scams and fraud. Public corruption, and its various effects on and links with the private sector, seems predominant in many nations—Argentina, Brazil and Mexico, in particular.

There is some consensus among Latin American academicians that corruption seems to be the major concern for the near future. Both the opinion of citizens in everyday life as well as existing studies provide ample evidence that the view of academics is a fair assessment of the situation. Research also shows that corruption has become stabilized, even established and expected, within society, a fact that should be of serious concern to all citizens. Even a country such as Chile, usually known for its trustworthiness and high levels of upright behavior, has in recent years experienced several notable cases of moral misconduct, both among the political class as well as certain business sectors (and in the relations between the two). The use of political power for private gain remains the most common form of corruption in Latin America.

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Academic research in business ethics remains scarce and, in general, lacking in rigor. Consequently, the number of publications is few and most are published in local academic journals of limited reach and impact. It follows that there is ample room for research and publication in the field of business ethics focused on the Latin American context. The discipline is still in a stage of early development, which provides the opportunity for new scholars to form part of its development, and for those already involved to deepen the work done so far. Other possible initiatives might include strengthening the work of the organization ALENE, and establishing a specialized journal on business ethics in Latin America. Similarly, the teaching of business ethics is mostly concentrated in a few business schools and universities in each country. The impression remains that there is, at times, no real willingness to increase business ethics course offerings; in some instances there are not enough professors able to teach the corresponding courses. For a real improvement in business ethics in Latin America it would seem essential to promote ethics education among university (and secondary) students, which requires, in turn, the determined will of educational institutions and the training of the professors.

There is a lack of research results, inter alia, and an almost complete absence of studies on the activities and level of progress achieved by businesses (via codes, compliance offices, training programs) and NGOs (programs on business ethics and their social impacts). The information available is piecemeal, anecdotal, and undeveloped. All said, it is strange that the various existing institutions are not more connected with each other than they are. A tremendous opportunity exists for collaboration between organizations in order to achieve increased positive influence in their societies and in the region.

Governments in the region have not carried out properly conceived initiatives on ethics, but have rather limited their efforts to those of a normative legal order, chiefly with an eye to greater integrity in the public sector. Yet the laws in this area have not translated into substantive improvements in the behavior of the groups or officials who are, ostensibly, the target of these laws. It is not unreasonable to speculate why this might be the case: Since the very persons who draft and enact these laws are the same persons who are the focus of these laws, they have little incentive to make or to enforce a law which might, so to speak, put them “out of business.” This sad conclusion at least points to the need to create separate agencies equipped with enough power to deal with bad ethical practices, at least from a legal/regulatory perspective.

The final conclusion is the obvious one: From either a practical or theoretical point of view, there is plenty of room for action or for reform. This fact should arouse the motivation and sense of responsibility of researchers, professors, officials of NGOs, business and political leaders, and all citizens. The strong impression remains that there is much good at stake for the countries of the region or, at the very least, the avoidance of abundant evil in the future.

Essential readings

There exist few published studies on business ethics in Latin America. The unpublished study by María C. Arruda and Georges Enderle, “Is Corporate Ethics in Latin America becoming More Articulated? Views from Experts in the Field” (2006), remains quite valuable. The published study of Álvaro E. Pezoa and María P. Riumalló, “Survey of Teaching, Training and Research in the Field of Economics and Business Ethics in Latin America,” has both a long version (2012a) and a short one (2012b).

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For further reading in this volume on the global problems of corruption and bribery, see Chapter 34, Corruption, bribery, and moral norms across national boundaries. On problems of rent seeking and public corruption, see Chapter 7, Can profit seekers be virtuous? and Chapter 21, Regulation, rent seeking, and business ethics. On globalization and business ethics, see Chapter 32, The globalization of business ethics. On business ethics in the North American context, see Chapter 4, Teaching business ethics: current practice and future directions.

Notes

1    The relevant citations for these summary remarks are in the appendix to this chapter. Citations are grouped in accordance with the number of the summary remarks (e.g. 1, 2, 3, and so on); within these groupings, citations for distinct themes or types of claims are separated by a two parallel lines ( “//”).

2    A survey on business ethics called the Barometer of Values and Ethics, conducted annually by the Fundación Generación Empresarial (Business Generation Foundation) among employees of various Chilean companies, reveals results that point in the same direction as those of studies on corruption carried out by Transparency International for Latin America. The state of ethics in companies operating in Chile would seem to be characterized by stagnation, without experiencing statistically significant variations over the last three years (2011–2013).

