APEC leaders aim to ban "grease" payments

SYDNEY, Sep 7 (Reuters) Asia-Pacific leaders will fire a shot in the battle against corruption at their weekend summit, endorsing a code of conduct banning companies from paying bribes to speed up deals or making dubious political contributions.

The edict, drawn up by the 21-member Asia-Pacific Economic Cooperation (APEC) at a meeting in Sydney, also stipulates that government officials should not accept gifts to use their positions for personal gain.

"It takes two to tango. When we say government officials must be disciplined, the ones giving the bribe must also be disciplined," Malaysia's Trade Minister Rafidah Aziz told reporters.

"Certain countries may give bribes in all sorts of forms as quid pro quo, whether to get votes at forums or selling military hardware," she added.

APEC leaders, including US President George W Bush and Chinese President Hu Jintao, are gathering in Sydney ahead of the Sept. 8-9 summit that will tackle issues such as climate change and trade.

APEC's economies -- which include Japan and Russia -- account for nearly half of global trade and 56 per cent of the world's gross domestic product.

APEC's code of conduct comes as rapid economic growth in much of the region has led to profound governance implications, said corruption watchdog Transparency International.

"Many Asia-Pacific countries suffer from corruption, in some cases endemic. At the same time, there are outstanding examples of transparency and accountability in the region," it said.

Removing bribes and hidden trade barriers in APEC member economies could add about 148 billion dollars to APEC economies, a World Bank report published on Monday said. The report called for more transparent and predictable trade regulations.

Under the APEC edict, companies should eliminate what it calls "facilitating" or "grease" payments to secure or expedite a routine service to which they are entitled.

Companies should not make direct or indirect contributions to political parties or their officials as a subterfuge for bribery.

"All political contributions should be transparent and made only in accordance with applicable laws," it said.

The leaders will also press for closer international legal cooperation on extradition, mutual legal assistance and the recovery and return of proceeds of corruption.

REUTERS ARB HS1028