Denmark

The Danish Defence Acquisition and Logistics Organization (DALO) is responsible for the disposal of assets, and is under the control of the Defence Command, and therefore under the control of the Defence Ministry. The DALO no longer holds its own auctions on smaller, &quoute;uncomplicated&quoute; assets but has delegated asset disposal to a private surplus manager. Planned disposals are published publicly on their website. The sale of larger, &quoute;complicated&quoute; assets is conducted by the DALO Sales Department in direct contact with the customer. No further information could be identified on these planned disposals. The financial results of asset disposals are published in the Defence Command's yearly report, which is publicly available.

RESPONSE TO GOVERNMENT REVIEWER: The government reviewer refers to the proceeds from sales being publicly available as the reason for raising the score to 4. I agree with the reviewer that this information is public. However, the reason I have selected 3 is not because of the publicly available information on the proceeds of sales, but the lack of publicly available information on planned disposals (a key requirement for awarding the higher score).

As discussed, while planned disposals of smaller, uncomplicated assets are published on the website. However “sale of larger, &quoute;complicated&quoute; assets is conducted by the DALO Sales Department in direct contact with the customer. No further information could be identified on these planned disposals. Score maintained.

Independent scrutiny of asset disposals is conducted by the Defence Internal Audit, who reports to the government and Rigsrevisionen (the General Audit Office). No reports of the scrutiny of asset disposals could be found.

RESPONSE TO GOVERNMENT REVIEWER: As stated in the comments for Q15, internal documents of the Defence have not been made public even after auditing by Rigsrevisionen. I was also not able to determine if the reports of the Defence Internal Audit are available upon request.

Score maintained.

In 2014, the budget of the defence Intelligence Service (Forsvarets Efterretningstjeneste) was 664 million DKR, which constitutes approximately 3,3 % of the Ministry of Defence spending in 2014. The budget is not disaggregated.

RESPONSE TO REVIEWERS: It is not clear from the annual budget that the only spending on secret items is the budget for the defence intelligence service, as Peer Reviewer 2 states. Given the information from the government reviewer, and noting the defence intelligence service’s budget for 2015 is 3.3% of the defence budget, the score is changed to 2.

The parliamentary committee (“Udvalget vedrørende Efterretningstjenesterne”/”Kontroludvalget”) does not have powers to check the spending of the intelligence services, but can be made aware of some general expenditure while collecting information relating to the intelligence services by the government. The Committee's exact mandate and powers are not specified, but it does receive briefings from the government on the activity of the security and intelligence services, which is also available in the budget. The government also introduces the committee to the aggregated annual budget of the intelligence services. The parliamentary committee consists of five members of parliament. Information on the Defence Intelligence Services spending is only available to selected members of Parliament. Overall, parliamentarians have restricted or no access to top secret and other classified information and little access to budgetary information.


RESPONSE TO REVIEWERS: Relevant information incorporated, score raised to 1 to reflect the aggregated information received by the Committee.

The Danish Defence Intelligence Service is subject to control by the government, the parliament, Rigsrevisionen (the General Audit Office) and a special, independent supervising organ (Tilsynet med Efterretningstjenesterne). The Public Accounts Committee (Statsrevisorerne) is only given information on the spending on the intelligence services insofar as there have been inconsistencies found by Rigsrevisionen (the General Audit Office). There was no information available as to whether the Parliamentary Defence Committee or any members thereof are given full information the spending on the Defence Intelligence Service.

It is unclear whether the Defence Committee or selected Members of Parliament who have access to classified information receive full access to audit reports of intelligence and security services.

Off-budget expenditure is illegal according to the Constitutional Act of Denmark. All expenditures are regulated in the Finance Act (Finansloven) and any expenditure not previously approved in the Finance Act must be applied for by the Defence Minister to the Parliamentary Financial Committee. There is no evidence of the laws being circumvented.

There is no evidence of off-budget expenditures, and the defence budget is audited effectively by Rigsrevisionen (the General Audit Office).

