Colofon Responsible publisher: Transparency International Belgium - - PDF document

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Colofon

Responsible publisher: Transparency International Belgium VZW-ASBL, Nijverheids- straat 10 rue de l‘Industrie, 1000 Brussels, Belgium. Date of publication: 10 February 2017, www.transparencybelgium.be Transparency International is the global civil society organization leading the fight against corruption. Through more than 100 chapters worldwide and an international secretariat in Berlin, Transparency International raises awareness of the damaging effects of corruption and works with partners in government, business and civil society to develop and implement effective measures to tackle it. Every effort has been made to verify the accuracy of the information contained in this report. All information was believed to be correct at the date of our review (1-20 October 2016). Nevertheless, Transparency International cannot accept any responsibility for the consequences of its use for other purposes or in other contexts. We would like to thank all individuals who contributed to the research, the review or the drafting of the report: Karel Boone, Guido De Clercq, Hanneke de Visser, Evert- Jan Lammers, Lydia Ruelens, Anja Siebel and Brendan Sinnott (for Transparency International Belgium) and Aurélia Belvaux, Alexia Borremans, Maxime Servais, Léna Vandermoere, Marie Vranckx, Lionel Willems and Corentin Hericher (for Louvain School of Management).

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CONTENTS

• 1. Results at a glance ..................................................................................................................................... 4
• 2. Introduction ............................................................................................................................................... 5
• 3. Summary

.................................................................................................................................................... 8

• 4. TRAC-methodology .................................................................................................................................. 16
• 5. Reporting on Anti-Corruption-Programmes ............................................................................................ 21
• 6. Organisational Transparency (OT)

........................................................................................................... 25

• 7. Country-by-country Reporting (CBC) ....................................................................................................... 28
• 8. Scores per company

................................................................................................................................. 29 Create change with us ................................................................................................................................. 30 Join us .......................................................................................................................................................... 31

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• 1. Results at a glance

Overall score and results per section: Section Acronym Average score * Results for reporting on Anti-Corruption Programmes ACP 27% Results for Organisational Transparency OT 65% Results for Country-by-country Reporting CBC 7% Overall** 33%

* Unweighted average scores per Section: equal weights for the questions and for the companies ** Unweighted overall average score: equal weights for the sections.

Companies included in the survey: Agfa-Gevaert Exmar Recticel ArcelorMittal Greenyard Resilux Barco IBA Sioen Biocartis Kinepolis Sipef CFE Lotus Bakeries Ter Beke Deceuninck Melexis Tessenderlo Chemie Econocom Nyrstar Van de Velde Euronav Ontex Viohalco EVS Picanol Zetes

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• 2. Introduction

Transparency in Corporate Reporting: Assess ssing 27 7 Listed Belgian Compani nies 2016 provides an evaluation of the transparency of reporting by 27 listed companies of the Euronext Brussels-index. The methodology used (Transparency in Reporting on Anti-Corruption - TRAC) focuses on three areas of reporting which are evolving fast in the face of rapidly changing public expectations of what constitutes good corporate practice: anti-corruption programs, their organisational transparency (where and through what subsidiaries they operate) and country-by-country reporting. The aim of this report is to encourage companies to align with developing reporting requirements rather than lag behind to await the inevitably slower developing statutory requirements. Leading from the front can be a competitive advantage, particularly in attracting investors and enhancing the public image. Being compliant with formal reporting requirements is not enough, companies increasingly need to anticipate change. This is as true of their investor relations as it is of their business strategies. The voluntary reporting that is described in this report today will be part of the formal reporting standards of tomorrow. Transparency International encourages companies to adopt these standards now because it makes sense: their statements will be more convincing; their standards will be more credible; their values can be linked to policies and procedures; their vision is translated into strategy, policies and

• procedures. That is at the core of the business case of transparency in reporting on

anti-corruption. For many years already Transparency International encourages companies to disclose their group structure and corporate income tax structure. Organisational transparency is important for many reasons, not least because company structures can be made deliberately opaque for the purpose of hiding the proceeds of

