The companies that export corruption

Issues highlighted in the report: Settlements with companies should include admissions of guilt and should not preclude prosecutions of responsible individuals. Also, the settlement did not include any victims’ compensation and showed an unwelcome shift away from self-reporting as a condition for a deferred prosecution agreement.

What’s at stake: In the words of Daniel Bruce, Chief Executive of Transparency International UK: “Large penalties are a quick and effective way to sanction companies for wrongdoing, but they should be one of a number of consequences for egregious corruption cases such as this. Individual prosecutions in this case are vital to ensure that justice is seen to be done. Failing to go after those involved will give the impression that big companies play by a different set of rules and can simply buy their way out of trouble.”

In addition, governments should ensure that the victims of corruption are compensated, and that the perpetrators face the consequences they deserve. They should also ensure that settlements are only used in cases of strong public interest, with utmost transparency and to help encourage self-reporting by others in the future. Settlements should also meet high standards of transparency, accountability and due process.

Issues highlighted in the report: The leniency agreements resulting from the Operation Lava Jato investigations, including those relating to foreign bribery, are only partially accessible to the public in heavily redacted, anonymised versions providing little information.

The annexes where the foreign bribery conduct is detailed remain under seal. This hinders public understanding of the offences committed and impedes independent evaluation of the proportionality and dissuasive effect of sanctions imposed.

What’s at stake: Enforcement authorities and members of the public in the affected countries are deprived of key information that would help them to follow-up on domestic bribery cases.

Some of the leniency agreements, such as the one with Odebrecht, include confidential provisions requiring implicated companies to seek out officials in other countries where they bribed to settle pending matters.

Such arrangements foster opaque deal-making and deprive the public of the information needed to pressure any reluctant law enforcement officials into fully investigating domestic aspects of the corruption scheme.

The Odebrecht case exposed a wide range of high-level corruption as well as challenges to enforcement and international cooperation across the continent.

Issues highlighted in the report: As part of the decision, the regulator required the company to publish an extract of its ruling “in a medium of wide circulation and in a visible part of its website”. This was a welcome and innovative form of transparency about an enforcement outcome.

What’s at stake: This was s the first company to be fined for foreign bribery by the Superintendency of Corporations, the local enforcement body established by Colombia’s Transnational Corruption Act of 2016, designed to meet the requirements of the OECD Anti-Bribery Convention. There is a serious lack of transparency about enforcement information in most OECD Convention countries and the Colombian regulator showed a different approach.

Issues highlighted in the report: This case highlights how slow the Belgian enforcement authorities have been and their lack of resources, as well as a greater need for international cooperation. Victims also have an important role to play and their compensation should be built into case outcomes.

What’s at stake: In September 2020, leaked electronic correspondence revealed that the Belgian passport company paid the former Secretary of State for Public Security of Madagascar €120,000 (US$ 140,000), possibly more, in explained fees. This same top official, Lucien Victor Razakanirina, contracted Semlex Group to provide the nation’s biometric passport at a sky-high price, equivalent to a month’s salary on minimum wage. The leaks also revealed that Razakanirina received a share of the passport sale, at about 2 euro apiece. TI’s Malagasy chapter asked the competent authorities to investigate these allegations.

What’s at stake is the possibility of intervention in cases of victims and their representatives and that this may help lead to results in the long-running case.

Issues highlighted in the report: Without parent company responsibility to ensure adequate anti-corruption preventive measures in their subsidiaries, there is insufficient deterrence. . Increased liability of parent companies for subsidiaries could help deter cases of foreign bribery and related money laundering.

What’s at stake: Parent company liability for subsidiaries in foreign bribery cases would mean additional deterrence in the form of potential enforcement by the authorities in several countries.

With parent company responsibility to ensure adequate anti-corruption preventive measures in its subsidiaries, the Dutch and Russian parent companies might be held liable if the Czech company were found liable for foreign bribery.