TI PUBLISHES CORRUPTION PERCEPTIONS INDEX 2012

10 Dec 2012

Transparency International (TI) published the Corruption Perceptions Index 2012 (CPI).The CPI, originally launched in 1995, ranks countries according to how corrupt their public sector is perceived to be. The index is compiled using a combination of polls drawing on corruption-related data and also reflects the views of observers from around the world. TI has amended the way that the results are shown so that countries are now given a score between 0 and 100 (with 0 being highly corrupt and 100 being very clean). A total of 176 were rated by TI. Below we draw out some of the more interesting results from the CPI generally, before focussing in more detail on the CPI’s assessment of perceived corruption in the UK.

General observations by TI

• Two thirds of the countries rated scored below 50 in the CPI, highlighting a need for more to be done to make public institutions in those countries more transparent and accountable.
• Denmark, Finland and New Zealand tie for first place in the CPI (each scoring 90 points) – TI particularly emphasised good access to information systems and strong rules governing the behaviour of those in public offices in these jurisdictions.
• Afghanistan, North Korea and Somalia tied for final place in the CPI (each scoring 8 points). The CPI particularly highlighted the lack of accountable leadership and lack of effective public institutions as areas of concerns.
• Countries that have suffered most in the Eurozone financial crisis underperformed quite significantly – TI has previously warned that European countries should use the financial crisis as an opportunity to tackle the risk of corruption in the public sector. The lowest-ranked EU countries were Greece, Bulgaria and Italy.
• The Arab Spring has not necessarily resulted in the reforms that might have been hoped for – TI concluded that genuine and transparent political reforms have not taken place since the democratic elections that followed the respective revolutions. Egypt’s ranking in the CPI dropped significantly to equal 118th.

What the CPI says about the UK?

The UK was ranked equal 17th with Japan (scoring 74). This is marginally worse than the 2011 CPI where the UK was equal 16th. What is perhaps of more interest and note than the figures is TI’s on UK press release which concludes that political scandals are hindering the UK in its fight against corruption.

In particular, TI singles out:

• lobbying of politicians by those who allegedly buy access in order to influence legislation, budget priorities or other relevant policy decisions;
• the relationship between government and business; and
• the funding of political parties.

Each of these areas has previously been highlighted by TI in reports and briefings (linked to above). The general perception of the UK is summed up by Chandu Krishnan, Executive Director of TI UK, who is quoted as saying that, despite the Bribery Act, “the UK continues to be more vulnerable to corruption than the political establishment is willing to admit…”. Mr Krishnan argues that the “steady stream of political scandals” shows a complacency at the heart of UK politics.

Implications for industry

The CPI is, without doubt, a useful tool, although it remains a measure of the perception of corruption – not a measure of corruption itself – and, as such, incorporates an inevitable element of subjectivity.
Companies have always had to be aware of the risks and dynamics in the countries in which they operate, and the introduction of the Bribery Act has thrown this into sharper relief. The new CPI will doubtless continue to be widely used by companies as part of their ‘adequate procedures’. On a practical note, those that have adapted risk assessment scoring systems (for example, in relation to the appointment of representatives) that reference the old TI CPI scale will need to adjust their scoring to reflect the new 0-100 scale.