Ethical Performance
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UK moves on bribery as OECD pressure mounts

October 2008

Signs are emerging that the UK government is beginning to adopt a tougher stance on the behaviour of British companies abroad, partly as a result of sustained pressure from the Organisation for Economic Co-operation and Development.

The OECD Convention on combating bribery of foreign public officials in international business transactions, which came into effect in February 1999, has been ratified by 37 countries. The organization has been pressing the UK to meet its international obligations this summer and autumn, and the pressure is expected to be kept up when the OECD working group on bribery meets this month.

In response, the UK Department for Business, Enterprise and Regulatory Reform, which takes the lead on anti-corruption, has announced the first conviction under a 2001 law that made it illegal for British companies to bribe foreign public officials abroad.

Neils Tobiasen, managing director of CBRN, a British company that specializes in protecting individuals and organizations from chemical and biological attacks, was found guilty of bribing officials in Uganda in connection with a contract to supply training and equipment to protect the country’s president.

Last month a Ugandan government official was also jailed for a year in the case, the first brought by the Overseas Anti-Corruption Unit of the City of London Police.

In a separate move, the government has declared a UK company in breach of OECD guidelines by allowing ‘taxes’ to be paid to rebel groups in the Democratic Republic of Congo.

The complaint against Afrimex UK by the human rights group Global Witness is one of two to have been upheld recently by the British government’s National Contact Point (NCP), which examines instances of non-compliance with the voluntary guidelines covering business behaviour.

The NCP said the unlisted London-based company sourced cassiterite, coltan and other minerals from a closely associated business, Socomi, and two independent agents who paid ‘taxes’ and licence fees to the rebel group RCD-Goma.

RCD-Goma has been accused of human rights abuses and war crimes. NCP officials decided Afrimex did too little to stop payments being made, thus contributing to ‘the ongoing conflict’. Afrimex is one of the first companies reviewed under strengthened procedures introduced in 2006.

In July the NCP upheld another complaint against a British company, DAS Air, by Rights and Accountability in Development. It said the UK-based air cargo firm had failed to observe the guidelines through its part in transporting minerals from rebel-held areas in DRC.

Patrick Alley, director of Global Witness, said he hoped the actions would ‘mark the start of a new era in which the UK plays a leading role in curbing unethical corporate behaviour’.

Afrimex has now told the NCP it will put in place a corporate responsibility policy  – and the NCP, which has the power only to make recommendations to the company in the wake of its findings, has advised Afrimex to begin using an OECD risk assessment tool for guidance.

The Corner House, a UK-based civil society group, said the NCP decision and the prosecution under 2001 legislation were good first steps, but not enough on their own ‘to get the UK out of very sticky waters’ on corruption. A 2008 progress report from the OECD named Britain among the 16 governments that are doing little or nothing to meet their obligations under the convention.

A further dent in the British government’s reputation was caused in July by the House of Lords, which overturned a High Court ruling that the director of the Serious Fraud Office acted unlawfully when, acting on government advice, he terminated a corruption investigation into BAE Systems’ arms deals with Saudi Arabia.

The Corner House said that those currently in the government’s sights were ‘small fry’ and that ministers must be prepared to take on bigger targets if necessary.

Organisation of Economic Co-operation & Development | UK & NI Ireland | Bribery

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