26
Apr
2013

Transparency International calls on the United Nations to make governance a global commitment post 2015

Political Corruption

- Transparency International has published its recommendations to the United Nations to adopt a goal on governance as part of new global commitments to succeed the Millennium Development Goals (MDGs).

The Global Corruption Report 2004 provides an overview of the state of corruption around the world. It covers national and international developments, institutional and legal change and activities within both the private sector and civil society for the period from July 2002 to June 2003. This year the Global Corruption Report focuses on political corruption. It presents 34 country reports and the latest research on corruption.

Political corruption is the abuse of entrusted power by political leaders for private gain. The scale of the problem can be vast. One of the world’s most corrupt leaders, Mohamed Suharto of Indonesia, allegedly embezzled up to US $35 billion in a country with a GDP of less than US $700 per capita.

Corruption in political finance takes many forms, ranging from vote buying and the use of illicit funds to the sale of appointments and the abuse of state resources. Not all are illegal. Legal donations to political parties often result in policy changes, for example. A 2003 World Economic Forum survey finds that in 89 per cent of the 102 countries surveyed the direct influence of legal political donations on specific policy outcomes is moderate or high.
http://www.transparency.org/research/gcr/gcr_political_corruption

Anti-corruption reporting: the first line of defence for companies

Posted 24 April 2013

The European Commission recently announced a proposal that would require 18,000 European companies to be more transparent about their efforts to combat corruption and bribery by publishing details of how they go about this. This is good news. Anti-corruption programmes constitute a company’s first line of defence against corruption.

Full and transparent disclosure of anti-corruption programmes underscores a company’s commitment to countering corruption and enhances ethical conduct among management, employees, partners, agents and other relevant parties up and down the value chain.

Transparency International has long advocated for greater transparency in corporate reporting as part of a company’s dedication to fighting corruption. That’s why we have developed a way to measure how well companies are positioned to carry on that fight. We have identified three areas where companies can demonstrate the strength of their position to combat corruption. The first is reporting on their anti-corruption programmes. The other two are reporting on their organisational structure and their key financial data on a country-by-country basis.

Transparency in Corporate Reporting

In 2009, when Transparency International published its first report on the anti-corruption programme reporting practices of 500 major multinationals, they scored an average of 47 per cent.

In the July 2012 report Transparency in Corporate Reporting: Assessing the World’s Largest Companies, the score for the anti-corruption dimension had risen to 68 per cent – a marked improvement over the 2009 numbers. That study analysed the publicly available information from the company websites of the world’s 105 largest publicly traded multinationals.

While some multinational companies now report on certain aspects of their anti-corruption programmes, there is still significant room for improvement. For example, few indicate that facilitation payments are prohibited and reporting on monitoring procedures tends to be weak. The study found that three of the companies published all the prescribed information while three published none.

Best Practice

We encourage all businesses, both large and small, both listed and unlisted, to have comprehensive anti-corruption programmes in place and to make them publicly available. By adopting greater corporate transparency, companies provide the necessary information for investors, journalists, citizens and civil society to monitor their behaviour and hold them accountable.

Transparency International published in 2009 its Business Principles for Countering Bribery, which provided a blueprint for establishing anti-corruption systems. These principles, which form the basis for other similar codes and guidelines, show companies what the key components of a robust anti-corruption programme should be. The Business Principles are the product of a multi-stakeholder effort, including input from the business community.

Formalised and consistent reporting on anti-corruption activities, integrated into already established reporting processes (e.g., accounting), ensures reliable and measurable internal operations. It shows employees that the fight against corruption is taken very seriously (“What gets measured gets done”). This results in the following benefits:

strengthening anti-corruption behaviour, including better risk management and compliance
encouraging and supporting employees in resisting corruption
providing management with a foundation for analysis of progress
planning and continuous improvement
motivating employees to be proud of their organisation.

Get involved

Transparency International has updated the Business Principles and is currently seeking comments on the revised draft. The deadline for contributions is 27 May this year.

Press contact(s):

Chris Sanders
Manager, Media and Public Relations
press@transparency.org
+49 30 3438 20 666

Global Corruption Report 2004: Political Corruption

Filed under:

Global Corruption Report published 25 March 2004

The 2004 edition of the Global Corruption Report focuses on corruption in the political process and on the insidious impact of corrupt politics on public life in societies across the globe. It includes a special section on political corruption with expert reports on the regulation of political finance worldwide, the practice of vote buying, barriers to transparency in the arms and oil sectors as well as efforts to repatriate wealth looted by politicians.

The 2004 edition of the Global Corruption Report focuses on corruption in the political process and on the insidious impact of corrupt politics on public life in societies across the globe. It includes a special section on political corruption with expert reports on the regulation of political finance worldwide, the practice of vote buying, barriers to transparency in the arms and oil sectors as well as efforts to repatriate wealth looted by politicians.

