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Monday, 18 August 2008

UK is 'most corrupt' developed nation

More embarrassment for Gordon Brown with the news that the UK may be suspended from the OECD's 37-member anti bribery group when it next meets in October. It's not just the BAE-Saudi deal that in question - and I'm personally equivocal on this - but on our endemic failure to tackle major corporate bribery and corruption.

Now this nation has a proud tradition of buccaneers and warrior-merchants, audacious men who broke the rules to achieve personal wealth and economic advantage for the nation; from Drake to Rhodes such men have bestrode the globe and a little bribing of corrupt foreigners was no more than oiling the wheels of trade. So we shouldn't be all holy and prissy about this. But those days were before globalisation, and things have changed.

Just as the international mobility of capital means that the wealthy want their libel cases heard in Britain but their divorces in America, so firms will shift their operations to take advantage of local laxity in legal areas that provide competitive advantage. Firms that do business by corruptly enriching the buying decision-makers of less transparent nations will find advantage in locating in Britain. And this is what is bugging the OECD.

The FT reports:

The letter attacked Britain over its failure to bring a single overseas bribery case or to deliver on a years-old pledge to update its anti-corruption laws. It also raised concerns that the Serious Fraud Office (SFO) would downgrade its commitment to tackling corporate foreign bribery, because of plans for it to focus more on public education and consumer crimes such as share scams.

The letter was approved by all the anti-bribery group’s 37 members except Britain, people familiar with its contents said. Those members include the US, Japan and Europe’s leading economies. Anti-corruption campaigners and lawyers say Britain has fallen behind other previously poorly-performing nations such as France and Germany, which have launched investigations into leading companies such as Siemens and Alstom, the engineering groups.

The US has brought dozens of corruption cases over the past 30 years and companies under investigation include Halliburton, the oil services group formerly headed by Dick Cheney, the vice-president.

British campaigners say the undoubted commitment of some anti-corruption investigators is being neutered by archaic laws and a lack of political will to pursue cases that – as with BAE – are seen as potentially damaging to British strategic and commercial interests. The OECD anti-bribery group’s October meeting will review the results of a probe it launched last year into London’s efforts to tackle corruption, after the scrapping of the BAE-Saudi probe in 2006 caused an international outcry.

The BAE case aside, I think there's a case to answer. An international reputation for a tolerance of corporate corruption cannot be in the UK's long term interest. The probity of our merchant laws and courts is at the heart of the trust that is essential for business to thrive. Labour's laxity in this area, perhaps not unexpected in a party that has indulged itself in the most shameful decade of political corruption in over a century, must be rectified.


DWMF said...

Misleading title. British society or commerce is not the most corrupt - it isd British commercial law that is the most lenient in corruption cases. This is because British businessmen are comparatively honest and straightforward, and we have not needed such tough laws here.

Sadly, I can see the necessity for uniformity of laws regarding commerce across the world, but the UK will be a darker, duller, less flexible place for it.

Blue Eyes said...

NL have done their best to drop us out of the "developed nation" list, so no surprises that they have presided over an intolerable increase in corruption. Ministers wish they could get away with things that their friends in their Marxist allies' lands.

Nick Drew said...

national reputation and thriving business are desirable enough, for certain: but defending them is not the primary reason for attacking corruption

it's personal safety: if the authorities and the courts are routinely to be bought, everyone's wellbeing stands to be compromised at the whim of the highest bidder; no-one is safe

corruption bothers me more than almost anything else