Time has come for emerging market companies to fight corruption

Study highlights major gaps in anti-corruption reporting by emerging market multinationals

Issued by Transparency International Secretariat



Translations: ZH | AR | RU | ES | PT


Rapidly-expanding companies in emerging economies such as China and India must become more publicly accountable, anti-corruption group Transparency International said today.

The 52-page report, Transparency in Corporate Reporting: Assessing Emerging Market Multinationals, scored 100 of the fastest-growing, companies based in 16 emerging markets.

Three quarters of the emerging market companies scored less than 5 out of 10, where 0 is the least transparent and 10 is the most transparent. Scores were based on publicly available information about anti-corruption measures, transparency in reporting, on how the companies structure themselves and the amount of financial information they provide for each country they operate in.

Chinese companies, which account for more than a third of the assessed companies, had the weakest overall performance among the BRICS (Brazil, Russia, India, China and South Africa) countries, highlighting the need for China and its business community to take immediate action to raise their standards.

“The time has come for emerging markets to play their part in the global fight against corruption,” said Transparency International chair Huguette Labelle. “As emerging market companies expand their influence they should seize the opportunity to play a bigger role stopping corruption internationally.”

Publication of corporate anti-bribery measures should become standard

Emerging market companies should communicate to the public what they are doing to prevent corruption and their relations with governments, Transparency International said. The study shows that about 60 per cent of the companies evaluated do not even disclose information about political contributions.

Furthermore, governments in emerging markets should pass new laws obliging companies to publish what they pay to governments in every country where they operate, Transparency International said.

The report points out that publicly-listed companies performed better than state-owned and privately-held companies, illustrating the positive impact on transparency of the disclosure requirements imposed on publicly-traded companies. 

Thanks to national laws obliging publication of key financial information on their subsidiaries, Indian firms perform best in the BRICS with a result of 5.4 out of a maximum of 10. In country-by-country reporting, Indian firms scored 29 per cent, compared to 9 per cent on average and 1 per cent in China. Last year, in a similar study conducted by Transparency International, the world’s 105 largest global companies scored 4 per cent.

“Businesses operating globally without transparency risk damaging their brand and losing the trust of local communities,” said Labelle. “People have a right to know what multinationals pay their government and how much taxes they pay.”

Seventy-five of the 100 companies in the report come from the BRICS, which have contributed 50 per cent of world growth since the crisis.

The full report is available on: 

http://transparency.org/news/feature/emerging_market_multinational_companies_ready_for_prime_time 

Background:

Transparency International released similar reports on the world’s largest 105 companies in 2012 and the oil and gas sector in 2011.

###

Transparency International is the global civil society organisation leading the fight against corruption

For daily global anti-corruption updates follow us on Twitter at http://www.twitter.com/anticorruption or on Facebook at http://www.facebook.com/transparencyinternational


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

Risky business: Europe’s golden visa programmes

Are EU Member States accepting too much risk in their investor migration schemes?

Future Against Corruption Award 2018

TI is calling on young people across the globe to join the anti-corruption movement. People between the age of 18 and 35 are invited to submit a short video clip presenting their idea on new ways to fight corruption. Three finalists will be invited to Berlin during the International Anti-Corruption Day festivities to be awarded with the Future Against Corruption Award. Apply today!

The Azerbaijani Laundromat one year on: has justice been served?

In September last year, a massive leak of bank records from 2012 to 2014 showed that the ruling elite of Azerbaijan ran a $3 billion slush fund and an international money laundering scheme. One year on, has enough been done to hold those involved to account?

Right to information: knowledge is power

The right to information is vital for preventing corruption. When citizens can access key facts and data from governments, it is more difficult to hide abuses of power and other illegal activities - governments can be held accountable.

Paradise lost among Maldives dodgy land deals

Should tourists run for cover as a storm of corruption allegations sweeps across the Maldives?

Foreign bribery rages unchecked in over half of global trade

There are many losers and few winners when companies bribe foreign public officials to win lucrative overseas contracts. In prioritising profits over principles, governments in most major exporting countries fail to prosecute companies flouting laws criminalising foreign bribery.

Ensuring that climate funds reach those in need

As climate change creates huge ecological and economic damage, more and more money is being given to at-risk countries to help them prevent it and adapt to its effects. But poorly governed climate finance can be diverted into private bank accounts and vanity projects, often leading to damaging effects.

Social Media

Follow us on Social Media