U.S. Ambassador to the OECD Karen Kornbluh
On Fighting Corruption with the OECD Anti-Bribery Convention
At Transparency International
December 9, 2009
Good morning. I am pleased to be able to speak with you today to commemorate International Anti-Corruption Day. I want to thank Transparency International for hosting this event, as well as for the important role this organization plays in highlighting the corrosive effects of corruption.
Anti-Corruption is not a crime without victims. The World Bank 2009 Annual Report estimates that corrupt payments in Bank-financed procurement equal 5-20 percent of contract amounts. Imagine the cost to development if 5-20% of the Bank's $66 billion in lending in '09 were lost to corruption. Worse, consider that global procurement is estimated at $14 trillion. The potential loss globally is staggering - $700 billion to $2.8 trillion.
This money does not only end up in the hands of corrupt officials. It makes its way into many other illicit activities such as money laundering, human trafficking, and terrorism that destroy lives and cripple society.
There is no doubt that the United States has been in the lead in the fight against international corruption. In fact, the origins of the OECD Anti-Bribery Convention can be traced to the 1988 The U.S. Omnibus Trade and Competitiveness Act which asked the Administration to work with the OECD on anti-bribery. Eleven years later (a short time in OECD time!), the Convention came into effect.
The Convention marked an early milestone in history: it was one of the first treaties dealing with efforts to combat corruption of foreign officials, following the OAS Treaty of 1996. It incorporated a number of key mechanisms that proved effective in reducing corruption.
The OECD Convention began by redefining the norms of business practices with a legal framework. Thirty-eight countries in total, both OECD and eight non-members - including important international players such as Brazil, Argentina, Israel and South Africa - have joined together to criminalize bribery. This is an historic achievement.
The peer review process has encouraged consistency in the way the legal systems of each country address issues of bribery of foreign officials. By making their laws consistent with the convention, signatories have established clear rules of the game for companies.
Peer review also attempts to evaluate countries' efforts to enforce and implement the treaty, by reviewing and commenting on countries' efforts.
In addition, the OECD has prepared reports on each country, documenting their efforts. Civil society has the opportunity to contribute to the reports, which are then reviewed by the entire working group at the OECD.
In line with the leading role that we played in the negotiation and adoption of the Convention, the United States has been very active in the Working Group monitoring the Convention and its enforcement.
We strongly support the on-going peer-review and monitoring process, which allows us to examine and question - as well as to be examined and questioned - by other signatories in order to ensure that countries are meeting their commitments under the Convention.
We have also organized prosecutors meetings, which the new Recommendation official endorses. And we have been active in evaluation and recommendations produced by the working group.
Annex 2 of the Convention the Good practices Guide, is directed toward companies. It has state-of-the-art accounting methods, internal controls and ethics and compliance provisions to help governments and private sector actors detect and prevent bribery.
Transparency International has played a critical role in raising awareness and keeping pressure on countries to enforce the Convention. They hold countries accountable for enforcing anti-corruption laws and publish the widely quoted and avidly awaited "Corruption Perceptions Index." They are a key partner in our efforts.
Today, we also mark an important new development in our fight against bribery - the release of the OECD's new Recommendation, which will greatly enhance enforcement of the Convention so that we can better fight bribery and corruption of foreign officials in international business, and uphold the rule of law around the globe. Let me give you a few examples of why I think this Recommendation is so important:
It provides guidance to Parties on the basic offense, corporate liability, outreach and training, and enforcement.
It established regular meetings of prosecutors.
It identifies international cooperation as a critical area for further work by the Working Group on Bribery.
It strengthens cooperation with international organizations, by recommending that enforcement authorities accept referrals of bribery cases from such bodies.
It requires Parties, and encourages companies, to have easily accessible reporting channels, as well as whistle blowing provisions, to encourage reports of bribery and protect those who do the right thing and report.
We are also working through other bodies at the OECD to reinforce the message of the Convention. The OECD Working Party on Export Credits has developed guidelines to ensure that officially-supported export credits do not support deals made through bribery.
In addition, procurement guidelines address how to put controls into place to guard against corruption.
Through OECD's program for countries in the Middle East and North Africa, called MENA, the organization has reached out to make good governance a priority. Over 10 MENA countries have ratified the UN Convention Against Corruption (UNCAC). The United States has supported training and expert advisors to help these countries build the capacity to implement reform.
The United States will continue to be in the forefront in efforts to combat corruption:
First, following the G-20 Summit in Pittsburg, where leaders stressed the importance of adopting and enforcing laws against bribery, the OECD is reaching out to new countries to encourage them to sign the Convention.
Second, it is not enough to make bribing a foreign official a crime. We must develop new ways and tools to reduce the opportunities for corruption.
The OECD Anti-Corruption Campaign will raise awareness of the impact of corruption on health and safety and call attention to the fact that this "white-collar crime" impacts individuals at all socio-economic levels.
We do not see corruption as an isolated issue. Thanks to the multi-disciplinary scope of the OECD, we are able to look at it in the context of good governance, regulatory, accounting and development issues -- including through the Development Assistance Committee where we can work on government financial accountability and transparency issues.
These are all areas where we will work with the OECD to ensure that anti-corruption efforts are broadly integrated into the organization.
About U.S. Engagement at the Organization for Economic Cooperation and Development
The United States is a founding member of the OECD, a global policy shop - or "GPS" of the world economy - composed of 30 democratic countries with market-based economies. Shared goals include achieving a rising standard of living in member countries, as well as engaging with non-members to contribute to the development of the world economy. Through its public policy research, ‘soft law,' and peer reviews, the OECD provides the United States an opportunity for engaging with other countries on economic regulatory issues.
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