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Corruption and the private sector
Other mechanisms established to monitor compliance include hotlines (e.g. at DANIDA, the Danish public donor),29 ombudspersons (e.g. at Germany’s GTZ) and the World Bank’s Department of Institutional Integrity, which investigates allegations of fraud, corruption and staff misconduct in bank operations. Export credit agencies (ECAs) can also make a major contribution to incentivise corporate integrity. They underwrite an estimated 10 per cent of global exports by large industrialised countries and provide loans that exceed the lending of multilateral development banks.30 ECAs can help tackle corruption in foreign investment projects by including strong due diligence and anti-corruption measures in their guarantee and loan schemes. In order to get a guarantee from the Norwegian Export Credit Agency (Garanti-Instituttet for Eksport Kreditt), for example, companies must sign a statement declaring that they will refrain from any illegal bribes. The 2006 OECD recommendations to deter bribery in officially supported export credits provide an updated guiding framework for good anti-corruption practices. The challenge is to ensure more widespread and effective implementation of many important provisions, such as the requirement for the applying exporters to disclose the use of agents and commission fees, and to induce the ECAs of non-OECD countries to adopt the same principles.31
Addressing the global supply side of corruption Ring-fencing donor projects is not enough. For a sustained impact on corporate integrity in developing countries, donors must address the global supply side of corruption. A major step forward is the OECD’s Principles of Donor Action in Anti-Corruption.32 Principle 2 provides a clear mandate for donors to address proactively the supply side of corruption, stating: ‘Donors recognise that corruption is a two-way street [and that] action is needed in donor countries to bear down on corrupt practices by home-based companies doing business internationally.’ In this context, donors aim at influencing national and international processes and instruments that address the supply side of corruption. At the national level, the GTZ and BMZ (Federal Ministry for Economic Cooperation and Development), for example, are currently engaging in a reform of the German National Contact Point that monitors the OECD Guidelines for Multinational Enterprises. At the international level, donors support the further development of private sector anticorruption instruments, such as the OECD Anti-Bribery Convention and the UN Convention against Corruption (UNCAC). 29 Ministry of Foreign Affairs of Denmark, Help Us to Fight Corruption (Copenhagen: Ministry of Foreign Affairs of Denmark, 2005). 30 ‘Exporting Corruption: How Rich Country Export Credit Agencies Facilitate Corruption in the Global South’, An interview with The Corner House, Multinational Monitor, vol. 27, no. 3 (2006). 31 OECD, OECD Council Recommendation on Bribery and Officially Supported Export Credits (Paris: OECD, 2006); OECD, Export Credits and Bribery (Paris: OECD, 2008); S. Hawley, Experience and Practice of Combating Bribery in Officially Supported Export Credits (Sturminster Newton, UK: Corner House, 2006). 32 The principles are annexed to the Policy Paper and Principles on Anti-Corruption: Setting an Agenda for Collective Action (Paris: OECD, 2007) elaborated by the OECD–DAC–GOVNET Anti-Corruption Task Team.