Major exporters continue bribing abroad
OECD Convention needs greater enforcement, says new TI report
Over half of the world’s major exporting countries are still lacking the political will to prosecute foreign bribery, according to a new report by Transparency International (TI).
The 2007 TI Progress Report on OECD Convention Enforcement shows that more than half of 34 parties to the OECD Convention on Combating Bribery of Foreign Public Officials are not enforcing the Convention or keeping their commitments. Signatory countries account for about two-thirds of world exports of goods and services. At the same time, there is now significant enforcement in 14 countries compared with 12 in 2006 and 8 in 2005.
“Stronger measures must be applied to ensure compliance by governments that have not shown the political will to prosecute foreign bribery. Inaction by one country undermines enforcement by others, ultimately hurting international competition and business”, said TI Chair Huguette Labelle.
Of the eight largest exporters, France, Germany, Italy, the Netherlands and the United States have made important progress in enforcement; however, there have been no significant prosecutions in Canada, Japan and the United Kingdom.
“Allowing companies to compete through bribery is short-sighted and will backfire. Major exporting countries stand to gain by complying with their own commitments and stopping companies from undermining efforts to improve governance and strengthen institutions overseas”, added Labelle.
The termination by the UK of the investigation into allegations of bribery by BAE Systems on the Al Yamamah arms project in Saudi Arabia represents a major setback for the Convention. The UK’s claim that national security interests override the prohibition of foreign bribery creates an open-ended loophole that other countries could readily use. In addition, the UK should take prompt action to enact a new anti-corruption law to correct the current antiquated law. With the new leadership in the country, there is an immediate opportunity to correct this situation.
The key problem in non-enforcing countries is lack of political will. Additional obstacles identified in the Report include national legal systems that do not sufficiently comply with the convention’s provisions and a lack of resources which in turn hinders investigations and prosecutions.
Rigorous company compliance programmes are missing in many countries that are economic powerhouses and the base for major multinationals. The continuation of strong monitoring measures by the OECD, including country visits, is essential if any real advance is to be made. Increased awareness that bribery is illegal along with better complaint procedures and whistleblower protection for public and private sector employees, will increase willingness to report cases.
The 2007 TI Progress Report on OECD Convention Enforcement is the third in a yearly series and examines the enforcement performance of 34 of the 37 countries that have ratified the OECD Convention on Combating Bribery of Foreign Public Officials. It is based on information provided by TI national experts in each country. For the first time the report includes summaries of prominent foreign bribery cases involving multinational companies in the oil and gas, telecommunications and defence sectors. Effective enforcement of the Convention is crucial to the fight against international corruption by targeting the supply side of global corruption.
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Transparency International is the global civil society organisation leading the fight against corruption.
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