24 September 2009 | Jake Kanter
Corporate corruption is costing the global economy billions and obstructing financial recovery, a report by Transparency International (TI) has found.
The fraud watchdog's Global Corruption Report 2009 said corruption, including bribery and price fixing cartels, undermines fair competition and stifles world finances.
The wide-ranging review, released this week, said many international executives find fraud raises project costs by at least 10 per cent.
It said in developing countries alone, suppliers have paid bribes of up to $40 billion (£24 billion) a year to politicians and government buyers.
"Revolving doors between public office and the private sector provide a smooth path to deceitful public procurement deals where non-competitive bidding and opaque processes lead to immense waste and unreliable services or goods," TI said.
The report found that 90 per cent of the top 200 global companies have adopted anti-corruption codes, but fewer than half monitor compliance with the standards. Firms with strong ethical guidelines suffer 50 per cent fewer incidences of fraud and are less likely to miss out on business opportunities, it added.
TI chair Huguette Labelle said: "Winning on anti-corruption means adding to the bottom line.
"It is time that corporations faced up to the risk of paying millions in fines and the long-term loss of trust from their customers and shareholders."
A separate report out last week by KPMG found FTSE-listed companies are failing to mitigate the risk of overseas corruption. Of 109 firms surveyed, 43 per cent did not have systems and controls to stop staff using bribes to win contracts abroad (Web news, 17 September).