The authority to classify information due to national security reasons is provided for in the Danish Public Information Act, which enables classification on the ground of significance to national security. However, the legislation does not appear to provide more specific definition of information which can be withheld on national security grounds. The authority deciding whether to classify specific information is the authority which holds the information, and classification officials have to be specifically authorised to carry out these duties. There have been accusations by a former colonel that the Defence Ministry has instructed the Defence Command to not communicate to the ministry on controversial topics in writing, as the Danish Public Information Act would allow the public access to such briefs, suggesting that information that is not of significant importance to national security is being classified by the defence sector. The Defence Ministry subsequently declined to comment the specific accusations, except for stating the ministry did not recognize the description made by the colonel.

It appears that there is no dedicated oversight mechanisms over classification of information related to defence and security. Some oversight of the process is provided through the freedom of information request process, when refusals to open up information due to national security concerns can be appealed. There are, however, indications of shortcomings in the process. The provisions of the FOI legislation were tightened in 2013 (limitation of access to documents passed between ministers and civil servants); refusals to publish information do not need to be accompanied by comprehensive explanations or reasoning, and request processing times have been much longer than the prescribed 8 weeks. In 2015, the Danish Ombudsman secured the government's commitment to reduce response time to FOI requests to eight weeks, from the height of 27 weeks.

RESPONSE TO GOVERNMENT REVIEWER: While I agree that there are rules in place, shortcomings identified prevent Denmark from receiving the score of 4. As the government reviewer does not provide any sources to support the claim that the rules are enforced or any information on regulations of the mechanisms for classifying information, score 3 has been selected.

The Danish constitution states that the armed forces can only own what is set out in the annual Finance Act. There are no military-owned businesses in the Finance Act and the last Defence Command yearly report shows that Danish defence and security institutions do not own commercial businesses. This was also confirmed by a source within the Defence Ministry.

The Danish constitution states that the armed forces can only own what is set out in the annual Finance Act. There are no military-owned businesses in the Finance Act and the last Defence Command yearly report shows that Danish defence and security institutions do not own commercial businesses. This was also confirmed by a source within the Defence Ministry.

The Code of Conduct for public sector employees allows additional employment to be undertaken. However, additional work cannot create a conflict of interest with the primary post and needs to be reported, in some cases, to the public authority concerned. There is no evidence of any unauthorised private enterprise by military or other defence ministry employees.

Though no statements expressing commitment to anti-corruption and integrity by Defence Ministry officials or high-ranking armed forces officers could be found, the Danish government and defence establishment is actively involved in combating corruption, as exemplified by the plan for the Danish involvement in Afghanistan, which puts great emphasis on the Danish non-tolerance of corruption and active work against it. Commitment is also evidenced by the existence of laws, regulations and codes of conduct in the public sector (see Q47), which set out rules and good practices which can counteract corruption.

RESPONSE TO PEER REVIEWERS: I agree with the arguments of the reviewers. Score changed from 4 to 3.

The Military Prosecution Service (Forsvarets Auditørkorps) is responsible for investigating and prosecuting instances of bribery and corruption according to the civilian penal code and the military penal code, which provide for legal measures. There is public evidence that the measures provided for in these penal codes are carried out through the yearly reports by the Military Prosecution Service, which contain information on all cases prosecuted and examples of cases where no charges were brought or the defendant was exonerated. The case of a major who committed fraud for millions of kroner and was convicted to two years in prison underlines the effectiveness of the measures.

There is no specific legislation or whistleblowing mechanisms applicable to military and official personnel. A whistleblowing mechanism was proposed by one of the parties in parliament in 2014, but was not adopted. Over the past 10 years there have been several cases where people have not received any protection from reprisals after whistle-blowing on the defence sector (see sources).

Partial protection is provided by the general legal framework, including laws protecting freedom of speech and employee rights (the latter allows for compensation if an employee has been summarily and unjustly fired). The legislation permits public employees to disclose confidential information in public interest. Further protection is provided by the system of labour unions, who can intercede in employer-employee disputes.

RESPONSE TO GOVERNMENT REVIEWER: The goverment reviewer has not provided further evidence to support/verify this claim. By contrast, the case of Anders Kærgaard demonstrates that reporting to superiors is not encouraged. Anders Kærgaard approached his superior with evidence that Iraqi prisoners were being abused and was told to keep the evidence secret. He was subsequently sentenced to pay fines of 13,000 kr. for refusing to name the person who had initially obtained the evidence. None of the people implicated by the evidence made public by Anders Kærgaard were indicted. The score, however, was raised to 1 to reflect the existence of some general laws which can be used to protect whistleblowers.

