23 September 2008
TI calls on Irish Government to protect its own reputation from further harm as bribery scandals hurt Britain’s international standing.
Dublin, 23 September 2008 – The 2008 Corruption Perceptions Index (CPI), launched today by Transparency International (TI), shows Ireland’s reputation for honesty has improved over the last year – partly because the United Kingdom’s image has got dramatically worse.
Ireland’s score has risen from 7.5 to 7.7 out of 10 since last year, with a score close to 10 suggesting extremely low levels of corruption. Ireland is now ranked alongside the UK as the 16 th least corrupt country in the world out of 180 countries surveyed. Last year Ireland and the UK lay in 17th and 12th place respectively.
John Devitt Chief Executive of TI Ireland claimed the British Government’s decision to block an investigation into alleged billion dollar bribes to Saudi officials had badly damaged the UK’s reputation for fair play.
“Corruption and cover-ups are picked up by international investors like sharks smelling blood,” said Mr. Devitt. “The dramatic fall in the UK’s score is a likely sign of investor concerns about alleged corruption in Britain’s aerospace industry, and lax controls on political funding,” he added.
The global index of expert and investor surveys on corruption shows that while Ireland’s standing has improved marginally over the past year, its nearest neighbour has suffered one of the biggest drops in the history of the influential benchmark. Ireland’s ranking experienced a similar fall six years ago as evidence emerged of secret payments to Charles Haughey and other politicians.
It now means that global investors and analysts believe Ireland is no more corrupt than the UK, and just less so than Norway. However Ireland still lags way behind in the index from direct competitors for jobs and investment such as Hong Kong, Singapore, Finland and Denmark.
Today’s news is particularly important for a small open economy like Ireland’s claims TI, since investor decisions are often made on the back of a country’s reputation for fair regulation and government transparency. “The global financial crisis makes perceptions of corruption all the more significant for Ireland as countries’ markets increasingly rely on investor trust. A continued gap in trust is going to cost our economy – in the long term it’s going to cost us jobs,” said Justin Keogan, Chair of TI’s Irish chapter.
It is believed that Ireland’s mediocre score places it at a competitive disadvantage against some of its European neighbours such as Sweden and Denmark (both in joint 1 st place). The Scandinavian countries are making the most of their countries’ names for integrity, while countries such as Singapore and New Zealand regularly market themselves using their high rankings on the corruption index.
A Dublin Chamber of Commerce funded study in 2005 estimated that Irish business was losing €2 billion every year directly through economic crime. Ireland is also believed to be costing the economy indirectly. According to separate studies, an improvement in business trust as seen in a one point drop in the corruption league table is equivalent to the loss of €1 billion to the Irish economy every year. The combined economic cost of corruption is equivalent to the loss of 75,000 Irish jobs annually.
A survey produced by consultancy Control Risks Group (CRG) in 2006 found that “ more than 35 per cent of companies surveyed had been deterred from an otherwise attractive investment because of the host country’s reputation for corruption. By contrast, less than half as many had been deterred by the potential for controversy over each of the other issues cited in the survey – human rights, labour and the environment.” Over 70 per cent of businesses in the UK and US also said that their businesses benefitted from strong anti-corruption laws.
Bertie Ahern’s testimony to the Mahon Tribunal is not believed to have had any significant impact on the results; however the anti-corruption group warned against any complacency. The Government has recently moved to treble the value of gifts and loans that politicians can keep without disclosing them. In addition, delays in introducing safeguards for whistleblowers and high fees for public information mean that Ireland is expected to sit in the third-tier of honest democracies for the time being.
TI Ireland has again called on the Government to ratify the United Nations Convention against Corruption. It will also publish a set of recommendations to Government later this year as part of the first comprehensive study on safeguards against corruption in Ireland.
Notes for editors and Tables
International perceptions of ethical standards in Ireland have actually worsened since 1995 (see table 2 below). At the time ethics legislation was first introduced, Ireland was ranked 11 th “least corrupt country” in the world with a score of 8.57.
Transparency International and Transparency International Ireland recently carried out a study on safeguards against the bribery of foreign public officials.
An inquiry into alleged payments made to facilitate £43 billion in British fighter jet sales to Saudi Arabia was cancelled by the UK Serious Fraud Office in 2006. The Saudi Government had threatened to block further arms sales and cooperation on intelligence. The decision led to an outcry amongst the UK’s trading partners including the United States. Robert Wardle, head of the UK’s Serious Fraud Office, later admitted that the decision to terminate the investigation might have damaged "the reputation of the UK as a place which is determined to stamp out corruption."
A 2007 report by the economic think tank the OECD was heavily critical of the Irish government’s and businesses’efforts to combat bribery. In response the Department of Justice launched a new website for Irish businesses trading abroad - www.anticorruption.ie.