Organized Crime and Coruption Project

Looking to get a bribe from a foreign company? Ask companies from Russia and China.  A new study shows that companies from these two growing economies are the most likely to pay bribes in foreign countries, according to a survey by Transparency International (TI).  Mexico, currently bogged down in drug cartel violence, came was third from the bottom.

The anti-corruption NGO asked 3,016 business executives about the perceptions of bribes being paid by companies in 28 countries, including all the G20 countries.  In the resulting 2011 Bribe Payers Index, Russia and China fell at the bottom of the list, while Switzerland and the Netherlands scored best.

“It is of particular concern that China and Russia are at the bottom of the index,” the report authors noted, saying that their rising role in global markets, especially with Russian investments in oil and gas industries and Chinese investments in mining and infrastructure in Africa.

However, TI is quick to point out that none of the countries are “wholly clean of bribery.”   Moreover, other than India, there were few improvements since the last survey was taken in 2008, despite growing anti-bribery legislation globally.

TI lauded China’s move to put foreign companies and domestic operating overseas under the jurisdiction of anti-corruption laws.   Hailing it as a big step, TI China’s Rian Jianmin cautioned of potential “bottlenecks.”

Elena Panfilova, director of the Center for Anti-Corruption Research and Initiative --Transparency International Russia, wrote that “there are no islands of integrity in Russian public and business life.”

However, she said there has been noticeably increased enforcement of “new national anti-corruption legislation and compliance with international commitments.”

TI also assessed which industries are the most susceptible to bribes.  Agriculture and light manufacturing topped the list of 19, while public works and construction were at the bottom.

But the authors tempered this assessment, acknowledging that construction is often done through multiple contractors and sub-contractors, making it fragmented and hard to track.

Oil and gas energy, mining, real estate, and legal services are also marred by bribery, according to the report, because these sectors are “all characterized by high-value investment and significant government interaction and regulation, both of which provide opportunities and incentives for corruption.”

TI indicated some surprise that bribery between companies was as prevalent as bribes paid to governments.  The report extolled the UK Bribery Act, passed last year, which criminalizes bribery between business firms, including firms that do business in Britain.  “This sets a new global standard” that should be copied elsewhere, the authors wrote.

TI called on governments to honor their international anti-corruption commitments because of corruption’s “very real impact on human lives,” citing the role that shoddy construction has in times of natural disasters that have caused “many deaths…in highly corrupt countries.”