Westerners and Third World leaders profit from corruption and bribery at the expense of citizens of the world’s poorest countries.

We are pure. They are corrupt. We live by the rule of law. They live by the code of connections or cronyism or, in Chinese, guanxi. We, as a consequence, are rich, thoroughly deservedly, while they, equally deservedly, are poor.

All of that exaggerates reality but it isn’t that far from the way we view the world. Everything over here is neat and orderly and legal, while everything out there is disorganized, anarchic, secretive.

Our creed: Out of purity come profits.

For over a decade now, with the U.S. in the lead role, industrial nations have been trying to extend our way of doing business – legally-binding contracts, transparency, impartial courts – to the rest of the world.

When East Asia went into a financial crash in 1998 and 1999, the almost universal analysis was that these countries had brought it on themselves by “crony capitalism” or the cosy working arrangements between politicians and corporate leaders who got special favours (from import permits to monopoly franchises) in return for kickbacks. (A minority analysis held that the real problem was that our banks grossly over lent to countries trying to grow too fast).

Since then, both the World Bank and the International Monetary Fund have refused to grant loans to companies with a record of corruption. The anti-corruption campaign’s biggest success occurred a bit more than two years ago when the OECD, the Paris-based club of wealthy nations, convinced its 29 members to sign on to an Anti-Bribery Convention.

The treaty has flaws. It provides a legal loophole for bribes given to public officials. It doesn’t prohibit signatory nations from accepting as a tax deductible business expense bribes paid by their companies to secure contracts.

But once the treaty comes into full effect – it’s been delayed by a complicated weighting system designed to ensure that laggard countries don’t gain a competitive advantage – it will cover countries (Canada, included) that account for almost three-quarters of global trade. The rule of law will be globally triumphant, for corporations at least.

Not quite. For one thing, it’s never been self-evident that corruption prevents economic development. Certainly, not absolutely so.

According to Berlin-based Transparency International, the world’s most corrupt country is Nigeria. It’s in terrible shape. The least corrupt, Finland, is doing fine. (Canada ranks sixth.)

But lots of countries that rank high on the corruption scale, such as China, Thailand and Malaysia, are also doing fine. Indonesia, the worst off after Nigeria, was booming until four years ago and its present troubles are more political than economic.

Most OECD nations already have domestic laws that prohibit the commission of a crime, such as bribery, abroad. Canada does. But there’s never been a single court case brought against a Canadian company.

Here’s the rub. We profit from their corruption. The losers are the people in the Third World countries, not their leaders.

Hence, the contradiction between our fine words on battling corruption and our deeds – those of our corporations that’s to say. In the 12-month period May 1, 2000 to April 30, 2001, it’s reported reliably that contracts worth $37 billion were probably affected by the bribery of foreign officials. Of these suspect contracts, more than 70 per cent involved companies in the OECD member states that signed the much heralded anti-bribery convention. As well, as U.S. senate inquiry has recently recorded that once bribes are given to Third World officials, their most likely resting place is in the banks of First World nations. Which makes us accessories to the crimes.

So it seems that nothing is going to change.

In fact, change is happening. It’s happening not with the countries – ours, included – that do the preaching but in those that are constantly preached at.

Especially, it’s happening in the small African nation of Lesotho. In what is either a first or is extremely rare, the Lesotho attorney-general, Fine Maema, has brought a suit against a dozen Western engineering companies (among them, Acres International, a Canadian firm) for bribery.

These companies, most of them European, are alleged to have paid $4.2 million (U.S.) to an official responsible for awarding the contracts for a huge $1.4 billion project to construct dams to provide water and power to South Africa.

Maema has commented: “If someone is taking the money, then someone is paying it, and they must be held accountable, too.”

Lesotho’s action is extraordinarily courageous, much more courageous than the World Bank. When the bribery allegations first became public, the bank suggested that no action be taken for fear the construction scheme might have to be cancelled.

Richard Gwyn, Toronto Star, July 18, 2001