CORRUPTION AND UNETHICAL BEHAVIOR

What is ID Corruption?
 Corruption is a form of dishonesty or criminal offense undertaken by a person or
organization entrusted with a position or authority, to acquire illicit benefit or abuse
power for one's private gain.

Types of Corruption
 Bribery- means giving or receiving an unearned reward to influence someone’s
behaviour. One common form of bribery is “kickback” an unearned reward following
favourable treatment.
 Extortion- to obtain from a person by force , intimidation or undue or illegal power,
example is the protection scheme where figure with lies to organized crime demand
that shop owners pay for their protection to prevent something bad.
 Cronyism- is the partiality in awarding jobs and other advantages to friends or trusted
colleagues, especially in politics and between politicians and supportive organizations.
For instance, this include appointing cronies to positions of authority regardless of their
qualifications.
 Nepotism- partiality to family, giving relatives special treatment , especially in the
workplace , example the CEO of the company giving his underqualified niece high paying
job.
 Parochialism- means ignoring the impact of cultural concepts and diversity on
organizations, professions, procedures and programs. It is a tribal or only concerns a
local area, like with a person with parochial mentality is narrow minded or not open to
new ideas’
 Influence peddling- a type of corruption in which people use their connections with
governments to gain favours or preferential treatment for a third party, usually in return
for money.
 Graft- unscrupulous use of politicians authority for personal gains. Similarly , political
graft occurs when funds intended for public projects are intentionally misdirected in
order to maximize the benefits to private interest.
 Embezzlement- occurs when someone in charge of another money and/ or property
usually company's takes or uses those assets for their own gain.
 CAUSES OF CORRUPTION

 Higher levels of market and political monopolization- the government may wish to
regulate monopolies to Greed of money-is an excessive love or desire for money or any
possession.
 protect the interest of consumers, for example monopolies have the market power to
set prices higher than competitive markets.-transparency of organization , countries
with better information flows also govern better.
 Low level of democracy, weak civil participation and low political transparency-the
beaurucratic organization is very organize with a high degree of formality in the way it
operates. Organizational charts generally exist for every department, and decisions are
made through an organized process.
 Higher level bureaucracy and inefficient administrative structures - the beauratic
organization is very organize with a high degree formality in the way it operates.
Organizational charts generally exist for every department , and decisions are made
through an organize process.
 Low press freedom - Principle that communication and press through various media, it is
the press freedom
 Low economic freedom - the freedom of choice enjoyed by individuals in acquiring and
using economic goods and resources.

What is the disadvantages of corruption?

 Corruption erodes the trust we have in the public sector to act in our best interest. It
also wastes our taxes or rates that have been earmarked or important community
projects, meaning we have to put up with poor quality services for infrastructure or we
miss out all together.

The Philippine Corruption Report

 High corruption levels severely restrict the efficiency of businesses operating in the
Philippines. Extensive bribery within the public administration and vague and complex
laws make foreign companies vulnerable to extortion and manipulation by public
 officials. Favoritism and undue influence are widespread in the courts, leading to time-
consuming and unfair dispute resolution, and to an uncertain business
environment. Corruption plagues the customs administration, and fraud routinely
occurs for companies when filing import and export documentation. The Anti-Graft and
Corrupt Practices Act criminalizes active and passive bribery, extortion, abuse of
office and conflicts of interest. Giving gifts, except for gifts of insignificant value given in
line with local customs, is prohibited. Facilitation payments are not addressed by anti-
corruption regulations and private sector bribery is not criminalized. The legislative
framework for fighting corruption is scattered and is not effectively enforced by the
weak and non-cooperative law enforcement agencies.

