As the effects of the financial crisis are being felt around the world, Transparency International’s 2008 Bribe Payers Index (BPI) exposes the degree to which companies of the leading exporting nations are likely to engage in bribery when doing business abroad.

The damage caused by supplying bribes, irregular payments and other types of influence buying is clear – distorted markets and social inequity. In spite of governments’ pledges of zero tolerance for foreign bribery and assurances of ethical behaviour and corporate social responsibility from companies, the 2008 BPI reveals that not one of the world’s most influential economies can be seen as being exempt from exporting international corruption. The 2008 BPI should serve as a call to governments and companies alike to observe and pursue anti-corruption measures with renewed vigour.

The 2008 BPI ranks 22 of the world’s wealthiest and economically dominant countries by the likelihood of their firms to bribe abroad. It is based on the informed observations of 2,742 senior business executives from companies in 26 developed and developing countries, selected on the size of their imports and inflows of foreign direct investment.

"The combined global exports of goods and services and outflows of foreign direct investment of the 22 countries ranked in the 2008 BPI represented 75 percent of the world total in 2006."

Scores range from 0 to 10. The higher the score for the country, the lower the likelihood of companies from this country to engage in bribery when doing business abroad.

First place in the 2008 BPI is shared by Belgium and Canada with a score of 8.8, signifying that Belgian and Canadian firms are the least likely to engage in bribery when doing business abroad. Netherlands and Switzerland occupy third place in the index, each with a score of 8.7. At the other end of the scale is Russia, coming in last with a score of 5.9, just trailing China (6.5), Mexico (6.6) and India (6.8).

“The BPI provides evidence that a number of companies from major exporting countries still use bribery to win business abroad, despite awareness of its damaging impact on corporate reputations and ordinary communities,” said Transparency International Chair, Huguette Labelle. “The inequity and injustice that corruption causes make it vital for governments to redouble their efforts to enforce existing laws and regulations on foreign bribery and for companies to adopt effective anti-bribery programmes. In this spirit, all major exporting countries should commit to the provisions of the OECD Anti-Bribery Convention.”

The 2008 Bribe Payers Survey, which serves as the basis for the 2008 BPI, provides a closer looks at how corruption affects the private sector. Two new sector rankings highlight the likelihood of firms in 19 specific sectors to engage in bribery and exert undue influence.

The first ranking shows how likely companies in each sector are to bribe public officials. According to senior business executives, companies in public works contracts/ construction, and real estate and property development, are the worst offenders. Fisheries and the banking and finance sector were identified as the cleanest sectors in this regard.

Possible scores range from 0 to 10. 0 represents the view that ‘bribes are almost always paid’ and 10 that ‘bribes are never paid’ by a sector.

The second sector ranking reveals the frequency that sectors attempt to exert influence on government legislation, laws and decision-making through private payments to public officials, a practice commonly referred to as state capture. The public works contracts/ construction sector is again the worst performer, followed closely by oil and gas. In comparison, light manufacturing and fisheries were seen as being the least likely to engage in state capture. In light of the ongoing financial crisis, it is worrying that the banking and finance sector performs considerably worse when it comes to state capture, indicating the considerable influence it wields over regulation.

Possible scores range from 0 to 10. 0 represents the view that ‘bribes are almost always paid’ and 10 that ‘bribes are never paid’ by a sector.

The findings of the 2008 BPI and sector rankings highlight that both governments and businesses must do more to effectively curb supply side corruption. There is no place for complacency – even the best performers among the 22 countries are to a degree likely to pay bribes, as illustrated by 16 percent of respondents considering Belgian companies to ‘often’ or ‘almost always’ use familiar or personal relationships to win public contracts.

Governments have a special responsibility in cracking down on foreign bribery and to stand by commitments to prevent and prosecute such practices. In the 26 countries that the 2008 Bribe Payers Survey was carried out, two-thirds of senior business executives believed that governments are ineffective in the fight against corruption. It is both surprising and alarming that three-quarters of senior businesspeople surveyed revealed that they were not at all familiar with the OECD Anti-bribery Convention, the foremost international legal instrument for tackling the supply side of international bribery. Governments need to work to build awareness of the Convention within the business community and ensure that it is backed up with solid enforcement.

Similarly, companies headquartered in the world’s most economically influential countries have a duty to make sure their anti-bribery standards are comprehensive and enforced rigorously at every step. “Accountability must be guaranteed across borders, include improved risk management and reach all the way down a company’s supply chain,” said Cobus de Swardt, Transparency International’s Managing Director. “Businesses face a complex challenge, but efforts to improve labour practices, for instance, by working with intermediaries, suppliers and affiliates, show that there is no excuse to not extend anti-bribery standards globally in a similar fashion.”

Above all, efforts need to be united in order to stop the abuse of power for entrusted gain and lessen the destructive consequences corruption has for people around the world.