Transparency International releases Corruption Perceptions Index 2016

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Transparency International (TI), the international non-governmental organisation that monitors corruption around the world, published its latest annual Corruption Perceptions Index (CPI), for 2016, on 25 January 2017.

Defining corruption as “the misuse of public power for private benefit”, the CPI currently ranks 176 countries by their perceived levels of corruption on a scale from 100 (very clean) to 0 (highly corrupt). The final report, which has been published every year since 1995, is determined using data from a number of different sources measuring the perceptions of businesspeople and country experts of the level of corruption in the public sector.

The results are not encouraging. Over the last 12 months, more countries’ scores have declined than improved, compared with figures for the preceding year. Last year’s CPI struck a more optimistic note, with a greater number of countries improving, rather than deteriorating, their perceived corruption levels. Over two-thirds (69%) of the 176 countries and territories in this year’s CPI fall below the midpoint of 50 out of 100. The global average score is only 43. Top-scoring countries are far outnumbered by the poorer performing ones.

Denmark and New Zealand top the rankings, with a score of 90 each, closely followed by Finland (89) and Sweden (88). The UK holds the same position as last year, ranked 10th (81) along with Luxembourg. Denmark topped the rankings in 2015 also.

For the 10th year running, Somalia is the worst performer, scoring only 10 points, followed by South Sudan (11) and North Korea (12). Countries in the Middle East experiencing war and political turmoil are among those that registered the most substantial drops this year, with Syria (13) and Yemen (14) falling to the bottom of the rankings.

Qatar (61) has suffered the biggest fall in the rankings, dropping 10 points below its score of 2015. Other countries worth noting are Greece (44), China (40), Liberia (37), Iran (29), and Nigeria (28). The Iranian ranking will be particularly significant for those looking to do business with Iran following the recent easing of international sanctions.

According to TI, people in the lower-ranked countries frequently face situations of bribery and extortion, with common occurrences of misappropriation of funds and ineffective enforcement authorities. While higher-ranked countries tend to have stronger standards of integrity for public officials and independent judicial systems, they are not entirely immune from corrupt transactions and behaviour and are cautioned by TI against being too complacent. The bottom line is that no country got close to a perfect score.

The increase in global corruption has resulted in an increase in recent years in international anti-bribery legislation and cross-border cooperation on enforcement. Indeed, some of the largest cases of suspected bribery and corruption have involved several enforcement agencies working together; for example, in January 2017, the UK, Brazilian and US authorities all levied huge fines on Rolls Royce for corrupt practices worldwide.

With the proliferation of international anti-bribery and anti-corruption laws and more rigorous enforcement regimes world-wide, getting compliance right across a range of jurisdictions has become more important than ever. Corporates should ensure they have a robust compliance regime in place to avoid potential exposure to bribery and corrupt practices within their organisation or by those acting on their behalf. Such practices can lead to heavy fines and even criminal prosecution for a corporate in certain cases. Where necessary, legal advice should be taken in relation to current compliance procedures and recommendations for improvement.

The full CPI 2016 can be downloaded from TI’s website here.

 

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