Accessibility links

World: International Bribery Index Slams Russia, China, Turkey

The study found that companies act one way in developed countries and another in countries where they are less likely to face prosecution (RFE/RL) PRAGUE, October 4, 2006 (RFE/RL) -- Transparency International has issued a report comparing how companies in 30 top exporting countries use bribes to do business overseas.

Switzerland tops the list as the country where bribes are least likely to be used to help sell goods and services on foreign export markets, followed by Sweden.

At the "bad boys" end of the Transparency International list stand China, Russia, Turkey, and India -- all rapidly growing economies -- in some cases already powerhouses of the global economy.

An 'Alarming' Situation

Marie Wolkers is the senior research coordinator at Transparency, an independent Berlin-based organization campaigning against corruption. She says it's "alarming" to find companies in such important trading nations so willing to offer bribes.

The bribe-payers index is based on responses from over 8,000 businesspeople asked to provide their personal assessment of the bribery situation in the 30 countries assessed.

"Clearly it's alarming that those countries, those emerging economies which are among the biggest exporters in the world, are really showing very, very poor results, especially India, and China, and Russia," Wolkers said. "They are at the bottom of the list, and this index is a call to them that they need to change their behavior."

Transparency International says such "free riders" make it harder for those who want to play by the rules of "clean" business.

It says that as long as major players such as China, Russia, and India remain outside the framework of international laws designed to curb corruption, they will undermine the global efforts to improve the situation.

Anti-Bribery Convention

Transparency is referring at this point mainly to the Anti-Bribery Convention created by the Organization for Economic Cooperation and Development (OECD).

This international treaty, designed to keep business free from the taint of bribery, came into force in 2003. But Russia, China, and India are not signatories.

Turkey -- which is also at the bottom of Transparency's survey -- is a signatory. However it appears to be making little headway in implementing the provisions of the convention.

Wolkers says her organization’s assessment of Turkey echoes an unfavorable OECD report on that country issued in June.

Bad News For Turkey

"It's very frightening, and it is actually very consistent with the monitoring of Turkey by the OECD convention process, which produced a report on Turkey which is quite alarming, I mean it is very bad," Wolkers said.

The fresh criticism comes at a difficult moment for Turkey, which is a candidate for membership of the European Union. Last week the European Parliament issued a hard-hitting report pointing to many shortcomings in Turkey's general progress toward accession.

Transparency International acknowledges that bribery, which is a traditional way of doing business in many parts of the world, will not be easy to stamp out entirely.

Five Russian officials being sentenced on corruption charges in Moscow last month (TASS)

It pins its hopes on the growing body of national and international laws, and also on the ethical standards of individual companies, acting out of enlightened self-interest.

"We just hope that those laws will be increasingly implemented, and monitored, and that the countries make sure their judicial systems function properly and that there are sanctions, so we see more and more cases," Wolkers said. "In the U.S., there were some 50 prosecutions of companies bribing abroad, and 50 cases in France, so there are still positive signals."

The Transparency report goes on to note that there is a clear difference in the way that multinational companies approach the issue of bribery in the industrially developed world as opposed to in low-income countries.

Double Standards

A particular corporation may avoid bribery altogether in countries where there are well-developed legal and administrative systems, but a subsidiary of the same company will offer bribes in states where the environment is looser and the chance of prosecution lower.

Transparency says it is up to the parent company to control its subsidiaries in the Third World to ensure they do not add to problems of local corruption.

The bribe-payers index is based on responses from over 8,000 businesspeople asked to provide their personal assessment of the bribery situation in the 30 countries assessed. Those countries taken together create 82 per cent of the world's export trade.

RFE/RL has been declared an "undesirable organization" by the Russian government.

If you are in Russia or the Russia-controlled parts of Ukraine and hold a Russian passport or are a stateless person residing permanently in Russia or the Russia-controlled parts of Ukraine, please note that you could face fines or imprisonment for sharing, liking, commenting on, or saving our content, or for contacting us.

To find out more, click here.