Corruption is as strong as ever within many of the world’s wealthiest nations and trade powerhouses who regularly fail to stop bribery, according to a new report.
Transparency International’s annual progress report on the efforts of 40 countries in investigating and prosecuting corrupt individuals and companies working overseas concludes that “creating a corruption-free level playing field for global trade is still far from being achieved”. These 40 countries have signed an international Anti-Bribery Convention that makes foreign bribery a crime.
Of the countries studied, only New Zealand and Canada had improved over the last twelve months. Bulgaria and Denmark, which congratulates itself on experiencing no bribery at home, fell in the rankings to join 22 other nations who do almost nothing to deter people or companies from committing bribery in foreign countries.
“Obviously, I find it embarrassing for a country that tops the charts on controlling internal corruption to be so indifferent to external corruption,” said Knut Gotfredsen about his home country Denmark, where he is the Chairman of the Board of Transparency International.
Denmark should increase resources and efforts to prosecute, said Gotfredsen.
The United States, Germany, the United Kingdom and Switzerland come out on top of the rankings. These four countries, which represent nearly one-quarter of all of global exports and whose companies are widespread, imposed significant sanctions in 17 major cases of foreign bribery and investigated 62 others in 2013.
In contrast, the remaining 36 nations combined slapped sanctions on a company in just one case and launched investigations into another 40.
Countries' rankings are weighted according to their share of world exports, which means that smaller exporters such as Denmark and Luxembourg would need to investigate and prosecute fewer cases of foreign bribery to be considered active fighters of corruption.
Transparency International blames, in part, national politics for countries’ unwillingness to pursue corruption allegations, especially where economically important industries are potentially involved in corruption overseas.
"These countries have the resources," said Transparency International's Advocacy Adviser and report co-author Adam Foldes. "Often they just lack the political will to look closely at those companies that pay taxes and provide employment domestically."
The small European country of Luxembourg, which is home to the biggest banking sector in the European Union in terms of Gross Domestic Product, has been chastised for having “not taken a single measure to facilitate access to bank and tax information by law enforcement authorities” that could help in the prosecution and identification of bribery of foreign officials.
Analyzing instances of alleged bribery and corruption is difficult due to confidentiality rules that prevent the open discussion of matters before the courts. However, in cases listed by Transparency International, 39 countries – the majority of which are poorer nations in Africa or Asia -have been victims of corruption by companies or individuals.
The greatest number of bribery allegations appears in China followed by Angola, Algeria and India. The most frequent industries linked to corruption and bribery are oil and gas, banking, and infrastructure.
Foreign bribery “has damaging consequences”, writes Transparency International, “in the form of contracts not going to the best qualified suppliers, prices often being inflated to cover bribe payments, environmental requirements not being enforced and taxes not being collected.”
For example, alleged corruption by managers at South Africa’s national oil company, PetroSA, led to cancellation fees and exaggerated bribe payments that cost the company – and therefore the taxpayer – more than $15 million than would have been paid without bribes. The loss of millions to corruption is all the more striking given that South Africa’s “austerity” budget, handed down on Wednesday, froze public sector wages and capped other government spending.
The G20, which is holding its final meeting in Brisbane, Australia, in November, has made anti-corruption one of its priorities in recent years.
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