On some rankings it’s best to score near the bottom. So it is with assessments by Transparency International (TI), the anticorruption group, of the tendency of industries to pay bribes. On two new rankings related to TI’s Bribe Payer’s Index for 2008, the oil and gas business ranks near the top.
The survey evaluates 22 of the world’s wealthiest exporting countries based on the likelihood that companies from them pay bribes abroad. It comes from observations of 2,742 senior business executives from companies in 26 countries, selected according to the size of their imports and inflows of foreign direct investment. This year the survey also produced two evaluations of the likelihood that companies from specific industries engage in illicit behavior.
Third place
In a list showing how likely companies in specific industries are to bribe public officials, the oil and gas industry ranks third. It scores 5.9 on a scale of 0-10 in which 0 means “bribes are almost always paid” and 10 means “bribes are never paid.”
Industries more likely than oil and gas to practice bribery, according to the TI assessment, are real estate and property development, scoring 5.7, and public works contracts and construction, 5.2. Industries least likely to be involved in bribery are information technology, 7.0, and banking and finance and fisheries, 7.1 each.
The other TI industry ranking gauges the frequency of attempts to influence legislation, laws, and decision-making through private payments to public officials. On this list, based on the same 0-10 scale, the oil and gas industry holds second place with a score of 5.7. The public works contracts and construction industry holds the number-one position on this list, too, at 5.6. Third place belongs to mining, 5.8. The least frequent payers for influence are agriculture and fisheries, 7.1 each, and light manufacturing, 7.2.
TI’s basic country survey also assigns scores of 0-10: the higher the score, the lower the likelihood that companies from the country pay bribes abroad. The countries least likely to export bribery are the Netherlands, 8.7, and Canada and Belgium, 8.8 each.
On the country list, unlike the industry rankings, the cleanest countries rank highest. At the bottom of the ranking are Mexico, 6.6, China, 6.5, and Russia, 5.9. Other countries with more than minor oil production and their scores are the UK, 8.6, Australia, 8.5, France and the US, 8.1 each, Brazil and Italy, 7.4 each, and India, 6.8.
The index, said Huguette Labelle, TI chair, shows “a number of companies from major exporting countries still use bribery to win business abroad.” Labelle urged countries to commit to the provisions of the Organization for Economic Cooperation and Development Antibribery Convention, which the TI report calls “the foremost international legal instrument for tackling the supply side of international bribery.”
Surveyed executives don’t think governments are answering the call. The TI report said, “two thirds of senior business executives believed that governments are ineffective in the fight against corruption.” But the executives themselves seemed less than savvy about anticorruption efforts. The report said three fourths of them “revealed that they were not at all familiar” with the OECD convention.
TI’s survey reflects perceptions about bribe-paying—the countries from which it emanates and the industries that practice it. Perceptions can be wrong. They do influence behavior, however. The public’s behavior toward the oil and gas industry, transmitted inevitably through politics, cannot improve after the TI report.
How to react
The oil and gas industry has several ways to react to TI’s findings. It can agree with them and either do nothing or resolve to improve. It might also disagree with the findings and either do nothing or actively defend itself. Companies and their trade associations will have to decide how to proceed.
What they must not do is shrug off the TI findings as not relevant to their work or, worse, evidence of ingrained practice about which nothing can be done. Bribes are tools of corruption, and corruption hurts people, usually poor people. Work by oil and gas companies that hurts people is work that shouldn’t be done.
