PPT Presentation: Corruption and Markets (Royal Holloway University, March 2013)

Corruption and markets March 14th 2013 Dr Robert Barrington Executive Director Transparency International UK

1

Agenda • • • • • •

Transparency International What is corruption?

Where does it happen?

Corruption and companies Global trends Discussion

2

Transparency International

3

Transparency International

• Founded in 1993 • Chapters in over 90 countries • Specialist anti-corruption NGO

4

TI National Chapters around the world

5

Transparency International’s approach • Zero tolerance • Policy changes are built on sound research • The legal framework is usually a necessary first step • Corruption has victims • Any bribery embeds corruption in the system • But…pragmatic towards individual cases • Fighting corruption often requires collective action to achieve systemic change

6

TI definition of corruption ‘Corruption is the abuse of entrusted power for private gain’

7

How does bribe-paying happen?

Grand corruption Off-sets

large bribes

Facilitation payments

Benefits & perks to relatives

Employing of relatives

Gifts

Hospitality

Bribery

Education & Training projects

Political donations

In-kind help & support

Charitable contributions

Enhanced commission

Agents

8

Victims of corruption • $100 of development funding in Chad • how much reaches the local health clinic? » » » »

$75? $50? $5? $1? [source: Paul Collier – The Bottom Billion]

9

How extensive is bribe-paying?

• Annual sum paid globally in bribes each year: • • • •

£100 million? $1 billion? $100 billion? $1 trillion?

[Source: World Bank Institute 2004] 10

Where does it happen?

11

Corruption Perceptions Index 2012

12

Corruption Perceptions Index

13

How extensive is bribe-paying?

Global Corruption Barometer

[Transparency International 2010]

14

Corruption in the UK

15

Corruption and companies

16

Eurobarometer • 26,856 EU citizens polled in September 2011 • 67% believe that corruption is part of their country's business culture (88% of respondents in Greece, Italy and Cyprus).

17

Bribe payers’ Index

•

•

Ranks 28 of world’s leading economies by perceived likelihood of companies to pay bribes abroad Survey of 3,000 business executives

18

Which country’s companies pay bribes?

19

TRAC report

20

TRAC report

21

TRAC report • Survey of 105 companies globally • Data to Oct 2011, publicly-available data • Scored in 3 categories • Statoil highest performing company • Chinese and Japanese lowest performing • Financial sector perform below average • Several companies score well on anti-corruption systems • Poor scores across the board on country-by-country reporting

22

Global trends

23

24

Corruption - not just bribery • Money laundering • Other corrupt behaviours…

• • • • •

Lobbying?

Political financing?

Facilitating abusive tax avoidance?

Mis-selling?

Exceeding society’s licence to operate?

25

Global trends Rise of civil society – India, China, MENA • Social media – open data • Corporate transparency – Dodd-Frank, EU Directive • Tax – secrecy jurisdictions • Money laundering • Government action – G8, G20, OGP, UNCAC

26

Global trends

The moral relativism that traditionally infects multinationals in hot, corrupt countries is going out of style.

Jonathan Guthrie, Financial Times HSBC exits Panama

27

Discussion • Are emerging market companies more corrupt?

• Can an ethical company compete with a bribe-paying company?

• Is there such a thing as good corruption?

28

www.transparency.org

29