Employees of the defence are required to procure security clearance before employment starts and regularly during employment, with sensitive positions requiring a higher level of clearance than lower positions. The security clearance vets for former employment and economic condition of the household. No adequate information was found on any mandatory rotation or post-retirement restrictions.

RESPONSE TO GOVERNMENT REVIEWER: It was not possible to locate either a list of positions considered sensitive or full regulations applying to them. The publicly available posts the Reviewer is referring to are vacancies, not positions considered sensitive. Score 2 was selected.

The number of civilian and military personnel in the armed forces is accurately known and publicly available on the homepage of the Defence Command. Its annual reports provide numbers for the army, navy, air force and joint service, specifying personnel category. On the website of the Defence Command, all personnel (including those of the Ministry) are listed according to personnel category, but not department.


The number of civilian and military personnel in the Defence Ministry is a bit less accurate (stated as being ca. 270), but this is most likely due to frequent organisational changes and not a reflection of any illicit motives.

RESPONSE TO REVIEWERS: No annual reports from the Ministry of Defence more recent than 2006 have been located, thus the available number remains an approximation. However, I agree that this is not sufficient to lower the score to 3. Score 4 selected.

Pay rates and allowances for all civilian and military personnel are openly published on the website of the Danish Defence Personnel Organisation

There is no evidence to suggest personnel do not receive the correct pay on time. The Danish Defence uses the DeMars system, which has been audited by Rigsrevisionen (the General Audit Office), who concluded the audit in 2011, having found DeMars to be working satisfactorily.

There is an established, independent, transparent, and objective appointment system for the selection of military personnel at middle and top management level. The HR Strategy specifies that all positions are filled on the basis of an open application process. For lower-level positions, it is the individual manager who decides whether a free position should be occupied and to post the position; for middle and top management levels, the Defence Personnel Organisation, the Defence Command, and the Ministry of Defence are also involved, with the Defence Personnel Organisation in an advisory role. The Chief of Defence is appointed by the government after an open application process. No evidence or allegations of appointments not based purely on merit has been found.

RESPONSE TO REVIEWERS: Comments incorporated, score raised to 3 as it appears that the process is indeed well defined, but it is not clear how systematic and independent oversight is. NB: The new HR strategy also means the sources provided by the Peer Reviewer are no longer applicable.

All MOD employees have annual &quoute;development conversations&quoute;, where they are subject to a formal appraisal process and their potential for promotion is assessed. No further information could be found on the promotion process, including the existence of promotion boards outside the chain of command. There have been no public cases indicating inappropriate conduct or corruption in the promotion process.

RESPONSE TO REVIEWERS: Comments accepted. Score changed from 2 to 3 as the most suitable.

National military service is written into the Danish Constitution. However, recruitment is based primarily on volunteers supplemented by conscripts selected through lottery. Conscription service lasts between 4-12 months. No evidence of a specific policy regulating issues of bribery in the armed forces has been found.
However, bribery is prohibited by §144 in the Danish Penal Code, which applies to the armed forces as well, with the Military Prosecution Service as the organisation responsible for prosecuting any attempts of bribery. There is no evidence of attempts at bribery to avoid conscription. Those called to compulsory conscription have the possibility of abstaining for reasons of conscience, which is likely to diminish the probability of bribery attempts.

National military service is written into the Danish Constitution. However, recruitment is based primarily on volunteers supplemented by conscripts selected through lottery. Conscription service lasts between 4-12 months. No evidence of a specific policy regulating issues of bribery in the armed forces has been found.
However, there is no evidence of any cases of bribery to gain preferred postings in the recruitment process. Bribery is prohibited by §144 in the Danish Penal Code, which applies to the armed forces as well, with the Military Prosecution Service as the organisation responsible for prosecuting any attempts of bribery.
Those who have been conscripted have the option of entering into a contract with the armed forces in order to have influence on where they will be posted.

There is no evidence of ghost soldiers. The payment system is monitored by the Defence Ministry and has been found to be working satisfactorily by Rigsrevisionen (the General Audit Office)

Salary management is entirely separated from the chain of command. Forsvarets Personeltjeneste (the Defence Personnel Service) along with the trade unions collaborate in developing collective agreements for the personnel in the armed forces; for personnel in the ministry, the collective agreements are made between the Agency for the Modernisation of Public Administration and the trade unions.

