The Enforcement Gap

By Nancy Z. Boswell and Robert N. Walton, Transparency International-USA

Transparency International’s sixth annual report on enforcement of the OECD Anti-Bribery Convention, released last week, paints a mixed picture. On the positive side, it shows active enforcement in seven of the 36 countries evaluated, including the U.S, Germany, Italy and Norway. The U.K. even made the cut, despite the disappointing news last month that it is postponing the implementation of its sweeping new Bribery Act until April 2011.

Far less encouraging is the report’s finding that there is only moderate enforcement in nine countries and little to none in the remaining 20. This latter undistinguished group represents 15% of world trade and includes G8 members Canada, Japan and France.

The numbers speak for themselves, but the underlying question is why, after a dozen years, so many governments that committed to criminalize the use of bribes to get business have failed to live up to that promise. One can only conclude many of them have decided that it is not in their economic interest to do so. Motivations may vary, but these governments may see greater value in promoting the international commercial success of their country’s enterprises. If that means ignoring the Anti-Bribery Convention, so be it.

This disheartening conclusion is ominous for the countries where bribes continue to be paid, and for fair competition for those who observe the rule of law. There can be little doubt that inconsistent enforcement will allow bribery to continue unabated and may well undermine support of those countries that have followed their commitments with action. Likewise, it will hinder efforts to ensure that important emerging exporters –- notably China, India and Russia –- agree to and impose foreign bribery constraints on their companies.

Given the serious and damaging consequences of bribery in countries that can least afford it, the OECD, the governments that are complying with the convention, and those of us in the anti-corruption movement need to put more pressure on lagging countries to step up to their commitments and actively enforce the convention. Time is running out.

Nancy Boswell is the President and CEO of Transparency International- USA (TI-USA) and a former member of the Board of Directors of Transparency International (TI). She can be contacted here.

Rob Walton is TI-USA’s Senior Policy Director for Private Sector Initiatives. He can be reached here.