Corporate bribery crackdown put on back burner in recession: report

Wed Sep 5, 2012 11:02pm EDT
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By Robin Emmott

BRUSSELS (Reuters) - Only a handful of wealthy nations are tackling bribery by companies vying for lucrative contracts abroad as a worldwide crackdown launched 15 years ago is weakened by the global economic downturn, a watchdog said on Thursday.

The United States and Germany led efforts last year to catch companies and officials who use bribes to seek deals and influence, with about 450 foreign bribery-related cases between them that ended in litigation or settlements, a 25 percent rise on 2010, Transparency International said in a report.

But while Britain and Italy, under reformist Prime Minister Mario Monti, stepped up the fight against bribery in 2011, the report said Japan had only brought prosecutions in two foreign bribery cases in the past 12 years, a very low number given the size of its economy.

Other major nations including France, Canada and Brazil made little headway, while Mexico, where the local unit of U.S. retailer Wal-Mart Stores Inc. (WMT.N: Quote) faces bribery accusations, did not wrap up any cases in 2011 and opened just two inquiries.

"The progress in terms of enforcement is not good," said Jana Mittermaier, who heads the watchdog's EU office in Brussels. "The number of foreign bribery cases and investigations in most countries is low to nothing," she said.

Thirty-nine countries including most of the industrialized world - but not China and India - have signed a 1997 convention to combat bribery in international business transactions.

The convention was drawn up by the Paris-based Organisation for Economic Co-operation and Development (OECD). The OECD and Transparency International monitor progress annually.

Governments' reluctance to crack down seems to be linked to the poor state of the world economy since the 2008/2009 global financial crisis and the fallout from the euro zone debt crisis, although no studies have been done to link the two.   Continued...