Corruption Perception Index: ‘It cannot be a box-ticking exercise’- NOUV Director

Last Updated on Thursday, 27 January, 2022 at 10:46 am by Andre Camilleri

Malta scored 54, well below the average for Western Europe.

Malta has made very slight progress in this year’s Corruption Perception Index. The CPI is published yearly by Transparency International. Malta received a score of 54 this year, edging up only one point over its 2020 score of 53. The country’s score is well below the 66 average for Western Europe.

Globally, Denmark, Finland and New Zealand ranked first, with a score of 88, while South Sudan is last on the list, with 13 points. In the Western Europe region, Bulgaria (42), Hungary (43) and Romania (45) remain the worst performers.

Transparency International said that two years into the Covid-19 pandemic, and despite early warnings, Europe continues to use the crisis as an excuse for stagnating anti-corruption efforts and troubling decisions. Accountability and transparency measures are also being neglected or rolled back.

The reports cite Cyprus’ golden passports scandal; however, it does not mention Malta’s own citizenship scheme. In addition, no mention is made about Malta’s recent reforms. On a global level, this year’s Corruption Perceptions Index reveals that corruption levels have stagnated worldwide. Despite commitments on paper, 131 countries have made no significant progress against corruption over the last decade and this year 27 countries are at historic lows in their CPI score. Malta’s 2020 score was an all-time low for the country, which Transparency International described as a ‘significant decliner.’

It highlighted the need for reforms and the increased perception of corruption as a result of the findings of the Daphne Caruana Galizia public inquiry, as well as the protests in 2020, the resignation of Joseph Muscat and the arrest of Keith Schembri.

Daniel Bilocca, Corporate, Risk and Compliance Director at NOUV. Photo: Rene Rossignaud

The news has sparked strong reactions across the islands. Speaking to the Malta Business Weekly, Daniel Bilocca, Director, Governance, Risk, and Compliance, NOUV,stated, “If Malta is to start making significant improvement in its position in the Corruption Perception Index, accountability and transparency need to become ingrained values across all institutions. Both regulators and us operators must work together for a robust yet reasonable plan on how to get Malta off the grey list. But just focusing on getting Malta off the grey list at all costs, by instigating more onerous AML procedures, might send a positive signal but will not get us far. This does not mean that if the inclusion of new and more onerous regulations are really necessary, then yes, let’s focus on enacting them in a harmonious way that will add the necessary controls and will not hinder businesses.

Let’s not beat around the bush. The country-wide culture around AML, governance, and accountability needs to be addressed. Opting for a ‘fast and furious’ approach will leave many casualties along the way. Small and medium enterprises might not be able to cope with the requirements posed and thus, have no other option but to close shop and have all their employees jobless. This cannot be a ‘box-ticking” exercise, but the start of a new way of operating, which has to become a second nature to all stakeholders across the sector.”

He added, “On the other hand, the fact that we, as a nation, are becoming more conscious of the situation and how to address it, is encouraging. Some difficult decisions still need to be taken to show good will. We also need to address some core issues so that we can absorb the true spirit of regulation. At the same time, we need to strike a healthy balance so that while we address the issues and concerns, we do not create a sector which makes it increasingly impossible to work in. True that the pandemic is slowly retracting, but many businesses are still struggling. We cannot risk closure of business and further loss of employment.”

“Bottom line: We need to collectively nurture a culture where everyone understands the importance and true value of operating accountable and transparently. Only then we will start making inroads to improve our country’s standing.” Bilocca concluded.

Speaking to this newsroom, The Daphne Caruana Galizia Foundation, Transparency International’s Malta contact point, also reacted to Malta’s low Corruption Perception Index score, “The CPI measures the perceptions of experts and business people. It is a composite indicator based on 13 external data sources and uses a methodology that has been adjusted and refined to allow comparison over time. A change in 1 or 2 points in a country’s CPI score often happens from year to year. This can be due to a change in a single data source, so it is not a reliable indicator that the situation is improving. Malta’s 1 point improvement in CPI 2021 follows a sharp drop in the previous year’s CPI. This indicates that not enough is being done about public sector corruption. For example, there has been no prosecution for high level corruption despite the serious scandals that have been reported on for several years.

Malta urgently needs to address the problems that led to the country’s FATF grey-listing and address state failures and gaps in the systems that should protect fundamental rights. The public inquiry into the circumstances of Daphne’s assassination documented multiple institutional failures, identified the need to address impunity, corruption, and abuses of power effectively, and create an enabling environment for journalism as key areas for reform. As Transparency International’s Chair, Delia Ferreira Rubio says, “Human rights are not simply a nice-to-have in the fight against corruption. Authoritarian approaches destroy independent checks and balances and make anti-corruption efforts dependent on the whims of an elite. Ensuring people can speak freely and work collectively to hold power to account is the only sustainable route to a corruption-free society.” Without proper protection of fundamental rights, the accountability and transparency of state institutions and public officials cannot be assured.”

The MBW also reached out to leading academic Dr George Vital Zammit, Head of Public Policy at the University of Malta for his comments. “For the past 9 years, Malta has been scoring in the mid-50s, with no significant improvement or regress. Malta is therefore consolidating itself in a ranking position that is flanked by countries where corruption is systemic, or substantial enough to shape the national economy. Whereas this is a perception exercise, collated by experts, the ranking is considered to be valid, with strong correlation to reality.

Malta has to be more ambitious here, or else risk getting stuck in a position where country attractiveness may suffer. Countries in 2021 are reported to have backslidden due to other urgent reforms that needed to be addressed, but this should be no alibi. Whereas 2021 can be seen as a “continuity” of previous years, an important test lies ahead for our next ranking. With 2022 being an election year, public leaders in Malta will be facing the dilemma of whether to take concrete action, or succumb to populist and partisan measures and shelve once again the necessary bold decisions to restore credibility on the international stage. Resting on our laurels is not an option.”

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