Judicial System
 Corruption risks are high in the judicial system. Bribes and irregular payments in return
for favorable judicial decisions are common (GCR 2015-2016). The judiciary is
formally independent, but the rich and powerful have frequently influenced
proceedings in civil and criminal cases (BTI 2016). Procedural fairness and transparency
are severely undermined by nepotism, favoritism, and impunity (HRR 2016). Companies
do not have sufficient faith in the independence of the judiciary and they rate the
efficiency of the legal framework in settling disputes and challenging regulations as poor
(GCR 2017-2018). Investment disputes can take several years to resolve due to a lack of
resources, understaffing, and corruption in the court system (ICS 2017). Low salaries for
judicial officials are said to perpetuate the problem of bribery (BTI 2016). The judiciary is
underfunded by the state and often depends on local sponsors for resources and
salaries, resulting in non-transparent and biased court decisions (FitW 2017). Foreign
investors have noted that the inefficiency and uncertainty in the judicial system are
disincentives for investment; investors regularly decline to file disputes due to the
perception of corruption among personnel and the complex and slow litigation
processes (ICS 2017). Enforcing a contract takes much longer than the regional average,
but the costs involved are significantly lower  (DB 2017).
 In one recent case, a businessman filed an administrative complaint in the country’s
Supreme Court against Makati City judge for allegedly asking for a PHP 15 million bribe
in exchange for a favorable ruling in an insurance claim (Inquirer, Aug. 2016). At the time
of review, no further updates on the case were available.

Police
 There is a high-risk of corruption when dealing with the police. The national police force
is widely regarded as one of the most corrupt institutions in the country (ABS CBN, Jan.
2017). Reports of the police and military engaging in corruption, extortion, and being
involved in local rackets are widespread (FitW 2017). Companies report that they cannot
rely on the police services (GCR 2017-2018). More than half of firms pay for private
 security (ES 2015). Businesses rate the National Police’s commitment to fighting
corruption as ‘poor’ (SWS 2016). President Duterte has accused several police generals
of being involved in the trafficking of illegal drugs (ABS CBN, Jan. 2017).
 In one corruption case, Police Commissioner Mr. Sombero, is under investigation for
allegedly facilitating a PHP 50 million bribe from gambling tycoon Jack Lam, who tried to
bribe immigration authorities in order to release approximately 1,300 Chinese nationals
who were working in his resorts illegally (CNN Philippines, Feb. 2017).

Public Services
 Companies contend with a high corruption risk when dealing with the public
services. Approximately half of business executives reported being asked for a bribe by
someone in the government in 2016 (SWS 2016). Nearly three out of five business
reported expecting to give gifts in order ‘to get things done’, but only one in ten
reported expecting to give gifts to get an operating license (ES 2015). Irregular payments
and bribes in the public services sector sometimes occur (GCR 2015-2016). Philippine
officials involved in processing documents related to civil and property registration and
building permits are more likely to solicit bribes compared to officials dealing with other
types of services (Ombudsman’s Office Survey 2013). Inefficient government
bureaucracy is ranked as the most problematic factor for doing business in the
Philippines (GCR 2017-2018). Civil servants often do not have the resources or abilities
to fulfill their tasks free from corruption and red tape (BTI 2016). Furthermore, civil
servants are generally not recruited in a competitive manner; appointments are based
on a practice of patronage (BTI 2016).
 The total number of procedures required to set-up operations, including registering the
company with local government and getting a construction permit, are significantly
higher than regional averages (DB 2017). Getting electricity takes significantly less time
than elsewhere in the region (DB 2017).

Land Administration
 Corruption risks in the land administration are high. Two out of five companies report
expecting to give gifts when obtaining a construction permit (ES 2015). Property rights
are formally recognized and protected in the Philippines, but in practice, the law is not
always upheld (ICS 2017). Businesses have insufficient confidence in the protection of
property rights (GCR 2017-2018). Corruption and arbitrariness in the application of the
law are common (BTI 2016; ICS 2017). Multiple agencies are responsible for land
administration, which has led to overlapping procedures for land valuation and title
registration; this has made the process costly (ICS 2017).
 The court system is slow to resolve land disputes (ICS 2017). Land records are not
properly managed due to a lack of trained personnel and funds (ICS 2017). Foreigners
 are not allowed to directly own land, but they may lease land for up to 50 years with a
possible one-time extension of 25 years (ICS 2017). Expropriation is possible under
Philippine law; the law calls for fair market value compensation, but coming to a
mutually acceptable price can be a lengthy process in the court system (ICS
2017). Registering property takes nine procedures in the Philippines, which is double the
regional average (DB 2017). However, the total time required is less than half of the
regional average (DB 2017).

