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It concludes that the international community has the capacity to address a significant segment of corruption – the actions of transnational corporations based in the developed world. 9 Steven R Salbu, 'The Foreign Corrupt Practices Act as a Threat to Global Harmony Michigan Journal of International Law 419.


Defining ‘Transnational Corruption’

Corruption, the most recent and widely endorsed convention on the subject, requires parties to criminalize bribery of foreign officials.21 Similar requirements. 18 Examples include police corruption or bribery of government officials by domestic companies.

The Consequences of Corruption

Firm Level Evidence' (werkdocument nr. 7969, National Bureau of Economic Research, 2000); Paolo Mauro, ‘The Effects of Corruption on Growth, Investment and Government Expenditure: A Cross-Country Analysis’ in Kimberly Ann Elliot (ed), Corruption and the Global Economy (1997) 83. 33 Mauro, boven n 30; Susan Rose-Ackerman, 'The Political Economy of Corruption' in Kimberly Ann Elliot (ed), Corruption and the Global Economy (1997); Susan Rose-Ackerman, 'De politieke.

The Causes of Corruption

Other scholars of corruption focus on the absence of these strong and effective institutions. Because of mediation difficulties, this article focuses on the supply-side of corruption.52 Demand-side corruption occurs, on the one hand, through solicitation.

Globalisation and the International System


Of particular importance is the fact that some of these treaties make national laws mandatory. Because such laws have an effect beyond the state that created them, they have been the subject of heated academic debate.

Global and Regional Conventions

The earliest comprehensive instrument to do so was the OECD Convention.79 Targeting the developed countries where most TNCs are based, the OECD Convention extended an FCPA-like prohibition on foreign bribery to most of the relevant actors. 80 Some years later, at the end of 2003, the first truly global initiative followed - the United Nations. The Act refers to acts in furtherance of "an offer, payment, promise to pay or authorization to pay money or offer, gift, promise to give or authorization to give anything of value".

Corruption, Culture and Compulsion

Moreover, the conventions can be justified in principle independently, insofar as they affect other nations. In terms of transnational corporations, these can be equated with the "routine acts of government" referred to in the FCPA; see above no. 75 and accompanying text. As Philip Nichols notes, “[in] those twenty years [of the FCPA] not one significant diplomatic breach can be attributed to law enforcement.”94 Add to this the fact that the UN.

States and Implementation


This responsibility inevitably passes to a bureaucratic agency that enforces the law on behalf of the state. The idea of ​​an intergovernmental anti-corruption network, however, is not without practical and theoretical problems. This chapter contends that the anti-corruption network is unlikely to ever be effective enough to control corporate behavior without additional back-up measures.

Transgovernmental Networks

Moreover, given the extraterritorial nature of the laws, their implementation requires cooperation with similar bureaucratic agencies in other countries. While networks can encourage transnational cooperation, they cannot overcome all the challenges of the international system. Imelda Maher suggests that the move towards intergovernmental networks is 'a reflection of the trend towards the regulatory state with increased delegation of regulatory authority to specialized agencies'119 As a result, the international sphere can be conceptualized in terms of interactions between government agencies. and not only interactions between states.

The Effectiveness of the Anti-Corruption Network

A number of scholars suggest that one of the defining characteristics of bribery is its secrecy.125 Certainly, TNCs, aware of the illegality of corruption, use their significant resources to conceal their actions. It is clear that US companies engaging in bribery in violation of the FCPA have assumed some risk, which would be motivation to spread the same risk to competitors. 142 The income associated with bribery appears to be twenty to a hundred times the amount of the payment: Posadas, above n 1, 355.

Legitimacy and Networks

Regulators are sanctioned only democratically through a chain of accountability, first to the legislature and through the legislature to citizens. This has led White to conclude, in the field of financial regulation, that 'a community of central bankers and regulators has emerged whose shared values ​​may give them more in common than they might have with parts of various of their national government'158 Similarly. Anderson suggests that regulators in a transgovernmental network have a tendency to move away from accountability through the state over time.159 Given an already growing regulatory state, '[or] top leaders this leads to the further problem of loss of control over their scope and governmental. Indeed, in relation to network competition policies, she has warned of the dangers of policy isolation, where networks are limited to the powerful, and policy imposition, where powerful nations try to impose their governance models on weaker nations.162 However, A New World Order, Slaughter nevertheless continues to suggest that the exercise of power is inevitable and that networks are at least as equal as other international institutions.163 She is clearly right in putting noting that power exists as the subtext of all relationships. between states.

Legitimacy and the Anti-Corruption Network


Despite the centrality of such non-state actors, much of the literature on corruption has neglected any careful analysis of them. While regulatory webs demonstrate the possibility of non-state global regulation, they are far from a panacea. A comprehensive approach to the regulation of transnational corporations must therefore incorporate both state-based and non-state regulation in combination.