3    The first statement occurred at a meeting between President Michelle Bachelet and French businessmen: M.E. Alvarez, “Michelle Bachelet en encuentro con empresarios franceses: ‘No somos un país poco serio, no somos populistas,’” June 9, 2015, online at: www.latercera.com/noticia/politica/2015/06/674-633467-9-bachelet-en-encuentro-con-empresarios-franceses-no-somos-un-pais-poco-serio-no.shtml. The second quotation may be found in the same newspaper on the same date: see R. Alvarez and M.E. Alvarez, “Bachelet aborda corrupción en discurso frente a la OCDE” online at www.latercera.com/noticia/politica/2015/06/674-633479-9-bachelet-aborda-corrupcion-en-discurso-frente-a-la-ocde.shtml, June 9, 2015.

4    María Cecilia Arruda (Emeritus Professor EAESP—FGV, Brazil), Patricia Debeljuh (Professor IAE Business School, Universidad Austral, Argentina) and Javier I. Pinto (Professor College of Business Administration, Universidad de los Andes, Chile).

5    By way of example, the following can be highlighted: the Argentine Institute of Corporate Social Responsibility (IARSE); the Ethos and Social Balance Indicators Institute (IBASE) in Brazil; Acción RSE, Business Generation and ProHumana in Chile; the Colombian Center for Social Responsibility (CCR); and the Business Foundation for Social Action (FUNDEMAS) in El Salvador, among others.

References

Arruda, M. and G. Enderle (2006). “Is Corporate Ethics in Latin America Becoming More Articulated? Views from Experts in the Field.” Presentation at the Academy of Management. Atlanta, GA.

Bosch, M. and M. Riumalló (2012). Índice de Entornos de Responsabilidad Familiar Corporativa. Santiago de Chile: ESE Business School, Universidad de los Andes.

Bosch, M., M. Riumalló and R. Capelli (2015). Conciliación Trabajo y Familia: Guía de Buenas Prácticas. Santiago de Chile: Editorial Valente.

Cardoso, M., I. Font, P. Gudiño, C. Medina and A. Sánchez (2010). “Responsabilidad Social Empresarial en América Latina: un Panorama General,” Administración y Organización. México: UAM Azcapotzalco, 57–73.

Debeljuh, P. and Á. Destéfano (2013). Hacia la Responsabilidad Familiar Corporativa: Guía de Buenas Prácticas. Buenos Aires: IAE Publishing.

Destéfano, Á. (ed.) (2011). Hacia una Empresa Familiarmente Responsable. Buenos Aires: sin editorial.

Destéfano, Á. (ed.) (2013). Hacia la Responsabilidad Familiar Corporativa. Buenos Aires: sin editorial.

Estol, C. (ed.) (2011). Varón + Mujer = Complementariedad. Buenos Aires: LID Editorial.

Generación Empresarial (2014). VII Barómetro de Valores y Ética Empresarial. Santiago de Chile: Fundación Generación Empresarial.

La Tercera (2015). Available at: www.latercera.com, Santiago de Chile, June 9.

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Appendix: press citations

1. Notes for cartels, collusion, abuse of dominant position

“El Gobierno analizará si hay posición dominante en 11 sectores,” ieco.clarin.com, Economy section, April 2, 2016. // “Precio de la carne: acusan a los supermercados,” ieco.clarin.com, Economy section, February 10, 2016. // “Cinco ejecutivos ya han ido a declarar por el caso de colusión,” diario.latercera.com, Business section, December, 2015. // “Estudio de Dictuc rebate acusación de FNE sobre colusión en el mercado del pollo,” diario.latercera.com, Business section, July 10, 2013; “FNE pide aumentar multas a Don Pollo y la APA por colusión,” diario.latercera.com, Business section, October 10, 2014. // “El caso farmacias es el más sensible de los que estoy heredando,” diario.latercera.com, Business section, April 2, 2010; “Los últimos argumentos de la FNE y las farmacias al cierre del caso colusión,” diario.latercera.com, Business section, August 29, 2011; “TDLC aplica multa histórica a farmacias y fallo será base para la arista penal,” diario.latercera.com, Business section, February 1, 2012; “Salcobrand y Cruz Verde niegan colusión y acudirán a Suprema,” diario.latercera.com, Business section, February 1, 2012; “Fiscalía pedirá penas de cárcel para 10 ejecutivos por alterar precios de los remedios,” diario.latercera.com, July 11, 2012. // “Los secretos del cartel del papel higiénico,” ElEspectador.com, Economy section, April 6, 2016.

