International Aspects
of Engineering Ethics
Examples of ethical issues in some other
cultures and countries…
The fuzzy line between gifts and bribes
“Grease” payments and US law
Bribery (and Extortion)
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Bribery: A gift or payment offered or
solicited in exchange for some other action,
when the action in question is not one to
which the recipient is entitled.
Extortion: A payment demanded in
exchange for prevention of some
unwarranted harm that otherwise would not
occur.
Bribery and the law

Federal (1977 Foreign Corrupt Practices Act)
and state laws make offering or soliciting a
bribe a criminal offense.
“Grease” payments
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A gift or payment solicited from an applicant
by an official to expedite the handling of a
request for a service or action to which the
applicant is generally entitled.
Grease payments are a form of petty
extortion, and common practice in some
countries.
“Grease” payments and US
law
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US law (FCPA) does not prohibit US
engineers working in foreign countries from
making such payments for “routine
governmental action” for permits, etc.
However, any payment to other private
entities or any payment with the intention of
gaining new business is illegal under the
FCPA.
Gifts and Japanese business
customs
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Gift giving has long been a tradition in
Japanese business.
Shinto, Japan’s main religion, is built on
ritual and ceremony, not a moral basis.
There is a fuzzy line between gift giving,
commissions, “introduction fees”, which are
all part of traditional Japanese business
practices, and bribery.
A case of bribery in Japan
In 1972 All Nippon Airline (ANA) decided to
purchase 21 Lockheed Tristar L-1011 airliners for
about $105 million.
 This surprised most industry observers who had
expected ANA to select the DC-10 to replace their
aging Boeing 747 fleet, because of close business
ties between ANA and McDonnell Douglas.
 In 1976, former Prime Minister Kakuei Tanaka was
arrested for alleged involvement in the multimillion dollar Lockheed Aircraft bribery scandal.
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Bribery in Japan…
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It was discovered that Lockheed had paid 2.4 billion yen to
win the ANA contract.
500 million yen went to Prime Minister Tanaka, 160 million
yen to ANA officials, and the balance to various other
political leaders.
Tanaka was found guilty of accepting a bribe, but he
delayed by appealing the verdict and stayed out of prison
until his death in 1993.
(In 1977 the US passed the FCPA)
(Case from Joseph M. Katz Graduate School of Business webpage, Univ. of
Chicago)
Product Liability issues in
Japan
Before Japan’s 1995 Product Liability Law,
compensation for damages caused by defective
products was usually settled through direct
negotiation between the victim and the maker,
resulting in a discrete settlement without making
the facts about the problem public.
 Before this law, injured parties had to prove fault
by the manufacturer. For various reasons, it was
very difficult for consumers to prevail in court.
Thus, only about 160 product liability lawsuits were
filed in the 50 years prior to the adoption of the
1995 law.

Product Liability issues in
Japan
Japan’s new law is based on European laws rather
than the more liberal US model.
 The law defines defects only generally as "a lack of
safety normally expected for a product".
 Like US law, it is a defense if the manufacturer can
show that, at the time of product delivery, the
hazard could not be predicted with then-current
technology.
 The Japanese law requires the cause of the failure
to be established by a government research
institution.

A comparison of Japanese and
American tort law
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Conflicts: Americans seek resolution in courts,
whereas Japanese prefer negotiation.
Sanctions: Americans strive to recover material
loss, whereas Japanese seek to recover
emotional loss.
Justice: Americans are concerned with universal
justice whereas Japanese try to attain harmony
inside the group.
Bridging the Communication Gap : How IBM Succeeded in Japan,
Jack Seward, Howard Van Zandt : Japan : The Hungry Guest, Japan :
Lotus Press, 1985, p 239
Mexico and piracy of
intellectual property
The U.S. music, film, and software industries
estimate that they lose $485 million annually to
piracy in Mexico, the third largest producer of
pirated intellectual property.
