The world’s biggest telecommunications companies do not disclose enough information on how they organize themselves and even less on each country where they do business which makes it difficult to hold them to account for their actions, according to a report from the anti-corruption pressure group Transparency International and its national chapter in Hungary.
In what TI claim is a first assessment of the major telecoms companies’ transparency in corporate reporting, 27 out of the 35 largest firms measured do not disclose where their subsidiaries operate and only four companies reveal information on their tax payments in each of the countries in which they are active, the campaign group says.
Overall the telecoms companies perform reasonably well in terms of how much information they disclose about their anti-corruption programmes but a significant number of corporate holdings are unreported, resulting in opaque corporate structures.
Transparency International Business Advisory Board Chair Jermyn Brooks said: “Mobile phones, the Internet and widespread access to cellular networks have proven vital to economic growth, the spread of democracy and even reducing inequality. Telecommunications companies have an important obligation to do everything possible to keep their businesses as clean as possible and stop corruption in their companies.”
The report analyses the 35 largest telecoms companies (service providers and equipment manufacturers) and ranked them based on their reporting of the measures they take to prevent corruption, information about subsidiaries and holdings, and key financial information including payments abroad.
According to these criteria European companies are the best performers, Asian companies the worst. Three companies (Deutsche Telekom, Vodafone and Telenor) scored over 50 per cent in all three dimensions.
Developments such as liberalization of rules and regulations has increased exposure to corruption, along with the temptation of big profits and the opportunities for corruption that came with large licensing fees, major equipment contracts, the sale of state operators and an increase in mergers and acquisitions. TI points out that some leading telecommunications companies, such as Vimpelcom, Alcatel-Lucent, TeliaSonera and China Mobile, have been subject to extensive corruption investigations in recent years.
József Péter Martin, Executive Director of Transparency International Hungary, said: “To ensure compliance with laws and to manage the broader risks of corruption and poor performance against ethical standards, telecommunications companies must adopt strong and clear policies and management systems to curb bribery and corruption.”
While there are anti-corruption programmes in place at most of the assessed companies, only 15 out of the 35 companies have a mechanism for regular monitoring of this programme. An anti-corruption programme can only be applied effectively in practice if it is adequately and regularly checked, the campaigners say. At management level, senior members of the management or board in the majority of the companies (83 per cent) demonstrate support for anti-corruption measures. However, only half of the assessed companies make it clear that the anti-corruption policy or the code of ethics applies to their directors as well. To download the 44-page report visit http://www.transparency.org/.
