Leading defence firms ‘not transparent enough’: study

By on Monday, October 8th, 2012

A large majority of the world’s biggest defence companies do not provide enough evidence that they adequately prevent corruption, campaigners Transparency International UK said in a study on Thursday.

The pressure group analysed the top 129 global defence firms and has published its Defence Companies Anti-Corruption Index, which grades from A-F how effectively companies combat corruption.

Almost two thirds, or 85 companies out of 129, were judged to have inadequate information available on their anti-corruption policies, and scored the bottom grades of D, E or F.

“Two-thirds of the world’s biggest defence companies do not provide enough public evidence about how they fight corruption,” Transparency International UK said in a statement.

“This includes companies from all of the ten largest arms exporting nations like USA, Russia, Germany, France, the UK and China — who between them are responsible for over 90 per cent of the arms sales around the world.”

Those registering the bottom F grade included Abu Dhabi Shipbuilding, Aviation Industry Corporation of China, French arms manufacturer Nexter, Israel Military Industries and Kawasaki Heavy Industries.

French aerospace group Dassault Aviation, Japan’s Mitsubishi Electric Corporation, and US naval defence group DCNS were among companies which scored an E grade.

Nearly half of companies, or 60 firms out of 129, scored the worst grades E and F, meaning that they had very little or no evidence of having basic systems in place to prevent corruption and instil strong ethical values.

“Corruption in defence is dangerous, divisive and wasteful. The cost is paid by everyone,” said Mark Pyman, author of the study and director of Transparency International UK’s defence and security programme.

“Governments and taxpayers do not get value for their money and clean companies lose business to corrupt companies. Money wasted on defence corruption could be better spent.”

The campaign group estimated that the global cost of corruption in the defence sector was a “minimum” of $20 billion (15 billion euros) per year, and cited data from the World Bank and the Stockholm International Peace Research Institute.

Transparency added that just ten companies scored in the top two bands — A and B — meaning that they have publicly demonstrated in considerable detail the systems and procedures that they have in place to prevent corruption.

Those ten companies included Britain’s BAE Systems, France’s Thales, Japan’s Fujitsu and US groups Northrop Grumman and United Technologies.

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