Tom Stocker: Vigilance required as bribery and corruption continue to grow
The publication of the 2022 edition of the Corruption Perceptions Index (CPI) highlights that the perceived risk of bribery and corruption in many countries has shown no improvement — and in some important markets such as the UK is unfortunately worsening — which highlights the need for businesses to remain focused on managing corruption risk, writes Tom Stocker.
Using a scale ranging from zero to 100, with zero meaning that the country is perceived to be highly corrupt and 100 meaning the country is considered very clean, the CPI ranks 180 countries and territories by the perceived levels of corruption in their public sector.
Published by Transparency International, the 2022 index shows corruption levels in 124 out of 180 countries are considered to have remained stagnant, while the number of countries considered in decline is increasing. In recent years, very few countries have improved their CPI score, while countries that have seen a decline in their scores include Austria, Azerbaijan, Canada, Indonesia, Oman, Malaysia, Myanmar, Pakistan, South Africa, Spain, UAE and the UK.
The UK’s score fell significantly from 78 in 2021 to 73 in 2022. This is lowest score the UK has received since the CPI rankings were revamped in 2012 and results in the UK dropping in the global anti-corruption rankings from 11th to 18th. According to Daniel Bruce, chief executive of Transparency International UK, the fall in the UK’s score “is a powerful indictment of a recent decline in government and controls over the use of taxpayer money”.
The CPI is a powerful tool because it is based on survey data of experts and business executives from eight independent sources, including the Economist Intelligence Unit and the World Economic Forum. A particularly striking finding is that 155 countries have either declined since 2012, or not made significant progress against corruption in a decade.
The CPI suggests that corruption will remain an issue that is a top priority risk area for companies to proactively deal with, and that in 2023 we may see the UK and other countries, which take these rankings seriously and as a marker of international credibility, tightening anti-bribery standards and enforcement with the objective of addressing their reduced rankings.
Recommendations that Transparency International made to help combat corruption include reinforcing checks and balances and the promotion of the principle of separation of powers; promoting and upholding the public’s right to access to information; limiting the influence of the private sector over governments by regulating lobbying and promoting transparency in decision-making; as well as combating transnational forms of corruption.
Many businesses conduct anti-bribery risk assessments or in response to specific developments. For UK businesses, the decline in the UK’s CPI score and the score of the countries in which they conduct business, will be a concern that needs reflected in their risk assessments.
Unfortunately, the scourge of corruption is not yet showing signs of real improvement and vigilance remains necessary.
Tom Stocker is a partner at Pinsent Masons