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Transparency International survey says firms still used to paying bribes abroad

International business leaders reported the practice of firms paying bribes to public officials to win tenders, avoid regulations, speed up processes or influence policy.

Mail Today Bureau | November 3, 2011 | Updated 10:28 IST

Bribing public officials when doing business abroad is a regular occurrence, according to a survey of 3,000 business executives from developed and developing countries, according to the Bribe Payers Index released by Transparency International on Wednesday.

Transparency International's 2011 Bribe Payers Index, ranks 28 leading international and regional exporting countries by the likelihood of their firms to bribe abroad.

India's score improved to 7.5 points, up by 0.7 points since the last survey in 2008 but it still remains at the 19th spot in the Bribe Payers Index of 28 countries, as there was a high likelihood of Indian companies paying bribes abroad. India's score was below the global average of 7.8 points.

Companies from Russia and China, which invested $120 billion overseas in 2010, are seen as most likely to pay bribes abroad. Companies from the Netherlands and Switzerland are seen as least likely to bribe with scores of 8.8 points.

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Next on the list were Belgium, Germany, Japan, Australia, Canada, Singapore, the UK and the US. Canada and the United Kingdom saw the most significant deterioration in their scores and their country rankings fell by five and three places, respectively.

Canada and Belgium were together ranked at the top of the previous list in 2008. The countries were evaluated on a scale of 0-10 points, with the maximum 10 points corresponding to the view that companies from that country never indulged in bribery abroad and a zero score being equivalent to these companies having always paid bribes.

Those ranked below India include Turkey, Saudi Arabia, Argentina, the UAE, Indonesia and Mexico. Addressing foreign bribery is a priority issue for the international community. A year ago the group of 20 developed economies (G20) committed to tackling foreign bribery by launching an anti-corruption action plan.

The progress report of the working group monitoring the action plan, which G20 leaders are expected to approve at Thursday's Cannes summit, will recognise steps taken by G20 countries China, Russia, Indonesia and India in making foreign bribery a criminal offence. In the survey, international business leaders reported the widespread practice of companies paying bribes to public officials in order to win public tenders, avoid regulations, speed up government processes or influence policy.

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However, companies are almost as likely to pay bribes to other businesses, according to the report, which looks at business-to-business (B2B) bribery for the first time. This suggests that corruption is not only a concern for the public sector, but also for the business sector, carrying major reputational and financial risks for the companies involved.

The Bribe Payers Index 2011 also looks at the likelihood of firms in 19 specific sectors to engage in bribery and exert undue influence on governments. Public works and construction companies scored the lowest in the survey. This is a sector where bypassed regulations and poor delivery can have disastrous effects on public safety.

Oil and gas is also a sector seen as especially prone to bribery. The extractives industry has long been prone to corruption risk. Companies operating in oil-rich Nigeria have already been fined upwards of $3.2 billion in 2010-2011 for bribery of public officials.

Courtesy: Mail Today 

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