World Bank move to reduce private sector bribery welcomed by Transparency International

World Bank will require firms bidding for large contracts to certify steps taken to prevent bribery

Transparency International (TI) welcomes the World Bank's decision to require companies bidding on large Bank-financed projects to certify that they 'have taken steps to ensure that no person acting for [them] or on [their] behalf will engage in bribery'. "This is an important step toward reducing the incidence of bribery in such projects, and remarkable after the many years of sometimes contentious discussions on the issue" said Peter Eigen, chairman of TI, the leading international non-governmental organisation engaged in the fight against corruption. Speaking today in Berlin, he continued, "This is a testament to the effectiveness of the anti-corruption movement in getting and keeping the anti-corruption message on the global agenda."

According to the World Bank, bribes cost the global economy over US$1 trillion every year, with a substantial amount of public funds lost in government contracting. Given the magnitude of the problem and its destructive impact, particularly in developing economies, TI has long advocated both greater transparency in procurement processes as well as requirements to ensure that bidding companies have the policies and systems in place to prevent bribery and corruption.

"The new certification requirement will promote the adoption of codes of conduct and help level the playing field for companies that operate with integrity," said TI Director Jermyn Brooks. The Bank action follows discussions with TI and the urging of construction industry leaders who have adopted an industry-wide code of conduct. This code was developed by a World Economic Forum task force based on the Transparency International Business Principles for Countering Bribery.

"We applaud the World Bank for taking yet another step to strengthen its procurement procedures. But further action is needed," cautioned Brooks. "We call on the Bank to encourage all lenders, public and private, to adopt similar requirements for all bidders, not only those engaged in competitive bidding on large civil works projects", he continued. "We will also continue to urge the Bank to require companies bidding on Bank-financed projects to have anti-bribery codes and programmes, and to implement other bribery-prevention tools." Brooks went on to say that TI now calls on all development banks and lenders to take up the challenge of improving their procurement guidelines.

With the widespread enactment into national law of the OECD Convention on Bribery of Foreign Public Officials, there are now laws criminalising foreign bribery in most major exporting nations. This has led to broader acceptance by international companies with headquarters in OECD countries of the need for corporate codes of conduct. An international group of companies and other stakeholders led by TI developed the Business Principles for Countering Bribery in order to provide a comprehensive template for such codes.

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