Part II: Case Analysis

Case Study Combating Corruption - the Convention against Bribery Please read the following case to answer Questions 56 - 63.

Corruption has been a problem in almost every society in history, and it continues to be one today. There always have been and always will be corrupt government officials. International businesses can still gain economic advantages by making payments to corrupt officials. But in 1997, the trade and finance ministers from over forty countries adopted the Convention on Combating Bribery of Foreign Public Officials in International Business Transactions, or, in short, Anti-Bribery Convention.

The convention, which went into force in 1999, obliges member states to make the bribery of foreign public officials a criminal offence.

Increased enforcement against foreign bribery, especially in the United States, exposed egregious, multi-country bribery schemes of companies like Siemens and BAE Systems to the detriment of the people in the countries affected. Enforcement uncovered large-scale bribery of highlevel officials by companies like Halliburton, enabling them to win major infrastructure projects. These cases sent shockwaves worldwide. Yet, despite these scandals, bribery continues to be used by companies from major exporting countries to win business in foreign markets. In recent years, multinationals like Airbus, Ericsson, Odebrecht, Rolls Royce and many more have been caught redhanded in systematic and widespread bribery schemes.

Corruption in international business transactions undermines government institutions, misdirects public resources, and slows economic and social development. It distorts cross-border investment, deters fair competition in international trade and discriminates against small and medium-sized enterprises.

Country implementation of the Convention is monitored in successive phases by the OECD Working Group on Bribery (OECD WGB), which is made up of representatives of the 44 signatories to the OECD Anti-Bribery Convention. The reviews also cover implementation of the 2009 Recommendation of the OECD Council for Further Combating Bribery of Foreign Public Officials in International Business Transactions (2009 Recommendation). The 2009 Recommendation is being updated by the OECD WGB.

Exporting Corruption is an independent assessment of the enforcement of the Anti-Bribery Convention, which requires parties to criminalize bribery of foreign public officials and introduce related measures.

Transparency Internationals 2020 report, Exporting Corruption, rates the performance of 47 leading global exporters, including 43 countries that are signatories to the Anti-Bribery Convention, in cracking down on bribery of foreign public officials by companies operating abroad. This is the thirteenth edition of the report.

The report shows how well or poorly countries are following the rules. More than 20 years after the Convention was adopted, most countries still have a long way to go in meeting their obligations. In fact, active enforcement has significantly decreased since the last report in 2018, and nearly half of world exports come from countries that fail to punish foreign bribery.

Bribery of foreign public officials has huge costs and consequences for countries across the globe and those costs have become more severe during the COVID-19 pandemic.

The response to the virus is creating new opportunities to exploit weak oversight and inadequate transparency, diverting funds away from people in their hour of greatest need. For instance, a recent report into the use of South Africa's Covid-19 relief fund has revealed overpricing and potential fraud. In some cases personal protective equipment (PPE) was bought for five times more than the price the national treasury had advised. The government allocated funds were meant to assist vulnerable households with food parcels, unemployment grants, support small business, farmers and to also procure PPE. Corruption was "amplified" - that's the term used by South Africa's auditor general in his report on the misuse of funds which were aimed at mitigating the impact of coronavirus in the country.

Unscrupulous merchants peddle faulty products such as--defective ventilators, poorly manufactured tests or counterfeit medicines. And collusion among those who control supply chains has led to outrageous costs of much-needed goods, skewing the market and denying many people life-saving treatment.

Those costs have increased during the COVID-19 pandemic. The pervasive cross-border corruption in health care will cost additional lives unless robustly countered. But the dangers of corruption during COVID-19 go beyond the health sector. Triggered by the pandemic, a global economic crisis is also depleting public treasuries.

Wasting precious public resources on corruption fueled deals with unscrupulous companies and intermediaries is even more deadly and damaging than before.

As companies profits shrink, the temptation will grow for them to win business in foreign markets at any cost and by any means. The states where multinationals are headquartered may hold back foreign bribery enforcement on short-sighted economic grounds.

The need for robust foreign bribery enforcement is as urgent today as when the OECD Anti-Bribery Convention was first adopted in 1997. Now more than ever, we need stronger foreign bribery enforcement and international cooperation and coordination.

Sources: C. Hill, T. McKaig, Global Business Today, McGraw-Hill Ryerson, 2018; Coronavirus in South Africa: Misuse of Covid-19 funds 'frightening', BBC, September 2, 2020; Corruption and Covid-19, The Secretary-General - Statement on Corruption, United Nations, 2020; Exporting Corruption, Report. Transparency International, 2020.

Question 56 (1 point)

Listen

Foreign bribery is not an abstract phenomenon. It has huge consequences for both the _____________.

Question 56 options:

A)	payer and recipient.
B)	home and host countries.
C)	bribery and corruption.
D)	government and business.

Question 57 (1 point)

Listen

_______________ uses various indexes, surveys, and opinion lists to create a comparative numerical score to track public opinion on corruption. It surveys 114,000 people in 170 countries on their view of corruption.

Question 57 options:

A)	Transparency International
B)	United Nations Commission on Population and Development
C)	World Trade Organization
D)	Organisation for Economic Co-operation and Development

Question 58 (1 point)

Listen

In order for the Convention on Combating Bribery of Foreign Public Officials in International Business Transactions to be truly effective, what must happen?

Question 58 options:

A)	further UN actions must be taken
B)	the WTO Code of Ethics must be implemented
C)	side payments (kickbacks) must be outlawed
D)	the convention must be translated into laws by each signatory nation

Question 59 (1 point)

Listen

Money lost to foreign bribes

Question 59 options:

A)	creates significant economic repercussions
B)	triggers unfair competitive advantages
C)	results in fewer public services for the people who need them most
D)	all of these answers are correct

Question 60 (1 point)

Listen

___________ gives rise to very significant risks of corruption. It compromises the government response, undermining much-needed trust in public institutions, squandering supplies and resources, and impeding their flow to those in need.

Question 60 options:

A)	Extortion
B)	Technology
C)	COVID-19 pandemic
D)	International business bribery

Question 61 (1 point)

Listen

_________________ is a research report that rates the performance of 47 leading global exporter, including signatories to the Anti-Bribery Convention.

Question 61 options:

A)	Exporting Corruption
B)	Corruption Perception Index
C)	WTO Anti-Bribery
D)	Convention on Combating Bribery of Foreign Public Officials in International Business Transactions

Question 62 (1 point)

Listen

What was the multinational organization that adopted the Convention on Combating Bribery of Foreign Public Officials in International Business Transactions in 1997?

Question 62 options:

A)	Transparency International
B)	United Nations Commission on Population and Development
C)	World Trade Organization
D)	Organisation for Economic Co-operation and Development

Question 63 (1 point)

Listen

From a pragmatic standpoint, the practice of giving bribes, although an evil, might be the price that must be paid to do a greater good (assuming the investment creates jobs where none existed before). Several economists advocate this reasoning suggesting that in the context of pervasive and cumbersome regulations in developing countries corruption may

Question 63 options:

A)	actually improve efficiency and help growth
B)	undermine government institutions
C)	misdirect public resources
D)	both B and C