Expansion of the OECD Anti-Bribery Convention: A Skeptical View

The OECD Anti-Bribery Convention (the unwieldy official name of which is the “OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions”) has proven to be a surprisingly successful international agreement—far more effective than the various regional anticorruption instruments or the U.N. Convention Against Corruption (UNCAC), and indeed far more effective than even the OECD Convention’s proponents had predicted. Of course, it’s hard to know how much one can credit the OECD Convention for changes in anticorruption laws and enforcement patterns, but lots of well-informed people believe it has had a big effect, primarily because of its rigorous peer review system. In contrast to other, weaker review systems associated with UNCAC and some of the regional conventions, members of the OECD Convention must submit to a quite extensive and intrusive form of peer review, in successive phases, and cannot veto or prevent disclosure of the resulting reports. The reports are often quite harsh, even scathing, and the political embarrassment associated with a bad review can shame governments and mobilize public opinion.

Given that the OECD Convention has been so successful, should it be expanded to include more countries? After all, membership in the Convention is not limited to the OECD , and indeed several non-OECD countries (Argentina, Brazil, Bulgaria, Columbia, Russia, and South Africa) are already parties. The OECD’s leadership seems to think the answer is a clear yes. At a recent Chatham House conference on “Combating Global Corruption” (which I was fortunate enough to attend), Ángel Gurría, the OECD Secretary-General, declared that it was “imperative that all G20 countries become Parties to the OECD Anti-Bribery convention,” and specifically noted the importance of bringing China, India, Indonesia, and Saudi Arabia on board.

I’m sympathetic to the general idea, and would certainly like to live in a world where all countries accepted—and respected—the commitments embodied in the OECD Convention. But rapid expansion of the Convention has important drawbacks that deserve more attention than they seem to be getting. So at the risk of being the skunk at the garden party, let me lay out the case for skepticism about rapid expansion of the OECD Anti-Bribery Convention.

The skeptical argument is actually pretty easy to summarize: rapidly expanding the membership of the OECD Convention risks weakening the Convention. At a time when over half of the current Convention members have not yet successfully prosecuted a single foreign bribery case, this is a substantial concern. The OECD Convention only works because the peer review system is effective. But the peer review system is only effective because (1) countries are willing to issue harsh reports about their peers, and (2) countries care about the reports, and find bad reviews embarrassing and/or politically damaging. The rapid addition of new members—particularly those that are less than fully committed to combating bribery of foreign public officials—risks eroding each of these two bases of the Convention’s effectiveness. Consider each in turn:

As to the first: It’s true that under the OECD Convention, no one country can block a report—the system works not by consensus, but by “consensus minus one.” Yet the more countries that are part of the system—and the more of those countries that have a less-than-stellar record on anticorruption—the greater the worry that the peer review system will be watered down. Explicit, secret collusion is not unthinkable—if French and Russian figure skating judges would collude to favor the other nation’s Olympic competitors, it’s not outside the realm of possibility that French and Russian officials would agree to go easy on one another when assessing the vigor of anticorruption enforcement. But the more plausible concern is that participants in the peer review process might assess another country’s behavior through the lens of what is “normal” or “acceptable” in their own countries. Additionally, insofar as the rigor of some Convention reports is driven by a handful of countries with a strong interest in this issue (such as the United States, Germany, and perhaps now the United Kingdom), a larger pool of potential reviewers means that there’s a lower likelihood that representatives from one of those jurisdictions will be in the set of primary reviewers for the initial investigation, and the less influential those countries might be in the negotiations over the final language in the reports.

As to the second factor: Currently, a bad report is embarrassing because countries—or active and influential citizens within those countries—care what the OECD Convention members say about them. There’s a sense that all these countries are part of the same “club,” and this is what makes shaming an effective motivator. But that tool may not be nearly as effective against countries that, for better or worse, care less about what the “club” thinks about them on this particular issue. China and Saudi Arabia, for example, get criticized for their human rights record all the time, and it doesn’t seem to make much difference. And the more OECD Peer Review Reports are ignored or dismissed, the less significant they become. We can flip this around as well: the UK or France or Canada may care quite a bit when they are raked over the coals by their fellow OECD countries; will the criticisms have the same sting when they’re coming from a group that includes Russia, China, Saudi Arabia, and Indonesia? Again to use human rights as a comparison, there’s a plausible argument that the moral force of reports issued by the U.N. Human Rights Council is substantially weakened, rather than strengthened, by a membership that includes (or has included) China, Zimbabwe, Russia, Saudi Arabia, Pakistan, Sudan, and Vietnam.