 In one year, Mexico City pirates sold 66 million
music cassettes compared with only 30 million
legal sales.
 Piracy is viewed as a means of employment for a
large portion of a population which is already
suffering from unemployment.
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Preston, Julia, "As Piracy Grows in Mexico, U.S. Companies Shout Foul,"
New York Times, April 20, 1996, pp A1.
Cheap labor and exploitation
Maquiladoras are Mexican plants, owned or directly
employed by a U.S. company, which assemble goods for
sale in the U.S. GM, Ford, AT&T, General Electric, and
Johnson & Johnson are just some of the well-known US
companies that employ thousands of workers in the
Mexican maquiladora industry at only $35 to $55 per week.
 The Mexican government does not enforce labor laws on
foreign companies, and foreign companies are much harder
for Mexican citizens to take legal action against.
 U.S. companies in Mexico are bound only by their own
ethical codes, and not necessarily by legal codes.
 Is this ethical or is it exploitation?
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Peters, Susanna, "Labor Law for the Maquiladoras: Choosing between Workers'
Rights and Foreign Investment," Comparative Labor Law Journal, Vol. II,
Number 12, Winter 1990.
Environmental issues in
Mexico--freon
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There are many examples where Mexico and the US are in conflict over
environmental issues.
Industrialized countries have agreed to end production of freon
refrigerants. The US acted in 1996 to restrict manufacture of freon.
Developing countries, including Mexico, are not restricted from
manufacturing or using this product, and this situation has created
problems in the US.
A black market exists in the US for imported freon refrigerants, which
sell for over $30/lb here, now. The retail price of this product was
about $1/lb before the 1990 ban. Profits can be higher than for
cocaine smuggling.
“You name it, they’ve tried it,” says Marc Gwaltney, a U.S. Customs
official in Los Angeles. He cites a taco stand in Tijuana, Mexico. “In
addition to a taco, you could buy a one-pound can of Freon, put it in
your pocket, and walk back across the border.”
A scheme to divert a 72,000 lb shipment of freon from Russia to Mexico
was thwarted in 1995.
Environmental issues in
Mexico--water
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Most residents in the U.S. have abundant access to water.
An exception is along both sides of the US-Mexico border.
Even there, some corporations are privileged with priority
access to water.
A maquiladora in Piedras Negras produces over 21,000
pairs of pants daily, using a huge quantity of water 10
enormous washing machines in the process used to make
the fabric wrinkle-free.
At the same time, nearby colonia residents struggle to have
sufficient potable water for their basic cooking and
consumption.
I. Coronado and G. Kourous, “Water Conflict in the
Borderlands”Borderlines 57, vol. 7 no. 6 1999.
Environmental issues in
Mexico--wildlife
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“MEXICO CITY, Mexico, March 3, 2000 (ENS) - After a five
year battle by environmentalists, the Mexican government and
Mitsubishi Corp. announced Thursday they have canceled
plans to build the world’s largest salt plant in a gray whale
breeding lagoon. The project, situated in the heart of the last
pristine breeding grounds for the California gray whale, had
drawn opposition from scientists, Hollywood stars and
government officials around the world…”
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Mitsubishi planned a 116 sq.-mile salt plant that threatened
calving waters for the recovering Pacific gray whale population.
A fight led by environmentalists (International Fund for Animal
Welfare) was successful in mobilizing public opposition, and
convincing the Mexican government and Mitsubishi to
terminate the project.
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German Business Culture
Germans tend to take themselves very seriously.
They do not tend to joke during meetings or
presentations.
 Presentations should be well thought out, carefully
researched, thorough and orderly. German
businessmen like facts, more facts, examples, and
a summary of all main points at the end. They do
accept new information, but are very persevering
and persistent when assessing new situations and
ideas.
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German business culture,
cont’d…
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Many Germans tend to be more frank than Americans. They have a
forceful manner of speaking, but tend to use restrained gestures. They
can sometimes be seen by others as insensitive and pushy.
