A view from the Inside at Transparency International. entrusted power for private gain WHAT the abuse of ISentrusted power for private gain the

Size: px

Start display at page:

Download "A view from the Inside at Transparency International. entrusted power for private gain WHAT the abuse of ISentrusted power for private gain the"

Jack Holmes
5 years ago
Views:

Fighting Corruption: A view from the Inside at Transparency International Susan Côté-Freeman, Transparency International Utilities & Energy Compliance & Ethics Conference Houston, Texas 1 March 2011

private gain the abuse of entrusted private gain the abuse of entrusted private gain the abuse of entrusted private gain the abuse of entrusted power for private gain WHAT the abuse of ISentrusted

1 Fighting Corruption: A view from the Inside at Transparency International Susan Côté-Freeman, Transparency International Utilities & Energy Compliance & Ethics Conference Houston, Texas 1 March 2011 power for private gain the abuse of entrusted power for private gain the abuse of entrusted power for private gain the abuse of entrusted power for private gain the abuse of entrusted power for private gain the abuse of entrusted power for private gain the abuse of entrusted power for private gain the abuse of entrusted power for private gain the abuse of entrusted power for private gain the abuse of entrusted power for private gain the abuse of entrusted power for private gain the abuse of entrusted power for private gain the abuse of entrusted power for private gain the abuse of entrusted power for private gain the abuse of entrusted power for private gain the abuse of entrusted power for private gain the abuse of entrusted power for private gain the abuse of entrusted power for private gain the abuse of entrusted power for private gain the abuse of entrusted power for private gain the abuse of entrusted power for private gain WHAT the abuse of ISentrusted power for private gain the abuse of entrusted power for private gain the abuse of entrusted power for private gain the abuse of entrusted CORRUPTION? power for private gain the abuse of entrusted power for private gain the abuse of entrusted power for private gain the abuse of entrusted power for private gain the abuse of entrusted power for private gain the abuse of entrusted power for private gain the abuse of entrusted power for private gain the abuse of entrusted power for private gain the abuse of entrusted power for private gain the abuse of entrusted power for private gain the abuse of entrusted power for private gain the abuse of entrusted power for private gain the abuse of entrusted power for private gain the abuse of entrusted power for private gain the abuse of entrusted power for private gain the abuse of entrusted power for private gain the abuse of entrusted power for private gain the abuse of entrusted power for private gain the abuse of entrusted power for private gain 1

2 WHY FIGHT CORRUPTION? COST OF CORRUPTION Annual Total Costs of Corruption (Including: Bribes, Cartel Pricing, Fraud, Illicit Trade and Money Laundering) THIS DWARFS THE SPENDING ON: United Nations Millennium Development Goals - US$60 billion World Food Program US$3.72 billion (146 million people including 62.2 million children) US$1 trillion US$1.6 trillion Haiti Reconstruction (estimate) - US$11 billion Polio eradication programme (3 year) - US$2.6 billion Sources: World Bank, TI Global Corruption Barometer 2009, United Nations, The Guardian, World Health Organisation, World Food Program 2

3 WHAT IS TRANSPARENCY INTERNATIONAL A global coalition fighting corruption: 80 National Chapters worldwide 13 more in the process of accreditation International Secretariat Board of Directors & Advisory Council 29 Individual Members Senior advisors and other volunteers TI AROUND THE WORLD 3

Index (CPI) demand side Bribe Payers Index (BPI) supply side Global Corruption Barometer people s

4 TI APPROACH combine local and international expertise politically non-partisan non-investigative consultative fight corruption at its roots TI TOOLS to measure corruption Corruption Perceptions Index (CPI) demand side Bribe Payers Index (BPI) supply side Global Corruption Barometer people s opinions to prevent corruption Integrity Pacts Business Principles for Countering Bribery (BPCB) 4