6 corruption, as LuxLeaks, Panama Papers and Bahama leaks have shown during the past years. In 2016, Belgian multinationals have seen a true wave of new laws, regulations, standards, guidance and recommendations in all of the above areas, which confirms the relevance of our TRAC-studies. All the average scores are unweighted and must be interpreted with caution, not least because the relative importance of questions varies from company to company depending on the extent of their international business and presence outside Belgium and business sectors. We would particularly like to thank the companies which responded with useful comments on the initial evaluations giving rise to fruitful exchanges of views. The more we can dialog with companies in such a study the better and more useful the findings. Transparency: “Characteristic of governments, companies, organisations and individuals of being open in the clear disclosure of information, rules, plans, processes and actions. As a principle, public officials, civil servants, the managers and directors

• f companies and organisations, and board trustees have a duty to act visibly,

predictably and understandably to promote participation and accountability and allow third parties to easily perceive what actions are being performed.” Bribery: ”The offering, promising, giving, accepting or soliciting of an advantage as an inducement for an action which is illegal, unethical or a breach of trust. Inducements can take the form of gifts, loans, fees, rewards or other advantages (taxes, services, donations, favours etc.).” Corruption: “Corruption is the abuse of entrusted power for private gain. It hits all the people whose live, livelihoods or happiness depend on the integrity of those holding a position of authority.”

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• 3. Summary

Overall The following general trends and conclusions can be drawn from this year’s review:

• Euronext Brussels-companies improve their corporate reporting over time, even if

this improvement is small: : from 34% (TRAC2015) to 35% (TRAC2016) for the 13 13 companies that were als lso included in last year’s sample. The 14 new companies have an average score of 31%, which leads to an overall average score for the 27 companies of 33%;

• This improvement is in line with the trend of increasing reporting on non-financial

performance;

• Size and degree of multi-nationality matter: in general, the Euronext Brussels-

multinationals (33%) are lagging the BEL20-companies (44% in TRAC2015). The distance is even bigger in the section Anti-Corruption Programmes (27% versus 50%) while the international score of large corporates is as high as 70%;

• Companies pay increasi

sing attention to reporting on anti-corruption programmes (27%) and on organizational transparency (65%). However, country-by by-country reporting at corporate level still does not get the attention it deserves (7%). This year’s Champions are Arcelor-Mitttal (overall average score 52%), Barco (51%), Exmar (49%), Recticel (48%) and Ontex (46%). The only 100%-score for an entire section is achieved by Ontex (section Organisational Transparency). Arcelor-Mittal comes close with 96% (section Anti-Corruption Programmes). The results of this TRAC-review vary considerably from company to company, which is related to size and may also reflect the extent to which they have international

• perations and presences:
• Companies operating internationally on a large scale may be more frequently

faced with issues around bribery and corruption, not least the legal risks associated with external jurisdictions such as the US Department of Justice (DoJ) with the Foreign Corrupt Practices Act (FCPA) and the UK’s Anti-Bribery

9 legislation, now more vigorously pursued by the Serious Fraud Office (SFO). Companies with the bulk of their operations centred in Belgium, appear to be less conscious of these risks, though they still exist, at least about public disclosure of policies to combat corruption and bribery.

• Clearly too, companies with largely domestic operations are less likely to be

preoccupied with disclosure around their corporate organisation and country-by- country reporting. Both these factors are reflected in the results as also in companies’ appreciation of their sectoral exposure both about risks and public expectations. The business environment in which companies operate has been changing very rapidly in recent years in response to the globalization, a mixture of corporate failures, the financial crisis of 2008 and the resultant increasing public scrutiny of the ethical stance of companies be it about fighting corruption or perceived fairness in paying corporate income taxes. The range of corporate stakeholders has widened considerably beyond just investors, employees, customers and suppliers. Governments, politicians and the general public, particularly the younger generations, are becoming more demanding. Recent cases such as that of Vimpelcom in The Netherlands and Odebrecht in Brazil reinforce public expectations

• f more active corporate policies to fight bribery and corruption.

