---
title: "Refusing Bribes: The Red Line an Owner Sets in Advance"
description: "Refusing a bribe is a rule written in advance, not a call made at the counter. See UNGC Principle 10, the 2019 Walmart settlement and a one-page policy."
url: "https://staging.khoi.co.uk/en/blog/ranh-gioi-do-hoi-lo"
lang: en-GB
author: "Lê Quốc Khôi"
date: 2026-11-03
updated: 2026-11-03
topics: ["Ethics & corporate governance"]
tags: ["Anti-bribery", "Corporate integrity", "FCPA", "CSR pyramid", "Internal controls"]
---

# The bribery red line: a rule the owner sets before anyone is asked

## Key takeaways

- Refusing a bribe works best as a rule the owner writes in advance, not a judgement made by the person who is asked. UN Global Compact (UNGC) Principle 10: "Businesses should work against corruption in all its forms, including extortion and bribery" (United Nations Global Compact, n.d.).
- On 20 June 2019 Walmart agreed to pay a combined $282.7 million to resolve US Department of Justice and Securities and Exchange Commission (SEC) investigations under the Foreign Corrupt Practices Act (FCPA). The agreements relate to anti-corruption internal controls in Brazil, Mexico, India and China before April 2011 (Walmart Inc., 2019). The SEC said Walmart failed to operate a sufficient compliance programme for more than a decade (Securities and Exchange Commission, 2019).
- Carroll (1991) treats the tension between economic and legal duties, and between economic and ethical ones, as an organisational reality (Carroll, 1991, p. 42). The seven-line policy and the mango exporter below are my own design and invented figures. This article does not cover Vietnamese law or the UK Bribery Act; the FCPA is US law. Legal facts hold as of the source dates (20 June 2019; UNGC pages read on 3 November 2026); later changes are not checked.

A consignment of dried mango is waiting for an inspection stamp before it can board a ship. The officer says it can be signed this afternoon if the envelope holds VND 3 million. Your logistics clerk rings you: pay or not? That question should not reach your desk at three in the afternoon. It should have been answered earlier, on one sheet of paper.

## Why should refusing a bribe be a rule written in advance, not a decision each time?

Because the person who is asked has the least room to weigh it, while the owner carries the consequences in the end. That is my reading; two sources sit behind it.

The UNGC, the United Nations' corporate responsibility initiative, opens its page on the ten principles by saying that corporate sustainability starts with a value system and a principles-based approach. Responsible businesses, it says, apply the same values wherever they operate, and know that "good practices in one area do not offset harm in another" (United Nations Global Compact, n.d.).

> **Figure:** [UN Global Compact ten principles](https://staging.khoi.co.uk/en/framework/ungc-ten-principles) The UNGC ten principles; Principle 10 sits in the anti-corruption group.

Carroll describes three kinds of manager. The amoral manager does not see that everyday decisions have an ethical side, and takes the letter of the law as a guide (Carroll, 1991, p. 45). The moral manager wants profit, but "only within the confines of sound legal and ethical precepts" (Carroll, 1991, p. 45).

I draw two reasons for writing the rule down, both my own inference. The clerk bears the cost of delay but not the company's legal risk, so the clerk's incentives differ from the owner's. And priced one case at a time, the request is usually cheaper than the wait, as the invented example near the end shows. The library calls this an [ethical red line](https://staging.khoi.co.uk/en/glossary#ethical-red-line): a choice not optimised like an ordinary cost.

## Where does a bribe sit in Carroll's pyramid?

In the legal and ethical layers, which sit below the philanthropic layer. The wish to keep the contract sits in the economic layer. Carroll's article never mentions bribery or corruption, so the application here is mine.

> **Figure:** [Carroll's CSR pyramid](https://staging.khoi.co.uk/en/framework/carroll-csr-pyramid) Carroll's CSR pyramid (redrawn from Carroll, 1991).

Carroll splits a firm's responsibilities into four kinds: economic, legal, ethical and philanthropic (Carroll, 1991, p. 40). Ethical responsibilities cover what society expects or prohibits even where no law says so (Carroll, 1991, p. 41). Philanthropy is different: communities do not regard a firm as unethical if it gives less than they would like (Carroll, 1991, p. 42). My reading is that "we do not pay" is not a line item to cut when the quarter is hard.

Carroll admits the layers pull against each other. He calls the tensions between economic responsibilities and each of the other three the most critical, and treats them as organisational realities (Carroll, 1991, p. 42). When a shipment sits in the yard and someone asks for VND 3 million, the economic layer pulls towards paying and the middle two pull towards refusing.

