More international articles
☛ Want the latest procurement and supply chain news delivered straight to your inbox? Sign up for the Supply Management Daily
6 September 2012 | Anna Reynolds
Prosecutions for foreign bribery cases are increasing but governments need to maintain pressure on companies if progress is to continue, says a report by Transparency International (TI).
The report by TI Exporting Corruption? reviews how enforcement of the OECD's (Organisation for Economic Co-operation and Development) Anti-Bribery Convention has progressed since it was adopted in 1997.
The convention enforces laws forbidding firms from bribing companies or individuals abroad to win deals or dodge local regulations when doing international business. By the end of 2011, 250 individuals and almost 100 companies in countries that are signatories to the convention had been sanctioned as a result of foreign bribery-related cases.
The US shows the highest enforcement of the convention, with 275 criminal prosecutions completed by the end of 2011. Germany completed over 100 cases. A total of 66 people have gone to jail for bribing overseas officials in business deals.
However, active enforcement of the convention applies to only seven countries, which account for 28 per cent of world exports; Denmark, Germany, Italy, Norway, Switzerland, the UK and US. TI warned that this was inadequate to bring about significant change.
Concerns lie with Japan, which has brought less than 10 criminal prosecutions forward while Mexico, Greece and South Africa are among the 18 countries are yet to bring any major criminal charges.
TI said government support of the convention has fallen over recent years as a result of the global recession. It urged government leaders to reject arguments that winning foreign orders during the recession justifies condoning foreign bribery.
Chandu Krishnan, executive director of Transparency International UK, said: “It is possible for companies to remain doing business in high-corruption-risk countries but strong systems must be in place. If companies rely heavily on agents and intermediaries, they need to make sure they are contractually bound. If you rely on government officials to get business done, there is greater exposure to demands for bribery.
“Companies need to set the tone from the top that they will not accept bribery and this must apply to all the countries they operate in, there can be no half-measures. Joint business ventures can also be more at risk to bribery so companies must constantly monitor their risk.”
In a further study by TI, more than one-in-four business executives (27 per cent) believed bribery by a competitor resulted in direct costs to their business in the past 12 months.