Reluctant or forced disclosure of corporate tax policies are leading to the rapid moves towards Base Erosion Profit Shifting (BEPS) rules under pressure from the OECD and G20 and even more rapid moves to country-by-country (CBC) reporting of tax and profits. Regulation and guidance In 2016 Belgian multinationals have seen a wave of new laws, standards, recommendations and guidance about corporate reporting and the combat of

• corruption. We mention a few.

10 In July 2016, Belgium has implemented legislation for large enterprises (consolidated revenues > €750 million) dealing with country-by-country reporting and the

• bligation of reporting payments made to tax havens totalling at least €100,000 per

financial year. In December 2016, Belgium has drafted a bill for the implementation of EU Directive 2014/95 on disclosure of non-financial and diversity information. The new legislation will be applicable to:

• large undertakings of public interest (i.e. companies listed on regulated stock

markets, credit institutions and insurance institutions) which exceed on their balance sheet date the average number of 500 employees and either a balance sheet total of €20 million or a net turnover of €40 million (on an individual basis); and

• public-interest entities which are parent undertakings of a large group which (on

a consolidated basis) exceed on their balance sheet date the average number of 500 employees and either a balance sheet total of €20 million or a net turnover

• f €40 million.

These companies must now include in their annual report information relating to environmental social and employee matters, respect for human rights and anti- corruption and bribery matters. For this last element, the information could include information on instruments in place to fight corruption and bribery. The company should provide:

• a brief description of its business model;
• a description of the policies pursued by the company, and the outcome of these

policies;

• the principal risks related to these matters; and
• the relevant non-financial key performance indicators.

This information should be disclosed on a comply-or-explain basis: the company is not obliged to pursue policies in relation to the above matters. However, if it does not pursue such policies, it should provide a clear and reasoned explanation for this. The information in the non-financial statement must be verified by independent

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• auditors. The first company reports will be published in 2018 covering financial year

2017. These companies are encouraged to rely on recognized frameworks such as GRI’s Sustainability Reporting Guidelines, the United Nations Global Compact (UNGC), the UN Guiding Principles on Business and Human Rights, the various OECD Guidelines and Recommendations and ISO 26000. In 2016 this framework has expanded further with the COSO Fraud Risk Management Guide (September), ISO 37001 Anti-Bribery Management Systems (October) and VBO-FEB’s Anti-Corruption Guide for Belgian Enterprises Overseas (December). Here we add that in 2017 the EU Member States must implement the 4th and the 5th EU Anti-Money Laundering Directives, which give further directions in the fight against corruption and intransparency. Anti-corruption programmes The evaluation in this Section is based on 13 questions (see Chapter 4), which are derived from the UN Global Compact and Transparency International Reporting Guidance on the 10th Principle against Corruption. This tool, based on the Business Principles for Countering Bribery, which were developed by Transparency International in collaboration with a multi-stakeholder group, includes recommendations for companies on how to publicly report on their anti-corruption programmes. The results in this section show that companies improve their corporate reporting

• ver time. This can be seen by comparing the scores from the Euronext Brussels-

companies that were also included in the TRAC2015-study. This improvement however is relatively small: from 24% (TRAC2015) to 27% (TRAC2016). More importantly the Euronext Brussels-companies are lagging the BEL20- companies as it appears from our previous assessments. These differences remain significant for most of the 13 areas under scrutiny. The average score of the Euronext Brussels-companies is 27% (TRAC2016) while BEL20-companies had an average

12 score of 50% (TRAC2015), at great distance from the international corporate average

• f 70% (see TRAC2015 report).