There is no publicly available Code of Conduct specific to the defence sector that provides military and civilian personnel guidance with respect to bribery, gifts and hospitality, conflicts of interest, and post-separation activities. There are, however, other regulations. The Danish Defence Acquisition and Logistics Organisation (DALO) has specific policies regarding acceptance of gifts and other services for their employees but no other defence organisation was found to have such policies openly stated. The employees of the Danish Defence Acquisitions and Logistics Organisation (DALO) are subject to policies ensuring their decisions are made without undue influence.

Due to the low level of corruption in Denmark (as seen in Transparency International's Corruption Perception Index), there is unlikely to be a Code of Conduct for military and civilian personnel with regards to corruption.

All public employees, including military and civilian personnel in the defence, are however required to abstain from receiving gifts, no matter how small, and other similar services. The Code of Conduct for all public employees also covers military personnel. It includes guidance with respect to bribery, gifts and hospitality and conflicts of interest. It does not include guidance on post-separation activities. Bribery of public employees is prohibited according to the Danish Penal Code.

RESPONSE TO REVIEWERS: Discussion updated to reflect the existence of a wider public sector code that provides partial guidance for personnel. Score changed from 0 to 2.

Although there is no publicly available evidence of a Code of Conduct for military or civilian defence personnel, research indicates that relevant breaches are likely to be strongly dealt with.

Personnel are partially covered by a wider public sector code of conduct (see Q47) and the Military Penal Code. According to the Penal Code, public servants who have received gifts or other advantages are penalised with a fine or prison up to six years. (LBK no. 871 of 4 July 2014, §144). The Military Prosecution Service is the body responsible for prosecuting breaches of military and civilian law. This includes breaches of §16 of the Military Penal Code, which prohibits gifts or other advantages from other military personnel.

The yearly report of the Military Prosecution Service, which lists all prosecutions, declares that the penalty for a breach of § 16 should be a fine of 2,000 kr. While no breaches of §16 took place in 2014, there is nonetheless evidence that relevant breaches have been taken seriously and that the results of prosecutions have been made publicly available. In 2012, an officer was convicted of having set up a “fine jar”, whereby soldiers could avoid facing the military penal system by paying an informal fine of up to 200 USD into a pool that was then used to supplement parties for the unit. The Military Prosecution Service found that this was in violation of §16 of the Military Penal Code and the case was referred to the judicial system. The court found the officer guilty of gross negligence and sentenced him to a fine of 8,000 kr.

No evidence of breaches of the public servant Code of Conduct by Defence personnel could be found.

RESPONSE TO GOVERNMENT REVIEWER: The intention of the question is to examine whether breaches of the Code of Conduct are likely to be effectively addressed and the results of prosecutions made publicly available. There is enough available evidence to assess this. The full score has not been awarded on the basis of the findings in Q47: the Code does not regulate post-separation employment.

According to conversations with military personnel, no training specific to anti-corruption takes place.

There is a policy to make public outcomes of the prosecution of defence services personnel for corrupt activities, and the Military Prosecution Service publishes yearly reports with all prosecution outcomes, available on their website. There is no evidence of cases being suppressed or sanctions being inappropriately applied.

Facilitation payments are illegal pursuant to section 122 of the Criminal Code. However, there appear to be shortcomings in enforcement: a 2015 OECD implementation report noted that enforcement of foreign facilitation payments remains lax and a defence is available in the Criminal Code. Despite OECD recommendations, the overall government policy with regard to facilitation payments has not been revised.

RESPONSE TO TI CHAPTER REVIEWER: While the TI reviewer is correct that the Ministry of Justice states in its guide to private businesses that small facilitation payments may not be prosecuted, it stipulates that this is in reference to exceptional circumstances where in some countries certain gratuities might fall outside the scope of this provision, even if such acts would constitute criminal bribery had they been granted in Denmark. The Ministry is also clear that these must always be documented.

