By Lidia Kelly
MOSCOW (Reuters) - More than 50 international companies are pledging zero-tolerance of bribery in Russia under a fresh Kremlin-backed effort to improve the business climate in one of the world's most corrupt countries.
Anti-graft legislation initiated by President Dmitry Medvedev in late 2008 had yet to be effective, according to Transparency International, an independent global group which monitors business corruption.
The new Corporate Ethics Initiative for Business in the Russian federation stems from political signals by the government and its growing recognition of the problem, according to Michael Harms, executive director of the German-Russian Chamber of Commerce in Moscow, which initiated the pact.
"The political background is very good now in Russia, with the Russian government fully supporting anti-corruption efforts," Harms said.
Transparency International last year ranked Russia a lowly 146 for corruption out of 180 countries. Medvedev has described corruption as "public enemy number one."
According to INDEM, the Moscow-based Information Science for Democracy foundation, a non-government organization, more than $300 billion is paid in bribes each year in Russia, more than a quarter of the country's GDP in 2009.
The 56 mainly German companies which will sign the pact on Wednesday include carmaker Daimler. engineering group Siemens, Deutsche Bank, publishing and media company Axel Springer AG and German state rail company Deutsche Bahn.
"Corruption is an obvious problem in Russia," said Frank Schauff, chief executive officer of the Association of European Businesses in Russia.
"But in the past few years the government has increased its efforts in fighting corruption."
ANTI-CORRUPTION PRINCIPLES
The agreement is based on a World Economic Forum initiative from 2004 and obliges each signatory to implement or improve existing anti-bribery and anti-corruption practices and report any incidents.
Schauff said the pact was not connected to a recent spate of bribery probes.
The world's top personal computer maker Hewlett-Packard is being investigated over whether it paid $11 million in bribes to win business in Russia.
Siemens agreed in 2008 to pay $1.3 billion to end corruption probes in the United States and Germany. Last month, Daimler agreed to pay $185 million to settle U.S. charges it showered foreign officials with money and gifts to win contracts, including in Russia.
"Multinational companies are particularly challenged in emerging markets, since they have to abide by more stringently applied regulation in their home countries, while trying to compete in rapidly growing, but inconsistently regulated markets such as Russia," said Brook Horowitz, IBLF's executive director for Russia.
Transparency International said in a statement the excessive role of government in the economy and business sector helped spur corruption and aggravated the problem.
(Reporting by Lidia Kelly; Editing by David Cowell)
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