PPT Presentation: Corruption in the Defence Sector (TI-UK Beginner's Guide to Corruption, 2012)

Corruption – A beginner’s guide 6 December 2012 Corruption in the defence sector

Anne-Christine Wegener

www.ti-defence.org

Development of the anti-corruption discussion

1997 subject on global agenda; corruption can be measured

2002 “Professional isation� of the subject

now - more ground level, public action - more sector specific research

Why defence corruption matters - numbers • A 2006 survey by Control Risks showed that roughly one third of international defence companies felt they had lost out on a contract in the previous year because of corruption by a competitor.

• Another report from the US Department of Commerce claimed that the defence sector accounted for 50 per cent of all bribery allegations in 1994 -1999, despite accounting for less than 1 per cent of the world trade.

• It has been estimated that bribes accounted for as much as 15 per cent of the total spending on weapons acquisitions in the 1990s.

• Transparency International estimates the global cost of corruption in the defence sector to be at a minimum of USD 20 billion per year.

Why defence corruption matters effects Defence officials tell us that corruption:  Wastes scarce resources  Hurts operational effectiveness  Diminishes public trust

High risks: • Huge contracts • High secrecy • Unique corruption risks: peacekeeping operations, conflict environments

Photo attribution: Joint Chiefs of Staff Flikr

Defence and security institutions exist to protect a country and its citizens.

When they are weakened by corruption, they can’t do that.

What we mean by ‘defence corruption’ POLITICAL

PERSONNEL

PROCUREMENT

Defence & security policy

Leadership Behaviour

Technical requirements / specifications

Defence budgets

Payroll, promotions, appointments, rewards

Single sourcing

Nexus of defence & national assets

Conscription

Agents/brokers

Organised crime

Salary chain

Collusive bidders

Control of intelligence services

Values & Standards

Export controls

Small Bribes

FINANCE

OPERATIONS

Financing packages Offsets Contract award, delivery

Subcontractors Asset disposals

Disregard of corruption in country Seller influence

Secret budgets

Corruption within mission

Military-owned businesses

Contracts

Illegal private enterprises

Private Security Companies

5

How we work

Military Defence Ministries

Police, MOI Security Forces

Government Index

Companies Index Research, Tools

Global Arms Trade Defence companies

Fragile states Peacekeeping

Workshop Tuesday 6.15pm

Supply + demand – two Indexes

Defence Companies Index 2012 • 129 large defence companies • Global scope • 34 detailed questions on anticorruption systems • Analysis based on public information • Companies banded from A (the best) to F (the worst) • Companies also invited to provide internal information • Report launched October 4th, 2012 • www.defenceindex.org

Results – public information only • Only 10 companies in the top two Bands (good disclosure of anti-corruption systems) • 2/3 of defence companies do not provide adequate levels of transparency • High number of companies from all major exporting countries in D/E/F

Plus company-internal information • More good a-c systems • Much improvement underway in the industry

Government Integrity Index • 82 countries • 76 detailed questions • 29 defence corruption risks in 5 categories • Scores 0-4: • ‘Model’ answers • Results in Bands A-F • Assessor, 2 peer reviewers, TI review • Government MOD review of their draft results

Government Defence AntiCorruption Index What is it?

• A global Index to measure levels of corruption risk in national defence and security establishments worldwide.

• A means to monitor the success of anti-corruption mechanisms over time and compare countries • Wide range of input: from National Chapters, Civil Society experts, Defence and Security sector experts, and governments themselves.

• Based on Questionnaire of 76 questions • Next step in sector-specific research

Thank you & discussion

Thank you

Discussion

www.ti-defence.org

Countries: Government Defence AntiCorruption Index Asia Pacific: China, South Korea, Singapore, India, Thailand, Pakistan, Australia, Sri Lanka, Indonesia, Japan, Malaysia, Philippines, Bangladesh, Taiwan, Nepal, Afghanistan Europe/Central Asia: Italy, Greece, UK, Germany, Spain, France, Norway, Austria, Czech Republic, Sweden, Cyprus, Turkey, Russia, Belarus, Poland, Bulgaria, Georgia, Ukraine, Kazakhstan, Serbia, Hungary, Uzbekistan, Croatia, Latvia, Bosnia, Slovakia, Israel MENA: Iran, Saudi Arabia, Jordan, Syria, Egypt, Lebanon, Libya, Iraq, Morocco, Algeria, Bahrain, Qatar, Yemen, Kuwait, Tunisia, UAE, Oman, Palestinian National Authority Sub-Saharan Africa: Angola, South Africa, Eritrea, Ethiopia, Nigeria, DRC, Zimbabwe, Uganda, Kenya, Rwanda, Tanzania, Cote d’Ivoire, Ghana, Somalia, Cameroon

Americas: Colombia, Brazil, Chile, Venezuela, Argentina, Mexico, USA