Home   About Us   Contact Us
 

Public Sector Governance


Country Reports

On This Page

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

And:

* * *

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

Back To Top

* * *

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

Back To Top

 

* * *

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


* * *

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

  1. Legal frameworks are being introduced, but the level of enforcement and effectiveness is low. Implementation of these new frameworks still remains the biggest challenge for all countries. The report notes that overall, there is a lack of political commitment and leadership to do so. When local public officials see their national leaders engaging, or at least passively accepting, corrupt behavior, there is little motivation to change. TI says that most countries are signatories to various international conventions against corrupt practices, but few of them have actually domesticated the protocols.
  1. Multiparty democracies provide more opportunities for corruption, but there is growing pressure for political finance regulation. The general public opinion in most countries is that politics is simply the means by which one can gain power, wealth, and employment through candidates, according to the report. This creates an environment where self-interest is high, and ethical behavior is not a priority. Opacity in financing is also weak, and there is little internal or external party accountability. However, TI says more people are pressuring the government to adopt political finance regulation, especially in Zambia and Mauritius.
  1. Corrupt judiciaries block anti-corruption efforts. Courts in the DRC and Zimbabwe have become increasingly politicized, according to the report. Swaziland often defers to traditional systems when modern ones do not satisfy them. Poor pay and conditions encourage many judges to accept bribes.  Some reforms, such as codes of conduct, have been introduced in Zimbabwe, the DRC, and Mauritius, but enforcement is very limited.
  1. Accountability for public resources is limited. Political interest is still a major barrier to reforming the public procurement system. Some new reforms have been instituted, often as part of an effort to increase international investment, but once again, effective monitoring is lacking and sanctions are rare, according to the report.

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.

  • TI gives many successful examples of civil society-private sector coalitions in the individual country reports.  Although African countries have a history of animosity between their governments and civil society, TI believes these coalitions can still be a force for good.

  • Awareness of public sector ethics is growing, TI argues. Although enforcement is overall very low, there are some good examples where legal frameworks against corruption are effective.

  • There is significant potential in reforming public procurement, according to the report. Some countries are beginning to consider independent review panels.

  • More countries are heightening their efforts to tackle corruption internationally. TI cites the example of civil action brought against the former President of Zambia as a significant step forward.

  • Most countries have taken the first step toward adopting international convention protocols. There is much work left to be done, but TI believes stepping up the necessary resources to help countries domesticate the protocols is important for future anti-corruption work.

Posted 1/4/08

Back To Top

* * *

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.

kenya bribery

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.

kenyacampaign

Posted 12/17/07

Back To Top

* * *

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

Back To Top

* * *

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. 

Widespread Poverty Due in Part to Corruption

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. 

Political Godfathers

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.”

Youth Gangs

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.” 

Government Spending

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. 

HRW Recommendations

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

Back To Top

 

* * *

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

Back To Top

* * *        

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.

TIKenyaIndex

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:

aggregateindex

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

Posted 8/22/07

Back To Top

 

* * *

Bulgaria’s Progress Report Based on Established Benchmarks

Bulgaria has been widely criticized recently by the EU and other international organizations for its lack of progress on curbing corruption.  In an effort to improve its status, Bulgaria established the Cooperation and Verification Mechanism, which laid out a number of benchmarks. The Sophia Echo posted an in-depth article on Bulgaria’s varying degrees of progress regarding these benchmarks. It is still clear the government has a long way to go in its fight against corruption and organized crime. The following is a short summary of the article. 

Benchmark 1: Adopt Constitutional amend­ments removing any ambiguity regarding the independence and accountability of the judicial system.  

Bulgaria has adopted a constitutional amendment providing for an independent judiciary, along with an independent inspectorate; however, it is too early at this time to measure the effectiveness of amendment until full implementation takes place.

Benchmark 2: Ensure a more transparent and efficient judicial process by adopting and implementing a new judicial system act and the new civil procedure code.

A new Judicial System Act was recently adopted. A monitoring system for the new penal procedure code and the new administrative procedure code has been set up to facilitate uniform application of law. However, there has been no systematic reporting on the findings of this monitoring mechanism.

Benchmark 3: Continue the reform of the judiciary in order to enhance professionalism, accountability and efficiency. Evaluate the impact of this reform and publish the results annually.

Only limited progress can be reported in this area. A judicial inspectorate has been established along with specific ethical codes and plans of disciplinary action against indicted prosecutors, but there are not yet measurements of success. Progress has been made by Bulgaria in terms of the recruitment procedure and performance evaluation of magistrates.

Benchmark 4: Conduct and report on professional, non-partisan investigations into allegations of high-level corruption. Report on internal inspections of public institutions and on the publication of assets of high-level officials. 

