Corporate Governance Chapter 5 Chapter 5 Table 5.5: Corruption as perceived by the private sector Mauritius Region All Percentage of firms that expect to make informal payments to public officials (to get things done) 1.59 41.42 31.02 Percentage of firms expected to give gifts to get an operating licence 0.00 19.40 16.05 Percentage of firms expected to give gifts in meetings with tax officials 0.28 20.43 17.99 Percentage of firms expected to give gifts to secure a government contract 8.81 44.27 31.91 Percentage of firms that identify corruption as a major constraint 50.72 33.33 36.82 include a recent condemnation of a senior manager of the MCB for laundering around Rs3.4 million.41 Recorded complaints (known or anonymous) totalled 65 in 2007/2008, compared with 51 in 2006/2007.42 This is an increase of 27 per cent. 751. Money laundering is often linked to drug trafficking and, because Mauritius is so open to business and the movement of persons, it is exposed to this particular criminal activity that is growing in Africa and elsewhere. The recent interception by the Anti-Drug Squad of a boat transporting cannabis43 illustrates this. Although the CRM could not gather objectively verifiable data on insider trading, it was satisfied to note that the legislator tried to circumvent the danger by clarifying one of the sources of insider trading. This is conflict of interest. In fact, chapter 2.4 of the Code of Corporate Governance gives appropriate guidance aimed at preventing insider trading, because one director often sits on the board of many companies. 752. The CRM’s investigations and its interviews with stakeholders show that the public and the private sectors have begun a number of initiatives to increase respect for the Code of Corporate Governance and to combat the corruption that involves collusion between business operators and public officials, particularly in the Customs Department. 753. The CRM acknowledges the government’s efforts to establish numerous legal structures to support ethical business practice in the country. However, it is difficult to determine whether the private sector adheres to them. The CSAR proposes that, to achieve its ethical objectives, the MCSAR should monitor adherence to the code of ethics in the public sector and the Ministry of Consumer Protection and Citizens Charter should monitor compliance at all times. However, the CSAR does not give any detail about how to do this. 754. The CRM believes that, if the government and stakeholders are determined to fight money laundering, they should convert this shared commitment into action by way of the judicial system. However, as the government liberalises trade further and eases the movement of capital in and out of the country, crimes related to money laundering will become more and more difficult to track. Source: World Bank. Enterprise Survey 2009. 747. Table 5.5 suggests that, even if Mauritius has the best score of all, the business community is still vigilant about corruption and has the highest levels of awareness about the danger of corruption as a constraint to doing business. 748. A recent report published by Transparency International on perceptions of corruption ranks Mauritius 41 worldwide and the second lowest in Africa after Botswana. It appears that the score the country got in 2008 (5.5) is an improvement over the score in 2004, when it was 4.1. The score dropped in 2009 to 5.4. This means that, although it still has a high rating, corruption in Mauritius is improving at a slow rate. The CRM thinks that, as the economic activities of the country expand and grow, its exposure to corruption39 will also increase. 749. The low salaries of public officials, faced with extended families, social needs and solicitations, often drive corruption in many African countries. This does not seem to be the case in Mauritius, where the country has developed a comprehensive welfare system for the people. Mauritius should be an inspiration to other African countries. Money laundering and insider trading 750. 266 FIAMLA, with its amendments dated June 2006, defines money laundering offences and gives guidelines for tracking and punishing offences. The ICAC Annual Report (2007/2008) lists offences brought to courts. They include 39 charges of money laundering. This is 52 per cent of all cases.40 Government’s efforts to fight money laundering 39 - Transparency International. Corruption Perception Index 2002–2008. 40 - ICAC Annual Report, 2007/2008. Table 7, p 15. Corporate Governance Lack of management transparency 755. Many stakeholders believe that, while corporate management in Mauritius appears satisfactory, there is little transparency in the way 41 - Le Matinal. 21 July 2009. Daily Newspaper No 248. 42 - ICAC Annual Report, 2007/2008. p 13. 43 - L’Express. 25 July 2009. No 11. 267