In this slightly longer post, Melissa Khemani, an anti-corruption analyst and legal expert at the OECD in Paris, kindly agreed to respond to questions about some current institutional measures on the issue:
JF - Partnership between
members of the OECD and the African Development Bank (AfDB) last year led to a
new initiative, the Anti-Bribery and Business Integrity Course of Action for Africa. What are some challenges you
think it has or will encounter in terms of uptake and implementation by
governments in Africa?
MK – In 2011, the members of the Joint AfDB/OECD
Initiative agreed to the Course of Action, which sets out a number of measures
countries can undertake to help curb the bribery of public officials in
business transactions from both the demand and supply side. This was a major
accomplishment and reaffirmed the momentum that is building in this region to tackle
this form of corruption.
Of
course, the biggest challenge now is to turn the rhetoric into reality, and to implement
and enforce these policies effectively. Bribery in business transactions is a
complex crime, which is difficult to prevent, detect, investigate and
prosecute. It requires a coordinated approach from a cross-section of
government agencies and non-governmental stakeholders to fight effectively. It
also requires a great deal of technical legal and investigative expertise. Cultivating
the political will -- which in turn translates into the resources and priority
dedicated to fighting this form of corruption -- is the biggest challenge in
any country. The objective behind the Joint Initiative is not only to share the
15 years of the OECD’s expertise and experience in fighting bribery in business
transactions through the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions (OECD Anti-Bribery
Convention) but to also raise awareness of the economic and social costs of
this form of corruption in order to help garner the political will to fight it.
JF – What about on
the part of business -- is it partly an issue of awareness-raising, or is there
much more to it than that?
MK
– Awareness-raising is crucial, not only of the sanctions companies and
individuals may face for engaging in bribery, but also for making the ‘business
case’ against corruption, especially at this important juncture which is seeing
Africa increasingly attract significant foreign investment, and African
companies increasingly investing abroad. It is easy to see the short term gain
of paying a bribe to obtain a contract. But in the long term, this increases
the costs of doing business, and these costs can only be recouped through the
delivery of sub-standard products or through higher prices. This is
unsustainable for companies in increasingly competitive, globalized markets.
Engaging
in bribery also creates business uncertainty, as such behaviour does not necessarily
guarantee business to a company; there can always be another company willing to
offer a higher bribe to tilt the business in its favour. As a result, bribery
may swiftly lead to, in economic terms, a ‘race to the bottom’, where the least
desirable and inefficient company may obtain business not on the basis of merit
but on the basis of ‘deep pockets’ -- a situation that cannot be sustained over
the medium and long term.
Robust
awareness-raising also helps set and reinforce the tone of a company’s anti-corruption
ethos. All of the companies I have met with which place a very high priority on
anti-corruption ethics and compliance have said that one of the most important
ways to prevent bribery is to set the ‘tone from the top’ that bribery and
corruption is not their way of doing business, it is not in the interests of
the company, and employees will be reprimanded for engaging in such conduct. Of
course, such awareness-raising must be backed-up by a meaningful anti-bribery
compliance infrastructure including, among other things, regular
trainings, clear rules on gifts and hospitality, due diligence rules on agents
and joint venture partners, and internal whistleblower reporting mechanisms. It
is much more than just simply sending out a yearly memo.
JF – There is a lot
of talk about the need for a ‘level playing field’ on business integrity
regulation. How do you see the role of the OECD in promoting harmonization of
standards across OECD members on anti-bribery and corruption in the context of
all one hears about the need to compete?
MK
– One of the main objectives that underpinned the drafting and signing of the
OECD Anti-Bribery Convention in 1997 was to try to ensure a level playing field
in international business through international treaty commitments. The idea is
that companies should obtain business on the basis of merit and fair
competition rather than on having paid bribes. With the OECD Anti-Bribery
Convention, 39 of the world’s largest exporting and foreign direct investing
countries have enacted and enforce foreign bribery laws.
The
rigorous peer review monitoring mechanism attached to the Convention,
undertaken by the OECD Working Group on Bribery, plays an important role in
ensuring such standards are being equally enforced across member countries. Furthermore,
in 2009, the Working Group on Bribery adopted the Good Practice Guidance on Internal Controls, Ethics and Compliance to assist companies prevent and detect foreign
bribery. This is the first ever guidance provided to the private sector at the
inter-governmental level, and has thus played a very important role in
harmonizing minimum standards on anti-bribery business integrity.
JF – The suggestion
of those seeing a ‘Beijing consensus’ phenomenon is that increasingly it is /
may be state-owned firms we see investing in Africa and its resources. How does
this raise problems or possibilities for regulating bribery and corruption?
MK
– The OECD Anti-Bribery Convention requires member countries to include
state-owned companies within the jurisdictional reach of their foreign bribery
laws. As such, these companies should be just as aware of bribery risks and
implications as private companies, especially when operating in high risk
geographic zones or sectors. I am aware that there are concerns that countries
will not enforce such laws against state-owned companies as rigorously.
However, the Convention addresses this in part through Article 5, which
prohibits considerations of national economic interest to influence enforcement
actions, and there have been examples of enforcement actions taken against
state-owned companies in member countries of the Convention.
JF – I see talk of a ‘monitoring
mechanism’ for the Course of Action. What will happen with that? Indeed, more
broadly where do you see the emphasis likely going in terms of the future work
of the initiative?
MK
– The Initiative has just taken off, and the next step is for the member
countries to decide how they wish to implement the Anti-Bribery and Business
Integrity Course of Action for Africa. This could take the form of a monitoring
system loosely based on the OECD’s peer review mechanism where countries review
one another’s efforts to implement the Course of Action and make
recommendations. It could also take the form of having certain thematic issues
addressed in the Course of Action investigated in more depth, and identify best
practices. This is really for the member countries to decide, and it is
envisioned to be discussed at their next meeting.
In
terms of future work -- again, this is for the member countries to set -- but I
would surmise that emphasis will likely be placed on horizontal challenges the
countries are confronting; this could include issues concerning anti-bribery
enforcement, promotion of anti-bribery corporate ethics and codes of conduct,
anti-corruption in national resources extraction, transparency in public
procurement, or preventing corruption in development aid-funded contracts, to
highlight a few…
[I record my thanks
to Melissa, whose responses are reproduced unedited but which do not
necessarily represent those of the OECD secretariat, the Working Group, or the
joint OECD-AfDB initiative].
This blog will
continue to feature occasional interviews. I hope you
are enjoying the weekly or fortnightly posts (we’re all saturated in
information these days) and feel free to forward the blog to those you think
may be interested in it; also, feel free to use the ‘comments’ facility.
Jo
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