International anti-corruption NGO, Transparency International, yesterday released its latest Corruption Perceptions Index (CPI), reviewing public sector corruption risk in 168 countries.

• http://www.transparency.org/

Herbert Smith’s 2015 report highlights the same offending countries and points to similar issues, particularly systemic government corruption, failed electoral mandates and public revolts against alleged grand-scale corruption.

• http://www.herbertsmithfreehills.com/insights/guides/global-anti-corruption-guide-2015?wtr=module-global-anti-corruption-guide

The latest CPI scores confirm corruption’s status as a social, political and commercial issue to be reckoned with. Boards, governments, companies and individuals from all walks of life encounter it; with technological advances only serving to aid rather than quell its increasingly covert forms.

CPI scores

1. A country’s CPI score indicates the perceived level of public sector corruption on a scale of 0-100, where 0 means that a country is perceived as highly corrupt and 100 means that the country is perceived as very clean.
2. The countries surveyed are ranked by reference to their CPI score; those scoring the highest attain the highest ranking. Since corruption is deliberately hidden, it is impossible to measure accurately.
3. However, the CPI offers an indicative measure of perceived risk.

The ‘cleanest’ countries

4. In keeping with 2014’s CPI, four of the top five ranked countries are Scandinavian; jurisdictions characterised as ‘open’ societies, allowing for social cohesion and public accountability.
5. Denmark retains its number one ranking, followed by Finland and Sweden (which see their rankings improve to take their places in the top three).
6. Norway is fifth (alongside the Netherlands, up from eighth in 2014).
7. New Zealand remains the only non-European country in the top five.

The worst offenders

1. As for 2014, the same five countries occupy the bottom five places.
2. Somalia and North Korea are the most corrupt, just ahead of Afghanistan, Sudan and South Sudan. African and Middle Eastern countries dominate the lowest rankings, with Myanmar, Cambodia and North Korea the lowest performing Asian jurisdictions.
3. Improving countries
4. Overall, more countries improved their corruption perception scores in 2015 than did worse. Notable improved countries include Greece, Senegal and Great Britain. The latter re-entered the top ten for the first time since 2002.
5. Transparency International commented in 2014 that Great Britain needed to do more to tackle corruption.
6. It would appear that a number of successful prosecutions under pre-Bribery Act legislation, the bedding down of the Bribery Act itself, and progress under the first UK Anti-Corruption Plan launched in December 2014, have positively influenced perceptions of corruption.

The BRICS countries

1. As highlighted in Herbert Smith’s report (page 17), a number of Brazilian companies and senior political figures are embroiled in widespread public sector corruption scandals.
2. Brazil has seen its CPI score drop significantly as a result (the worst decline of any country on the CPI). Despite a number of legislative reforms in 2014 and 2015, these have not yet managed to stem perception, which has been influenced by a number of high-profile scandals, particularly involving state-owned oil company, Petrobras. Brazil now sits alongside countries like India, Thailand and China on the CPI.
3. The other BRICS countries have largely retained last year’s rankings. Perhaps surprisingly, China, where president Xi Jinping’s ‘purge’ of public sector figures continues to gather pace, has failed to see any real improvement in its CPI score. Despite the country’s top-down crackdown, the oft-cited ‘root’ causes of public sector corruption (low salaries and inadequate checks and balances), continue to drive perception that corruption remains a major obstacle in China.

Asia Pacific

1. The overriding message across Asia Pacific is ‘zero improvement’.
2. Two thirds of the countries scored less than 40 out of a possible 100. Several governments across the region have made huge promises in the last two years to tackle corruption, but are viewed as failing to deliver on these promises. In India and Sri Lanka for example, governments have come to power on anti-corruption platforms. It will inevitably take some years to unravel and deal with the legacies of previous governments, as well as the challenges that face incumbent ruling parties. Nowhere is the latter truer than Malaysia, where protests against the prime minister over an alleged investment fraud continue.
3. Hong Kong, whilst dropping a place, retains its 2014 score. A number of recent high-profile cases in the territory may have contributed to the slight drop. The Independent Commission against Corruption (ICAC), Hong’ Kong’s anti-corruption regulator, in fact saw a 24% increase in the number of convictions in 2015, and an 80% conviction rate. An ICAC survey published in 2015 also found that only 1.3% of respondents had encountered corruption in the past year, lower than the previous year.
4. Australia has seen its ranking drop, indicating an incremental downward trend year on year. Despite efforts acknowledged by the Organisation for Economic Co-operation and Development (OECD) in April 2015 in the field of foreign bribery, the status of and investigations into a number of alleged bribery schemes last year have contributed to the perception of enhanced corruption risk.

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