The responses that we have obtained from several smaller multinational companies indicate that they do have relevant policies and procedures in place but either they are less inclined to publicly report on them, or they are on the verge of opening-up. For companies, the best protection against the risk of bribery and corruption must be a comprehensive anti-corruption programme that is fully implemented and monitored on a continuing basis. Such anti-corruption programmes need to be very clearly endorsed by the Boards (tone at the top) as an integral part of the company’s ethical stance. The publication of the key-elements of an anti-corruption programme demonstrates a company’s commitment to fighting corruption and increases its responsibility and accountability to stakeholders. In addition, a strong and public commitment to a robust anti-corruption programme has a positive impact on a company’s employees as it strengthens their anti-corruption attitudes. Public reporting on anti-corruption programmes can also contribute to positive changes as the process of reporting focuses the attention of the company on its own practices and drives improvements in policies and programmes. Organisational transparency The evaluation in this Section is based on 8 questions (see Chapter 4). Many companies demonstrate high standards regarding organisational transparency, even if the average score of 66% in this section is lower than last years’ Euronext Brussels- average of 74% (TRAC2015). The reason for this decrease is that the TRAC2015- sample of Euronext Brussels-companies consisted essentially of the largest enterprises that, in general, have better scores than the smaller multinationals which populate half of the extended 2016-sample. The scores from the Euronext Brussels- companies that were included both this year and last year remained stable (73%

13 versus 74%). Companies remain reluctant to disclose all countries in which they have

• perational activities.

Large multinational companies operate as complex networks of interconnected entities involving subsidiaries, affiliates or joint ventures controlled to varying degrees by the parent company. These can be registered and operate in several countries, including secrecy jurisdictions or tax havens. If companies choose not to disclose these structures and holdings it can be very difficult to identify them and understand how they relate to each other. US regulators require the disclosure of material subsidiaries only, which may explain a poor performance of companies with US subsidiaries in this section. Organisational transparency is a prerequisite to effective country-by-country reporting as the next section illustrates. Country-by by-country reporting The evaluation in this Section is based on 5 questions (see Chapter 4). Scores in this section are mostly low (on average 7%), which is not surprising given that moves to country-by-country reporting are very recent and the financial reports that have been the subject of review are those from 2015. Further, many Euronext Brussels- companies are not as multinational as they may seem, having less investments and less exposure in other countries than their larger Euronext Brussels and BEL20

• brothers. But it is clear that some companies are more advanced than others:
• Overall company performance is very weak;
• Companies disclose financial information for selected countries only;
• Revenues are the most-often disclosed data point; pre-tax profits are the least-

disclosed. Country-by-country reporting is an essential element of corporate transparency to ensure a stronger accountability of multinational companies through an increased monitoring by stakeholders and citizens, which will also help to reduce tax

• avoidance. Currently, multinational companies publish their accounts by combining

14 data about tax compliance from multiple countries into one single aggregate report, making it difficult to distinguish between the contributions they make to all the individual countries they operate in. As the recent Luxleaks and Panama Papers brought to light, in most cases multinational companies are not transparent regarding their structure and

• perations, and exploit loopholes in domestic and international tax law that allow

for ‘profit shifting’ from country to country, with the intention of reducing the taxes paid on profits. Transfer pricing policies are not per se unacceptable but increasingly society demands transparency as to their effect on taxes paid in the countries in which companies operate. In July 2016, a new Belgian law came into effect of dealing with the transparency of the finances of multinational corporations, requiring EU-based multinational companies to reveal details of tax payments to governments around the world, reporting financial information on a country-by-country basis and to publicly disclose information regarding tax rulings. Under the country-by-country provision multinational companies would be required to disclose crucial information such as, among others, their turnover, number of employees, profit made, taxes paid and public subsidies received for all the countries in which they have an establishment.

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• 4. TRAC-methodology

Transparency in Corporate Reporting: Analysing 27 Listed Belgian Companies 2016 is based on a methodology defined by Transparency International. The Belgian chapter

• f Transparency International has published TRAC-reviews in 2009, 2012 and 2015.

The most recent global TRAC-report has been issued in 2015. The TRAC (Transparency in Reporting on Anti-Corruption) methodology consists of four steps. Step 1: Selection This year, we kept 14 out of the 15 companies of the Euronext that were selected in

• ur last year report (excluding CMB that is not listed on Euronext anymore). To those

14 we added another 13 newly selected of companies listed on Euronext. The companies are active in different segments and do business on an international level. You can find the name of the selected companies on page 4. Step 2: Review The review is based on a questionnaire containing 26 questions developed by Transparency International. (See below). The 26 questions are divided into 3 main dimensions:

• Anti-Corruption Programmes (ACP): 13 questions focusing on information about

preventive measures and the commitment to combat corruption.

