Category: Industry Integrity
Dear Director
Ensuring any enforcement action against Airbus meets fair justice standards
We are writing as concerned anti-corruption organisations that have seen the effect of corporate bribery on democracy, good governance, economic progress and security across the world.
We are aware of extensive media coverage about allegations of bribery involving Airbus. The allegations are egregious. They span over a decade and include at least 14 countries including Sri Lanka, Kazakhstan, Austria, Tunisia, India, Poland, China, Greece, Saudi Arabia, Turkey, Indonesia, Kuwait, Mauritius and Mali as well as implicating all business segments within Airbus, including aerospace and defence, commercial aerospace and helicopters. The media coverage has indicated that the SFO, PNF and DOJ are all investigating alleged wrongdoing. Other authorities around the world are also investigating these allegations, including in Austria, Kuwait, Poland and Sri Lanka.
We welcome the fact that the SFO and the PNF have set up a joint investigation team in this case with close coordination with the DOJ. The co-ordination of law enforcement activities in such cross-border and global alleged wrongdoing is essential. It helps to maximise use of law enforcement resources and ensure that investigators and prosecutors are aware of the full facts of potential wrongdoing when making enforcement decisions.
We are writing to ask you to ensure that any enforcement action against Airbus, whether a settlement or other form of action, meets standards that would ensure justice is achieved and that the harm caused by any wrongdoing is properly assessed and compensated for. We would encourage you to give careful consideration to the full range of enforcement options available, including prosecution. In particular, we ask you to ensure that: (more…)
6th June 2018, London – New allegations made by Corruption Watch U.K. that British intermediaries took corrupt payments from an Italian defence company, to secure defence contracts in South Korea, must be fully examined by the UK’s Serious Fraud Office and where wrong-doing is established prosecutions should follow.
Robert Barrington, Executive Director Transparency International UK, said:
“’These are strong and long standing allegations about significant crimes having been committed, and need to be properly examined by the authorities in the jurisdictions concerned, which means the Serious Fraud Office in the UK. We also encourage UK MoD to fully consider the use of their procurement exclusion powers and whether the company should be temporarily suspended from MoD bidding while these matters are investigated. If wrongdoing is found to have occurred, the full weight of the law should be used against the individuals involved, any senior officers of the company who were complicit, and the company itself.”
“The use of third parties in defence deals has long presented a significant corruption risk and this case demonstrates the need for more consistent transparency requirements in export policies around the use of payment of agents.”
Transparency International’s. “Licence to Bribe? Reducing corruption risks around the use of agents in defence procurement” highlighted the profound risks of using middlemen in defence deals and showed that 90% of companies assessed by TI, fail to provide evidence of regular due diligence over the use of agents.
***ENDS***
Contact:
Dominic Kavakeb
+44 20 3096 7695
+44 79 6456 0340
Dominic.kavakeb@transparency.org.uk
20th March 2018, London – The re-opening of corruption charges against former South African President Jacob Zuma, relating to a 1999 arms deal, are a welcome step and should mark the beginning of justice finally being served, according to Transparency International Defence & Security.
Research from Corruption Watch UK into the scandal known as the ‘Arms Deal’ suggests billions of taxpayers money was squandered – at a time when the South African government claimed that there were insufficient funds to treat thousands of citizens for AIDS.
Andrew Watson, Head of Industry Integrity at Transparency International Defence & Security, said:
“We warmly welcome the news that Jacob Zuma may now finally face justice for his crimes. It’s a shame that these charges took him to leave office for a prosecution to take place – but it is encouraging that his crimes may now finally be catching up with him.”
“Jacob Zuma and the companies alleged to have paid bribes to him have escaped justice for many years. These charges must now finally shed some light on one of the largest defence corruption scandals ever seen and result in robust prison sentences for those found to have been involved.”
***ENDS***
Contact:
Dominic Kavakeb
020 3096 7695
079 6456 0340
dominic.kavakeb@transparency.org.uk
19th January 2018, London – Commenting on an announcement by the Serious Fraud Office that it is investigating Chemring Group PLC, a British Defence Company, for corruption, money laundering and bribery, Andrew Watson, Head of Industry Integrity at Transparency International Defence and Security, said:
“It is disappointing to see another British defence company facing fresh allegations of systemic and widespread corruption, highlighting the very real challenges facing this unique sector.”
“Once again, intermediaries – long established as one of the highest corruption risks in defence commerce – are at the heart of these allegations.”
“Whilst it is encouraging that the company reportedly discovered the allegations themselves during an internal audit and that it was then self-reported to the SFO, we call for the company to fully cooperate with investigators and conduct an internal review of its anti-bribery procedures to discover what went wrong and why it wasn’t discovered before now. It’s vital that this investigation is thorough and perpetrators are brought to justice, no matter how high-up in the company they may be.”
Chemring scored a C in the Transparency Internationals most recent Defence Companies Anti-Corruption Index, meaning there is “moderate evidence” that they have anti-corruption measures.
Transparency International’s 2016 report “License to Bribe” identified the significant risks in the use of third parties and agents in arms deals, one area reported to be the subject of this investigation.
***ENDS***
Contact:
Dominic Kavakeb
020 3096 7695
079 6456 0340
dominic.kavakeb@transparency.org.uk
23rd September 2017, London – Transparency International Defence and Security welcomes the pledge by Heckler & Koch to no longer sell arms to corrupt states, and calls on the wider defence industry to make similar commitments.
The German firm has announced that it will use Transparency International corruption assessments as one of three indicators to decide which states to sell weapons to, in what is believed to be an industry first. Heckler & Koch should now publicly announce the exact criteria of this move, as well as which countries this will apply to, ensuring full transparency and accountability.
