Reimagining the Compliance Side of International Development

Among the thousands of professionals displaced when USAID was dismantled were numerous lawyers whose work had undergirded the agency’s programs worldwide, designing grant agreements and contracts, ensuring compliance, conducting due diligence to vet implementing partners and more. To explore how some of those experts now plan to deploy their skills, I spoke recently with Jonathan Ng, one such former USAID lawyer.

Ng emphasized the importance he places on maintaining the work he had previously done at the agency. As he told me, those efforts were too important to stop, because international development “feels more like a calling than a job.” However, Ng recognizes that the work was not without its challenges. He told me that advancing anti-corruption in the development sector sometimes engendered criticism or pushback at the local level, either from implementers, their partners or host country governments eager for things to move faster or disinclined to take outside advice on reforms.

In particular, I was curious about Ng’s views, in this post-USAID context, about the future of governance and rule of law programs, such as training for ministries, supporting civil society, and the like, which USAID funded so extensively. This is the type of proactive work that improves the business climate and the flow of deals that can help countries become less reliant on foreign aid by building a thriving private sector. Ng noted that other bilateral and multilateral agencies have long supported such projects, but those donors will need to step up to fill the void, given the high priority of such efforts. 

Following the dissolution of USAID, Ng, in collaboration with a team of other attorneys, launched a law firm, Mission Driven Counsel LLP, to support other organizations in the international development and humanitarian assistance space – such as foundations, impact investors, multilaterals and non-profits, as well as corporations doing business in emerging and frontier markets.

From the standpoint of working with commercial clients in particular, rather than on USAID projects, Ng anticipates that his approach will have to adapt. Helping companies protect their investments is different than protecting US taxpayers’ funds. He is eager to tackle this paradigm shift, making the rationale for compliance about the benefits to a firm, such as safeguarding its resources and earnings. Taking an economic approach to advising firms on risk management is different from a more strictly ethical and values-based approach to anti-corruption common within an international development context.

Along those lines, I was also curious how Ng sees the weakened FCPA, now several months along, affecting international business transactions. To his mind, it is important to work around that challenge, and to ensure that clients understand, notwithstanding the policy changes, that the substance of the law is still critical. At root, Ng said, the legal guidance is: “Don’t do business with bad actors.” Companies must continue to ensure compliance, keep their anti-corruption policies up-to-date and train their staff. The FCPA was the means to achieve that end, but the end remains. In his view, a greater risk is that some developing countries now, as he put it, “take their foot off the gas” without US influence, and could “default to the lowest common denominator.”

Ng told me he understands that companies might think that a trade-off between doing business ethically and getting the deal done is worth the risk – that they can afford the cost of some bribes if the profits are worth it. Thus, he thinks it is important also to quantify the costs of corruption in terms of intangibles, such as reputational damage or the risk of getting entangled in long-term corrupt relationships. Drawing on his long experience in emerging markets, Ng emphasized, “They may think that the trade-off might work, until it doesn’t.” 

Marc Schleifer

Governance, Democracy and Economic Development Expert