ICC Rules of Conduct : Foreword

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In 1977, ICC issued a Report on Extortion and Bribery in business transactions. This broke new ground in calling for complementary and mutually supportive action by governments, intergovernmental bodies, and the business community to combat extortion and bribery in international trade.

The Report aroused interest in intergovernmental fora, such as the OECD and the UN Commission on Transnational Corporations. Moreover, corporations in a number of countries were prompted to establish or strengthen their internal rules of fair practices, taking as a model the Rules of Conduct for enterprises which were set forth in Part III of the 1977 Report.

Today, the importance of effectively combating extortion and bribery is greater than ever. In the early 1990s, scandals involving extortion and bribery were a significant factor in toppling governments in many parts of the world. This situation, if allowed to continue, could undermine the most promising development of the post Cold-war era, i.e., the spread of democratic governments and of market economies worldwide. It is all the more unacceptable in view of the liberalization of world trade in goods and services achieved through the Uruguay Round: freer trade must be matched by fair competition, failing which trading relations will be increasingly strained to the common detriment of governments and enterprises. In addition to being a crime, offering or giving bribes may constitute acts of unfair competition, which could give rise to actions for damages.

Against this background, ICC, as the leading world business organization, decided in 1994 to review its 1977 Report and set up for this purpose an Ad Hoc Committee under the chairmanship of Mr. François Vincke (Belgium), Secretary General of Petrofina.

The updated Report, which ICC now presents, confirms the basic approach recommended initially, i.e., the need for action by international organizations, governments and by enterprises, nationally and internationally, to meet the challenging goal of greater transparency in international trade.

Major responsibility in this area undoubtedly rests with governments, as has been recognized by the OECD, the Council of Europe, the Organization of American States and United Nations. Part II of the Report accordingly urges all governments to demonstrate their political will to implement promptly the OECD Convention to Combat Bribery of Foreign Public Officials and the Revised OECD Recommendation. ICC considers it particularly important that the OECD Convention and Recommendation be implemented by all countries, including the developing countries. To that effect, ICC recommends that the OECD establish close liaison with the World Trade Organization (WTO), in order to further the understanding of problems associated with extortion and bribery and encourages countries that are not OECD members to participate in the OECD's outreach program.

For its part, the international business community has the corresponding responsibility to strengthen its own efforts to combat extortion and bribery. Part II of the Report thus sets forth the Rules of Conduct recommended by ICC for voluntary application by enterprises. These are in many respects more stringent than those issued in 1977. The 1977 Rules only prohibited extortion and bribery in connection with obtaining or retaining business; the new Rules prohibit extortion and bribery for any purpose. Thus, extortion and bribery in judicial proceedings, in tax matters, in environmental and other regulatory cases or in legislative proceedings are now covered by the Rules. Governments are urged to regulate political contributions by enterprises and to ensure that they are publicly recorded. New emphasis is placed on implementing mechanisms within companies to enforce corporate codes of conduct.

Finally, ICC itself is alive to its own responsibility to promote and monitor the acceptance and application of the Rules of Conduct. Part III of the Report therefore sets out the priorities of the Standing Committee which ICC is establishing. Its principal purpose will be to stimulate action by enterprises and business organizations in support of self-regulation, as an important factor in effectively combating extortion and bribery. This approach is more promising and more in line with the responsibilities of a non-governmental organization than the establishment of a Panel to investigate alleged infringements of the Rules, as envisaged in 1977.