Wednesday, December 10, 2008

Indian firms fourth on graft graph

DH News Service, New Delhi

India is one of the most corrupt countries in the world fourth from the top as its companies routinely engage in bribery when doing business abroad, a survey has revealed.

According to a Bribe Payers’ Index (BPI) prepared by the Delhi-based Transparency International, 2008 companies based in emerging economic giants such as China, India and Russia are perceived to be engaged in bribery and corrupt practices when doing business abroad.

Belgium and Canada shared first place in the 2008 BPI with a score of 8.8 out of a very clean 10, indicating that Belgian and Canadian firms are seen as least likely to bribe abroad. The Netherlands and Switzerland shared the third place on the index, each with a score of 8.7. At the other end of the spectrum, Russia ranked last with a score of 5.9, just below China (6.5), Mexico (6.6) and India (6.8).

The study said the government here should take early action not only to sign the international anti-corruption conventions but also to ratify the UN Convention Against Corruption and pass laws like the US Foreign Corrupt Practices Act of 1977. “India must also conduct education campaigns to ensure that the corporate sector is aware that bribery is illegal, at home and abroad,” the study said.

TI’s 2008 BPI ranks 22 leading exporting countries by the tendency of their firms to bribe abroad. Their combined global exports of goods and services, and outflows of foreign direct investment (FDI) represented 75 per cent in 2006. The 2008 BPI is based on the responses of 2,742 senior business executives from companies in 26 developed and developing countries, chosen by the volume of their imports and FDI inflows. A score of 10 indicates a perception of no corruption, while zero means corruption is seen as rampant.

The Bribe Payers Survey also looks at the likelihood of bribing in 19 specific sectors. In the first of two new sectoral rankings, companies in public works contracts & construction; real estate & property development; oil and gas; heavy manufacturing; and mining were seen to bribe most frequently. The cleanest sectors were identified as information technology, fisheries and banking and finance. A second sectoral ranking evaluates the likelihood of companies from the 19 sectors to engage in state capture, whereby parties attempt to wield undue influence on government rules, regulations and decision-making through private payments to public officials.

Public works contracts and construction; oil and gas; mining; and real estate and property development were seen as the sectors whose companies were most likely to use legal or illegal payments to influence the state.