Companies Lack Transparency on Foreign Operations, Report Says

The world’s top companies disclose few, if any, financial details about operations outside their home country and are often tight-lipped when going public with their anti-corruption efforts, says a new report from Transparency International. The organization, which monitors and publicizes corporate and political corruption, adds that that the largest oil, gas, and mining companies are ill-prepared for forthcoming rules in the United States and European Union that require the disclosure of payments to foreign governments.

“Transparency in Corporate Reporting,” analyzed 124 companies culled from the Forbes list of the world’s largest publicly-traded companies. It ranked them based on measures taken to prevent corruption, information about subsidiaries and holdings, and key financial information about overseas operations. Ninety of those companies do not disclose the taxes they pay in foreign countries, while 54 disclose no information on their revenues in other countries, it found.

The report also purports that the world’s largest oil, gas, and mining companies are not ready for new EU disclosure requirements that are slated to begin in July 2015. These regulations require extractive companies to report payments to governments on a country-by-country and project-by-project basis. A similar rule, delayed by an oil lobby lawsuit, is also in the works by the U.S. Securities and Exchange Commission. Of the 24 extractive companies in the report who would fall under the new rules, 19 disclose tax payments and revenue in fewer than half the countries where they operate. Only BHP Billiton, Statoil, and Indian firms ONGC and Reliance disclose tax payments in nearly every foreign country where they do business.

U.K. companies drew praise from Transparency International, with the 13 of them included in the report earning high rankings for their anti-corruption efforts. All of them publicly commit to compliance with anti-corruption laws and have codes of conduct or anti-corruption policies that apply to all employees.

All 44 U.S. companies included in the report publicly commit to compliance with anti-bribery laws, but that wasn’t enough to escape criticism. Only two companies publish tax payments in foreign countries (ConocoPhilips in Canada, Walmart in Chile). Amazon, Apple, and Google are among the companies whose company leadership “doesn’t publicly demonstrate support for anti-corruption on their website” and neither Amazon nor Apple “says whether they have anti-corruption training for staff.” Amazon is also the only U.S. company silent about its policy on gifts, hospitality and expenses, as well as on the channels it provides for whistleblowers, the report claims.

Lingering at the bottom of the report’s rankings, were eight Chinese companies. Ay six of the eight, “leadership does not demonstrate public support for anti-corruption.”  Only one reports a policy on gifts and hospitality, and only one reveals whistleblower protections and channels for reporting corruption. None explicitly prohibit facilitation payments or discloses financial data in any of the foreign countries where they operate. Transparency International reiterated its call on China, the world’s largest trading nation, - to join the Organisation for Economic Co-operation and Development (OECD) anti-bribery convention which sets standards for government investigation and prosecution of companies that bribe foreign governments.