Transparency International Defence & Security would like to announce the initial phase of the 2019 edition of the Defence Companies Anti-Corruption Index (DCI).

UPDATE: The final version of the Question and Model Answer document is available here. The accompanying methodology document is available here.

We appreciate the interest and involvement of all stakeholders who provided feedback on the draft Question and Model Answer document as part of the consultation period, including civil society, industry, experts, the investor community, government, and legal professionals.

The updated methodology includes a number of changes, many of which incorporate feedback received as part of the consultation. At the core of our approach remains the belief that there is an inherent value in information being available in the public domain as it contributes to setting common standards, encourages the sharing of best practice, and deters corrupt activity. Following the consultation, we have edited and refined questions to ensure that the level of transparency and disclosure needed for the highest score reflects the importance of the issue and the level of corruption risk it is aiming to address. These changes can be seen throughout the revised methodology; as an example, we rarely ask for the disclosure of full policy documents, but instead look for evidence that such a policy exists, through a company statement or otherwise, and we have revised our language accordingly. Where certain practical and / or legal considerations could not be mitigated at this point in time, we have removed several questions, in the hope that we can work towards greater standards of transparency over time.

Greater openness and transparency will not only help reduce corruption in the sector, it will build public trust, reassure investors, build constructive relationships with customers and improve the reputation of companies and the industry as a whole. Ultimately, the most responsible companies in the sector will benefit from adopting this approach and the clean business practices it promotes.

What is the Defence Companies Anti-Corruption Index (DCI)?

The DCI sets standards for transparency, accountability and anti-corruption programmes in the defence sector. By analysing what companies are publicly committing to in terms of their openness, policies and procedures, we seek to drive reform in the sector, reducing corruption and its impact. The DCI will assess 140 of the world’s leading defence companies across 39 countries. The Index was first published in 2012 with a second edition in 2015, and the latest edition is set to be published in early 2020.

Following consultation with the industry, governments and civil society, the upcoming index will apply a revised methodology and will include some key differences from previous editions. The final Questionnaire and Model Answer document for the 2019 DCI can be found here.

How will the 2019 Index be different?

After a comprehensive review, the new DCI assessment has evolved and should be read alongside our recent report ‘Out of the Shadows: Promoting Openness and Accountability in the Global Defence Industry’ – which provides greater insight into the theory behind our methodology. Based on consultations with anti-corruption and defence experts, TI DS have identified ten key areas where higher anti-corruption standards and improved disclosure can reduce the opportunity for corruption.

In one the most significant changes to the methodology, TI DS will this year base the research only on what companies choose to make publicly available. The decision to exclude internal information from the evaluation reflects our increased focus on transparency, public disclosure of information, incident response and the practical implementation of anti-bribery and corruption programmes.

How have companies been selected?

Companies for the 2019 DCI have been selected on the basis that:

• The company features in the 2016 edition of SIPRI’s Top 100 Arms-Producing and Military Services companies.
• The company features in the 2016 edition of Defence Industry Weekly’s Top 100 defence companies.
• The company is the largest national defence company headquartered in a country exporting at least £10 million, as identified by SIPRI.

To see the list of companies selected for assessment in 2019, click here.

How will data on companies be collected?

Our assessment of a company’s individual anti-bribery and corruption record is based entirely on publicly available information. In particular, we will review the company’s website, including any available reports, for evidence of robust anti-corruption systems, as well as any functioning hyperlinks to other relevant online materials. In reviewing your company’s materials, we will assess the completeness and accessibility of the information, in particular:

• The amount of information a company publishes about its internal anti-corruption programmes, incident response systems and interactions with third parties;
• Evidence that these systems are used by employees and made available to all employees;
• Evidence that the company monitors and reviews its anti-bribery and corruption processes.

Researchers from TI DS will conduct assessments of each company’s public information starting in May 2019, giving companies an opportunity to make any alterations to their publicly available information before the research process begins. The initial results will be shared with your company, after which you will have the opportunity to review the initial findings and suggest any corrections. The final assessments will be published on our website.

Where can I find the assessment criteria?

The final version of the 2019 Questionnaire and Model Answer document is available here. Companies, governments, and civil society alike were invited to provide feedback on the methodology as part of the process to develop the new Model Answer document. To view an anonymised version of this feedback, click here.

Our recent report ‘Out of the Shadows: Promoting Openness and Accountability in the Global Defence Industry’ provides greater insight into the theory behind the changes to the 2019 methodology.

What is the timeline for the Index?

With the final version of the Questionnaire and Model Answer Document now published, research will begin in May 2019.

During the research phase we will share initial reports with the companies in question, giving you the chance to review these initial findings and suggest corrections. This will be an ongoing process, starting from May.

We aim to have the assessment phase of the index completed by November, and following an analysis of the overall results, aim to publish the full index in early 2020.

What do companies have to do next?

Companies still have the opportunity to make any improvements to their publicly available documents based on the final version of the Question and Model Answer document.

Research will begin in May 2019 and during this process companies will be given the chance to respond to initial findings and suggest any corrections or additional published evidence. We aim to complete this research phase by the end of 2019, with the publication of the results expected in early 2020.

Will we have an opportunity to give feedback on the methodology before the assessments start?

Yes – companies, industry groups and experts were able to provide feedback during a dedicated consultation period in November 2018. A document containing the entirety of this feedback in the form that it was submitted, with company names anonymised, is now available here.

Feedback is welcome from all users of the index including governments, civil society, journalists and companies.

Resources

• Question and Answer Document 2019
• Methodology Document
• Full List of Companies Selected for Assessment in 2019
• Company Feedback, November 2018
• Report: ‘Out of the Shadows: Promoting Openness and Accountability in the Global Defence Industry’
• Past editions: Defence Companies Anti-Corruption Index 2015