For facilitation payments involving public employees, the guide states: “Making payments, including ‘small facilitation payments’, in connection with international business transactions in order to make a public employee act in breach of his duties will always be undue and thus be comprised by section 122 of the Criminal Code (active bribery).” However, score has been changed to 2 to reflect remaining lack of clarity regarding the legal framework and enforcement.

Denmark is at present conducting operations in Afghanistan. The Danish plan for operations outlines how it intends to combat corruption in the country; however, there is no explicit military doctrine. The plan is publicly available.

Research found no evidence of training for commanders on corruption issues. However, there is also no evidence of corruption issues being mishandled.

Forsvarets Regnskabstjeneste (The Defence Accounting Service) regularly deploys trained professionals to the mission in Afghanistan and monitors corruption risk in the field. Their yearly reports are publicly available, however, the most recent report is from 2010. Legal advisers are also deployed.

There is a policy in place on how to issue Codes of Conduct for deployed personnel. Only one example of one such Code of Conduct was found however, and its contents were general guidelines for behaviour while deployed rather than specifically indicating how to address corruption risks. While no specific guidelines on contracting have been located, information provided by the Government Reviewer - that Danish forces monitor corruption in theatre and analyse Civil-Military Cooperation funds to mitigate corruption risks - indicate that existence of guidelines applicable to contracting is likely.

While no specific legal prohibition on employment of private military contractors has not been found, Denmark nonetheless does not employ PMCs. In cooperation with the other state forces in the mission in Afghanistan, PMCs hired by these states might be used to carry out certain tasks such as protection of civilian advisors. No information was available on possible sanctions by Denmark on these PMCs.

There is both national and EU legislation covering defence and security procurement. The national laws only concern material items valued at 2,979,640 kr. or more and non-material items valued at 500,000 kr. or more. The Danish Defence Acquisition and Logistics Organisation (DALO) has decided by policy that all orders of materials over 500,000 kr. and less than 2,797,640 kr. should also follow the rules set out in the Udbudsdirektiv. DALO also has to abide by the basic principles of the EU, including the principle of transparency, for all orders. The exception clauses in the above laws, and alternatively art. 346 in the Treaty For the European Union, are used where an order is to be kept secret out of security concerns.

Material orders of a value of less than 2,797,640 kr. are not covered by law. The DALO has decided by policy that all orders of materials for less than 2,797,640 kr. but more than 500,000 kr. should also follow the rules set out in the Udbudsdirektiv. DALO has decided to collect offers from at least three potential providers for material and non-material orders of a value between 200,000-499,999 kr.

DALO has stated that in a number of cases of procurement in 2012 there were doubts as to whether the rules were followed. This has lead to renewed scrutiny of the cases and clearer guidelines for future procurement.

RESPONSE TO REVIEWERS: The central issue here is not the fact that there have been cases where the rules have not been followed, but rather that material orders of a value of less than 2,797,640 kr. are not covered by legislation. While there are policies in place and these appear to be followed, the question is about legislation. To qualify for a score higher than two, the items exempt from legislation would have to be “of particular national importance or sensitivity”, which I have found no evidence of being the case here.

The defence procurement cycle process is disclosed to the public on the website of The Danish Defence Acquisition and Logistics Organization (DALO).

RESPONSE TO GOVERNMENT REVIEWER:

Research found no evidence to indicate that the defence procurement cycle is openly disclosed in more than just summary form.

For larger materials, assessment of needs is a political process, and publicly announced in the Defence Agreement (Forsvarsforlig) (http://www.fmn.dk/videnom/Documents/Aftale_paa_forsvarsomraadet_2013-2017a.pdf, accessed 28 May 2015).

A list of current procurement processes can be found at the Forsvaret “Indkøb og Udbud” webpage:
http://forsvaret.dk/FES/Indk%C3%B8b%20og%20Udbud/Pages/default.aspx (also accessible via forsvaret.dk/FES). Of further relevance is The Danish Defence Acquisition and Logistics Organization (DALO), &quoute;Material and procurement underway&quoute; (my translation) http://forsvaret.dk/FMI/nytMateriel/Pages/default.aspx (accessed 28 May 2015)

For mundane procurement, nothing on assessment of needs, through contract implementation and sign-off to asset disposal could be found.

Score maintained.

