Public Sector Governance

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A Series Of Country Case Studies on What Works in Fighting Corruption

• Pervasive Corruption in Italy says Council of Europe
• Joint US - Russia Working Group Proposes Integrity Actions in Moscow
• Governance Crisis in Niger - Transparency International Chapters Protest
  
• European Commission Slams Bulgaria and Romania for Continuing Corruption
• First East African Regional Bribery Index
• Michela Wrong's New Book on Kenya
• Fullbright Fellow Maps Nigerian Oil Sector Corruption
• Public Perceptions of the Local Tax System in Tanzania
• Kenya Bribery Index 2008 Shows No Improvement of Corrupt Officials
• Case Studies of Oil Resource Management in Four African Countries
• Local NGO Struggles to Promote Women in Zimbabwe Elections
• Tanzania Tested in Corruption Scandal
• TI Reports on Emerging Good Practices in Southern African Countries
• Report Shows Voter Bribery Dominates Kenya's Political Campaigns
• GRECO Recommends Anti-Corruption Reforms in Ukraine
• Human Rights Watch in Nigeria: How Poverty and Corruption Reinforce Each Other
• Chinese Corruption Should Elicit Global Concern, Say Carnegie Scholar
• TI-Kenya 2007 National Corruption Survey
  
  Read more on the next page...
  
  

Also see International Surveys

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Pervasive Corruption in Italy
An Official Report by The Council of Europe’s Group of States against Corruption (GRECO)
In a detailed and remarkable first report on Italy, GRECO Makes Far-Reaching Recommendations for Improvements

GRECO, which currently comprises 45 European States and the United States of America, is the Council of Europe’s anti-corruption monitoring body. GRECO's objective is to improve the capacity of its members to fight corruption by assessing their compliance with Council of Europe anti-corruption standards through a process of mutual evaluation and peer pressure. It helps to identify deficiencies in national anti-corruption legislation and policies, prompting the necessary legislative, institutional and practical reforms.

The report as a whole addresses 22 recommendations to Italy. GRECO will assess the implementation of these recommendations in the second half of 2011 through its specific compliance procedure. the following are some of the report's conclusions:

Despite the clear commitment of judges and prosecutors to deal effectively with corruption instances, corruption is perceived in Italy as a pervasive and systemic phenomenon, with numerous areas of activity (in particular, urban planning, public procurement and the health sector) and territories being affected. While a considerable arsenal of legislation has been passed, especially in the 90s, to set in place a repressive framework for corruption (for example, by introducing far-reaching rules providing for the attachment of corruption proceeds, application of special investigative techniques, use of cooperative witnesses, full access to bank accounts, etc.), more needs to be done to articulate an effective preventive policy in this area. Yet to be launched is an overarching anticorruption programme which is coupled with adequate monitoring so that citizens are made aware of the measures taken and the concrete results achieved in the fight against corruption. This would require a long term approach and sustained political commitment; combating corruption has to become a matter of culture and not only rules.

The Italian criminal system suffers from an excessive length of judicial proceedings thus raising the potential for the expiration of the relevant time limit specified in the statutes of limitation. Lengthy delays for concluding corruption cases can clearly represent a most serious problem in the fight against corruption, especially when those delays result in cases being dismissed on limitation grounds rather than ending in decisions on the merits. It is essential that an assessment of the impact of this problem on the adjudication of corruption cases be undertaken and, need be, concrete measures be put in place to help ensure that cases reach a decision on the merits. Concerns also exist with respect to the immunities enjoyed by certain categories of holders of public office. It must be ensured that this state of affairs does not generate an unacceptable obstacle to the country’s capacity to effectively prosecute corruption.

Likewise, while recognising some of the efforts undertaken to enhance efficiency and transparency of the Italian public service, there is still room for further improvement as regards transparency and ethics of public administration. Further measures are recommended with respect, for example, to access to official documents, internal auditing, enforceability of deontological provisions, prevention of conflicts of interest, movement of public officials to the private sector (pantouflage), and whistleblower protection. In addition, further implementation of corruption prevention policies requires extensive awareness-raising and the provision of appropriate information to the relevant authorities and to the public at large.

As far as the issue of legal persons and corruption is concerned, several key elements have been introduced to strengthen the system of registration of legal persons, to track convicted companies and to promote ethics in the private sector. These are all positive steps. The introduction of corporate liability is also commendable. It remains crucial to strengthen the accounting and auditing obligations for all forms of companies and to ensure that the corresponding sanctions are effective, proportionate and dissuasive.

Posted 10/23/2009

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Proposals for Russian Integrity Reform
Moscow meeting Develops Recommendations for Reform

The Joint Working Group identified key actionable areas which build on President Medvedev’s initiatives and measurably address the integrity issues confronting both Russia and the international business community.

Russia-US Joint Working Group on Investment and Institutional Integrity

• The private sector should advocate for the adoption and the implementation of international commitments, most notably accession to, and ratification of, the OECD Convention on Combating Bribery of Foreign Officials. Along with compliance with the UN Convention Against Corruption (UNCAC), Russia‟s definition of “government official” should be consistent with global standards, the promising of bribes should be banned, and the concept of criminal liability for legal entities should be introduced.
  
  
• In the realm of government procurement, Russia should retain the requirement that bidders submit guarantees or advance payments to obtain preliminary qualification, as well as the policy of “hard” contract prices. Russia should also institute auctions as the preferred method for awarding contracts, and perform random independent quality audits of procured products and services.
  
  

• To promote transparency and reduce opportunities for corruption, foreign investors and Russian firms should comply with international corporate governance practices and guidelines. To maintain these guidelines, corporate boards of directors should recruit independent directors, and ensure that such directors are trained in anticorruption compliance, and are subject to strict performance evaluation criteria.
  
  
• The two countries‟ law enforcement agencies should create mechanisms for exchanging relevant data on corruption issues. Top prosecutors from both countries should establish a platform for sharing best practices, and an expert advisory group on the G8 and G20 levels could use successful experiences in other countries to support the development of anticorruption measures.
  
  

• A new law reducing barriers for businesses limits inspections and requires entrepreneurs only to notify the government, rather than obtain prior approval, before launching certain business activities. Further reforms are needed to remove the remaining barriers to those businesses not subject to the new procedures.
  
• A law passed in February 2009 grants citizens the right of access to information on state agencies but fails to establish procedures to enable such access. Additional regulations are needed to guarantee accurate, timely, and unencumbered access to information from all levels of government, particularly via the Internet.
  
  

• All draft laws should undergo anticorruption expert evaluation to determine both their potential for corruption and compliance with existing guidelines. Such a federal program can be modeled after successful programs in Russian regions.
  
  
• To ensure the effectiveness of President Medvedev‟s executive orders requiring the declaration of earnings and assets by civil servants and office-seekers, the government must guarantee public access to this information and create mechanisms preventing officials from transferring illicit assets to relatives or friends.
  
  

• To ensure public control over the implementation of the National Anticorruption Plan, including business associations and other civil society institutions.
  
