In December 1997, the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions was adopted. This document marked a turning point in international law: For the first time, the world’s biggest economies had committed to ban the payment of bribes in foreign countries. In earlier decades, most advanced economies – except for the U.S. since 1978 – had seen such payments as legitimate business expenses meant to facilitate exports and investment.
In December 2017, Transparency International’s German chapter hosted an event to reflect on twenty years of OECD anti-bribery efforts. Some points I found particularly interesting are summarized below. Please accept my apologies for the nerdy focus on details …
Mark Pieth, one of the key players in the OECD negotiations and global anti-corruption more generally, recounted how the convention was drafted and how the (famously tough) peer-review mechanism developed over time. In the mid-1990s, Pieth did not believe a binding treaty would be possible given the adversarial positions taken by different OECD member states. When it suddenly seemed within reach, the Convention was written over the course of one weekend, in a boat house in Lugano. (I was thrilled about some further remarks very much in line with what I argue in my dissertation; more on that soon.)
Once the Convention had entered into force in 1999, the practice of peer review began: Each member state sends a small team of experts to the Working Group on Bribery. In this forum, they discuss and assess each others’ performance on various aspects of the convention. (The OECD recently published a summary of the first 17 years.)
One particularly interesting detail concerns the tracking of enforcement (rather than legal implementation). After all, having laws against foreign bribery doesn’t really make a difference when they are never enforced by domestic prosecutors and courts. In the early years of peer review, talking about individual cases or general patters of enforcement was taboo. Only in 2002 did the OECD delegates (reluctantly) begin to discuss individual cases and collect data on enforcement actions.
Another juicy anecdote concerns the UK, which nowadays brands itself as pioneer and front-runner in anti-corruption: In 2006/2007, Tony Blair allegedly “killed” a British investigation related to a Saudi arms deal. This political meddling with judicial affairs drew sharp criticism from OECD peers, who threatened to increase due diligence requirements for anyone doing business with the UK. The British, apparently, gave in and returned to the fold.
Enforcement is far from universal
Moving from the convention’s early years to current enforcement practice, Markus Busch from the German Ministry of Finance made several important points. He praised the OECD procedure as gold standard for peer review – but also admitted a certain “review fatigue” now that Germany is involved in the Council of Europe, OECD, and UN review mechanism. (Imagine the strain on resources for smaller and poorer bureaucracies!)
When it comes to anti-bribery enforcement in practice, there are some judicial trap doors. Witnesses might be reluctant to cooperate even if they get a good offer from German prosecutors: After all, their statements in one proceeding might be used against them in another that is run in a different jurisdiction. (Most treaties try to put a lid on double jeopardy, but would you take this bet?)
Elisa Hoven, law professor in Cologne, provided the most critical and eye-opening assessment of enforcement practices in Germany (but probably applicable to other member states). For her habilitation project, she interviewed prosecutors in different German states, finding substantial differences in how many resources are allocated for anti-bribery investigations and in how cases are handled. This seems quite remarkable, to put it mildly, for a self-declared Rechtsstaat with high bureaucratic capacity.
Turning to the OECD in general, Hoven called for more self-criticism considering that half of the member states have failed to prosecute even a single case of foreign bribery in twenty years! Even among the active states, we don’t know how many cases remain undetected, authorities are often reluctant to cooperate with requests for mutual legal assistance, and many cases are settled without much fanfare rather than resulting in convictions.
Oliver Wieck, secretary-general of the German ICC chapter and the sole business representative on the panel, underlined that corporate actors are keen to cooperate. However, small and medium enterprises struggle with the costs associated with setting up elaborate compliance mechanisms. In an off-the-cuff remark, he suggested that import/export in some parts of Europe is still impossible without good connections or a facilitator taking care of local customs authorities. I was reminded of old discussions in the corruption literature: Extortion and bribery can be hard to tell apart …
Overall, TI Germany’s panel on 20 years of OECD anti-bribery efforts provided fascinating insights into the on-the-ground enforcement of international treaties and the roles played by experts and peer-review mechanisms. While we’ve certainly moved beyond the state of play in the early 1990s, I was left with a sobering impression of how good intentions are put into practice in what should be the “most likely case”.