Combating corruption: A task for Sisyphus?
There are numerous legal tools for fighting corruption. But do they offer an effective remedy for a socioeconomic affliction?
Corruption is not just a legally defined act whose commission may result in criminal responsibility. It is first and foremost an ethical dysfunction that leads to behaviour that is punishable under national and international law.
In most legal systems, it is a crime to offer or accept bribes, in both the public sector (corruption of public officials) and the private sector. The range of behaviours punishable as corruption may vary, but in most instances corruption involves offering an undue benefit to a person vested with specific authority in exchange for taking certain action, and acceptance of the benefit by that person. The common element in the definition of corruption is tied to the fact that punishing corruption is not just an independent legislative initiative of each jurisdiction, but also represents implementation of obligations assumed by the state under international conventions.
National and international law
The range of legal instruments for battling corruption at the international level is broad. Among the international agreements that may be cited are:
- the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions
- the UN Convention against Corruption.
The UN convention creates a general obligation on the part of its signatories to prosecute all forms of corruption, including bribery, nepotism, influence-peddling, and so on. The OECD convention, meanwhile, has a narrower scope, and requires its signatories to introduce national laws punishing a specific type of corruption, i.e. corruption of foreign officials in international transactions. The purpose of the OECD convention is thus to eliminate irregularities in cross-border ventures.
Some of the leading national laws include:
- the US Foreign Corrupt Practices Act of 1977
- the UK Bribery Act of 2010.
These two acts differ significantly. The Bribery Act encapsulates the UK’s overall anti-corruption policy and addresses all forms of corruption, within the UK and extraterritorially. It also introduced the new offence of failure to prevent corruption by establishing adequate procedures. The FCPA is focused on offering bribes to foreign officials.
Apart from strict requirements concerning the range of penalties imposed, the OECD and UN conventions contain a range of norms and directives whose implementation should help the signatory states combat corruption. An example from the UN convention is the requirement to promote cooperation between states, between the public and private sectors, and between the authorities and the public (Art. 12, 13 and 39).
In reality, however, implementation of mechanisms to support the battle with corruption is sometimes stuck at the level of wishful thinking. The involvement of states in performance of their international obligations is often limited to introduction of appropriate national regulations. Therefore the conventions also provide for a system of periodic oversight by independent experts with respect to the scope of implementation and enforcement of the convention by the signatory states. Transparency International also issues an annual report on the degree of implementation of the UN convention.
Within Europe, notable initiatives to battle corruption include the Council of Europe’s Criminal Law Convention on Corruption and Civil Law Convention on Corruption, as well as the Council’s Resolution (97/24) on the Twenty Guiding Principles for the Fight against Corruption. An institutional expression of the Council’s involvement in combating corruption is GRECO (the Group of States against Corruption), established in 1999 to monitor the degree of implementation and application of the norms established by the Council of Europe. Apart from its oversight function, GRECO also serves an advisory function on improvement of mechanisms for combating corruption on the part of states who are members of the group, and also provides a forum for sharing knowhow and best practices in this area.
The framework for the EU’s anti-corruption measures is set forth in Art. 83 and 84 of the Treaty on the Functioning of the European Union, pursuant to which the European Parliament and the European Council are authorised, by means of directives, to establish minimum rules concerning the definition of criminal offences and sanctions, including corruption. An example of such an initiative is Council Framework Decision 2003/568/JHA of 22 July 2003 on combating corruption in the private sector.
The range of instruments for fighting corruption also includes various initiatives by business, academia and NGOs. These “soft” solutions are multifaceted, reflecting the specifics of each field while also offering universal rules and standards, such as the Rules on Combating Corruption and the Whistleblowing Guidelines issued by the International Chamber of Commerce in Paris.
Another rich source of inspiration for developing anti-corruption programmes in the private sector is the Business Principles for Countering Corruption published by Transparency International—a comprehensive description of the elements that should be contained in any anti-corruption programme, how to develop such a programme and the reach it should have. Anti-corruption programmes cannot be limited to the internal functioning of an enterprise, but must also reflect the relations with current and potential customers and suppliers. The foundation for all anti-corruption programmes of organisations must be a robust and healthy corporate culture based on ethical values, properly spread among the employees. Particularly during a time of crisis, staff should feel secure, with guarantees from management that they will not face any negative consequences for refusing to offer or accept bribes in order to obtain or maintain contracts.
Despite the existence of such a broad range of tools, it is increasingly clear that legal solutions are not enough. If the fight against corruption is not to be limited to declarations and directives, it is necessary to develop standards for behaviour—best practices.
Best practice may be defined as a technique or method proven to be effective at achieving a specific purpose.
Best practice is developed through a process drawing on specific knowhow. If application of such knowhow in a particular manner has been successful, the practice may become established so that the success can be replicated. As best practice becomes recognised as effective and reliable, it may turn into a customary practice or “soft” law, not backed by any legal sanction. Soft law may even, in time, be adopted by lawmakers, and thus be introduced into the legal system as a prescriptive form of behaviour.
Best practices may develop as a result of initiatives of both the public and private sectors. An advantage of best practice is that it is an expression of grassroots concern and reflection on the need for effective measures against corruption, rather than being imposed from the top down by the public authorities.
Despite these advantages, there may be serious difficulties in achieving common application of best practice, arising out of a lack of knowledge of the existence of best practice, unfamiliarity with the method and purpose of applying it, or a lack of proper motivation, particularly given that as a non-legal instrument best practice does not carry any legal sanction.
Examples of best practice in fighting corruption include the following aspects which are more and more commonly followed in the business community:
- Compliance procedures designed to assure that commercial activity is conducted in line with relevant provisions of law and to eliminate irregularities within the organisation, including anti-corruption compliance
- Whistleblowing to bring corrupt practices to the attention of the authorities, and also as a system for reporting irregularities within the organisation, thus constituting one of the elements of effective compliance.
A specific example of best practice in combating corruption which is promoted by Transparency International is integrity pacts used in public procurement procedures. An integrity pact is essentially an understanding within a specific contract award procedure between the contracting authority and the bidders, pursuant to which the parties undertake to refrain from bid-rigging, bribery or any other corrupt practices. In order to assure the transparency of the tender, integrity pacts may also involve external monitoring by independent social groups.
Integrity pacts have been used in public procurement practice since the 1990s in 15 different countries as far-flung as Germany, Mexico and Pakistan, in 300 different public tenders. Although integrity pacts are based not on binding law but on the concept of a “gentlemen’s agreement,” they offer an effective tool for assuring transparency and propriety in the conduct of public procurement procedures, reducing the risk of bribery, and assuring that projects are implemented to the desired quality standards.
The fight against corruption cannot be limited to top-down orders issued by regulatory authorities, which may be effective only on paper. It requires a change in world view, leading by example, openness to dialogue and initiatives and the courage to implement them, which should be adopted as standard operating procedure. Otherwise combating corruption will remain a lonely task for Sisyphus.
Aleksandra Stępniewska, Dispute Resolution & Arbitration Practice and Business Crime Practice, Wardyński & Partners