Out of the shadows

Brussels: The free trade agreement currently being negotiated between the European Union and the United States of America is worrying many members of the public. Known as the Transatlantic Trade and Investment Partnership (TTIP), this ambitious project not only aims to harmonise tariffs on both sides of the Atlantic. The negotiators also want to include provisions on mutual recognition of standards, conformity assessment procedures and licensing. TTIP’s opponents are demanding transparency – a difficult issue for negotiators, who claim that the talks are too complex to be conducted in public.

Qatar: In 2022, the emirate will host the FIFA World Cup. FIFA, football’s international governing body, announced the decision in late 2010 – and triggered a wave of protest worldwide, which has still not receded. There are allegations of vote-buying during the crucial ballot, and critics are calling for transparency. But FIFA refuses to submit to full public scrutiny.

Consumer organisations demand transparency in supply chain

Bangladesh: The collapse of a garment factory on the outskirts of the capital Dhaka in April 2013 led to more than 1,100 deaths – only months after a fire in another local garment factory claimed more than 100 lives. Both disasters could have been prevented. The two factories produced clothing for the European garment trade, which was criticised for using cheap labour. Consumer organisations promptly demanded transparency in the supply chain. Since then, around 180 clothing companies from more than 20 countries have joined the Accord on Fire and Building Safety in Bangladesh, a transparency initiative launched by the Geneva-based trade union federation IndustriALL. More than 50 German manufacturers, retailers and importers have signed up to the initiative, including major brands Aldi Nord, Aldi Süd, Lidl, Adidas, Puma, Otto, Rewe, s.Oliver, Esprit, Orsay, Takko and KiK.

Transparency is in demand nowadays. Some people even regard it as a cure-all. And that’s correct, surely? It is easier to trust people who have nothing to hide. Transparency promotes trust, and trust promotes social cohesion. Compliance monitoring, reports and full disclosure can reduce mistrust – although they can never overcome it completely. It was mistrust of the food industry which resulted in content labelling becoming a requirement. But who knows whether the information on the label is correct? More mistrust – so compliance checks by government agencies were introduced. But who can say whether they are reliable? No matter how detailed the checks, there is always a point at which trust is our only option.

Openness builds trust

Nonetheless, the transparency issue has been around for a very long time. Indeed, demands for transparency are barely younger than humankind itself, as the history of the handshake demonstrates. After all, extending your right hand to another person shows that you are not holding a weapon and that you come in peace. How trustworthy is a person who greets someone else with their hand concealed in their pocket or behind their back? Openness and a willingness to state one’s intentions and purpose – these are things that build trust. So transparency is an indispensable part of human interaction. In commerce, businesspeople must be able to rely on each other, secure in the knowledge that their partners will abide by certain basic rules so that contracts are enforced, supply chains are clear, people are treated fairly and workforces are not played off against each other.

But wherein lies the power of transparency? Why is information often enough to change real-world situations? Transparency on its own cannot really force anyone to behave differently. It merely creates the fresh air of publicity. Perhaps the fear of losing one’s good reputation is enough to ensure good behaviour? Even if we cannot identify the reasons, there is plenty of evidence that due to the publicity that it creates, transparency has immense power to effect change. In the case of the garment industry, the information about supply chains has improved conditions for thousands of factory workers and done much to combat child labour. For example, the Accord not only publishes the names of purchasers of textiles from Bangladesh on the internet; it also identifies the factories in Bangladesh that have joined the initiative.

Transparency initiative lists textile factories

More than 1,600 companies are listed in a closely typed table, along with their telephone numbers and many other details. How many storeys does the building have? How many people work there? Do they sleep in the factory? The information is checked by the initiative’s experts, who visit the factories regularly and publish their findings on the internet. The transparency initiative itself is a model of transparency.

This is evidence of the power of transparency: it holds manufacturers and retailers to account if they fail to honour their commitments. This principle operates in many industries – in gold, gemstone and resource extraction, but also in agriculture, the food industry and commerce. Corruption, fraud and dishonest business practices thrive on darkness. In the light of transparency, they cannot survive for long. The risk of being held to account for their misconduct is often enough to change the behaviour of managers, businesspeople, politicians and industry association functionaries.

Original documents on TTIP talks on the internet

The reverse also applies: a lack of transparency creates mistrust, undermines political systems and hampers economic development. The same applies to crime, as the poet and playwright Bertolt Brecht knew. In his song ‘Mack the Knife’, an international hit from ‘The Threepenny Opera’ – which brought huge success for Brecht and caused a sensation in late 1920s Berlin – he used a shark as a metaphor for transparency: ‘Oh, the shark has pretty teeth, dear / And he shows them pearly white / Just a jack-knife has Macheath, dear / And he keeps it out of sight!’

