Global Lessons, Trends and Guideposts for the UNCAC?

10 March 2015, by Keith Henderson.

For those who have not seen it I highly recommend reviewing the recently released OECD Foreign Bribery Report: An Analysis of the Crime of Bribery of Foreign Public Officials. That said, it is important to read between the lines. As we all know, general findings from aggregated data, while useful, can also be misleading and misused — especially to the untrained eye. Thus, we in the UNCAC Coalition have a special responsibility to not only disseminate but carefully analyze and comment on what some of the Report’s key findings mean and don’t mean and where information/data gaps exist.

It is a long-awaited and first-of-its-kind report that summarises findings from the 427 cases that have brought under the OECD Anti-Bribery Convention in a range of countries. Because no one else right now has access to the full range of data behind the Report, only the OECD could have written it. Hopefully OECD will make it available for independent and deeper analysis soon.

Now is the time for all of us to stop and reflect on where we’ve been and where we are going on the long road to combat bribery and promote a culture of public and private sector integrity. Clearly, the Report illustrates that progress on the enforcement front has been made since signing of the OECD Anti-Bribery Convention in 1999. This 15 year old (delete) record holds promise and lessons learned guidance (delete) for the UNCAC’s future as well. Indeed, the Report deserves multi-stakeholder attention, rigorous analysis and open debate. The UNCAC Coalition is uniquely capable and positioned to lead this important global dialogue and to prepare a lessons-learned report that both examines and digs deeper into the data.

Key OECD Foreign Bribery Report Take-Aways

There are many take-aways in this data-laden report that both confirms and calls into serious question many assumptions about the who’s, where’s, penalties, amounts, costs and enforcement priorities related to foreign bribery. These ‘real-world’ aggegated findings include:

  • 80.11% of total bribes were promised, offered or given to SOE (I would use the full term here) officials;
  • 57% related to bribery in the public procurement arena;
  • 75% involved payments through intermediaries;
  • 69% occurred in just 4 sectors (extractive, construction, transportation & information/communications);
  • 53% involved the knowledge of? corporate management (41%) or CEO’s (12%);
  • 11% involved heads of state (7%) or ministers (4%);
  • 24% resulted from internal (17%) or external whistleblowers (2%) or the media (5%) and
  • 10.9% was the average amount of the bribe relative to the total value of the transaction.

Issues, Action and Future UNCAC Priorities

Even a cursory review of some of these key findings raises a host of questions and is fertile food for thought and action. And a close reading of the full Report makes it clear that there are some information/data gaps behind the numbers and that some of the key aggregated findings need to be disaggregated or further analyzed in order to be truly useful or informative.

However, we know from experience that many, including the media, will likely only read summaries and press releases and run with the overall numbers without more analysis. Examples of two of the overall percentages that bother me include the 10.9% (cost of bribery) and 24% whistleblower numbers. Some are interpreting the 10.9% number as an indicator that the total direct and social cost of bribery may not be a high as previously thought. Well, we all know that the 10.9% cost number does not reflect the cost range among sectors and between countries or the multiple bribes that are often paid over long periods of time to multiple officials. We also know prosecutors only tend to bring bribery cases when they can prove their case with documents and financial records. My best guess, based on my research and experience as a whistleblower in a major FCPA case, is that this number, even if accurate as to the cases actually brought and settled/tried, is woefully low. And as for the 24% whistleblower number (particularly the low 2% external whistleblower number), it is being interpreted by some to mean that maybe whistleblowing should not be a priority issue.

Well, here my own experience tells me that whistleblowers often quietly report through others out of necessity. However, I would posit that even if this number is close to accurate this may mean we just have a lot more to do to make sure whistleblowers feel safer and more secure professionally. In any case, the low whistleblower number is indeed concerning and needs further analysis and debate so that we better understand its import and relevance to the UNCAC reform agenda.

In short, my worst fear, perhaps unfounded, is that the net result of these findings is not that they will shedding more light on corruption but rather that they will be used in a superficial way to support conclusions that may not be supported across the board. I hope others in the Coalition will take note and react to some of the Report’s important but potentially deceptive limited overall key findings. I also hope others will support some of the Report’s “Next Steps” ideas — particularly the need to make the data behind the Report public and on-line.