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Round Table On Business Accountability And Corruption

Experts from various European and African countries met this week at the Theodor Heuss Academy near Cologne, Germany. They discussed combating illegal business practices. Co-hosted by the Friedrich Naumann Foundation and the African Forum in Brussels (Mazungumzo), the Round Table focussed on harmful effects – social, ecological, political and the distortion of fair competition – that corruption engenders in both developed and developing countries.

African delegates emphasized the urgency of the situation, particularly regarding mining and armaments procurement. The corrosive effect of endemic corruption and the willingness of global corporations to misfeasance and malfeasance in the belief that “this is the way business is done in Africa” received close examination.

The propensity of European arms manufacturers and global corporations to “export” corruption, via their dealings with states in Africa came under scrutiny. Focus was given to activities on the Copperbelt (straddling the Congo and Zambia), and in the procurement of armaments and boilers for power stations in South Africa.

Corruption authorities in Britain in respect of BAE and in Germany in respect of ThyssenKrupp and MAN/Ferrostaal are considered to have been appallingly lax in enforcing international commitments against bribery of foreign officials.

It has been questioned whether the German State Prosecutors are sufficiently concerned about the implications of e.g. MAN/Ferrostaal’s activities in the South African arms deals, and allegations of bribery by German executives.

Experts could hardly believe the statement by the former South African Minister of Justice;
“Germany has closed its investigation into alleged corruption relating to the Strategic Arms Procurement processes. Written confirmation in this regard has been forwarded to our Government from the German Government. In this regard, the matter is considered as closed.”
[Parliamentary reply 9 May 2008/688]

Accordingly clarification/confirmation is sought from German authorities that investigations are continuing. Ostensibly it is only Sweden where an investigation continues into improprieties in the procurement of arms by the South African government.

There is a real risk that the arms deal has unleashed a culture of corruption and that, like its northern neighbour Zimbabwe, South Africa may become a failed state. The consequences of state sponsored arms exports is now evident in Libya where civilians are targeted.

It is within the power of the European Union, its governments and prosecution services to take effective steps to guard against further failure of South Africa’s democratic order.

This could be achieved by holding accountable those responsible for the bribery and corruption in the South African arms deal.

European experts welcomed the case before the Constitutional Court in Johannesburg regarding a judicial commission of enquiry into the arms deal scheduled for 5th May 2011.

Delegates noted the necessity for additional rules and effective corporate peer review procedures in Europe, both at governmental and business-to-business level to mitigate future corruption.

Paul Hoffman
March 2011

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