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Corruption Perceptions Index 2013: What can Ireland learn from Hong Kong?

Dublin, 3 December 2013

Ireland’s international reputation continues to be dogged by a legacy of wrongdoing and failure to hold people to account. It’s time to end impunity, says John Devitt.

Transparency International (TI) publishes its annual Corruption Perceptions Index (CPI) today. Although there has been an improvement in terms of Ireland’s ranking (it finds itself in 21st place compared to 25th place last year), its score on the index has not improved significantly enough to demonstrate a measurable change in perceptions of corruption.

Those countries perceived to be least affected by corruption have remained unchanged from last year. Denmark, New Zealand and Finland are seen as the cleanest of those countries featuring in the index, while Afghanistan, North Korea and Somalia are regarded as the most affected by corruption and abuse of power.

The CPI is published annually by Transparency International and measures relative levels of perceived corruption in 177 countries. The higher a country’s score on the index is, the less corrupt its public sector is perceived to be by international analysts and business people. It is worth noting that the index is also used as a measure of credit worthiness by ratings agency, Standard and Poors.

While Ireland is perceived to perform relatively well by international standards, it continues to trail its Northern European neighbours and other small open economies with which it competes for foreign direct investment. One of those small open economies is Hong Kong.

Since 1995, Hong Kong has performed better than Ireland on almost every international economic and political risk indicator, including the CPI. It outperforms Ireland on the Global Competitiveness Index which measures productivity and economic development. It attracts five times the foreign investment of Ireland. And unlike Ireland, it has chosen not to sweep its problems under the carpet.

After a series of political scandals damaged public trust in Hong Kong government, it established an Independent Commission Against Corruption (ICAC) in 1974. ICAC now has 1,200 staff investigating corruption and promoting anti-corruption initiatives. In 2011 ICAC prosecuted 283 people for corruption related offences. Of those, 241 or 81 per cent of indictments led to a conviction. The ICAC is not afraid to investigate its own staff either. Earlier this year, ICAC chief Timothy Tong resigned after he spent ICAC money on hospitality and gifts. Mr Tong denies any wrongdoing but has still found himself under investigation nonetheless.

In the same year that the Hong Kong authorities secured over 200 corruption convictions, the Irish brought a total of three prosecutions and secured one (1) conviction against a public official.

It’s hard to describe our performance in tackling corruption as anything other than pathetic.

There are a number of reasons for Ireland’s failure to tackle this problem, but a lack of resources and a lack of political interest in providing those resources are leading factors.

Unlike Hong Kong, Ireland does not have a single agency dedicated to fighting corruption. The closest comparison that can be drawn to ICAC is the Standards in Public Office Commission. It has nine staff and cannot fully investigate wrongdoing without a prior complaint. Other agencies that tackle white-collar crime also lack the resources they need to do their job. The Office of the Director of Corporate Enforcement has been perennially understaffed since it was established in 2001. The Gardaí also have scant resources to fight corruption, and show little appetite for investigating corruption-related offences. In total, Ireland has five times fewer employees allocated to investigate every form of white collar crime than Hong Kong has to investigate wrongdoing by public officials.

When there are so few people trained and paid to uncover corruption, it’s no wonder there are so few prosecutions.

Despite the Government’s promises to clean up Ireland's act, the last two years have shown that there is little political will to hold people to account. This seems clear from the failure to obtain criminal convictions arising from the systemic corruption exposed by the Mahon Tribunal or the wrongdoing highlighted in the final Moriarty Tribunal report. Likewise, controversy surrounding the ‘Anglo tapes’ has come and gone and the authorities have failed to even interview those involved.

Ireland’s failure to hold people to account for manifest wrongdoing in public office and business sends the message to Irish citizens as well as international investors, that in Ireland, as long as you are well-connected or powerful enough, you can lie, cheat, bribe and neglect your official duties with impunity.

It is no wonder therefore that Ireland has been described by the New York Times as the ‘Wild West’ of European finance.  It’s time that Government noticed that this image does us no favours; and that its ambivalent attitude towards corruption affects international investment and our ability to borrow and trade on global markets. It’s time it learned from Hong Kong and realised that there is no trade-off between ending impunity and building a strong economy.

John Devitt is Chief Executive of TI Ireland. Please contact communications@transparency.ie for more information or call 01 871 9433