Welcome to London

By Martin Vogel

Home to the reputationally challenged.

There’s some interesting coverage today of the reputational fallout of Britain’s relationship with Libya.

Philip Stephens, in the FT, examines London’s status as a place where dictators can launder their image.  He portrays a city where it is just so much a part of the everyday culture of business to deal with unsavoury regimes that the risks are normalised.

Britain, he says, has become a “coin-operated laundry for the reputationally challenged.” He’s referring not only to the PR agencies which cast dictators in a more benign light, but the investment advisors, hedge funds and private banks that help them recycle ill-gotten money into more legitimate vehicles.

But, in contrast to the fashionable view that the modern media environment – with its Wikileaks and social networks –  leaves no place to hide, he minimises the capability of the media to publicise this kind of activity.  This is because Britain offers another advantage to those wanting to launder their reputation:

“It comes in the form of draconian libel laws and, this goes without saying, a battery of lawyers ready to ensure that the protection of the courts is put at the disposal of anyone with sufficient riches to pay their exorbitant fees.

“The media has been muzzled. To dig deep into the dealings of peripatetic billionaires and foreign despots is to invite instant legal challenge. The law demands journalists provide absolute proof of dubious dealings. That’s hard to find in the wild west of the former Soviet Union or the closed world of Middle Eastern autocrats. So, in spite of the occasional bouts of indignation, Britain shrugs its shoulders and gets on with the washing.”

This may provide some comfort to dictators and oligarchs.  But as Michael Skapinker, also in the FT, points out there are many who are now having to account for their relationships with dictators.

While he emphasises that few organisations are immune from the perils of doing business with dodgy regimes, he suggests that it is at least reasonable to expect companies to avoid actually becoming agents of repression.

But even here, it is hard to draw a firm line.  Vodafone was criticised for complying with a request from Hosni Mubarak’s regime to shut down its network in Egypt.  It had to choose between the interests of the regime and the safety of its workers and chose the latter.

As Michael Skapinker argues, companies cannot avoid have a clear understanding of their ethical position:

“The battle for corporate principle is one you fight every day but it is easier when you have a firm idea of the line your company will not cross.

“Every organisation needs its own sense of where that line is. It might be that it will never be complicit in torture or act in a way that will put regime opponents at risk or, as Vodafone argued, that it will put its employees’ safety first.”

Sensible advice.  There’s a beguiling safety in aligning one’s practice with the prevailing consensus.  But when the reckoning comes, there’s no substitute for one’s judgment having been reached with integrity.