Bolivia, Venezuela most corrupt nations in Latin America, say business execs

Gáldu

Venezuelan President Hugo Chávez (rigth), with his close ally Bolivian President Evo Morales

NEW YORK
Petroleumworld.com, October 28, 2008

About half the executives who participated in a survey of companies doing business in Latin America said corruption is a substantial obstacle to doing business there, with Bolivia and Venezuela identified as the most corrupt countries.

The Mexican and Brazilian police, and the Argentine executive branch, were singled out by executives working in those countries as among the most corrupt institutions, according to a survey conducted by the law firm of Miller & Chevalier and six Latin American partner firms.

The survey results suggest that “corruption continues to be a widespread and costly problem for businesses in the region,” the firm said in a statement today.

The survey of 201 executives focused mostly on Latin American companies in countries such as Brazil, Argentina and Columbia, about half of which trade on U.S. stock exchanges. The companies are in energy, oil, mining, agriculture, telecommunications, financial services and other industries.

Of the executives surveyed, nearly half said corruption is a major obstacle to doing business, and 59% said they have lost contracts to competitors who made illicit payments. Only 9% reported these activities to authorities, according to the survey released today.

“Survey responses reflect both a high level of concern in the private sector about corruption and a cynicism about meaningful enforcement of the anti-corruption laws,” said Homer Moyer, a partner with Miller & Chevalier.

In 1996, the Inter-American Convention against Corruption was adopted by the Organization of American States. The survey suggests that the agreement has proved ineffective.

“The lack of enforcement of corruption laws is the biggest problem,” Miller & Chevalier partner James Tillen said in an interview.

Even with the low opinion of the effectiveness of anti-corruption laws, about 77% of the executives said their companies have tried to protect against corruption risk, mostly by instituting anti-corruption policies and procedures.

Miller & Chevalier plans to pass on the survey results to the Department of Justice, which has stepped up enforcement of the Foreign Corrupt Practices Act in recent years, Mr. Tillen said.

The survey was initiated because so much prosecutorial attention seems to have focused on alleged corruption in China, Nigeria and other Asian and African countries, with little focus on Latin America, he said.

Last month Albert Stanley, who ran KBR when it was a Halliburton unit, pleaded guilty to using bribes, kickbacks and corruption to secure oil deals in Nigeria. About $182 million in bribes were allegedly paid by Halliburton and an international consortium of engineering companies from France, Italy and Japan.

Mr. Stanley has agreed to cooperate with prosecutors.

(To see the the full results of the survey, CLICK HERE ).