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Tougher laws needed to crack down on Irish firms exporting corruption

Dublin, 10 April 2007 - The OECD has published its long-awaited report on Ireland's efforts to prevent the bribery of public officials by Irish companies. It is one of the most damning the Paris think-tank has ever published, writes John Devitt

While we have made occasional attempts to come to grips with corruption at home, it now appears that Irish nationals may also been busy exporting corruption abroad. At the same time, the Irish authorities have turned a blind eye.

According to the latest report of the Organisation for Economic Co-operation and Development (OECD), representatives of Ireland's business community recently stated that Irish small and medium-sized enterprises (SMEs) would "do anything necessary to secure business overseas", including one assumes, engage in criminal activity. It should be no surprise therefore to find that six separate allegations of foreign bribery are currently levelled at Irish companies, both multinational and SME. Equally predictable is the fact that only one prosecution* has arisen from these allegations.

Sanctions for foreign bribery are severe. The bribery of public officials overseas by Irish companies has been illegal in Ireland since its ratification of the OECD Convention on Bribery in 2001. It is punishable by a sentence of up to 10 years' imprisonment and an unlimited fine. Since 2005, the Criminal Assets Bureau (Cab) has been empowered to confiscate any assets arising from a corrupt payment overseas. In addition, any company found guilty of corruption within the European Union can now be debarred from undertaking any public contract anywhere within the EU.

Given the seriousness of the crime in Ireland and the damage that corruption can do to domestic and global commerce, it is curious that virtually nothing has been done by the Irish authorities or business community to prevent corruption in international business.

The OECD report highlights the absence of efforts to raise awareness amongst the business community that bribing foreign public officials is a crime. In fact, the Government representatives stated that there were "no plans to make [the foreign bribery offence] more widely known than at present". What's more, Enterprise Ireland, the one agency charged with promoting and protecting Irish business overseas, blithely claimed it was not "responsible for raising awareness of the myriad of Government legislation".

The level of interest amongst Irish officials in preventing corruption was also called into question. When Transparency International published a report with similar findings in 2006 there was no official response from Government.

One might expect such disregard of a non-governmental organisation. What is a little more surprising is that Irish officials effectively snubbed the OECD when it visited Dublin last year. Representatives from the Department of Foreign Affairs and Enterprise, Trade and Employment did not even attend those meetings to which they were invited. This in itself posed "questions as to the seriousness with which the Irish authorities have taken their obligations", according to the OECD.

More substantive obstacles to fighting corruption were also highlighted in the report. There are no reporting obligations placed on public officials to report allegations or suspicions of wrongdoing. No whistleblower safeguards are in place for members of the Irish public service, except in very limited circumstances. In fact, public officials could be prosecuted for reporting corruption under the Official Secrets Act. While Ireland has adopted a "sectoral" approach to whistleblowing safeguards, there is no indication as to when, if ever, all employees will be able to report suspicion of corruption without legal retaliation.

Legislation is also deemed to be too weak to predict whether prosecutions will be successful. Some potential loopholes in the law are expected to be addressed in forthcoming legislation, but not all. Perversely, companies will still be allowed to deduct bribes for tax purposes in Ireland.

Two questions arise from the embarrassing mess reported on by the OECD. Firstly, how can the Government's fight against organised crime be taken seriously if it is not prepared to also prevent Irish nationals from becoming cogs in the wheel of international crime and corruption?

After all, it is widely accepted that drug smuggling and human trafficking rely on the complicity of corrupt officials, and that transit routes usually pass through those countries with the weakest rule of law. Bribes, even those labelled as "marketing expenses", promote further corrupt behaviour and weaken government attempts to stamp it out. Secondly, what is the point of Irish taxpayers giving €1 billion a year to developing countries when our Government is prepared to allow Irish companies to steal it back, or undermine development and democratisation through corruption?

Much of our aid goes to those countries that are most vulnerable to corruption. And as long as Ireland delays implementing and promoting the law on foreign bribery, there is little disincentive for Irish companies to pay bribes in those same countries.

This is not to say of course that all Irish companies are involved in corruption overseas. No doubt the vast majority abide by both domestic and international law. However, the OECD report does highlight the potential for Irish involvement in widespread white-collar criminality and the need to inform business of the risks involved when doing business abroad.

While the Government has announced that it will implement changes to existing legislation, these do not go far enough. Whistleblower legislation protecting all employees needs to be introduced as a matter of urgency as does a ban on deducting bribes for tax purposes. Only then will Government efforts to tackle international corruption and organised crime be taken seriously.

• John Devitt is chief executive of Transparency International Ireland. The OECD report is available on

© 2007 The Irish Times

This article appeared in the Irish Times on 11 April 2007

*This prosecution has taken place in the United States