Distinguished Service Professor of Public Policy and Management and CMU-A Executive Director Emil Bolongaita argued in his paper, “Mandate without Means”, that the Anti-Bribery Convention of the Organisation of Economic Cooperation and Development (OECD) is not working and needs urgent fixing.
Established in 1998, the OECD Convention is the first global legally binding agreement that criminalises bribery of foreign officials by corporations and citizens. With forty-one large economies in the world as signatories, including Australia, the Convention covers two-thirds of world’s global exports.
In his presentation at the 2017 OECD Global Anti-Corruption and Integrity Forum in Paris, France on 30 March 2017, Professor Bolongaita pointed out that only four signatories are effectively enforcing anti-bribery laws (mainly the U.S. and Germany, and to a much lesser extent Switzerland and U.K.).
The majority of countries have been conducting investigations and to some extent prosecutions for foreign bribery, but have not been able to secure significant convictions or apply sanctions. Australia, after seventeen years, has successfully prosecuted only two cases from almost three dozen cases it has been investigating for years.
Professor Bolongaita argues Australia and other countries are acting like “free riders” because they reap benefits from other countries’ enforcement of anti-bribery laws and do not shoulder substantial enforcement costs. Unlike other global agreements such as the World Trade Organisation, there is no institutional compelling mechanism in the OECD convention that can adjudicate complaints about countries’ non-compliance.
Professor Bolongaita’s research points to significant under-investment of governments in their law enforcement bodies, particularly those tasked to investigate and prosecute foreign bribery. The level of underinvestment in Australia is particularly severe compared to other jurisdictions. The lack of resources and qualified staff helps to explain why the Australian Federal Police has, in the findings of the OECD, prematurely closed investigations, as well as been unable to complete investigations expeditiously.
Professor Bolongaita recommends that unless enforcement bodies to fight foreign bribery are adequately funded, the governments that signed up to the Convention are perversely incentivising bribery in international business and worsening governance and development in developing countries. Such outcomes can lead to failing states that can pose risks for neighbouring states. Surrounded by states that suffer from corruption challenges, Australia has a vested interest to ensure that its firms are not contributing to corruption but are actually leading the fight to curb it.