An implementation program to fight corruption has been established, but the guidelines for coordination and responsibility are not clearly defined.  This will make the program difficult to sustain.

Benchmark 5: Take further measures to prevent and fight corruption, in particular at the borders and within local government.

Bulgaria has successfully stepped up its efforts to curb corruption at some border stations with an increased number of preventive controls and sanctions. The establishment of electronic payment systems and a system of random shifts at some border stations have contributed to a decline of corruption opportunities and to increased revenue. This good practice should be extended to all border stations. In addition, training and awareness programs implemented at the local level are beginning to produce results.  Those high-level officials who have not yet submitted their property declarations are also being investigated.

Benchmark 6: Implement a strategy to fight organized crime, focusing on serious crime, money laundering as well as on the systematic confiscation of assets of criminals. Report on new and ongoing investigations, indictments and convictions in these areas.

Bulgaria is implementing an updated action plan on organized crime which focuses on prevention measures. Overall, progress in this area is still insufficient.

The article reports that the achievement of these benchmarks is a long-term process for Bulgaria.  None of the benchmarks are independent of the others, and the progress toward one will most likely positively affect progress in the others. The article emphasizes Bulgaria can only be successful if there is a strong commitment to the strict separation of executive, legislative and judicial power.

Posted 7/9/07

Back To Top

* * *

2007 Nigerian Corruption Index

In the time leading up to the 2007 elections in Nigeria, the Independent Advocacy Project lead a comprehensive survey, released in June, to determine Nigerians’ perceptions on the Obasanjo regime and corruption that has racked the country for years.

The 2007 Nigerian Corruption Index (NCI) was conducted just before the Nigerian election, against a backdrop of rampant misuse of power and economic mismanagement.  As it happened, many observers – domestic and international – concluded that the 2007 election poll was severely flawed. There were widespread reports of violence, rigging, multiple voting, box snatching, illegal possession of ballot boxes, stuffing of ballot boxes; impersonation, ‘house voting’, unlawful possession of voting machines, vote buying, deliberate delay or refusal to supply election materials to certain areas, multiple thumb-printing of ballots, harassment or intimidation of candidates, agents, voters and monitors, and absence of valid voters register. In addition, despite large oil revenues, Nigeria entered the new millennium with real income per capita of around $260 (the same as it was during independence), and currently, it is believed that well over 70 per cent of Nigeria’s population survive on less than $1 a day. In the time running up to the 2007 elections, the report sought to elicit responses from prospective voters and others on bribery and corruption in addition to constructing a scorecard on the anti corruption programme of the Obasanjo regime and set an agenda for the new regime.

Objectives

In many ways, the 2007 survey is a comparative analysis on the 2005 survey. Here are the main objectives of the 2007 survey:

• To assess the general level of corruption in the daily interaction of members of the public with government institutions and identify further opportunities for advocacy work and consequently design appropriate advocacy responses.

• To provide hard data on corruption in the country thereby identifying possible linkages between levels of disposable incomes and incidence of bribery, such as percentages of incomes being paid as bribes.

• To make practical recommendations to government on reforms that are expected to strengthen the nation’s anti-corruption legal and administrative frameworks.

• To create awareness on the adverse effects of corruption on the enjoyment of economic rights in a democratic society and its effect on poverty levels.

Major Findings

The two most significant findings from the survey are the extent to which corruption affects Nigerians’ psychological state and their socioeconomic rights. In 2005, 70% of the sampled population reported that being forced to pay bribes to access basic services adversely affects their state of happiness. In 2007, this figure rose marginally to 71%. Encouragingly, the proportion of people who did not give bribes for a period of one year preceding the survey increased from 23% in 2005 to 35% in 2007, an indication that the anti-corruption crusade and all the value reorientation campaigns may well be yielding some positive results. However, since 2005, the likelihood of giving a bribe increased from 58% to 65%.

In addition to the likelihood of paying a bribe, the average amount of bribe paid in a year to various organizations increased by 50%.

Most corrupt institutions: The Nigerian Police Force was again like in 2005 identified as the most corrupt institution by Nigerians, followed by Power Holding Company of Nigeria (PHCN), Education Ministry (particularly higher institutions and examination bodies) and Customs and Excise Department.

Least corrupt institutions: The Health Ministry, Justice Ministry/Judiciary, Nigeria Airports Authority, Federal Road Safety Corps (FRSC), Nigerian Railway Corporation and Agricultural Development Authorities were identified to be institutions where one would be the least likely to have to pay a bribe.

Former President Obasanjo was largely at the forefront while these incidences of corruption were taking place.  Local opinion regarding the effectiveness of the Obasanjo regime is mixed. While 47% believe Obasanjo’s anti-corruption programme has been a success, 45% regard it as a failure. Most of the critics of Obasanjo’s anti-corruption programme reside in the Federal Capital Territory, ironically the federal seat of power. The implication of this is that many Nigerians are not satisfied with the style of President Obasanjo’s anti-corruption crusade.