•  New laws must establish liability for corruption covering a variety of violations beyond bribery, reduce bureaucrats‟ too-frequent “immunity” from criminal prosecution, and protect whistleblowers who expose corruption.
  
  

• Because the judicial system itself is often associated with corruption, a number of court reform measures are in order: creating a system of administrative courts;  reviewing the role of court chairmen; overhauling the legal education system; and bolstering the independence of regional and local courts.
  
  
• Russia may consider the establishment of an autonomous anticorruption agency answering to only the President. Such an agency‟s transparency must be guaranteed through an independent body that can monitor and publicize its activities.

Posted 8/05/2009

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Governance Crisis in Niger

Transparency Ingternational Chapters from Across the World Protest to the President

Open Letter: TI chapters call on President of Niger to respect the rule of law

Berlin, 27 July 2009
Honourable Mr. Mamadou Tandja, President of the Republic of Niger,

It is out of great concern for Niger and its citizens, that we, National Chapters of Transparency International (TI), the civil society organisation leading the global fight against corruption, address you the present letter.

The recent political crisis in Niger regarding the process of constitutional reform is a matter of deep concern for us, as well as for national and international advocates of democracy and the rule of law.

Your efforts to hold a national referendum on changing the current Nigerien Constitution in order to seek re-election for a third consecutive term have been ruled unconstitutional and in violation of your oath by the Constitutional Court of your country. In addition, your pursuit lacks Parliamentary support and has been heavily criticized by Nigerien opposition parties, civil society organisations and important trade unions.

Your manner of addressing this internal resistance – by seizing emergency powers, dissolving the Parliament and the Constitutional Court and planning a national referendum to take place on August 4, 2009 – has notably alarmed the office of United Nations Secretary-General Ban Ki-Moon, the African Union and ECOWAS, as well as many governments worldwide.

Honourable Mr. Mamadou Tandja, President of the Republic of Niger, We, National Chapters of Transparency International, join this group in condemning any such actions that may undermine the rule of law, lead to the abuse of political power for private gain and threaten the health of democratic institutions in your country.

An independent and honest judiciary, which safeguards the democratic principles and values put forward in your Constitution, is indispensable to a functioning democracy and social stability. Furthermore, free, independent and transparent elections are fundamental to combating political corruption and upholding your electorate’s most basic civic rights and freedoms. In the present state of affairs, the citizens of your country can no longer rely on either of these democratic strongholds.

With these concerns in mind, we urge you to take urgent steps to address the political crisis in your country through lawful, democratic means. We therefore ask that you no longer endorse the proposal for an extension of the Presidential mandate and, additionally, to support the National Electoral Commission in organising the general elections later this year in a free, fair and transparent manner.

We, National Chapters of Transparency International, further urge you to act in agreement with your country’s constitutional order, guaranteeing the safety of Nigerien democratic institutions and creating space for the participation of civil society in political processes.

Only such commitments can assure citizens of your country, and the democratic world at large, that Niger will continue down the road of good governance and respect for the rule of law paved over the past ten years.

Yours sincerely,

The TI National Chapters in:

Posted July 28, 2009

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Commission of European Union Again Underscores Serious Corruption Problems in Romania and Bulgaria.

EU Report Notes Progress on Some Institutional Fronts, But Stresses Lives of Ordinary Peoploe Continue to Be Plagued by Corruption

(see the reports on Bulgaria and Romania)

EU

The European Commission uses diplomatic language to comment on the continuing severe corruption issues in Bulgaria and Romania. In both countries, the Commission says that institutional progress is being made. But, the new reports also suggest that the impact of corruption on ordinary citizens remains largely unchanged.

Because of deep concerns about corruption, the EU sometime ago initiated periodic reviews of these two countries. The new reports, under the Cooperation and Verification Mechanism, stressed the need in each nation to build the necessary political consensus to push forward progress on judicial reform and the fight against corruption. The EU said, “ Cross-party political support is now needed to underpin the momentum that is building for reform in both Member States.

However, more needs to be done to deliver convincing results in judicial reform, tackling corruption, and in the case of Bulgaria in the fight against organised crime.”

The President of the European Commission José Manuel Barroso, said: “The reform momentum that has been established now needs to be backed up by a national political consensus involving all political parties and institutions, and more convincing delivery of results. Citizens in both countries and across the rest of Europe must feel that no one is above the law. I hope that the two governments will move quickly to implement the concrete recommendations for reform that the Commission has put forward."

The Bulgarian report, for example, said, “Signs of progress have not yet had an impact on the daily reality for Bulgarians who do not yet see improvements. In the public perception, justice in Bulgaria is slow and sometimes inequitable, with some prosecutors and magistrates allegedly subject to influence and interference. Bulgaria still suffers from an outdated Criminal Code and from excessive formalism in judicial practice. Thorough reform of the judiciary has not yet started and the positive results of recent reform efforts remain fragmented. They need to be adequately backed up by a broad political consensus and a convincing strategy to make the fight against organised crime and corruption the top priority for Bulgaria. The report calls for an unequivocal and long term political commitment by Bulgaria to sustain and extend the current momentum of progress in order to register more substantial results in investigating, prosecuting and judging cases of high-level corruption and organised crime.”

The report on Romania noted that there is real institutional progress here, but, “Reform efforts remain fragmented, they have not yet taken firmly root and must still produce practical results for Romanian citizens. The Parliament should show the full commitment to pursuing the fight against high level corruption. A lack of initiative in addressing local corruption is apparent. Jurisprudence remains contradictory and a legislative patchwork of emergency ordnances and implementing rules creates legal insecurity. Overall, a broad based political consensus behind reform and an unequivocal commitment across political parties to real progress has still to be demonstrated. There is a real risk that an ever growing web of legislation, implementing rules and practices resulting from permanent political party infighting may result in a loss of focus for the ultimate objective which is to establish an independent and stable judiciary. The report calls for a political consensus in Romania to allow the judicial system to work independently and to allow non-partisan investigations into corruption lead to swift and effective decisions.”

Posted 07/29/2009

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Kenya, Tanzania, Uganda

East African Bribery Index Highlights Depths of Corruption Across the Region - A Joint Report from TI-Kenya, Tanzania Transparency Forum and TI-Uganda

Which Country Has The Highest Incidence of Bribery?
The overall level of corruption as reflected by the proportion of East Africans from whom a bribe was solicited or expected during service interaction stood at 34.6% for Uganda, 17% for Tanzania and 45% in Kenya.

Links to the full report and rdelated news can be found at the website of TI-Kenya

The first East African Bribery Index is based on a survey conducted among 10,517 respondents selected through random household sampling across all the administrative provinces in the three countries. The sample was distributed as follows- 3,500(Kenya), 3516(Uganda) and 3501(Tanzania). Details of the findings and the methodology used can be found in the report.

The respondents were asked to mention institutions where they were required to pay or where bribes were expected as a condition to access public services. Out of a total of 23,226 interactions with public service delivery institutions reported, 33% of them involved a situation where a bribe was either demanded or expected. Out of this, bribes were actually paid during 23% of all interactions with the institutions.

