Examination of Witnesses (Questions 95
TUESDAY 14 NOVEMBER 2000
95. Can I welcome you all here today to talk
about this difficult but important subject of corruption? I wonder
whether it would be appropriate for you to introduce your colleagues?
We do know Mr Hasan because we had an informal session in Dhaka
with him about a year ago, I suppose it was, but we welcome you
all. Perhaps you would like to introduce your colleagues for the
benefit of the shorthand writer.
(Mr Cockcroft) Yes, certainly, Chairman.
Thank you very much. On my far right is Graham Rodmell, who is
the Co-ordinator of Transparency International (UK) and who will
today particularly take issues to do with UK legal questions.
On my right, as you correctly say, is Mr Manzoor Hasan, who is
the Executive Director of Transparency International-Bangladesh.
I am Laurence Cockcroft, the Chairman of TI-UK, and on my left
is John Bray, who is a Senior Consultant to Control Risks Group,
who has done a great deal of work on corporate attitudes to corruption
and responses within the corporate sector working with companies.
96. May I, first of all, thank you very much
for your written submissions to the Committee, which we have read
very thoroughly and from which our questions arise this morning.
I understand you want to make an opening statement, Mr Cockcroft.
Is that right?
(Mr Cockcroft) We would welcome that opportunity,
97. I just wanted to find out what is Control
(Mr Bray) We are a business risk consultancy. We are
based up the road in Victoria Street, we have a network of international
offices and we assist companies in facing up to non-commercial
risk, particularly political and security risks.
98. Mr Cockcroft, perhaps you would like to
introduce the statement in writing we have in front of us?
(Mr Cockcroft) Yes, Chairman. The statement
makes some points which are not highlighted in our long text because
our text, of 70 pages, was designed to respond to the terms of
reference which the Committee had set itself. We were concerned
that one or two very broad brush issues should not be neglected
which did not appear to be adequately reflectedperhaps
not in our terms of reference but in our response, which was very
specific. So we just would like to say three or four things. First
of all, we think it is important to recognise that corruption,
both grand and petty, does impact on the very poor in the developing
world. We would like to emphasise that corruption is a dynamic
phenomenon which changes over time; so questions of whether or
not corruption is culturally endemic have to be seen in a dynamic
context rather than one in which it is static. Thirdly, we would
like to say that we are increasingly convinced within TI-UK (I
might say with regret and after considerable debate) that there
is a strong case for tapering aid to countries which are endemically
corrupt and where governments show no sign of changing their position.
But in these contexts we believe that increasingly aid should
be channelled to NGOs and civil society, but not neglecting key
government institutions which are competently managed, such as
the offices of Auditors General, which can actually make a significant
difference, even in a corrupt environment. In that particular
framework, we want to recognise the fact (which, of course, is
implied in your terms of reference) that high levels of corruption
do dissuade foreign direct investment, with the exception of smaller
countries with a high mineral resource base. So that, in those
cases, one can see FDI flowing to those particular contexts. We
want to say that although it is very easy to, as it were, castigate
countries for corruption and, therefore, for avoiding foreign
direct investment or mitigating its flows, this is in fact only
one side of the coin. In 1999 for the first time TI published
a bribe payers index which was based on a survey of 750 senior
officials and business people in 13 different emerging market
economies, which was conducted by Gallup, so it was independent.
This confirmed that particularly in the arms and civil construction
sectors bribes were regularly on offer from international companies.
We just wanted to make the point that the Lesotho Highlands Water
Project case currently in court does tend to illustrate that particular
problem. So the corporate sector has a key role to play, both
in, as it were, creating a situation and in potentially rolling
it back. Most importantly, and we do think this comes out in our
text so we will not emphasise this point now, we want to stress
that the UK has responsibilities in this respect which go well
beyond the aid programme. In TI we are extremely impressed by
what DFID is doing in attempting to deal with the corruption issue.
We are much less impressed by what is happening in the Home Office
in relation to the OECD Anti-Bribery Convention and the follow-up
legislation in relation to money laundering and in relation to
effective mutual legal assistance. I know these points will come
up in the discussion. So we just wanted to highlight those themes,
Mr Chairman, before going into any further details.
99. Thank you. I think the question of the tapering
aid is of particular importance, which I think we will want to
go into in the course of the questioningas to what can
we do about corruption. I think we will conclude that in the section
of questions which we intend to ask you. I would like to thank
you for that. Can I make certain that we are referring to the
same table? In your submission to us, on page 21, you have a table
where you rank countries which start with China as being the most
prone to pay bribes and, at the other end, Sweden as the least
prone. Is that the table you are referring to?
(Mr Cockcroft) Yes.
5 See Evidence pp 104-105. Back