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Busting the bribe tribe

By Cao Li (China Daily)
Updated: 2009-08-20 14:50

Meanwhile, Fang Weigang, director of the Fanyu district TV station in Guangzhou, capital of Guangdong province, who received five years in prison for graft, bribery and embezzlement in 2007, also told media reporters: "If I don't accept the money, they (the company officials offering the bribes) will feel restless. If I do, they will expect to be treated fairly. Giving me money is a way for people to show me respect."

Zhang, who refused to comment directly on the Rio Tinto allegations, said he would not be surprised if every executive from the 16 Chinese steel firms participating in the ongoing iron ore talks had received bribes.

"Anti-corruption raids are like seasonal typhoons; wherever it goes, corruption and the shocking damage it causes are revealed," he said. "But I fear what we are seeing is only the tip of the iceberg."

Speeding up political reforms is the only way to tackle corruption head-on.

"The country has experienced fast economic growth over the past 30 years but the political reform has lagged far behind. It is like someone trying to walk when their legs are moving at different speeds, one faster than the other. That person will almost always fall down," he added.

A recent study of the economies and business practices employed in 152 nations found corruption was more prevalent in those with a large number of state-run companies, according to Hu in Beijing.

It also found that, like in China, the majority of these companies were the dominant forces highly profitable industries and had little in the way of competition.

"When politics and enterprises are not clearly divided, business ownership is not clearly defined and the management is not scientifically structured, leading to low efficiency and corruption," said Hu. "In China, SOEs are simply an extention of the central government and follow the rules of bureaucracy instead of the market.

"We need to establish a database of experienced and professional managers and then choose the heads of SOEs from it, while SOEs should also be opened up for market and public supervision."

Lawyer Zhang agreed and said more transparency is vital to cleaning up the image of SOEs. "The media and public need to be able to keep a close watch," he said.

The government in Guangzhou announced plans to reform SOEs under its administration in May, focusing on stripping the administrative rank of bosses, replacing them with professional managers and linking the income of SOE leaders with a company's performance.

Officials at the SASAC were unavailable to comment yesterday. However, in July, the central government and CPC released a "definition of good executive conduct" for leaders of SOEs in an effort to halt the spread of corruption.

The guidelines state bosses should not abuse their power to impair the interests of the State or other investors, or use their position to reap personal gains at the expense of the enterprise.

Compared with similar guidelines issued in 2004, the new stricter rules clarify their scope and are more comprehensive in drawing the lines executives must not cross. They cannot set their own salary, housing allowance and other welfare benefits, and are barred from traveling at the expense of the company. Their spouses, children and spouses of children are also barred from investing in any company related to their SOE.

The rules apply both during and after a leader's tenure.

Every SOE boss is also required to file an annual report to the local SASAC detailing their investment and property status, as well as the employment and overseas residency status of their spouse and any children.

Premier Wen Jiabao announced in February the State Council is also working on a plan to publish the assets of government officials.

"The earnings of SOE leaders must be connected to the success of their company," added Xue. "It is the only way to make sure they focus on the busness, rather than the politics."

(For more biz stories, please visit Industries)

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