India: One of the 5 worst bribe-payers in the world

Indian companies have been perceived as one of the worst bribe-payers while engaging in business abroad, ranking along with firms in other BRIC countries - Russia and China - according to anti-corruption organisation Transparency International 2008 Bribe Payers Index, released on Tuesday.

Though India has improved its BPI score of 6.8 out of 10 this year compared to the last BPI survey in 2006, when it was ranked last with a score of 4.62, it still remains one of the five worst countries in the world, as bribery by emerging exporters is still on the high side. The lower the average score, higher the corruption.

"The BPI provides evidence that a number of companies from major exporting countries still use bribery to win business abroad, despite awareness of its damaging impact on corporate reputations and ordinary communities," said TI Chair Huguette Labelle in a press statement.

Belgium and Canada shared first place in the 2008 BPI, with a score of 8.8, indicating that Belgian and Canadian firms are seen as least likely to bribe abroad. The Netherlands and Switzerland shared third place on the index, each with a score of 8.7. On the other end of the spectrum is Russia, which is ranked last with a score of 5.9, just below China (6.5), Mexico (6.6) and India (6.8) (see table).

The BPI also shows that public works and construction companies are the most corruption-prone when dealing with the public sector, and most likely to exert undue influence on the policies, decisions and practices of governments. In the first of two new sectoral rankings, companies in public works contracts and construction; real estate and property development; oil and gas; heavy manufacturing; and mining were seen to bribe officials most frequently.

The cleanest sectors were identified as information technology, fisheries, and banking & finance. While most of the world's wealthiest countries already subscribe to a ban on foreign bribery, under the Organization for Economic Co-operation and Development's anti-bribery convention, there is little awareness of the convention among the senior business executives interviewed in the Bribe Payers Survey.

Transparency International recommends the Indian government to sign the international anti-corruption conventions, ratify the United Nations' convention against corruption and also exhorts it to pass laws like the US Foreign Corrupt Practices Act of 1977.

"The unfolding financial crisis has shown us just how integrated the world's markets have become. Accountability must be guaranteed across borders, include improved risk management and reach all the way down a company's supply chain," said Cobus de Swardt, managing director, TI.

"Businesses face a complex challenge, but efforts to improve labour practices, for instance, by working with intermediaries, suppliers and affiliates, show that there is no excuse to not extend anti-bribery standards globally in a similar fashion."

The BPI is a ranking of 22 of the world's wealthiest and most economically-influential countries according to the likelihood of their firms to bribe abroad. These countries are - Australia, Belgium, Brazil, Canada, China, France, Germany, Hong Kong, Italy, India, Japan, Mexico, the Netherlands, Russian Federation, Singapore, South Africa, Spain, South Korea, Switzerland, Taiwan, the UK and the US.

The survey asked two questions: whether the respondents had business dealings with companies in the list of 22 countries. If so, how often the companies, having their headquarters outside, pay bribes in their own country. The index was then composed based on the reply to these two questions. Around 2,742 executives in 26 countries were part of the latest survey.