The Defence Companies Anti-Corruption Index 2015 paints a worrying picture of corporate practices that in many cases simply do not go far enough to support fair and transparent dealings in the arms sector. It is also noteworthy that the split between good and poor performers in the report is not clearly delineated along geographic lines – for example US-based arms manufacturers appeared in both the top and bottom bands measuring the strength of companies' internal anti-corruption policies.
Transparency International recommendations for the UK MOD
In addition to the clear evidence of corporate shortcomings in tackling defence sector corruption, Transparency International's 2013 Government Defence Anti-Corruption Index provides equally strong evidence that governmental establishments could be doing more to address corruption risk.
The 2013 Index placed the UK in Band B (on a sliding scale from A to F). While this rates the risk of corruption evident within the UK defence establishment as "low risk", it falls short of meeting the standards required to be considered "very low risk".
Building Integrity in UK Defence
With this in mind, a subsequent Transparency International policy paper, Building Integrity in UK Defence, made the following recommendations to the Ministry of Defence:
A corporate perspective
While Transparency International's Building Integrity in UK Defence paper is aimed at government, rather than business, it provides an exemplary framework for the implementation of strong anti-corruption policies and practices within defence sector companies.
Arms deals are already subject to anti-corruption legislation such as the UK Bribery Act 2010, the Foreign Corrupt Practices Act (FCPA) in the United States, and similar laws which cover international trade. However, if companies are to take steps to address corruption risk, they must be prepared to go beyond tick-box regulatory compliance and make positive changes in attitudes towards due diligence and risk assessment.
Key aspects of Transparency International's recommendations, such as implementing a formal anti-corruption policy and establishing who is responsible for monitoring corruption risk, could equally be applied within the corporate structure of any defence company – and would contribute to minimising that firm's exposure to the very real financial, regulatory and reputational risks associated with corruption.
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