India fares poorly with regard to cracking down on bribery of foreign officials by its exporters, having failed to define and criminalise foreign bribery so far, with its legal framework suffering from shortcomings that affect its capacity to prevent and prosecute the offence, according to a report of the Transparency International. As per Transparency International's 'Exporting Corruption (Progress Report 2020-Assessing Enforcement of the OECD Anti-Bribery Convention)', India, which is amongst the major non-OECD convention exporters, has little or no enforcement of laws to act against foreign bribery.
While India's share of exports during 2016 to 2019 was 2.1 per cent, during this period, it initiated no investigations of foreign bribery, commenced no cases and concluded no cases. The report noted that, in India, bribery of foreign officials is not criminalised at all, despite the fact that the country is a party to the UN Convention Against Corruption, which requires the same.
“Although India has been a party to the UN Convention Against Corruption since 2011, it has yet to meet the Article 16 obligations to define and criminalise foreign bribery and the legal framework suffers from other shortcomings which affect India's capacity to prevent and prosecute foreign bribery,” said Ashutosh Kumar Mishra, lawyer and senior advisor at AGAM: An Initiative for Good Governance, which partnered with Transparency International in this report.
The report said that while the Companies Act 2013 places greater focus on transparency, accountability and corporate governance than the previous Companies Act, 1956, it is not certain whether bribing a foreign public official would be considered an illegal purpose under the law.
It said that while the listed companies which accept deposits from the public, and companies which have borrowed money from banks and public financial institutions in excess of Rs 50 crore are required to establish a vigilance mechanism for directors and employees to report their genuine concerns about unethical behaviour, misconduct or corruption, in reality, these provisions are minimal and ineffective.
On the Whistleblowers Protection Act, 2014, the report noted that the Act is not operational as rules are yet to be framed by the Central government. It stated that while the Indian Penal Code and Prevention of Corruption Act prescribe criminal and civil liability for domestic corruption, the reality is that actions taken against the perpetrators have been rare.
Political interference, lack of coordination amongst the multiple investigating agencies and the shortage of staff as also their inadequate skills to investigate white collar crime and other economic offences was highlighted. It was also pointed out that the investigation of transnational crimes, especially those linked with corruption and money laundering, are delayed due to lack of timely coordination with foreign investigating agencies. This has long been an area of concern, but remains unaddressed to date, the report said.
Amongst the recommendations made with regard to India are that the country should become a party to the OECD Anti-Bribery Convention, pass legislation criminalising foreign bribery, extend coverage of whistleblower protection to the private sector and enforce against foreign bribery to the extent possible under existing legislation.
“It is a matter of concern that India failed to initiate or conlude a single case of foreign bribery during 2016 to 2019. It needs to reject every form of corruption and ameliorate on several parameters which this report has reflected,” said Brij Bhushan Singh, an anti-corruption activist.