## What did Walmart's 2019 settlement show about controls?

In my reading, it showed that what a company ends up paying is tied to its internal controls, not only to whether someone handed over cash. In 2019 Walmart was listed on the NYSE and the FCPA is US law; this case says nothing about Vietnamese law. I read Walmart's statement and the SEC's press release 2019-102, both of 20 June 2019, so everything here is the position on that date. The library has a [Walmart case](https://staging.khoi.co.uk/en/case/walmart-mexico-bribery).

| Item | Per Walmart's statement |
|:--|:--|
| Combined payment | $282.7 million |
| Penalty to the Department of Justice (DOJ) | $137.96 million |
| SEC: disgorgement of profits plus interest | $144.69 million |
| Terms of the commitments | DOJ non-prosecution agreement 3 years; DOJ independent monitor of limited scope 2 years; SEC reporting 2 years |
| Spent on investigations, compliance programme and organisational changes | more than $900 million over 7 years |

The figures are Walmart's (Walmart Inc., 2019); the SEC's release agrees on the total (Securities and Exchange Commission, 2019). The SEC said Walmart failed to investigate or mitigate certain risks sufficiently, and let subsidiaries in four countries use third-party intermediaries who paid foreign officials without reasonable assurance of FCPA compliance. It also said its order details several instances where Walmart planned compliance measures and then put them on hold, or let deficient internal accounting controls persist despite red flags (Securities and Exchange Commission, 2019). The head of the SEC's FCPA unit put it this way: "Walmart valued international growth and cost-cutting over compliance" (Securities and Exchange Commission, 2019).

After the settlement Walmart listed the steps the DOJ and SEC acknowledged: dedicated compliance leadership, tighter controls on intermediaries who deal with officials, an automated system for licences and permits, and ending relationships with third parties involved (Walmart Inc., 2019).

One limit: the two statements give no amount for any single payment to an official, and the SEC's findings concern books and records and internal accounting controls. I cannot say from them that any particular Mexican bribe was proven.

## What goes on a one-page red-line policy?

Seven lines, each answering a question: who decides, what is never paid, what may be paid, how to refuse, who bears the cost of delay, who to call, and how intermediaries are bound. The right-hand column shows which lines have a source and which are my own design.

| Line | What to write | Source |
|:--|:--|:--|
| 1. Who decides | Only the owner, or one person named in the document, may set an exception. Nobody below may promise or pay | My design |
| 2. Never paid | Money, gifts or favours to an official or anyone passing them on; commissions outside the contract to distributors or agents | My design; definition of bribery from the UNGC Principle 10 page |
| 3. What may be paid | Only fees in a published tariff, with an official receipt, into the agency's account. No receipt, no fee | My design |
| 4. Refuse and record | Script: "Our company does not allow it; please give me the official fee and a receipt." Log time, person, request, delay caused; send to the owner within 24 hours | My design |
| 5. Cost of delay | The owner approves a delay budget in advance. Whoever refuses is not docked bonus for the late shipment | My design |
| 6. Who to call; threats | Name and number of the person who takes the call, a deputy, an outside lawyer, an anonymous [whistleblowing channel](https://staging.khoi.co.uk/en/glossary#whistleblowing-channel). Under physical threat, safety first and report within 24 hours | My design; OECD extortion definition quoted on the UNGC page |
| 7. Intermediaries | Contracts carry a ban. Commission paid only against contract and invoice, to the contracting party's own account. A breach ends the relationship | Follows the steps Walmart lists (Walmart Inc., 2019); detail is mine |

The three questions below combine lines 2, 3 and 7 into a test before any money leaves the company.

> **Figure:** (flow) This three-question test is my own design, not taken from any source.

```json
{
  "type": "flow",
  "steps": [
    { "key": "published", "gate": "1", "question": "Is it in a published tariff or a signed contract?", "hint": "State fees: the tariff. Commissions: the contract clause.", "no": "No: do not pay; use the refusal script in line 4" },
    { "key": "receipt", "gate": "2", "question": "Is there a receipt or invoice, and a bank transfer to the account of the named party?", "no": "No: no cash to an individual" },
    { "key": "books", "gate": "3", "question": "Could the payment be booked exactly as it is and shown to an auditor?", "no": "No: stop and call the person named in lines 1 and 6" }
  ],
  "end": "Passed all three: pay it as an ordinary expense and keep the paperwork"
}
```

The policy does not replace a lawyer. It forces three things: an owner's decision, real paperwork, and an employee who knows what they may say.

