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