• Organisational Transparency (OT): 8 questions focusing on transparency about

corporate structure, holdings and subsidiaries and on the countries of incorporation and operation.

• Country-by-Country Reporting (CBC): 5 questions on the impact of the business
• n a country-by-country level.

17 We have assessed the publicly available information on the corporate websites. The questions are equally weighted in the scores per section, per company and in the

• verall score.

Step 3: Scores The draft scores are sent to the participating companies, asking them for their

• comments. A good number of the companies have taken the opportunity to respond.

This took place in the month of November 2016. Step 4: Report The final step consists of drafting of the report that includes all answers per question and per company, trends, conclusions and where possible recommendations for improvement. More detailed information on the TRAC-2016 methodology can be found at our website. Every effort has been made to verify the accuracy of the information contained in this report. All information was believed to be correct at the date of our review (closing 20 October 2016). Nevertheless, Transparency International Belgium cannot accept responsibility for the consequences of its use for other purposes or in other contexts.

18 Questionnaire The TRAC-2016 review is based on the following questionnaire: Section I: Corporate reporting on anti-corruption programmes (ACP) 1. Does the company have a publicly stated commitment to anti-corruption? 2. Does the company publicly commit to be compliance with all relevant laws, including anti-corruption law? 3. Does the company leadership (senior member of management or board) demonstrate support for anti-corruption? 4. Does the company’s code of conduct / anti-corruption policy explicitly apply to all employees and (Board of) directors? 5. Does the company’s anti-corruption policy explicitly apply to persons who are not employees but are authorised to act on behalf of the company or represent it (for example: agents, advisors, representatives or intermediaries)? 6. Does the company’s anti-corruption programme apply to non-controlled persons or entities that provide goods or services under contract (for example: contractors, subcontractors, suppliers)? 7. Does the company have in place an anti-corruption training programme for its employees and directors? 8. Does the company have a policy on gifts, hospitality and expenses? 9. Is there a policy that explicitly prohibits facilitation payments?

• 10. Does the programme enable employees and others to raise concerns and report

violations (of the programme) without risk of reprisal?

• 11. Does the company provide a channel through which employees can report

suspected breaches of anti-corruption policies, and does the channel allow for confidential and/or anonymous reporting (whistle blowing)?

• 12. Does the company carry out regular monitoring of its anti-corruption

programme to review the programme’s suitability, adequacy and effectiveness, and implement improvements as appropriate?

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• 13. Does the company have a policy on political contributions that either prohibits

such contributions or if it does not, requires such contributions to be publicly disclosed? Section II: Organisational Transparency (OT)

• 14. Does the company disclose all of its fully consolidated subsidiaries?
• 15. Does the company disclose percentages owned in each of its fully consolidated

subsidiaries?

• 16. Does the company disclose countries of incorporation for each of its fully

consolidated subsidiaries?

• 17. Does the company disclose countries of operations for each of its fully

consolidated subsidiaries?

• 18. Does the company disclose all of its non-fully consolidated holdings?
• 19. Does the company disclose percentages owned in each of its non-fully

consolidated holdings?

• 20. Does the company disclose countries of incorporation for each of its non-fully

consolidated holdings?

• 21. Does the company disclose countries of operations for each of its non-fully

consolidated holdings? Section III: Country-by-country Reporting (CBC)

• 22. Does the company disclose its revenues/sales in country X?
• 23. Does the company disclose its capital expenditure in country X?
• 24. Does the company disclose its pre-tax income in country X?
• 25. Does the company disclose its income tax in country X?
• 26. Does the company disclose its community contribution in country X?

The TRAC-methodology provides further instructions as well as scoring-criteria for every question to ensure consistent application by the researchers.