## What does refusing cost an invented company?

**A hypothetical example.** Sample A, an exporter of dried mango, its inspector and every figure below are invented by me. The firm ships 48 consignments a year. The inspector asks for VND 3 million to sign today. If refused, the consignment waits another 3 days, and each day costs VND 2.4 million in yard and container charges.

| | Pay each time | Refuse under the rule |
|:--|:--|:--|
| Per consignment | VND 3 million, off the books | VND 7.2 million in delay costs, documented |
| 48 consignments a year | VND 144 million off the books | up to VND 345.6 million |
| Who decides | The employee at the counter | The owner, beforehand |

In my reading, case-by-case arithmetic always leans towards paying: VND 3 million is cheaper than VND 7.2 million on every consignment, so if the person at the counter does the sums, the rule effectively does not exist. In this example refusing costs more money; Carroll says the economic-legal tension is real (Carroll, 1991, p. 42). The owner's decision is whether to accept the delay cost as a fixed expense, once, and write it into line 5.

The sums leave the other side unmeasured. The risk that VND 144 million a year off the books creates for a small firm is not something the sources I read can tell me, and Walmart's figures belong to a different scale, so I do not compare them.

## Going deeper: what did I read, and what did I not?

Carroll (1991): I read all ten pages (39 to 48) from a PDF scan posted by the author, run through OCR, so small details may be wrong; page numbers are the printed ones. I did not read his 1987 article on the moral manager.

UNGC: I read the full page on the ten principles (United Nations Global Compact, n.d.) and the Principle 10 page on the same website (https://unglobalcompact.org/what-is-gc/mission/principles/principle-10), both as they stood on 3 November 2026. The latter is not in the library, so I used it only for the definitions of bribery and extortion and the points on internal policy. I did not read the UN Convention against Corruption it cites.

Walmart and the SEC: I read both statements in full (Walmart Inc., 2019) (Securities and Exchange Commission, 2019). I did not read the SEC's order, the DOJ's non-prosecution agreement or the text of the FCPA.

The biggest limit: this article does not cover Vietnamese law, the UK Bribery Act or whichever law applies to you, and the policy has not been reviewed by a lawyer or tried in a real firm.

## Frequently asked questions

### Is a small payment to speed up paperwork still a bribe?

I found no source that settles this, and the answer depends on the law that applies to you, so ask a lawyer. The UNGC page on Principle 10 quotes Transparency International's definition: an offer or receipt of any gift, loan, fee, reward or other advantage as an inducement to do something dishonest, illegal or a breach of trust in the conduct of the enterprise's business. I see no minimum amount in that wording. The policy in this article bans even small payments without an official receipt, as a design choice.

### Which law applies to a Vietnamese company: the FCPA, UK law or local law?

This article cannot say. I did not read Vietnamese law, the UK Bribery Act or the text of the FCPA. What I did read is that the SEC charged Walmart under the books-and-records and internal-accounting-controls provisions of the Securities Exchange Act of 1934 (Securities and Exchange Commission, 2019), and that in June 2019 Walmart described itself as listed on the NYSE (Walmart Inc., 2019). A small firm with customers or partners in the US or UK should ask a lawyer, and check the current law, before assuming those laws are irrelevant.

### What if the person asking for money makes threats?

The UNGC page on Principle 10 quotes OECD guidance: a request for a bribe becomes extortion when it is accompanied by threats that endanger the personal integrity or the life of the people involved. My policy puts physical safety ahead of the rule: a person under threat does what is needed to stay safe, then tells the owner within 24 hours. That is my design, not legal advice.

### Is a one-page policy enough to say a company applies UNGC Principle 10?

I read it as no. The Principle 10 page says participants commit to develop policies and concrete programmes against corruption inside the company and in its supply chain, and calls an internal anti-corruption policy the first and basic step. The page is the first step. Checks, a refusal log and a quarterly review turn it into a programme.

## References

- Carroll, A.B. (1991) ‘The pyramid of corporate social responsibility: toward the moral management of organizational stakeholders’, *Business Horizons*, 34(4), pp. 39–48. https://doi.org/10.1016/0007-6813(91)90005-g
- Securities and Exchange Commission (2019) *Press release 2019-102 on the Walmart FCPA resolution (20 June 2019)*. Available at: https://www.sec.gov/newsroom/press-releases/2019-102.
- United Nations Global Compact (n.d.) *The ten principles of the UN Global Compact*. Available at: https://unglobalcompact.org/what-is-gc/mission/principles.
- Walmart Inc. (2019) *Walmart reaches agreements with the DOJ and the SEC to resolve their FCPA investigations (20 June 2019)*. Available at: https://corporate.walmart.com/news/2019/06/20/walmart-reaches-agreements-with-the-doj-and-the-sec-to-resolve-their-fcpa-investigations.

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