Tax Administration
 There is a high risk of corruption when dealing with the tax administration. Around one
in seven companies indicate they expect to give gifts in meetings with tax officials (ES
2015). Tax regulations are among the most problematic factors for conducting business
in the Philippines (GCR 2017-2018). Companies indicate that they perceive that only a
fifth of businesses in their line of business pay their taxes honestly (SWS 2016). Officials
at the Bureau of Internal Revenue (BIR) are believed to be prone to corruption and
known for embezzlement and extortion (Manila Bulletin, Feb. 2014). A typical example
of this can be found in a recent case in the city of Bacolod; an officer with the BIR was
caught extorting PHP 125,000 from a local company (Philippine News, Mar.
2017). Businesses rate the BIR’s commitment to fighting corruption as poor (SWS 2016).
On a more positive note, there are signs that the BIR is pursuing more cases of tax
evasion (BTI 2016).
 Companies make twenty-eight tax payments a year, which is higher than the regional
average (DB 2017).

Customs Administration
 There is a high risk of encountering corruption when dealing with the customs
administration. Companies indicate that irregular bribes and payments in import and
export procedures are very common (GETR 2016). About a quarter of companies
indicate they expect to give gifts when obtaining an import license (ES 2015). A business
survey indicates that the Bureau of Customs (BOC) was the only agency receiving a
rating of ‘very bad’ when it came to its commitment to fighting corruption (SWS
2016). Companies cite burdensome import procedures and corruption at the border as
being among the most problematic factors for importing (GETR 2016). The efficiency and
time predictability of procedures are rated as poor (GETR 2016). Border compliance
costs in the Philippines are significantly higher than the regional average, whereas the
time required is in line with the regional average (DB 2017).
 The Bureau of Customs (BOC) has indicated that smuggling of goods, among which
cigarettes, vehicles, and oil, into the Philippines has led to the evasion of taxes worth at
least USD 1 billion yearly (Philstar, Feb. 2017). Consistent fraud in the form of under-
 invoicing when importing and exporting costs the state USD billions in revenues each
year (Wall Street Journal, Mar. 2014). In 2016, the BOC alleged one of its employees
accepted as much as USD 4 million in bribes monthly (Rappler, Aug. 2016).

Public Procurement
 There is a very high risk of corruption in the public procurement sector, which is subject
to rampant corruption, irregularities, and inconsistent implementation of legislation.
Likewise, more than a fifth of businesses report they expect to give gifts in order to win
a government contract (ES 2015). Two in five companies indicate that most companies
in their sector give bribes in order to win contracts (SWS 2016). Diversion of public
funds, as well as favoritism in the decisions of public officials, is very common (GCR
2017-2018). The public sector is obliged to procure goods and services from companies
with at least 60% Philippine ownership (ICS 2017). Local-level public procurement lacks
transparency, fostering a culture of corruption through the misuse of the pork barrel
system; which are funds for discretionary use by representatives for projects in their
respective districts (BTI 2016). Philippine law allocates responsibility for monitoring,
investigating and sanctioning irregularities in public procurement to a number of
different state institutions, leaving potential misconduct, inefficiency and impunity
unchecked (Sunlight Foundation, Oct. 2013).