Although they dislike personal confrontation, they do not hesitate to
point out if a foreigner does not meet acceptable behavior.
Since German society has not been very mobile in the past, many are
not used to dealing with strangers. This is slowly changing, however, as
they too become more global and interact more with foreigners.
To a greater extent than Americans, they are typically well informed as
to what is happening across Europe and in the rest of the world.
They have a strong sense of privacy and seldom invite people to their
homes.
German business culture,
cont’d…
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They do not like questions about family or their personal life, and they
tend to avoid personal relationships in business. They are often
uncomfortable with "small talk" and like to get right down to business.
Their personal space tends to be a bit larger than Americans and they
tend to dislike touching, but do use direct eye contact.
Germans dislike boasting and believe in cooperation, not competition.
Reliability , loyalty and the integrity of the company are very important.
Germans are meticulous about appointments. They are made very far
in advance and everything must be planned out. Punctuality is very
important. Do not be late! Meetings will start on time and end on time
even if its aims are not accomplished. Time consciousness is
important, as is adhering to an agreed-upon schedule.
German etiquette--some do’s and don’ts…
Use formal greetings and a firm handshake.
 Never use first names unless invited to do so.
 Managers tend to keep office doors closed.
 Top managers dress more conservatively than middlemanagement and nonprofessionals.
 Waving the hand back and forth means "no".
 To signal the number "one," hold thumb upright.
 Gum-chewing is considered impolite for professionals.
 Putting your hands in your pocket while talking is impolite.
 The OK gesture is considered rude among the more
cultured.
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Germany—bribes and
kickbacks
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Problems with bribery are not uncommon in the German
construction industry, where competitive bidding from both
the public and private sector takes place for building
contracts. An anti-corruption squad in the state of Hesse
uncovered 1,500 cases of public officials on the take
between 1987 and 1995. The anti-corruption squad
estimated the average bribe added 3% to 5% to every
building contract. Kickbacks, bribes, and other schemes
contributed to an estimated additional cost of 20% to 30%
to projects, costing taxpayers billions per year. Auditors
complain that they have no mandate to look for improper
expenditures, and the German tax code actually allows
deductions for bribes.
France—bribes and
kickbacks
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The problem of bribes and kickbacks in
France is not uncommon. For a construction
firm to secure a contract often requires
donations to local political parties, from
which a generous fraction is skimmed by the
local political officials.
France—bribes and
kickbacks
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Not just companies are involved. According
to a French secret service report, the official
export credit agency of France paid around
$2 billion in bribes to foreign purchasers of
“defence equipment” in 1994.
The Engineering “profession” in
France?
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Because of a lack of organization of the French engineering
profession, until 1987“…there was no code of ethics for
engineers in France. For cultural and historical reasons, the
question of being or not being a profession is not an issue
in France. Therefore, professional ethics have not been
developed as in English-speaking countries.”
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Except for a 1934 law protecting the term “Graduate
Engineer”, the practice of engineering is not protected or
regulated.
Ironically, “…France is the one country in the world where
the social status conferred to the engineer is the highest.”
Christelle Didier, Centre d’Ethique Contemporaine.
Université Catholique de Lille
Canadian Business Ethics
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Canadians are averse to any appearance of
impropriety.
Cronyism and Nepotism are not favorably
looked upon in Canada.
Bribery is not tolerated in Canada.
Generally speaking, Canadians are
somewhat suspicious and disapproving of
the wealthy.
United Kingdom
Some building regulations include a "deemed to
satisfy" provision; work performed in conformity
with the engineers’ codes of practice automatically
satisfies statutory building regulations.
 In the US, this is not the case, and simply
satisfying all regulations will not protect a designer
against a claim, when the design is not consistent
with engineering standards of practice.
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Vivian Weil, “Prospects for International Standards”, the Online Ethics
Center for Engineering and Science