"Still serious loopholes in ECGD's anti-corruption procedures"

by The Corner House

first published 21 October 2005

PRESS RELEASE, 21 October 2005

On 21st October 2005, the ECGD announced its provisional response to the public consultation, held from March to June 2005, on its anti-corruption procedures.

The ECGD proposes to take some steps towards re-strengthening its procedures, but has still stopped short in some key areas.

The ECGD also announced today that it will hold a further round of consultation on its provisional response and issue a final response by the end of this year.

"We really regret this delay in coming to a final decision" said Nicholas Hildyard of The Corner House. "Every day that goes by with weakened anti-corruption procedures provides yet another opportunity for bribery."

"While we welcome the re-strengthening of some of the procedures", said Susan Hawley of The Corner House, "there will continue to be serious loopholes until ECGD fully re-introduces all the measures in its original anti-corruption programme."

In November 2004, following intense industry lobbying, the ECGD had weakened the robust new anti-corruption procedures it had introduced in May 2004. After a legal challenge by The Corner House to this action, the ECGD agreed in January 2005 to consult with all concerned parties on the weakened measures it had introduced.

The Corner House argued in its submission to the March-June 2005 consultation that, if the ECGD were serious about combating bribery, it should re-introduce in full the original May 2004 anti-corruption procedures. In particular, the ECGD should:

  1. agents' commission

    re-strengthen disclosure requirements on agents' commission, by requiring details of commission payments on all transactions regardless of the value of the contract, and by removing a let out clause for companies not wanting to give the name of their agent.

  2. no-bribery warranties

    re-introduce the requirement on customers to make no-bribery warranties in relation to their joint venture partners, parent and sister companies and subsidiaries (whether directly controlled or not).

  3. 'to the best of our knowledge and belief'

    introduce a proper definition of the phrase 'to the best of our knowledge and belief' which qualifies the no-bribery warranties, so that it requires due diligence to be done by companies before they make such warranties.

  4. audit procedures

    re-strengthen its audit procedures, drastically weakened following industry lobbying, so that ECGD can conduct spot checks on company documents without having to have suspicions of wrong-doing and without having to write to companies to alert them of their suspicions.



Postscript Notes

For all the documents related to this consultation, see the "Anti-Bribery and Corruption Procedures 2005-06" heading under the Public Consultation documents listed in the "Public Information" section of ECGD's website.