1. 1 Corruption and markets March 14 th 2013 Dr Robert Barrington Executive Director Transparency International UK

2. 2 Agenda Transparency International What is corruption? Where does it happen? Corruption and companies Global trends Discussion

3. 3 Transparency International

4. 4 Founded in 1993 Chapters in over 90 countries Specialist anti-corruption NGO

5. 5 TI National Chapters around the world

6. 6 Transparency International’s approach Zero tolerance Policy changes are built on sound research The legal framework is usually a necessary first step Corruption has victims Any bribery embeds corruption in the system But…pragmatic towards individual cases Fighting corruption often requires collective action to achieve systemic change

7. 7 TI definition of corruption ‘Corruption is the abuse of entrusted power for private gain’

8. 8 Bribery Grand corruption large bribes Facilitation payments GiftsHospitality Political donations Charitable contributions Agents Enhanced commission In-kind help & support Education & Training projects Employing of relatives Benefits & perks to relatives Off-sets How does bribe-paying happen?

9. 9 Victims of corruption $100 of development funding in Chad how much reaches the local health clinic? »$75? »$50? »$5? »$1? [source: Paul Collier – The Bottom Billion]

10. 10 How extensive is bribe-paying? Annual sum paid globally in bribes each year: £100 million? $1 billion? $100 billion? $1 trillion? [Source: World Bank Institute 2004]

11. 11 Where does it happen?

12. 12 Corruption Perceptions Index 2012

13. 13 Corruption Perceptions Index

14. 14 How extensive is bribe-paying? Global Corruption Barometer [Transparency International 2010]

15. 15 Corruption in the UK

16. 16 Corruption and companies

17. 17 Eurobarometer 26,856 EU citizens polled in September 2011 67% believe that corruption is part of their country's business culture (88% of respondents in Greece, Italy and Cyprus).

18. 18 Bribe payers’ Index Ranks 28 of world’s leading economies by perceived likelihood of companies to pay bribes abroad Survey of 3,000 business executives

19. 19 Which country’s companies pay bribes?

20. 20 TRAC report

21. 21 TRAC report

22. 22 TRAC report Survey of 105 companies globally Data to Oct 2011, publicly-available data Scored in 3 categories Statoil highest performing company Chinese and Japanese lowest performing Financial sector perform below average Several companies score well on anti-corruption systems Poor scores across the board on country-by-country reporting

23. 23 Global trends

24. 24

25. 25 Corruption - not just bribery Money laundering Other corrupt behaviours… Lobbying? Political financing? Facilitating abusive tax avoidance? Mis-selling? Exceeding society’s licence to operate?

26. 26 Global trends Rise of civil society – India, China, MENA Social media – open data Corporate transparency – Dodd-Frank, EU Directive Tax – secrecy jurisdictions Money laundering Government action – G8, G20, OGP, UNCAC

27. 27 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

28. 28 Discussion Are emerging market companies more corrupt? Can an ethical company compete with a bribe-paying company? Is there such a thing as good corruption?

29. 29 www.transparency.org