Anti-graft plan 'jeopardises UK firms'

Many poor people live in mineral-rich countries

British firms risk losing business if the UK brings in anti-corruption measures without international co-ordination, the head of the Confederation of British Industry (CBI) has said.

As part of efforts to tackle world poverty, the British government is thought to favour introducing a voluntary code under which UK firms would declare all payments to foreign governments.

The idea has been welcomed by aid agencies as a positive first step towards tackling poverty around the world by discouraging corrupt payments.

But both aid agencies and the CBI think stronger measures would also be needed to improve revenue tracking and hold developing countries to account.

'Competitive'

The aim would be to ensure that earnings from oil, gas and mining projects are used for development and not pocketed by corrupt officials.

I would hate British companies to be the only ones doing this because frankly it's such a competitive place out there

Digby Jones, CBI

But Digby Jones, the CBI's director general, warned against Britain introducing a new code in isolation and called for a three-pronged approach.

"What happens about companies in other parts of the European Union, what about companies in America and Japan?" Mr Jones said on BBC Radio.

"I would hate British companies to be the only ones doing this because frankly it's such a competitive place out there."

'First step'

He was commenting on reports that Mr Blair would use his visit to the World Development Summit in Johannesburg to press for a global crackdown on corruption.

Everybody knows what the money is, but still it disappears

Ex-Shell chairman

Voluntary declarations of payments to foreign governments would be "a good first step... but it's only a first step", Mr Jones said.

To be effective, anti-corruption measures would also have to highlight what happens to revenue from oil, gas and mining once it goes into government coffers, he said.

Without such powers, Mr Blair's proposals would only be "a first step" said John Hilary, trade policy advisor for UK charity Save the Children.

The need to monitor government funds in the developing world has also been stressed by the ex-chairman of international oil firm Shell.

Transparency

"Everybody knows what the money is, and it still disappears," said Sir Mark Moody Stuart on BBC Radio.

Alexandra township is to get a visit from Mr Blair

"We have to work together to put in place the structures to ensure that it's properly spent in the interest of society as a whole, and that's not just a corporate responsibility," he said.

But Mr Jones pointed out the British government was divided on the rights and wrongs of interfering in other countries' sovereignty by dictating their spending.

Effective policies needed a mix corporate social concern backed by community work "a push, not just at Mr Blair's level but at European Union level" and international pressure for transparent government, he said.

In his speech to the Johannesburg summit, Mr Blair issued a strong appeal to tackle global warming and said Africa's poverty was a scar on the conscience of the world that must be healed.

Mr Blair did not include the anti-corruption plan in his speech, which was branded "a disappointment" by environmentalist group Friends of the Earth (FOE).

"It was full of exhortations urging everyone to do the right thing... but lacking in new British commitments to action," said FOE executive director Charles Secrett.