Tag Archives: OECD anti-bribery convention

January 14 Webinar: Challenges Facing the OECD Antibribery Convention – Reflections from Three Former Working Group Chairs

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The OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions stands as the most far reaching measure to curb transnational bribery. Its member states account for anywhere between two-thirds and three-quarters of total global trade in goods and services, and each has pledged to prosecute any person or firm subject to its law that bribes an official of a foreign government.

Compliance with the Convention is overseen by the OECD Working Group on Bribery, representatives of each treaty party who meet regularly to assess how well member states are complying with their treaty obligations. As Transparency International has observed, the Group “plays an indispensable role in providing a forum for the exercise of peer pressure on governments lagging on their commitments” (here). And key to the Group’s continuing to play that role has been its chair.

Current chair Kathleen Roussel has taken over at an especially challenging time for the Group and the Convention. The Trump Administration’s retreat from vigorous enforcement of the Foreign Corrupt Practices Act (here), which inspired the Convention, and Italy’s recent actions in foreign bribery cases (here and here) have raised questions about the effectiveness of the Convention in holding the line against bribery.

Financial Times columnist Martin Wolf will moderate a discussion with three former Working Group chairs — Mark Pieth, Drago Kos, and Danielle Goudriaan — on what the Group must do to ensure the Convention’s continued effectiveness. Organized by Corner House (UK), Hawkmoth (the Netherlands), HEDA (Nigeria), and ReCommon (Italy), the online event will be held January 14, 9:30 am US East Coast time, 3:30 pm Central Europe time.

Registration details are here.

The Failure to Limit the Corruption of Global Capital

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This past April I was fortunate enough to attend a wide-ranging discussion at the Stanford Business School of what the growing power of global capital and the declining trust in government institutions means for the future of capitalism and democracy.

Not surprisingly corruption emerged as a major theme.

Speakers examined everything from the failure of multinational corporations to enforce their own ethics codes to the rise of a profession devoted to helping corrupt officials hide stolen assets to the OCED’s failure to crack down on Italy’s breach of the Antibribery Convention.

A link to the conference papers is here. My summary of what was said about the transnational spread of corruption and measures to curb it, published on the ProMarket page of the University of Chicago’s Stigler Center, is here.

An extraordinary app, NotebookLM, converted the summary into a dialogue explaining the summary and exploring its implications.  It is here.( A physicist friend had raved about how NotebookLM made his technical papers understandable to lay audiences. I didn’t believe him until I heard the dialogue it created off the summary. I am astonished at the result.) 

Pressure Growing on OECD Antibribery Working Group to Review Italy’s Noncompliance

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As a party to the OECD Antibribery Convention, Italy is bound by international law to investigate any Italian citizen or company alleged to have bribed an official of another government. In pursuing a case, the treaty requires that Italy “not be influenced by considerations of national economic interest. . . or the identity of the natural or legal persons involved.”

Successive Italian governments have ignored the no favoritism requirement. Economically important and politically influential Italian firms have regularly escaped punishment on the flimsiest of grounds: €10.5 million paid to a foreign public official’s cousins called not a bribe but a “consulting fee,” €197 million to well-connected insiders termed a “lobbying fee” (here).

Italy’s most recent breach of its treaty obligation: the refusal to appeal the acquittal of oil giant and partially state-owned firm Eni for paying a $1.1 billion bribe to Nigerian officials. A case where the evidence of wrongdoing was overwhelming (here); the trial court’s acquittal reeks of judicial incompetence or worse (here); and in an extraordinary, unprecedented move that will surely deter future foreign bribery cases, the prosecutors are themselves being prosecuted for pursuing the case (here).

That economic considerations or political pressure might dissuade a government from enforcing its foreign antibribery law was not lost on the drafters of the Antibribery Convention. To guard against it the included an article requiring the parties to submit to a “program of systematic follow-up to monitor and promote the full implementation of this Convention.”  That follow up takes the form of a periodic review of compliance by the Antibribery Working Group, a committee consisting of a representative from each treaty party with a senior diplomat chairing.

On its website the Working Group stresses its commitment “to global engagement on anti-bribery.” Italy’s flagrant treaty violations have sparked anticorruption activists to take the group on its promise of a global dialogue. Last October more than two dozen of them asked it to review Italy’s compliance (here); in a tightly reasoned 47-page submission this June a coalition of civil society groups laid out the case for considering Italy’s (non)compliance (a request later amended to overcome the reason the chair gave for putting off review – amended submission here).

Most recently the Federación Latinoamericana de Fiscales, a federation of national associations of prosecutors from Latin American states, has written to the court hearing the Italian prosecutors’ case to emphasize that the proceedings are “undermining the sense of security and institutional trust that all prosecutors must have” to faithfully discharge their duties (here).

Past time for the Working Group to act.

