More than half of the largest exporting nations are doing little to nothing to prevent multinational companies from using bribery to gain access to overseas markets, according to a study released this week.

Anti-corruption watchdog Transparency International surveyed the 40 nations signed onto the Organisation for Economic Cooperation and Development's Anti-Bribery Convention. The convention, signed in 1997, was intended to stop corporations from bribing foreign governments in order to win contracts or evade local tax and other laws. The report found that 30 of the 40 nations are not living up to the agreement. The group said those 30 nations are “barely” investigating and prosecuting cases of foreign bribery.

“The 40 countries, which represent more than two thirds of global exports, would make it very hard to get away with bribery if they lived up to the requirements of the OECD anti-bribery convention,” Transparency International Chair Huguette Labelle said in a statement.

Reasons cited for the enforcement failings include budget cuts to enforcement agencies, a lack of specialized groups to conduct investigations, and the failure to use existing deterrents.

The report found that 23 countries have failed to bring any criminal charges in the last four years against companies for cross-border corruption.

The report, which is the group's ninth annual review of foreign bribery enforcement, ranked countries in four categories.

·         Active Enforcement: Four countries with 26.2 percent of world exports; Germany, United Kingdom, Switzerland, United States

·         Moderate Enforcement: Four countries with 6.1 percent of world exports: Italy, Austria, Finland, Australia

·         Limited Enforcement: Ten countries with 11.3 percent of world exports; France, Sweden, Norway, Denmark, Hungary, Portugal, Bulgaria, Canada, South Africa, Argentina

·         Little or No Enforcement: Twenty countries with 26.9 percent of world exports; Netherlands, Russia, Spain, Belgium, Ireland, Poland, Turkey, Czech Republic, Luxembourg, Slovak Republic, Greece, Slovenia, Estonia, Japan, South Korea, Mexico, Brazil, Chile, Israel, New Zealand.

Thirteen of the 20 countries in the bottom category were European members of the convention. Netherlands, Belgium, and Spain were demoted from the moderate enforcement category into the bottom tier, based on the countries' actions over the last four years. Also dropping in the survey was Italy, which sunk from the top category to moderate, which TI said was due to the unavailability of recent enforcement data. Norway and Denmark dropped two levels each, moving from the active enforcement  tier to the limited enforcement category.

Bulgaria, Hungary, and Portugal improved in this year's review, climbing up from little enforcement to the limited enforcement category.

Transparency International is calling on countries to increase their anti-corruption efforts, and is hoping additional major exporters like China and India join the convention. “It is especially important these economies meet their G20 commitments and ensure that their companies, which have increasing influence overseas, operate cleanly,” Labelle said.

There has been other troubling news in anti-corruption efforts recently. A report released last week by the European Anti-Fraud Office (OLAF) revealed that €2.2 billion was lost in 2010 through public procurement projects. The study, conducted by PricewaterhouseCoopers, cited bid rigging, kickbacks, and conflicts of interest as examples of fraud that cost EU taxpayers money. The public procurement review covered road, water, utility, and other projects in eight EU nations chosen at random. Italy fared particularly poorly, with OLAF determining that one out of every 10 public contracts was tainted by corruption.

A recent review by the United Kingdom's own construction industry found corruption still prevalent in that sector as well. The study by the Chartered Institute of Building found that 49 percent of construction executives polled believes corruption is common in the industry. Forty-three percent said corruption can occur at all stages of construction process. Reasons cited were embedded practices and a tough economic climate with less work and tighter margins.

Topics