Tradeable Corruption Certificates

Tradeable Corruption Certificates (TCC) are likely to be launched on stock markets in Asia and the Middle East today with the Indonesian Stock Market likely to be a star performer given Indonesia’s guilt-edged market performance in the sector.

These innovative certificates would facilitate recovery of bribes made by foreign companies and redeploy the funds to tourists from the same country, but only when visiting the country where the bribes were received. This is intended to create awareness of corruption in bribe-giving and bribe-taking countries by motivating tourists to apply for the 50 percent TCC Discounts (TCCDs) to which they are entitled in bars, restaurants and hotels in the bribe-receiving country.

Certainly the region is fertile ground. Only Singapore scores highly on the Transparency International corruption perceptions index of 180 countries, and there’s nothing to do there that's any fun. Indonesia is ranked 111th, Vietnam 120th, Pakistan and the Philippines are tied at 139th, Timor-Leste at 146th. Cambodia and Laos, conveniently situated together geographically, are tied at 158th, and so on. Afghanistan is ranked 179th of 180 in corruption, but not many tourists are interested in going there right now.

The scheme is reportedly to be rolled out in bars in Bali as a pilot project. The initial response from British tourist Sidney Barking of Essex one evening in Bali last week indicated enthusiasm. “Marvellous idea, if they bring it in I might vote Labor. The Tories have nothing like it.”

If the scheme is adopted, a British flag next to the TCCD sign, for instance, would indicate that British tourists, on production of their passports, would be eligible for the TCC Discount of 50 percent, with funding recouped from those who were bribed in Indonesia by British firms.

Sapta Narwindar, Indonesia’s Director General for Marketing in the Ministry of Culture and Tourism said, referring to a current promotion of “Remarkable Indonesia” which begins on 1st April in Harrods, “We hope the promotion can boost more tourists from the UK to visit Indonesia .” He told the media that “The UK is one of the most influential areas. It is also the centre of media and culture”.

British adoption of TCCs by Prime Minister Gordon Brown is the sort of thing that might indeed swing the election result, appealing to the socially responsible non-Tory majority in the UK with prospects for really cheap holidays in Bali for large numbers of politically principled tourists who would welcome their drinks and meals at half price.

This is particularly germane given the fact that three British executives for Alstom, the giant French power and transportation conglomerate, were detained recently regarding possible bribes to secure contracts across the planet. Nor is Siemens, the German industrial conglomerate, pleaded guilty two years ago to paying more than US$800 million in bribes and Daimler, the German carmaker, had agreed to pay out US$185 million in bribes. An official for the Organization for Economic Cooperation and Development in Paris told the New York Times that at least 345 cases worldwide are in different stages of investigation against multinationals.

In the UK, Lord Justice Thomas spoke plainly and named names recently in Southwark Crown Court that the total paid out in bribes by a British Company Innospec Ltd to Indonesian officials in just one case was around US$8 million. “It is not possible to calculate precisely the total amount of bribes, but the best estimate is approximately 5 percent of $160 million, namely US$8 million,” he told reporters in the UK

The British Serious Fraud Office (SFO) and Lord Justice Thomas named PT Soegih Interjaya (PTSI) as the intermediary company receiving a reported $11.7 million in commissions from which bribes were paid.

According to the SFO opening statement in the UK Court and the summing up during sentencing by Justice Thomas (the British firm maintained a stiff upper lip and pleaded guilty) bribes were paid to former director general for oil and gas Rahmat Sudibyo in the Energy and Mineral Resources Ministry and former processing director at the state owned Pertamina oil and gas company Suroso Armo Martoyo. Justice Thomas said that the amount paid to Rachmat exceeded $1 million.

Both Rahmat and Suroso denied the allegations according to The Jakarta Post and Suroso said “I had nothing to do with this”.

The new TCC Fund could be started by contributions from the companies and individuals specified in the Southwark Court Case. These bribes were paid in connection with the purchase of lead additives to petrol and may have delayed the introduction of lead-free gasoline. This health hazards arising from lead additives must weigh heavily upon this case and may prompt the individuals concerned to get a weight off their minds by voluntarily paying into the TCC Fund.

Of course the bribing company should not get their money back. In this case the benefits should go to the people of Britain and Indonesia , most of whom oppose bribery. The same principle should apply to all nations bribed by the British. Nor would the French nor the Germans.

Terry Lacey writes from Jakarta