Leading legal experts have called for the latest corruption scandal involving Chinese companies to be used as the launch pad for a crackdown on bribery in the industrial sector.
The US Department of Justice (DOJ) recently said that US-based valve maker Control Components Inc had pleaded guilty to federal charges and admitted to paying bribes to officials and employees of various foreign state-owned companies as well as foreign and domestic private companies.
Chinese companies that are believed to have been trapped in the bribery net include PetroChina, China National Offshore Oil Corp, Jiangsu Nuclear Power Corp, Guohua Electric Power, China Petroleum Materials and Equipment Corp and Dongfang Electric Corp.
None of the Chinese companies involved were prepared to comment on Friday until they had seen the paperwork.
However, Ren Jianming, dean of the Against Corruption Research Center at Tsinghua University, said it was time to bring international companies to heel.
"Chinese procuratorate organs should follow the case closely and take overseas prosecutors' evidence into account, weighing it with Chinese laws," he said.
"It's a matter of historical record that none of the Chinese companies involved in overseas bribery cases has ever been investigated or prosecuted by Chinese prosecutors."
Ren drew reference to the recent Rio Tinto case in which it is alleged staff at the world's second largest mining group illegally obtained commercial secrets and offered bribes.
"The Rio Tinto case should be a milestone for a new approach in the investigation of overseas business operations," he said.
"If foreign companies are offering bribes in order to win contracts, it is time for the government to take tough measures," he said.
The DOJ announced that Control Components Inc (CCI) admitted to having made approximately 236 payments in violation of the Foreign Corrupt Practices Act (FCPA) and the Travel Act in more than 30 countries between 2003 and 2007. These resulted in net profits to the company of approximately $46.5 million from sales related to those corrupt payments. CCI pleaded guilty and agreed to pay a criminal fine of $18.2 million.
Avery Dennison, one of the world's largest suppliers of adhesive tape, recently admitted that its China unit was involved in bribery of government officials to get large orders. It has subsequently paid a fine of $200,000 to the US Securities Exchange Commission (SEC).
The statement on the US Department of Justice read: "Specifically, from 2003 through 2007, CCI paid approximately $4.9 million in bribes, in violation of the FCPA, to officials of various foreign state-owned companies and approximately $1.95 million in bribes, in violation of the Travel Act, to officers and employees of foreign and domestic privately-owned companies.
(China Daily August 15, 2009)