OUTLOOK - NEGATIVE

KENYA:  More than 90% of the respondents rank Kenya as being between corrupt and extremely corrupt. Only 7.2% of the sample termed the situation as moderately corrupt. A whopping 72.6% of the respondents opined that the level of corruption had increased in the last one year. 14.5% of those sampled said that the level of corruption had remained the same, while 11.2% reported a decrease.

TANZANIA:  Asked on their perception on the current level of bribery in the country, more than 67% of the respondents rank Tanzania between corrupt and extremely corrupt. Only 5.7% of the sample judged the corruption situation in Tanzania as moderately corrupt. Approximately 26.3% of the respondents had no opinion. In relation to change in the level of corruption, 47.3% of the respondents opined that the level had increased in the last one year. 23.5% of the sample expressed that the level of corruption had remained the same, whereas only 4.7% of the sample reported a decrease. Almost a quarter of the respondents (24.5%) of the respondents expressed no opinion on this issue.

The FUTURE:

The report said: “There has been a concerted effort to revive the East African Community (Kenya, Tanzania and Uganda) and its objective is to promote trade and development, and improve the lives of citizens of East Africa.” But, to attain this demands that corruption be curbed in the member countries. The report noted that The World Bank observes that African manufacturers pay on average 7% more for electricity than South East Asian counterparts. Today’s report notes that in its new survey of over 10,000 people in East Africa, all the three power utility companies in the region - TENASCO in Tanzania, Kenya Power and Lighting Company [KPLC] in Kenya and UMEME in Uganda - are seen as some of the most corrupt public institutions in their respective countries. The report added, “The power sector is only one of many public services that have extorted bribes from citizens. Others include water, security, health, licensing, immigration and infrastructure. Corruption in these sectors all contributes to deepening poverty and increasing the cost of doing business in East Africa.”

KENYA --- OVERVIEW OF THE FINDINGS

The overall level of corruption as reflected by the proportion of Kenyans from whom a bribe was solicited or expected during interaction with service delivery institutions fell from 56% in 2008 to 45% in 2009. 59% of those from whom a bribe was expected or solicited actually paid. Approximately 20% of those who did not pay bribes when asked or expected to, were denied the services that they were seeking. On the contrary, 92% of those who paid bribes reported that they accessed the services that they had bribed for.

Analysis of bribery by purpose
The respondents reported to have paid bribes for the five following reasons;
1. To access or speed up services;
2. To avoid the consequences of failing to comply with certain regulation;
3. During interaction with law enforcement agencies;
4. For employment related services such as recruitment, promotion, transfers.
5. For business purposes like acquisition of tenders.

TANZANIA - OVERVIEW OF THE FINDINGS

The overall level of corruption as reflected by the proportion of Tanzanians from whom a bribe was solicited or expected during interaction with service delivery institutions stood at 17.8%. 72% of those from whom a bribe was expected or solicited actually paid. 7% of those who did not pay bribes when asked or expected to were denied the services they were seeking. This can be contrasted with 60.5% of those who paid bribes and accessed the services they sought.

The fundamental reasons for paying bribes in Tanzania were seen as the same general five categories listed above for Kenya. However, even though 55% of the bribery incidences in Tanzania by respondents were for services, bribes paid for services constitute only 13% of the total value of bribes paid. 41% of the total value of bribes paid was for employment related issues. This underpins the premium attached to job seeking. While the survey indicates that only 4% of the bribery situations and total value of bribes were for business related purposes, this does not accurately reflect the level of integrity in public procurement but rather that the household survey targeted ordinary Tanzanians who may not have regular business interactions with public institutions.

UGANDA - OVERVIEW OF THE FINDINGS

The overall level of corruption as reflected by the proportion of Ugandans from whom a bribe was solicited or expected during service interaction stood at 34.6%. A worrying 81.6% of those from whom a bribe was expected or solicited actually paid the bribe in Uganda. Approximately 9% of those who failed to pay bribes when asked or expected to were denied the services they were seeking for. This compares closely with 7% for Tanzania but deviates significantly from 20% for Kenya. Approximately 72% of those who paid bribes where solicited or expected accessed the services they bribed for.

Perceptions of the Most Corrupt Institutions in East Africa

Public institutions in the region were ranked in an aggregate index – with the 10 seen as most corrupt being the following:
 

The East African Bribery Index is a survey of more than 10,000 citizens.  

The survey found that the Kenyan Police is the most corrupt institution in East Africa, followed by the police in Tanzania and then the military in Kenya.

Posted 07/05/2009

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"It's Our Turn to Eat: The Story of a Kenyan Whistleblower"
New book by Michela Wrong

Published by Harper Collins in the U.S. and by Fourth Estate in the U.K.

(for an interview on critical issues facing Kenya with Michela Wrong visit Policy Innovations at the Carnegie Council)

Kenya—seen as the most stable country in Africa—was hailed as a model of democracy after the peaceful election of its new president, Mwai Kibaki. By appointing respected longtime reformer John Githongo as anticorruption czar, the new Kikuyu government signaled its determination to end the corrupt practices that had tainted the previous regime. Yet only two years later, Githongo himself was on the run, having discovered that the new administration was ruthlessly pillaging public funds.

"Under former President Moi, his Kalenjin tribesmen ate. Now it's our turn to eat," politicians and civil servants close to the president told Githongo. As a member of the government and the president's own Kikuyu tribe, Githongo was expected to cooperate. But he refused to be bound by ethnic loyalty. Githongo had secretly compiled evidence of official malfeasance and, at great personal risk, made the painful choice to go public. The result was Kenya's version of Watergate.

Michela Wrong's account of how a pillar of the establishment turned whistle-blower, becoming simultaneously one of the most hated and admired men in Kenya, grips like a political thriller. At the same time, by exploring the factors that continue to blight Africa—ethnic favoritism, government corruption, and the smug complacency of Western donor nations—It's Our Turn to Eat probes the very roots of the continent's predicament. It is a story that no one concerned with our global future can afford to miss.

Posted 06/22/2009

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Fulbright Fellow Maps Corruption in Nigeria's Oil Sector

Corruption is widely perceived as a long-standing and influential component of Nigeria's oil sector operations. In a two-part policy brief published by the Christian Michelsen Institute, Alexandra Gillies provides an introductory mapping of where this corruption takes place, how it impairs sector operations, and the efforts at its reduction. Gillies is a Fulbright Fellow to Nigeria from the University of Cambridge and co-editor of Smart Aid for African Development.

Part One, "Mapping Corruption Risks in Nigeria's Oil Sector," identifies five loci of corruption in the upstream oil sector: awarding upstream licenses; awarding contracts; bottlenecks and inefficiencies that can lead to bribery; "bunkering," or theft of oil from pipelines and industry facilities; and exporting crude and importing refined products. By describing the practices observed in each area, the report adds some specificity to our understanding of how corruption takes place. Taken together, the corrupt behaviors described, and the incentives they create, often prevent Nigerian government institutions from managing the oil sector in accordance with society's long-term interests. For instance, evidence suggests that large-scale bribery influences the awarding of contracts to oil services companies, advantaging companies with deep pockets and good connections, not those which can most efficiently execute the task.

