For the last two years, however, members of the OECD have been implementing legislation that makes bribe-paying a criminal offence, along the same lines as US regulations. The result is a new focus on the whole issue of corruption and the role of investors. Coupled with a growing media interest in companies and corporate responsibility, the new laws mean that investors in countries like Kazakhstan have to think long and hard about how to do business in an environment where corruption is rife and demands for bribes almost certain. Some respond by staying away, inevitably limiting the investment that Kazakhstan s economy desperately needs. Others find that trying to work in accordance with anti-corruption laws at best slows projects down and raises costs in other ways.
Some Western businessmen are fairly cynical about anti-corruption measures.
There are many ways to circumvent the rules, such as creating offshore companies and opaque transfer pricing schemes. In the case of signing bonuses, which are standard payments made by oil companies to governments at the beginning of a contract, there is little control over where those payments go once they have left a Western bank account. Nevertheless, the Giffen case could prompt further investigations that may prove embarrassing for Western investors, many of whom are increasingly concerned about reputational issues in their home constituencies. Tractebel denies that there was anything improper in the payments. But it seems almost certain that the Giffen and Tractebel cases will not be the end of the story.