See also, “Grupo Familia suspende gerente general por cartel del papel higiénico,” elcolombiano.com, Business section, April 13, 2016. // “La SIC multó al cartel del azúcar,” elcolombiano.com, Business section, October 8, 2015. // “Une alerta monopolio en T.V.,” elcolombiano.com, Historical section, February 4, 2014. // “Multa histórica de la SIC a Claro: $87.750 millones,” elcolombiano.com, Historical section, September 4, 2013; “La SIC pone lupa en operadores móviles,” elcolombiano.com, November 18, 2013; “Ratifican multa por 45 millones de dólares contra Claro en Colombia,” elcolombiano.com, Historical section, November 20, 2013. // “Cuatro empresas de ingeniería fueron sancionadas por cartelización,” elcolombiano.com, Colombia section, January 19, 2015. // “Hay abusos con precios de energía: Superservicios,” elcolombiano.com, Historical section, October 28, 2009. // “Denunciarán a empresas por prácticas monopólicas,” jornada.unam.mx, Economy section, March 24, 2011. // “Demandarán 25 empresas a Telmex y Telcel,” jornada.unam.mx, Economy section, March 7, 2011; “La sanción a Telcel, 18 veces mayor al total de las multas que aplicó la CFC desde 2007,” jornada.unam.mx, Economy section, April 18, 2011; “Decidió competencia sobre multa por $12 mil millones a Telcel,” jornada.unam.mx, Economy section, May 1, 2012; “Multa Ifetel a Telmex con $ 50 millones por una práctica monopólica relativa,” jornada.unam.mx, Economy section, October 1, 2014. // “Multa la CFC a seis laboratorios por elevar artificialmente precios IMSS,” jornada.unam.mx, Economy section, February 24, 2010. // “Sanciona competencia a Cemex por boicotear importadora de cemento,” jornada.unam.mx, February 21, 2012. // “Admiten denuncia contra Telefónica,” gestión.pe, Business section, June 22, 2012. // “Indecopi multa con S/. 5.7 millones a Cementos Lima por faltar a la libre competencia,” gestión.pe, Business section, February 6, 2013. // “Indecopi multa con S/. 2.71 millones a 72 transportistas de carga de Ancash,” gestión.pe, Business section, January 30, 2014.

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2. Tax fraud

“P&G detiene operaciones e inicia diálogo con Argentina sobre evasión fiscal,” gestión.pe, Business section, November 4, 2014. // “Los litigios fiscales de Telefónica en Brasil suman ya 2.038 millones sin provisionar,” economía.elpais.com, Economy section, February 28, 2014. // “MMX niega multas del Servicio de Impuestos Internos,” Valor, January 9, 2013; “Tribunal Federal condena a Valério por evasión de impuestos y falsificación,” Valor, February 15, 2012. // “Hallan anomalías en declaración de impuestos de 2 grandes tabacaleras,” jornada.unam.mx, Economy section, February 25, 2013. // “Afronta Pemex más de 20 mil juicios que le costarán $ 44 mil millones,” jornada.unam.mx, Economy section, March 7, 2010. // “Telefónica: deuda tributaria aún deberá ser resuelta por el poder judicial,” gestión.pe, Business section, March 27, 2015; “Telefónica del Perú pierde litigio y deberá pagar más de S/. 1,500 millones,” gestión.pe, Economy section, March 27, 2015. // “Se aumentará la fiscalización de los gastos de las empresas,” gestión.pe, Business section, April 25, 2012; “Deudas tributarias por más de S/. 10 millones,” gestión.pe, Business section, March 24, 2013; “Embargo al Grupo Santo Domingo fue aprobado por Tribunal Fiscal, afirma la Sunat,” gestión.pe, Business section, April 11, 2014; “Rústica espera resultados de investigación tributaria de Sunat en 45 días,” gestión.pe, Business section, January 14, 2015.

