Guest Post: The Government Defence Integrity Index — Assessing Corruption in Defence

Stephanie Trapnell, Senior Advisor on Defence and Security at Transparency International, and Matthew Steadman, Research Officer at Transparency International UK’s Defence and Security Programme, authored today’s post on the UK Programme’s Government Defence Integrity Index. The Index evaluates corruption risks across defence financing, operations, personnel, political, and procurement for 87 countries using data on 77 defence-related areas. (As the index was produced by TI Defence & Security, a program housed within the TI-UK chapter, the British spelling is followed throughout.)

Corruption in the defence sector poses grave risks for security in both national and international contexts. Transparency International’s flagship report for the Government Defence Integrity Index (GDI) shows 86% of global arms exports between 2016-2020 (worth US$1439.6 billion) originated from countries at a moderate to very high risk of corruption in their defence sectors. The top five exporters – the United States (overall score of 55/100), Russia (36/100), France (50/100), Germany (70/100) and China (28/100) – accounted for 76% of the global total. Meanwhile, 49% of global arms imports are arriving in counties facing a high to critical risk of defence corruption.

Although President Biden’s new anticorruption strategy outlines a “whole-of-government approach” to countering corruption, it stresses the importance of addressing corruption specifically in defence and security. Indeed, the strategy is a critical and welcome acknowledgment, by a global power and major provider of security assistance, that corruption plays a considerable role in destabilising democracy. In Strategic Objective 5.5, emphasis is placed on assessment of corruption risk, causes of corruption, and political will for reform. Specifically for the security sector, there is a call for greater transparency in military budgets, whistle-blower protections, and oversight.

Not only does corruption have a devastating impact on both the defence apparatus itself and on wider peace and security, it can undermine otherwise robust democracies, by serving as a type of statecraft for defence officials and military elites. Corruption undermines the efficiency of security forces, damages popular trust in state institutions, and feeds a sense of disillusionment, which threatens the social contract and the rule of law, and can empower non-state and extremist armed groups.

Given the distinct nature of governance in the defence sector, and the evolving understanding of how corruption operates, the question then turns to what can be done to counter or prevent corruption in a traditionally secretive yet critical sector like defence. The answer is not to measure corruption itself, which is inherently covert and difficult to capture, but instead to measure institutional resilience to it. The Government Defence Integrity Index (GDI) is the only tool that captures comprehensive information on the quality of institutional controls on corruption in the defence sector.

The GDI recognises that:

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Why Has Ukrainian Military Corruption Been a Non-Story in the Current Conflict?

In my post two days ago, I noted that one reason that the Russian army’s progress in Ukraine has been slower than expected—notwithstanding Russia’s overwhelming numerical superiority—may be the corruption that has been rampant in the Russian military and defense sector for years. (See, for example, here, here, and here.) While I don’t want to attach too much importance to this factor, it does seem at least plausible to me that widespread corruption has undermined Russian military effectiveness, particularly with respect to things like supplies, maintenance, and equipment quality, and possibly also with respect to training and the competence of the leadership.

But if we think that widespread defense sector corruption has played a non-trivial role in Russia’s under-performance on the battlefield in the current war, this naturally invites a question: Why haven’t we also seen reports suggesting that Ukrainian defense sector corruption has hampered the effectiveness of the Ukrainian defense against Russia’s invasion? After all, while corruption has long been recognized as a serious problem in the Russian military, many commentators—including many Ukrainian analysts—have been saying for years that the Ukrainian military also suffers from serious corruption problems, and that those problems threaten to undermine Ukrainian military effectiveness (see, for example, here, here, and here). And yet the news out of Ukraine suggests that the Ukrainian armed forces are fighting quite effectively, without reports of equipment or operational problems that might plausibly be due to corruption.

