According to a new survey by Transparency International, Bribe Payers Index 2006,
Overseas bribery by companies from the world’s export giants is still common, despite the existence of international anti-bribery laws criminalising this practice…
The BPI looks at the propensity of companies from 30 leading exporting countries to bribe abroad. Companies from the wealthiest countries generally rank in the top half of the Index, but still routinely pay bribes, particularly in developing economies. Companies from emerging export powers India, China and Russia rank among the worst. In the case of China and other emerging export powers, efforts to strengthen domestic anti-corruption activities have failed to extend abroad.
Conclusions suggest, at least to me, that introducing penalties for corruption is not enough. Penalizing people for wrong doing (which is important in its own right) will not do much good if opportunities for corruption are not reduced. Consider China, where public executions of corrupt government officials have done little to stop corruption. We are talking about taking away your life – what greater punishment can you have?
To me, the report also underscores the dilemma companies from the OECD countries face in emerging markets. On the one hand, they have to comply with highest of transparency standards as well as anti-bribery laws. On the other hand, they face pressure to perform, explore new markets, increase profits, etc. Ensuring implementation of good governance mechanisms throughout companies so that anti-bribery slogans trickle down from leadership to the implementation level is one of the solutions. Due attention must be paid to supply chains. Reducing opportunities for bribery and extortion, as noted above, is another one.
Published Date: October 12, 2006