The B20 Anti-Corruption Working Group Is Focused on the Right Topic, But It Is Unlikely That There Will Be Meaningful Action

The B20 Anti-Corruption Working Group Is Focused on the Right Topic, But It Is Unlikely That There Will Be Meaningful Action

 This article was reprinted with permission from FCPA Professor

Earlier this summer, the B20 Anti-Corruption Working Group released this report detailing various policy recommendations to combating corruption.

As highlighted on its website, the Business 20 (B20) is a forum through which the private sector produces policy recommendations for the annual meeting of the Group of 20 (G20) leaders.   The G20 is a forum for international economic cooperation and decision-making, with members from 19 countries plus the European Union.

Unlike certain other groups active in the anti-bribery space who seemingly take the singular position that bribery and corruption would be eliminated if only those evil corporations would stop victimizing and exploiting marginalized actors, the recent B20 report contains a refreshing and holistic view of the issue – not surprising given that it members have real-world experience with the issue.

The overall recommendation from the B20 is stated as follows.  ”The business community is united in its view that combating corruption, both supply and demand, requires a coordinated effort across governments to harmonize regulation, incentivize corporate responsibility, and enable consistent enforcement.”

I’ve long maintained that trade barriers and distortions are often the root causes of bribery and a reduction in bribery will not be achieved without a reduction in trade barriers and distortions.

On this score, the B20 report is spot-on as it states:

“Corruption remains a significant barrier to trade, particularly where border and customs facilities are hindered by red tape, pervasive corruption, inadequate infrastructure and low levels of security.  Business calls on G20 leaders to remove supply chain barriers through targeted infrastructure build, streamlined border administration, including reduction of corruption in customs clearance, and domestic regulatory reform.”

As rightly noted in the B20 report, “trade negotiations can provide an opportunity to support” harmonization of anti-corruption approaches.

Although the B20 report is focused on the right things, I am pessimistic that actual, substantive action will be taken by the G20 as to its recommendations.

The reason is simple.

Trade agreements and trade policy are used by all governments as “carrots” and “sticks” to accomplish selfish domestic goals whether political, economic or national security.

That is fine on one level, but so long as this dynamic persists, a reduction in bribery will not be fully achieved because trade barriers and distortions are often the root causes of bribery.

 Read more articles on the FCPA by Mike Koehler at FCPA Professor.

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