Emerging market companies show low levels of transparency, allowing corruption to thrive

75 per cent of companies in Transparency International report score less than 5 out of 10 in transparency tests

Issued by Transparency International Secretariat



Translations: PT | ES


The vast majority of the world’s biggest emerging market companies have failed when it comes to transparency, creating an environment for corruption to thrive in their businesses and in the places they operate. A new report from Transparency International reveals an urgent need for these large multinational firms to do much more to stop corruption.

In the latest edition of Transparency in Corporate Reporting: Assessing Emerging Market Multinationals 100 of the fastest-growing companies based in 15 emerging market countries and operating in 185 countries around the world scored an average of 3.4 out of 10, where 0 is the least transparent and 10 is the most transparent. The average score fell slightly by 0.2 compared to the last time the survey was taken in 2013.

“Pathetic levels of transparency in big emerging market companies raises the question of just how much the private sector cares about stopping corruption, stopping poverty where they do business and reducing inequality. Time and again we see huge corruption scandals involving multinationals, such as Odebrecht Group or China Communications Construction Company, doing immense damage to local economies. Through adequate transparency and anti-corruption measures and will from the top this could have been prevented. Although many companies say they want to fight corruption, this is not enough. Action speaks louder than words,” said José Ugaz, Chair of Transparency International.

The seventy-five companies from BRICS countries (Brazil, Russia, India, China and South Africa) did no better, failing to beat the average score as poor-performing Chinese companies dragged the whole group lower. Companies from BRICS countries produce about 30 per cent of global GDP, giving them a clear obligation to take responsibility for their actions. 

Chinese companies, which account for a third of those assessed, had the weakest overall performance, scoring an average of 1.6 out of 10 with just one making it to the top 25. This again underscores the need for China and its business community to take immediate action to raise their standards. This is especially true in places like Africa where the Chinese government recently pledged to invest $60 billion, money that will likely be spent on services from Chinese companies.

The very weak Chinese results stem from weak or non-existent anti-corruption policies and procedures, or a clear failure to disclose them in line with international best practice. Regulation matters, as also the Indian case shows. Indian companies have the highest average score of any country – they all score 75 per cent or more – in organisational transparency largely due to the Companies Act.

Across emerging markets all companies need to do much more to pursue comprehensive public reporting to address corruption and provide the transparency that is the basis for robust and accountable governance.

Anti-corruption programs that keep a company from using bribery as a tool or provide ways for whistleblowers to report corruption without fear of retribution must be made publicly available to send a clear message to their customers, staff and partners that a company does not accept corrupt practices.

“Customers should demand the companies they patronize live up to the highest anti-corruption standards or risk losing their business,” Ugaz said.

Exhaustive lists of subsidiaries, affiliates, joint ventures and other entities must be easily accessible, allowing local stakeholders to understand the economic and social impact of multinational business in their societies and communities.

At the same time governments should implement strong anti-bribery laws, like the UK Bribery Act and enforce the laws, like the US does, as well as adopt rules for mandatory reporting on anti-corruption and company structures.


For any press enquiries please contact

Chris Sanders
T: +49 30 34 38 20 666
E: .(JavaScript must be enabled to view this email address)

Latest

Support Transparency International

The terrible consequences of police corruption in South Africa

What do we do when those mandated to protect us are serving other interests than public safety and security? In South Africa, police corruption leaves the public exposed to high rates of crime, and causes distrust of the police service while allowing crime to flourish.

Why do DRC citizens report such high levels of corruption?

People's experiences with corruption in the DRC are far worse than in most other African countries. Why is corruption so prevalent in the DRC, why is bribery so commonplace and why do two thirds of citizens feel powerless?

Is Mauritius at a tipping point in the fight against corruption?

According to the latest GCB for Africa, very few Mauritians who accessed public services, like health care and education, had to pay a bribe for those services. But given recent scandals, citizens still see certain groups and institutions as corrupt.

Protecting Africa’s wildlife from corruption

When they deliberate over amendments to the global wildlife trade regime, CoP18 must address impunity for illegal timber trafficking in Africa as a matter of high priority.

How the US can help Mongolia get to grips with corruption

A series of bi-lateral meetings and a proposed trade agreement present an opportunity for the US to promote rule of law and an independent judiciary in Mongolia.

Blood diamonds and land corruption in Sierra Leone

A community in Sierra Leone has created powerful short videos documenting their experiences of corruption, forced evictions and a botched resettlement programme at the hands of a multinational diamond mining company.

Countries must be more transparent when investigating transnational corruption

Supervisory and justice systems should be transparent and accountable so that the public can assess their performance.

Resilient institutions

Reducing corruption is an important component of the sustainable development agenda, and one that all state parties have an obligation to address. Although corruption is often thought of as a ‘third-world problem’, institutions in the Global North play an important role in the corruption cycle, and are therefore an essential part of the solutions.

In whose interest? Political integrity and corruption in Africa

What accounts for the wide disparity in peoples’ perceptions of the integrity of elected representatives in different countries? In this piece, we will to look at various forms of political corruption, how they manifest in African countries and what can be done to promote political integrity.

Cidadãos opinam sobre a corrupção em África

A décima edição do Barómetro Global de Corrupção (GCB) – África revela que embora a maioria das pessoas na África acreditem que os níveis de corrupção aumentaram no seu país, elas também se sentem otimistas, pois acreditam que os cidadãos podem fazer a diferença no combate à corrupção.

Social Media

Follow us on Social Media