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TI publishes 2007 report on Foreign Bribery - Transparency International welcomes Garda investigation into suspected deals with Saddam

Dublin, 18 July 2007 - TI 2007 Progress Report on the OECD Convention shows a lot more needs to be done. Ireland regarded as having made the least progress on foreign bribery.

The Irish chapter of anti-corruption group Transparency International (TI) has welcomed a Garda investigation into allegations that three Irish companies paid illegal kickbacks to Saddam Hussein in 2001. The UN is believed to have forwarded financial records to the Gardaí related to payments made during the ‘Oil for Food programme’.

The allegations were revealed in 2005 after a United Nations investigative committee named three Irish businesses in the kickback scandal involving the former Iraqi dictator. The companies are among over two thousand that are believed to have paid Saddam some €3 billion in kickbacks after sanctions were imposed to force the Ba’athist regime into complying with UN resolutions.

The Oil for Food programme was implemented in 1995 to allow Iraq export limited amounts of oil in return for food and medicines. The apparent failure of sanctions was used as a pretext for the US-led invasion in 2002. The sanctions themselves are blamed for the death of 500,000 Iraqi children. At the same time illegal oil shipments and contracts were funding the purchase of weapons and luxury goods for members of Saddam’s family and government. Kickbacks on contracts are also believed to have increased the price of food, medicine and other commodities by ten per cent over the life of the scheme.

John Devitt, Chief Executive of TI Ireland said that the investigations were a wake-up call for Irish exporters doing business in countries with weak rule of law. “This investigation will hopefully lead to greater compliance with a law that has been shamefully ignored since its introduction” he said. “Aside from the legal risks involved, there is a moral issue at stake – businesses should think about the human consequences of paying bribes and kickbacks.”

The bribery of a foreign public official by an Irish company or national has been illegal since it transposed most of the OECD Convention on Bribery into Irish law in 2001 – around the time the Irish payments are alleged to have been made.

A guilty verdict can lead to up to ten years imprisonment, an unlimited fine or both. Nevertheless, a TI report on the implementation of the OECD Convention published in Ireland today, claims that not enough has been done by the Irish Government to enforce or raise awareness of this crime. An OECD study published last March reported that a business representative had stated that Irish companies would “ do anything necessary to secure business overseas” .

The 2007 TI Progress Report allows comparisons of action in 34 different countries on bribery of foreign officials by domestic firms or government employees.

Of the Irish investigations cited in TI’s report, all relate to the Oil for Food Scandal. A further two incidents have emerged in the past two years: one relating to bribes made by an Irish national in Azerbaijan, and the other surrounding bribes paid to officials in Oman. The US authorities have brought charges against the individual involved in the Azeri investigation. No Garda investigation appears to have been opened into events in Oman.

Ireland is included in a group of 21 countries “with little or no enforcement” of the law on foreign bribery. It is highlighted, along with Portugal and Turkey, as a country where experts have reported multiple problems. These three are also regarded as having made the least progress.

Of the 34 countries under scrutiny, 15 have a centralised office/unit that deals with foreign bribery enforcement. Ireland is one of the 18 countries that does not, and is placed in the group of 9 countries in which the “level of coordination and supervision…for foreign bribery enforcement” is regarded as “unsatisfactory”.

TI experts reported that Ireland suffers from “significant inadequacies in the legal framework for foreign bribery prosecutions”, that the Irish Government's efforts to provide publicly-known and accessible procedures for reporting foreign bribery allegations were unsatisfactory, as were efforts to create public awareness that foreign bribery had become a crime. Ireland’s whistleblower protection in the public and private sectors is seen as inadequate. Corporate anti-bribery compliance programs are also deemed to be unsatisfactory, as is public access to information about foreign bribery statistics and legislation.

The report has also stressed the need for continuing strong OECD monitoring of each country, and the necessity of securing public attention and civil society partnership in ensuring the Convention is a success. TI has also recommended the increase in the number of states that are party to the Convention; the coverage of bribery to political parties and party officials; ensuring that companies headquartered in OECD states apply their anti-bribery policies to their foreign subsidiaries; and the re-examination of the exclusion of “facilitation payments”.

TI Ireland has welcomed the establishment of a civil service committee to discuss the implementation of the OECD Convention and recent Government funding for training for Irish business, but has called on the Government to take more robust action against foreign bribery.

TI’s recommendations include

  1. Implement comprehensive Whistleblower or Public Interest Disclosure Legislation. Current legal safeguards in Ireland for those wishing to report corrupt acts are believed to be inadequate and should be addressed through overarching legislation as a matter of urgency. 
  2. Support continued monitoring of enforcement of the OECD Convention on Bribery and the resources needed to continue this work.
  3. Expedite the publication of the Criminal Justice (Miscellaneous Provisions) Bill to address any legal uncertainties over extraterritorial jurisdiction and legal personalities liable to prosecution under the Prevention of Corruption Acts.
  4. Provide the necessary resources to An Garda Síochána and Director for Public Prosecutions to investigate and prosecute the foreign bribery offence.
  5. Undertake a sustained information programme to educate all relevant government officials and Irish-based enterprises (including Multi-National Corporations) of their moral and legal responsibilities in relation to domestic and international law on bribery. Such a programme should be coordinated with the active input of a number of Government departments and agencies, including but not limited to the Department of Justice, Department of Enterprise, Trade and Employment, the Department of Finance, the Department of Foreign Affairs/Irish Aid, and Enterprise Ireland; together with An Garda Síochána, Irish business organisations and civil society.
  6. Provide for separate annual Garda statistics on the Foreign Bribery Offence under the Fraud Headline Offence (Group 9).
  7. Secure Ireland’s ratification of the United Nations Convention against Corruption as soon as possible.

Table of Countries and Notes

The Irish section of the TI Progress Report was completed by Diarmuid Griffin, a law lecturer at the National University of Galway. This is the second year that Ireland has been covered in the report.

TI Ireland is the Irish chapter of Transparency International, a non-governmental organisation, dedicated to fighting corruption in government and business worldwide.

TI Ireland was launched in 2004 and since March 2006 has been based at the School of Business, Trinity College Dublin . Its Board includes people from business, civil society and politics.

The chapter is expected to publish a National Integrity System Country Study on Ireland later this year which will assess the ability of the state, business community and civil society to detect and prevent corruption. The study will be led by Dr Elaine Byrne at the University of Limerick and John Devitt and is funded by the Department of Justice, Equality and Law Reform.

TI Ireland is currently funded by membership and the Joseph Rowntree Charitable Trust, a UK based philanthropic group which recently announced a further grant of €70,000 over two years to TI Ireland.

Dowload the full list of countries

TI's In Focus Section on OECD Progress Report (Global Site)