3. Consumer scams and unfair business practices

“Gobierno investiga las quejas contra los bancos,” Valor, January 4, 2013; “Unicel desaparece, pero deja las deudas y créditos,” Valor, September 21, 2011. // “Sernac demanda a Presto por clientes en Dicom y empresa niega acusación,” diario.latercera.com, Business section, June 20, 2011; “El precedente que dejó el fallo de la Corte Suprema contra Cencosud,” diario.latercera.com, Business section, May 7, 2013. // “Desatada, la especulación en la venta de alimentos en el país,” jornada.unam.mx, Economy section, January 24, 2010; “Consumidores cautivos de monopolios son base de fortunas,” jornada.unam.mx, Economy section, March 16, 2010; “Por prácticas comerciales abusivas sanciona Profeco 15 hoteles del DF,” jornada.unam.mx, Economy section, July 25, 2013; “Aumentaron 129 percent los reclamos por tarjetas de crédito no solicitadas,” jornada.unam.mx, Economy section, July 30, 2013; “Alto costo del limón hace meses, por ‘práctica comercial desleal,’” jornada.unam.mx, Economy section, October 14, 2014; “Alerta Condusef sobre fraudes de las empresas que otorgan ‘créditos exprés,’” jornada.unam.mx, Economy section, May 13, 2015. // “Osiptel multó a Nextel del Perú con S/.255,000,” gestión.pe, Business section, August 20, 2012; “Osiptel sancionó a Telefónica con 83 UIT por infracción grave a prestación de servicios,” gestión.pe, Business section, March 16, 2013; “Indecopi sancionará a unas 100 framacias por no exhibir precios,” gestión.pe, Business section, May 2, 2013; “Osiptel multó a Telefónica con más de S/. 1.4 millones,” gestión.pe, Business section, June 28, 2013; “Indescopi sancionó a Telefónica con S/. 11,100 por no entregar vuelto completo en Cusco,” gestión.pe, Business section, December 13, 2013; “Indecopi sancionó al BCP por reportar indebidamente a consumidora ante la central de riesgos de la SBS,” gestión.pe, Business section, December 13, 2013; “Osiptel multa a Telefónica con más de S/. 714,000 por mal servicio,” gestión.pe, Business section, March 1, 2014; “SMV clausuró empresas que operaban sin autorización,” gestión.pe, Business section, February 5, 2015. // “Indecopi investiga a tres empresas por publicidad engañosa,” gestión.pe, Business section, November 28, 2013; “Indecopi sanciona academias preuniversitarias por publicidad engañosa,” gestión.pe, Business section, September 19, 2014. // “Escándalo financiero en La Polar golpea a la Bolsa y AFP ven pasos legales,” diario.latercera.com, Business section, June 10, 2011; “Firma ofrecerá a clientes repactados mantener la deuda original,” diario.latercera.com, Business section, June 16, 2011; “Servicio de Impuestos Internos evalúa situación tributaria del caso La Polar,” diario.latercera.com, Business section, June 16, 2011; “Coloma dice que las sanciones por caso La Polar pueden llegar a 15.000 UF,” diario.latercera.com, Business section, June 23, 2011; “SVS alista cargos en caso La Polar y fiscalía refuerza equipo,” diario.latercera.com, Business section, July 1, 2011; “Reclamos al Sernac aumentan 75 percent entre junio y septiembre por La Polar,” diario.latercera.com, Business section, September 28, 2011; “Tribunal ordena prisión contra el ex presidente y dos ex gerentes de La Polar,” diario.latercera.com, Business section, December 16, 2011.

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4. Environmental damage

“Chevron derrama crudo en la costa de Brasil por segunda vez en cinco meses,” elpais.com, Society section, March 16, 2012; “El miedo se instala en la región brasileña de Mariana,” elpais.com, International section, November 10, 2015; “Vale, el gigante de hierro del sur,” elpais.com, Economy section, December 20, 2015; “El tsunami de barro tóxico, el mayor desastre medioambiental de Brasil,” elpais.com, December 31, 2015. // “Pascua Lama arriesga permiso ambiental tras reconocer que incumplió exigencias,” diario.latercera.com, Business section, May 7, 2013; “Fallo del Tribunal Ambiental complica a Pascua Lama y a la SMA,” diario.latercera.com, Business section, March 4, 2014. // “Ninguna empresa paga multas ambientales impuestas por OEFA,” gestión.pe, Economy section, April 20, 2012; “Más del 50 percent de la industria no cuenta con regulación ambiental,” gestión.pe, Economy section, May 29, 2012; “Yanacocha acepta pagar la multa del OEFA, pero niega impacto negativo al medio ambiente,” gestión.pe, Business section, November 8, 2012; “El OEFA multó a minera en S/. 235,600,” gestión.pe, Business section, January 2, 2014; “El OEFA ordena a siete empresas detener el vertimiento de efluentes al mar en Piura,” gestión.pe, Business section, May 8, 2016.

