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BW Businessworld

Bribery Index: India 'Most Improved', Russia Worst

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Chinese and Russian firms are the most likely to pay bribes while operating abroad, and the most corrupt sectors are public works contracts and construction, according to Transparency International's latest "Bribe Payers' index".

China and Russia rank bottom, in 27th and 28th place respectively, in the 2011 index released on Wednesday, while the Dutch, Swiss, Belgians, Germans and Japanese get the top scores. Britain and the United States rank eighth and ninth.

But the Berlin-based anti-corruption campaigners said not one of the 28 countries surveyed -- which include all of the G20 -- was perceived as "wholly clean of bribery" and few had made a major improvement since the last bribery index in 2008.

"India's score improved the most, with an increase of 0.7, but it still remains near the bottom of the table. Canada and the United Kingdom saw the most significant deterioration in their scores with a drop of -0.3," read the report.

The group asked 3,016 business executives in 30 countries -- selected by the value of their foreign direct investments and exports, plus their regional significance -- how often companies based in countries in the survey engaged in bribery.

Transparency urged countries to ratify conventions against bribery under the auspices of the United Nations, the Organisation for Economic Cooperation and Development and the European Union.

"In their meeting in Cannes this week, G20 governments must tackle foreign bribery as a matter of urgency," said Huguette Labelle of Transparency International in a statement.

"It is of particular concern that China and Russia are at the bottom of the index," it said, citing their increasing global presence, especially in oil and gas in Russia's case and China's investments in infrastructure and mining, in particular in Africa.

Corruption Kills
China's decision this year to expand anti-corruption laws to Chinese firms operating overseas and foreign companies in China was an important step, but there was still a risk of "bottlenecks", said Ran Jianmin of Transparency in China.

New Russian laws outlawing foreign bribery gave rise to hope, Transparency's Russian research head Elena Panfilova said, although she added that there were as yet "no islands of integrity in Russian public and business life".

Russia came joint 154th of 178 nations in Transparency's 2010 index of public-sector corruption and China ranked 78th.

Breaking down the bribery index into 19 business sectors, public works contracts and construction were the most prone to bribery and agriculture and light engineering were the least, but no single sector scored above 7.1 on a 10-point scale.

Mining, oil and gas, real estate, and legal and business services were also very prone to bribery, it said, adding that they were "all characterised by high-value investment and significant government interaction and regulation, both of which provide opportunities and incentives for corruption".

Transparency said it was surprised that the likelihood of bribes being paid from one private firm to another "is almost as high as bribery of public officials across all sectors".

"Bribery can also be disguised through offering clients gifts and corporate hospitality that are inappropriate in value," said the report.

New British legislation this year making bribery between firms an offence, including any company incorporated overseas or carrying out business in the United Kingdom, "sets a new global standard" that should be widely imitated, it said.

It said corruption in public works contracts and construction often compromised safety in public buildings, "which, as witnessed by the many deaths from earthquakes in highly corrupt countries, has a very real impact on human lives".