As with our survey in 2012, respondents identify West Africa and
sub-Saharan Africa as the most risky regions to engage in
agribusiness activities. The Middle East and North Africa (MENA),
followed by Russia and the CIS, and China and India, are also
considered higher risk regions.
42 per cent of respondents are concerned about contractual
risks, followed by land title (27 per cent respondents) and
enforceability issues (21 per cent). They note that these risks are
generally heightened for transactions in emerging markets.
Several respondents highlight the difficulty in enforcing
contracts and rights. For some, the legal environments with which
they deal can be unpredictable and the amount of time it takes to
enforce their rights can be lengthy.
About a quarter of respondents see bribery and corruption risk
as being 'high' or 'very high'. Respondents
highlight Africa and Asia as the main regions where bribery and
corruption risk in the sector is high.
Respondents point to the price-fixing scandal involving infant
milk formula in China. Price-fixing investigations also regularly
occur in the developed world in the agricultural sector as well as
other industrial sectors.
Respondents note that profit margins can be expanded by
targeting emerging markets, but that this may increase exposure to
bribery and corruption.
Many respondents (77 per cent) have seen no change in the
potential for exposure to bribery and corruption; a few (6 per
cent) report a decline.
"Essentially as a PLC we need to make sure
that what we do can withstand the scrutiny of the stock exchange
Stephen Wheatcroft, Trader, Wilmar Oils and
Respondents comment that more instances of bribery and
corruption have been exposed in recent years, and this has served
to encourage organisations to address potential internal problems.
As regulatory and investigative agencies around the world are more
active in seeking out bribery and corruption, companies are taking
extra steps to mitigate the risk of prosecution. Several
respondents suggest that bribery and corruption is becoming a
bigger problem because of the growing status and influence of
emerging nations in the food and agribusiness sector.
A large number (81 per cent) of respondents have formal
anti-bribery and corruption compliance programmes. Antibribery and
corruption compliance programmes may also be included in general
corporate compliance programmes, policies and procedures.
However, it is noteworthy that one in five organisations does
not have a formal anti-bribery and corruption compliance
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