This week, OpenCorporates launched over 5 million companies from Germany, marking our 130th jurisdiction.
Read the original version of this blog in German here.
A large portion of the German budget is spent through contracts with companies – a three-digit billion euro sum that accounts for more than 30% of annual government spending. It’s difficult to determine who benefits and whether the decision-makers in politics are acting in the citizens’ interests. We Germans have a nice word to describe the cozy relationship between companies and politics: Vetternwirtschaft, nepotism or literally “a cousin economy”. It thrives in the dark. On the much-loved weekly crime show Tatort (Germany’s answer to Law & Order) it might be portrayed with a briefcase in a dimly-lit hotel bar.
Neither the details on companies nor the awarding process for public contracts are transparent. The German transparency law of 2017 was supposed to solve the problem for company data, but it did not, thanks in part to the corporate lobby. Contract details are hard to find, the information is limited. Although information on high-value contracts must be made public thanks to EU regulations, there is scarcely anything on small and medium-sized contracts, which account for the majority. On the official portal of the federal government bund.de, you’d be lucky if the final contract amount is visible.
It would be easy to rely on the results of the Corruption Perceptions Index. Germany doesn’t come first but it sits comfortably among the global elite. Corruption? Not here. At least that’s what we believe. It can’t yet be verified in practice.
At least for the “Who” of contracts there’s now a solution. Thanks to OpenCorporates, the Open Knowledge Foundation Germany and Transparency Germany, the platform OffeneRegister.de now provides access to company data. It will hopefully also be an incentive to take this up at the federal level.
For the “What”, Germany lags far behind. Countries like Colombia, Paraguay, and Ukraine are opening up the entire contracting process so everyone can see everything. Finland, France, the UK, and Portugal are leading the charge in Europe. The B20, the private sector voice of the G20, recommends publishing timely information on contracts for infrastructure projects, from planning through to implementation. This is also best practice for the OECD and the EU.
However, publishing the data is only the beginning. To make the open data usable, some modernization is also needed at the technical level; in particular, a uniform global identification system for companies and for every procurement process so that information can be easily followed, to give a full picture of purchases from start to finish or a company’s track record.
Ultimately, this is not just about detecting fraudulent practices and corruption.
It is also, and more importantly, a question of how to improve politics, in the spirit of open government, with the citizen at the center. That means social programs that develop solutions that align with citizens’ needs, and economic policy that rewards innovative companies. And whether the federal government, regional states, and municipalities actually get the best price and quality. Is the offer for new police cars from BMW actually cheaper than what the city of Munich is currently paying? Who can check whether the proposal of a company is actually as good as claimed?
Civil society and the media need this data to inform decision-making, not block it.
OffeneRegister.de has shown that it can be done. Open contracting should be next.