The Defence Ministry has the oversight of defence procurement of larger materials, receiving reports every quarter from the Defence Command. Procurement of larger materials requires permission from the financial committee in parliament Parliamentary Finance Committee. Parties to the defence agreement yearly receive a plan of procurement in the coming year. Internal audit is conducted by the Defence Internal Audit and Rigsrevisionen (the General Audit Office) provides external auditor services. Rigsrevisionen is active and transparent, although its annual reports are available to parliament and not the public (see Q15).

There is a policy to disclose defence purchases and defence purchases are audited by Rigsrevisionen (the General Audit Office). Potential and actual defence purchases are required to be made public on the state website udbud.dk. The government publishes plans for defence purchases for the next few years in the Defence Agreement passed by Parliament. (see Q3)

Companies with prosecutions for corrupt activities are barred from bidding. Companies are required to comply with all applicable laws governing the execution of the seller's business, no matter where this business is carried out.

RESPONSE TO GOVERNMENT REVIEWER: The DALO does indeed have a “CSR requirements” appendix for all contracts, which includes standards on human rights, labour, anti-corruption and the environment. These requirements have been made available to the researcher upon request. The researcher understands from a source within DALO that the requirements are currently being updated, suggesting that there is a conscientious effort from the government to ensure the requirements are up to date. However, score 2 was maintained as these requirements do not amount to a full compliance programme.

Procurement requirements are derived from the Defence Agreement reached by the parties in parliament, which is openly published. The Defence Minister is required to ask the Parliamentary Financial Committee for permission for all procurements. The Defence Ministry reports on the procurements to the parties behind the Defence Agreement, the Parliamentary Defence Committee and the Parliamentary Financial Committee. While the General Audit Office routinely audits the defence sector, it is unclear whether and how regularly it verifies the flow from strategic requirements to particular procurement decisions.

The requirements for specific purchases can be seen on udbud.dk, and collectively give evidence of the Ministry of Defence and Armed Forces systematically basing their purchases on clearly identified requirements. There is evidence of work being undertaken to define and quantify the need for all significant purchases before the procurement procedure commences. However, the only general requirement that would apply for this question as evidence that work is undertaken to define and quantify the need for all significant purchases before the purchase procedure commences was &quoute;the economically most advantageous offer&quoute; (assessor's translation).

All defence procurement not of a highly secret nature have to be published on www.udbud.dk.t
Several cases have shown that defence procurement has not always been conducted in accordance with the rules. With the new Defence Agreement per April 2014, the responsibility for the procurement process will be moved to the Defence Ministry.

The employees of the Danish Defence Acquisitions and Logistics Organisation (DALO) are subject to policies ensuring their decisions are made without undue influence. Decisions on procurement are subject to independent internal audit by the Defence Internal Audit and external audit by Rigsrevisionen (the General Audit Office).

Collusion is illegal and offences result in sanctions such as prison and fines. The extent of collusion is not accurately known but a survey of Danish companies showed that 43% believed there was occurrences of collusion in their industry and there are occasional stories of collusion and their sanctions in the press (though none could be found specific to defence sector procurement).

RESPONSE TO PEER REVIEWER: The criteria for awarding score 4 include that collusion &quoute;is almost unknown in the country&quoute;. While accepting there are no known examples of collusion in the defence sector, the examples of collusion in Denmark and the statistic showing 43% of Danish business owners believing there is collusion in their industry conclusively demonstrate this is not the wider case. Score maintained.

The Security Procurement Directive (2009/81 EC) states that staff in procurement must be able to ensure that defence contractors meet their obligations, however, no information could be found on the specific training of procurement staff.

RESPONSE TO REVIEWERS: A DALO source was not able to respond to a request for information before the deadline. During the short conversation I had with DALO over the phone, it was indicated that training is in place but the contents of the training was not specified. It is also not clear whether the level of resourcing is sufficient and whether employees are legally empowered to verify contract fulfilment. Score 2 selected.

All companies with a legal interest in making a complaint can complain to Klagenævnet for Udbud (Board of Complaings for Procurement). There are no provisions in the law allowing for future discrimination of companies who have made a complaint, and as such the companies are protected from future discrimination (as they will be able to complain again if they are discriminated against). However, there is no specific non-discrimination provision, thus score 3 has been selected.