Non-State Actors and ‘Regulatory Webs’

Braithwaite and Drahos considered the use of "dialogic networks" to create coherence in the international sphere, where the powers of individual states remain limited.185 These networks, operating through persuasion rather than coercion, can effectively globalize practice without resorting to state announced rules. For example, the Global Reporting Initiative, in consultation with civil society, encourages companies to implement reporting processes for a range of activities, both economic and social.186 Similarly, the Global Compact, a voluntary initiative in which companies commit to complying with ten principles covering human rights, labor standards, the environment and corruption, its architect described as a 'social learning network'.187 Determining the effectiveness of such networks, especially in relation to corruption, requires an examination of their functioning. Four mechanisms help dialog networks work effectively; the way in which epistemic communities redefine interests, the use of reputation as a constraint on behavior, creation.

Parker, reviewing empirical studies of self-regulatory schemes, has identified this constituency as a key contributor to corporate compliance.197 In the case of corruption, the FCPA has already encouraged a group of such professionals.198 Motorola, for example, allows financial specialists check for accounting discrepancies that may result from corruption.199 Once established, internal compliance agencies are integrated into existing epistemic communities of compliance professionals. This expertise is particularly reflected in the model corporate codes issued by these organizations, which are discussed below. A measure of the success of this epistemic community is the renewed interest in corruption and the growing number of voluntarily signed corporate codes on corruption.203 The International Chamber of Commerce in particular has been active in drafting them.

Furthermore, companies may respond with public relations exercises rather than genuine reforms.217 Continued oversight by organizations such as Transparency International provides some protection against these. 213 Corporate epistemic communities are in this sense analogous to the transnational communities of state officials discussed by Keohane: Keohane, above n 105, 7. Although reputational responsibility is not without its shortcomings, it contributes another thread to the web of regulatory influences .218.

Vincke chaired the ICC's Ad Hoc Committee on Extortion and Bribery in International Business Transactions, which sat from 1994 to 1996, and the subsequent Standing Committee. McBride Principles, Hess and Dunfee developed a twelve-point set of principles, labeled the C2 Principles (Combating Corruption) ('Principles').232 Hess and Dunfee suggest that the Principles aim to emphasize policies, procedures and publication. 233 Emphasis of policy is designed to prevent a superficial acceptance of the Principles, and to inform employees of the position of the company. For a discussion of the Sullivan and McBride Principles, see Christopher McCrudden, 'Human Rights Codes For Transnational Corporations: The Sullivan and MacBride Principles' in Dinah Shelton (ed), Commitment and Compliance: The Role of Non-Binding Norms in the International Legal System (2000) 418.

Also noteworthy are Transparency International's efforts in designing the Business Principles for Countering Bribery.238 These principles were explicitly designed to help companies develop internal compliance mechanisms, and they did. Changes in policy, including measures such as company codes, also have a clear effect on employee behaviour. Communication of ethical commitments to employees opens them up to discussion, which in turn increases the likelihood that employees will adopt broader ethical standards.243 Samart Powpaka looked at the effect of support for bribery on managerial decision-making and found that reducing perceived support the likelihood of bribery.244 Therefore, even voluntary self-regulatory systems can have a marked effect on behavior as part of a regulatory web.

The Limits of Soft Power

For example, Koenig-Archibugi has suggested that such codes do not take into account the concerns of those who did not participate in their drafting, and that certification alone is usually not sufficient to ensure compliance where lax enforcement would benefit the company.250 Furthermore, as noted above, reputation is not a universally effective means of controlling corporate behavior—corporations may not care about their reputation or engage in public relations.

Private Actors and Accountability

Some of the criticisms leveled at transgovernmental networks in the previous chapter no doubt also apply to an anti-corruption regulatory web. In fact, the inclusion of global interest networks can increase accountability,254 as long as the state remains involved in the process. It is therefore also important to involve companies in the regulatory process, as they are the most direct subjects.

Combining State and Non-State Regulation

Chanda, Parthapratim, 'The Effectiveness of the World Bank's Anti-Corruption Efforts: Current Legal and Structural Obstacles and Uncertainties Denver Journal of International Law and Policy 315. Rose-Ackerman, Susan, 'The Political Economy of Corruption' in Kimberly Ann Elliot ( ed), Corruption and the Global Economy (1997). Salbu, Steven R, 'The Foreign Corrupt Practices Act as a Threat to Global Harmony Michigan Journal of International Law 419.

Shaw, Bill, 'The Foreign Corrupt Practices Act and Progeny: Morally Unassailable Cornell International Law Journal 689. Sporkin, Stanley, 'The Worldwide Banning of Schmiergeld: A Look at the Foreign Corrupt Practices Act on its Twentieth Birthday Northwestern Journal of International Law og Forretning 269.


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