Which companies are the most—and least—open in their dealings?
MANY of the world’s biggest firms commit to obeying anti-corruption laws. But what they do not say can be informative too. Transparency International, a watchdog, studied publicly available information about the world’s 105 biggest listed companies as a measure of their commitment to anti-corruption. It looked at public declarations to stay within the law, the degree to which companies disclose their organisational structure and the amount of information they release on a country-by-country basis. Declarations may be just words but they tie a firm’s actions to its reputation. Organisational structure and country-by-country reporting provide useful information about flows of money and about what companies are reluctant to reveal. Firms working in extractive industries are among the most open. Companies registered in Europe and America, both of which have strict anti-corruption laws, also tend to score higher. Less intuitively, technology companies and firms from Japan are well represented at the lower reaches of the table. But it is financial-services companies and companies from Russia or China that scored the worst.
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"Oil Little Changed as Jobless Claims Curb Gasoline Rally"
- Oil was little changed as gasoline and heating oil futures climbed while more Americans than
forecast applied for unemployment benefits.
- Oil for October delivery settled at $91.87 a barrel on the New York Mercantile Exchange, the fourth
consecutive decline.
- Total gasoline inventories fell 1.41 million barrels to 196.3 million, the eighth consecutive
decline and also the lowest level since October 2008.
Regard
Time Leverage Capital
ArcelorMittal and Bharat Petroleum(BP) in the top ten!
At least the privet sector in India is less involved in corruption.
BP Stands for British petroleum ,Bharat petroleum is not in the top 105 and besides that ArcelorMittal is listed in the US and Euro area and Headquartered in Luxembourg. Typical Indian mentality of blowing things out of propotion I must say
The actual companies which resulted in Mittal steels the Ispat International, greenfield steels, LNM, International Steel Group are all registered in India and the founder/chairman/CEO Lakshmi Mittal is an Indian national.
ArcelorMittal is not registered in the USA.
Luxembourg is the headquarters and not the place of origin or the place of registration.
And Bharat petroleum is not of Indian origin. It was incorporated in Scotland. Indian government bought it and renamed it.
Typical anti-Indian mentality of mocking things without prior knowledge, I must say.
The actual companies which resulted in Mittal steels the Ispat International, greenfield steels, LNM, International Steel Group are all registered in India and the founder/chairman/CEO Lakshmi Mittal is an Indian national.
ArcelorMittal is not registered in the USA.
Luxembourg is the headquarters and not the place of origin or the place of registration.
And Bharat petroleum is not of Indian origin. It was incorporated in Scotland. Indian government bought it and renamed it.
Typical anti-Indian mentality of mocking things without prior knowledge, I must say.
The more one declares one's innocence...
Dear Economist, please fire the journalist who wrote this.
2 statements - below - show essential errors which makes me think that the author is biased and, more over, has critical judgement lapses.
#1 " But it is financial-services companies and companies from Russia or China that scored the worst."
But from the table (last 10 comapnies) there are more American companies named as bad. Russia has only one (1) - Gazprom - which is at least on the same place with Amazom (American), if not better! This makes me think that the author is biased and inclined to eastern bashing
# 2 "Companies registered in Europe and America, both of which have strict anti-corruption laws, also tend to score higher."
But the data proves that you're wrong: America doesn't score at all better! There are NO American companies in the top 10, but there are 3 American companies in the last 10. This proves that the author lacks critical understanding of facts.
Technically only Amazon and Berkshire are still "American" companies. Anheuser-Busch was acquired by InBev, a Belgian-Brazilian company, making it no longer "American."
I think you need to read the statement more inclusively.
The "bottom bracket" contains two separate groupings: tech and financial services as opaque industries (regardless of nationality) vs China and Russia as opaque nationalities (regardless of industry).
In the tech world "security through obscurity" tends to be how the businesses naturally think, so I'm not surprised to see a company like Amazon near the bottom. I can't speak directly to financial services, but I assume a financial apologist would probably appeal to "customer privacy" and othersuch ideas for why they are more opaque.