Natural Resources
 Companies operating in the natural resources sector face a high risk of corruption. The
Philippines has shown marked improvements in its natural resource governance in the
past few years; the country has a good enabling environment and its regulatory quality
and control of corruption are judged as adequate (NRGI 2017). However, poor value
realization and revenue management have caused the country’s overall resource
governance to be judged as ‘weak’ (NRGI 2017). The Philippines has been working to
achieve compliance with the Extractive Industries Transparency Initiative (EITI) since
joining in 2013 (EITI 2016). Some mining contracts are publicly disclosed via the EITI
portal. While transparency in the sector has improved, poor regulation and overlapping
policy responsibilities between local and central governments have meant that small-
scale mining is still a contentious issue (EITI 2016).
 Government corruption has allowed mining companies to evade government
regulations, which has resulted in large-scale deforestation, flattened mountaintops and
water pollution (New York Times, Apr. 2017). The government responded by cracking
down on illegal mining operations; and as of 2017 Secretary of the Environment Gina
Lopez shut down 28 of the country’s 41 mining companies for polluting the environment
(New York Times, Apr. 2017). However, Lopez was removed from her job by Congress in
May 2017 after mounting complaints from the pro-mining lobby (Mining.com, May
2017).
 Legislation
 Companies should note that the legal anti-corruption framework in the Philippines is
complicated and poorly enforced; there is a lack of cooperation between law
enforcement agencies, and officials are rarely prosecuted and convicted for corruption
crimes (HRR 2016). The Anti-Graft and Corrupt Practices
Act criminalizes active and passive bribery, embezzlement, extortion, abuse of
office and conflict of interest in the public sector. Bribery of public officials and trading
in influence are also criminalized in the Anti-Red Tape Act. The Act forbids office-holders
from accepting any gifts or material benefits in exchange for any government permit or
license. Under the Revised Penal Code, gifts are classified as indirect bribery. An
exception is made for gifts of insignificant value given as a token of friendship in line
with local customs. Facilitation payments are not addressed in the law. Private sector
bribery is not criminalized (UNODC 2014). Under the Code, public officials are required
to regularly file a statement of their assets and liabilities. In case of any discrepancy
between the official’s asset declaration and the amount of property or financial assets
actually possessed, the official is subject to immediate dismissal. Punishments for
corrupt acts include imprisonment of up to ten years, a fine, removal from office, and/or
confiscation of property. The Anti-Money Laundering Act criminalizes money laundering
and organized crime. The Act Establishing a Code of Conduct and Ethical Standards for
Public Officials and Employees formulates standards for the personal integrity and
accountability of civil servants. The Government Procurement Reform Act requires
competitive and transparent bidding. Philippine legislation does not contain any
provisions on protecting whistleblowers who report on corruption. The Philippines has
ratified the United Nations Convention against Corruption.

Civil Society
 The Constitution guarantees freedoms of speech and of expression, but in practice these
freedoms are not consistently upheld (HRR 2016; BTI 2016). The media environment is
largely privately owned and diverse, and the state generally exercises very little
censorship (BTI 2016). The views represented in the mainstream media are heavily
influenced by the oligarchical owners of many of the outlets (BTI 2016). The Philippines
is the second most dangerous country in the world for journalists to operate in, as
measured by the number of journalist deaths (BTI 2016). The state is not directly
responsible for the violence, which can mostly be blamed on local strongmen and
criminals and the weakness of the authorities (BTI 2016). The existence of libel and
defamation laws remains a problem and are frequently used by officials and powerful
individuals to try to silence journalists (FotP 2016). The media does frequently report on
high-level corruption cases (FotP 2016). Independent observers report that bribes and
other incentives are often used by high-level officials to motivate journalists to create
one-sided reports for the official’s benefit (HRR 2016). Internet access is widely
 available, but there are concerns about the government trying to install some degree of
censorship (FitW 2017). The Philippine press is classified as ‘partly free’ (FotP 2016).
 Philippine civil society is active and is represented by a wide variety of different
organizations. Public participation is high and civil society organizations (CSOs) enjoy a
high level of social capital (BTI 2016). CSOs are normally not included in formal decision-
making, but they play a large role in initiating legislation and steering debate in Congress
(BTI 2016). There are a multitude of watchdog organizations monitoring implementation
of policy (BTI 2016).

