2015

Mark Pyman [email protected] Katherine Dixon [email protected] Katie Fish [email protected] The Index at a glance 2015

2015 2012 • 163 companies • 129 companies • 47 countries • 36 countries • 41 questions • 34 questions • 6 bands, A (best) - F • 6 bands, A-F •63 companies provided • 34 companies provided internal information internal information • All 163 company reports available on the website Results at a glance 2015

Most companies show little Many defence companies evidence of ethics and anti- now addressing corruption corruption programmes risks more systematically • 2/3rds are in bands D-F • 60% of companies are scoring • 23% provide no evidence at all better Agents: Only 13 companies provide • 33% of companies have evidence of due diligence on agents improved by one band or more • 17% of companies are in A & Whistleblowing: Only 8 have B, compared with 8% in 2012 whistleblowing programmes that encourage reporting • Improvement in all regions of the world Offsets: Only 3 have good anti- corruption procedures on offsets Public disclosure is much improved What next? Realising

our common interest 2015 CEOs, Boards of Directors Robust ethics and A-C programme; Engage openly Defence Procurement Chiefs Require ethics and A-C programmes by all bidders Exporting gov’ts: Require robust A-C programmes in national defence companies; Engage openly Investors & portfolio managers Ask the CEO and Chair to explain their programme Civil society: Engage actively with gov’ts and defence companies 2015 Results comparison 2015 How did • Questions approx. 7% companies harder • 76 scored higher (60%) in the 2012 • 42 improved by one or index score more bands (33%) • In bands A/B, up from in 2015? 10 to 26 companies • In band F, down from 46 to 35 companies • 6 companies down one band • Improvement in all regions Companies improving 2015 US companies 29% of global exports 2015

Bechtel, Fluor, Lockheed Martin, Alion Science & Technology, Ball Raytheon & Technologies Corp., CSC, Excelis Inc., Gencorp, CACI, CAE, CUBIC, Curtiss-Wright Hewlett-Packard, KBR, Northrop Corp, Esterline Technologies, FLIR Grumman, Rockwell Collins, Systems, Huntington Ingalls United Technologies Industries, Mantech, Navistar, Precision Castparts Corp., Teledyne ATK, Boeing, Booz Allen Technologies, Triumph Group, VSE Hamilton, Day & Zimmerman, Dyncorp International, GE AAR, The Aerospace Corporation, Aviation, , AM General, Moog Harris Corporation, Honeywell, Jacobs Engineering, L-3 Batelle, General Atomics, M.C. Communications, Leidos, Dean, The Mitre Corporation, SRA Mission Essential, Oshkosh, Intl., SRC Inc., Wyle SAIC, Textron Russian companies Chinese companies 27%, 6% of global exports 2015

Company Public Public Public Info Public info Information Information 2012 2012 2015 2015 (Score) (Score)

Gorky Automobile Plant (GAZ Plant) E 18 E 14 Irkut Corporation F 0 F 0 Joint-stock Company Concern "Almaz- Antey" F 0 F 0 JSC United Engine Corporation F 0 F 0 KBP Instrument Design Bureau JSC F 0 F 0 RTI Systems E 15 E 14 Russian Aircraft Corporation MiG (RSK MiG) F 0 - - Russian Helicopters JSC F 3 F 3 Sukhoi Company (JSC) F 0 F 0 Tactical Missiles Corporation JSC F 0 F 0 "Research and Production Corporation F 4 - - "UralVagonZavod" OJSC

Aviation Industry Corporation of China (AVIC) F 0 F 0 China North Industries Group Corporation F 0 F 0 (NORINCO Group) China Shipbuilding Industry Corporation F 6 F 0 German companies 7% of global exports 2015

Company Public Public & Public Info Public & Information Internal 2012 Internal 2015 Information Info 2012 2015 Airbus Group B A C -

Diehl Stiftung & Co. D D D C Krauss-Maffei F D F - Wegmann GmbH & Co.