Formal Review of Italy’s Compliance with OECD Antibribery Convention Requested

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In a June 5 submission to Kathleen Roussel, Chair of the OECD Working Group on Bribery, three NGOs have asked the group to find Italy has failed to prevent political interference in a case where, in the face of overwhelming evidence, Italian oil giant Eni, Shell, and accomplices were acquitted of paying a $1.1 billion bribe to acquire rights to Nigerian oil field license OPL-245 (here).

As a party to the OECD Antibribery Convention, Italy pledged that the investigation and prosecution of foreign bribery cases would not “be influenced by considerations of national economic interest. . . or the identity of the natural or legal persons involved” (article 5). In their submission, the NGOs list 60 different instances where politics, Eni’s nationality, or both compromised the case. The evidence includes:

  • Admissions by Italian officials Eni associates conspired with state officials to “pollute” the OPL 245 investigation
  • The current trial of Eni’s former chief legal counsel for his alleged role in the plot
  • The termination of the OPL 245 prosecutions on overtly political grounds
  • The disciplining and criminal conviction of the two First Instance court prosecutors on charges that an independent judicial expert has described as “questionable conjectures

The complaining NGOs are Corner House Research of the United Kingdom; Hawkmoth, a Netherlands-stichting; and Nigeria’s HEDA Resource Centre.

The Working Group on Bribery is responsible for monitoring compliance with the Convention, and the NGOs’ submission is now circulating among its members. The Convention remains a signal commitment in the global fight against corruption.The Working Group should act promptly and decisively to see Italy observes its commitment to eradicating foreign bribery – no matter the political implications or the bribe payor’s identity.

Open letter to OECD Antibribery Convention’s Working Group on Italy’s Noncompliance

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In a world where the fight against corruption remains an uphill struggle, the OECD Antibribery Convention is a signal achievement. The 38 members of the OECD, the world’s richest nations, have bound themselves to make it a crime under their domestic law for any person or entity subject to their jurisdiction to bribe an official of a foreign country. What was once common practice by large multinational corporations is now subject to stiff fines for the corporation and prison sentences for their executives.

To ensure their commitment is more than just words on paper, convention parties regularly review each other’s compliance. But as this blog has reported, recent decisions by the Italian judiciary and the Italian government now threaten the enormous progress made in curbing foreign bribery (here, here, and here). Italy’s compliance is being discussed this day by the group charged with reporting on compliance with the Convention. In the letter to group members reprinted below, current and former corruption prosecutors, investigators, academics, and activists urge the group to hold Italy to account for its noncompliance.

The letter remains open for signature. Those who wish to add their names should do so by submitting a comment to this post.. Italy’s noncompliance must remain at the top of the international agenda to fight corruption.

We the undersigned anti-corruption experts and practitioners are writing in the context of discussions about Italy and its resistance to recommendations contained in the Working Group’s (WG) 2022 Phase IV report on Italy. 

We wish to inform you of our immense concerns about Italy’s performance pre and post the Phase IV report issued by the WG.  In particular, we would point you to the following:

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Guest Post: The OECD’s Report on Brazil Should Be a Wake-Up Call

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Today’s guest post is from Guilherme France, the Research and Advocacy Manager at Transparency International Brazil and a PhD candidate at the Institute for Social and Political Studies at the State University of Rio de Janeiro.

The OECD Working Group on Bribery (WGB) conducts periodic reviews (in successive “phases”) on how well signatories to the OECD Convention on Preventing Bribery of Foreign Public Officials. Recently, the WGB published its Phase 4 report on Brazil. The picture it paints is rather bleak, and should be a wake-up call for Brazilian citizens and, one hopes, the Brazilian government. While the WGB also acknowledged some improvements in Brazil’s anticorruption framework (such as better inter-institutional cooperation, an increase in funding for law enforcement agencies, and efforts to enact a stronger whistleblower protections), Brazil is underperforming with respect to enforcement, and backsliding with respect to institutional independence. Continue reading →

Civil Society to the U.S.: Repair the Damage Italy Has Done to the OECD Antibribery Convention

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Eni and Shell’s acquittal by an Italian court of foreign bribery threatens to undermine one of the major advances of the fight against corruption: the OECD Antibribery Convention. Italy and the 43 other wealthy nations parties to the Convention pledge to investigate, prosecute, and punish nationals who bribe officials of another government.  

The trial court’s acquittal of Eni, Shell, and four individuals of paying Nigerian officials over $1.1 billion in return for the rights to OPL-245, a lucrative offshore oil field, shocked those following the case. The bribery evidence on the public record was overwhelming. Rumors that the acquittal was bought immediately began circulating. When the prosecutor announced she would not to appeal the acquittal, the rumor mill went into overdrive and put the question Italy’s commitment to the Convention squarely on the international agenda.

And if a G-7 country backs away from it, how long before other parties follow? Especially when, as in Italy, one of their major companies is in the dock?

