The OECD Anti-Bribery Convention 10 years on

Nicola Bonucci, Director, OECD Legal Directorate and Patrick Moulette, Head of the OECD Anti-Corruption Division*

The OECD Convention on Combating Bribery of Foreign Public Officials celebrated its 10th anniversary in November 2007**. A decade on, the aim of the Convention–to fight against active corruption (offering bribes)–is as pertinent as ever.
For months now, the press around the world has featured almost daily revelations of presumed or actual cases of cross-border bribery, many involving reputable corporations. This does not necessarily mean that the prevalence of bribery has increased over the past ten years, but no doubt there is a higher level of consciousness on the part of the media and public opinion, and a shifting perception of a practice that was long tolerated and even secretly encouraged.

Against this backdrop, which is also shaped by expanding global economic activity, it is only right to wonder how the OECD and its Anti-Bribery Convention can effectively counter cross-border corruption today.

Let’s start by stating an obvious, yet relevant, point: if businesses or the individuals who run them are now being prosecuted for bribing foreign public officials, it is because national laws transposing the obligations of the OECD Convention have in fact been adopted in the 37 countries adhering to the Convention, and because the courts and relevant authorities are ensuring that those laws are enforced.

Clearly, the general trend is towards more and more investigations, prosecution and convictions for instances of international bribery. In Germany, Siemens is subject to multiple criminal and tax investigations linked to an estimated €1.3 billion slush fund, which have so far resulted in the imprisonment of several former top executives of its power generation unit and the confiscation of the company’s alleged “profit” from the transactions in question, which have been estimated at €38 million. A €201 million fine was also imposed for illicit profits in relation to illegal payments by Siemens’ communication unit. Other criminal proceedings related to this company are ongoing in Germany, Hungary, Indonesia and the United States. At the end of April, a US court fined the American firm Baker Hughes $44 million and placed it under the watch of an outside observer for a period of two years. Although one of the investigations into BAE was suspended by the United Kingdom, the US has picked up the baton, and at least seven other investigations of the same firm are still active in Britain. In France, many newspapers have devoted extensive coverage to indictments of senior executives of Total and other companies operating in international markets. In Korea, several persons have been convicted for bribery of foreign public officials.

In all, investigations of allegations of foreign bribery are currently open in 26 State parties to the Convention. All of these cases are also examined when the OECD Working Group on Bribery analyses legislation and systems to combat international corruption, insofar as it is the Working Group that upholds the integrity and effectiveness of the OECD Convention. Nonetheless, major problems persist. Apart from the political determination of the parties to the Convention, investigations and prosecutions that have been launched in Europe have seldom resulted in convictions.

In France, numerous investigations have been initiated, and several persons indicted, but for the time being no court case has been adjudicated and no one convicted of bribing a foreign public official. This situation, which is not unique to France, must be held up against experience in the United States, where procedures such as plea bargaining can expedite the process, even if in some cases it results in lesser penalties. Thus at the beginning of January 2008, the French telecommunications giant Alcatel-Lucent agreed to pay $2.5 million to settle bribery charges stemming from travel and expense payments made by Lucent Technologies to Chinese public officials, before it merged with Alcatel in 2006.

European legal traditions, which emphasise individualised criminal sanctions, and the tendency of judges to begin by ascertaining the responsibilities of individuals, provide a partial explanation of this difference with the US approach. Even so, a strong impression remains that institutions and resources are inadequate for combating economic crimes, and cross-border bribery in particular.

Moreover, the effectiveness of the OECD Anti-Bribery Convention also hinges on implementation by the leading emerging countries. South Africa recently became the first African country to adhere to the Convention. But it is essential that other countries, such as China, India and Russia, join in the efforts to combat international corruption. Indeed, Russia is a candidate for OECD membership, while the OECD is stepping up its relationship with China and India.

With the OECD and United Nations Conventions, corruption and bribes are now universally condemned. Nevertheless, much remains to be done before what is now a highly comprehensive arsenal of standards can be enforced effectively. Stringent and ongoing monitoring mechanisms, such as the OECD’s, as well as an ever stronger commitment by the major players in world trade, will be crucial in the battle against international corruption.

The G8 countries need to set an example and exhibit determination at all times and at every level–a point that was reaffirmed explicitly at the summit in Heiligendamm in June 2007. As a recent ruling of the International Centre for Settlement of Investment Disputes proclaimed, international corruption is contrary to international public order and ought to be treated and combated as such. It is in this spirit that we wish to mark the 10th anniversary of the OECD Anti- Bribery Convention, by launching a fresh appeal to businesses–particularly to the world’s leading corporations. If we are to make progress in the next 10 years, chief executives of these firms must realise once and for all that the cancer of corruption eats away at economies, and that means their businesses too. A company that wins contracts through bribery is not a healthy business.

It is a carrier of disease it thinks it can control, but which sooner or later will cause the business’s own demise. We openly invite corporate leaders to join us in the fight against international bribery.

* The opinions expressed herein are the authors' alone.
**The Convention on Combating Bribery of Foreign Public Officials in International Business Transactions was adopted on 21 November 1997. It has since been ratified by all 30 OECD member countries and by seven non-member States (Argentina, Brazil, Bulgaria, Chile, Estonia, Slovenia and South Africa). A strong impression remains that institutions and resources are inadequate for combating economic crimes.

References For more on the OECD Anti-Bribery Convention, see

©OECD Observer No. 264/265, December 2007-January 2008

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