Transparency and anti-corruption

These resource pages provide an introduction and brief overview of the subject of bribery, corruption and transparency. They also give information and further links to various governments, NGOs, industries and companies which are taking action and initiative in these areas.

Corruption is the lack of integrity or honesty, often associated with bribery, through the use of a position of trust for dishonest gain.

Bribery and corruption are globalised ethical issues which have a massive impact on both developing and developed countries. The globalisation of business has lead to many multinational and international organisations investing in some of the most corrupt countries in the world (according to Transparency International’s index) therefore making it a worldwide issue that has serious implications for individuals, business and government relations.

Additionally, corruption remains a serious problem for companies operating in parts of the world where corruption is a day-to-day factor; it is incorporated into business activities across regions, sectors and industries.  The Governance Director from the World Bank Institute, David Kaufman, identified that “bribery has become a $1 trillion industry” (Source: www.unglobalcompact.org).

Transparency International (TI) is a global civil society organisation and a leading NGO addressing corruption. In 2008 they ranked 180 countries to develop the Corruption Perception ranking (see Figure 1). Through a system of colour coding the TI Index ranges from 0 (highly corrupt) to 10 (highly clean). What is immediately obvious is that the lowest scores, indicated by the darker colours (red and brown) are mainly represented by lower income countries, where poverty remains a major concern. 

Figure 1: TI’s Corruption Perception Index 2008

 
Online at: Transparency International [Accessed on 13/10/09]

0-5: According to the above figure, the African continent is an area where corruption and bribery obtain a significant proportion of business transactions, spanning across a wide array of industries and sectors, e.g. from construction to agriculture. Within Africa, the water sector is continuously under threat from embezzlement, bribery and the misuse and manipulation of power from major stakeholders. As a result, these major issues are continuing to threaten and harm poor communities, fair business practice, sustainable development, good governance, democracy and the fibres of our society.

Similarly, in Burma, where there is a strong military dictatorship, corruption and bribery is high, therefore the EU are banning investment and stopping the import of many resources, e.g. timber and metals [Source: http://www.ethicalconsumer.org/]. The reason for this is because the military are using outside investment to fund their military regime. Many businesses in Burma have suffered consumer boycotts, owing to their direct and indirect influence on Burma’s regimes.

7-10: Comparatively, the highest scorers in Figure 1 are predominately the wealthiest countries where they can take greater responsibility. Denmark are ranked 1^st in the Corruption Perception Index by TI in 2008. The President and Chief Executive Officer for Novo Nordisk in Denmark, Lars Reiben Sorensen, stated "There is no business which is so important that we will jeopardise our business ethics".

In recent years the fight against corruption and bribery has gained great momentum, with the introduction of many new statutory bodies, codes, principles, standards and supportive intergovernmental instruments. These are aimed towards improving the behaviour of corporations, sectors and industries, and governments all over the world. The areas below explore the issues, cases and link to further resources. 

1. How does corruption affect sustainable business? 
2. Why should business fight corruption? 
3. International NGOs and business initatives 
4. Case studies 
5. Standards 

(Version 4, produced January 2010)

How does corruption affect sustainable business?

Corruption has a negative impact on organisations' ability to make a postive contribution to sustainable development, and is evidence of poor governance and dishonest business practices.  Corruption is not only defined by unfair behaviour between organisations, but it also threatens the integral sphere of the business, including the community, employees, shareholders, business partners, suppliers and the environment.  Organisations that are striving to uphold their social responsibility, maintain strong relationships with their stakeholders and uphold their reputation must figh corruption in all its forms.

Why should business fight corruption?

1. To maintain a good reputation
2. To avoid damaging consumer boycotts and NGO pressure 
3. To avoid the cost of cleaning up corrupt practices
4. To avoid legal risks connected to illegal practices
5. To help to solve global poverty and extreme deprivation
6. To assist organisations to become better corporate citizens 
7. To enable organisations to have more freedom from governmental intervention

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