'Defense companies need to boost transparency'

By Kim Bo-eun

Korean defense companies need to step up efforts to enhance transparency and stem corruption, said Mark Pyman, an anti-corruption expert for the defense sector.

"The Korean government has made a lot of progress in terms of improving transparency but defense companies remain secretive and refuse to disclose critical information," said Pyman, director of a defense and security program of United Kingdom NGO Transparency International (TI).

The program's international anti-corruption index released last week listed South Korea in the "B Band" which means they have a low risk of corruption, based on detailed assessments of five main indicators: politics, finance, personnel, operations and procurement.

However, the report released last year on five Korean defense companies scored them very poorly ― one was listed in the “C Band” and the other four in the “E Band.”

The examinations of efforts to enhance transparency were based on information made public as well as internal information provided by the companies. The areas examined were training, personnel, policies and codes, corruption risk assessment and leadership.

“Historically, defense companies have been hidden, and there hasn’t been pressure from the government or the public to disclose what they do,” said Pyman.

“The defense ministry, as the customer, should make it clear that it expects good anti-corruption systems from its contractors. The ministry and the companies should work together to collectively eradicate corruption, such as eliminating commission agents.”

According to Pyman, promoting transparency in the defense sector is especially important, for several reasons.

“First, defense is a big source of spending. And defense corruption can give rise to dangerous outcomes, such as when defective equipment is bought because corruption was involved, as it puts lives at risk,” he said.

He added that enhancing transparency in the defense sector, an area which has traditionally had a lot of corruption, will lead to improved efforts in other sectors as well.

Despite its fair performance on the anti-corruption index, Pyman spoke of several areas in which the Korean government could improve.

“The government should strengthen its whistleblower system, which is crucial in discovering corruption, and putting an end to it. Improvement in procurement is also necessary, by encouraging competition among defense companies,” he said.

Lastly, he called for an active engagement of the civic society, to make the defense sector more accountable.