“Classic Consultancy Scam”
The recent activities of some international companies in Singapore are a classic text-book case of how much international corruption is operating, says the Berlin-based international anti-corruption organisation, Transparency International (TI).
The organisation, which yesterday applauded the concept of the Singapore government in blacklisting five international companies, was commenting in the light of further press revelations concerning the case.
"Around the world, international companies are daily paying huge and professionally unjustified 'consultancy fees' so that when trouble comes they feel able to claim not to have had any idea that their consultants were using this money as a slush fund to bribe public officials," TI chairman, Peter Eigen, said in Berlin today (Friday).
"It strains belief that companies should seriously asking us to accept that they were paying millions of dollars to consultants yet remain oblivious to the fact that large proportions were being used to pay bribes. Even if this were so, it points to a remarkable absence of accountability between the parties involved", he continued.
"Fees have to be wildly out of line with legitimate expectations or there simply would not be the slack to use for them for major corruption," he remarked.
Dr Eigen said that the time has come for international business to start putting its own house in order. He pointed to the wider damage that companies can suffer, as competitors in other markets exploit a disgrace sustained in one market as a reason why other governments should refuse to do business with those named.
"The excuse that corrupt payments are needed to sustain domestic employment, never justifiable as corruption always discriminates against the honest trader, has a particularly hollow ring when jobs are actually lost as companies are barred from traditional markets", he said.
Transparency International said that change is "in the wind" but not yet "around the corner".
"We have been initiating discussions with business leaders across Europe aimed at raising consciousness of the damage done by corruption to all concerned - and especially to the people in the third world. There is no doubt that responsible business leaders want action to end these practices, but that they are inhibited by a fear of losing market share to less reputable competitors," Dr Eigen explained.
"This is a legitimate concern, and so we are working on a concept of "islands of integrity" which would see the cancer of corruption cut out from transactions in particular markets and in particular areas," he said. "This will call for confidence-building and co-operation between international business and the governments of the countries who are seriously trying to address corruption, and a serious commitment from firms active in the areas in question to stamp out undesirable practices," he said.
There will also needed to be mechanisms which will provide protection for companies who genuinely try to keep their sales staff and consultants under control but who, through no fault of the companies, are tempted to misbehave. "However, a legal requirement that all consultants' fees must be disclosed as part of the tender process will go a long way towards getting the present monster under control," Dr Eigen concluded.
For any press enquiries please contact
Prof. Dr. Peter Eigen, Chairman
Dr. Hanjörg Elshorst, Managing Director
tel. + (49 30) 343 8200
fax + (49 30) 3470 3912