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22 Apr, 2010 06:52

Business pledges to do away with bribery

Leading foreign companies operating in Russia have signed a pledge not to bribe Russian officials. German firms initiated the document, following scandals involving electronics giant Siemens and car maker Daimler.

More than 50 mainly German companies have committed themselves to doing business without bribery. It is a significant public step forward in the fight against graft.

Michael Harms, Chairman of the Russian-German Chamber of Commerce, is optimistic but believes there is a still a long way to go.

“We must be realistic, a public announcement is one side of the coin, on the other side you have still all these difficulties and I cannot promise you that starting from now 100 percent of all companies will implement this in full. It’s a process. I think it’s a good starting point.”

President Medvedev has said bribery in one of the greatest impediments to Russia’s investment climate and vowed to fight corruption when he took office in May 2008. But almost two years on, international firms are still kicking back to get ahead.

Hewlett Packard is the latest company under the spotlight. It is being investigated for allegedly paying $11 million in bribes to win a contract in Russia.

This follows the high profile cases of Daimler and Siemens, both of which paid hundreds of millions to settle charges of corruption, including in Russia.

However, Siemens CEO, Dr. Dietrich Moeller, said that practice has stopped for his company.

“After three years of practice, I can say that I’m 100 percent sure that no bribe anymore can happen in Russia.”

While the firms may say they won’t give bribes, there are still officials to worry about. Presidential Aide, Arkady Dvorkovich, says that situation is improving too.

“The very fact that in the recent few months we have seen an increasing number of cases that were brought to the court and people who were proved to be involved in the corruptive activities were prosecuted.”

But such court cases in Russia are more likely to lead to fines than stronger punishment. Some argue a real deterrent is sending people to jail, as in China, where four Rio Tinto workers were sent to 14 years in prison after being found guilty of accepting bribes.

Wednesday’s written pledge is a voluntary code and like all such codes is liable to be broken especially when officials in Russia can make the difference between life and death of a business venture.