But transparency is not about honour among thieves. Its purpose is to promote fair and equitable social relations. One of democracy’s great strengths is that politicians must justify their decisions and initiatives publicly before a parliament. In countries where democratic institutions are weak, transparency in politics is major progress in itself. In the case of the TTIP, negotiators have made some concessions to the critics. Although the talks are still taking place behind closed doors, they have now published some of the original documents and various position papers on the internet and are speaking more openly and more often about their goals, assuaging some of the doubts about this free trade agreement.

„Transparency alone cannot solve complex conflicts, but without it the hope of resolution is dramatically diminished.“
Kofi Annan, former UN Secretary-General

Although the concept of transparency has existed since time immemorial, it was discovered fairly late in the day in the political context. Certainly, in the Greek city-states of antiquity, public debates helped to explain political decisions to citizens. And during the 500 years or so in which the Roman Empire was organised as a republic, there was a high level of political transparency. But these initial attempts never really took hold on a permanent basis. One remnant of those times lingers on, however, in the word ‘republic’, which comes from the Latin ‘res publica’, meaning ‘public matter’. In Rome, government matters were made public; in other words, they were transparent. Not enough people were involved in decision-making to qualify Ancient Rome as a democracy by today’s standards. Nonetheless, this transparency was accompanied by some fledgling elements of citizen participation, although the term was not yet in use.

Up to the end of the 18th century, however, the term ‘transparency’ was used only in physics. In the natural sciences, an object is said to be transparent if light can pass through it. The word itself comes from the Latin ‘trans’, meaning ‘through’ or ‘across’, and ‘parere’, meaning ‘to be visible’ or ‘to be evident’. The more transparent an object, the more light it lets through.

New form of Enlightenment

During the French Revolution, bringing light into the dark corners of power – in other words, transparency – was the political order of the day. It was recognised that only if political decisions were clear to citizens would it be possible for them to have a say, voice their grievances, suggest improvements and submit their demands. It is no coincidence that the French call the Age of Enlightenment as ‘le siècle des Lumières’ – the century of light. And the reverse also applies: political transparency makes for better decisions. It compels politicians to take account of citizens’ wishes and reins in politicians’ power. Their decisions are then the outcome of a broader consensus.

65 countries have joined the Open Government Partnership, launched in 2011. Through their membership, these countries signal their commitment to greater openness and accountability towards citizens.
www.opengovpartnership.org

Once the concept of transparency had entered politics, it made rapid headway in the nascent economic sciences as well. Perfect or full market transparency was soon accepted as one of the basic premises underlying the model of perfect competition: in a completely transparent market in which full information is freely available about all the traded goods, their quality, scarcity and all their other properties, the forces of supply and demand can operate unhindered, at least in theory.

Market transparency for economical success

In economic theory, then, transparency benefits the economy. Market transparency means that no market participant has an advantage over others. In politics and economics, the term ‘transparency’ never described a physical state but was always linked to the notion of fairness. In both spheres, transparency has an ethical dimension and describes an ideal state which, in practice, is never completely attainable.

In the 18th and 19th centuries, the demand for transparency was confined to increasing the clarity of political decisions. Today, however, it operates in a much more complex field of interdependencies. The majority of people would surely agree that the decisions taken by local, regional or national parliamentary assemblies should be published. But how many of us would want to be a ‘transparent citizen’, with full disclosure of our personal affairs to the advertising industry or internet giants? And when it comes to politicians and industry leaders, where should the limits lie? To what extent should their lives be on public display? What about their privacy – where does it begin? What should they be allowed to conceal from the media and the public?

Controlling people's behaviour

The demand for transparency is not a cure-all, then. On the contrary, it can create new conflicts within society. One of the pioneers of transparency as a core concept in politics, the economy and society was the English philosopher and jurist Jeremy Bentham, who was born in 1748, one year before the German poet Johann Wolfgang von Goethe, and died in 1832, the same year as Goethe.

Bentham’s interest in transparency was not motivated by a desire to promote the freedom of the individual. On the contrary, he saw it as a way of controlling people’s behaviour non-violently. So he designed prisons built of glass and iron, making them so transparent that the inmates had to act as though they were being watched at all times. He called his model of transparent imprisonment – which deprived inmates of every shred of privacy – the Panopticon.

Many prisons were constructed on the basis of Bentham’s designs, albeit with various modifications; one example is the star-shaped prison in the Berlin suburb of Moabit, built in 1880, part of which is still in use today. The design enables guards stationed in the centre of the star to keep watch over the various wings of the prison with a minimum number of staff.

34 % of Americans think their education system is corrupt or even very corrupt. Source: Global Corruption Report: Education, published by Transparency International.