Below is a letter from a broad coalition of civil society groups, and the lawyer who represents Nigeria in foreign bribery cases asking U.S. Attorney General Merrick Garland to open a case against Eni and Shell for bribing Nigerian officials.  As the authors explain, because Eni and Shell are both subject to Foreign Corrupt Practices Act, when the allegations involving Nigeria first surfaced the U.S. had initiated an investigation. After Italy signaled it was also investigating the companies, the U.S. deferred and closed its case.  Now that Italy has utterly failed to see the case through, they urge the U.S. to pick up the ball. 

Dear Mr. Attorney General:

Urgent action required by US to defend the OECD Anti-Bribery Convention: The Department of Justice must reopen its investigation into Eni and Shell

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OECD Denounces Italy’s Failure to Enforce the Antibribery Convention

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GAB readers know that Italy has repeatedly failed to meet its obligations under the OECD Antibribery Convention (here. here, and here). That in recent high-profile cases where evidence Italian companies bribed officials of foreign governments was overwhelming, the companies, their executives, and accomplices were all acquitted.  And that civil society organizations in Italy, Nigeria, and the United Kingdom have urged the OECD in no uncertain terms to condemn the Italian government’s blatant violation of its obligation to levy “effective, proportionate, and dissuasive criminal penalties” on those who bribe foreign public officials (here).  

Last Friday, the OECD did exactly that. In a comprehensive, well-reasoned report, a model for future compliance reviews, its Working Group on Bribery in International Business Transactions fingered both the legislature and the judiciary for Italy’s noncompliance. The legislature because the sanctions for foreign bribery are too low to deter anyone or any company from paying a bribe, the judiciary for interpreting the rules of evidence in ways that almost invariably end in acquitting defendants.

Indeed, it is hard to read the Working Group’s analysis of the decisions in recent cases without concluding as I have that underneath the strained reasoning in the recent acquittals is some mix of bribery, favoritism, or threats.

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Will the OECD Whitewash Italy’s Flagrant Violations of the OECD Antibribery Convention?

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Italy’s compliance with the OECD Antibribery Convention will reportedly be reviewed this week by the OECD’s Working Group on Bribery in International Business Transactions.  The Convention’s review mechanism has been called “the gold standard” for evaluating compliance with an international agreement (here). Whether it deserves that billing will depend on what the Working Group says about Italy’s compliance.

As with all compliance reviews, the Working Group has before it a report prepared by experts from two other Convention parties documenting whether Italy has lived up to its promise to investigate foreign bribery by its nationals. From the public record alone, on which the experts were well informed (here, here, here, here, and here), it is impossible to believe their report is anything but strongly critical.

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That Corruption Infects the Italian Judiciary Is Now Undeniable

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In March 2021, a Milan trial court acquitted Italian oil giant ENI, its partner Royal Dutch Shell, and numerous individuals of bribing Nigerian President Goodluck Jonathan and pals to secure the rights to the lucrative offshore oil field denominated OPL-245. The evidence of bribery was overwhelming, including internal Shell e-mails describing the scheme and the testimony of an ENI official confirming his bosses were fully aware of it. Suspicions that someone had “gotten” to the judges immediately arose stoked by revelations of close ties between the presiding judge and ENI’s senior counsel.

Any doubt that the verdict was tainted was put to rest when the court published its opinion justifying it. As the attached analysis by the British, Italian, and Nigerian NGOs that have pushed the case shows, the court’s “reasoning” was laughable. Two examples of many. The court wrote off the then oil minister’s sale of OPL-245 rights to a company he secretly owned as a trifle because neither he nor the government officials bribed to approve the sale objected. Equally ridiculous, the court found that a Shell briefing note reporting that part of the bribe would be in the form of political contributions simply recounted a rumor then circulating.

Between the strength of the evidence the prosecution presented and the court’s flimsy if not bizarre reasoning dismissing it, the expectation was that the acquittal would easily and quickly be overturned on appeal. That hope is not to be however.  Last week the Italian prosecutors assigned to handle the appeal announced they were withdrawing it. 

Thus ENI, Shell, and the 13 individuals named as accomplices in the payment of a $1.1 billion bribe stand exonerated. And it now clear that the rot in the Italian judiciary reaches into its once revered prosecution service.

Nor is the damage from the rot limited to Italy. Thanks to the doctrine of ne bis in idem (double jeopardy in American law), a Dutch investigation of Shell’s role had to be dropped (here).  

The last hope for justice now lies with the Nigerian judiciary. Ne bid in idem only bars EU countries from pursuing a case. A Nigerian investigation of the companies and their accomplices is underway. It is critical it continue and that the international anticorruption community do all it can to support it given what has happened in Italy.

Moreover, as this blog has urged, it is critical too that the OECD hold Italy to account for its failure to live up to its obligations to sanction Italian companies that bribe foreign officials. The ENI-Shell case must be an outlier not a precedent.