SUNS 4294 Monday 5 October 1998
DEVELOPMENT: COMMONWEALTH AGREEMENT TO FIGHT CORRUPTION
Ottawa, Oct 2 (IPS/Mark Bourrie) -- Commonwealth finance ministers pledged to fight corruption this week in concluding their meeting in Ottawa - the capital of a country where bribery of foreign officials is tax deductible.
The Commonwealth ministers said that the OECD convention against bribery should be expanded to include contributions to political parties, and transnational corporations engaging in such practices should also be listed, as transparency international now does of countries viewed as corrupt.
Canada has one of the worst bribery policies in the world, according to diplomats.
It's a criminal offence in this country to pay off government officials, but Canadian corporations, especially mining companies, openly practice bribery and deduct the cost from their taxes.
The most notorious involved Bre-X Minerals, an Alberta-based company that bribed Indonesian officials in the early 1990s to allow it to open a gold mine in Busang, Borneo. The company later turned out to be a massive stock manipulation that cost investors nearly USD 3 billion, but not before members of the Suharto family collected nearly millions in bribes for mining exploration licenses.
Many US corporations have opened branch offices in Canada to take advantage of the official blind eye to corruption, since US law makes foreign bribery a felony.
James Peterson, Canada's junior foreign minister, was embarrassed when asked during talks Thursday about Canada's foreign bribery laws. "We are very much against that (bribery) and hopefully very soon we will have legislation to deal with the problem," Peterson said.
The Commonwealth finance ministers pledged to fight institutionalised corruption after hearing a report on the threat posed to the economies of many Commonwealth members because of bribery and corruption.
Their move followed other treaties against corruption adopted by Organisation of American States, the European Union and the Organisation for Economic Co-operation and Development.
The Commonwealth report said bribery and corruption increased the cost of government programs, stifled government revenue-collection and discouraged foreign and domestic investment. Public policy and regulatory processes were undermined, governments fall into disrepute, and donor countries cut foreign aid.
"Corruption is an integral part of poor governance and should be viewed within this environment," the report said. "Corruption has become global in its scope, impact, and possible solutions. It is an
increasing threat to the fabric of global human society. Like drugs, pollution and international terrorism, the fight against corruption requires international co-operation."
The report urged that:
the OECD convention against bribery should cover the funding of political parties.
laws relating to the laundering of the proceeds of corruption could be strengthened, especially in relation to banks. Since many off-shore banks are in Commonwealth countries such as the Bahamas and the Cayman Islands, this is an area that is appropriate for Commonwealth action.
banks and financial institutions should have stronger rules against their employees being parties to corrupt actions.
a ranking of international corporations by corrupt practices should be evolved, the same way Transparency International ranks countries on a corruption index.
"The objective of all countries should be to attain 'zero tolerance' for corruption, nationally and Internationally. This attitude must permeate value systems, current policies and legislative frameworks," the report said. "While governments must aim to eliminate corruption, it may be unrealistic to expect an immediate or total elimination of corruption. However, it is vital that the concept of zero tolerance be adopted from the outset. Actions taken should focus not only on the
costs of corruption but also address the underlying causes which differ from country to country."
Nationally, governments and media need to foster society-wide resentment against corruption, the report said.
"Action programmes need to be designed to meet the expectations of citizens, who need to be informed about the national strategy to combat corruption. Effective action to fight corruption is most likely through programs which are nationally owned, designed to meet national circumstances and built on the foundation of popular empowerment," the report said.
"An anti-corruption strategy must encompass practices in the private sector and non-government institutions. Moreover, even where governments are less than enthusiastic in tackling corruption, popular support and the agencies of civil society can still be mobilised in support of an anti-corruption agenda."
In their final communique, the finance ministers stopped short of using the tough language contained in the report. They did, however, agree to improve the aid and procurement practices of multilateral and bilateral donors, "with emphasis on greater transparency ion consultation, two-sided accountability and strengthening the capacity of countries to implement anti-corruption reforms." Aid policies, they added, should be "examined and reformed where necessary, to avoid any contribution to corruption, with particular reference to tied-aid, and suppliers' credits."
Nigeria's Emeka Anyaoku, secretary-general of the Commonwealth, told reporters finance ministers had "pledged themselves to national actions and international actions to combat corruption..the measures mentioned in the statement are to be taken seriously."