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UK Oil and gas sector sees most corruption prosecutions

23 October 2012

A report from Ernst & Young has highlighted that the UK oil and gas sector has seen the most completed prosecutions for bribery and corruption in the UK. The accountancy and consultancy firm, which analysed 26 UK corruption cases since 2008 across a range of industries, found that the oil and gas sector accounted for nearly one-fifth of prosecutions.

Ernst & Young stressed that there was no suggestion that individuals or companies that operate in the UK oil and gas industry are more corrupt than those who work in other sectors, and the corporate compliance structure that exists should be the envy of the world. 

The main problem was that the industry operated in areas where high levels of corruption were a fact of life. Being a partner in an exploration license in a developing country, particularly in a frontier exploration zone, might expose a UK firm to its partners’ dubious practices.

In Transparency International's “Index of Bribery in Business Sectors 2011”, the oil and gas industry was rated as only less corrupt than the property services, utilities and public works contracts sectors out of a list of 19 business sectors.

The Corruption Perceptions Index (CPI) for 2011 shows Africa and South America to be seen as pretty much entirely corrupt with only Botswana, Chile and Uruguay being judged as being on a par with the United States and European countries such as Spain and France in terms of cleanliness.

In Western Europe, Italy is judged as being the most corrupt country in the region. In Eastern Europe Russia, Belarus and the Ukraine are deemed to be highly corrupt countries with CPI scores ranging from 2.3 to 2.4 out of 10.

The UK ranked quite well, scoring 7.8 out of 10 – higher than the United States at 7.1. Australia does even better, with a score of 8.8, but (perhaps not surprisingly) the least corrupt countries are seen to be Finland, Sweden and Norway, which all have scores in excess of 9 out of 10.

As UK-headquartered oil and gas companies chase exciting new projects in frontier zone regions in Russia and Central Asia, South America and East Africa will have to be very wary about compliance and avoid being caught up in any kind of corruption.

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