More than two-thirds of countries surveyed were found to have poor controls against corruption, including inadequate oversight of defence policy and standards.
Of 82 countries surveyed, only Germany and Australia were found to have strong anti-corruption mechanisms.
Global military expenditure in 2011 was worth 1-point-6 trillion dollars, while corruption cost the defence sector an estimated 20-billion dollars worldwide.
Presenter: Sen Lam
Speaker: Mark Pyman, director, Defence programme, Transparency International UK
PYMAN: It's all to do with defence, and it's one of five general forms. It's either to do with procurement, which is the most commonly recognised one, or it is to do with political factors, such as the budget or defence policy. Or it is to do with personnel matters - promotion, pay, reward. Or it is to do with finance - things like asset disposals or stealing salary money on its way to paying soldiers. Or, finally, it's on operations - either military intervention operations or peacekeeping - where there're quite often corruption issues in such operations.
LAM: And nearly 70 percent of nations polled had poor mechanisms against corruption in the defence industry - did the figure surprise you?
PYMAN: Yes, it did. Two things really surprised us. The fact that 70 percent, which is a huge number of many quite well-developed nations - and the other surprise, was at the top end, in the top band, actually there were only two countries - one was Australia and the other was Germany. And again, I was expecting many nations to be at that level as well.
LAM: And you're speaking to me of course, from Taipei. How does North Asia, including China, score in this defence corruption survey?
PYMAN: Well, we're launching here in north Asia because it is such an important region strategically and in terms of military spending, which has been rising rapidly over the last ten years. It's quite a varied picture. In the better scores of controls, come from South Korea and Taiwan. Then, there's Japan in Band C, followed by China in Band D, Indonesia is in Band E, and then there's a variety of other nations after that.
LAM: I was also surprised to learn that the terribly efficient Southeast Asian country of Singapore was included in the high-risk category for arms importers. What are the risks there for Singapore?
PYMAN: Well, we were surprised at Singapore too. Because it has a very good reputation in general, on the anti-corruption front, with the high quality of its public institutions. The reason for the low score is that whilst that high quality civil service is true, when it comes to defence, they make very little information available, and there appears to be very little independent scrutiny of its defence policy strategy or budget. So that's the reason why. On the personnel front, Singapore scores very highly because of the good public institutions, but on the other areas, transparency in the political and finance arenas, it scores much lower.
LAM: And Germany and Australia were the only countries out of 82, with strong anti-corruption mechanisms. What is it that they're doing right?
PYMAN: They score well across most of those categories, so it tends to mean that they have very high availability of information, for example, on the defence budget, on the strategy, or the policy. They have good external oversight and controls - either parliamentary or through agencies such as audit, or a similar institution. They have good controls over the whole finance area - things like asset disposals and things like whistle-blowing mechanisms, payroll, promotions - all of those sorts of things are very strong and very clear. So it tends to mean that they have a pretty good performance across all five of the risk areas.
LAM: Of the worst-performing countries, are there common factors at play here, or is it just down to weak and corrupt regimes?
PYMAN: There're two or three common factors. One is that the country may have emerged recently from conflict, and quite often that means the institutions themselves are either very weak or only just rebuilding. So some of the Arab Spring countries like Libya and Tunisial, where there's significant remedial activity going on now - to build and to rebuild institutions like defence - they score badly because their scores are related to the old regime and to the situation since then, where there has of course been a war or a conflict. The second common factor, is that there are a large number of countries who're very resistant to any sort of transparency of defence - and indeed, it can be dangerous to ask questions - so with such countries, actually not only is there no disclosure, but there're very widespread opinions and commentaries about corruption deep-seated across the whole military environment. So those would be the two most common features.