Perspectives on Corruption in Latin America 2024

As part of the initiative led by the firm Miller & Chevalier to periodically evaluate the impact of corruption on business in the region, the Survey on Corruption in Latin America 2024 was published, the results of which were discussed and analyzed on April 25 by the “Panel on Corruption in Latin America 2024”. The panel featured the notable participation of Alejandra Montenegro Almonte and Gregory Bates, partners at Miller & Chevalier, with moderation by Juan Carlos Tristán, a partner at BLP. 

This initiative, which began in 2008, seeks as part of its objectives to provide recommendations on how to attack corruption in the region and mitigate the identified risks. The 2024 survey involved 14 Latin American law firms, of which BLP stands out. 

Among the results published this year, 80% of the 1,072 respondents in the 2023 edition indicate that their companies have taken measures to protect themselves from the risk of corruption. For their part, 41% of those surveyed consider that their companies have lost business to competitors who have made illicit payments, versus 47% who answered affirmatively in 2020. 

In the case of Costa Rica, 88% of companies carry out anti-corruption training, and 82% have policies on this matter. Additionally, 43% of those surveyed consider that corruption is not a determining obstacle to developing their businesses in Costa Rica; 20% believe that corruption does constitute a challenge in developing their businesses and decision-making. Regarding prosecuting offenders, Costa Rica leads the index with 75% of respondents stating that the country criminally prosecutes acts of corruption. The above is directly related to the effectiveness of the laws and the unique results of this issue in Costa Rica since the country is above the regional average in Latin America in terms of the perception of the effectiveness of the laws with 48% (8 points above the regional average). 

The other side of the coin is that respondents classify political parties (72%), municipal governments (67%), the executive branch (65%), and the legislative branch (64%) as the most corrupt entities, which denotes an important challenge and focuses attention on measures to mitigate corruption in public institutions and positions of popular representation. Uruguay and Costa Rica have the lowest levels of perception of corruption in government entities within the region, which goes hand in hand with the confidence they have to report corrupt activity and maintain effective reporting channels. 

The study enables us to conclude that corruption in Latin America remains a real risk and a challenge for business. However, private companies have shown that change and progress in risk mitigation can be achieved through effective compliance programs; moreover, a significant change can be seen in the business culture in Latin America. These positive developments in ethics and compliance result from multiple efforts developed at both the public and private levels. 

Without detracting from the above, the main challenge to conclude from the study revolves around the implementation and effective execution of anti-corruption laws. In the case of Costa Rica, the last four years have been very positive in the issuance of new statutes on ethics and anti-corruption; nevertheless, there is a perception of inefficiencies regarding the uniform application of these laws and their sanctioning regime. 

Among the recommendations to companies that confront corruption are implementing and monitoring compliance programs, developing mechanisms to improve and disseminate compliance programs, performing periodic audits, and strengthening their internal compliance mechanisms.