In line with Bentham’s ideas, civil servants and members of parliament, too, should always make their decisions under the watchful eye of the public. And just as Bentham’s concepts have been channelled into many prisons’ design, so too has his concept of transparent power influenced architecture in Western Europe. The European Quarter in Brussels is just one example: after the decision was taken in the 1950s to locate key European institutions in the Belgian capital, a number of new buildings were constructed, including the European Commission’s Berlaymont building and the European Parliament, where the MEPs hold their sessions when they are not convening in the main building in Strasbourg. The new political Europe was keen to signal its transparency and express this in its architecture as well, so the buildings in the European Quarter were built from glass and flooded with light: physical evidence of the new Europe’s openness.

What use to the customer are the lists on food packaging?

There was one area in which Bentham was unsuccessful, however. He was determined to purge language of every element that might create confusion, for as he rightly observed, language is the archenemy of transparency. But his efforts came to naught, as today’s plethora of incomprehensible or confusing press releases, laws, regulations and business reports shows.

The fact is that in many cases, information simply creates the impression of transparency. What use to the average consumer are the detailed lists on food packaging of chemical components whose names and effects are understood only by highly qualified food technologists? Information is not the same as transparency.

A precondition for, but no guarantee of, democracy

And yet Bentham’s ideas show that demanding transparency can be much more effective than demanding democracy. Rare is the despot nowadays who makes the mistake of failing to cloak his unjust regime in at least a modicum of democracy. Parliaments are convened after supposedly free elections – but without any international observers able to check whether these assemblies can operate democratically. The extent to which members of parliament can exercise their mandate freely is often difficult to determine. But it is easy to see whether the records of parliamentary proceedings are published or simply vanish into an archive.

In Kenya, anti-corruption suggestion boxes can be found in many public spaces. Members of the public who believe that they have been the victim of corruption can submit their grievances anonymously. But is this really progress? Yes – provided that citizens are informed in a transparent manner about how their complaint has been dealt with.

Important aspect of Good Governance

Otherwise, the suggestion box is useless. It is sometimes difficult to determine exactly how much democracy has been achieved by many developing countries. Transparency, on the other hand, has certainly increased all over the world in recent years. In many countries, civil society structures have become well-established, even in countries with a question mark over their democratic decision-making processes. The internet, satellite TV and global interconnectedness make it more difficult for authoritarian leaders to suppress information about corruption or bad governance.

„Talking much about oneself can also be a means to conceal oneself.“
Friedrich Nietzsche, German writer and philosopher

In the West, too, there are many areas where transparency is urgently needed. One lesson learned from the financial crisis – which began with the collapse of the Lehman Brothers investment bank in the US in 2008, with devastating effects that reverberated around the world – is that the major banks in Europe and North America lacked transparency. In developing and emerging countries, too, economic transparency is always a work in progress: supply chains, product components and corporate decision-making are often obscure. Admittedly, some things initially work better if they are hidden from sight, but sooner or later, whatever has been concealed will come to light.

However, there are limits to transparency. Too much of it can generate a flood of information that obscures the message. It is also an expensive undertaking. Business representatives often complain about the heavy financial and administrative costs resulting from companies’ numerous reporting obligations. And simply demanding more transparency as a reflex response whenever abuses occur can overwhelm the individuals and organisations responsible for creating this transparency, as well as those whom this flood of information is intended to enlighten. However, societies’ value systems and attitudes towards transparency change over time, resulting in greater clarity on where transparency should begin – and where it should end, bearing in mind its potentially harmful consequences. The boundary is fluid and it changes over time. Ultimately, transparency is a judgement call.

published in akzente 2/15

SOCIAL STANDARDS

Project: Producing socially conscious and eco-friendly clothing
Country: Bangladesh
Commissioned by: German Federal Ministry for Economic Cooperation and Development, European Union
Lead executing agency: Bangladesh Ministry of Commerce
Term: 2010 to 2015

JUSTICE

Project: Increased efficiency, accountability and transparency of courts in Moldova
Country: Moldova
Commissioned by: Government of Moldova
Project partner: Center for International Legal Cooperation, The Netherlands
Term: 2014 to 2017

ADVICE CENTRE

Project: A fair approach to securing skilled labour – geriatric nurses for Germany 
Country: Viet Nam
Commissioned by: German Federal Ministry for Economic Affairs and Energy
Lead executing agency: Ministry of Labour, Invalids and Social Affairs, Viet Nam
Term: 2015 to 2017

GOOD GOVERNANCE

Project: Strengthening governance in Central Africa’s extractive sector
Countries: CEMAC member states
Commissioned by: German Federal Ministry for Economic Cooperation and Development
Lead executing agency: Economic and Monetary Community of Central Africa (CEMAC)
Term: 2007 to 2017