Honest as they come.

I don’t think so, but the United States dropped two places in Amnesty International’s annual Corruption Perceptions Index. The 2011 Index has been released in time to ponder how much those holiday gifts are really costing us.

The CPI ranks countries/territories based on how corrupt their public sector is perceived to be. It is a composite index, a combination of polls, drawing on corruption-related data collected by a variety of reputable institutions. The CPI reflects the views of observers from around the world, including experts living and working in the countries/territories evaluated.

And, yes, the United States of America is perceived as only the 24th least corrupt country on the planet. We come in behind Qatar and Chile – and just ahead of France, St. Lucia and Uruguay. OK, no more jokes about corruption in South America or fraud in the Middle East. At least there are 158 places that are perceived to be more corrupt than we are. So it is not that we are particularly bad, but it does make one ask if we can be better. It is not just tiny, highly controlled countries that are ahead of us, but some of our strongest competitors.

After all, we are not as goody two-shoes (where does that awful phrase come from?) as New Zealand, Denmark, Finland, Sweden, Singapore, Norway, Netherlands, Australia, Switzerland, Canada, Luxembourg, Hong Kong, Iceland, Germany, Japan, Austria, Barbados, United Kingdom, Belgium, Ireland, Bahamas, Chile and Qatar. At least we aren’t at the other extreme: Somalia, North Korea, Myanmar and Afghanistan (starting with the most corrupt).

Incidentally, Singapore dropped from a tie for 1st Place in 2010 to only 5th this year. Heads will roll. The Lion City has been beaten by the land of the Hobbits!

APEC made progress in Honolulu

It was hidden behind the hoopla, but there was an advance in the campaign against corruption during the APEC meetings in Honolulu last month. I caught wind of it when I participated in meetings of APEC’s SME working groups – though I was speaking on a different subject. Reference was made to three documents I was unfamiliar with: the Hanoi Principles, the Kuala Lumpur Principles and the Mexico City Principles. It turns out that these are attempts by APEC’s SME Working Group to reduce or eliminate corruption in the construction, engineering, medical device and biopharmaceutical industries. The Hanoi Principles address construction and engineering, while the Kuala Lumpur and Mexico City Principles tackle medical devices and biopharmaceuticals, respectively.

In development for several years, the Principles were all adopted by the APEC Ministerial Meeting on November 11. That by no means implies a sudden disappearance of corruption in the 21 APEC economies. The three sets of principles are merely guidelines, best practices that should be taken into account in developing codes of business ethics in the member economies. It will take many years for all this to sift down through the legal regimes of each APEC member, so don’t get too excited. Still, it is progress.

Every APEC project has a member government that takes the lead on that issue, which generally involves scheduling meetings and making sure that these meetings come up with proposals or drafts. The United States has the lead on developing business codes of conduct that address corruption, so it was the U.S. Commercial Service that called a meeting of APEC small business leaders in Hanoi in October to draft what became the Hanoi Principles. The formal name is the “Hanoi Principles for Voluntary Codes of Business Ethics in the Construction and Engineering Sector”. The principles address far more than just corruption, providing guidance to APEC members should they develop legislation on such things as transparency, related party transactions, intellectual property rights, health and safety in the workplace, environmental issues and fair treatment of workers. The Principles are deliberately non-binding and very broad, merely encouragement to countries and industries to behave in an ethical manner. But the Principles are backed up by a work program of training, lobbying and workshops to push its agenda.

All three sets of principles are similar. I haven’t seen the Hanoi Principles on-line, but you can find the Mexico City Principles for biopharmaceuticals here. And the Kuala Lumpur Principles, developed last April for the medical device sector, are here. All, of course, are named after the cities in which they were first developed.

Patented in China?

I posted back in the summer about how China produces two-thirds of the world’s counterfeit goods. The New York Times has added some insight to the problem, namely comments by inventor James Dyson about China’s “uneven” patent protection system. Let’s let Dyson speak for himself:

China, Mr. Dyson says, is a particular problem, not only because of the pirates but because of its patent policies. Under World Trade Organization rules, domestic and foreign companies, in theory, are to be treated the same. “China is clearly not doing that at the moment,” he said in an interview.

In China, Mr. Dyson says, it typically takes four or five years for a foreign company to get a patent approved. Domestic filers, he noted, usually get their patents approved in nine months or so, and they receive a $15,000 incentive payment from the Chinese government, which wants China to become a global patent power.

The lag in patent approval for foreign companies, Mr. Dyson said, makes it difficult to get at pirate producers in China, since there may be no approved patents to enforce.

Dyson, inventor of the bagless cyclone vacuum cleaner and the bladeless fan, is advising the British government on China policy, so perhaps we can anticipate some sort of U.K. or EU action in the WTO. Dyson also notes in the article that his fan has been copied 100 times in at least twenty different countries, so China is only the biggest problem, not the only problem.