5 TI TOOLS to monitor enforcement OECD Progress Report against bribery of foreign officials to analyse corruption Global Corruption Report National Integrity System (NIS) country studies WHAT IS THE CPI 2010? An aggregate indicator that Measures the degree to which corruption is perceived to exist among public officials and politicians in 178 countries around the world. Focuses on perceptions and not hard data Draws on 13 different surveys and country assessments from 10 independent institutions carried out among experienced observers, such as business people and country analysts, including local experts. 5

6 OBJECTIVES To enhance comparative understanding of levels of public sector corruption. To create public awareness of corruption and create a climate for change. To offer a snapshot of the views of businesspeople and experts who make decisions about trade and investment. To stimulate scientific research and complementary diagnostic analysis on causes and consequences of corruption, both at international and national level. METHODOLOGY The CPI is an indicator that combines different sources of information on perceived levels of corruption 13 surveys from 10 institutions (different sampling and varying methodologies) All sources of information assess levels of corruption mainly, in the public sector. Some sources of information contribute with more detailed data, thus simple averages must be calculated prior to inclusion. Country scores on a scale from 10 (very clean) to 0 (very corrupt). At least 3 sources per country. Businesspeople opinion surveys cover last 2 years while for assessments made by experts only the most recent iteration is included. For more details, see one page methodology document or detailed methodology document 6

7 SOURCES Asian Development Bank (ADB), Country Performance Assessment Ratings, 2009 African Development Bank (AfDB), Country Policy and Institutional Assessment, 2009 Bertelsmann Foundation (BF), Bertelsmann Transformation Index, 2009 The Economist Intelligence Unit (EIU), Country Risk Service and Country Forecast, 2010 Freedom House (FH), Nations in Transit, 2010 Global Insight (formerly the World Markets Research Centre, GI), Risk Ratings, 2010 The Institute for Management Development (IMD) Lausanne, World Competitiveness Yearbook, 2009 and 2010 The Political and Economic Risk Consultancy, (PERC) Hong Kong, Asian Intelligence Newsletter, 2009 and 2010 World Economic Forum (WEF), Global Competitiveness Report, 2009 and 2010 World Bank (WB), Country Policy and Institutional Assessment 2009 SAMPLING Source 1 ADB, AFDB, BTI, EIU, GI, WB 2 FH, IMD, PERC, and WEF Sample Non-resident perspective; respondents largely from developed countries of the western hemisphere. Resident perspective; respondents from local experts and local business and multinational firms. Composition of respondents is approximately 60 percent nonresidents and 40 percent residents 7

8 COVERAGE The CPI 2010 covers 178 countries/territories (2 less than in 2009). Change resulted from individual sources adjusting their coverage: -Kosovois included for the first time this year. -Saint Lucia, Saint Vincent and the Grenadines, and Suriname, are not included in the CPI RESULTS CPI 2010 Rank Country Score Surveys used 1 Denmark New Zealand Singapore Finland Sweden Countries where corruption is perceived to be lowest Rank Country Score Surveys used 175 Iraq Afghanistan Myanmar Somalia Countries where corruption is perceived to be highest 8

9 CHANGES IN RESULTS 2010 VS The CPI should not be used to compare across editions. Scores from original sources were used to identify countries for which perceptions of the prevalence of corruption changed. Changes in scores that can be identified in the sources themselves: Decliners 2009 to 2010: -The Czech Republic, Greece, Hungary, Italy, Madagascar, Niger and the United States. Improvers 2009 to 2010: -Bhutan, Chile, Ecuador, FYR Macedonia, Gambia, Haiti, Jamaica, Kuwait, and Qatar HOW TO EXPLAIN YEAR-TO-YEAR CHANGES Some changes in score are result of an observable change in perceived levels of corruption In 2010 some changes are result of: -Changes in sources: There is a change in countries covered by the original sources or some sources are not longer used. - Rounding and standardizing of data. 9

CPI 2010 MAP TI s approach to working with the private sector To engage with and support companies by implementing anti-bribery work through: Promoting knowledge and research Identifying and

