Transparency International (TI) has published the Corruption Perceptions Index 2013 (CPI). The CPI, originally launched in 1995, ranks countries according to how corrupt their public sector is perceived to be. The index is compiled using a combination of polls drawing on corruption-related data and also reflects the views of observers from around the world. Countries/ territories are given a score between 0 and 100 (with 0 being highly corrupt and 100 being very clean). A total of 177 countries/territories were rated by TI. Below we draw out some of the more interesting results from the CPI generally, before focussing in more detail on the CPI’s assessment of perceived corruption in the UK and other key jurisdictions.

General observations by TI

  • More than two thirds of the countries rated scored below 50 in the CPI, highlighting a need for more to be done to make public institutions in those countries more transparent and accountable.
  • Denmark and New Zealand tie for first place with scores of 91. TI particularly emphasised good access to information systems and strong rules governing the behaviour of those in public offices in these jurisdictions.
  • Afghanistan, North Korea and Somalia this year make up the worst performers, scoring just 8 points each. The CPI particularly highlighted the lack of accountable leadership and lack of effective public institutions as areas of concerns.
  • Big movers this year included Syria and Spain, dropping 9 and 6 points respectively. TI attributes this to the civil war in Syria and Spain’s corruption scandal over party funding involving the Prime Minister and the Royal family.
  • Countries that have suffered most in the Eurozone financial crisis continue to underperform in the index. TI has previously warned that European countries should use the financial crisis as an opportunity to tackle the risk of corruption in the public sector.
  • Middle Eastern and North African countries have scored poorly in the CPI: attributed to political unrest throughout the region. 84% of Middle East and North African countries score below 50. The average regional score is 37, below the global average of 43.

What the CPI says about the UK

The UK was ranked 14th with a score of 76 out of 100, this is slightly better than in 2013 when the UK was ranked equal 17th. TI’s press release on the UK concludes that the UK’s improved score is a continuing effect of the Bribery Act and improved rhetoric from the UK Government on tackling corruption. TI highlights two principle vulnerabilities in the UK; continued scandals related to politics and parliamentary ethics, and the removal of key corruption checks and balances in local government i.e. removal of independent public audit and reduced capacity of the local press etc, as outlined in TI’s recent report.

What the CPI says about key jurisdictions

  • Australia was ranked equal ninth with a score of 81 out of 100 in the 2013 CPI. This is marginally worse than the 2012 CPI where Australia was equal seventh (scoring 85).
  • Poor scores in the Asia Pacific region show economic growth under threat. TI suggests that economic and social growth throughout the region may be hampered by governments’ failures to curb corruption. More than half of Asia Pacific countries score lower than 40 out of 100.
  • Myanmar has shown significant relative improvement ranking 157th with a score of 21 in 2013 compared to 172nd in 2013. This is undoubtedly a reflection of the introduction of more transparent and democratic rules. New laws are being reviewed, including ones on new media, anti-corruption and NGOs; the country has now ratified the UN Convention against Corruption.
  • China scored of 40 out of 100. TI stresses China’s need to embrace a more holistic approach to corruption, going beyond simply observing the rule of law and embracing political reforms to increase transparency and independent scrutiny.
  • India scored 36 out of 100 in this year’s CPI. TI attributes this score to the state’s inability to deal effectively with petty corruption as well as the large-scale corruption scandals which have rocked the country over the past two years and continue to be a running theme.

Implications for industry

The CPI is, without doubt, a useful tool, although it remains a measure of the perception of corruption – not a measure of corruption itself – and, as such, incorporates an inevitable element of subjectivity. Companies have always had to be aware of the risks and dynamics in the countries in which they operate, and the introduction of the Bribery Act has thrown this into sharper relief. The CPI will doubtless continue to be widely used by companies as part of their ‘adequate procedures’.