Transparency International Germany Files Complaint against 57 German Companies over UN Oil for Food Scandal in Iraq

Issued by Transparency International Germany



The German chapter of the anti-corruption organisation Transparency International (TI) today lodged a complaint with the German Federal Ministry of Economics and Technology (BMWi) against 57 German companies for allegedly paying $11.9m in kickbacks in the United Nations’ Oil for Food Programme in Iraq.

TI accuses the companies of violating OECD Guidelines – adopted by Germany and 38 other governments – that set social, environmental and anti-corruption standards for Multinational Enterprises.

The BMWi has the responsibility under international agreements to promote adherence to the Guidelines and when called upon to examine alleged abuses by German companies.

The filing of the complaint marks the first time in any country that a government has been asked to take action under the OECD Guidelines regarding the corruption that occurred in the Oil for Food programme.

TI-Germany chairperson Hansjoerg Elshorst said “The abuse of the Oil for Food Programme was one of the largest corruption scandals of our time, involving thousands of companies. Action is necessary to ensure, especially for the companies concerned, that they draw consequences out of this scandal”.

Shirley van Buiren, chairperson of TI-Germany’s Corporate Accountability working group said: “Our aim with this complaint is not to just look back at why and how the corruption occurred, but to look forward – to help ensure that the companies involved have procedures in place to stop them becoming involved in such a scandalous behaviour again”.

The complaint makes specific recommendations that companies improve the management of their corruption prevention systems based on the OECD Guidelines, in a process overseen by the BMWi.

The 57 German companies, which include Linde, Babcock Borsig, DaimlerChrysler, and Siemens, are among the 2253 businesses worldwide cited in the independent ‘Volcker’ report into violations of the Oil for Food Programme.

Between 1999 and 2002 the former regime of Saddam Hussein collected $1.8 bn in kickbacks from companies, distorting a programme designed to ease the suffering of ordinary Iraqis under UN sanctions.

The Volcker report – named after Paul Volcker, chair of the investigation and former chairman of the US Federal Reserve – presented authoritative, detailed financial evidence of the kickbacks (illicit or disguised payments) paid by German companies and others to gain contracts to supply food, medicines and humanitarian goods to Iraq. TI’s complaint is based on the Volcker report findings published 2005.

TI-Germany noted that state prosecutors in several German states have launched investigations into the role of some of the 57 German companies in the UN Programme. TI-Germany welcomed the investigations but considers the complaint necessary to supplement these legal proceedings.

Even if a German company – or a member of its staff - is found guilty in these investigations it is under no legal obligation to establish mechanisms to prevent bribes being paid in future. Yet the UN scandal was so serious that we must ensure the companies involved intensify their efforts to abide by the high anti-corruption standards in the OECD Guidelines and take constructive action in this respect.

TI submitted its complaint, known as a ‘specific instance’ under rules governing the OECD Guidelines, to the ‘National Contact Point’ in the BMWi. The NCP is tasked with dealing with alleged violations of the guidelines. TI expects the NCP to agree procedures with the 57 companies to ensure repeat Guideline violations do not occur.

Notes to editors:

TI-Germany’s complaint includes names and contact details of the 57 German companies, and information from the Volcker report of the kickbacks they allegedly paid. See TI-Germany website for full complaint.

OECD Guidelines for Multinational Enterprises comprise the most comprehensive set of standards governing the operations of multinational companies based in the 39 signatory countries. Revised most recently in 2000, the Guidelines have been endorsed by 30 member states of the Organisation for Economic Co-operation and Development, and nine other governments, including Argentina, Brazil and Israel. Click here to see the Guidelines. TI-Germany is a member of OECD Watch, an international alliance of over 50 non-governmental groups that campaigns for full implementation of the Guidelines. See www.OECDWatch.org.

OECD Guidelines and G8 summit: The OECD Guidelines for Multinational Enterprises are on the agenda of the G8 summit from June 6-8 in Heiligendamm. G8 labour ministers, at a meeting from May 6-8 in Dresden, agreed in a communiqué to be presented to the G8 summit that: “We strongly encourage companies in the G8 countries and beyond to observe the OECD Guidelines for Multinational Enterprises and commit ourselves to actively supporting the dissemination of these Guidelines and promoting a better governance through OECD Guidelines’ National Contact Points”. See www.bmas.bund.de for the communiqué.

Or visit the website: http://www.transparency.de


For any press enquiries please contact

TI Germany
T: +49- (0)30- 54 98 98 22
E: .(JavaScript must be enabled to view this email address)

Shirley van Buiren
Chairperson Working Group Corporate Accountability
Monitoring of the OECD Guidelines for Multinational Enterprises
T: +49- (0)30- 54 98 98 0

Prof. Dr. Hansjoerg Elshorst
Chairperson Transparency International Germany
T: +49- (0)30- 54 98 98 0

Latest

Support Transparency International

Anti-Corruption Award 2018 - Nominations Open!

Our Anti-Corruption Award recognises the courage and determination of the many individuals and organisations fighting corruption around the world.

Nominate an anti-corruption hero today! 

Comment gagner la lutte contre la corruption en Afrique

Aujourd’hui est la Journée africaine de lutte contre la corruption – une occasion opportunité pour reconnaitre le progrès dans la lutte contre la corruption en Afrique et le travail significatif qui reste encore à accomplir.

How to win the fight against corruption in Africa

African Anti-Corruption Day is an important opportunity to recognise both the progress made in the fight against corruption in Africa and the significant work still left to do.

Increasing accountability and safeguarding billions in climate finance

In December 2015, governments from around the world came together to sign the Paris Agreement, agreeing to tackle climate change and keep global warming under two degrees centigrade. They committed to spend US$100 billion annually by 2020 to help developing countries reduce their greenhouse gas emissions and protect themselves against the potentially devastating effects of climate change.

After Gürtel, what next for Spain’s struggle with political corruption?

At the start of June, the Spanish parliament voted to oust Prime Minister Rajoy after his political party was embroiled in the biggest corruption scandal in Spain’s democratic history. At this critical juncture in Spain’s struggle with political corruption, Transparency International urges all parties to join forces against impunity and support anti-corruption efforts in public life.

Risk of impunity increases with outcome of Portuguese-Angolan corruption trial

A verdict last week by the Lisbon Court of Appeals in the trial of former Angolan vice president Manuel Vicente has disappointed hopes for a triumph of legal due process over politics and impunity. It also has worrying implications for the independence of Portugal’s judiciary.

The UK just made it harder for the corrupt to hide their wealth offshore

If counted together, the United Kingdom and its Overseas Territories and Crown dependencies would rank worst in the world for financial secrecy. Fortunately, this could soon change.

The new IMF anti-corruption framework: 3 things we’ll be looking for a year from now

Last Sunday, the International Monetary Fund (IMF) unveiled its long-awaited framework for “enhanced” engagement with countries on corruption and governance issues. Here are three aspects we at Transparency International will be looking at closely in coming months as the new policy is rolled out.

Social Media

Follow us on Social Media