Of the agencies involved in the fight against corruption, only the efforts of the EFCC (4.21 out of 5) and Transparency International (3.77 out of 5) were credited with an appreciable level of effectiveness. For enhanced performance, respondents advocate that the agencies should be:

• given more power to prosecute offenders
• independent of the Presidency
• better funded

To combat corruption effectively, most respondents advocated stringent legislation against corruption and severe punishment and sanctions against anyone involved in corrupt practices.

To read the public presentation of NCI 2007, given by IAP's non executive chairman Babatunde Olugboji, click here.

Posted on 6/26/07

    Back To Top

    * * *

    Anti-Corruption and Institutional Integrity in East and South East Asia:
    A Regional Overview

    On February 28, 2007, Transparency International (TI), a global corruption watchdog, released its Regional Overview Report on National Integrity Systems in East and Southeast Asia which assesses the health of institutions that most affect corruption levels in nine countries: Cambodia, China, Hong Kong, Japan, Korea, Philippines, Singapore, Thailand and Vietnam.

    The report studies each country according to TI’s 'National Integrity System' (NIS) model - defined as the key institutions, laws and practices that contribute to integrity, transparency and accountability in a society – as well as identifies major trends and best practices in the region.

    Below are highlights from the report:

    Regional Trends


    According to the country studies, reliance on multiple anti-corruption agencies leads to lack of coordination, competition for resources and dilution of anti-corruption efforts, whilst a single anti-corruption agency proves more effective in leading the fight against corruption in the region.

    Key Country Findings

    Singapore and Hong Kong
    The NIS in Singapore and Hong Kong are the most effective out of the nine societies examined in this report. According to the World Bank’s six governance indicators, Hong Kong and Singapore have the highest average governance scores and they are the two least corrupt Asian societies according to Transparency International’s (TI) 2006 CPI.While in Hong Kong civil society groups like Civic Exchange can operate freely helping the territory to achieve a more inclusive type of governance, there is a lack an active civil society and weak media in Singapore. Singapore has contained corruption largely thanks to the political will of ruling elites and a sound anti-corruption framework.

    Hong Kong and Singapore – both former British colonies – have also fought corruption by rejecting the British colonial model police dependence (instead relying on a single anti-corruption agency) and by maintaining the British meritocratic tradition in their civil service.

    Vietnam
    In Vietnam, the adoption of mixed-market reforms in 1986 led to an escalation of corruption – both petty and grand corruption are widespread. While the passage of the first Anti-Corruption Law in late 2005 shifted the focus to corruption prevention and emphasised the role of civil society and the media, these institutions are currently ill-equipped to act as watchdogs.

    There are six fundamental problems in Vietnam’s NIS: the adoption of an incremental approach to tackling corruption; the protection of the politically powerful from prosecution; ‘institutional rivalry and jurisdictional disputes’ between anti-corruption agencies; widespread nepotism ; public consultation that is ‘formalistic and narrowly based’; and public reluctance to make complaints due to lack of whistleblower protection.

    Philippines

    Despite efforts by the government and civil society corruption remains a serious problem in the Philippines. According to a recent country report, the NIS in the Philippines faces two major problems. Firstly, legislation tends to under-legislate (as in the lack of protection for whistleblowers) or over-legislate (like, for instance, in government regulations). The second problem is ‘more disturbing’: the study found that all the integrity pillars are ‘tainted by internal corruption and are therefore heavily compromised’, ‘unable to perform their functions and operate effectively’. For example, the constitutional commissions are not independent and the public procurement system is plagued with misappropriation problems.

    China
    China has shown marked signs of improvement in addressing corruption in the past 10 years. Nevertheless, the recent analysis of China’s NIS China showed that corruption remains at a ‘comparatively severe level’ (for earlier coverage of China's NIS, see below)

    Thailand
    In 1997, Thailand adopted the ‘People’s Constitution’ along with a series of anti-corruption measures, including the formation of the NCCC in November 1999. However, the positive effects of these measures have been eroded in the past five years through the influence exerted by former Prime Minister Thaksin Shinawatra.

    On September 19, 2006, Thaksin’s government was overthrown in a bloodless military coup and the Council for Democratic Reform took power, vowing to stamp out corruption. If the Council for Democratic Reform keeps its promise to hold elections after formulating a new constitution in one year’s time, there is hope that the corruption situation in Thailand will improve. Political leaders need to demonstrate their political will to curb corruption by strengthening anti-corruption measures.

    South Korea
    The South Korean government has demonstrated strong political will in curbing corruption. President Kim Dae Jung’s comprehensive anti-corruption strategy resulted in the enactment of the Anti-Corruption Act in July 2001 and the creation of the KICAC in January 2002. Civil society has also played an important role in fighting corruption in South Korea through the work of K-Pact.

