Johannesburg - The arms and defence industry is the most corrupt business sector, the rule of law is commonly flouted and China is the country most likely to bribe a South African company for business.

These are among the findings presented at an international corruption conference here yesterday, where Transparency International (TI) unveiled its Bribe Payers' Index (BPI) for 2002.

According to the index, Australia is believed to be the most honest of the world's leading industrialised nations, while Russia is the most likely to pay a bribe in exchange for a business deal.

TI is a global anti-corruption organisation which commissioned an international survey to rank leading exporting countries in terms of the degree to which they are likely to pay bribes to senior public officials in key emerging markets.

The survey developed out of a concern that only the demand for bribes had been mapped, and it now focuses on who is actually paying. It measures the supply side in countries where bribery is paid and examines which sectors are most corrupt.

The BPI is based on surveys with 853 businesspeople in 15 emerging market countries.

Mari Harris, director of Marikinor, which conducted the SA leg of the research, said 84% of the respondents described the arms and defence industry as corrupt, followed by the public works sector.

She said South Africans identified the flouting of the rule of law, public tolerance of corruption, public procurement practices, inadequate control over money-laundering, increasing global competition and low public sector salaries as the top five motivations for corruption.

Respondents were asked which sector they would most like to clean up. Most said the police and courts.

Corporations from Russia, China, Taiwan and South Korea were most likely to offer bribes to developing nations despite the fact that all these countries have laws making corrupt payments to foreign officials illegal.

"Large numbers of multinational corporations from the richest nations are pursuing a criminal course to win contracts in the leading emerging market economies of the world, TI chairman Peter Eigen said.

Companies from Russia and China were found to be using bribes on "an exceptional scale".

Domestic companies in developing countries were also found to be involved in heavy bribe-paying.

US and Japanese multinationals had the highest propensity to pay bribes to foreign government officials followed by France, Spain, Germany, Singapore and the United Kingdom.

Those with the lowest propensity to bribe officials abroad were companies from Australia, Sweden, Switzerland, Austria, Canada, Belgium and the Netherlands.

"Today's BPI underscores the fact that we have a global problem of corporate bribe-paying that demands concerted global actions..." said TI advisory council chairman Kamal Hossain.

With acknowledgements to Gill Gifford, Sapa and Cape Times.