From poverty to power - Oxfam-Québec

FROM POVERTY TO POWERlong-term development. This issue is discussed in Part 2(see page 89).• Corruption: World Bank figures suggest that $1 trillion inbribes is paid annually by international companies to securelucrative deals. In 2004, the World Bank estimated that over 60per cent of multinational corporations paid undocumentedbribes in non-OECD countries to procure contracts. 110 Theexport credit agencies of rich-country governments, whichinsure large companies to trade and invest in developing countries,can be complicit in corruption, most directly by including‘commissions’ that hide bribes in the overall sum underwritten,and most notoriously in the arms trade, which accounts for 50per cent of the bribes paid worldwide between 1994 and 1999,according to the American Chamber of Commerce. 111There are several promising developments in this field, providedNorthern governments are willing to back them. The OECD Conventionon the Bribery of Foreign Officials in International BusinessTransactions (the OECD Anti-Bribery Convention) makes it a criminaloffence for a representative from a business operating from any OECDcountry to bribe a government official anywhere in the world. Incontrast with the civil penalties imposed before the Convention wasintroduced, company directors and managers may now face jail termsif they engage in active corruption. While countries such as the USA,France, Germany, and Italy have enforced anti-bribery laws, since theConvention took effect few significant prosecutions have occurred inJapan, Canada, or Australia. The UK government drew widespreadcondemnation in 2007 when it suspended investigations into alucrative arms deal between British Aerospace and Saudi Arabia, citingnational security considerations. 112Most countries lag behind the USA in holding their companies toaccount; the 1977 Foreign Corrupt Practices Act has led to numerousprosecutions. For example, in 2006 the US Securities and ExchangeCommission (SEC) alleged that Brazilian and South Koreansubsidiaries of the Tyco conglomerate had repeatedly made illegalpayments to government officials in those countries in exchange forbusiness. The SEC action was settled with $50m in penalties. 113346