Finance crisis shows transparency vital - group - Islamic Relief USA

“The International Foundation for Organic Agriculture topped the table …They were followed by aid agencies and non-governmental groups Plan International, Transparency International, Catholic Relief Services and Islamic Relief.”

Mon Dec 8, 2008

By Peter Apps

LONDON, Dec 8 (Reuters) – Lack of transparency in the banking sector helped cause the global financial crisis and multinational companies, inter-governmental and non-governmental organisations must do more to open up, a report said on Monday.

In its annual Global Accountability Report, the London-based One World Trust rated 30 corporations and organisations from Goldman Sachs to the United Nations refugee agency UNHCR but found only one met what it described as minimum standards.

The overall worst performers were UN nuclear watchdog the International Atomic Energy Agency (IAEA), defence alliance NATO and in bottom place the International Olympic Committee (IOC), all accused of lacking openness and accessibility to those their actions affected.

“The credit crunch and global financial crisis shows just how important transparency is in all sectors,” said trust deputy head of research Letitia Labre. “Companies and organisations are not doing enough to be accountable to those they affect.”

The impact from bad debts in the US mortgage market spread through the global financial system, with banks no longer trusting each other to lend money, prompting a credit crunch and worldwide slump in markets and economic growth.

Critics blame banks and other investment institutions for packaging and selling financial products they did not fully understand, with little clarity on who would take responsibility and with mutual mistrust now paralysing markets.

The report, which focuses on a representative sample of organisations each year, rated only one private sector bank — one of the few surviving Wall Street banks, Goldman Sachs. It put the bank in the bottom third of the list.


In contrast, mining firm BHP Billiton and oil giant Shell — representatives of industries often criticised for their lack of transparency in negotiating contracts with developing world governments — were among the best performing corporates.

Transparency campaigners have praised the Extractive Industries Transparency Initiative for improving the transparency of mining and similar firms, although say colossal problems still remain.

The International Foundation for Organic Agriculture topped the table followed by multilateral lender the European Bank for Reconstruction and Development (EBRD), World Bank group member of the International Finance Corporation and UN children’s fund UNICEF.

They were followed by aid agencies and non-governmental groups Plan International, Transparency International, Catholic Relief Services and Islamic Relief.

The poor performance of organisations such as the IAEA and International Olympic Committee were particularly worrying, the trust said.

“These are very powerful bodies which have the ability to affect the lives of all of us,” said Labre.

The report graded the organisations according to four dimensions of accountability: transparency, participation of stakeholders, evaluation of performance and scalability and response to complaints.

Researchers examined documents provided by the organisations, interviewed their key officials and examined publicly available information as well as talking to stakeholders and experts on each of the organisations. (Editing by Charles Dick)

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