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5. Working conditions

“Doencas do trabalho oneram mais o INSS,” Valor, January 14, 2013. // “Petroperú niega contratación de menores de edad para limpiar derrame de petróleo,” gestión.pe, Business section, July 21, 2014. // “Mexicana, Click y Link suspenden pago de salarios,” jornada.unam.mx, Economy section, August 10, 2010. // “Doe Run Perú niega incumplimiento en pago de sueldos a personal de La Oroya,” gestión.pe, July 11, 2014.

6. Fraud within companies

“Las empresas prevén una suba en los fraudes durante el año,” clarín.com, Politics section, July 5, 2014. // “Un creciente número de fraude realizado por los empleados,” Valor, January 23, 2012.

7. Financial fraud

“Claves para entender la crisis de Saludcoop,” eltiempo.com, Lifestyle and Health section, August 8, 2015; “Saludcoop: lo que fue y lo que está por venir,” elespectador.com, Investigation section, November 28, 2015; “Saludcoop, el desfalco de la historia,” semana.com, National section, May 8, 2016. // “Caso Ficrea: sin solución, reunión entre defraudados y autoridades,” jornada.unam.mx, Economy section, December 23, 2014; “Caso Ficrea elevó reclamos ante Condusef,” jornada.unam.mx, Economy section, January 23, 2015; “Alerta Condusef sobre fraude de las empresas que otorgan ‘créditos exprés,’” jornada.unam.mx, Economy section, May 13, 2015. // “Se duplican operaciones sospechosas de lavado en el sector financiero,” jornada.unam.mx, Economy section, September 19, 2010; “Subieron 24 percent las operaciones financieras inusuales,” jornada.unam.mx, Economy section, July 19, 2013; “Autoridades financieras intervienen Ficrea por posible lavado de dinero,” jornada.unam.mx, Economy section, November 8, 2014.

8. Information and lack of transparency

“SVS sanciona a gerente general de Larraín Vial,” diario.latercera.com, Business section, January 5, 2010; “Por qué la SVS no aplicó a Larraín Vial la sanción máxima,” diario.latercera.com, Business section, September 5, 2014; “Iusacell demandará a Pérez Motta por ‘difundir información confidencial,’” jornada.unam.mx, Economy section, January 20, 2012.

9. Risks, fraudulent bankruptcy and conflicts of interest

“Interbolsa, la historia de un desplome,” elespectador.com, Economy section, November 8, 2012; “Condenan a Tomás Jaramillo y Juan Carlos Ortiz por desfalco de Interbolsa,” elpais.com.co, Economy section, April 28, 2016; “La verdad sobre la comisionista Interbolsa,” semana.com, National section, May 8, 2016. // “La quiebra de Mexicana, fraude maquinado, acusa diputado,” jornada.unam.mx, Economy section, August 6, 2010; “Fraude maquinado por sus dueños: PRI y PRD,” jornada.unam.mx, Economy section, August 13, 2010. // “Por el carrusel de contratación imputan otro delito a Federico Gaviria,” elpais.com.co, July 11, 2011; “Por carrusel de contratación, a la cárcel concejal de Bogotá José Juan Rodríguez,” elpais.com.co, May 23, 2013; “Condenan a diez años de cárcel a Julio Gómez por el carrusel de contratación,” elpais.com.co, July 14, 2014; “Así fue como quebraron a Saludcoop,” elpais.com.co, November 29, 2015. // “Mexicanos guardan en paraísos fiscales más del doble de la reserva de divisas del país,” jornada.unam.mx, Economy section, February 12, 2015.

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10. Bribes and extortion

“El pago de sobornos se lleva hasta 20 percent de ingresos,” jornada.unam.mx, Economy section, April 14, 2010; “Difusión de supuestos sobornos para desprestigiar: OHL México,” jornada.unam.mx, Economy section, June 2, 2015; “Ni autoridades ni empresarios enfrentan a mafias en la industria de la construcción,” jornada.unam.mx, Economy section, July 4, 2014.