Ungreasing the Palm
Apparently society's expectations for corporate behavior are rising. Bribery is becoming less tolerated in many nations as a way of doing business.
As evidence of this change, we note four developments:
1. Next week officials of the 29 nations that are members of the Organization of Economic Cooperation and Development (OECD) will meet in Paris to finalize an anticorruption convention. The deal, if approved, will be signed with appropriate pomp and ceremony just before Christmas.
The Convention on Combating Bribery of Foreign Public Officials in International Business Transactions will oblige its signatory nations to make the bribery of foreign officials a crime wherever this takes place.
Considerable ado has been made about corrupt officials in developing nations demanding bribes from foreign businesspeople to win contracts. This convention strikes at those business executives in the industrial countries who either give in to such demands or initiate bribes themselves.
2. Even in Africa, where some nations are ranked among the world's worst for corruption, there is change. Last Wednesday the Global Coalition for Africa announced in Washington a program of action that includes a "model for public procurement" aimed at stopping bribery. Leaders of six African nations will write World Bank president James Wolfensohn with pledges to stop bribery.
Leading the press briefing was Robert McNamara, co-chairman emeritus of the coalition, former World Bank president, former United States secretary of defense. He was just back from a coalition forum in Moputo, Mozambique, where an "action agenda" for curbing corruption in Africa was put together.
One element behind the moves is a recognition that widespread corruption slows or even reverses economic progress. It deters foreign investment. It causes social and political instability. That was plain in Zaire under the late President Mobutu.
3. Last year, Latin American nations approved the Organization of American States Treaty under which they will work more closely to curb, detect, and prosecute corruption.
It is seen as an important first step in tackling corruption. The topic will come up again at the Summit of the Americas next May in Santiago, Chile.
4. The World Bank and the International Monetary Fund have toughened efforts to combat corruption.
The bank, for instance, will not finance a project if the contract process is not transparent against bribery. If IMF loan money goes into private pockets, the fund sends no more.
It would be naive, of course, to assume that these four developments will end corruption. But they do represent progress.
The US has led the way with the Foreign Corrupt Practices Act, passed after Watergate and other scandals. American executives see the new convention and ensuing national legislation as ways to level the playing field in bidding for foreign contracts.
Many European executives would welcome laws making bribery of foreign officials a crime, says Frank Vogl, vice chairman of Transparency International, a nonprofit group that has done yeoman work in the campaign to curb corruption around the world. Most businesspeople find it demeaning and unpleasant to engage in bribery, even if they regard it as necessary to win a contract.
For the OECD negotiations to succeed, Transparency International sees several necessities. The language must cover government-owned or controlled enterprises. The convention should require signature by only three or four members of the Group of Seven industrial nations to come into force. Negotiators shouldn't balk over whether penalties against bribery are civil or criminal, so long as they are a meaningful deterrent.
We agree with Transparency International that no excuses for failure in negotiating the convention are acceptable. The pact should come into effect in December 1998. And it should be followed up to see that its obligations are met in each signatory nation.