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By Mark Pieth and Huguette Labelle
In December 1997 the OECD Anti-Bribery Convention was signed in Paris. This was a major breakthrough because it committed the world’s leading exporting countries to prohibit bribery, thereby aiming to turn off the spigot on the supply-side of global corruption. Previously only one government had made foreign bribery a crime. Most other governments had treated foreign bribe payments as legitimate business expenses for tax purposes. It is now universally recognized that foreign bribery distorts competition, undermines good governance, and hurts the most vulnerable.
The OECD and Transparency International have worked together to promote the implementation of the Convention. After fifteen years there has been much progress. All 40 parties have passed laws making foreign bribery a crime. However, enforcement, the key to the success of the Convention, remains uneven. Almost half of the parties, including many of the larger exporters, have taken action. As of December 2011, 300 companies and individuals have been sanctioned under criminal proceedings for foreign bribery. Sixty-six individuals have been sentenced to prison. Many companies have been subjected to large fines; one company faced combined sanctions of EUR 1.24 billion. Another 300 investigations are underway.
However, in over half of the parties there has been little or no enforcement. Investigating and prosecuting foreign bribery is difficult and expensive and some governments have been unwilling or unable to muster the required resources. This problem has been aggravated by the adoption of much more sophisticated methods by bribe payers and bribe collectors. Bribery is now conducted through layers of intermediaries and complex money-laundering schemes.
Because the Convention is a collective commitment to stamp-out foreign bribery by all the parties, lack of consistent enforcement endangers the success of the Convention. This is particularly dangerous at a time of global recession when some argue that winning orders should trump fighting corruption. Such arguments fail to recognize that the present situation is unstable. Unless the prohibition against foreign bribery is applied consistently, there will be a race to the bottom from which it will be practically impossible to recover.
Because it was recognized from the outset that achieving consistent enforcement would require strong efforts, the OECD established a follow-up monitoring process carried out by the OECD Working Group on Bribery. Rigorous and highly professional country reviews have been conducted, with a third round of country visits now underway. As a result there has been steady progress in strengthening enforcement. This progress has been tracked by Transparency International, which for the last eight years has published annual progress reports on the state of OECD enforcement. The most notable success has been the adoption by the United Kingdom of a strong anti-bribery law in 2011 after a ten-year effort by the Working Group on Bribery. Last month the US adopted a comprehensive guidance on the application of its Foreign Corrupt Practices Act, as recommended by OECD monitors.
We urge the adoption of a systematic effort to move the Convention forward so that the goal of throttling the supply side of foreign bribery can be achieved by 2017, the Convention’s 20th anniversary.
That will require three steps:
First, continuation of rigorous follow-up monitoring.
Second, high level advocacy directed to the political leaders of the governments where there is still little or no enforcement.
Third, adoption of the Convention by other major exporters, in particular by the four remaining G20 states China, India, Indonesia and Saudi Arabia.
Mark Pieth is Chair of the OECD Working Group on Bribery in International Business Transactions, which is made up of representatives from the 40 Parties to the Anti-Bribery Convention. Huguette Labelle is Chair of Transparency International, the global civil society organisation leading the fight against corruption.