Once again, Transparency International (TI) has called on governments to crack down on foreign bribery in order to keep global trade fair. In its latest annual progress report on Organisation for Economic Co-operation and Development (OECD) anti-bribery convention treaty released on October 23, TI decried the fact that, many leading economies are failing to stop their companies from spreading corruption around the world.
OECD entered into a treaty to curb corruption especially amongst multinational companies towards the third world 1997 but it went into force on 15 February 1999.
Fifteen years after however, only four of 41 countries signed up are actively investigating and prosecuting companies that cheat taxpayers when they bribe foreign officials to get or inflate contracts, or obtain licences and concessions. Five others are classified as having moderate enforcement, while another eight had limited enforcement. Twenty-two of the countries parties to the Convention are doing little or nothing by way of enforcement. These 22 countries according to TI represent 27 per cent of world exports. The four leading enforcers (Germany, Switzerland, United Kingdom, United States) completed 225 cases and started 57 new cases from 2010-2013. The other 35 countries completed 20 and started 53. Twenty countries have not brought any criminal charges for major cross-border corruption by companies in the last four years.
Transparency International said enforcement is low because investigators lack political backing to go after big companies, especially where the considerations of national economic interest trump anti-corruption commitments. Investigators also often lack the resources to investigate complex white-collar crime.
In Nigeria, the Socio-Economic Rights and Accountability Project (SERAP) found out that companies caught bribing in the country have paid billions in fines, but not in Nigeria. The Nigerian non-governmental organisation made efforts to find out about foreign bribery fines through the awareness created by the OECD reports on bribery and various other works by anti-corruption movements. This is in a bid to reduce the case of corruption within and between multinational companies.
Amongst the enforcers of the convention is the United States of America who has been in forefront of ensuring proper prosecution of culprits. For instance, Halliburton in January 2009, paid a $559 million (N84 billion) fine to the U.S government after the company was found guilty of bribing Nigerian officials. The bribe givers have all been convicted and fined, and in some cases jailed in their countries of origin and in the U.S.
Beneficiaries of the bribe, as revealed by several investigations, include three successive Nigerian heads of state, former petroleum ministers, officials of the Nigerian National Petroleum Corporation, and other government officials. It is be amazing to find out that no Nigerian bribe recipient has been convicted or jailed at home. Awful enough, most beneficiaries of the bribes are presently occupying high public offices. This incident would no doubt have affected one developmental contract or the other in the country.
It is quite unfortunate that developing nations are quite susceptible to bribes and corrupt practices because of ineffectual or even non-existing legislations against such acts. In its 2012 Corruption Perception Index, TI described Nigeria as highly corrupt, being the 35th most corrupt nation in the world. Thus foreign multinational companies find it pretty easier to influence decisions in their favour via bribing of local officials and executives.
Companies like Willbros Inc, Julius Berger and other big multinational in the country have been found culpable in various bribery scandals. A German Engineering Firm, Bilfinger SE based in Mannheim has been fined $32 million for violating the Foreign Corrupt Practices Act (FCPA) by bribing some Nigerian government officials. The firm, an international engineering and services company bribed the officials to secure and retain contracts related to the Eastern Gas Gathering System (EGGS) project, which was valued at approximately $387 million.
Court documents revealed that, Bilfinger in collaboration with Willbros Group Inc. and others conspired to pay bribes of more than $6 million to the government officials to secure the EGGS contracts. They inflated the price of the joint venture’s bid by three percent to include the $6 million bribe.
Late in 2013, the United States Justice Department and the Federal Bureau of Investigation confirmed that construction giant Julius Berger agreed to pay N5.1 billion ($32m) penalty for violating the Foreign Corrupt Practices Act. Bilfinger SE was also charged with bribing Nigerian government officials to obtain and retain contracts related to work for the Eastern Gas Gathering System (EGGS). The project was reportedly valued at $387 million.
Where actions appear to be taken in few of these cases, their trials are are becoming protracted. On December 19, 2008, Kenneth Tillery, a former Willbros executive, was charged with conspiring to make and making bribe payments to Nigerian and Ecuadoran officials in connection with the EGGS project and pipeline projects in Ecuador and conspiring to launder the bribe payments. The charges against Tillery were said to be mere accusations, and he is presumed innocent unless and until proven guilty. Thus many other cases like this go down the drain and culprits escape unscathed.
A year later, Paul Grayson Novak a former Willbros consultant, pleaded guilty to one count of conspiracy to violate the FCPA and one substantive count of violating the FCPA in connection with his role in making corrupt payments to Nigerian government officials to obtain and retain the EGGS contract. Novak was sentenced on May 3, 2013, to 15 months in prison, to be followed by two years of supervised release, and was ordered to pay a $1 million fine.
But as it is said above, only a handful of developed countries are taking action against this unwholesome practice. Nine of the 20 countries with the least public sector corruption are doing little or nothing to make sure their companies follow the same standards overseas, allowing them to contribute to public sector corruption elsewhere. (TI Oct. 2014)
It is no more news that cases of bribery have rocked nations’ public and private procurement processes leading to inflated and unfinished contracts which then affects the development of countries. This may be largely as a result of incompetence of companies which get contracts as a result of bribing of corrupt executives and officials.
Nigeria for instance where huge amounts of oil wealth have been squandered through corruption, has a stack of some 12,000 abandoned public projects. It is pertinent to say that some of the projects date back to 2007, when former president Olusegun Obasanjo signed a deal with China that included the promise of a $500-million loan, with $341 million in matching funds from Nigeria to build it by 2011.
The deals, worth an estimated $50 billion have sat idle for various and often indiscernible reasons. Countless kilometres of road, many fine factories and hundreds more projects exist only as dreams in Nigeria despite years of promises. While foreign companies’ corruption continues to thrive, the locals continue to suffer and deteriorate in terms of development as a result of this exploitation.
According to Transparency International, one reason cross-border bribery in international business deals thrives despite being outlawed is that investigators lack the resources to track the complex money laundering techniques increasingly used to conceal bribery deals. Today corrupt deals are increasingly masked by sophisticated shell companies whose real beneficial owner is not known, even to authorities.
In this latest report, Transparency International advised the OECD to help authorities work together across borders if they are to keep pace with the increasingly cross-border nature of crime. The anti-corruption group also reiterated its call on the EU and G20 to ensure the publication of beneficial ownership in public registers of company information.
It is hoped that countries under the treaty would make effort to track down corrupt companies in a bid to ensure that the objectives of the convention are met.
In the same vein, Nigeria’s Federal Government should not relent but continue to push further in cleaning up its procurement processes which it commenced when it made what appears to be its first major breakaway from dubious state contractors by barring 10 companies from further doing business in the country. This followed their alleged corrupt practices. The ban on the companies was prompted by the report from both the World Bank and the Inter-American Development Bank Group.