Part Two, "Progress and Prospects for Reform," describes the ongoing efforts to reduce corrupt practices in the oil sector and the challenges to doing so. To guard against corruption, reform is needed in several areas: the legal and regulatory framework; license and contract award procedures; process and revenue transparency; investigation and prosecution; and oversight and accountability mechanisms. The report briefly assesses the progress made in each of these areas, and finds the results generally uneven, with significant improvements yet to be made.

The report concludes with words of advice for Nigeria's international donors. Generally speaking, donors have limited leverage and few entry points for promoting oil sector reform. The report suggests that their comparative advantage may lie in combating the international elements of corruption (via more robust laws, investigations, etc.), designing and actively promoting international best practices for oil sector governance processes, and supporting in-country accountability institutions.

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Tanzanian Research Group Analyzes Public Perceptions of the Integrity of the Local Tax Systems

The government of Tanzania instituted significant reforms in the local tax system in 2003 and 2004, significantly increasing public trust in the tax system and the capacity for the local councils to offer public services.  The group Research for Poverty Alleviation, based in Tanzania, conducted another review of public perceptions of the tax system within local governments in order to assess what progress has been made and what still needs to be done.  The basic conclusion was that although there has been significant progress in increasing public trust since 2003, there is still a wide perception that tax money is not being spent on public services.

Results of the 2006 survey were evaluated to determine why citizens pay or do not pay taxes, public perceptions of the quality of government services, their perception of tax misuse, and the level of reporting of corruption within the local government.  Citizens from six local councils in Tanzania were surveyed.  The local councils in Tanzania are primarily responsible for service delivery. 

The reforms of 2003 and 2004 greatly improved people’s perceptions of the quality of public services.  In 2003, only 22.6% said they paid taxes because they anticipated public services; whereas in 2006, 50.4% said the same.  In addition, 54% said the quality of service delivery has increased in 2003 and 75% believed this to be the case in 2006.  However, about half of the respondents in both 2003 and 2006 still said people would avoid paying taxes if they could get away with it.

Perceptions of fund misuse varied between different councils, often dependent on the political climate.  Significant improvements have been made since 2003 to increase people’s trust in the government.  In 2003, only 13% said they trusted the government to use tax money responsibly, and in 2006 43% said they trusted the government.  These numbers are still relatively low.  A majority of the respondents said more transparency in local government finances would contribute to greater public trust in the government.  Currently, local government finances are rarely publicly available.

Almost half of respondents in both years said corruption is a major problem.  However, only 2-4% actually reports abuse.  The most common reason given for not reporting abuse was fear of repercussions. 

Research for Poverty Alleviation concludes that public trust and government transparency are still serious problems.  By finding solutions to these problems, the government will be more effective at collecting taxes, the study states.  The group offers a number of recommendations to that end:

• More effective measures to encourage tax payers to report abuse is required.
  
  
• Clear guidelines on how to report abuse are necessary as well as appropriate protection for whistleblowers.
  
  
• Transparency in local government operations is “crucial.”
  
  
• The capacity of the government to collect taxes needs to increase so that there is greater efficiency and trust that government can manager tax money.

Posted 9/9/08

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Kenya Bribery Index 2008 Shows No Improvement of Corrupt Officials

Corruption in Kenya shows no signs of slowing, according to the latest Kenya Bribery Index 2008 conducted by the Kenya branch of Transparency International.  According to the 2,400 Kenyans surveyed in 2008, 87% of the respondents said they were asked to pay a bribe during the past year and 88% of those actually paid it. 

TI-Kenya has conducted this survey in order to track overall trends, but also to set benchmarks for the future.  The survey was first conducted in 2005, and the methodologies have changed somewhat over time.  Not all aspects of the survey are comparable to past surveys, but the data is strong enough to show there has been little improvement.

The survey was conducted on the basis of how many people were asked to pay bribed when interacting with public and private organizations, how many times they were asked to pay the bribe, and how much they were asked to pay.  Respondents encountered bribery in just over half (56%) of their interactions with all organizations, both public and private, compared to 54% in 2007.  This number has been steadily rising since 2005, the survey says.

Other major findings from the survey:

• The average number of public and private organizations with which respondents interacted was slightly less than 6 (5.6).
  
  
• Respondents said they were asked to pay a bribe most often in order to gain access to some service (45%) and to avoid legal penalties (24%).
  
  
• Respondents were asked to pay a bribe most often by Law Enforcement.
  
  
• The biggest bribes were required to gain employment.  The average cost of a bribe for employment was 2,618 Ksh (about US$40). 
  
  
• Public perception of corruption in Kenya is turning slightly more negative, with no significant change overall.  Out of the total number of respondents, 37% said there was no change in the level of corruption and 17% said it was a lot worse.
  
  

Kenya Police Ranked Most Corrupt

• Only 8% of the respondents said they made an official report of having encountered bribery, while 64% said they remained silent.  TI-Kenya believes this kind of reaction strongly contributes to Kenya’s “culture of impunity.”
  
  
• The highest level of passivity (where Kenyans did nothing after being asked to pay a bribe) was in the Kenya Police.  TI-Kenya speculates people fear repercussions most from this agency. 
  
  
• The Kenya Police have consistently been ranked most corrupt.  According to the survey, 93% of the respondents said they had encountered bribery from the Kenya Police, followed closely by local ministries and authorities (84%).  The average number of times a single respondent said they had encountered bribery from both agencies was four.       
  
  

See also TI-Kenya's 2007 Kenya Bribery Index.

Posted 7/22/08

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A Question of Governance – Case Studies Explain the Roadblocks to Development in Oil Rich African Countries

A South African advocacy organization has produced case studies in four different oil rich African countries, all having different experiences with oil management, in order to identify alternative avenues to avoid the “resource curse.”

The “resource curse” is a popular term used to describe the inverse relationship that often occurs between the discovery of oil in a country and the downward slope of development.  Several factors could be attributed to this phenomenon, but a serious cause is the mismanagement of oil revenues, according to a recent report by the Institute for a Democratic Alternative in South Africa (IDASA).  Once oil is discovered in a country, the government is forced to adopt very strict governance structures very quickly in order to hedge the interests of multiple stakeholders against the interests of its own people.  This has often proven difficult in countries where democracy is highly unstable and governance structures are weak.

The Institute for a Democratic Alternative in South Africa, commonly known as IDASA, is a public interest organization committed to promoting sustainable democracy.  The Institute has produced a report with a series of case studies on four African countries in various stages of the oil management process.  The focus of the studies is on the political context within each country in order to identify barriers to managing oil revenue, according to the report.  The larger goal is to identify avenues through which there can be greater public participation and oversight and where more effective advocacy can be done.  Each study contains an account of how multiple stakeholders function in the oil management system, including government, multinational companies, international funding agencies, donors, local and international NGOs and the citizens in the country.

