China Anti-Corruption Compliance: What's Peeing Got To Do With It?

If you want to keep operating in China and stay out of legal trouble, the time is now to get your China house in order. But how?

I have written a number of posts on how China’s government is tougher on foreign companies than it is on domestic companies, and of how critical it is for foreign companies doing business in China to abide by the law. See Foreign Business in China: The Welcome Mat Is Not OutChina: Should I Stay Or Should I Go?, and Your Job Is To Avoid China Corruption Charges.

If you want to keep operating in China and stay out of legal trouble, the time is now to get your China house in order. But how? Can you rely on the advice of your China staff to establish and enforce your anti-corruption policies? The answer is a weak (or is it a strong?) maybe. The problem is that far too often your local China staff will view what constitutes compliance differently than you do.

The University of Pennsylvania’s language log, in a post entitled, In Dead and alive: metaphors for (dis)obeying the law, explains 规矩是死的,人是活的, a common Chinese phrase that highlights this problem: 

It conveys a fairly typical Chinese attitude towards any rules/laws/regulations: they are made to break, bend and be compromised. View it positively, this indicates a way of problem solving. There is another expression “大活人还能让尿憋死,” which is less known, more crude and more regional, but expresses a similar meaning.

It requires a bit of effort to figure out the cruder, more visceral variant, but here goes:

(大)活人还能让尿憋死

A (fully) living person could never have to pee so bad that he / she would burst to death.

*    *    *    *

1. How could a living person possibly die of holding back urine?

2. How could a living person possibly be exploded by urine?

It means people should deal with things with flexibility….

Literally, it means a live person will find a way to relieve himself regardless what the situation is. In a general reference, niào 尿 (“urine”) is the problem (whatever that might be) one is having, and a live person will find a way to solve it. The implication is that do whatever you can to take care of the problem and not let it get you.

The Penn post seeks to explain a recent China old meat scandal involving OSI Group in China.

You want and you need your Chinese staff to be involved in complying with China’s laws, but because breaking, bending, or compromising on compliance does not work for foreign companies. Foreign companies with a history of “local-style problem solving” are low-hanging fruit for a Chinese government looking to show its citizens that it has the will to enforce its own laws and benefit the citizenry it serves.

My law firm’s China lawyers are always getting contacted to help foreign companies after they have gone through the following:

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  1. Foreign company establishes a “no bribery policy” and so instructs its employees.
  2. Upon being so instructed, its Chinese employees think that “if we follow all of these stupid rules, we will not be able to accomplish anything.”
  3. The Chinese employees insist that they understand the company’s anti-corruption policies, but nothing really changes. The foreign company nonetheless believes everything is just fine.
  4. A Chinese government bureau shows up at the company for an audit. By the way, this is not at all uncommon.
  5. The foreign company learns that everything was not “fine,” and that its employees’ definition of corruption compliance did not jibe with the company’s definition at all.

An important first step to preventing China corruption compliance problems is to establish a strong anti-corruption policy that addresses both China’s anti-corruption laws and those of your home country. At minimum, this means you have provided all of your employees with an Anti-Corruption Compliance Manual — written in both Chinese and in English — and you regularly conduct staff training to ensure the necessary shift in company culture takes place. You also should have objective third parties audit your company for corruption compliance, and then take any actions necessitated by that audit report.

In my next post, I will discuss how foreign companies should handle employee resistance to their anti-corruption compliance program.


Dan Harris is a founding member of Harris Moure, an international law firm with lawyers in Seattle, Chicago, Beijing, and Qingdao. He is also a co-editor of the China Law Blog. You can reach him by email at firm@harrismoure.com.

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