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Friday, 10 April 2009

Corporate Bribery on the Rise Worldwide

By Anthony Stoppard

Inter Press Service 

International conventions have not stopped multi-national corporations from trying to secure valuable contracts by bribing government officials in the world's emerging economies - especially in the arms and defence, and public works and construction industries.

Transparency International Kenya Director, John Githongo, called for anti-corruption legislation and conventions to be enforced.

''Fine words are not enough. Until people are brought before the courts, the Organisation for Economic Co-operation and Development Convention (OECD) convention on bribery will not make a difference to the developing world, where money is siphoned off from schools and hospitals and essential public works projects,'' he says.

He adds that bribery and corruption in business deals also hampers the development of free and fair trade and economic development. The OECD convention makes it illegal for companies from member countries to bribe government officials. The United States has had similar legislation for over 20 years.

TI is an international coalition against corruption and the organisation has released a Bribe Payers Index (BPI) -- a survey designed to measure perceptions of bribery by companies from the industrialised world -- in Johannesburg on Tuesday.

The survey was run in 15 emerging market economies - including South Africa, Nigeria, Argentina and Russia, among others.

The BPI was commissioned after developing countries objected to the TI corruption index - which measures perceptions of corruption across the world. Developing countries appear very high on this list because they are usually perceived to accept bribes, while the industrialised countries did not appear because the corruption index did not look at who was paying the bribes. Unfortunately, domestic companies in developing countries are on top of the BPI - this means local firms most often offer bribes to officials to secure contracts. Next come companies from Russia and then the People's Republic of China.

Companies from France, the United States, Japan and Italy - all part of the Group of Eight Industrial countries (G8) - are in the top ten of perceived bribe paying nations. Companies from Australia are seen as least likely to pay bribes.

The acting Chief Executive Officer of Transparency South Africa, Larry Kaufmann, points out that the industrialised countries have committed themselves to kick-starting economic growth and social development in Africa - through the New Partnership for African Development (NEPAD).

He called on them to help Africa tackle the problem of corruption by enforcing their anti-bribery conventions. G8 countries have closely linked improved trade and aid deals for Africa to the countries of the continent cleaning up corruption in their governments.

Githongo points out that very often money obtained through bribery and corruption in Africa ends up in offshore bank accounts in industrialised countries. By tightening their controls on money laundering, for example, industrialised countries could also make it harder to get away with bribery and corruption in Africa and the developing world.

''Bribery and corruption is globalising faster than TI,'' he says ironically.

Africa is trying to tackle corruption on the continent. The Southern African Development Community (SADC) and the Organisation of African Unity/the African Union all have anti-corruption conventions. But, Githongo warns that there is a serious lack of institutional capacity in African countries to enforce these conventions.

TI is trying to raise public awareness about the anti-corruption legislation and is presently discussing ways that the organisation can help tackle bribery and corruption in the developing world. They expect to come-up with a programme of action in the course of the year.

The survey shows that only a small percentage of international businessmen know about the convention or had plans to enforce it in their companies. Most of the business experts interviewed wanted to eliminate corruption from the courts, political parties and the police, among others. Only marginally more respondents felt that corruption was not getting significantly worse in their countries.

''The BPI results signal the rejection by multinational firms of the spirit of international anti-bribery conventions, while their actions lead to a huge misallocation of very scarce resources in developing countries,'' says TI Advisory Council Chairperson, Kamal Hossain.

''Today's BPI underscores the fact that we have a global problem of corporate bribe-paying that demands concerted global actions by official international organisations, civil society organisations and national governments,'' he adds.

Gallup International interviewed 835 business experts from 15 countries for the survey.

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