Four African countries were chosen – Angola, Chad, Gabon and Sao Tome e Principe – IDASA says, because of their diverse characteristics.  Angola is the second largest sub-Saharan oil producer.  Chad has tried, with varying success, to implement innovative laws to manage disbursement and use of oil revenues.  Gabon is struggling under an oil dependent economy with limited oil reserves.  Sao Tome e Principe (STP) has recently received reports that billions of barrels of oil are just off its shores and is in the beginning stages of negotiating exploration.

All face significant challenges.  Some countries have more difficulty in some areas than in others.  The main points covered in the report are:

• Lack of institutional capacity
• Struggle to maintain adequate oversight of oil revenue
• Money diversion through outside, secret channels
• Power in government is highly concentrated
• Contracts are often skewed to benefit multinational oil companies who often have more power over negotiation than the governments
• Lack of diversity in economies
• High level of externally generated income that goes directly to state coffers instead of being redistributed to the people
  
  

Each study contains a fairly detailed account of how these factors are affecting each country’s progress toward (or detraction from) effective oil management.  A brief history of the political climate is provided in each situation with an outline of the latest legislative initiatives which aim to provide more oversight in the process.  Sadly, none of the countries seem to be making any significant progress.  A summary of the key points made in each case study is provided below.

ANGOLA

The government has been slow to adopt transparency in its financial dealings, despite protests from its people.  Only since 2005 has there been a website which publishes what payments the state oil company receives and the payments it makes to the government.  However, IDASA states there is still a serious lack of information on how revenues enter national budgets, leading to the suggestion that alternative budgets are set up which funnel the money into secret accounts.  The country has been ravaged by decades of civil war and has not had an election since 1992.  Civil society has only just started to become more active and in many cases, organizations do not yet fully understand the process or details involved in oil revenue management.  There is also a real lack of funding for many organizations trying to get themselves off the ground.  Because such secrecy surrounds the budget, access to information is mainly controlled by bribery.  At the same time, the report states many government officials are not well-trained in oil management, so the multinational companies who come in to negotiate usually end up with the better end of the deal.  According to national law in the country, these companies are now required to devote 15 percent of their budgets to “corporate social responsibility,” a trend which is starting to gain ground.  However, the measure has not been well implemented and has not contributed much. 

CHAD

The President of Chad has very extensive powers, making any real oversight a real challenge, IDASA states. A monitoring body was set up in 2000 which was called at the time a “model” piece of legislation.  The outside body, called “The College,” was charged with making sure money was allocated appropriately and each Ministry had a plan for spending it.  Civil society members are also represented.  An annual report is produced every year.  Despite the enthusiasm that accompanied the new department, IDASA research shows it has not been a smooth path.  Under the President’s authorization, revenue has gone toward activities other than poverty alleviation leaving The College with little power to react.  The positive side of The College’s creation is that civil society organizations have become more active in the industry and are further along in pushing for transparency.  However, this is not so much the case for people living in the Southern part of the country.  These people are more restricted in their movement and have a much weaker voice in government.  The President, along with the people, has had strained relationships with the oil companies.  In attempts to increase the government’s share in oil revenues, IDASA states he has alienated many company employees making the process more difficult.  Similar to Angola, oil companies have significant leverage in Chad and act more like a “state within a state,” a situation many locals resent.  A sign of progress is the higher level of engagement that oil companies are having with civil society which could eventually lead to greater transparency, the report states.

GABON

Gabon has the longest serving head of state in the world and the party’s political power is firmly entrenched.  It is mainly an extractive economy, with a strong reliance on oil, and suffers a massive wealth gap.  Along with a lack of diversity, varying oil prices contribute to economic instability and oil reserves are starting to run out.  The country is also plagued by having to pay 50 percent of its oil revenues to pay off its debt.  Civil society is beginning to become more active, but according to personal accounts in the report, many people simply lack motivation to promote change.  IDASA says none of the government ministries are independent and corruption is endemic, a notion supported by Transparency International’s Corruption Perceptions Index.  Although Gabon is described as a fairly closed society, there is a growing environmental activist movement which could filter down to other industries, the report says.  There are currently no oversight mechanisms, but the government did recently sign on to the Extractive Industry Transparency Initiative (EITI), an international standard-setting organization encouraging governments to publish what they pay and the payments they receive. 

SAO TOME E PRINCIPE (STP)

Unlike some of the other countries in this study, STP has three branches of government and freedom of speech is respected.  However, the population is tiny.  It is more difficult to avoid conflicts of interest in government, and oversight is perceived to be less necessary as everyone knows everybody else.  Before oil was discovered, STP government officials were known to be very open with the people and crime was relatively low.  When oil was discovered about 10 years ago, this dynamic began to change, according to IDASA.  The rate of HIV/AIDS is higher, petty crime has increased, and prostitution now exists where it did not before.  The report attributes these negative trends to the discovery of oil.  Even after 10 years, STP has seen no new revenue.  IDASA’s estimation is that, despite lessons from the past, STP is on no better path than its oil-rich predecessors.

Ways Forward

After a gloomy analysis of the oil management in each country, ISADA provides several “strategic imperatives” and “engagement imperatives” for governments, civil society, international actors and multinational corporations. 

• For governments, the report encourages the creation of a more vibrant “culture of democracy,” with independent electoral bodies and branches of government.  It also stresses adherence to international laws and greater information sharing between government and relevant stakeholders in the oil management process.  Better training of government officials involved in oil management is also necessary, the report says.
  
  
• For civil society organizations, strategies should be more closely tied to local interests and include a clear stance toward multinational organizations.  Greater collaboration across organizations, both domestic and international, can help capacity building and the promotion of international initiatives.
  
  
• For international actors, the focus should be on local interests.  Civil society organizations should be playing a larger role in negotiations and wider networks should be built in order to share information, the report says.
  
  
• For multinational corporations, the report recommends more transparency in financial dealings and stronger lines of communication between all relevant stakeholders.  It is also important that MNCs formulate and promote ethical operational guidelines within countries.    

Posted 4/7/08

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One Local NGO’s Struggle – Encouraging More Female Candidates in Zimbabwe Elections

Allowing women’s voices to be heard in public office is an important part of democratic society.  Ensuring that women have an equal chance at participating in elections is a vital step toward safeguarding women’s rights.  In more traditional societies, the burdens of poverty fall hardest on females who are often left at home and have little if any economic independence.  They need representatives in government who will speak on their behalf.  Including a proportionate number of women in public office is an important aspect of good governance, which a local Zimbabwean NGO has made its priority.

In the last few months, the IPS News Service has followed Women's Trust, a local Zimbabwean women's rights group, which focused on increasing the number of women running for public office.  Of the total population in Zimbabwe, 52 percent are women.  The “50-50” campaign, was created by Women’s Trust to give women an equal chance to participate in government and to encourage that half the party funding provided by the government be reserved for women. 

Unfortunately, the campaign was not able to meet its goals in the upcoming March 26 elections.  An IPS article on December 30, 2007 described the challenges laid out for the group, and a follow-up article on March 23, 2008 outlines in an interview with Women’s Trust's executive director what barriers stood in the way of success. 

