Executive Director, Transparency International UK Corruption IMLPO February 28th 2013 Robert Barrington Executive Director, Transparency International UK

Agenda Is corruption still a problem? Shining a light on grey areas Best practice Global corruption trends

Is corruption still a problem? Corruption Perceptions Index 2012

Corruption Perceptions Index

Corruption Perceptions Index

Global Corruption Barometer [Transparency International 2010] Where are bribes paid? Global Corruption Barometer [Transparency International 2010]

Shining a light on grey areas Four areas where adequate procedures are inadequate

Grey area 1: Governance ‘Tone from the Top’ What is good anti-corruption governance? What it is not…what we can learn from the banking crisis Low board priority Lack of board responsibility Unclear reporting lines Poor response to whistleblowing Perverse remuneration incentives Skimping on resources

Grey area 2: Risk assessment Foundation of a good procedure Conducted at too high a level… Failing to capture the real risks Little buy-in for complex assessment Not linking with existing procedures

Grey area 3: Due Diligence Flows from governance and risk assessment How far should it go? Suppliers, agents, targets, partners What have we learnt? The highest risk area is agents Know who they are Know who you can trust Don’t rely on contractual provisions – but don’t do without them Liability can no longer be outsourced

Grey area 4: Facilitation payments What are they? Do they matter? Can they realistically be stopped? Is there an acceptable transition period? Will they be driven underground?

What is best practice?

What is best practice?

How well are companies doing?

TRAC report Survey of 105 companies globally Publicly-available data Scored in 3 categories anti-corruption systems organisational transparency country-by-country reporting Maximum 23 points

TRAC report

TRAC report – Financial Services

TRAC report – Financial Services

Global Corruption Trends

Corruption - not just bribery Money laundering Other corrupt behaviours… Lobbying? Political financing? Facilitating abusive tax avoidance? Mis-selling? Exceeding society’s licence to operate?

Global trends Legal framework and enforcement Rise of civil society – India, China, MENA Social media – open data Corporate transparency – Dodd-Frank, EU Directive Tax – secrecy jurisdictions Government action – G8, G20, OGP, UNCAC Money laundering – systemic questions 21 21

Global trends The moral relativism that traditionally infects multinationals in hot, corrupt countries is going out of style. Jonathan Guthrie, Financial Times HSBC exits Panama 22 22

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