Our key takeaway: The scale of corruption is huge, and is unchanged or worsening. According to Transparency International, more countries have seen a decline in their corruption score. Only eight countries have significantly improved their scores in the past five years, and 10 countries have dropped significantly, including high-ranking countries such as Austria, Luxembourg and the United Kingdom. Corruption has a number of negative knock-on effects: it fuels conflict, it threatens peace and security; it undermines defence and security institutions, it erodes state legitimacy; and it hinders governments’ ability to guarantee the safety and security of their populations. In this context, companies have a critical role to play: they can monitor corruption risk levels in the countries that they operate in; they can ensure their own systems and governance structures are transparent; they can use their leverage to encourage governments to tackle corruption; and they can create an environment which welcomes civic action and democratic decision-making.
Transparency International published its Corruption Perceptions Index for 2022 (January 2023) which scores 180 countries according to perceived levels of public sector corruption:
- The scale of corruption is huge, and is unchanged or worsening: The report highlights that corruption remains stagnant on a global scale: “[T]he global average remains unchanged at a score of 43 out of 100 for the eleventh year running, and more than two-thirds of countries (68 per cent) score below 50”, with 100 and 0 scoring very clean and highly corrupt on the corruption index, respectively. Comparatively, more countries have seen a decline in their corruption score: “In the past five years, only eight countries have significantly improved their scores, and 10 countries have dropped significantly, including high-ranking countries such as Austria, Luxembourg and the United Kingdom.” All this is to say that corruption remains unchanged or worsening in some countries, which will only intensify the effects of multiple crises such as Covid-19, climate change and growing security threats.
- The link between corruption and adverse human rights impacts: The report makes clear that higher levels of corruption fuels conflict and threatens peace and security: “Corruption generates new grievances in society, or drives existing ones, by undermining defence and security institutions, and by eroding state legitimacy.” Additionally, high levels of corruption will adversely affect governments’ ability to protect citizens and their wellbeing: “Countries with low CPI scores tend to experience more violent threats, and be worse at dealing with them and guaranteeing the safety and security of their populations.” On the flip side, low levels of corruption create a more resilient environment against risks: “Countries with high CPI scores are more resilient to the threats posed by organised criminal groups.”
- Companies have a crucial role in combatting corruption: There are key actions that companies can take to ensure they are playing a role to support governments in combatting corruption and in fulfilling their own responsibility to respect human rights. This includes participating in public decision-making: “Governments must open up space to include the public in decision-making – from activists and business owners to marginalised communities and young people”, as well as voicing concerns if participatory processes lack transparency. “In democratic societies, the people can raise their voices to help root out corruption and demand a safer world for us all.” The private sector can have a unique role to play in ensuring that spaces where activists and defenders speak out are protected, whether via respecting freedom of association and collective bargaining, or committing to respect the rights of human rights and environmental defenders. Two additional recommendations for government include: “[G]overnments should limit private influence by regulating lobbying and promoting open access to decision-making [and] combat transnational forms of corruption.” Companies have a clear role to play in understanding how their own lobbying and government relations practices may suppress the ability to combat corruption, as well as lessons on increasing transparency for how they engage with governments and industry associations that lobby on behalf of corporate sectors.