Huawei's global economic model based on bribes

WASHINGTON – In Algeriahe was prohibited from bidding for public contracts after one of his leaders was found guilty of corruption.

In Zambiait has been studied Bribery charges linked to multi-million dollar contract build cell towers in rural areas.

In Solomon Islands, was accused of offer millions of dollars to the ruling party in exchange for a fiber optic submarine cable contract.

In all three cases, and half a dozen more in recent years, the alleged perpetrator was Huawei Technologies, the Chinese telecommunications giant who faces the scrutiny of Western countries following allegations of theft of intellectual property and espionage.

The company has denied the corruption charges and he said that he had strong guarantees against corruption in the company.

In a statement posted on its website, Huawei said it has a "zero tolerance" policy on transplantation.

"Huawei believes that corruption seriously harms fair market competition and poses a threat to the development of our society, our economy and our business"said the statement.

But experts who have studied Huawei's business practices say that the company's statements contradict their behavior.

"Unfortunately, the reality of Huawei's activities on the (African) continent is that they have demonstrated their involvement in corruption and other dubious trade agreements"said Joshua Meservey, an African expert of the Heritage Foundation, and the author of a recent report on corruption in Chinese companies.

With commercial operations in over 170 countries and an annual turnover of $ 108 billion, Huawei is the world's largest supplier of telecommunications equipment. Last year, the multinational beat Apple and became the world's second largest maker of smartphones and tablets.

Huawei rejected the charges. In a recent letter to the UK Parliament released last week, Huawei refuted the charges of espionage and said that if the company was involved "in malicious behavior, it would not go unnoticed, and it would certainly destroy our business.

In the developing countries of Asia and AfricaThe corrupt business practices of society are of great concern to industry officials and civil society activists.

In the last 12 years, Huawei and his little Chinese rival, ZTE, they were "wanted or convicted of corruption" According to Andy Keizer, a former intelligence committee member of the House of Representatives, up to 21 countries.

These include a dozen African countries like Algeria and Ghana, as well as the Philippines, Malaysia, Norway, Papua New Guinea, Mongolia, Solomon Islands and China itself, according to Keizer.

"ZTE and Huawei have developed a dubious reputation around the world"Keizer testified before Congress last June.

The transaction cost of Huawei's corrupt business is several billion. RWR Advisory Group, a consulting firm that tracks Chinese investments around the world, estimates that Huawei has concluded over $ 5 billion in trade deals on corruption charges.

The charges against Huawei goes from absolute corruption to illegal donations political parties in exchange for contracts and other business benefits.

The Algerian case involved an elaborate scheme in which the leaders of Huawei and ZTE supposedly they paid $ 10 million in bribes a former telecommunications manager and a businessman in exchange for winning contracts.

In 2012, an Algerian court sentenced former executive and businessman for receiving bribes. The two Algerians were sentenced to 18 years in prison.

Three leaders of Chinese companies were also tried in absentia and sentenced to 10 years in prison for their role in the plan.

Government fined Huawei and ZTE banned them from awarding public contracts for two years.

In Ghana, Huawei has faced charges of illegally fund the ruling party, a charge that Huawei and other Chinese companies have faced in other countries.

In 2012, an opposition group revealed what it claims to be proof that Huawei had made illegal contributions to the Democratic National Congress during his election campaign in return for a $ 43 million tax break. of dollars.

The Alliance for Responsible Governance (AFAG) has prepared invoices and other documents showing that the Chinese telecommunications company had paid millions of dollars in campaign props for the ruling party's 2012 election campaign.

In return, according to the group, the government has awarded "one of the most lucrative contracts to be distributed by the government": a $ 150 million contract for the construction of an eGovernment platform.

Huawei and the government have denied the accusations.

Huawei has already faced similar charges.
In Solomon IslandsHuawei faced similar charges. In 2017, a parliamentary committee accused the government of granting Huawei a contract for the construction of a fiber optic submarine link with Australia, after what Huawei will offer a campaign donation of $ 5.25 million to the ruling party.

"The committee is of the opinion that this is the main reason why the government ignores the supply requirements for Huawei," said a parliamentary report.

Huawei rejected the charges.

"As a global business entity, Huawei does not enter into politics and Huawei forbids all its global affiliates to do any type of political donation, even in places where this practice is legal," he said. the company in a statement.

Corruption charges also hurt Huawei's plans in SSouth Africa, Nigeria and Pakistan. But the company seems to have overcome these accusations and has positioned itself as a major player in building 5G networks around the world.

Until last February, Huawei had signed 25 memoranda of understanding with telecom operators around the world to test 5G equipment, according to a Reuters poll on public announcements.

In recent years, HUawei was also a victim of the Chinese government's crackdown on internal corruption. In 2017, the head of the Huawei mainstream business group for China was arrested on suspicion of bribery.

Eradicate corruption among its employees, Huawei said it has put in place policies that require executives to take an oath of loyalty. But the guarantees have "limited value if the material incentives offered to employees do not reflect these priorities," said Alexandra Wrage, president of TRACE International's trade organization.

"This danger can be compounded when a company maintains the political and financial support of the government, which is often seen as encouraging greater risk tolerance in the pursuit of growth," Wrage said.