Transparency International’s research has found that selling arms to corrupt states can perpetuate conflict and lead to deadly weapons falling into the wrong hands. This can fuel violent conflict and terrorism, with repercussions both domestically and internationally.
Transparency International’s most recent “Government Defence Anti-Corruption Index” found 70% of states assessed for risk of defence corruption are either at high, very high or critical risk. Defence spending is growing fastest in states at the highest risks of defence corruption with real implications for human suffering.
Katherine Dixon, Director Transparency International Defence and Security, said:
“If implemented fully, this is a welcome pledge from Heckler & Koch. This sort of due diligence should be the norm for defence companies. But it’s important that this commitment is more than just a PR exercise. The best way to ensure this is to provide full transparency over the criteria and which companies they will no longer sell to.”
“It should be difficult for any responsible defence company or State to justify exporting to countries which don’t implement the minimum transparency and accountability mechanisms to achieve at least a D on TI’s defence anti-corruption index. Introducing lethal weapons into unaccountable and corrupt environments is a recipe for disaster. Defence companies and the governments that license their exports have the power and responsibility to make a difference in these states and reduce human suffering; we encourage them to use it’.”
***ENDS***
Contact:
Dominic Kavakeb
Dominic.kavakeb@transparency.org.uk
0044 20 3096 7695
0044 796 456 0340
23rd September 2017, London – Transparency International Defence and Security welcomes the pledge by Heckler & Koch to no longer sell arms to corrupt states, and calls on the wider defence industry to make similar commitments.
The German firm has announced that it will use Transparency International corruption assessments as one of three indicators to decide which states to sell weapons to, in what is believed to be an industry first. Heckler & Koch should now publicly announce the exact criteria of this move, as well as which countries this will apply to, ensuring full transparency and accountability.
Transparency International’s research has found that selling arms to corrupt states can perpetuate conflict and lead to deadly weapons falling into the wrong hands. This can fuel violent conflict and terrorism, with repercussions both domestically and internationally.
Transparency International’s most recent “Government Defence Anti-Corruption Index” found 70% of states assessed for risk of defence corruption are either at high, very high or critical risk. Defence spending is growing fastest in states at the highest risks of defence corruption with real implications for human suffering.
Katherine Dixon, Director Transparency International Defence and Security, said:
“If implemented fully, this is a welcome pledge from Heckler & Koch. This sort of due diligence should be the norm for defence companies. But it’s important that this commitment is more than just a PR exercise. The best way to ensure this is to provide full transparency over the criteria and which companies they will no longer sell to.”
“It should be difficult for any responsible defence company or State to justify exporting to countries which don’t implement the minimum transparency and accountability mechanisms to achieve at least a D on TI’s defence anti-corruption index. Introducing lethal weapons into unaccountable and corrupt environments is a recipe for disaster. Defence companies and the governments that license their exports have the power and responsibility to make a difference in these states and reduce human suffering; we encourage them to use it’.”
***ENDS***
Contact:
Dominic Kavakeb
Dominic.kavakeb@transparency.org.uk
0044 20 3096 7695
0044 796 456 0340
The world’s major arms exporters have a conflicted approach when it comes to dealing with what are effectively kleptocratic governments. (more…)
This blog was orginally published by New America and can be accessed here
These are banner times for corruption watchdogs pushing for transparency. From Congress’s recent repeal of the bi-partisan Lugar-Cardin provision—which would’ve required oil, gas, and mining companies registered with the SEC to disclose payments to foreign governments—to the ongoing controversy involving veteran intelligence officer Michael Flynn and Russia’s ambassador to the United States, transparency and security have never seemed more impossibly intertwined—or at stake. (more…)
Eva Anderson, our Senior Legal Officer and Barrister discusses issues around debarment (more…)
Following the Rolls-Royce DPA, Andy Watson, Head of Industry Integrity, asks who are the real victims in a big corruption case like this? (more…)
Katherine Dixon, Director Defence and Security Programme, considers whether some defence companies are too important to be prosecuted (more…)
8th November 2016, London – India must put in place strong safeguards to ensure effective anti-corruption mechanisms are built into any coming defence deals between the UK and India, according to Transparency International Defence and Security (TI-DSP).
During Prime Minister Theresa May’s visit to India it was announced that “the UK and India are committed to further strengthening their strategic partnership in defence.” India is the largest importer of arms in the world but scored a ‘D’ in TI-DSP’s 2015 Defence Corruption Index, meaning vast sums of vital public funding is at a high risk of corruption.
India must ensure that the new blacklisting policy remains a robust sanction while allowing India to procure the technology that meets its security needs. Blacklisting is a vital tool sending a strong message to Indian and international suppliers that corruption will not be tolerated, and protects India’s public funds from misuse. The new policy should replace mandatory minimum penalties with a debarment system that weighs mitigating factors, and allows for shorter sentences in the event of strong remediation actions taken by the company.
Katherine Dixon, Director Transparency International Defence and Security, said:
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“As India is one of the largest defence markets in the world, the UK Government is naturally extremely keen to cultivate deals. But unless India has in place strong anti-corruption mechanisms, public funds will continue to be at risk, while poor procurement practices contribute to military shortages and undermine public trust.”
“Recent allegations that a major British defence company paid bribes to win contracts only further underlines the risks that weak procurement systems are at serious risk of being exploited by unscrupulous suppliers or their agents.”
***ENDS***
Contact:
Dominic Kavakeb
Dominic.kavakeb@transparency.org.uk
020 3096 7695
0796 456 0340
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