Also, the graphic is only of the top and bottom 10 companies -- nothing there is contrary to the idea that "anglo-saxon" countries might have more laws and regulations requiring greater transparency and thus their companies score higher on average overall.
Please go check the actual Transparency International data to determine whether the post is factual, and see the graphic as only a small snapshot of it.
'Big oil good, finance and tech bad' or 'Big oil good, Chinese finance and tech bad'? Don't needlessly bad-mouth finance!
I didn't know Berkshire Hathaway was Chinese...
How transparent is the Economist, should be the next question?!?
Judge for yourself
http://www.pearson.com/about-us/business-information/
http://www.economistgroup.com/
The next question then should be can we have the over used twitterific punctuation back please?
Not to be cynical, in the top ten, BP, France Telecom, Rio Tinto, and HSBC appear to be among the companies that have the strongest lobbying and PR in Europe and North America. I wonder if there is a disclosure on the dealings between transparency international and the companies it rates.
You forgot to mention companies registered in Australia (Rio, BHP)which has strict anti-corruption laws..
the US have 2 companies in the botton ten none in the top 10 (or is BG group US?).Not a good score.
Wow, you really aren't good at bashing the US. You must be from China.
In order to compare countries, you would have to have more than just the top 10 companies. What if 20 to 11 were all American companies? The difference between 1st and 2nd is small. And, the accuracy of this chart is questionable. So, the most interesting thing to look at is the overall question of transparency, not your typical US bashing, cry baby BS.
The survey compares "the world’s 105 biggest listed companies" or are big numbers too difficult for you?
And only 20 are included here, which is where the poster I was replying to got his information. Or is logic too complicated for you? It really amazes me how uneducated people are in their comments. Please read the first comment and then you might understand where most other comments come from.
'Less intuitively, technology companies and firms from Japan are well represented at the lower reaches of the table.'
Actually, no much of a surprise from Japan
Rather remarkable that both HSBC and France Telecom show up on this list. That finding must mean that there is no correlation between actual performance, particularly with regard to delivering to customers, and transparency; and therefore fundamentally questions the value of corporate transparency. And as someone who moved within past year has moved to France and has undergone two moves that required France Telecom (Orange) to install internet/tv/telephone, I question how transparent France Telecomm is with regard to their bureaucracy and utter incompetence. I missed that in their last annual report.
I don't want to step on your toes with regards to the incompetence of Orange, as I do agree. But what does bad customer service/support have to do with lack of Transparency. The criteria of the research isn't well explained here, but I would assume it has something to do with the transparency of the provided service/operations/HR/finances rather than the support on the commercial level?
What on earth has your move to France got to do with the price of fish?
Big oil? Shouldn't you be praising mining companies?
Mining/metals companies make up 3 of the top 4
I agree. I have just visited the Drummond coal mine in Colombia and talking to colleagues about Rio Tinto in Peru and Brazil,and realize how high their standards are. It must be because mining makes a big hole and threatens water flows. But I admire them
Amazing! How did Berkshire Hathaway get such a low score? Surely there is a catch to this data. With the emphasis Warren Buffet lays on investor activism, I would not suspect his company of trying to deceive its investors.
To all those people who wants to Criticize the west and indulge in a blame game. Here are the Transparency international rankings for corruption.
U.S.A 24
U.K 16
Canada 10
Australia 8
Germany 14
Japan 14
France 25
Taiwan 32
Israel 36
South Korea 43
........
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.......
.......
.......
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China is at 75 (lesser than Ghana, Namibia and equal to Tunisia)
This clearly proves that your development is extremely unsustainable and is coming at a great cost.
Now you'all can go back to extoling the next super power!
The dragon century!
Or that transparency doesn't matter for development. Do you really think Japan is all that transparent? The Japanese make it look good on the surface, but everything in Japan is done behind closed doors.
Then why is Japan ranked ahead of the U.S?
As I said, the Japanese are good at keeping up apperances.