Download the report | View online | Translations: ES FR RU

18
Apr
2013

Time for G20 finance ministers to lead reforms

Issued by Transparency International Secretariat

17
Apr
2013

Red Elección Ciudadana consignó denuncias recibidas el 14-A ante el CNE

Issued by Transparencia Venezuela

17
Apr
2013

Citizen Election Network reports on irregularities during Venezuela’s election

Issued by Transparencia Venezuela

16
Apr
2013

European countries sign up to greater cross-border transparency

Issued by Transparency International Secretariat

16
Apr
2013

EU rules will put business anti-corruption efforts in spotlight

Issued by Transparency International Liaison Office to the European Union

12
Apr
2013

Transparency International asks Nigerian organisation to stop using its name and logo

Issued by Transparency International Secretariat

Deal reached on EU extractives legislation

Posted 10 Apr 2013

France: politicians and banks put on the spot

Posted 10 April 2013

It often takes a full-blown scandal to spur politicians to act on concrete measures to fight corruption. In France last week, it was disclosed that Jérôme Cahuzac, the former Minister of Budget, had hidden money in an undisclosed offshore account. French President François Hollande, who had made cleaning up politics a centrepiece of his election campaign, responded by going on the offensive.
By 15 April members of the French government will have to make public asset declarations. MPs, local elected representatives and high-level officials will all have to do the same as soon as there is a new law in place. President Hollande also announced the establishment of an independent oversight body to review and keep a check on local and national politicians’ declarations.
What is missing from President Hollande's proposals, however, is an immediate curb on the number of official posts that politicians can hold. This should happen now, rather than in 2017.
President Hollande also called on French banks to publish an annual list of all their subsidiaries around the world in an effort to bring greater transparency to their operations and thereby stem illicit financial flows. This is an essential step towards corporate transparency and a core recommendation in our report, Transparency in Corporate Reporting: Assessing the world's largest companies.
All these new measures are welcome. The next step is to turn them into laws and push for their swift implementation and enforcement.

Leaks led to action

Hollande's announcement follows the publication, last week, of information based on leaked data that showed how widespread the use of secrecy jurisdictions is. The International Consortium of Investigative Journalists, working with leading newspapers, published reports on records gathered from more than 120,000 companies registered in offshore locations famous for their secrecy – from the British Virgin Islands and the Caymans in the Caribbean, to the Cook Islands and Singapore in Asia. Mr. Cahuzac had deposited €600,000 in a Singapore bank, in a case revealed by Mediapart.
This scandal also appears to have spurred the governments of France, Germany, Italy, Spain and the United Kingdom to announce plans to exchange banking data, while Luxembourg said that it would end its bank secrecy laws.

Closing the gap

The requirement for French government members, their co-workers, MPs, local elected representatives and high-level officials to make public their asset declarations is – if a law is adopted by Parliament – an important step forward, one long overdue in French politics. The United Nations Convention against Corruption (UNCAC), which has been ratified by 166 countries including France, requires a legal framework for asset declarations of government officials. The 2011 study by Transparency International of France's institutions showed that the French parliament was rated the most vulnerable in the fight against corruption and recommended that the government publish politicians’ asset and interests declarations.
The French proposals are in line with seven key recommendations put forward by Transparency International France calling for greater transparency and accountability in French politics. President Hollande signed the Transparency International France pledge, committing to all of the recommendations, ahead of last year's election.
France is one of only two countries in Europe that has not made public the list of assets, incomes and interests of politicians, although the law mandating asset disclosure was passed in 1988. (The other is Slovenia.)

Best practices for asset declarations
Research shows that an asset declaration open to public scrutiny is a way for citizens to ensure leaders do not abuse their power for personal gain (our definition of corruption). Asset declarations are a means to anchor the issue of ethics and integrity in the political classes and should be part of all codes of conduct. They are a way to ensure that people in power do not have conflicts of interest.
There are no international standards mandating how asset declarations are made and monitored. However, there are core principles that should form the foundation of any legal framework.
An asset declaration is a person's balance sheet and should cover assets (from all properties, valuables and financial portfolios) to liabilities (such as debts and mortgages), and all sources of income from directorships and investments to consulting contracts. It should also include gifts and sponsorship deals and any potential conflicts of interest such as unpaid employment contracts and participation in non-governmental organisations.

The leadership of the three branches of government – executive, legislative and judiciary – and senior career civil servants should be required to file asset declarations before and after taking office as well as periodically (annually or every two years) during office.
Ideally, the asset declaration records exact values, but some countries opt for ranges of value.
Asset declarations should be made publicly available.
The administration of an asset disclosure programme requires a monitoring and evaluation agency to collect and verify information and investigate, prosecute and sanction those who fail to comply.