Taking a robust stance on bribery

Foreign Secretary, Government of the United Kingdom

Bribery is a modern day scourge on international trade. At a time when so many people are struggling through an economic downturn, bribery is a very real disease threatening our prosperity. It poses a serious challenge to the development of economies and contributes to market failure. It distorts competition, damages free enterprise and blights business. It stifles talent and innovation and kills entrepreneurship. In many cases it is the poorest in society who are hit the hardest

For business, bribery is a threat that needs to be actively managed, like fraud or embezzlement. Corruption adds up to 10% to the total cost of doing business globally, and up to 25% of the cost of procurement contracts in developing countries.

Doing business in corrupt markets has been found to add costs equivalent to a 20% tax on business. In 2010 and 2008, roughly a fifth of surveyed executives reported that they had been asked to pay a bribe, with a similar proportion reporting that they had lost business to a competitor who paid bribes.

Social costs invariably come hand in hand with costs to business–detrimental effects to employment, health, education and a wasteful depletion of natural resources.

The UK Bribery Act, which came into force on 1 July, is an important step in Britain’s efforts to combat bribery. The Act will equip the UK courts with some of the most robust anti-bribery legislation in the world. The Act consolidates and brings up to date previous legislation and introduces two new general offences of giving bribes or receiving bribes: an offence of bribery of foreign public officials for business reasons, and an offence relating to commercial organisations which fail to prevent bribery committed on their behalf.

Taking a robust stance on bribery will not just tackle the scourge, but it will act as a spur to business. Robust action against bribery will strengthen free market forces. It will fuel competition and will ensure consumers and the public get a fairer, better deal. Prices come down, services improve and business grows. But most of all a tough stance against bribery will attract business and investment rather than deter it.

Business agrees with us. They too would like to see the scourge of bribery removed from business transactions. They will also want to see fair play by everyone and a level playing field for all. All the leading businesses and business organisations in the UK have made clear they want to see an end to this problem.

This is not just a problem for the West or the leading economies in the world. Bribery does even more damage to developing countries that can least afford it. Developing countries face enough of a struggle to build economies, create proper tax systems, provide public services like health and education, and stimulate growth. Bribery adds costs, cheats the system and steals money. It traps people and countries in poverty.

I call on other countries to look hard at their own laws and regulations on bribery and to take tough action against it. The more that join with us to fight this scourge the quicker we will beat it. Many countries already have tough laws on bribery but there is no doubt more can be done to make them stronger and also enforce them fully.

The OECD has led international efforts to tackle bribery across the world and should be commended for their efforts thus far. The UN Convention against Corruption is another important international agreement in the fight to build stronger economies and societies. There are many other organisations such as the G20 joining in the effort to tackle this problem and the UK is keen to work with them all. I firmly believe that the UK Bribery Act will do more to support business and our trade with the world. But the UK cannot succeed alone. Only by global action, only through determined leadership, and only through government action in OECD countries and elsewhere and through the support of business will we make possible the prosperous future we all want to see.

References

Ernst & Young (2008), 10th global fraud survey. Visit www.ey.com

Grant Thornton (2010), Decision time: The UK Bribery Act and the changing face of business, Anti-Corruption Survey 2010.

Data also come from various World Bank and UN reports.

See also www.oecd.org/corruption

©OECD Observer No 285, Q2 2011




Economic data

E-Newsletter

Stay up-to-date with the latest news from the OECD by signing up for our e-newsletter :

Twitter feed

Editor's choice

  • Base Erosion and Profit Shifting (BEPS)
  • Base Erosion and Profit Shifting: "Currently tax planning results in locating the profits in tax havens where nothing is happening. BEPS is rewriting the international tax rules to realign the location of the profits and the real activity."
  • Try our latest OECD Observer crossword!
  • OECD Yearbook 2014
    Catherine L. Mann has been appointed as the new OECD Chief Economist. She replaces Pier Carlo Padoan, who became Italy’s minister of economy and finance in February 2014, and will take up her post in October. Ms Mann will be the second woman in the OECD's 50-year history to be chief economist.Click for bio.
  • Climate change video
  • Climate change: Reduce greenhouse emissions, strengthen climate resilience and mobilise finance, policies and willpower for a meaningful global agreement in Paris in 2015: these are the issues as government leaders, business heads and civil society representatives prepare for UN climate talks (COP20) in Lima, Peru, in December. The OECD is in the vanguard of efforts to fight climate change, and is providing facts, data and guidance to steer these discussions. Simon Upton, Director of Environment, explains the key issues.
  • Better Life Index
    How do you measure a Better Life? The OECD has launched a new interactive infographic where visitors can explore the priorities of people worldwide. Be a part of it. Create and share your Better Life Index.
  • Tim Harcourt Video
  • G20 and Australia: Economist Tim Harcourt speaks to the BBC about how Australia has gone from "Down Under to Down Wonder".
  • OECD Week 2014 : Resilient economies for inclusive societies. Forum 2014 was organised around three cross-cutting themes: Inclusive Growth, Jobs, and Trust. Watch the video. And check out our 2014 yearbook by clicking here.
  • better-life
  • What does a better life mean for you? Watch this video produced by students from La Sorbonne and see what people around the world have to say.
  • In the transition to cleaner and greener economies, the OECD is helping government and business with the tools to get climate finance right for greener growth plus job creation, while treating our environment as a precious resource.
  • Did you miss the press conference with French President François Hollande & IGO heads friday? Read about it by clicking on the photo!
  • wages-crisis
  • Most workers have seen their wages and earnings rise little or even fall since the crisis. This video explores why and explains who has been affected.

Most Popular Articles

Subscribe Now

<b>Subscribe now!</b>

To receive your exclusive print editions delivered to you directly


Online edition
Previous editions

Poll

Is deflation a major risk in OECD economies?

Yes
No
Don't know

OECD Insights Blog

NOTE: All signed articles in the OECD Observer express the opinions of the authors
and do not necessarily represent the official views of OECD member countries.

All rights reserved. OECD 2014