Austria’s Hirtenberger Group, which produces industrial equipment and defence technology, is one of 37 companies that failed to make passing grades in an analysis of ethics and corruption released by Transparency International on Monday.

Austrian arms firm fails

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

However, there is no suggestion that any individual company in the report has engaged in corrupt practices.

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.

Thirty-seven companies, including Hirtenberger, showed no evidence at all of having anti-corruption or ethics programmes. When contacted by The Local, a spokeswoman at Hirtenberger said the company had “no comment” in response to the report.

Corruption in the defence industry is an issue that we all should be concerned about,” report author Katie Fish told The Local. “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.”

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 and both Accenture and Airbus reaching 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.”

“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. There is still a need for improvement even in western Europe.”

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.”

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