Construction and Arms Industries Seen as Leading International Bribe-Payers

New Transparency International Survey Highlights Bribe-Paying Sectors

The construction and arms industries are seen as the business sectors with the greatest propensity to pay bribes to government officials in emerging market economies, according to Transparency International (TI), the leading anti-corruption organisation.

TI today released a report based on in-depth interviews by Gallup International with more than 770 business executives, lawyers, accountants, bankers and officials of chambers of commerce in 14 leading emerging market countries. On a scoring basis of 0 to 10, with 0 indicating great willingness to pay bribes and 10 indicating the opposite, the public works and construction sector scored 1.5, followed by firms in the arms and defence industry with 2.0 and then corporations in the power business (including petroleum and energy) with 3.5 (see chart).

"This is our first business sector survey and the results indicate great willingness by many international firms to bribe senior government officials around the world," said TI Chairman Peter Eigen. "While firms in manufacturing, mining and healthcare appear less willing to use bribes than in construction and defence, they too are seen as widely using bribes in their foreign business dealings. Bribery by international corporations is weakening national economies, creating great waste of scarce public funds and encouraging large-scale abuse of public office by high level civil servants and politicians."

OECD Anti-Bribery Convention: Companies expose employees to severe penalties

TI report shows that most corporations doing business abroad are seen to be exposing their employees to the risk of severe penalties as they appear to ignore the 1999 OECD Anti-Bribery Convention that criminalises the bribery of foreign officials. "Companies doing business abroad will have to wake up to the reality that foreign bribery now is a crime," Peter Eigen said. "Only a fraction of the international business executives questioned indicated awareness of the new Convention, or corporate plans to comply with the new international anti-corruption rules."

TI's report includes detailed results of questions to private sector leaders, including senior representatives abroad of international firms, that show that only six percent of those surveyed are familiar with the OECD Convention that was signed by the 34 leading industrialised countries at the end of 1997 and entered into force last year. Only 19 percent of those surveyed said that a review of bribery practices is planned by their firms as a result of the OECD Convention. "Leading corporations need to demonstrate that they understand the law and are acting to voluntarily enforce it," said Eigen.

Bribery in Business Sectors
Gallup International asked: Which are the sectors in your country of residence where senior public officials would be very likely, quite likely, unlikly to accept or extort bribes? The scores below are mean averages from all the responses on a 0 to 10 basis where 0 represents perceptions of very high levels of corruption, while 10 represents perceptions of extremely low levels of corruption. The standard error in the responses was small at 0.2 or less.
1. Public works contracts and construction	1.5
2. Arms and defence industry	2.0
3. Power (including petroleum and energy)	3.5
4. Industry (including mining)	4.2
5. Healthcare/social work	4.6
6. Post, telecommunications (equipment and services)	4.6
7. Civilian aerospace	5.0
8. Banking and finance	5.3
9. Agriculture	6.0

Low salaries and immunity from prosecution key factors for corruption

Today's TI report further notes that low public sector salaries are seen as the prime cause of corruption of senior government officials (65 percent), followed by immunity from prosecution (63 percent). These findings underscore the need for a transparent civil service system and an independent judiciary as cornerstones of anti-corruption efforts. Peter Eigen said: "Low public sector salaries must be understood within the broad national economic and budgetary framework of countries. Developing countries must be able to afford an effective public sector. Civil service reforms, which include raising salaries to decent levels, need to be supported by the international community."

Transparency International's Chairman added: "When we look at the reasons that senior officials are seen to take bribes and at the propensity of international firms to use bribes, then we have to reflect on some basic realities - although it is mostly the rich who are the most corrupt in international grand corruption, the taking of bribes is often driven by greed not by need."

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TI Int’l Secretariat:
Mr Jeff Lovitt
Head of Public Relations
Tel.: +49-30-343 8200
Fax.: +49-30-347 03912
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in the U.K.:
Ms. Susan Coté-Freeman
Tel.: +44-207- 610 1400
Fax.: +44-207-610 1550
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Mr. Fredrik Galtung at the Faculty of Social & Political Sciences
Cambridge University
Tel.: +44-7979-64 88 77,
Fax.: +44-1223- 33 45 50
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in the U.S.:
Mr. Frank Vogl, TI Vice Chairman
Tel.: +1-202 331 8183
Fax.: +1-202 331 8187
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