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U.S. Ambassador to the OECD Kornbluh's Remarks at the World Governance Forum, November 2011

Speaker: Karen Kornbluh, Senior Fellow for Digital Policy
Published November 11, 2011

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On November 11, 2011, U.S. Ambassador to the OECD Karen Kornbluh gave a speech titled, "Leveraging OECD Anti-Corruption Disciplines to Increase Prevention and Enforcement," at the first World Forum on Governance in Prague.

Prevention and enforcement are two sides of the same coin – sound governance systems spell out integrity standards and penalize misconduct.

The World Bank estimates that more than 1 trillion dollars in bribes are paid each year out of a world economy of 30 trillion dollars. Corruption has a corrosive effect on development 00 including the diversion of funds from project which should be helping to raise citizens out of poverty, lost confidence in government officials, and distorted competition. Corruption undermines faith in our markets and weakens the rule of law. This is why President Obama has stated, "The struggle against corruption is one of the great struggles of our time," and brought to the G20 a proposal to broaden the G20 anti-corruption agenda.

It is a global problem requiring a global solution. Only by acting in concert can governments tackle international bribery. A single country acting alone will only lose business.

The strongest international anti-bribery standard is the anti-Bribery Convention monitored by the OECD. The ABC grew out of US frustration that while American companies were required to abide by our FCPA, many of their developed country competitors were deducting their bribes of foreign officials on the tax returns! Today it has 38 signatories who have bound themselves to criminalize foreign bribery and participate in the OECD's rigorous enforcement monitoring mechanism.

Successes in the past year:

  • In May 2011, the Russian Federation became a full participant in the Working Group on Bribery. This will advance the rule of law, reduce opportunities for corruption, and commit Russia to a comprehensive peer review process that will scrutinize Russian legislation as well as implementation and enforcement.
  • To increase accountability, the United States negotiated with other members of the OECD Working Group the public release of the OECD's annual data on anti-bribery enforcement actions taken by working group member countries, including corporate sanctions and plea agreements. This builds on and complements the good work that NGOs - such as Transparency International - are already doing.
  • The OECD now also hosts twice yearly prosecutors' meetings, another U.S. priority.
  • In April 2010 the UK enacted a new, stronger Bribery Act.
  • China has sent substantive participants (three Deputy Director Generals from the Ministry of Supervision) from Beijing to participate in the WGB.
  • Thailand, Peru, Indonesia and India have also participated in WGB meetings.
  • Several new countries have expressed interest in acceding to the convention, notably Colombia.

It is easy to pull together quickly a strategy against corruption, but what will actually make a difference is whether relevant stakeholders were involved in the process. Otherwise the strategy will remain words on paper, gathering dust on a shelf.

Page 17 from the 2010 OECD Annual Report by the Working Group on Bribery, which you received as a handout, demonstrates just how much work is still to be done.

In some cases, anti-corruption policies -- driven by high political or corporate will -- fail because countries lack knowledge and experience on effective design and implementation

OECD findings on how to create a successful, effective anti-corruption policy include:

  • Embedding integrity commitments into organizational reforms, including financial disclosure of public officials' personal wealth;
  • Instilling a culture of integrity by setting conflict of interest rules, guidelines and training for public officials, compliance monitoring, whistleblower procedures and inspection regimes:
  • Creating coordinating bodies or naming integrity officials to monitor and promote anti-corruption policies and measures and to ensure their consistency;
  • Codifying integrity and anti-corruption standards and procedures in stable and clear regulations.
  • Promoting sound procurement, merit-based human resource management and other transparent and accountable processes, e.g. budget formulation.

Integrity depends on more than the commitment of a few leaders: it has to be reflected throughout public sector systems, processes and institutions. Ultimately organizational reform will shape new behaviors and change mentalities

Because corruption is so complex, many argue that corruption fighters need to mobilize in a comprehensive approach. But, as you know, resources and energy are limited. So where is it better to focus our efforts? Are there quick and important wins that will make a difference?

What new measures would be helpful to the broader business community? How can we use our existing tools better?

Are institutional investors aware of our ongoing anti-corruption efforts? If not, why not? How can we get the word out?

The OECD just launched a web portal, Clean.Gov.Biz (http://www.oecd.org/cleangovbiz) that in one virtual place brings together the existing instruments which work to build integrity and fight corruption.

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