Blair anti-corruption plan weakened by British firms

Britain has the world's most corrupt companies, and some of the weakest legislation among industrialised countries for dealing with them, it was revealed at the Earth Summit yesterday.

The revelation undermines a voluntary initiative to tackle corruption to be unveiled by Tony Blair in Johannesburg today as one of his main contributions to the summit.

The Prime Minister's "Transparency Initiative" will urge oil, gas and mining companies to publish what they pay governments in developing countries. But Mr Blair is planning to bring in legislation to enforce it ­ by stopping offending companies being listed on the stock exchange ­ only if the voluntary approach does not work.

It is backed by five companies ­ Rio Tinto, Shell, BP, Anglo-American and BHP ­ and by a coalition of charities including Save the Children and the Tear Fund. But other pressure groups say that it will not work and dismiss it as spin to cover up Britain's poor record in tackling corruption.

Half of the 70 companies identified by the World Bank as so corrupt that it has decided never to do business with them are based in Britain. By comparison, only six of them are based in Nigeria ­ one of the other main offenders. The Government has dragged its feet in bringing in legislation to tackle corruption, despite agreeing to an international convention on the bribery of overseas public officials.

The convention ­ drawn up by the Organisation for Economic Co-operation and Development (OECD) ­ made this a criminal offence. The convention came into force three years ago but countries had to change their own laws to implement it. The Government long refused to do this, arguing that existing British laws were enough.

But the OECD pointed out that there had never been an effective prosecution under the old legislation and insisted that Britain should bring in new laws. Last year Enery Quinones, the head of the organisation's anti-corruption unit, said that Britain's legislation was the worst in the developed world.

Since then new measures have been included in the Prevention of Terrorism Act. But critics say they "lack a proper enforcement mechanism".