I want to be careful not to overstate my concerns. There are clear advantages to expanding the OECD Convention.  The addition of other G20 countries will not cause the Convention to collapse. And even if expansion does lead to some dilution of some reports, that might be a price worth paying to get major players like China and India on board. But as Secretary-General Gurría acknowledged during his Chatham House remarks, the fact that so many of the Convention’s existing members seem not to be meeting their Convention obligations weakens the Convention, and threatens to undermine its continued effectiveness. In light of that fact, a push for rapid expansion may be premature.  Perhaps expansion of the OECD Convention should remain a long-term goal, but that expansion should proceed more carefully and deliberately. It might make sense to first make sure that the OECD Convention can succeed in getting get France and Finland to vigorously enforce their foreign anti-bribery laws, before trying to bring in China and Saudi Arabia.

7 thoughts on “Expansion of the OECD Anti-Bribery Convention: A Skeptical View

  1. Very interesting post. I wonder, would some of these other countries even want to join? If France and Finland are having trouble meeting the standards, would China (even if it wanted to) have any chance at all? And, especially given the new Chinese government’s focus on tamping down on corruption — combined with the limits it has discovered in its ability to do so — it seems that putting itself in a club where it is reviewed and assessed against countries that (1) have fewer corruption problems and (2) have greater government capacity to prosecute corruption, would just highlight problems with domestic corruption enforcement.

    Do you think some of the smaller concerns you raise — such as the greater likelihood of collusion to overcome the “consensus minus one” rule — could be fixed through smaller changes to the OECD Anti-Bribery Convention, such as a “consensus minus three” rule, or similar? Or would a move like that weaken the logic behind the “minus one” rule, making the rule arbitrary?

    And separately, do you think that another avenue for expansion of the regime is not in terms of membership but in terms of the kind of corruption on which it focuses? (I.e., expansion beyond the covered forms of bribery.) Or is the success of the Convention tied to its narrow scope?

  2. All good questions.

    On the first, I agree that some countries may be reluctant to join, and China is a prime example of a country which (I believe, though I could be misinformed) has been quite reluctant to join. But Russia was quite anxious to join, and other countries that have trouble with compliance, like South Africa (see the most recent Phase 3 report) are in. Indeed, one way you could frame my skepticism is as asking whether it really makes sense to be pressuring countries like China to join when they might not be fully committed to what true compliance entails. Best case scenario is that membership in the regime changes their behavior. That was certainly the hope with Russia. Worst case scenario is that membership in the regime weakens the regime. That’s the concern I want to raise — not because I’m sure it’s right (I’m not), but because I think we need to be having that conversation.

    Altering the voting rules for the report might help, though from what little I know altering those rules is itself quite difficult, so might not be feasible. But it’s a reasonable suggestion, and might be worth thinking more about.

    Your last question is another great one, and thematically close to the set of concerns I was trying to raise in the original post. My hunch is that the narrow scope of the OECD Convention helps with its effectiveness. Some expansion might be possible and desirable, but too much risks a similar sort of dilution. I have a sense that whenever an international regime proves successful, whether in anti-bribery or trade or what have you, there’s often an impulse to expand the regime–both in terms of membership and scope of topics covered–and while that’s often a good idea, there’s frequently the risk that too much or too rapid expansion will undermine some of the features that made the regime effective in the first place.

  3. Great post! One small comment, though: you made the point that an OECD nation is much more concerned about being embarrassed by its peers, and that seems true, but I wonder if criticism from a club that included, say, China would not be equally if not more embarrassing? I imagine it would prick American pride if China were to win a WTO case against the U.S., and might lead to some soul-searching about our trade policies. Likewise, for a developed nation to be “raked over the coals” by an anti-corruption club that includes China would be rather embarrassing, at least in my opinion. As you acknowledge, the benefits of admitting China to the club might outweigh the negatives–and, as another poster pointed out–it’s not as if the current regime isn’t looking for opportunities to trumpet their anti-corruption stance.

    • I stand corrected: according to Professor Wu, China won a major case against the US at the WTO and not many people outside of the beltway noticed. It was called “United States — Definitive Anti-Dumping and Countervailing Duties on Certain Products from China.”

      • Your point about being embarrassed made me think of Putin’s Op-Ed in the NYT when he chastised Obama for considering an invasion of Syria, and of John Kerry’s post-Crimea comment on how civilized nations don’t go around invading each other in the 21st century! Any OECD rebuke will be accompanied by a degree of hypocrisy, but will the hypocrisy eclipse the importance of the rebuke?

    • This might be right in principle, but I think this is less likely to be a problem in practice. It also may be the case that the “raking over the coals”, when it happens, will start to seem politically-motivated.

      That said, I want to reiterate that I’m not necessarily arguing that expansion of the OECD Convention would be a bad thing. I don’t know nearly enough to make a confident prediction. But I do think there are some plausible negatives that need to be considered along with the positives.

  4. Pingback: Should the OECD Anti-Bribery Convention be Expanded? - www.ethic-intelligence.com

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