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Corruption overseas – Britain’s bribery shame

Ethical Corporation: Magazine, Conferences, Reports
Business and government complacency explains why the UK is rightly perceived as being soft on international corruption, says Laurence Cockcroft 
In November more than a thousand people from across the globe met at the International Anti-Corruption Conference in Athens. They met to assess progress in attacking the many forms of corruption that continue to undermine economic progress, generate political instability and lead to the failure of states.

In the course of nearly a week, the resolve of companies, governments and individuals was subject to a remorseless spotlight, and the ability of corruption to contribute to other phenomena such as climate change, ethnic rivalry and even the frailty of financial institutions was established. 

The strongest criticism of any country was reserved for the UK – no longer regarded as a bastion of public integrity but rather as the principal danger to the first and most important anti-corruption convention: the OECD Anti-Bribery Convention of 1997. 

A special session was convened on this topic addressed by the chairman of the OECD working group on bribery, Mark Pieth, which ten days earlier had condemned the UK’s inability to meet its commitments under the anti-bribery convention. This requires signatory states to ensure that their anti-corruption legislation criminalised bribes paid abroad and that they have in place an effective mechanism for prosecution. 

The UK has been identified for several years by the OECD as one of the worst laggards in the implementation of this convention. This is highlighted by the fact that the suspension of the Al-Yamamah investigation in 2006 – looking at alleged bribes paid by BAE Systems as part of a UK-Saudi Arabia arms deal – was in direct contradiction of the no exceptions commitment built into the convention. 

Equally importantly, the UK’s record of investigating and prosecuting bribery is still extremely poor when compared with its G7 peers – a mere two cases to date, compared with 103 in the US, 43 in Germany and 19 in France. This has aroused real anger in those countries whose companies compete with the UK in the international marketplace and which have brought prosecutions against large and highly regarded companies such as Baker Hughes, Elf and Siemens. 

Bribe with impunity?

This extraordinarily feeble performance by the UK is regarded as symptomatic of a profound lack of commitment to addressing corruption. The report of the OECD working group suggests the UK government’s inaction is creating a situation where UK-based companies can behave with impunity in the payment of bribes to win overseas business. It also warned that uncertainty over the UK’s legislative framework may trigger a need for increased due diligence over UK companies by their commercial partners or multilateral development banks such as the World Bank. 

In an earlier report, the OECD had raised the question of whether the UK’s failure was effectively “systemic”. This implied that the nexus of inadequate legislation, feeble prosecuting agencies and a political willingness to buckle to an ally (Saudi Arabia) made uncomfortable by a criminal investigation meant that the UK was totally unable to address corruption. This fear was quietly reinforced by the fact that in Transparency International’s corruption perceptions index, published in September this year, the UK fell from 12th to 16th place. 

Is the UK government as feeble and incompetent on international corruption as this implies? The fact that the government has twice published an “action plan” to fight international corruption – in 2006 and 2008 – is outweighed by the fact that there have been no fewer than three “ministerial champions of anti-corruption” in the same number of years (Hilary Benn, John Hutton and now Jack Straw). 

Closer to the mark appears to be the charge of complacency: a political view that the legislation is not really necessary and certainly not urgent, a willingness to bend to a small number of unrepresentative companies that seek to ensure that legislation will not be effective, and a severe reluctance to provide the financial resources necessary to enable the Serious Fraud Office and the police to pursue effective investigation and prosecution. 

Ten years ago, the international community relied on the UK to be progressive in this arena, not least because of its influence as the world’s fourth largest exporter and a major source of foreign direct investment around the world. Now, disappointment at the lack of a serious stand has turned to disbelief, and disbelief to anger – raising the question of whether other countries (such as the US and France) should now take steps to weaken their legislation. It is not quite too late to salvage the situation, but it will be a hard-won fight, without a day to lose. 

Laurence Cockcroft served as chairman of the UK chapter of Transparency International from 2000 to 2008. He stepped down in November. 

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