It kind of defeats your point when you include three East Asian countries on your list that share a common culture with China.
All of the countries on the list were substantially more corrupt when they were earlier in their development (think of the USA during the Gilded Age), but as they became wealthier and better educated they developed better institutions to fight corruption.
The fact that Namibia has less corruption than any of the BRIC countries basically undermines your entire point. The relative lack of corruption in Namibia certainly has not benefited the people or the national development.
I wonder how much you actually know about Japan. Most likely you are one of these Chinese people who are racist against all people from Japan, so you make up your stories and spew them all over the internet. I have spent a lot of time in both China and Japan, and China is obviously more corrupt from the local shop to the highest level of officials. Japan has corruption, but it is more higher level only.
I am not Chinese; not even Asian. I have spent a lot time in both countries. My point was that corrpution, per se, does not preclude development, it all depends on the type of "corrpution". Maybe we should distingush between a lack of transprency and bribe taking.
What I think would be of more interest would be the degree to which honesty is a recognized value discipline in the organizations rated. Measures of transparency seem to me to be only like rating a house through the dimensions of a single window. The window may be wide open into the most elegantly furnished room in the house. What does that tell us about what goes on elsewhere in the house?
In praise of oil...honesty...hahaha what a joke!
IF BIG OIL TOLD THE TRUTH:
-We are past Peak Oil. Your child will see the end of oil in her lifetime. Your latest car will be obsolete before it breaks down...there will no more fuel.
-Global warming has made summers hotter. And deserts are rapidly expanding. And some nations and cities are now unliveable and have biblical droughts.
-People in desert cities are becoming vampires. Staying indoors all night by the Air conditioner and TV. Coming out only at night. Wearing exclusively black outfits. Pale and poorly conditioned. Electronic Zombies isolated from nature.
-Indulgent car-based suburban lifestyle has lead to an epidemic of human blimps. They now need scooters to 'walk around'.
-Breathing engine exhaust is worst than smoking a cigarette.
-Some petroleum and therefore subsequent vehicle exhaust is radioactive. No different than mineral contaminants they are drilled from. Same with coal and natural gas.
-Cars kill more people today than War.
-Petroleum and the Influence of Petroleum has caused 90% of all War and Conflicts in the past generation.
-Terrorism is a side effect of Petro Wealth. Ultimate solution to Terrorism is to run out of oil.
-One gallon of used motor oil can contaminant an island the size of Manhattan making it a Superfund Site. And some clunker cars leak a quart a week.
-80% of oil is now controlled by our worst enemies.
-You can be a madman like Qaadafi and typically shunned socially. But if you have his oil wealth you and your sons will be treated like Bonny Prince Harry.
-Every new Third World Oil project needs multi-million dollar bribes to prime the pump. IF no bribe is sought--there must be something terribly wrong!
-Fracking contaminants water supplies permanently.
-Fracking causes more earthquakes and seismic damage on some years than mother nature.
-Fracking chemicals contain known carcinogens. But hey, they work great!
-1/3 of all Cancers are related to the Petrochemical Industry.
-1/2 of all spontaneous abortions are related to chemical toxicity.
-Going to the Moon for a crew of three, will use more petroleum than a city of 300,000 for one year.
-Petroleum is a mutagen. And it may be exerting more effects than radiation. And it is in our DNA.
-Oil has empowered us, but it has also made us mad.
Would you please provide the references you used to prepare your document. I would guess that none of the references would be refereed.
You contradict yourself again and again. On the one hand you talk about being past peak oil and a few sentences later you talk about fracking. If fracking is utilized on an industrial scale, peak oil will not be reached in the coming decade. Oil will last more than a century. In this article the author talks about peak oil and the effects of fracking on it. Though he focuses mainly on the environmental aspect, he proves that the theory of "peak oil" is wrong.
http://www.monbiot.com/2012/07/02/false-summit/
"People in desert cities are becoming vampires. Staying indoors all night by the Air conditioner and TV. Coming out only at night."