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• 5. Reporting on Anti-Corruption-Programmes

Unweighted average scores Highest Lowest Average Reporting on Anti-Corruption Programmes 96% 0 % 27 % The reporting on anti-corruption programmes is the first and the biggest section of the analysis. The average score in this section is 27%, while at the same time it also has an important standard deviation. Therefore, a conclusion for one company would not stand for another company. Overall, the respective scores companies received shows that basic preventive measures against corruption are in place but are for certain still to improve for almost all of them. Only one third of the 27 companies publicly commit to zero tolerance. It is even so that companies rarely mention the term “corruption” as such. Two out of every three companies included in the review should formalize their public commitment to zero tolerance of corruption as being part of the company values. An assessment has to be carried out on whether or not the company publicly commits to be compliant with all relevant laws, including anti-corruption laws. It is the best performing part of this category with an average score of 63% being compliant and even 17 companies getting the full score. Probably the main reason is that being compliant to domestic and international laws is indispensable for having a healthy business abroad. A company that does not specifically agree with this statement will most likely appear questionable. Transparency International Belgium expects that company’s leadership explicitly demonstrates support for the anti- corruption programme. This part ends up with a poor score of 14%. As a natural result, companies who do not commit publicly to a zero-tolerance on corruption can not see their leadership demonstrate such a support.

22 We recommend to first improve on the zero-tolerance policy as recommended above, followed by a clear statement from leadership at highest level to adhere to such a policy. Companies generally disclose a “Code of Conduct”, a “Code of Ethics”, “Anti- corruption policy” or equivalent that browses, sometimes in detail, their corporate social responsibility and ethical values. Transparency International Belgium expects such documents to apply to all employees and directors. Nine companies got a full score, whereas the average score is 40%. Companies often think is goes without saying that the policy applies to everybody, but if it is not clearly mentioned it can raise doubt, so a clear insertion is recommended. Questions 5 & 6 relate to the condition that the policy should also apply to persons who are not employees but are authorised to act on behalf of the company, or to represent it. Only 30 % of the companies mention specific compliance for agents, intermediaries or representatives. Another group to be included in the anti- corruption policies are the non-controlled persons or entities that provide goods or services under a specific contract (e.g. suppliers, contractors and sub-contractors). Here three criteria apply. A full score is awarded if:

• Such persons/entities comply with the company’s anti-corruption programme or

its equivalents;

• If the company performs anti-corruption due diligence on such persons/entities;
• And if the company monitors such persons/entities.

Only 6 companies obtain a full score, whereas the average score is 24 %. An important gain in the implementation of a broad anti-corruption policy can be achieved by including this policy in the already existing anti-corruption strategy of the company. Draw up policies on anti-corruption is not sufficient, putting in place a dedicated training programme for both employees and directors is also of big importance. Out

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• f the 27 companies, no company achieved a full score, because if training is existing

mostly it is only applicable for employees, excluding management. Offering training programmes on anti-corruption is not wide-spread: with an average score of 22% this is the least performing sub section. Companies must act now. Transparency on how a company is conducting his business can be enhanced by having a policy on gifts, hospitality and expenses. Usually such items are considered acceptable courtesies, as long as they do not impact business or political decisions. However, as soon as anyone’s economic or political choice is affected by generous advantages, such gifts are to be considered as being bribes. Only 12 of the companies achieved a positive score. Companies should be more specific about the acceptable thresholds of gifts, clearly describing what is acceptable and what not. Facilitation payments are payments made to expedite or to secure the performance

• f a routine governmental actions, by an official, political party, or party official.