10 CPI 2010 MAP TI s approach to working with the private sector To engage with and support companies by implementing anti-bribery work through: Promoting knowledge and research Identifying and promoting good practice, Providing anti-bribery tools and resources Facilitating sector initiatives Giving advice Engagement allows TI to learn how companies counter bribery effectively and uses this experience to improve its private sector work for the benefit of the business world 10

11 Six actions for companies and tools to help STAGE RELEVANCE TI Tools Assess Where do you stand? TI ABC Checklist Plan Act Monitor What are the risks? Benchmark against best practice using a code; develop detailed polices Implement your no-bribes policies through detailed procedures Carry out continuous self-check and improvement TI Indices Business Principles for Countering Bribery and SME Edition TI Guidance Document; TI 6Step process TI Self-Evaluation Tool; Enablon ABS interactive tool Report to stakeholders Report internally and externally on what you do Global Compact-TI Reporting Guidance; TRAC survey; PRT Report Assure Raise the credibility of what you do Assurance framework (in development) PROMOTING REVENUE TRANSPARENCY 2011 REPORT ON OIL AND GAS COMPANIES P 11

12 METHODOLOGY Our sample: 44 major oil and gas producers 20 international and 24 national oil companies Based in 30 home countries Producing in 73 host countries Coverage of global reserves: 60 per cent of oil and 55 per cent of natural gas Coverage of global production: 60 per cent of oil and 60 per cent of natural gas Questionnaire: Reporting on anti-corruption programmes Organisational disclosure Country-level disclosure NOC-specific questions Data collection: Desk research Websites and their links Data sharing with companies 24 out of 44 companies reviewed their data (19 IOCs + 5 NOCs) ORGANISATINAL DISCLOSURE GOOD REPORTING ON ANTI-CORRUPTION AVERAGE COUNTRY-LEVEL REPORTING - POOR 12

13 PRT MAJOR FINDINGS COUNTRY-LEVEL DISCLOSURE 13

14 COUNTRY-LEVEL DISCLOSURE AND EITI-SUPPORT VERY DIFFERENT LEVELS OF CORPORATE DISCLOSURE WITHIN THE SAME HOST COUNTRIES 14

15 VERY DIFFERENT LEVELS OF CORPORATE DISCLOSURE WITHIN THE SAME HOST COUNTRIES NOC GROUPS PUBLIC LISTING MATTERS 15

16 RECOMMENDATIONS For companies: - Detailed anti-corruption programmes should be publicly available -Companies should undertake voluntary independent assurance of anti-corruption programmes -Companies should publish details of their subsidiaries and fields of operations -Oil and gas companies should increase their reporting on a country-by-country basis - Companies should join the Extractive Industries Transparency Initiative - Companies should create and maintain up-to-date corporate websites FOR NATIONAL OIL COMPANIES (NOCS) All NOCs should introduce internationally or generally accepted accounting standards, as well as publish independently audited accounts The relationshipsbetween home governments and the NOCs that they regulate should be clear and publicly disclosed 16

17 FOR PUBLIC BODIES The European Union should amend relevant legislation to require EU-registered companies to report on their operations on a country-by-country basis All governments that are home to oil and gas producers should require companies to report on their operations on a country-bycountry basis Stock exchanges should enforce regulations providing for country-level reporting FOR THE INVESTOR COMMUNITY International rating agencies and risk analysts should include anti-corruption measures in their risk evaluation models The International Accounting Standards Board should require companies to report key information on a country-by-country basis Corporate responsibility indices should include reporting on anticorruption programmes, organisational disclosure and countrylevel disclosure 17

TI s Corruption Perceptions Index (CPI)

TI s Corruption Perceptions Index (CPI) ADB-OECD Anti-Corruption Initiative for Asia and the Pacific 5th regional anti-corruption conference Beijing, September 28-30, 2005 How can public opinion surveys assist in preparing anti-corruption reform?