Is this not just a return to the norm pre-1960s, before the grossly inefficient use of (usable) energy and resources that has been development of such locales. It could be argued that this is a reversion towards sustainability.
You always give very odd answers that usually have no relevance to the actual article
The real problem associated with peak oil is that high prices will slow economic growth. It costs more to produce oil through fracking and tar sands than with conventional wells. And that is precisely what we are seeing, high costs and a never-ending recession.
Can you please tell me which bar you drink in so that I can avoid it? Or don't they let you at night on your own?
And it is no accident that your Monbiot article is fried in other fora :-)
If Monbiot uses very optimistic depletion rates for conventional oil he should at least bring data which support his approach.
With actual data on depletion provided by producing(!) countries, which are two times higher than Monbiots, Monbiot's conclusions are not tenable.
Don't let Data get in the way of The Truth.
Sometimes common sense negates agenda driven science.
If we wait for the most conclusive data before we act, for many problems we will be waiting centuries.
See any global warming denier argument.
And the Ttobacco Industry denied smoking causes lung cancer, despite overwhelming public perception. Even after mountains of data and decades of longitudinal studies, as recently as the 90's, the Tobacco Industry was spouting out its denials in Congressional Subcommittee Meetings.
Yes that is true, I haven't verified Monbiot's conclusions. He does have a tendency to get a bit wild when making allegations, but you can't dispute the fact there is a certain amount of truth in most of his insinuations. Oil won't last for a century, but it will last much more than predicted 10 years ago.
No surprises here. Everyone already knows that Asians are less transparent than the West. And even thought many people don't want to admit it, the Asians are also more deceitful and corrupt. Preemptively: Yes, western governments are hypocritical liars. But all governments lie. The difference is that common Americans, and many other westerners, are generally straightforward and honest people. Even ordinary East Asians are tricky and deceitful. I've brought this up with my Chinese friends and colleagues and they take pride in this.
For the industries, again no surprises. Extractive industries shouldn't have anything to hide. And if they do have something to hide it is likely terrible (such as employing mentally retarded people in coal mines). In contrast, technology companies need to keep their research, development, and new products a secret to maintain a competitive advantage. They have every right to that secrecy.
I could not agree more.
As a person who grew up in a developing country in Asia, and now resides in the US, there is corruption in both places. But those who equate the two don't know what they're talking about. A couple of important points -
1. In America, bribes are taken (that too only very occasionally!) by bureaucrats and government workers to do something that IS NOT part of the job that they're paid for. In Asia, you have to pay them routinely to do what IS their job anyway. From getting a driving license, business permit to a birth or death certificate, the corruption is unbelievable. And let's not even talk about the police stations, courts and justice system.
2. If you thought #1 was bad, its gets worse. There is no stigma associated with corruption. Ordinary everyday middle class people will say things like "Well, she's so lucky. Her husband may make only X amount in terms of salary, but do you know how much he earns under the table?" and parents tell their kids "Study hard and get into the civil service. Do you know the fortune you can make within a few years?". In the early 90s there was a major stock market scam in South Asia. The chief culprit ( a man equivalent to Bernie Madoff ) who bankrupted so many ordinary people and wiped out their savings was celebrated as a hero. Why? Well for one, he made a lot of money and that's always adorable. And two, he was seen as a person who was "sticking it to the government" (utter nonsense considering that it was ordinary families, not politicians that got ruined).
So there's no need for people to want to "admit it". The truth just is, and that's the beauty of it.
What about Arcelor Mittal? Given that it's owned by Lakshmi Mittal - who is as asian as it gets - does your hypothesis hold?
Also, what about Amazon? Where are the asians in Amazon?
It appears that your comment is not only racist but also completely unfounded in fact (i.e. you did not even bother to check it against the list in the graph). You must feel pretty foolish.
The author is talking about Asian companies, not European companies owned by Asians. There is a great difference between the two and ArcelorMittal clearly falls into the second category. Mr. Mittal has himself said that ArcelorMittal is a European company. A company is classified as Asian if it conducts a majority of its business in Asia, which is clearly not the case with ArcelorMittal. And as pointed out by the original commenter, technology firms such as Amazon are secretive because of the nature of their business. With the entry barrier so low, they must be secretive or someone else will run away with their idea.