Though such payments are illegal in most countries they are not prohibited under the foreign bribery laws of some countries, such as the US Foreign Corrupt Practices

• Act. Even if most companies do discourage such payments, they often allowing them

if permitted by local law. Facilitation payments are not allowed under Belgian law or under the UK Bribery Act. As much as 89% of the companies does not achieve a positive score. Companies should explicitly reject facilitation payments, since illegal under Belgian law. Companies seeking transparency should allow the possibility to employees to raise concerns in case of doubt that the anti-corruption policy is correctly applied cor. A good functioning whistle-blowing system offers protection to those having the courage to act since both their jobs and their personal security are in danger. The system should allow for confidential reporting of concerns and violations regarding anti-corruption policies. The system should allow a two-way communication

24 between the whistleblower and those dealing with the report. Only 22% of the companies allow for a two-way communication, whereas 7% do offer a confidential reporting system, available to all employees, but the system does not allow two-way communication. Companies’ internal reporting systems should not only allow confidential reporting but also confidential two-way communication with the whistleblower Hardly any company discloses if and how it monitors it’s their anti-corruption programme. Companies should review their anti-corruption programme on a regular basis as this allows them to implement improvements. Transparency International Belgium expects companies to be transparent about their political party contributions, which includes public disclosure of contributions or explicitly prohibiting such payments. Only 14% of the companies achieved a positive score. Companies should be more transparent about their policies regarding political party contributions.

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• 6. Organisational Transparency (OT)

Unweighted average scores Highest Lowest Average Organizational Transparency (OT) 100% 19% 65 % Companies are doing relatively well in the area organisational transparency, with an

• verall average score of 65% and only limited variances between the individual
• scores. The disclosure of fully consolidated subsidiaries is, on average, the best

performing area, with a score of 93%. Not only are companies scoring well on the disclosure of fully consolidated holdings, it is also the case for the disclosure of their non-fully consolidated holdings, with an average of 75%. Nevertheless, they are lagging behind on the score of the fully consolidated holdings because companies pay more attention to divulging their subsidiaries involving a participation exceeding 50%. Companies seldom disclose the countries of operations, possibly for strategical reasons, but also for tax reasons. LuxLeaks, PanamaPapers and Bahamas Papers show the importance for companies to be more transparent about their countries of

• perations.

Companies should disclose all the countries in which they operate. The same goes for their subsidiaries, joint-ventures and associates (acting on the company’s behalf).

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• 7. Country-by-country Reporting (CBC)

Unweighted average scores Highest Lowest Average Country-by-country reporting (CBC) 60 % 0 % 7 % In this section, we verify the disclosure of financial data on a country-level, in particular the reporting on revenues, capital expenditure, pre-tax income, income tax and community contributions in each country of operations of the company. The

• verall company performance is weak with an average score of 7%.

Seventy percent of the companies have a score of 0 in this section. From the other companies that do disclose some information at country-level, 50% relates only to major countries or for countries of their major customers. The disclosure of revenues has the least-weak score: 19% of the enterprises publish their revenues for each country where they directly conduct business; 11% of the enterprises publish their revenues in those countries. The disclosure of the capital expenditure per-country is weak. Only one company obtained a score higher than 0 for the publication of the income tax by country. Not one single company publishes information on community contributions per country. Companies should report financial information for each country where they conduct business, and not only on a geographical region or business segment basis.

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• 8. Scores per company

Sections: ACP ACP OT OT CBC CBC Avera rage 1 Agfa-Gevaert 65 38 34 2 ArcelorMittal 96 38 17 50 3 Barco 77 75 51 4 Biocartis 4 88 30 5 CFE 75 26 6 Deceuninck 8 75 27 7 Econocom 54 56 36 8 Euronav 35 75 36 9 EVS 38 75 38 10 Exmar 73 75 49 11 Greenyard 75 25 12 IBA 38 75 38 13 Kinepolis 19 38 60 39 14 Lotus Bakeries 75 18 31 15 Melexis 37 20 19 16 Nyrstar 58 18 25 17 Ontex 35 100 3 46 18 Picanol 12 75 29 19 Recticel 65 75 47 20 Resilux 12 75 29 21 Sioen 15 75 4 43 22 Sipef 8 75 20 34 23 Ter Beke 4 75 20 33 24 Tessenderlo Chemie 12 75 29 25 Van de Velde 12 75 29 26 Viohalco 38 13 27 Zetes 38 13

* ACP=Anti-Corruption Programmes, OT=Organisational Transparency, CBC=Country-by-country Reporting. ** Detailed scores per question and per company are available upon request: info@transparencybelgium.be.

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