Like many other countries, Women's Affairs Minister Oppah Muchinguri admitts Zimbabwe is a patriarchal society.  The main barriers to getting women elected to public office that the December. 30 article mentions are empowering women to challenge their traditional roles and getting them access to much-needed funding.  The same article does cite that Zimbabwe has a National Gender Policy, instituted in 2004, which gives 52 percent of decision-making posts to women, but most people believe this legislation carries no weight.  The main challenge to the success of the campaign, posed at the end of the article, was how the NGO would gain broad support for its initiative despite numerous other pressing issues that plague Zimbabwe.

In the end, it seems the “50-50” campaign could not overcome people’s overwhelming concern for soaring inflation rates, widespread poverty and dirty tactics on both sides to keep the opposition down.  According to the March 23 article, only 13 percent of the candidates running for House of Assembly were women and 30 percent of those running for the Senate were women.  Luta Shaba, executive director of Women’s Trust, explained some of the campaign’s setbacks.  She observed that political parties in Zimbabwe have no mechanisms to which they can be held accountable to their national policies on protecting women’s rights.  She also said there are serious male-biases in efforts to obtain funding for women candidates.  Some women were used as pawns for political purposes, she said, by being placed in elections that were not winnable.  In many cases, false information was distributed to women to discourage them from running.  All of these barriers inhibit women from having any real chance at gaining more seats in government. 

Despite not achieving its overall goal, Shaba did say the group was able to put women’s issues on the national agenda.  Through partnerships with other NGO’s involved in women’s issues, she was able to reach a greater number of people.   The group also achieved some political unity among women political activists despite very high tensions among opposing parties.  Elections will take place on March 26, and according to Shaba, “We are going to be fighting our final adverts a week before the election so that when people go to vote they will have females candidates etched in their minds.”

Posted 3/24/08

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Tanzania Tested in Corruption Scandal

On February 6, 2008 a Tanzanian Parliamentary Report directly implicated Prime Minister Edward Lowassa and other top Ministers in a corruption scandal.

(U.S. company denies briebry - see final paragraphs of this story)

A 165 page report alleged contracting and procurement violations in a major electric power deal between Tanzanian government controlled companies and a Texas company called Richmond Development Company LLC.Just a few days earlier President Jakaya Kikwete of Tanzania was elected to chair the African Union and in coming days he will play host in Tanzania to visiting U.S. President Bush. 

President Kikwete has previously declared a very strong anti-corruption policy and now it will be tested. If he can reconstitute a government, bar allegedly corrupt top officials and ensure all the facts are made public, then he will not only have enhanced his own reputation and that of governance in Tanzania, but set an important example for many countries.

Associated Press reported on February 8 that Prime Minister Lowassa stated,  “I have written to the president to relieve me of my duties after serving the government for two years."  He added that he was wrongly implicated in the deal and was never given a chance to explain. He did not offer any further explanations in his resignation letter.
     
Texas-based Richmond Development had signed a contract of $172.5 million with the government to supply 100 megawatts of emergency power when the drought hit Tanzania' s hydroelectric dams. But generators arrived faulty and late, or not at all. The parliamentary committee' that issued the report presented written evidence linking the prime minister to the hiring of the company. Energy Minister Nazir Karamagi and former Energy Minister Idrissa Msabahawere also implicated in the scandal.

AFP reported that according to a probe into the energy contract, the prime minister as well as two other government ministers and several other officials allegedly meddled in the tender to favor the US company. The emergency power supply deal aims at providing electricity to the east African nation in case of drought.  According to the report, the deal contravened laws and rules on procurement and costs the country 140,000 dollars a day.

In January, Kikwete sacked the central bank governor, Daudi Ballali, after an audit exposed fraudulent transactions involving the repayment of external debts. IPP Media/Guardian from Tanzania reported that in presenting the report in the National Assembly,  Dr Harrison Mwakyembe, chairman of the select committee, said their findings had shown that Premier Lowassa had a hand in the whole issue. He said that the bidding process was violated and that the whole issue smelt of corruption. He said his committee had proved beyond reasonable doubt that Richmond did not deserve to be awarded the tender. ``From detailed investigations outlined in this report, we would like to announce in this Parliament that Richmond Development Company LLC, which won the tender and eventually signed a contract with Tanesco on June 23, 2006 to generate 100 megawatts of electricity lacked experience, expertise and was financially incapacitated,``he said.

He said according to the committee`s findings, the firm had no share records or straight registration in the US or Tanzania and that the whole bidding process was marred by corruption and gross irregularities. Richmond was later succeeded by Dowans Holdings. Reading the report, Dr Mwakyembe said basing on what had happened as regards the whole saga, his committee had come up with 16 recommendations to make those responsible for this shameful act pay for their misdeeds.

He said due to the fact that the final selection of Richmond as the successful bidder was done by Prime Minister Lowassa himself on June 21, 2006, and due to the fact that he had exerted pressure to have Richmond awarded the tender, it was upon him, taking into consideration his position to the society, to ponder over the weight of the investigation and his responsibility to the nation.  The committee said Karamagi`s decision indicated that some entrusted leaders were out to advance their personal interests at the expense of national interests. The committee also proposed that the Attorney General, Johnson Mwanyika, and his representative, Donald Chidowu, who formed part of the Government Negotiations Team, be fired immediately for failure to advise the government on the discerned irregularities in granting Richmond the tender undeservedly.

Commenting on the scandal, an editorial in The Citizen newspaper in Dar es Salaam by Tom Mosoba stressed that the new report brings to an end the long-running search for the truth in the controversial tender that has been running since early 2006.  It, however, opens another chapter as MPs and the public were yesterday baying for the blood of those mentioned. The team recommended that the government immediately review the contract it entered into with Richmond and its inheritor on account of lies that were involved and the legality of Richmond conducting such business in the country.   

DENIAL: In a fax to The Associated Press, Houston-based Richmond Development Company said officials had not seen the parliamentary committee report that blamed the prime minister and two other ministers for continuing to make payments to the company after it had failed to provide emergency power. But, it said, neither it "nor any of its employees have received a single penny from, or paid a penny to, the government of Tanzania or any of its officials." The company did confirm it had negotiated a contract worth US$83 million (€57.2 million) with the government, but did not specify whether it had supplied any services under the contract. It said it had been "plagued by false and misleading claims" since it won the contract in 2006.

posted 2/11/08

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TI Reports on Emerging Good Practices in Southern African Countries

Transparency International (TI) published a serious of case study reports in November 2007 in an attempt to identify trends and good practices within anti-corruption work in Southern Africa.  Seven countries were analyzed – the Democratic Republic of Congo (DRC), Mauritius, Zambia, Zimbabwe, Botswana, Mozambique and South Africa.  Since institutional structures were found to be very weak, TI said it was difficult to identify very many good practices.  However, TI believes there is a growing awareness of the importance of good governance, and more countries are taking notice of governance challenges in neighboring nations.  A full report analyzing trends across these countries can be downloaded from TI's website.

