Multinational firms implicated in graft in Africa

Overseas bribery by companies from the world's export giants is still common, despite the existence of international anti-bribery laws criminalizing this practice, a leading anti-graft watchdog said in a new survey published in Nairobi Wednesday.

The 2006 Bribe Payers Index (BPI), done by the Transparency International (TI), has ranked 30 leading exporting countries according to tendency of their firms to bribe abroad.

The survey says companies from the wealthiest countries generally rank in the top half of the index and routinely pay bribes, particularly in developing economies.

"Foreign companies that commit the crime of bribery are undercutting Africa's anti-poverty efforts," Casey Kelso, TI's regional director for Africa told reporters in Nairobi during the launch of the report.

"African countries should prosecute them vigorously. Regional development institutions such as the African Development Bank can help by enforcing debarment programs that block crooked companies from profiting from development dollars while the poor are left out of the picture," said Kelso.

The survey looks at the use of bribes by companies with headquarters in 30 of the world's leading exporting countries either in global or regional terms.

The survey is based on questions asked of 11,232 business executives from companies in 125 countries, who are surveyed about the business practices of foreign firms in their country.

According to the anti-graft watchdog, respondents from lower income countries in Africa, for example, identified French and Italian companies as among the worst perpetrators.

"It is hypocritical that OECD-based companies continue to bribe across the globe, while their governments pay lip-service to enforcing the law. TI's BPI indicates that they are not doing enough to clamp down on overseas bribery," said David Nussbaum, TI's chief executive.

"The enforcement record on international anti-bribery laws makes for short and disheartening reading," Nussbaum added.

In Kenya, it's believed that most multinational companies take advantage of the loopholes in procurement procedures, which contribute to the increase in corruption.

According to Kenya Institute Of Supplies Management, close to 30 billion shillings (about 400 million U.S. dollars) is lost every year through corrupt practices in the procurement sector.

"The cost of corruption on developing countries is immense, and international bribery helps to fuel it. When giving aid, donors want to establish stringent anti-corruption criteria for poor countries, but exporters and investors undermine good governance and development when they allow their countries to bribe in those countries," said the TI.

"Companies must conduct due diligence when engaging in partnerships or acquisitions, and adopt and enforce strict internal no-bribes policies that include their agents, subsidiaries and branches," the survey said.

"Developing countries should vigorously prosecute foreign companies found to have bribed on their soil, and must be supported in these prosecutions by the legal and financial cooperation of the host countries," said the TI.

It is the subsidiary companies of multinationals that are being ranked by many of the respondents of this survey. But "companies must be ready to take responsibility for actions along their supply chains," said TI Board Member Jermyn Brooks.

"Multinationals cannot be absolved of the corrupt activities of their foreign branches, subsidiaries or agents, and they must conduct due diligence before engaging with joint venture or alliance partners. The purchasing, export, and marketing and sales departments remain the business functions most vulnerable to bribery and corruption," he said.

Source: Xinhua