(First published in Norwegian 23 Oct 2003)
By Pia A. Gaarder
From her office in a high-rise government building in Oslo, Eva Joly, the Norwegian corruption hunter, has a bird’s-eye view not only of Oslo but also of what corruption is in the process of doing to the world we live in.
When speaking with her, it becomes clear that the work against corruption concerns much more than ethics. It is about the future of democracy and preventing criminal forces from obtaining a constantly greater grip on world trade and the financial market. Not least, it concerns a fair distribution and the possibility of Third-World nations entering into a positive developmental spiral.
Joly would not, however, comment on the Norwegian multinational Statoil's corruption scandal in Iran. She only asked, “How many scandals must occur before we understand that corruption concerns us at the same level as in other countries? Here, as in other countries, you only find what you look for.”
Generally speaking, Eva Joly does not approve of the picture of corrupt nations in the Third World forcing solid Western companies to pay money under the table. Large-scale corruption as a phenomenon, on the other hand, she considers one of the Western world’s foremost and most destructive export products.
“The main flow of corruption goes from the North to the South. It is a phenomenon that well-developed Western countries have exported to Third-World countries within a frame that to me appears as very paternalistic. Some people still seem to believe that one must behave in this manner to South American, Asian, or African countries”, said Joly.
Corruption originates in large Western companies that gain an entry to the market, exorbitant economic advantages, and an illegitimate personal economic profit. This individual profit, moreover, Joly claimed to be an element that is often underrated as the driving force in corruption.
“The Western world exports a corruption that actually consists of the negative sides of our culture. This has various serious consequences for Third-World countries. By corrupting these countries’ leaders, the Western world appropriates their enormous resources cheaply. The negative economic consequences for the developing countries are dramatic. The flow of corruption from the North to the South is directly suppressive because it prevents development,” said Joly.
Joly does not believe that corruption is a question of a series of isolated cases. “It is a matter of a system,” she emphasized.
“But doesn’t this system greatly resemble old-fashioned imperialism?” we asked.
“I’m no historian, but in many ways one can say that the corruption system has definite characteristics that resemble a modern form of colonialism. In addition, the appetite has proved to be boundless. What is happening with regard to the Third World is brutal.”
Large- and small-scale corruption
Joly deals exclusively with what is called large-scale corruption and not the so-called small-scale corruption that is common in many developing countries. Large-scale corruption consists of tax havens, secret accounts, and buying off of a country’s leaders in politics, administration, and trade and industry. Large-scale corruption moves decisions away from what is best for Third-World countries to what is best for Western companies and for a corrupt elite on both sides of the North-South divide.
Small-scale corruption, in which one, for example, pays a clerk for getting one’s paperwork through the bureaucratic paper mill, Joly considers the result of poverty and not the reason for poverty and underdevelopment:
“The problem of the small, daily corruption is large and extensive, and it can be analysed in many ways. But in the end, poverty is the cause. It is in any case not necessary to add another and greater harm, which leads to a country being robbed of its resources. Small-scale corruption must not be confused with the mechanisms behind large-scale corruption, and it is this large-scale corruption we can do something about,” Joly emphasized.
Joly believes that one aspect of large-scale corruption receives far too little attention. When a Western company corrupts the petroleum minister of, for example, an African country, the minister receives perhaps 100-200 million dollars, but simultaneously black money returns to the West: “Part of the corruption money often returns to the payer. That is part of the corruption deal. Money thus flows back to secret accounts in the West, where secrets funds and enormous individual fortunes are developed. In France I have seen how the African corruption constantly fed French corruption. These side streams of the corruption which are returned to the West must pass through the whole money-laundering system before they again can be invested,” Joly explained.
Eva Joly uses every opportunity to emphasize that money laundering utilizes the same mechanisms, whether it is a question of corruption or of organized crime’s profit from drugs, extortion, prostitution, human trafficking, arms smuggling, and so forth.
The large-scale corruption that Western companies are behind maintains, in other words, the same mechanisms that organized crime is totally dependent on. A lax attitude in the work against large-scale corruption entails that we do not apply the brakes to stop organized crime’s growing infiltration into the world economy.
“Today we calculate that from 5% to 10% of world trade originates from criminal activity,” Joly explained. This percentage incorporates everything – from organized crime’s profits to the corruption flows that Western companies pay for. And everything is shovelled through the same channels back to the open economy, which consequently is to a constantly greater extent controlled by criminal powers.
Corruption in the West
Joly emphasized that even though the main stream of corruption money flows from the North to the South, there is another large flow consisting of corruption between companies, as well as between companies and politicians in the West.
“It is very common that those who sell, for example, aircraft engines pay the buyer under the table to choose their motors. According to many investigations, in France it is quite usual for 2.5% of the contract sum in a construction project to go to the politicians who awarded the contract to the firm. You simply do not get the contract if you do not pay. It is claimed that this is a means of financing political parties, but when you calculate the numbers, you find that this is not correct. It is a question of much too much money,” Joly reported.
“During the presentation of the Paris Declaration in June you pointed to four sectors that are specially vulnerable to corruption: large construction projects, arms trade, oil, and energy. Could the common denominator that makes them so vulnerable to corruption be an enormous use of government funds?” Norwatch asks.
“Yes, absolutely. It’s a question of four sectors in which all countries use specially large sums and in which the contracts are concentrated and large,” Joly said.
“Is it possible to operate internationally without paying corruption money?”
“You must keep in mind that Third-World countries suffer as a result of this corruption and that there is an increasing wish to get rid of this burden. A series of elections during the past years have been won precisely because the candidate says he will clean up the corruption. There is a constantly increasing demand for companies that guarantee that they will comply with ethical guidelines. In the end, it may become a competitive advantage to be a company that does not enter into contracts on the basis of corruption,” Joly concluded.
FACTS: Eva Joly
After 30 years in France, Eva Joly returned to Norway in 2002 as a special advisor to the Ministry of Justice, with a mandate to strengthen Norway’s work internationally against corruption and money laundering. As examining magistrate in France, Joly had, among other things, led the clearing up of the Elf case, Europe’s largest corruption scandal.
The petroleum company Elf proved to have used all of 32,5 billion (€4 billion) Norwegian kroner for the corruption of politicians in Africa and Europe. The CDU, the party of Germany’s earlier chancellor Helmut Kohl, is supposed to have received close to 350 million kroner (€43 mill) when Elf purchased Minol Leuna, a previously East German petroleum monopoly, in 1992.
In her book “Is This the World We Want To Live In?”, Joly describes the death threats and attacks she was exposed to during the investigation and thereby exposes the centres of power involved in large-scale corruption.