Ethics and professionalism in international PR: putting dubious practices behind us

In response to my most recent post, on media relations in China, a reader who related an experience he’d had in that country.  A reporter, he said, asked him for a “facilitation fee” to cover his company.  Although I’d never had that experience, it got me to thinking about the topic of corruption in international public relations.  In light of past accounts of U.S. public relations representatives who have worked internationally, some may wonder if they can expect reporters in other countries to expect compensation (in other words, bribes) for covering their companies.

Based on my own experience, here are some observations on ethics in international public relations, and how the actions of international PR representatives can reflect on their U.S. client companies:

The Foreign Corrupt Practices Act

Before embarking on international public relations work, a U.S. PR professional should consult the Foreign Corrupt Practices Act (FCPA), a federal law signed in 1977 and amended most recently in 1998.  The law sets penalties for such corrupt activity as bribery of foreign officials by U.S. firms.  Although the law pertains specifically to relationships between U.S. companies and foreign governments, the lines between government and the media – as illustrated in China – can blur.

In fact, the term “facilitating payment” is specifically included in the FCPA as one of the few exceptions from the law’s anti-bribery prohibitions.  In the law’s context, such a payment to a foreign official is allowed for such “routine governmental actions” as processing of papers, issuing permits or other expenses of a “non-discretionary nature” that are needed to carry out a government action (and, coming after the government decision, would not influence the government).

Is a reporter in China entitled to a “facilitation fee”? I would counsel the U.S. representative to review the FCPA and other commentaries on international PR, and to ask if the fee, rather than a routine expense, could instead be construed as an unfair attempt to gain influence and favor.

The natives may not know best

In addition, I would recommend that a company interacting with the news media in a country outside the United States enlist portada_elpaisthe services of broadly experienced international public relations counsel, and not just rely on employees who are native country.  I encountered this firsthand several years ago, when I led a “media tour” for my U.S.-based company, visiting major newspapers; for example, El Pais and El Mundo.

My role was as a corporate staff person, and I was working with staff from offices in Madrid, London and Brussels.  At the same time, a division of my company operated in Spain, and employed a Spanish national as a marketing-communications person, responsible only for the Spanish market.  When I mentioned that my colleagues and I had appointments at several major newspapers, she responded, “You must have the money to buy a lot of advertising.”  No, I said, we were simply briefing editors on our perspective on issues that might be of interest to the news media.  But she insisted that we could only obtain media coverage if we were willing to purchase advertising in those news media.

I note this because, although her views today would be viewed as crude and archaic, the division she worked for – managed by Americans – assumed, since she was a native of Spain, that she would know best.  As I expected, because she followed that approach and had a limited marketing budget, she purchased minimal advertising and gained next to no news media coverage.

Perhaps more importantly, the practices of that marketing person did nothing to build the company’s reputation or gain the respect of the local news media.  Fortunately, they were short-lived, as they also risked endangering our company’s reputation internationally.

Latin America: major growth – and increasing attention

As public relations practitioners represent their U.S. clients in other countries, and assess local public relations practices, it’s important to consider PR in Latin America.

Several years ago, as I met with international PR people from other U.S. companies, I often heard stories of bribery and less-than-ethical practices among news media on that continent.  Although I had very limited responsibilities with my company’s own Latin American operations, some of our executives there contented that it was common practice, for example, to purchase advertising in exchange for media coverage. And, based on reports of government corruption in such countries as Mexico and Columbia, U.S. executives likely assumed that such practices “came with the territory.”

Today, international media coverage of companies operating in Latin America is certain to increase, as the region experiences dramatic economic growth.  According to Global Reinsurance magazine, Latin America is “a hive of activity as highways, railways, stadiums, bridges, energy projects and other major construction takes place across the region.”  Brazil, the magazine adds, is setting the pace with the government anticipating around $100 billion in annual investment through 2017 to help the country meet its transport, logistics and energy needs.

So, based on rumor and stories about past practices, how should U.S. PR professionals approach Latin America?  To get a better picture of today’s situation, I contacted Jeffrey Sharlach, chairman, chief executive officer and founder of JeffreyGroup.  Headquartered in Miami, where it was founded in 1993, the public relations firm has long been viewed by U.S. firms as one of the best firms focused on the Latin American market.  Today, the company has offices in Mexico City, São Paulo, Buenos Aires and New York, in addition to Miami.

“We have never paid journalists for coverage, although at the time I first started working in Latin America I was told the same thing: journalists expect an envelope of cash with the news release,” Sharlach said.  “Still, once agencies like ours began representing the top companies and brands expanding in the region, it was difficult to ignore news of Nintendo, Discovery Networks, Kodak, MasterCard, and British Airways (to name a few early clients) investing in these countries.

“As other global agencies began to expand in Latin America, that trend continued, since most multinationals — and the firms that handle their communications — also had strict policies against paying journalists,” Sharlach said. “Today throughout Latin America, and particularly in the most populous markets of Brazil and Mexico, I would say without hesitation that nearly all journalists operate with the same high standards that you would find in most developed countries.”

