OECD Tells Chile To Do More Against Bribery, Says South Africa Must Act Urgently

Tom Burroughes

18 March 2014

The Organisation For Economic Co-operation and Development says Chile has progressed in the fight against bribery, but the country must do more to detect and punish such offences. Separately, it bluntly warned South Africa to crack down on bribery and protect whistleblowers.

In a report by the OECD Working Group on Bribery, the Paris-headquartered club of nations assessed the South American country’s performance in stamping out bribery, an issue that continues to be an important problem around the world, and a matter for wealth managers to watch.

“Chile has made positive efforts to implement the Convention, but there has not been a single foreign bribery conviction. Chile did not sufficiently investigate several of the six foreign bribery allegations that have surfaced since 2001. Chilean embassies failed to alert prosecutors to these cases which were widely reported in the foreign media. Only one of the cases has been detected through domestic sources. Chile should improve its investigative and detection efforts,” the OECD said in a statement.

The OECD recommended that Chile clarifies its corporate liability law and the system for certifying corporate offence prevention models; improve co-ordination and intelligence gathering; raise awareness that prosecutors and police in foreign bribery cases should not be influenced by economic, diplomatic and other inappropriate considerations; and ease bank secrecy protection for foreign bribery investigations.

There are positive changes in Chile, the report said.

“Chile’s current efforts to improve its implementation of the Convention through proposed Penal Code reform are welcomed. Chile has also improved its foreign bribery offence, and introduced corporate liability and nationality jurisdiction to prosecute,” it said.

It continued: “Efforts to raise awareness of foreign bribery appear successful. Many Chilean companies have put in place certain measures to address foreign bribery, though some of these may not meet best practices and international standards. Chile has also taken steps to protect whistleblowers though more could be done, particularly in the private sector.”

The Working Group on Bribery is composed the 34 OECD Member countries plus Argentina, Brazil, Bulgaria, Colombia, Latvia, Russia and South Africa.

South Africa

While South Africa is a member of the Working Party, the OECD went on to issue a sharp warning to the country about its own bribery controls.

“South Africa must take urgent steps to proactively investigate and prosecute foreign bribery. No foreign bribery cases have been prosecuted since South Africa joined the Convention in 2007. The 4 on-going investigations – out of only 10 allegations that have surfaced to date – are also far from reaching the prosecution stage,” the report said.

“The need for enforcement is imperative, especially as South African companies are increasingly operating abroad, often in sectors with a high risk of foreign bribery. There are also serious concerns that prosecutions may be hampered by political and economic considerations,” it continued.

The OECD recommend steps such as to significantly increase South Africa’s efforts to proactively detect, investigate and prosecute foreign bribery; ensure that national economic interests and the identities of the natural or legal persons involved do not influence the investigation or prosecution of foreign bribery cases; increase the financial resources available to law enforcement authorities and ensuring enhanced cooperation and coordination between the police and prosecutors; and urgently ensure and raise awareness that people who report suspected acts of foreign bribery are in practice afforded the protections guaranteed by the law, including those in the auditing profession.