MTU Aero Engines AG D B D B

Rheinmetall AG D B E -

ThyssenKrupp AG B A C A French companies 5% of global exports 2015

Company Public Public & Public Info Public & Information Internal 2012 Internal 2015 Information Info 2012 2015 Airbus Group B A C -

Dassault Aviation F - E -

DCNS D B E - - MBDA Missile Systems D D D

Nexter Group F - F -

Safran SA D C D -

Thales Group B B B -

Zodiac Aerospace E E F - UK companies 4% of global exports 2015

Company Public Public & Public Public & Information Internal Info 2012 Internal 2015 Information Info 2012 2015 Group Plc B B D -

BAE Systems Plc B A B B Chemring Group Plc C - C B Plc B A C - GKN Plc C B C - Plc B B B A Qinetiq Group Plc B A B A Rolls-Royce Plc B B C - Group Plc B A B A

Ultra Electronics Holdings Plc B - E - Italian, Spanish &

Scandinavian companies 2015

Company Public Public & Public Info Public & Information Internal 2012 Internal 2015 Information Info 2012 2015 Avio S.p.A. D - D - Fincantieri S.p.A. C C E - Finmeccanica S.p.A. B B C - Indra Sistemas D D C B Navantia E - F -

Kongsberg C B C B Nammo C C D -

Patria C B F -

Saab C B C B

Terma F - - - Japanese & South Korean companies Company Public Public & Internal Public Info Public2015 & Information Information 2015 2012 Internal 2015 Info 2012

Fujitsu B B B A Itochu Corporation E - - - Japan Marine United F - E - Kawasaki Heavy Industries E D F - Mitsubishi Electric Corp. D - E - Mitsubishi Heavy Industries D - E C NEC C B D B

Daewoo C C D C Doosan E E F - Korea Aerospace Industries F - - - LIG Nex1 Co. E E F - Poongsang Corp F - F - Samsung Techwin D - E - Other countries 2015

Company Public Public & Internal Public Info Public & Information Information 2015 2012 Internal 2015 Info 2012

Aselsan (Turkey) E - E - Otokar (Turkey) D - F - Denel (South Africa) D - F - Avibras (Brazil) D - F - Embraer (Brazil) C B D - Bharat Earth Movers (India) E - F - Bharat Electronics (India) E - F - Hindustan Aeronautics (India) D - D - Sapura (Malaysia) F D F - Singapore Technologies F D F - Elbit Systems (Israel) C B D - Israel Aerospace C B F - Israeli Military Industries E C F - Rafael B B D - Ethics & anti-corruption programmes 2015 Leadership, governance

& organisation 2015 • Company leadership speaking out regularly in A-C 66% in bands A-C vs 7% in bands D-F • Periodic Board review of the Programme in A-C 66% in bands A-C score well (only 29% in 2012) Risk management 2015 • Only 22 companies provide good public evidence of corruption risk assessment processes • 53 companies provide public evidence of due diligence on agents. BUT only 13 indicate that this is refreshed regularly • 54% of companies make their stance on anti-corruption clear to suppliers Company policies & codes 2015 • Best scoring pillar. Average scores on this pillar have still increased since 2012, 56 companies by at least 10% • But, 76% of companies provide no evidence explicitly prohibiting facilitation payments • UK companies dominate the top scoring companies in Europe but good practice is seen globally Training 2015 • Much more disclosure since 2012. 53 companies now provide evidence of an anti-corruption training module: only 20 companies did so in 2012 • But..little evidence of regular training for board members; OR for staff in sensitive positions Personnel & helplines 2015 • 67% of companies provide public evidence of at least one whistleblowing channel • BUT..only 8 companies provide good evidence of mechanisms to ensure whistleblowers are supported and not deterred • Major topic Offsets 2015 • 82 companies of the 163 enter into offset contracts • Only 3 companies provided detailed evidence of integrity procedures around offsets contracting • Only 13 companies provide public evidence that corruption risk is addressed or of due diligence; Using internal information, 24 companies provided evidence • Major topic, major corruption risk area Next? 2015

• Governments: Improvement in their own procedures. Require contractors to have ethics and A-C programmes. National CI analyses. • Companies: Advance in key areas - encourage whistleblowing, offsets, agents and third parties.. • TI: Government GI 2015 Index out in the autumn • TI: A second Raise the Bar report? Post mortem with industry on CI2015, and on the normative level of the questions? Ask for company surveys of their staff? Your views? 2015 Results based on public information 2015

Bechtel, Fluor, Lockheed Martin, Raytheon Accenture, Airbus Group, Babcock, BAE Systems, Cobham, CSC, Exelis, Finmeccanica, Fujitsu, GenCorp, Hewlett-Packard, KBR, Meggitt, Northrop Grumman, QinetiQ, Rafael Advanced Defense Systems, Rockwell Collins, Rolls-Royce, Serco Group, Thales, ThyssenKrupp, , United Technologies