The studies produced are very country-specific, taking into account each country’s unique social dynamics, history and political reality.  The TI general report uses Swaziland as an example where there is a strong culture of nepotism, which contributes greatly to corruption; whereas in Zimbabwe and DRC, corruption is simply a survival strategy. In terms of the levels of corruption, most countries had a very poor rating on TI’s Corruption Perceptions Index. Four countries scored below a 3.0, where corruption is seen to be rampant; two scored between 3.0 and 5.0, where corruption is seen to be a “serious challenge;” and only Botswana and South Africa scored above a 5.0.  Each country report can be individually downloaded on TI’s website.

Trends Across Southern African Countries

Emerging Good Practices

Clearly, there are still many institutional defects in southern African countries.  However, TI believes there are some important, if limited, emerging good practices that can be built upon.

Posted 1/4/08

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Report Shows Voter Bribery Dominates Kenya's Political Campaigns

A new report shows most Kenyan presidential campaigns are financed by corruption.  The report, published by the Coalition for Accountable Political Finance (CAPF) in Kenya and the United National Development Programme, shows that voter buying and voter bribery is a political concern for respondents in 71 constituencies surveyed.  In addition, findings show 60 to 80 thousand shillings (1 USD = 63 shillings) are spent per day on distribution of money and other benefits to voters.

The following are some of the key findings from the CAPF Election Monitoring Initiative:

• 60% of the money meant to pay off voters is consumed by middlemen.
  
  
• There is a direct link between voter bribery and electoral violence, since most electoral violence is paid violence by party supporters.
  
  
• More than 78% of voters were bribed to participate in the party nomination within polling stations.
  
  
• Only two out of nine voters actually voted for the candidates who paid them the bribe.
  
  
• 38% of candidates’ campaign budgets is spent on voter buying and bribery.
  
  

Posted 12/17/07

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GRECO Recommends Anti-Corruption Reforms in Ukraine

Group says public administration is "inefficient, biased, and opaque"

After Ukraine joined the Group of States Against Corruption (GRECO) on January 1, 2006, it was subject to an evaluation team made up of several European officials from various justice and legal departments. That evaluation team (GET), laid out specific principles on which Ukraine would be evaluated:

Independence, specialization, and means available to national bodies engaged in the prevention of and fights against corruption

1. The extent and scope of immunities granted
2. The proceeds of corruption
3. Public administration and corruption
4. Legal persons and corruption

The Ukraine then adopted measures to comply with these principles and GET has recently evaluated their effectiveness. It has produced a report that describes current conditions in Ukraine with respect to corruption and rule of law, and gives recommendations as to how Ukraine can confront its challenges.

According to Transparency International and many other more local organizations, Ukraine is one of the most corrupt countries in Europe.  On Transparency International’s 2007 Corruption Perceptions Index, the Ukraine received a score of only 2.7, out of a total of 10 possible points. Past efforts to improve governance in Ukraine have remained largely unsuccessful.  The Interagency Commission was established in 2005 as the main corruption fighting entity with officials representing the offices of the President, the Prime Minister, Parliament, the Security service, the Foreign Office, the Prosecution service, the ministries of the Interior and Justice. Due to the failures of this commission, the President of Ukraine released a Concept Paper in September 2006 that lays out the many problems with corruption.  The Cabinet of Ministers were charged with the responsibility of creating an action plan based on the Concept Paper, which has continued to be a critical goal of the Council of Europe and the European Commission Project Against Corruption in Ukraine. 

The GET is also involved in helping Ukraine determine goals and priorities for establishing an effective action plan with a clear structure.  Outlined by both the Concept Paper and reinforced by the GET’s findings, “Ukraine is considerably affected by corruption and the problem is widespread throughout the country and its public institutions, at central as well as local levels.  Corruption appears to be a systemic, wide-scale problem.  Public confidence in public institutions – including the judicial system and its representatives – is critically low and there are few signs that this is changing for the better.”

The most important task, according to the GET, is consolidating democratic principles, the rule of law, and institutional reforms.  The main challenge is how corruption problems should be addressed, because although there is a political will to do so, the political cooperation on the means for reform has proven difficult.

In an effort to create the most effective action plan for combating corruption in Ukraine, the GET has recommended the following:

• No particular body now exists to confront corruption.  One entity should be established which is distinct from law enforcement, representative of public institutions and civil society, and independent.
  
  
• The Criminal Code, which describes the means for criminalizing corrupt activities, has no clear definition of bribery. 
  
  
• The GET recommends full-scale reforms of this Code so that investigation and prosecution are effective.
  
  
• A number of different law enforcement bodies are responsible for investigating corruption, each of which is described in detail in the report. Also, there is virtually no training for law enforcement or judicial staff members.  Investigations and legal procedures are confusing and inefficient.  To confront these problems, the GET recommends that law enforcement bodies need a more centralized, cohesive structure. More training should be provided, and one singe policy should be made clear.
  
  
• The President, members of Parliament, and judges all enjoy immunity from prosecution while serving in office.  The GET recommends speeding up decisions to lift immunities, The process for determining whether immunities should be lifted are currently cumbersome and ineffective.
  
  
• No single anti-corruption policy exists for public administration.  The public administration overall was deemed to be “inefficient, biased, and opaque.”  The GET recommends creating a new model Code of Ethics that applies to members at all levels. 
  
  
• Public access to information must be enhanced
  
  
• Anti-corruption training for all employees should be mandatory
  
  
• An external, independent audit should be conducted to oversee accounting and governance.
  
  
• Finally, the GET recommends taking legal and/or regulatory measures to more actively involve accountants and auditors in detecting and reporting money laundering offenses.

To read the report in full, please click here to view the .pdf version.

GRECO was established in 1999 by the Council of Europe to monitor States’ compliance with the organization’s anti-corruption standards.

Posted 10/31/07

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Human Rights Watch in Nigeria: How Poverty and Corruption Reinforce Each Other

Following the April 2007 elections in Nigeria, widely seen to have involved exceptional levels of corruption and violence, Human Rights Watch (HRW) undertook field studies in various Nigerian states to learn how government funds were being used to foment violence and perpetuate graft on a massive scale.  HRW cited estimates from the head of Nigeria’s Economic and Financial Crimes Commission that Nigeria lost some $380 billion to corruption between independence in 1960 and the end of military rule in 1999.  During the last President’s administration, under Obasanjo in 2006, Western diplomats estimate between 4.25 percent and 9.5 percent of Nigeria’s GDP was lost to corruption.

The HRW report mainly covers the situations in Rivers State, Nigeria’s largest oil producer and wealthiest state, Oyo State, Anambra State and Katsina State, where current President Umaru Yar-Adua was formerly the Governor. 

HRW stated that in Rivers State, where revenues are high, per capita spending far exceeds many West African countries at the state level alone.  Nevertheless, primary health and education are in shambles and during the previous administration, 50 to 90 million Nigerians live on less than on US dollar a day.  To those who earn barely any money, accepting bribes in exchange for ratcheting up violence or participating in gangs is a particularly attractive option. 

One of the primary ways government funds are funneled through to criminal elements is the use of “political godfathers.”  In order to get elected, candidates are actually dependent of wealthy thugs who can organize gangs and other violent groups to scare off opponents, all in exchange for a portion of stolen government resources.  These activities, according to HRW, “help to reinforce the central role of violence and corruption in politics by making it even more difficult to win elected office without resorting to the illegal tactics they represent.”

