GoodCorporation welcomes anti-corruption study

Corruption in the defence sector costs an estimated $20bn per annum. So Transparency International’s (TI) findings that two thirds of the world’s largest defence companies do not provide enough evidence of the steps they take to combat corruption is of real concern.

Mark Pymen, head of defence at TI and the lead author of the study, is right to say that the degree to which a company is willing to publish details of its anti-corruption safeguards is directly linked to the effectiveness of its anti-corruption effort.

Indeed, in its guidance on the UK Bribery Act, the Ministry of Justice states that “top level management commitment to bribery prevention is likely to include communication of the organisation’s anti-corruption stance.”

However, this is only step one. What is especially worrying about this report, particularly in a sector that has repeatedly and regularly faced charges of corruption, is that developing and publishing anti-corruption safeguards and policies is the easy bit. The real test of a robust anti-bribery and corruption (ABC) programme is the effectiveness of its implementation.

It is also worth noting that the report makes no reference to facilitation payments. These have always been illegal under UK law and remain so under the Bribery Act. The defence sector is particularly exposed to risks from such payments and independent research by GoodCorporation has revealed that 80 per cent of UK defence companies signed up to the UK Defence Industry Anti-Corruption forum have no published statement on facilitation payments.

From the work we do, including assessments in the defence sector, we know that there is often a gap between policy and actual practice.  In addition to developing anti-bribery practices and communicating a zero tolerance towards corruption, companies need to carry out regular checks to see how their ABC programme is actually working on the ground. 

Without this comprehensive level of knowledge, organisations cannot be sure that they have sufficient anti-bribery safeguards.  More importantly, without measuring the effectiveness of such a programme, they are unlikely to be able to demonstrate that adequate procedures have been put in place prevent corruption – the only defence if charged with failing to prevent bribery, the new corporate offence introduced by the UK Bribery Act 2012.

What is also worrying is the divide between large and small organisations. Here, as in other sectors, we have observed that large organisations, are more likely to have the resources to develop and manage the necessary practices and procedures to prevent corruption.  Many smaller organisations are finding this much harder, as they simply don’t have the resources to take adequate safeguards and could find themselves very exposed.

GoodCorporation is already working with a number of companies to develop robust Anti-Bribery and Corruption procedures. Transparency International’s anti-corruption index is a welcome initiative which could have a significant impact on raising ethical standards in the defence sector. We hope to see it embraced by the sector as a whole, with companies seeking to improve their grading year on year.