ATK, Boeing, Booz Allen Hamilton, Chemring, Daewoo Shipbuild’g & Marine, Day & Zimmermann, DynCorp International, Elbit Systems, Embraer, Fincantieri, General Dynamics, GE Aviation, GKN, Harris Corporation, Honeywell, Israel Aerospace Industries, Jacobs Eng’g, Kongsberg, L-3 Communications, Leidos, Mission Essential, Nammo, NEC Corporation, Oshkosh, Patria, Saab, SAIC, Textron, URS Alion Science and Technology, Avibras Indústria Aeroespacial, Avio, Ball Aerospace & Technologies Corp., CACI, CAE, Cubic, Curtiss-Wright Corporation, DCNS, Denel, Diehl Stiftung, Esterline Technologies, FLIR Systems, Hindustan Aeronautics, Huntington Ingalls Industries, Indra, ManTech, MBDA Missile Systems, Mitsubishi Electric, Mitsubishi Heavy Industries, MTU Aero Engines, Navistar, Otokar, Precision Castparts Corp., Rheinmetall, Safran, Samsung Techwin,Teledyne Technologies, 2015 Toshiba, Triumph Group, VSE

AAR, The Aerospace Corporation, AIDC, AM General, Aselsan, Bharat Earth Movers Limited, Bharat Electronics Limited, Doosan DST, Gorky Automobile Plant, Israel Military Industries, Itochu, Kawasaki Heavy Industries, LIG Nex1, Moog, Navantia, RTI Systems, RUAG, Sumitomo Corporation, Zodiac Aerospace

AAL, Abu Dhabi Ship Building, Advanced Electronics Company, Almaz-Antey, Antonov, Arab Organization for Industrialization, Arsenal, ASC, Aviation Industry Corporation of China, Battelle, BelTechExport Company, Boustead Naval Shipyard, CEA Technologies, China Shipbuilding Industry Corporation, Damen Schelde Naval Shipbuilding, Dassault Aviation, FAdeA, General Atomics, Heavy Industries Taxila, Herstal Group, Hirtenberger Group, Igman d.d. Konjic, Indian Ordnance Factories, Iran Electronics Industries, Irkut Corporation, Japan Marine United, KBP Instrument Design Bureau, Kharkov State Aircraft Manufacturing Company, King Abdullah II Design and Development Bureau, Korea Aerospace Industries, Krauss-Maffei Wegmann, M.C. Dean, MITRE Corporation, Nexter Group, NORINCO, Pakistan Ordnance Factories, Polish Defence Holding, Poongsan Corporation, PT Dirgantara Indonesia, RSK MiG, Russian Helicopters, Sapura Secured Technologies, SATUMA, SC Uzina Mecanica Cugir SA , SRA International, SRC, Inc, ST Engineering, Sukhoi, Tatra Trucks, Terma, Topaz, Tactical Missiles Corporation, Turkish Aerospace Industries, United Engine Corporation, Uralvagonzavod, Wyle, Zastava Arms Regional results

Europe & Central Asia 2015

Aselsan, Gorky Automobile Airbus Group, Accenture, Babcock, Plant, Navantia, RTI systems, BAE Systems, Cobham, Ruag, Zodiac Aerospace Finmeccanica, Meggitt, Qinetiq, Almaz-Antey, Antonov, Arsenal, Rolls-Royce, Serco Group, Thales, Beltechexport Co, Damen Schelde Thyssenkrupp, Ultra Electronics Naval, Dassault Aviation, Herstal Group, Hirtenberger Group, Igman Chemring, Fincantieri, GKN, d.d. Konjic, Irkut Corp, KBP Kongsberg, Nammo, Patria, Saab Instrument Bureau, Kharkov State Aircraft Company, Krauss-Maffei Avio, DCNS, Diehl Stiftung, Wegmann, Nexter Group, Polish Indra, MBDA missile systems, Defence Holding, RSK mig, Russian MTU aero engines, Otokar, Helicopters, SC Uzina Mecanica Rheinmetall, Safran Cugir SA, Sukhoi, Tatra Trucks, Terma, Topaz, Tactical Missiles Corp, Uralvagonzavod, Zastav Arms Results based on Internal Information 2015