Why is this? I have no idea—so this is going to be one of those posts where I raise a question rather than trying to argue for what I think is the most likely answer. I may try to do more research and address this in a future post, but for now let me throw out three hypotheses. I would welcome comments from readers who know more about this topic as to which of these seem most plausible, or whether there might be another explanation that I have overlooked: Continue reading

Hooray for Corruption (in the Russian Military)

As I write this, the tragic unjustified conflict in Ukraine drags on, with anguishing reports of civilian casualties and needless destruction mixed with encouraging news of the valor of the Ukrainian armed forces and the resolve of the Ukrainian people and their leaders. I won’t pretend to have any idea what will happen. I’m just hoping that outnumbered the Ukrainian resistance can hold out long enough for the political and economic pressure to have some effect—if not in changing the Russian leadership’s policy, then at least in undermining its capacity to wage war or maintain a long-term occupation.

In trying to slow the Russian army’s advance and deny Russia control of major cities and other strategic targets, the Ukrainian military may have the help of an unexpected ally: corruption. The corruption, that is, of the Russian military and defense sector. Without taking anything away from the skill and bravery of the Ukrainian armed forces, many analysts have noted that the invading Russian force appears to have been hampered by cheap and poorly maintained equipment, shortages of fuel, rations, and other supplies, and deficiencies in training and coordination. And some of these analysts have suggested that while no one factor can explain Russia’s poor showing in the field (so far), pervasive corruption in the Russian defense sector may be an important contributing cause (see, for example, here, here, and here). Continue reading

Guest Post: Toward Global Standards for Defense Sector Governance

Amira El-Sayed, Program Manager for Transparency International’s Responsible Defence Governance program, contributes today’s guest post:

The governance of military power presents one of the great global challenges of our age. The defense sector is large, powerful, and secretive, and for those reasons especially vulnerable to corruption. In many countries, small groups of elites divert defense resources for personal enrichment, which can create risks to a state’s stability and security. Perhaps ever more troubling, in many countries powerful militaries run vast and secretive business empires exempt from oversight. Some of these businesses, such as resource extraction, are nominally legal, but militaries are often enmeshed with illegal activities like the trafficking of drugs, arms, and people. This too threatens state security, in at least two ways. First, poorly governed, corrupt militaries may be unable to respond effectively to genuine national security threats. Second, when the military uses its power to secure economic advantages for elites, this may contribute to the public resentment and frustration that can fuel violent extremist movements.

Improving governance in the defense sector is especially challenging. Defense sectors have historically hidden behind an “exceptional” status that has been used to stymie governance reform, with “national security” invoked as a sweeping justification to evade legitimate scrutiny from independent institutions and experts, such as auditors, anticorruption institutions, and civil society organizations. And this is not just an issue in authoritarian states: even in democracies, militaries are often exempted from meaningful oversight by parliamentary committees, judiciaries, audit offices, and anticorruption bodies, even as oversight by those bodies expands in other areas. While the need for secrecy may well be more pressing with respect to certain aspects of military and defense policy, the exemption of the defense sector from meaningful scrutiny is often overbroad, unjustified, and used to mask corruption, misuse of resources, and incompetence.

So how do you address one of the most complex challenges in governance, in a sector that has been exceptionally secretive, opaque, and impenetrable? Some of the work has to be done at the national level in individual countries, tailored to the each country’s specific circumstances. (There are many examples of such work by Transparency International (TI) and other civil society organizations. For instance, in Ukraine TI worked to establish high-level defense anticorruption committee called NAKO, and in Nigeria TI worked with the Air Force to take examine its governance structures and anticorruption systems.) But what about global standards, along the lines of what has been developed in other areas, like human rights and labor? Here there appears to be a significant gap. True, some security-related instruments do provide some principles for state/military behavior in specific areas, such as the OCSE Code of Conduct, UN Arms Trade Treaty, the NATO Building Integrity Programme, and the Tshwane Principles. And some of the general anticorruption or governance-related instruments, such as the UN Convention Against Corruption and Open Government Partnership, have some limited applications to the defense sector. But none of these instruments offers a comprehensive global approach to defense governance.

