By Kartik Lokhande
A
news item that an official of a high-profile consultancy group
PricewaterhouseCoopers (PwC) is under the scanner of Central Bureau of
Investigation (CBI) in the latest corporate espionage case, may appear
to be a small piece of information. However, if put in perspective, it
hints at a phenomenon that has been there in too brightly lit corridors
of business, and hence, not visible to naked eyes of many.
This is
not the first time that corporate espionage or economic espionage
involving the topmost corporate houses of the country having complex
partnerships/links with foreign entities, has come to fore. There had
been several cases. One major case that had rocked the nation, is now
popularly known as ‘Radia Tapes’. It involved mainly telecommunications
industry bosses, celebrated names in media operating from the corridors
of power in Mumbai and New Delhi. The latest case that has come to fore
after leaks of confidential papers from Oil Ministry, concerns oil,
petroleum, and energy industries.
This kind of espionage has been on
the rise, or, shall one say, going deeper into the Indian corporate
flesh, since India’s emergence as one of the most sought-after markets
in the world. With increasing inflow of foreign institutional investors,
raise in foreign direct investment (FDI) caps in various sectors, and
increasing competition among corporate entities that are here to make
money, more such chapters of economic espionage may be in the offing. At
the root of all this is the lust of the corporates to increase their
profits.
Doing business ethically, following all norms, and being
transparent at the same time has been made increasingly impossible in
India, mainly due to complex set of laws, taxation structures, political
appointments on regulatory bodies, and corporates wielding influence in
shaping of public policy. As a result, there is always a cut-throat
competition going on among corporate houses. This results in many
corporates trying to be in good books of Government authorities. To
strike cordial relations with the ‘officers who matter’, these
profit-oriented entities have started appointing former senior officers
and former or working journalists well-acquainted with the ‘systems’ and
‘channels’ in various ministries. Through them, the business houses try
to ‘collect’ information vital to their interests vis-a-vis competition
from others.
With this ‘mechanism’ getting prominence especially
over past two decades, the set has become ‘well-oiled’. Then, there are
several consultancy firms that are engaged officially. Some of these
consultancy firms often present proposals to the Government departments
to conduct ‘reality check’ or assessment or SWOT analysis, and suggest
ways and means to improve efficiency. Mostly, such assessment or
analysis reports are consigned to piles of files gathering dust in
various departments. But, under the facade of conducting such
assessments, these consultancy firms get an access into the functioning,
hierarchy, decision-making mechanism, quality of manpower and other
such details. In the process, consultancy firms identify the persons who
could be ‘of use’ later on.
Same thing happens in many scientific
research organisations also. There, too, some scientists are
‘identified’ by corporate houses lobbying with the Government agencies
for a particular policy decision. Later, participation of these
scientists at various conferences/workshops, their researches with a
defined objective are sponsored. And, when these ‘chosen few’ scientists
come up with inferences serving the interests of corporate lobbies,
those are quoted often in media to create a ‘conducive’ atmosphere for a
favourable policy decision from the Government side.
Defence
sector, too, is not untouched. Several cases of defence kick-backs had
come to fore mainly out of fierce competition between two or more
industries. Many cases have been reported in the past. With the Indian
market generating more and more demand for gadgets and vehicles,
engineering and technology firms also are locked in aggressive
competition. This has led to many unreported cases of design thefts,
leak of plans pertaining to acquisition of land for new plants, plans
for procurement of new equipment, passing on of documents relating to
new product marketing plans etc. In many cases, even the Government’s
stand in a particular court case is leaked to interested party, if it
concerns a corporate house.
And, this net of corporate or economic
espionage is widening with the growth of ‘market’, which has fuelled the
lust for more profits.
Many sensitive and confidential documents
are leaked from ministries, banks, financial institutions, regulatory
bodies, tax authorities, public sector units, stock exchanges, legal
service firms, Chartered Accountants, giants in particular sectors,
Government departments, scientific research organisations, etc.
To
arrest this, many companies have started installing safeguards and
‘Access Control Offices’. The Government, too, has ‘strengthened’ the
Information Technology Act. However, those bypassing the laws have
evolved newer mechanisms for pay-offs and have managed to remain free.
For instance, it has come to fore in the latest corporate espionage
case, those ‘collecting’ the information had helped form an NGO to park
funds meant to be utilised to pay off the information-givers. There are
thousands of NGOs in India that receive funds, from domestic and foreign
entities, but do not file audit reports with the Government agency
concerned. The Government has issued ‘warnings’ time and again, but that
is all. There is a problem too -- How can one expect the Governments to
act in such cases, when all the political parties shy away from
disclosing their own source of funding?
The phenomenon of corporate
or economic espionage cannot be stopped, but can be controlled by way of
putting in place deterrent mechanisms and laws. The United States has
Economic Espionage Act, India does not have one. This may be one area of
thought. Another area could be to make appointments to various
regulatory bodies free of political influence. Tracing the source of
funding of various NGOs and so-called study/research groups, may also
yield some good results.
India also needs to evolve a
checks-and-balances mechanism while granting access to
sensitive/confidential information. Ensuring least involvement of
consultancy firms, carrying out in-house assessment of functioning of
various Government agencies, increasing efficiency levels, and making
everyone accountable also may produce good results.
Of course, most
important things will be to provide level playing field to businesses,
let them grow on sheer merit of their product, ethicality, and
non-corrupt trade practices. Whether these are possible in the
environment of profit-making, remain to be seen.
(Filed on March 15, 2015)
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