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Transparency International Germany vs. 57 German companies

Case overview

Date filed 5 June 2007
Current status Rejected
Issue German companies’ involvement in UN Oil f. Food Scandal Iraq
Summary of the case In October 2005 the Independent Inquiry Committee (IIC) into United Nations’ Oil for Food Programme reported that 2,253 companies had paid a total of $1.8 billion in ‘kickbacks’ – illicit or disguised payments – to the Iraqi government to obtain contracts to supply food, medicines and other humanitarian goods to Iraq. At least 57 of those companies that allegedly participated in the extensive manipulation of the Oil for Food Programme are incorporated in Germany. The complaint is based on the substantial evidence presented in the Committee’s so-called ‘Volcker Report’.

Legal investigations are continuing in Germany into the kickbacks – totalling $11.9 million – allegedly paid by German companies according to the Volcker Report. Many cases are still being pursued, some have settled out of court and a few cases have been dismissed. While recognizing that submitting a complaint against so many companies is unusual, TI-G submits that the alleged breaches of the OECD Guidelines by such a large number of companies may not be ignored, if the credibility of the Guidelines is not to be compromised. Nothing in the Guidelines’ Procedural Guidance precludes such a complaint. TI-G asked the NCP to examine whether the German companies had breached the Guidelines’ anti-bribery provisions and to ascertain whether, in view of the evidence presented in the Volcker Report, they had subsequently introduced appropriate precautionary measures to prevent such breaches from occurring in the future.

Developments/Outcome After conducting an initial assessment, the NCP rejected the case on 5 September 2007. It put forward two reasons for dismissing the complaint: first, that the allegations of corruption were related to trade and not to investment activities; and, second, that the issue was under consideration by the German courts and therefore the NCP could not undertake parallel proceedings.

TI-G believes the German NCP’s decision not to investigate the case reveals a highly-restrictive, one-size-fits-all approach to the OECD Guidelines. Despite numerous references to trade in the text of the Guidelines, some NCPs still argue that the Guidelines are intended to apply only to investment by MNEs. TI-G wrote to the German Minister for Economics and Technology requesting a review of the NCP’s rejection, but on 19 February 2008 TI-G was informed that the rejection was being upheld. TI-G believe the decision represents a missed opportunity to send a clear signal that German companies are expected to uphold the Guidelines.

Relevant OECD Guidelines
Case keywords Supply chain, Investment nexus, Parallel (legal) proceedings, Bribery / Corruption

NCP Information

NCP name National Contact Point Germany
NCP address Scharnhorststrasse 34-37 D-10115 Berlin, Germany
NCP website www.bmwi.de/go/nationale-kontaktstelle
Other NCPs involved

Complainant

NGO

Company Information

Company responsible
Company address
Company website
Company in violation
Country of operations Iraq
Other companies involved

Timeline of developments

Some developments are only visible to logged in users.
Date Actor Action Description Document
12 February 2008 National Contact Point Germany reject Response and renewed rejection of complaint  
31 August 2007 National Contact Point Germany reject The NCP rejects the complaint, arguing that trade is not covered by the OECD Guidelines and that ongoing parallel procedures preclude the NCP's handling the case. download pdf (207Kb)  
5 June 2007 Transparency International - Germany file Annex A of the complaint lists the 57 German companies cited in the Volker Report and TI-Germany's OECD Guidelines complaint. download pdf (55Kb)  
5 June 2007 Transparency International - Germany press release TI-Germany press release regarding the filing of the complaint. download pdf (32Kb)  
5 June 2007 Transparency International - Germany press release Pressemitteilung auf Deutsch download pdf (34Kb)  
5 June 2007 Transparency International - Germany file English summary of the complaint download pdf (27Kb)  
4 June 2007 Transparency International - Germany file TI-Germany submits complaint to the German NCP. download pdf (90Kb)  

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