Tonight:
5°c
Jack Straw is "fully committed to combating foreign bribery", he promised us last week. Somehow I suspect that the Lord Chancellor's words will not have entirely reassured those representatives of the Organisation for Economic Co-operation and Development who were "disappointed and seriously concerned" at the "continued failure of the UK to address deficiencies in its laws on bribery of foreign public officials".
But there may be unexpected help for Mr Straw, who picked up the title of "anti-corruption champion" last week even though his officials will remain part of Lord Mandelson's Business Department.
Evidence of foreign bribery is most likely to come to light when disputes arise between traders. Increasingly, these disputes are being resolved by international arbitrators rather than by national judges - not least because an arbitrator's decision is easier to enforce.
Since arbitrators are paid by the various sides, a party that has acted corruptly might feel it can insist on its wrongdoing being ignored. But that would be a rash assumption, as demonstrated by a remarkable decision from a panel of arbitrators at the World Bank's International Centre for Settlement of Investment Disputes.
The claim was brought in 2000 by a company registered in the Isle of Man called World Duty Free which has nothing to do with the leading British travel retailer of the same name that was sold this year to the Italian group Autogrill.
Kenya had awarded the Manx-registered company an exclusive duty-free shopping concession at Nairobi and Mombasa airports. When things began to go wrong, the company took the Kenyan government to arbitration - accusing the government of expropriating the company's concession, with the support of a corrupt judiciary.
What was extraordinary was that Nasir Ibrahim Ali, World Duty Free's owner and manager, frankly admitted that he had been granted the concession only because he had paid a cash bribe of $2 million to the country's then president, Daniel arap Moi.
In his witness statement, Ali said: "I brought [part of the cash in Kenyan shillings] to my meeting with President Moi in a brown briefcase. When we entered the room where the President received us, [I] put the briefcase by the wall and left it there.
"After the meeting [I] collected the briefcase from where [I] had left it. On the departing journey I looked in the briefcase and saw that the money had been replaced by fresh corn."
The human-rights lawyer Geoffrey Robertson QC, representing Ali, tried to persuade three arbitrators that such gifts were customary in Kenya and therefore not illegal. Also, since the money had been paid to President Moi, Robertson argued that it had been sanctioned by the state a claim summed up in the notorious pun, L'Etat, c'est Moi.
But, remarking that bribing state officials was "more odious than theft", the tribunal decided two years ago that Ali's compensation claim for breach of the illegally-procured contract was inadmissible and the resulting contract unenforceable.
Constantine Partasides, a partner at the City firm Freshfields Bruckhaus Deringer and head of its international arbitration group in London, acted as counsel for Kenya. Even though cases of self-confessed corruption are rare, the solicitor argues that a process such as international arbitration can deal appropriately with such behaviour.
And he has a warning for traders who say that bribes are the only way to get business in some parts of the world.
"If the moral hazard is not enough to dissuade them, then perhaps the legal hazard will be," says Partasides. "Accede to a demand by a local government official that you pay a bribe, and in addition to any criminal consequences you forfeit the protection of the machinery of justice, no matter who that foreign official is."
A cautionary tale: losing your money may be even more of a disincentive than upsetting the OECD.
Email joshua@rozenberg.net
