The fight against corruption hits the headlines by Transparency International 11:37am 22nd Dec, 2012   At the World Economic Forum, Transparency International chair Huguette Labelle highlights that the long-running global financial crisis is also a crisis of governance and leadership.    With the richest 8 per cent of the world population owning 82.4 per cent of global wealth, it is high time for a renewed focus on inclusive, stable growth and a sharper focus on stopping the damaging effects of corruption on people and societies.    We need to go beyond personal or institutional agendas to find smart solutions that meet common challenges: economic crisis, financial instability, climate change, poverty, conflict and corruption.    These challenges share a common cause – humanity’s unsustainable practices.    We must not forget that the UN projects over one billion people will live on an income under US$1.25 in 2015, at which point we have to start working on new development goals replacing those set at the beginning of this millennium. Will we be more ambitious now, or less?    If we are to create inclusive and stable growth, higher employment and lasting poverty reduction, it must be on different terms than our current way of doing business.    We need to change the way we do business by implementing the standards agreed in the last decade such as the UN Global Compact. Still, future prosperity will always be undermined by corruption, excessive risk-taking, a lack of transparency and other unethical practices.    Only a more ambitious change of mindset among CEOs and their regulators will begin to defeat these troubles.    We do have models for more sustainable business practice. A number of industry leaders are aware of the risks and the costs of unsustainable business practices that are a barrier to economic recovery.    Furthermore, nine of the world’s ten fastest growing economies score less than 40 out of 100 on the Corruption Perceptions Index 2012, a serious warning sign of systemic public sector corruption that reveals a deep antipathy towards the fight against bribery, secret dealings and abuses of power in countries where resources are massive.    A number of recent initiatives, such as the Partnering Against Corruption Initiative. the Financial Action Task Force, the Financial Stability Board, the OECD and others have taken some important steps to make key areas of the economy more transparent and better regulated.    Our challenge is to ensure that the models for better business impacts on societies, supply chains, environments and each other are applied from the board room right to the front line.    Some business are beginning to take compliance with these models more seriously. As several huge foreign bribery scandals in 2012 have shown, compliance has gone from being a legal box for one staff member to tick, to a key part of a successful company doing business.    Trust in business is still low. When business stories made headlines in 2012, the stories tended to concern tax avoidance, market manipulation, bribery or dodgy mortgages.    Two in three Europeans, for example, believe that corruption is part of their country’s business culture.    Companies do have the potential to impact societies more positively, but the great question for the next few years is: will they be more transparent about their impact on societies where they operate?    Through their supply chains, tax payments, political contributions, salaries, royalty payments, factories and suppliers they run and hire, companies have myriad impacts on communities.    The last decade has seen some progress in the disclosure of supply chains. However, only half of major companies disclose or ban political contributions and 85 do not disclose income tax in any country of foreign operations.    Stories continue to emerge of companies that expanded into foreign markets with bribes, and of countries that are not feeling the benefits of natural resources exploited in their country.    The onus is now very much on companies to publish what they pay to governments, country-by-country, and project-by-project.    Legislation in the United States and the European Union is intended to make this disclosure obligatory for oil, gas and mining companies, but all companies should proactively seek this level of transparency.    December 2012    A growing outcry over corrupt governments forced several leaders from office last year, but as the dust has cleared it has become apparent that the levels of bribery, abuse of power and secret dealings are still very high in many countries. Transparency International’s Corruption Perceptions Index 2012 shows corruption continues to ravage societies around the world.    Two thirds of the 176 countries ranked in the 2012 index score below 50, on a scale from 0 (perceived to be highly corrupt) to 100 (perceived to be very clean), showing that public institutions need to be more transparent, and powerful officials more accountable.    “Governments need to integrate anti-corruption actions into all public decision-making. Priorities include better rules on lobbying and political financing, making public spending and contracting more transparent and making public bodies more accountable to people,” said Huguette Labelle, the Chair of Transparency International.    “After a year of focus on corruption, we expect governments to take a tougher stance against the abuse of power. The Corruption Perceptions Index 2012 results demonstrate that societies continue to pay the high cost of corruption,” Labelle said.    Many of the countries where citizens challenged their leaders to stop corruption –from the Middle East to Asia to Europe – have seen their positions in the index stagnate or worsen. In the Corruption Perceptions Index 2012 Denmark, Finland and New Zealand tie for first place with scores of 90, helped by strong access to information systems and rules governing the behaviour of those in public positions.    Afghanistan, North Korea and Somalia once again cling to the bottom rung of the index. In these countries the lack of accountable leadership and effective public institutions underscore the need to take a much stronger stance against corruption.    Underperformers in the Corruption Perceptions Index 2012 also include China, Russia and the Eurozone countries most affected by the financial and economic crisis. Transparency International has consistently warned Europe to address corruption risks in the public sector to tackle the financial crisis, calling for strengthened efforts to corruption-proof public institutions.    “Corruption is the world’s most talked about problem,” stated Cobus de Swardt, Managing Director of Transparency International. “The world’s leading economies should lead by example, making sure that their institutions are fully transparent and their leaders are held accountable. This is crucial since their institutions play a significant role in preventing corruption from flourishing globally,” de Swardt said.    * Corruption Perceptions Index: http://www.transparency.org/cpi2012    Oct 2012    Greed, reckless behaviour and the financial crisis: a timeline.    Four years on from the collapse of Lehman Brothers and its devastating fall-out, we look at how weak oversight and a lack of transparency contributed to the financial crisis. This crisis was not just the result of a few rogue traders placing reckless bets. Corruption, in the form of fraud and a ‘no holds barred’ pursuit of profits, bonuses and growth, infected the whole financial system.    Transparency International believes that not enough has been done to change the culture of greed and reckless risk-taking. The collapse of MF Global, the huge trading losses suffered by JPMorgan Chase and the ever-expanding LIBOR scandal are witness to that. The financial system is still highly opaque, riddled with skewed incentives and dominated by “too-big-to-fail” institutions.    These are precisely the conditions that allow corruption to flourish. To counter this, we need more transparent and accountable financial institutions that are responsive to the needs of consumers, investors and the wider economy. The freedoms that the financial sector has enjoyed under the banner of deregulation have too often served the financial elite.    The challenge to policy-makers and civil society is to ensure that the current wave of “re-regulation” serves the greater public interest – otherwise the privatisation of gains and socialisation of losses that were the hallmark of the financial crisis could occur again and again. We are not there yet.    The following selective timeline highlights key moments in the past two decades when lapses in accountability caused financial havoc. Could this all happen again?    http://www.transparency.org/news/features    Whistleblowers - disclosing wrongdoing benefits the public good.    Corruption often goes unchallenged when people do not speak out about it. Witness accounts offer invaluable insights into corruption, and are powerful tools in the fight against it.    From exposing multi-million dollar financial scams to dangerous medical practices, whistleblowers play a crucial role in saving resources and even lives.    But in some countries, blowing the whistle can carry high personal risk – particularly when there is little legal protection against dismissal, humiliation or even physical abuse. Controls on information, libel and defamation laws, and inadequate investigation of whistleblowers’ claims can all deter people from speaking out.    Whistleblowers are less likely to report workplace misconduct when their employers do not provide clear internal reporting channels. And in some settings, whistleblowing carries connotations of betrayal rather than being seen as a benefit to the public. Ultimately, societies, institutions and citizens lose out when there is no one willing to cry foul in the face of corruption.    Whistleblowers are invaluable in exposing corruption, fraud and mismanagement. Early disclosure of wrongdoing or the risk of wrongdoing can protect human rights, help to save lives and preserve the rule of law.    Safeguards also protect and encourage people willing to take the risk of speaking out about corruption.    We must push countries to introduce comprehensive whistleblower legislation to protect those that speak out and ensure that their claims are properly investigated.    Companies, public bodies and non-profit organisations should introduce mechanisms for internal reporting. And workplace reprisals against whistleblowers should be seen as another form of corruption.    Public education is also essential to de-stigmatise whistleblowing, so that citizens understand how disclosing wrongdoing benefits the public good.    When witnesses of corruption are confident about their ability to report it, corrupt individuals cannot hide behind the wall of silence.    http://www.transparency.org/topic/detail/whistleblowing    July 2012    It was the year when the fight against corruption hit the headlines, and stayed there.    In 2011, demonstrations unfurled across the world – from the Middle East to Wall Street – demanding leadership that was accountable, fair and just. Calls for financial transparency grew, as instability continued to rock global markets, and corruption scandals emerged from international corporations. And the drive for open government took on new momentum, propelled by rapid developments in mobile technology.    Transparency International is active in more than 100 countries, and our Annual Report provides a snapshot of how we tackled corruption in 2011.    Russia has slumped from 46th place in 1996 to 143rd in 2011, according to perceived levels of corruption. http://transparency.org.ru/en/    From sports cars seized in Paris to the fight for transparency in climate finance, it’s a record of how we grew, how we developed.    Our activities, like our movement, were diverse. We engaged the youth in the fight against corruption – from an international summer school in Lithuania to student competitions in Palestine – and called on global leaders to end impunity for asset theft.    We work to help safeguarded billions of dollars of public money through integrity pacts in procurement, and helped communities develop new techniques to uphold their rights.    Underpinning all of these efforts was our vision: a world in which politics, business, civil society and the daily lives of people are free of corruption.    When we talk about corruption in terms of statistics, it’s easy to forget the human cost of abused power. Behind every fact or figure are real people, forced to live without the services, opportunities and rights they deserve.    All too often, these stories remain hidden – silenced through threats and intimidation, or drowned out by louder, more powerful voices.    But with the right help, people can and do speak out. From rural villages to global cities, we work around the world to help people break the silence and stand up against corruption.    Access the report via the link below.    http://www.transparency.org/news/feature/annual_report_2011 Visit the related web page
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