Ian Birrell: Britain's tarnished reputation can be salvaged at last

Politicians turned a blind eye, even as they lectured others against corruption

The cardinal could stand it no longer. Conducting the funeral service for a prominent bishop in front of pews packed with his nation's top politicians and business leaders, Polycarp Pengo, the head of the Catholic Church in Tanzania, raged against the cancer of corruption eating away at his country. He urged all decent people to join a crusade against the 'vices' of bribery and embezzlement.

He was right to be annoyed. A series of scandals have highlighted the growth of graft in Tanzania. There have been calls for Benjamin Mkapa, the globally-respected former president who was among those mourners a month ago, to be prosecuted. And in a land where more than a third of people live on less than £1 a day, an MP linked to the BAE scandal said that $1m (£630,000) found in an overseas bank account was "small change".

Like too many African countries, Tanzania has been blighted by big men who have extorted their way to obscene wealth at the expense of millions living in poverty. But like elsewhere on the continent, it also has a growing number of civic leaders, journalists and campaigners standing up to these thieves. Many are risking their lives and liberty in one of the most important battles for the future of Africa.

For too long, these brave figures have been let down by the West. Bankers, accountants and lawyers lived like pimps off immoral earnings as stolen billions were stashed in hidden accounts. And politicians turned a blind eye, even as they lectured developing nations on the need to clean up their acts.

Tony Blair swept into power promising an ethical foreign policy, with ratification of the Organisation for Economic Co-operation and Development's landmark anti-bribery convention and promises of new anti-corruption legislation. It was never enacted, despite repeated promises. Instead, in possibly the most shameful episode of his time in office, Blair gave in to threats from Saudi despots and ordered the SFO to call off its inquiry into BAE bribery allegations just as investigators were about to access Swiss bank accounts.

This came just a year after his own Commission for Africa underlined the importance of good governance and the carnage caused by corruption. In an instant Britain's outspoken stance on sleaze was made to look the height of hypocrisy, with a criminal inquiry abandoned to satisfy the wealthy customer of a high-profile company.

This was not an isolated incident. Britain hindered the recovery of huge sums looted by President Sani Abacha of Nigeria and stashed in British banks. It dragged its feet on fulfilling obligations to prosecute bribery under the OECD convention, unlike the US, France and Germany. And earlier this year the SFO called off belated investigations into a massive Kenyan corruption scandal involving front companies in Britain.

This is why yesterday's announcement is so significant – the first prosecution of a major company for overseas bribery and a chance to restore Britain's tarnished reputation. After a series of humiliations, it seems the SFO has a director prepared to turn tough talk into action. And it comes as ministers look set to introduce that much-delayed bribery Bill, with maximum sentences of 10 years in jail.

The SFO decision follows two other breakthroughs in the fight against sleaze. The managing director of a British company was given a suspended prison sentence last year for bribing a Ugandan official in the first case involving overseas corruption. And last week came the first successful prosecution of a British company when Mabey & Johnson, a construction outfit, was convicted over sleazy payments in six countries. These included allegedly putting $5,000 into the bank account of the man who is currently Madagascar's representative to the UN.

The BAE case is on a much bigger scale. And what made the Tanzanian element so depressing was that it was so brazen. The World Bank condemned the idea of one of the world's poorest nations borrowing millions to buy a radar system. The International Civil Aviation Authority said that it was not needed. The development minister, Clare Short, said that the deal "stank" – but bizarrely, Blair waved it through.

The climate is getting chillier for companies that bribe their way across the world. Siemens, the German manufacturing giant, paid about £2bn in fines and legal costs over allegations of global graft. A senior executive with Halliburton, the US engineering company, faces seven years in jail after admitting offences in Nigeria. And now BAE could get the payback it deserves if these charges are proved.

Private companies are estimated to spend more than £20bn a year on bribes to politicians and officials in developing nations. This sum is nearly twice the size of the entire Tanzanian economy and makes a mockery of our aid efforts. The courageous Cardinal Pengo called on every decent person to join his crusade against corruption. We must hope that Britain is rallying at last to his cause.