Aisha Dos Santos

Reading Juliette Bennetts piece on “Multinational Corporations, Social Responsibility and Conflict” describes the ways in which MNCs should not replace or usurp governments and the way that they function within a state, but MNCs often work with NGOs and governments use their skills to promote stability in a state. But Bennett argues that MNCs can also be a vital force for corruption, but this corruption is not solely placed upon the shoulders of MNC firms because corruption is a vestige of a state lacking a transparent, honest, and accountable institutions and governmental apparatuses. When governments tend to lose grip on order this leads to the decay of accountable and democratic institutions within a state. This then leads to the possibility of the private sector engaging in policy dialogue or in civic institutional dialogue. But with the consistent increase in globalization, their needs to be greater economic inclusion and social justice in its operations, or violent conflict in institutionally weak countries will continue to reoccur (Bennett, 2002, p. 410).

The firms of two large MNCs Odebrecht and Petrobras, that are currently operating within many Latin American countries exemplify this need for transparency in government when engaging with the private sector. The Petrobras and Odebrecht scandals have embroiled business elites and politicians across Latin America, culminating in hundreds of arrests, and billions of dollars in bribes paid (Sabados, 2018). Executives from both Petrobras and Odebrecht, including the latter’s former chief executive, Marcelo Odebrecht, were sentenced to jail time. In April 2017, a U.S. federal court ordered Odebrecht to pay $2.6 billion in fines to authorities in Brazil, Switzerland, and the United States. The company had previously admitted to paying out hundreds of millions of dollars in bribes to officials in twelve countries. Facing financial losses that stem in part from the probe, the two companies have laid off more than one hundred thousand employees (Labrador & Felter, 2018). By October 2018 Lava Jato had resulted in more than two hundred convictions for crimes including corruption, abuse of the international financial system, drug trafficking, and money laundering. More than a dozen other corporations and multiple foreign leaders have also been implicated in Lava Jato (Labrador & Felter, 2018). This displays the ways in which states and heads of their government have the tendency to engage in clientelistic practices with corporate executives of MNCs through politically corrupt practices in the form of political bribery. Bennett’s article displays the way that MNCs have a reach that can exercise and operate across borders, should bear the responsibility for the effects of their operations on local environments.

Works Cited

Bennett, Juliette. 2002. “Multinational Corporations, Social Responsibility, and Conflict”.

(New York: Journal of International Affairs). P. 393-410.

Labrador, Rocio Cara, Felter, Cara. (2018). “Brazil’s Corruption Fallout”. (Council on

Foreign Relations).

Sabados, Katarina. (2018). “Brazil: Petrobras CEO Guilty in Odebrecht Corruption Case”

(OCCRP: Organized Crime and Corruption Reporting Project).