What is Unethical Behavior?

 Unethical behavior is an action that falls outside of what is considered morally right or
proper for a person, a profession or an industry. Individuals can behave unethically, as
can businesses, professionals and politicians.

Examples of Unethical Behavior

1. Abuse of leadership
In many workplaces, the culture is influenced by the attitudes and behavior of those in
management positions. In fact, research has shown that managers are responsible for 60%
of misconduct that occurs in the workplace.
Abuse of power can take on many manifestations. You may be asked to do something that
you are uncomfortable with, may witness or experience bullying from a manager or notice
that figures or reports are being manipulated.
An abuse of leadership is not only a form of unethical behavior. It can also have a toxic
effect on both the working culture and, potentially, the success of the organization.
However, many workers can be reluctant to report such unethical behavior for fear of the
repercussions.
If you’re witnessing a case of abuse of leadership in your workplace, consider speaking to
other co-workers about their experiences, begin to gather evidence of the managers’
unethical behavior, and check out your company policies so that you can be specific about
which company protocols they are breaking.
The next step is reporting them to someone who works above them or, if this seems too
drastic, you can also talk to your HR department about the best way to escalate the
situation.

2. Discrimination and Harassment

 Experiencing or witnessing cases of discrimination and harassment in the workplace is
not uncommon. When discrimination or harassment occurs in the workplace based on
 ethnicity, race, disability, gender or age, this is not only a case of unethical behavior.
Moreover, it is a legal issue also.
 It can be easy to turn a blind eye to such behavior, but allowing it to continue not only
contributes to a toxic culture in the workplace. It can also create an ‘othering’ mentality
that excludes and persecutes specific groups of people.
 If you have witnessed discrimination or harassment in the workplace, it is important to
seek support and help so that this unethical behavior does not continue. Look at your
company’s policies around this as these should guide you as to how to report cases of
discrimination and harassment. If you feel your organization is not handling your
complaint effectively, consider seeking legal advice.

3. Misusing Time
 No employee is perfect and it is impossible to be productive all of the time. However,
when the boundaries are pushed and you witness an employee misusing company time
for other purposes regularly, this can be an ethical conundrum.
 Perhaps they have another freelance business on the side and are using their time in the
office to pursue this. Or, even worse, they have asked you to cover up for them when
they’re spending time out of the workplace when they shouldn’t be.
 Handling this type of unethical behavior in the workplace is not easy, however, if left
unchecked, then it is likely to escalate. Consider speaking with your co-worker and let
them know about your concerns. It’s likely that once they’re aware that their behavior
has been noted, they will be more conscious of following the rules.

4. Theft by Employees
 When it comes to unethical behavior in the workplace, employee theft is high up there
as one of the most common occurrences. We’re not talking about stealing a few pens
from the stationery cupboard here. This is fiddling with expenses, inaccurately recording
sales or even fraud. According to a report in 2015, the amount stolen from US
businesses by employees in one year was a whopping $50 billion.
 If you’re suspicious of one of your co-workers, make sure you have your facts
straight before you consider reporting them. Accusing someone of stealing is a big deal
so ensure you have evidence of their activities before you take it up with HR or a
manager.
 5. Internet Misuse
 Another common unethical practice in the workplace is the misuse of the company’s
internet. While it may be tempting to check your Facebook at work, this can lead to
potentially hours of wasted time. In fact, a survey by salary.com found that at least 64%
 of employees use their company computer to look at websites that are unrelated to
their work.
 It is hard to work a whole day without having some breaks, so some companies
will tolerate some downtime to check your social media. However, if you feel one of
your co-workers is taking advantage of this and their work is suffering because of it,
consider dropping a few hints to let them know.
 Workplace politics are a minefield and it can be a tricky environment to navigate at
times. Witnessing or being at the receiving end of unethical behavior is tough. While it
can be tempting to brush it under the carpet, it is important to report and deal with
such behavior so that your own work happiness isn’t affected.