Who knows when bribes are paid?

Company bosses are often aware that bribes are paid to public officials in foreign countries to win contracts and to cut through red tape, according to the OECD’s first Foreign Bribery report released on Tuesday.

The report by the Organisation for Economic Co-operation and Development found corporate management was in the loop in over half of 427 enforcement actions taken since its Anti-Bribery Convention came into effect 15 years ago.

Its analysis of these actions found in 41 percent of cases management-level staff knew bribes were being paid and company chief executives were involved in 12 percent of cases.

Patrick Moulette, head of the OECD’s anti-corruption division, said he hoped the report would shed light on where more effort could be made to end corruption as campaigners had been fighting in the dark to tackle this complex, covert crime.

“Most of the time the bribes are made with the knowledge of senior management which is surprising because in most cases of international bribery sanctions are imposed on second row employees,” Moulette told the Thomson Reuters Foundation.

“We need to get away from the idea that if you want to do business in foreign countries then you have to give bribes.”

The report also questioned the notion that bribes were mostly paid to public officials in poor nations, finding that almost half of the cases, or 43 percent, involved bribery of officials in developed or highly developed countries.

But Moulette said more work was needed to check this trend as detection rates in developed countries could be higher due to stronger legislation to tackle corruption that erodes trust in governments, businesses, and markets, and undermines growth.

Bribes for public contracts

He said the aim of the Foreign Bribery report was to raise awareness about the nature of the crime and to identify areas for further analysis and policy recommendations for the future.

Foreign bribery was defined as offering, promising or giving any undue financial or other advantage, directly or through intermediaries, to a foreign public official to obtain or keep business or for improper advantage in any other business.

Analysis of the 427 cases found nearly six out of 10 – or 57 percent – involved bribes to win public sector tenders with 12 percent paid to clear custom procedures.

Two-thirds of the cases were in four sectors: extractive, construction, transportation and storage, and information and communication.

Intermediaries, such as local sales and marketing agents, distributors and brokers, had a role in three-quarters of cases.

When it came to detection, one in three cases came to light after being reported by the companies involved or individuals, with nearly one third of companies, of 31 percent, raising the alarm after finding evidence of bribery in an internal audit.

The second most common way of uncovering foreign bribery was via law enforcement agencies such as the police or customs officers. Media investigations initiated action in 5 percent of the cases and whistleblowers led to 2 percent of cases.

In total 80 people received jail sentences in the 427 cases after being found guilty of foreign bribery, while fines were imposed on 261 individuals and companies, totalling 1.8 billion euros ($2.25 billion).

Published in collaboration with Thomson Reuters Foundation Trust.org

Author: Belinda Goldsmith is an award-winning journalist who has reported and led news teams from more than 20 countries on political, financial and general news.

Image: An employee counts Indian rupee currency notes inside a private money exchange office in New Delhi July 5, 2013. REUTERS.