"Big corporations bring big corruption to Ukraine," reads the headline of a Nov. 5 news release by the Ukrainian branch of Transparency International, a Berlin-based corruption watchdog.
The group researched
124 global companies worth $14 trillion that are listed as the biggest
corporations by Forbes magazine. It found that 90 of them don’t disclose how
much in taxes they pay in countries located outside where their headquarters is.
Another 54 companies don’t publicly report on their foreign revenues.
However,
neither International Financial Reporting Standards, nor U.S. Generally
Accepted Accounting Principles, the globe’s two common corporate financial languages,
require reporting to publicly reveal revenues and taxes of foreign
subsidiaries. Such data is usually available only to corporate senior managers.
Italian
oil and gas producer Eni is the most transparent company when it comes to
reporting on foreign operations – it scored 7.3 points on a 10-point scale with
10 as the highest grade that reflects maximum transparency. British telecom
operator Vodafone enjoys second place with 6.7 points, and Norway’s energy
behemoth Statoil is the third, with 6.6 points.
Russian
state-run energy giants Gazprom and Rosneft are among the least transparent
businesses with only 3.5 and 4.2 points, respectively.
Meanwhile,
Eastern Europe’s largest lender Sberbank, a state-owned Moscow-based bank that
is the reincarnation of the only commercial bank that operated in the Soviet
Union, has only 1.5 points.
Japanese
automaker Honda, and Bank of China have the lowest scores – 1.3 and 1,
respectively.
The lack
of transparency is not just a problem of businesses from emerging markets, the
report found. American tech giants Apple (2.7), Google (2.2) and Amazon (2) are
also on the bottom of the list. With short one-sentence replies to media
requests, the global tech leaders remain closed to public scrutiny on many
issues that journalists feel concerned about.
For
Apple, it’s easier to reveal that their
chief executive officer is gay, rather than to share reports on
sales in various countries around the world, including in Ukraine.
“Ukrainians
will not stay silent about business activity that involves corrupt deals,”
said Transparency
International Ukraine head Andriy Marusov. “During
the Revolution of Dignity we have confirmed this in a very persuasive way by boycotting
enterprises belonging to supporters of (Viktor) Yanukovych’s regime or the
Russian companies. Any companies that operate in Ukraine should learn this
lesson – from global natural resource extractors or pharmaceutical producers to
local food makers or confectioneries.”
A May
survey conducted by the Kyiv-based Institute for Economic Research and Policy
Consulting found that 52 percent of 450 polled corporate
executives in Ukraine believed that corruption was widespread in their sector, 10
percentage points less than a year ago. Moreover, fewer business managers saw
personal connections with politicians as a key success factor. In 2013, 48
percent felt this way, while the most recent survey shows only 32 percent do.
Kyiv Post associate business editor Ivan Verstyuk can
be reached at [email protected].
