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 the 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.