to Fully Enforce a Ban on
CORRUPTION: The Big
Fish Slips Away
KARINA BOECKMANN (IDN)
BERLIN - If you thought
bribery was a synonym for under-development, you had better read a new report
by Transparency International (TI), the global civil society
organisation leading the fight against corruption.
majority of the world’s major exporting countries, nearly all of which
belong to the developed world, are failing to fully enforce a ban on
foreign bribery, according to a report published June 23.
This is in stark contrast to 1997 when the OECD (Organisation for
Economic Cooperation and Development) Anti-Bribery Convention came into
force. It was then considered a historical and much needed leap forward
in the fight against corruption worldwide.
The rich countries of the world committed to bring their house in order,
deal a major blow to supply side corruption and give the fight against
poverty worldwide a real chance to succeed.
Because most major multinational companies are based in OECD Convention
countries, the Convention was hailed as the key to overcoming the
damaging effects of foreign bribery on democratic institutions,
development programmes and business competition.
The Convention now has 38 parties.
Bribery of a foreign public official is defined in the OECD Convention
as the attempt “to offer, promise or give any undue pecuniary or other
advantage, whether directly or through intermediaries, to a foreign
public official, for that official or for a third party, in order that
the official act or refrain from acting in relation to the performance
of official duties, in order to obtain or retain business or other
improper advantage in the conduct of international business.”
The present report, titled the '2009 OECD Anti-bribery Convention
Progress Report', is the fifth of its kind by TI, and covers 36 of the
38 signatories of the Convention. The 72-page document reveals that only
four out of 36 countries evaluated are actively enforcing the Convention
to which they are party. There is "moderate enforcement" in 11
other countries and "little to no enforcement" in 21
Countries actively enforcing the Convention are: Germany, Norway,
Switzerland and United States.
Moderate enforcement is being done in Belgium, Denmark, Finland, France,
Italy, Japan, Republic of Korea, the Netherlands, Spain, Sweden, and
The findings show little or no enforcement in Argentina, Australia,
Austria, Brazil, Bulgaria, Canada, Chile, Czech Republic, Estonia,
Greece, Hungary, Ireland, Israel, Mexico, New Zealand, Poland, Portugal,
Slovak Republic, Slovenia, South Africa, and Turkey
The key conclusions which flow from these findings are:
• The Convention is still far from achieving the goal of ending
bribery in international business transactions. During the five years
that TI has published annual progress reports, enforcement has increased
from eight to fifteen countries.
However, there are great disparities in levels of enforcement even among
the largest exporters. Germany and the United States each have more than
one hundred cases, while the United Kingdom has four and Japan and Italy
have two each. The disparity in levels of enforcement shows how far
there is to go.
• Enforcement in the 11 countries with moderate enforcement has not
reached a high enough level to provide effective deterrence against
foreign bribery. Companies in the 21 countries with little or no
enforcement will feel even less constrained, and many are not even aware
of the Convention.
• The present situation is dangerously unstable. Unless enforcement is
sharply increased, existing support will erode and the Convention will
fail. Danger signals include the United Kingdom’s termination of the
BAE case, claiming that national security concerns overrode the
commitment to stop foreign bribery.
This was a grave blow to the Convention because it opened a loophole
that other governments could also exploit. Other examples include
efforts to eliminate the the role of anit-corruption commissions and
• This risk of backsliding has grown more acute during a time of
worldwide recession when competition for decreasing numbers of orders
has intensified greatly.
• In sum, the Convention is at a critical juncture. Proponents of the
Convention must press hard for greater enforcement. Otherwise,
proponents of corruption will prevail and the Convention will go into
LACK OF POLITICAL COMMITMENT
The report says: "Based on the reviews conducted by TI chapters, we
are convinced that the principal cause of lagging enforcement is a lack
of political will." In countries where there is committed political
leadership, the OECD’s outstanding monitoring programme has helped
improve laws and enforcement programmes.
However, in the absence of political will, even repeated monitoring
reviews have little effect. Lack of political commitment can take a
passive form: failure to provide adequate funding and staffing for
enforcement. It can also take an active form: political obstruction of
So the report highlights that whether through antiquated bribery laws,
outright political obstruction of investigations, lack of adequate
funding for prosecutors or curtailing the powers of investigative
magistrates the OECD Convention is facing grave challenges.
Another major obstacle, according to the report, is the use of national
security considerations as a reason for not prosecuting foreign bribery.
It is essential to reaffirm that the Convention does not permit national
The report does not leave it at finding flaws. It has a set of
recommendations addressed to OECD Secretary-General Angel Gurria; the
OECD Council at Ministerial Level; the OECD Working Group on Bribery;
and to the governments of the parties to the Convention.
• The Ministerial should exercise regular oversight to ensure that the
Convention succeeds in meeting its objectives. This should include a
review of annual reports from the Working Group on the status of
enforcement. Such reports should cover foreign bribery cases brought by
each party to the Convention, as well as the number of investigations
• The Secretary-General should meet with the Justice Ministers of
laggard governments to reach agreement on steps for achieving active
enforcement. Failure to take such steps should result in suspension of
membership in the Convention.
• Governments should assign responsibility for foreign bribery cases
to specialized staffs with adequate resources. Experience has shown that
investigating and prosecuting foreign bribery cases is extremely
challenging and time-consuming work, and that it is unrealistic to
expect overburdened local prosecutors to bring such cases. It is
encouraging that many governments have already organised specialised
• The Ministerial should adopt a declaration reaffirming the broad
scope of Article 5 of the Convention and making clear that claims of
national security exceptions violate Article 5. This is important to
ensure that the action of the United Kingdom in the BAE case does not
become a precedent.
• The Ministerial should encourage accession to the Convention by
China, India and Russia. To achieve a level playing field all major
exporters should play by the same rules. It is encouraging that South
Africa and Israel have joined in the last two years.
• It is essential that the Working Group begin Phase 3 of its
monitoring programme by the end of this year. Top priority should be
given to conducting country visits to ensure that deficiencies in laws
and enforcement programmes, as identified in prior reviews, are
corrected. To keep pace with changes in forms of corruption, increasing
attention needs to be devoted to combating indirect forms of bribery
such as the use of intermediaries, subsidiaries, contractual and joint
• The Working Group should conduct annual meetings with prosecutors to
obtain their views on how to overcome obstacles to enforcement. Recent
meetings with prosecutors were very productive and such meetings should
become a regular practice.
• The Working Group should, as soon as possible, begin to address
unresolved issues and potential loopholes in the Convention and national
implementing legislation, including bribe payments to political parties,
lack of corporate criminal liability, inadequate statutes of
limitations, and private-to-private corruption.
“Political will must be at the heart of efforts to deliver on
anti-bribery,” says Cobus de Swardt, managing director at TI.
"Especially in the current global recession when businesses face
acute pressure to win declining orders. Accelerated enforcement is
needed to ensure fair competition."