Oil, gas and mining firms are most exposed to demands for bribery. So says a report by risk analysis and forecasting company Maplecroft, which released a Corruption Risk Index earlier this year, ranking 198 countries on the prevalence of bribery and government effectiveness in combatting it.
The 12 highest-risk countries include six from Sub-Saharan Africa (identified as the region posing the highest risk to business): Democratic Republic of the Congo, Somalia, Central African Republic, Sudan, South Sudan and Equatorial Guinea appear alongside Iraq, Libya, Myanmar, Russia, North Korea and Libya. Botswana is ranked as the continent’s best performer.
The report identifies corruption as one of the greatest above-ground risks for oil, gas and mining companies: their vulnerability highlighted by the large-scale Petrobras scandal that has rocked Brazil over the last year. In this issue, our cover feature investigates the prevalence of bribery and corruption in the extractive industries and how the financial industry can – and should – crack down on it, in the same way that it’s addressing the issue of anti-money laundering.
The World Bank estimates that corruption adds 10% to business costs globally, with the equivalent of US$1tn paid in bribes annually. So while banks now fully understand the importance of investing in AML and technology (see our post-Sibos report), we think more focus on combatting bribery could be what’s missing to help boost the trade finance industry, which itself faces fairly modest growth.
GTR strives to bring its readers a truly global outlook Here are some places from which we have reported for this issue:
- Copenhagen, Denmark – Corporates should centralise payments and risk management capabilities, writes Melodie Michel at Eurofinance 2015.
- Lugano, Switzerland – Sofia Lotto Persio attends the GTR Global Commodity Finance conference in Lugano to take the pulse of Swiss commodity trading.
- Istanbul, Turkey – Melodie Michel chairs GTR‘s annual Turkey roundtable ahead of the country’s general election in November.
- Tehran, Iran – Melodie Michel interviews the head of the Export Guarantee Fund of Iran to find out what the opening of trade means for the country.
- Dubai, UAE – ITFA’s annual conference moved to the Middle East this year. Shannon Manders caught up with the association there.
- Singapore – Shannon Manders and Finbarr Bermingham report from Sibos 2015 and GTR Asia Trade Finance week: both in Singapore.
- Mauritius – Shannon Manders reports from GTR‘s first conference in Mauritius and examines the business case for the country.
- Lagos, Nigeria – Shannon Manders hosts a conference for trade financiers in Lagos to analyse what the future holds for the country.
- Mexico City, Mexico – Banks and corporates attending the GTR Mexico Trade and Export Finance conference talk to Melodie Michel about the country’s energy reform.