Corruption is a debilitating blight on the global economy. According to figures from the World Economic Forum, it costs the global economy 5% of GDP. The World Bank estimates that over $1 trillion is paid in bribes every year.
This is not for want of international efforts to crack down on corruption. Next week marks the ten-year anniversary of the United Nations Convention Against Corruption (UNCAC), which called on UN member states to criminalise corruption, to confiscate the proceeds of corrupt officials, and to improve transparency in both public and private sectors.
Of course, the UNCAC must be enforced if they are to have any effect. And as the UN prepares to convene in Panama next week to discuss the state of the convention, many are arguing that member states have failed to put it into practice.
Following through
"It is one thing for governments to enact laws," Juliet Soresen, law professor and former assistant US attorney in Chicago, argued in a recent Op-Ed for Al Jazeera America. "It is another for governments to enforce them, especially when those laws target conduct by government officials.
"The UNCAC’s demands are regrettably weak in this regard, consisting of a 'nonintrusive' desk review of a 'comprehensive self-assessment checklist' by each signatory nation," she adds.
Vincent Lazatin, who chairs a coalition of corruption-focused public interest groups, was more direct. “Corruption is no ordinary crime," he said in a statement ahead of next week’s UN meeting. "It destroys people’s lives around the world and too many governments are acting agonisingly slowly.
He adds: “People are fed up and want governments to get serious about implementation of the UNCAC. It is time to end impunity.”
These arguments could equally apply to businesses, many of whom have been slow to take precautions against corruption.
A recent survey conducted by the Economist Intelligence Unit, on behalf of global risk consultancy Control Risks Group, found that many businesses lack even the most fundamental anti-corruption controls.
As the graph above shows, half of companies lack due diligence procedures to assess the integrity of new business associates. This is in spite of the fact that 52% of companies ranked 'risks associated with company's relationship with third parties' among their greatest corruption-related fears.
"Integrity due diligence should be standard practice before embarking on major new business relationships," according to Control Risks.
Only 27% of companies provide anti-bribery training for all employees. US companies were way ahead of the global average, with 48% providing anti-bribery training, while the UK lagged with just 23%.
And only 40% provide a whistleblowing "hotline" that allows employees to report incidents of bribery and corruption.
The majority of businesses realise that they could improve their anti-corruption measures - only 42% said they make all the investment they need to mitigate the risk of corruption. However, 17% said that while they need to increase their investment in mitigating that risk, they do not have the budget to do so.
This is an especially disappointing statistic. Not only does corruption waste money and expose businesses to risk of legal repercussions (surely motivation enough to invest in preventative measures); it undermines the rule of law, it erodes human rights, and it robs citizens of the world of fair access to economic opportunity. And by failing to ensure that their own money is not enabling corruption, businesses are complicit.
The views and opinions expressed in this article are those of the authors and do not necessarily reflect the views of The Economist Intelligence Unit Limited (EIU) or any other member of The Economist Group. The Economist Group (including the EIU) cannot accept any responsibility or liability for reliance by any person on this article or any of the information, opinions or conclusions set out in the article.