Preying on youth is another method of perpetuating the cycle of poverty and corruption.  As one gang member was quoted as saying “The youth have no money – if you show them the bag of money or the bag of guns, they will work for you.”  Instead of the government really financing the needs of its people, it entices the poor with money and guns as a way to serve to continually enrich its own elite members.  HRW found one engineering graduate student in Anambra State who agreed to organize thugs on behalf of his sponsor candidate in exchange for $190.  His reasoning: “I earn money through my civil engineering and through politics. I get more money in politics.”

A similar situation is taking place in Katsina State, where the state government is directly paying youth gangs accused of carrying out widespread political violence.  HRW cited that according to former state government officials, civil society activists and People’s Democratic Party (PDP) Youth members, current President Yar’Adua used state government money to regularly maintain PDP Youth with a monthly stipend when he was governor of the state.  This initiative was euphemistically called “youth empowerment.” 

The governance system faces many problems.  According to HRW, an idea was brought to the Government House meeting in Katsina before 2003 to establish television viewing centers in al of the wards.  Some members opposed the plan as “an unacceptable legacy to bequeath on the youth,” said a former state government official.  The idea of computer training centers was brought forth.  “The idea was accepted but [later] this things suddenly became ‘Let’s give them a N5000 allowance,’” said the official.  The allowance is now funding youth gangs. 

One way of manipulating the government budgets is the use of the “security vote” fund.  The purpose of the fund is to act as a source of discretionary spending that the executive arms of government can use to respond quickly and effectively to threats to peace and security in their jurisdictions.  However, there are virtually no restrictions on how the money can be spent and has generally been used by state and local governments to foment violence and co-opt political opponents or has been lost to graft and patronage. 

Despite the challenges of combating a system so entrenched by corruption, HRW does make some recommendations.  To the government of Nigeria, there are many obstacles to overcome.  Currently, there is no anticorruption watchdog that could keep the government in check, and Nigeria has a very low level of transparency.  HRW suggests the creation of an independent body that would effectively investigate cases of corruption and consider the input of relevant stakeholders.  Also, enacting and aggressively implementing the Freedom of Information Bill to enhance more transparency in government spending.  Additionally, the current Electoral Reform Panel is virtually ineffective.  HRW urges the government respect the panel’s independence and seriously consider the recommendations it puts forth.  Sitting governors currently enjoy complete immunity from investigations, a policy HRW highly recommends the government rescind. 

To read a full description of HRW’s study and all of its recommendations, please click here.     

Posted 10/12/07

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Chinese Corruption Should Elicit Global Concern, Says Carnegie Scholar

The Carnegie Endowment for International Peace released a policy brief in early October 2007 called “Corruption Threatens China’s Future,” by Senior Associate Minxin Pei.  The well-documented report reveals the staggering scope of corruption within many Chinese sectors and what the implications are for the future of China and the international community. 

Pei cited the direct economic loss of GDP per year to a tiny group of elites is at least three percent of GDP.  The indirect costs to Chinese social services, public health, and environmental degradation are “incalculable,” he added.  Corruption in China, according to many national polls, is the number one public concern. 

The author stressed that not only will China have to be concerned about its long-term economic stability, but also with mounting social unrest, which is already an important issue. 

Survey results

Pei noted that almost one-quarter of the respondents to a 2006 survey of Chinese business executives said that their local officials were “bad,” and 12 percent said they were “very bad.” China’s National Audit Agency found that from 1996 to 2005, the government misused funds amounting to eight percent of on-budget spending.  Based on Pei’s “conservative” estimates, the direct costs of corruption in 2003 could be three percent of China’s GDP, roughly $86 billion. This exceeds the entire amount the government spent on education in 2006. 

Extensive state involvement in the economy and the absence of a competitive political process and free press greatly contribute to the prevalence of corrupt activities in China.  Half of the provincial transportation chiefs in China have been sentenced to jail terms, and some executed, Pei stated.  The Ministry of Land Resources found in 2005 that half of the land used for development was acquired illegally.

The financial sector is especially ripe for corruption.  A 2003 survey of employees working at banks, state-owned enterprises, private firms, brokerage houses, and rural households showed that 82 percent said corruption was “pervasive or quite pervasive” in financial institutions.  More recent developments within the past decade include the practice of buying and selling appointments in local government and collusion between local ruling elites.  Another survey suggests 20-65 percent of all corruption cases in China could be classified as collusive. 

Causes and Consequences

Heavy government regulation in the economy allows officials to easily abuse their power; a lack of enforcement, despite recent highly publicized punishments; and a failure on the part of the government to adopt meaningful political reforms seriously put into question China’s economic stability. 

So far, Pei argued, China has been able to offset the direct costs of corruption and maintain growth; however, corruption has lowered the quality of growth substantially.  There are real systemic risks that the international community should be concerned about.  What is happening inside China is putting global public health and safety at jeopardy.  Corrupt activities are contributing to cross-border crimes such as drug-trafficking, human smuggling, and money laundering. 

The US and other countries may have little power to influence how corruption is fought within China, but information sharing between the US and its allies regarding Chinese corruption is helpful to international investors and policy makers.  Increasing legal cooperation between the US and China on illegal immigration and money laundering can help combat cross-border criminal activities.  Finally, insisting on reform of China’s police and legal system is essential to tracking down fugitives and recovering looted assets that rightfully belong to the Chinese public. 

Posted 10/12/07

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TI Kenya Issues Sixth Annual National Corruption Survey

Transparency International - Kenya recently released its 2007 Bribery Index showing a 50 percent rise in bribery. The survey also found that of all institutions, the incidence of bribery in the police force is seen to be highest.

The survey looks at broad trends, in both the public and private sectors, across the entire country. Within each category of corruption, the index has a value range from 0 to 100, where the higher the value, the worse the performance.

Overall, encounters of corruption remained largely unchanged since 2006, but the cost of bribery rose sharply by 50 percent.

Law enforcement is still the most likely sector to elicit bribes, accounting for 36 percent of the reported number of bribes. However, bribery within employment rose sharply by 42 percent. TI analysts cite this is because of the continued scarcity of jobs, since more young people are entering into the labour force than jobs created. The trend may also reflect increased recruitment activity in the public sector. The third factor is the improvement in the economy - improved incomes translates to a willingness and ability to pay more to secure job opportunities.

Bribes for business declined due to a decline in the bribery activity reported in state corporations.  TI suggests that the corporate governance and procurement reforms undertaken in this sector are paying off.

Law enforcement bribes and service related bribes also declined significantly, by 42 and 36 percent respectively, while bribes related to regulatory compliance increased marginally. This can be attributed to reforms in the service delivery arena, and regarding law enforcement, the elimination of road licenses in the latter half of the year is a very significant factor.

More people’s perceptions of corruption are increasingly optimistic while willingness to report corrupt activity still remains low, but is growing.

TI-Kenya also produces an Index ranking the most corrupt organizations. The Index is listed below:

To read the report in full, click here to view the .pdf version.

Posted 8/22/07

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