• Business and corruption

Business and corruption

This paper reports on the results of a survey conducted on business attitudes to corruption. The report argues that despite new laws criminalising foreign bribery, there have been few prosecutions outside the United States and honest companies are still losing out to dishonest competitors on a large scale. Host countries lose out because high levels of corruption discourage reputable businesses from investing. And, although many companies are tightening their anti-corruption procedures, overall standards of compliance remain highly uneven – both across countries and across sectors.

The survey involved telephone interviews with 350 international companies based in seven jurisdictions: the United Kingdom, the United States, Germany, France, the Netherlands, Brazil and Hong Kong. Some results highlighted in the report include:

• 43% of respondents believe that they failed to win new business in the last five years because a competitor had paid a bribe, and one-third had lost business to bribery in the last year
• companies in the construction, oil, gas and mining sectors have been most likely to lose business to corrupt competitors
• more than 35% of companies surveyed had been deterred from an otherwise attractive investment because of the host country’s reputation for corruption
• a quarter of respondents said that the cost of bribery was between zero and 5% - however, 9.7% said that corruption could amount to up to half of the total project costs, and 7.1% said it could be even higher
• the level of awareness of new anti-bribery the laws among companies is low
• when asked to assess the likely impact of anti-corruption legislation over the next five years, 58% of respondents said that corruption levels would stay the same despite the laws; 12% thought that corruption would increase; and only 24% said that it would decrease as a result of the laws
• Canada is perceived to have the highest standards of compliance with anti-corruption codes
• the companies surveyed were pessimistic about the future: 42% expected the scale of corruption to remain the same in the next five years; 32% thought that it would increase; and only 23% thought that it would decrease.

The report concludes that co-ordinated implementation by individual companies, industry associations and governments is required to tackle international bribery, and that companies need to back up anti-bribery codes with effective compliance procedures.

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