How do you thrive in a corrupt environment? Paul Labic is a specialist in corruption and the protection of companies and their teams. As a consultant and academic, the French native approaches risks from two sides.
You have spent more than 20 years in the international automotive industry in various management positions. How did you come to specialise in combating corruption and risks in a hostile environment?
Paul Labic: Throughout my career, I have faced many crises, from floods to fires to legal or warranty issues. When I was Director of Sales and Programs in Asia about fifteen years ago, the discovery of corruption was a bolt in the night for me. I realized that many companies and executives like me were struggling to develop alternatives that respected ethics and the law. It became my research subject at university from 2016 and my profession soon after.
...an issue that is becoming increasingly important to the industry...
Labic: Yes, corruption, like all forms of crime, is discreet. The general feeling in Germany or France that we are little affected, despite the increase in scandals in our countries, says nothing about the reality of the difficulties faced by many industrial companies. This ignorance leads many companies to take no more precautions to set up a business in vulnerable countries than in simpler environments. Don't forget either the particular situation of German SMEs who believe that the excellence of their products will protect them from the hostilities of these new markets. Accustomed to working with a local network of banks, insurance companies or consultants who are also unfamiliar with the reality of corruption, they suddenly find themselves alone abroad. After some time, when they have to pay bribes, it is too late. The lack of knowledge, the lack of preparation and the sometimes certain naive recklessness are paid for in cash.
With the WB Risk Prevention Systems team, how can you support companies upfront before corruption happens so that your customers don't get nasty surprises later?
Labic:Preparation is everything and includes several aspects. We give our clients a precise idea of this new environment, which can go as far as the individual profile of their future customers, suppliers or partners. We offer reliable contacts and show why they are. We offer a network, often bi-national, of experts and advisors (lawyers, banks, etc.) who can assist our clients in accordance with ethics and law. We guide our clients in setting up tools to analyse and monitor the environment with the aim of making it autonomous. Our approach depends on the level of risk exposure. Often called in too late, we are confronted with a crisis situation and must first manage risks before taking preventive action can. Some clients also find it difficult to see that successful and sustainable development takes time.
Dhe crises related to corruption weigh most heavily on me personally, because they sometimes have serious consequences for our clients, especially in financial terms, and can also damage their reputations.
What are the characteristics of a successful crisis manager in the field of corruption?
Labic:: Perseverance. If a client comes to them and says they've been paying bribes for six months and don't want to in the future, it can take years to build alternatives. It's much easier when there has been no contact.
What ethical and legal alternative would be conceivable, for example?
Labic:: To develop an alternative to corruption, we need to understand how it works: It is a flow of value that creates additional remuneration for the corrupt or his network. How then to maintain this value flow in accordance with ethics and the law? If we can identify an activity that provides the same but legal value flow - for example, an import activity into Europe - we can provide an alternative to corruption. This approach is not new. Consider, for example, offsets in aerospace and defense contracts.
It gets even more complicated when the child has already fallen into the well and you have to play fire brigade.
Labic: An example from my time with one of my former employers: a producer of wind turbines supplied components to Indonesia, where they were assembled and installed on concrete pylons on the numerous small islands. After a year it turned out that the European project managers, on their own and with no alternative solution, had taken bribes to be allowed to transport the turbines locally from the ports, through the villages, etc. We then renegotiated the contracts in this way. We then renegotiated the contracts so that the producer only supplied the turbines and the local partner took over all other tasks. This solution was a bad compromise. It meant that the customer was no longer directly involved. However, he has been burned in Indonesia. His reputation is permanently at risk in Asia and globally.
What motivated you to bring your many years of expertise to WB Risk Prevention Systems as a partner?
Labic:We are a team in which everyone brings experience with crises. We have lived in different regions and worked for different industries. Ideally, we are able to anticipate and prevent the crisis. There are numerous analysis, anticipation, and prevention tools, many of which each of us has mastered. We are also involved in networks and can add experts who understand specific countries or industries to our core group.
You are also approaching the topic of anti-corruption academically, have recently completed two master's degrees and will earn your doctorate at the University of Strasbourg next year. What does theory mean in practice?
Labic: In my PhD, I am working on analysis, anticipation and prevention tools for the fight against corruption, very practical topics. I am also a member of the BETA Laboratory in Strasbourg since 2016, which focuses on theoretical and applied economics. The people who know the economy, the countries of the world or certain industries best are academics. This know-how is used far too little. A good example is the Berlin MERICS, Mercator Institute for China Studies. Every company in China should read its information every day. You have to study and learn before you act. Many companies are too focused on action and act too quickly.
Here you can find out which topics Paul Labic deals with besides corruption.
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