I think he means "Asian countries" by the term "Asians". There is nothing wrong (or right for that matter) with anyone based on race. But of course culture does matter and it shapes nations much in the way it shapes individuals. And it gives me no happiness to say that most of the large Asian countries (Middle East, South Asia and East Asia) have societies that are rotten to the core when it comes to corruption or even basic justice that Westerners take for granted. As an Asian American I am quite amused when people talk about combining the "Best from East and West".
OK - and Berkshire Hathaway? Its neither owned by Asians nor does much business in Asia. Neither is it a technology firm. So...?
I think before making an assertion as strong as "all Asian companies are secretive - its a culture thing' - it would be well advised to look at a large data set - for e.g. comparing transparency of a large number of Asian Vs US/UK countries.
At this point - this hypothesis has no basis in fact. It may or may not be true - but to assert so strongly without any proof or data is premature - to put it kindly.
Well, we both agree but I need to wonder what developing country in Asia you were from because of course the Asian countries differ significantly in terms of corruption and what you describe is pretty extreme.
I'm going to guess, South East Asian?
I live in China, and in major cities (I'm not sure what occurs in *typical* villages in terms of corruption) you don't need to bribe officials to perform their jobs. You just need to bribe them when you ignore the excessive regulation. And many people give government officials gifts without explicitly asking for anything in return just so they can gain an ally for future use. But obtaining birth certificates and licenses is done cleanly.
Its related to poverty and low quality of life. So, every body wishes for a windfall gain. Soon you will find corruption pervading at all levels in US and UK. Because, the govt. won't be able to provide adequate jobs and good quality of life to its people.
Even in India, if you provide food for all and health insurance to everybody and control inflation, I am sure corruption will reduce drastically. Recently, my brother in law (who is a civil servant) was telling me that the govt. is providing for mediclaim upto 10 lakhs per person. Moreover, he is getting easy car loan and house loan. Then why should he ask for bribe when he is earning with dignity ?
indyeah -
Thanks for your response.
I get your point but to be honest I don't think I can agree with you and here's why - yes, you are absolutely right that there is poverty and low quality of life. You are also right that several positions in government or state (especially lower ones are paid poorly).
But there's a major problem with your hypothesis - the worst corruption is seen at the highest levels of government by people who are already rich and powerful. You have for sure corruption at the level of the court clerk or police constable, but that is nothing compared to the ill-gotten millions made by ministers, top bureaucrats, commissioners and the like. Surely you cannot possibly argue that a cabinet minister is looting the country because of any real need for food, health insurance or quality of life?
There's also a second issue - the level of corruption and dishonesty goes well beyond what is needed for a secure lifestyle. Yes, the sub-inspector in the police precinct makes less in salary than a reasonable amount - but he loots far more than what is necessary to provide his family with a comfortable life. The bribery is completely out of proportion to the need. It may start with a desire to make enough, but very quickly devolves into an avarice to make as much as possible. It would be the equivalent of a poor hungry man going to a grocery with the intention of stealing milk and bread but then making off with as much steak and fine wine as he can get his hands on.
I sincerely hope these countries go the way you say - once a good salary and benefits are provided, bribery will stop. Somehow I don't think it will. Its like a man eating tiger - first kill is in desperation because other prey are not available, but then once it has a taste for human blood, near impossible to stop.
Thanks.
The Seattle Times recently published a major 4 part article regarding the secrecy surrounding Amazon.
The only strictly "big oil" in the top 10 is BP; Statoil is essentially a state entity.
Why the phrase "In praise of big oil" was used on the main page escapes me. Why not say: "In condemnation of Asia"? If we look at the bottom 10, it would be more accurate.
Geez Luis, Anheuser and Bershire are not Russian, only Gazporm is, and it is big oil (sort of?).