To fill this gap, TI is launching an initiative to formulate, formalize, and promote a set of global principles that underpin responsible, accountable governance of military power—principles that would embrace the idea that the military must be accountable to the people and that would, if followed, improve domestic governance of the defense sector. That is, TI is working with national governments, other civil society organizations, and the international community to develop Global Standards for Responsible Defense Governance, embodied in a Declaration on the Responsible Governance of Military Power. Continue reading

TNI’s Gold Mine: Corruption and Military-Owned Businesses in Indonesia

The Grasberg Mine, located close to the highest mountain in West Papua, Indonesia, is the world’s largest gold mine and third-largest copper mine. The mine, owned by the corporation Freeport-McMoRan Copper & Gold, has been the site of strings of grave human rights abuses, linked to Indonesia’s own National Armed Forces (Tentara National Indonesia/TNI). TNI’s presence in the territory is ostensibly to protect the mine, and Freeport’s Indonesian subsidiary acknowledges having made payments of as much as US$4.7 million in 2001 and US$5.6 million in 2002 for such government-provided security. A report by Global Witness, however, revealed numerous other payments ranging from US$200 to US$60,000 that Freeport Indonesia allegedly made to individual military officers.

The TNI’s sale of security services to companies like Freeport is only one of the many business ventures conducted by the TNI and its officers. As Human Rights Watch has reported, the Indonesian military has been supplementing its income through both its formally established companies, and through informal and often illicit businesses such as black market dealing. Moreover, the military’s business activities (both lawful and unlawful) are largely shielded from public scrutiny: budgeting for military purposes is generally kept secret, and TNI members generally refuse to answer questions about institutional spending.

Military-owned business in Indonesia are problematic, not only because this private-sector activity impedes military professionalism and distorts the function of the military, but also because it also contributes to crime, human rights abuses, and especially corruption. This problem is greatly compounded by the fact that TNI officers generally enjoy immunity from corruption charges brought by civilian institutions. In fact, the Transparency International’s Defense and Security Program has deemed Indonesia one of the countries most prone to corruption in its defense and security institutions. It is therefore appalling that this issue has not been addressed more seriously by the Indonesian government. Although a 2004 law mandated the transfer of control over TNI businesses to the civilian government within five years, the law did not clearly specify which types of business activities were covered, and this legal loophole enabled the TNI to preserve many of its moneymaking ventures, including TNI’s infamous security services—to say nothing of already-illegal criminal enterprises and illicit corporations. Moreover, despite the five-year timetable in the law, the government has been notably reluctant to enforce the transfer of ownership, making repeated excuses alluding vaguely to the need for the TNI to compensate for the lack of budgeting for security purposes. As a result, despite some efforts to reform the way the TNI is allowed to handle its businesses, military-owned businesses in Indonesia continues to flourish, with the Indonesian people of Indonesia having to pay the price.

The government’s weak response towards the military’s non-compliance with the 2004 law is merely one of the many indicators of how impervious the TNI’s power and seeming impunity. There are factors that contribute to this impunity, along with the corresponding corruption and abuse of power in the operations of military-owned businesses: Continue reading

TI Report on Anti-Bribery Compliance Programs in the Defense Industry: Some Quick Reactions

Last April Transparency International UK released a very interesting report on the quality of corporate anti-bribery compliance programs in the defense industry. (This was the second such report; the first was issued in 2015). The report evaluated the ethics and anti-bribery compliance programs of 163 defense companies along five dimensions (leadership & governance, risk management, policies & codes, training, personnel & helplines) using publicly available information, supplemented with additional internal information from 63 cooperating firms, and assigned each firm a letter grade (A-F). The most eye-catching result, and the one that has gotten the most attention in the press releases and reporting on the report, is how badly the defense industry seems to be doing overall on this issue: Of the 163 firms included in the review, there were 4 As, 23 Bs, 29 Cs, 31 Ds, 19 Es, and 57 Fs. Thus, fewer than 17% of the defense firms examined scored in the A or B range, while close to half (47%) received a failing grade of E or F.

That’s certainly a notable and important (and depressing) finding, but digging a bit deeper, there are a few other interesting features of the report that have gotten a bit less attention, and are worth highlighting. Continue reading