With both business and information now operating on a global scale, and development continuing in many world markets, successful international public relations practitioners must adhere to the highest standards of ethics and professionalism. Failing to do so risks both the effectiveness of international PR programs as well as public, international reputations.

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Media relations in China: a matter of protocol

xinhua_news_agency_32633aWith news global and accessible 24 hours a day, it’s easy to assume (as many do) that public relations – and, in particular, media relations – is the same the world over.  But although “Western” style independent journalism is practiced in many locations, there are still cultural and political norms and customs that need to be considered by professionals who represent their clients to members of the news media.

That’s especially true in China, whose one-party political system affects the Chinese view of how the media – both domestic and international – should function in their country.  Approaching the news media in that country – for example, to seek attention and coverage for a U.S.-based client entering the market or doing business there – requires a very different protocol than in the United States.  In business journalism in particular, it relates to the importance of hierarchy in China’s political system as well as among a variety of social networks and organizations, and the guanxi – relationships – that are required to conduct business effectively.

In the United States, a public relations professional who wants to provide information or pitch a story idea about a client to the media typically contacts the reporter or editor who would most likely cover that story – who covers that “beat.”  Successful PR people work to become trusted sources for reporters who may have an interest in a given topic and what their client may have to say about it.

While relationships with individual reporters are important in China, there are several other critical relationships required to deliver a client’s message or story effectively.  To successfully obtain media coverage in China, the first step is not necessarily taken by a PR person with a reporter.  Traditional protocol looks to top executives of the client organization – for example, a U.S.-based company – to introduce themselves and begin the relationships with the top management of the Chinese government as well as the targeted Chinese media organizations.  I saw this firsthand when serving as the public relations person for a U.S. reinsurance company entering the China market in 2001.

We were interested in obtaining coverage for our company’s opening of a Beijing representative office, even though many Western insurers already had such offices in China. But there were still many topics and issues in the China marketplace on which our company could offer insights and expertise.  So, with the help of an experienced China consultancy based in Hong Kong, the Exceptional Resource Group, or “XRG” (www.xrg-china.com), we prepared a set of statements on such topics as China’s pending entry into the World Trade Organization and the importance of reinsurance in the development of China’s infrastructure.  We had those statements, along with company fact sheets, backgrounders and a news release – both in English and Mandarin – ready to distribute in a comprehensive media kit.

The relationship lunch

Then, at XRG’s recommendation and with their assistance, we took the first step: an informal relationship-building lunch with editors of the top national Chinese business and news outlets.  In a private room at a Beijing restaurant, we hosted the top execs of such publications as China Daily, China Insurance, China Economic Times, China Women’s Daily, the Xinhua news service, and others invited with the assistance of XRG.  This kind of informal lunch is feasible in China because all national media organizations work for and report to the same national government and political overseers. Interspersed around the large table were well-briefed senior executives from our company, along with strategically positioned interpreters.  All of us from the United States were prepared to talk about not only what our company wanted to bring to the Chinese marketplace, but our views about key economic and business topics and issues – the timely topics that would be of most interest to each one of the different Chinese news organizations.

The conversation was friendly, convivial and free flowing.  It also was interesting to observe the interactions of the editors, who knew one another but apparently didn’t see each other very often.  The lunch also was an opportunity for them to reconnect and talk candidly about issues of the day.

XRG brought to our attention an important caveat: although it was okay for the Chinese editors to openly voice their criticisms of their current situation in the informal lunch atmosphere, this did not mean that we, as foreign guests in China, could, or should, do the same thing.

As the end of the luncheon approached, we distributed our prepared media kits.  Then, as the news chiefs reviewed the materials, we saw the fruit of our efforts: the editors began pulling out their cell phones and calling their reporters, instructing them to attend our official opening reception the following evening and to ask for me.  The next day, before the reception was to begin, reporters showed up at the event, asking for our media materials.  (Later that evening, our company’s executives would cap the event with an official ceremony with officials of the China Insurance Regulatory Commission.)

Mutual respect and trust

Does this approach guarantee a company’s desired media coverage? Not at all.  The reporters I talked with asked smart and probing questions, and were just as prepared – if not more so – than reporters I met in Beijing from Western news services.  But our media relations approach reflected a respect for their culture, and helped to build relationships of friendly respect and trust, demonstrating how building guanxi guides business and similar interactions in and with China.  The resulting positive media coverage, reaching millions in the China marketplace, helped to introduce our company to this dynamic and growing marketplace.

As China’s news media has grown and developed, such an approach likely may not be feasible in all circumstances.  But as our success showed, a clear holistic understanding of how to build relationships and navigate the protocols in and between many different Chinese political, government and media organizations is fundamentally important not only to doing business in that country, but to conducting media relations as well.