The World Bank estimates international corruption at a trillion U.S. dollars annually. That’s $2.7 billion a day, or about double the value of all Canada-U.S. trade!
It’s a big market – oil and natural gas, defence contracting, public contracting, even emergency relief, not to mention drug trafficking and arms smuggling.
Corruption is a hidden cost, coming from various sources and perhaps from those least likely to protest, like shareholders, consumers, or users. Food and medicines are delivered sub-standard or under-weight, bridges and houses collapse, highways disintegrate, and plants/utilities fail to produce. Worse, where emergency relief is targeted, those hurt once are hurt again when the promised aid is deficient.
Transparency International (“TI”) (Berlin, Germany) reports regularly on the perceptions of international bribery demand and supply. Poorer nations with scant resources or weak legal systems are the most affected by the corruption plague, but TI’s unpleasant revelation is that the perpetrators are the advanced and booming countries which take advantage of those weaknesses.
Complex anti-corruption standards are being imposed internationally, and paying bribes to gain the business edge is no longer that simple. Thirty member-countries of the Organization for Economic Cooperation and Development (“OECD”), (of which Canada is one), and six non-member countries have made the bribing of foreign public officials a criminal offence even if committed abroad. Pressure is mounting on other non-OECD exporters (such as the BRIC nations) to follow the lead of those six.
The World Bank now imposes a devastating sanction and publicly debars those it finds guilty of having indulged in corruption. Export credit agencies of the OECD countries, including Canada’s Export Development Corporation, now deny financial support to new and existing clients if they are found, or are suspected, to have engaged in bribery.
Compounding this, is the varying intensity with which countries enforce their anti-corruption laws. Political will can affect enforcement, as recent actions by the UK government in the Saudi arms scandal enquiry have shown.
Still, for exporters, it is a legal jungle out there! Be aware and beware