There are a range of sanctions available to punish the corrupt activities of a supplier, including prison sentences, debarment, and heavy fines. Such sanctions are consistently applied judging from news stories.

No information could be found on due diligence requirements. The government requires yearly reports from contractors and these reports are audited by a special organ comprised of representatives from the Ministry of Defence, The Danish Defence Acquisition and Logistics Organisation, the Confederation of Danish Industry, and the Central Organisation of Industrial Employees in Denmark.

The government makes public a list of the current contracts, however, not much information is available aside from the size of the investment and the names of the companies. Yearly reports on the overall status of the performance of offset contracts are made to the Defence and are available to the public. No information could be found on planned offset contracts.

The Danish Business Authority indicate that as of 2 April 2014 the previous regulation on offset contracts was lifted and administrative rules are to replace them. These rules are not yet established however. As such, it is not possible to answer this question at the current time.

RESPONSE TO GOVERNMENT REVIEWER: Comments accepted. Score changed to 4 as it is clear from this that offset contracts are subject to the same level of competition regulation as the main contract.

There appear to be no publicly available government-imposed restrictions on the use of agents and intermediaries in the procurement cycle. Though the sources quoted are from 2001 and 2007, there appears to have been no changes in legislation since then. However, there appear to be some internal regulations pertinent to the issue.

RESPONSE TO PEER REVIEWER 2: The only public source I was able to find supporting the existence of internal regulations is an article from 2001, claiming that the Defence’s Acquisition Provisions (Forsvarets Indkøbsbestemmelser) state that the officers processing different material offers “cannot be identical to or related to one of the bidders or suppliers” (my translation) The Defence’s Acquisition Provisions were not publicly available. Additionally, these rules are not government regulation on “the company’s use of agents or intermediaries”, but primarily government regulation of own employees. However, likely existence of some internal regulations support the score being raised to 1.

Major arms deals are planned in the Defence Agreement, which gives a rough overview of timeline and budget allocated to the procurement, but details of the interest rates, etc. could not be found.

Just as the main contractor, sub-contractors are required to comply with all applicable laws governing the execution of the Seller's business no matter where this business is carried out, in particular not making use of child labour. No information could be found on the government formally requiring main contractors ensuring sub-contractors adopting anti-corruption programmes. As there was also no evidence of the government formally requiring main contractors to adopt anti-corruption programmes (besides the requirements found in law), it is highly unlikely that such a requirement is made regarding sub-contractors.

RESPONSE TO GOVERNMENT REVIEWER: The CSR requirements that are used for all contracts by DALO have an anti-corruption clause. The CSR requirements also apply to any subcontractors:
“When assessing whether the Supplier in its performance of the Agreement is liable for any non-compliance of the requirements mentioned, the Supplier's own production processes and methods shall be taken into account as well as whether the Supplier's conduct otherwise in the performance of the Agreement may have had an impact, including the Supplier's choice of Subcontractors or choice of components for the products/services.” (source: standard contract Corporate Social Responsibility requirements, available upon request from DALO, obtained 28 May 2015)

The CSR requirements, however, also specify that “Except as set out specifically in the Agreement, DALO will not in general request documentation that the Supplier in the performance of the Contract complies with the above requirements regarding production processes and methods. ” While a statement is required from the supplier's management, where the supplier shall make representation ensuring, on a continuous basis, the compliance of requirements regarding human rights, labour standards and the environment in the performance of the Agreement, there is no requirement of representation ensuring the compliance of requirements on anti-corruption. No other evidence could be found that the anti-corruption requirements are enforced.

Score changed from 0 to 2.

While there are often political motivations as well as reasoning based on technical and military needs behind defence acquisitions, Denmark is very unlikely to make decisions as a result of political influence by the selling nations.

RESPONSE TO PEER REVIEWER 2: I agree with Peer Reviewer 2 that it is difficult to determine whether a downgrade is warranted. My original source estimated that the Danish government would choose F35 regardless of the amount of pressure from the US, which in his opinion would not be much. There is of course a difference between pressure and political influence, and the political influence of the US might have been a greater factor than I originally estimated. After reviewing the comments from Peer Reviewer 2 and the original source, there appears to be sufficient evidence indicating a (limited) risk of political influence to revise the score. Score changed from 4 to 3.