Remarks by Angel Gurría, OECD Secretary-General, delivered at the Launch of the OECD Foreign Bribery Report
2 December 2014, Paris, France
(As prepared for delivery)
Minister Taubira, Excellencies, Ladies and Gentlemen:
It is a pleasure to welcome you to this presentation of a new powerful tool in the fight against corruption. Bribery is a corrosive crime. It erodes the integrity of our institutions, the strength of our economies and the trust of our citizens. We need to combat this peril with all the power and reach of the state, and through effective multilateral cooperation.
To do this, we need to know our enemy. The first OECD Foreign Bribery Report: ”An analysis of the crime of bribery of foreign public officials”, that I am launching here today attempts to measure this complex and secretive crime, shining light on the 427 foreign bribery cases that have been concluded since the entry into force of the Convention.
I am delighted that Minister Taubira is here with us today. France has been a pioneer in the fight against bribery, especially at the time the Anti-Bribery Convention was signed.
I am also happy to welcome José Carlos Ugaz, the newly appointed Chair of Transparency International. José Carlos: bienvenido a tu casa! Transparency International is one of the OECD’s closest allies in the fight against foreign bribery and has always been a strong supporter of the OECD Anti-Bribery Convention.
Angel Gurría, Secretary-General of the OECD at the launch of the OECD Foreign Bribery Report. Photo: OECD/ Andrew Wheeler
I would also like to welcome US Assistant Attorney General Leslie Caldwell. The US government is giving high priority to the fight against corruption as evidenced by the recent White House Factsheet on the Global Corruption Agenda.
Finally, a warm welcome to Brackett Denniston from General Electric and Klaus Moosmayer from Siemens AG. Both companies have been taking leading roles in anti-bribery compliance measures and Siemens’ compliance journey is one of the greatest success stories of the OECD Anti-Bribery Convention. Thank you all for participating in this important event.
Tackling corruption and restoring trust are high on the OECD agenda
Before I share with you some of the Report’s findings, I would like to tell you why I think this is timely. The reason is simple to understand but complex to solve: after six years of crisis, our countries, both developed and emerging economies, are facing the largest breakdown of trust in recent history.
Trust in what? Well, trust in governments, political parties, corporations, banks, rating agencies and international organisations. Basically, the institutions that we have built over the past 100 years.
Corruption is at the very heart of this mistrust. Among those who reported trusting business or government less over the past year, the most frequently given reason was corruption or fraud. We have to step up our efforts to combat corruption and recover public trust. And the Report I am presenting today can be of great help. As US Supreme Court Justice Louis Brandeis once said, ‘sunlight is the best disinfectant’.
The OECD Foreign Bribery Report: Key Findings
The OECD Foreign Bribery Report is our first major scan of countries’ efforts to combat corruption since the Anti-Bribery Convention came into force. It tracks 427 cases concluded between 1999 and 1 June this year.
The report digs deep into those 427 cases and asks some important questions: Who was bribing who? Were intermediaries involved? How much was being paid? And how are those who bribe being punished?
The hidden nature of bribery means we don’t know how many cases go undetected, and therefore unpunished. But without a doubt, we have made a strong start.
So what does the report tell us?
First of all, it dispels the myth that corruption is confined to developing countries. The evidence shows that corruption occurs everywhere. Two-thirds of the bribes covered in the report were paid to officials from countries with medium to very high levels of human development. Officials were bribed from 24 out of the 41 member countries of the OECD Working Group on Bribery, and 15 out of the 19 G20 member countries.
Meanwhile, the time needed to conclude cases has increased, from around two years on average for cases concluded in 1999 to just over seven years today. This may reflect the increasing sophistication of bribers, the complexity for law enforcement agencies to investigate cases or the fact that companies and individuals have become less willing to settle.
The Report also reveals that bribery cannot be blamed on rogue employees. In over half of the cases studied, senior management – and even CEOs – were involved in corrupt behaviour or were at least aware of it. Companies can no longer play the victim. The same might be said for the recipients of bribes: our report notes that 11% of the total amount in bribes went to Ministers and Heads of State. So bribery is a challenge for everyone.
Our study identifies employees of state-owned or state-controlled enterprises as the single biggest category of foreign officials who were bribed. They account for almost one-third of the cases of bribery covered by the report.
In over half of the cases of bribery covered in the report, bribes were paid to obtain public procurement contracts. Despite this shocking statistic, only two companies sanctioned for foreign bribery were ever debarred from national procurement processes. That’s right - only two of the 115 companies found to have bribed in public procurement processes, have been prevented from bidding for public contracts again.
Our report shows that corruption cases often escape criminal trial. In 69% of cases, sanctions were imposed by way of settlement between the defendant and the national law enforcement authorities. These procedures may be preferred for their efficiency and flexibility. However, this should not come at the cost of due process, transparency and consistency.
The report also contains some reassuring findings. For example, one in three cases studied came to the attention of authorities as a result of self-reporting. This suggests that companies are willing to come clean when things have gone wrong. This is an important message.
The increase in the number of cases concluded over time is also encouraging. While in the first 5 years of the Convention less than 10 cases were concluded per year, the number is equal to almost 60 cases per year on average for the last 5 years.
So we know that we have to do more, but how? Well, the Report also suggests some lines of action.
What to do?
Thanks to the evidence contained in this report, the OECD has identified several ways in which public authorities can step up their efforts:
First, the leaders of the 41 member countries of the OECD Working Group on Bribery and the G20 must lead by example and prosecute corruption. And, crucially, they need to make information on concluded cases publicly available.
Second, we need to redouble our efforts to pierce the corporate veil, and put an end to the practices that have allowed intermediaries and beneficiaries of corruption to hide. At the OECD, we will work with our members to support implementation of the G20 High-Level Principles on Beneficial Ownership Transparency, including, for example, the creation of central registries of beneficial ownership of legal persons.
Third, public authorities and businesses must do more to ensure integrity, transparency and accountability in public procurement. The OECD’s Principles for Enhancing Integrity in Public Procurement (2009) show how this can be achieved.
We also need to look at the demand side of bribery. While the report I am presenting today focuses on the supply side – those who pay bribes – we must also make sure that those who seek or receive bribes are brought to justice. In this sense, we are working to better link our work on public sector integrity with the activities of the Working Group on Bribery.
Ladies and gentlemen:
Let me conclude with a quote from the Report itself: “The true social cost of corruption cannot be measured by the amount of bribes paid or even the amount of state property stolen. Rather, it is the loss of output due to the misallocation of resources, distortions of incentives and other inefficiencies caused by corruption that represent its real cost to society.”
From the local to the global scale, bribery is by its very nature complex and hidden. But, with tools like this Report we are no longer fighting in the dark in our attempts to eradicate corruption. We very much hope that it can contribute to the efforts of all the people that, like you, are working for a cleaner, more resilient and reliable world economy.
The OECD stands ready to keep working closely with the G20, with the members of the Working Group on Bribery, and with the international community at large to combat corruption and – ultimately – to recover public trust.