Transparency International releases new Bribe Payers Index

Source: Transparancy International, 7 June 2002

-> Russian, Chinese, Taiwanese and S. Korean companies widely seen using bribes in developing countries
-> High propensity to bribe overseas also seen for companies from Italy, Hong Kong, Malaysia, United States, Japan, France and Spain
-> Construction and arms industries top sectors of heaviest bribery

Transparency International (TI), the global anti-corruption organisation, today released its Bribe Payers Index (BPI) 2002, showing very high levels of bribery in developing countries by corporations from Russia, China, Taiwan and South Korea, as well as numerous leading industrial nations, all of which now have laws making corrupt payments to foreign officials a crime. The laws are not being properly enforced. Our new survey leaves no doubt that large numbers of multinational corporations from the richest nations are pursuing a criminal course to win contracts in the leading emerging market economies of the world, said TI Chairman Peter Eigen.
Speaking in Paris today, on the eve of this years Ministerial meeting of OECD member countries, Eigen added: Politicians and public officials from the worlds leading industrial countries are ignoring the rot in their own backyards and the criminal bribe-paying activities of multinational firms headquartered in their countries, while increasingly focusing on the high level of corruption in developing countries. The governments of the richest nations continue to fail to recognise the rampant undermining of fair global trade by bribe-paying multinational enterprises.

He said: The meeting in the coming days of ministers at the Organisation for Economic Cooperation and Development (OECD) and then the G8 Summit provide the leaders of the industrial world with an opportunity to confront this critical situation.

The TI Chairman stressed that todays BPI shows that companies from Russia and China, which are increasingly exporting to other emerging market countries, are using bribes on an exceptional and intolerable scale. The extent to which companies from Taiwan and South Korea use bribes abroad is only marginally less. The authorities of all of these countries need to do more to prevent bribery by their firms abroad.
TIs BPI is based on surveys conducted in 15 emerging market economies by Gallup International Association.

The BPI shows that US multinational corporations, which have faced the risk of criminal prosecution since 1977 under the Foreign Corrupt Practices Act, have a high propensity to pay bribes to foreign government officials. The US score of 5.3 out of a best possible clean 10 is matched by Japanese companies and is worse than the scores for corporations from France, Spain, Germany, Singapore and the United Kingdom. The highest scores, indicating the lowest propensity to bribe abroad, were for companies from Australia, Sweden, Switzerland, Austria, Canada, the Netherlands and Belgium.

The TI Bribe Payers survey is the most comprehensive set of opinion polls on perceptions of the sources of corruption that has ever been undertaken and expands on the first TI BPI in 1999. Todays results provide detailed reports on the propensity of multinational corporations to bribe; the business sectors most contaminated by bribery; the extent to which executives of major corporations overseas are even aware of the landmark OECD Anti-Bribery Convention that outlawed bribery of foreign public officials; the degree to which these firms are enforcing compliance with the Convention; and perceptions of unfair business practices apart from bribery used by firms to gain contracts.

The BPI was conducted in 15 emerging market economies: Argentina, Brazil, Colombia, Hungary, India, Indonesia, Mexico, Morocco, Nigeria, the Philippines, Poland, Russia, South Africa, South Korea and Thailand, which are among the very largest such countries involved in trade and investment with multinational firms. A total of 835 interviews were carried out between December 2001 and March 2002, principally with senior executives of domestic and foreign companies, but also with executives at chartered accountancies, binational chambers of commerce, national and foreign commercial banks and commercial law firms. The survey questions related to perceptions about multinational firms from 21 countries.

The results reflect the views of expert business leaders, who are best positioned to have significant insights into issues of grand corruption and the bribery of government officials in developing countries, said TI Head of Research Fredrik Galtung.