By Rob O'Brien

The massive scale of global corruption resulting from bribery, price-fixing cartels and undue influence on public policy is costing billions and obstructing the path towards sustainable economic growth, according to a new report released by global corruption watchdog Transparency International (TI).

The report - Global Corruption Report 2009: Corruption and the Private Sector (GCR) – was compiled by 75 experts examining the scale, scope and consequences of corporate corruption with 46 in-depth country reports along with best practices and practical recommendations. Australia was not included in the final report.

Among its findings the GCR found that corrupt practices were undermining fair competition, stifling economic growth and undermining faith in public and private institutions.

“Fostering a culture of corporate integrity is essential to protect investment, increase commercial success and ensure the stability sought by poor and rich countries alike, particularly as we climb out of an historical crisis,” said TI Chair Huguette Labelle.

The report stressed how larger and more powerful companies were able to exert undue leverage on political decision-making.

Lobbying efforts often lack transparency and tend to fall outside the system of checks and balances that firms rely on for strategic decisions, it said.

Transparency International also criticised the revolving doors between public office and the private sector, which provided a smooth path to deceitful public procurement deals, where non-competitive bidding and opaque processes lead to immense waste and unreliable services or goods.

“Winning on anti-corruption means adding to the bottom line. It is time that corporations face up to the risk of paying millions in fines and the long-term loss of trust from their customers and shareholders,” Labelle said.

According to the report in the last two years alone, companies have had to pay billions in fines due to corrupt practices.

The cost extends to low staff morale and a loss of trust among customers as well as prospective business partners.

The report documents many cases of managers, majority shareholders and other actors inside corporations who abuse their entrusted power for personal gain, to the detriment of owners, investors, employees and society at large.

In developing and transition countries alone, companies colluding with corrupt politicians and government officials, have supplied bribes estimated at up to US $40 billion annually, according to the GCR.