WRITTEN QUESTION E-2166/01

by Glenys Kinnock (PSE) to the Commission

(19 July 2001)

Subject: Prosecution of corrupt companies

Is the Commission aware that, in an attempt to combat corruption by overseas companies, the Lesotho Government is about to start legal proceedings against a number of British, Canadian and South African companies which have been accused of paying bribes to local officials in order to secure contracts?

Would the Commission indicate whether it has any plans to follow this example and crack down on the bribery of foreign officials by European firms?

Answer given by Mr Nielson on behalf of the Commission

(11 October 2001)

The Commission is well aware of the Lesotho Government's action to combat corruption by foreign and local companies. On 3 December 1999 the Director of Public Prosecution of Lesotho indicted 19 individuals, consortia and firms of Canadian, French, German, Lesotho, Panamanian, South African, Swedish, Swiss, and British origin and two multinational consortia for having taken part or being involved in the crime of bribery.

Under the African, Caribbean and Pacific States and the Community (ACP-EC) Cotonou Agreement (article 9 § 3) good governance is considered as a fundamental element which underpins the domestic and international policies of the Parties. Moreover, article 97 directly addresses the issue of corruption. The Commission is therefore giving its close attention to the Lesotho Government's action and to any other similar actions.

The Commission, through its Delegation in Lesotho, has been and is fully informed by the Government on the proceedings of the court case, which is expected not to be concluded before end 2002.

The European Anti-Fraud Office (OLAF) has been informed of the matter.

Together with the European Investment Bank, the Commission has sent a strong audit mission to Lesotho; its preliminary report regarding the Commission was received in March 2001 and discussed, in presence of OLAF and the auditors in May 2001. The report had to be substantially redrafted and completed following that meeting. A new draft was presented at the end of July 2001 for the approval of the Commission.

The Commission contributed to work at international level, undertaken by Council of Europe and the Organisation for economic cooperation and development (OECD) on the penalisation of active and passive bribery and complemented the international conventions by specific instruments were necessary. In particular, it adopted in 1998 a joint action on corruption in the private sector, that requires Member States to ensure that both active and passive corruption of any person to act in breach of his/her duties are punishable by effective, proportionate and dissuasive criminal penalties.

The Commission is also actively involved in the preliminary discussions on a future United Nations (UN) convention on corruption and intends to contribute to the negotiations that will start at the end of this year for the elements of this future convention that may touch upon Community laws.

The Commission makes use of international conferences, like the Global Forum on corruption or other International conferences to stress the necessity of common efforts in the fight against corruption and supports initiatives and projects in Balkan and accession countries with respect to curbing corruption.