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Spain's arms firms fail to meet grade on ethics

Emma Anderson · 27 Apr 2015, 12:35

Published: 27 Apr 2015 12:35 GMT+02:00
Updated: 27 Apr 2015 12:35 GMT+02:00

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The study analyzed 163 defence companies across 47 countries for having proper ethics and anti-corruption programmes in place - programmes which the anti-corruption group explained can help prevent shady deals that may lead to the sale of defective equipment and cause harm to soldiers.

Such programmes may include having whistleblower support and processes for disclosing potential conflicts of interest.

The report included evaluations of Spanish state-owned shipbuilding company Navantia as well as information technology and defence systems company Indra Sistemas, neither of which made passing grades.
"It is surprising that UK companies are now in the upper half of the index, and that we do still see companies from Spain, France and German appearing in the lower half," Katie Fish, the author of the report told The Local. "There is still a need for improvement, even in western Europe."
Navantia showed slight progress, going from a rating of F to E in the 2015 report, though it still scored 0 percent on three out of five criteria.

Navantia is Europe’s fifth-largest shipbuilder and the ninth-largest worldwide.

Indra Sistemas appeared to worsen since 2012, receiving a passing grade of C in the last report but a below average D grade in 2015. However, Fish explained that this could be due to more rigorous criteria used in this year’s study.

Fish also said that for both years of the study, Indra provided internal information, reflecting a trend across all companies of greater disclosure.

Faulty weapons and corrupt deals

Overall, while 33 percent of the companies reviewed in the last report in 2012 showed improvement, two-thirds, or 107 companies, were still rated with below passing grades this year.

Thirty-seven companies showed no evidence at all of having anti-corruption or ethics programmes.

"Corruption in the defence industry is an issue that we all should be concerned about," Fish said.

"It can be wasteful to taxpayers when money could be better spent on healthcare or education, and it can also impact the lives of soldiers when they are handling faulty equipment due to a corrupt deal, soldiers who are defending us all."

Just eight companies showed evidence of having mechanisms that encouraged whistleblower reporting and 13 companies conducted regular due diligence on agents.

In Europe and central Asia, 42 out of 62 received less than a C grade, 27 of which got the lowest grade of F.

Dublin-based Accenture, Airbus in the Netherlands and British Rolls-Royce were among the top-rated in Europe, each scoring a B based on public information while both Accenture and Airbus reached the A level when internal information provided to Transparency International was considered.

No companies in Europe and central Asia received the top A grade based solely on publicly available information.

"When you look at, say, North America compared to Europe, it looks as if the European companies are more often in the D, E and F bands, but the US is a much larger group," Fish told The Local. 

The report also recommends steps that company CEOs, country leaders and investors can take to improve anti-corruption measures, such as having more disclosure of programmes on company websites and conducting independent reviews.

"Just as companies have a responsibility, governments equally have a responsibility," Fish explained. "Politicians can really push to help the industry improve."

There is no suggestion that any individual company in the report has engaged in corrupt practices.


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Emma Anderson (emma.anderson@thelocal.com)

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