    However, corruption is still an issue, even though the KICAC has reported a gradual improvement of South Korea’s NIS architecture and significant improvements in governance and integrity , there are still important shortcomings in South Korea’s NIS.

    Four measures outlined in the NIS study to improve South Korea’s NIS: (1) introducing effective monitoring mechanisms to ensure accountability and integrity; (2) strengthening law enforcement by increasing the commitment of the courts and prosecutors to be fair and independent in performing their duties; (3) empowering the KICAC by providing it with ‘more authoritative and/or investigative powers’ and protecting whistleblowers from ‘tangible and intangible retaliation’ and (4) establishing a special bureau of investigation of corruption by high-ranking public officials.

    Japan
    The situation in Japan is unique. There is little or no low-level corruption in the administration, but Japan suffers from a high degree of institutionalised corruption involving political leaders and business interests. Japan has not demonstrated strong political will in fighting institutionalised corruption and corruption within the private sector. Its government has not assigned this task to any specialised agency. The Japanese government appears to be satisfied with maintaining the status quo.

    In its second review of Japan’s enforcement of the OECD Convention, the OECD Working Group on Bribery recommended that Japan be proactive in investigating and prosecuting foreign bribery cases . It also urged Japan to undertake an objective assessment of the legal and procedural obstacles to the effective investigation and prosecution of the offence of bribing foreign public officials.

    Recommended Best Practice for the Region

    1. Political will to curb corruption should be combined with a single independent anti-corruption agency;
    2.  Civil society should mobilise other sectors to fight corruption through coalition building; and
    3. As corruption cannot be solved overnight, a sectoral approach might be best suited to tackle critical sectors.

    For the full report - including more detailed country analyses - click here.

    Posted 3/2/07

    Back to Top

    * * *

    Global Integrity Index 2006

    Report Measures the Level of Anti-Corruption Mechanisms in 43 Countries

    In January 2007, Global Integrity (GI), a US-based, not-for-profit organization, released its Global Integrity Index 2006. GI’s flagship study, which includes 43 country reports, measures the existence, implementation of, and effectiveness of anti-corruption approaches and institutions designed to promote public integrity.

    The 2006 Global Integrity Report includes several key findings:

    1. Political financing is the number one anti-corruption challenge facing this year's group of countries.

    2. Weak legislative accountability threatens to undermine other crucially needed long-term anti-corruption reforms.

    3. Vietnam and the DRC are assessed as having the weakest overall anti-corruption framework of the entire group of countries; the strongest ratings go to Israel, Romania, South Africa and the United States.

    4. Russia appears to have made little progress in establishing and enforcing effective anti-corruption mechanisms compared to several other former Soviet Union states.

    5. Promoting effective anti-corruption and good governance programs in post-conflict Africa requires a long-term commitment.

    6. New European Union (EU) members Romania and Bulgaria displayed a moderate gap in overall anti-corruption mechanisms, with Romania exceeding the performance of Bulgaria.

    7. (Weak) Whistleblower protections and weak (or non-existent) access to information mechanisms threaten government accountability in almost every country.


    GI specializes in assessing governance trends and each country report is based on up to 290 separate indicators that are organized into six categories (plus 23 sub-groups) –

    1. Civil Society, Public Information and Media
    2.  Elections
    3. Government Accountability
    4. Administration and Civil Service
    5. Oversight and Regulation
    6. Anti-Corruption and Rule of Law


    In each country, the indicators are prepared by a lead researcher and then reviewed by in-country and external experts. Each country is then given an Integrity Indicators Scorecard, which is combined with journalistic reporting to produce a detailed country report.

    Below is GI’s overall asessment of countries based on their accumulated indicator scores:

    global integrity index


    For individual country reports, breakdown by categories, methodology and a list of indicators see Global Integrity’s website.

    Posted 2/23/07

    Back to Top

    * * *

    China: National Integrity System Country Study

    Supported by Transparency International (TI) and using its "National Integrity System" methodology, a report was published in mid-December 2006 on governance in China. The author, who has worked with TI for some years, is Mr. Yong Guo, Assistant Professor, School of Public Policy and Management, Tsinghua University, Beijing, People’s Republic of China. Full Report & Press Release

    Key Excerpts:

    To download full report in .pdf

    Currently, anti-corruption activity in China is at a crucial juncture, with certain progress already made but facing a long road ahead. In particular, there is still much room for improvement with respect to institution building. In this sense, the introduction of the analytical framework of the TI National Integrity System and its application in China for evaluation will promote China’s anti-corruption efforts.

    China is in the process of unprecedented reform and transition in its economic, political and social systems and a proper legal anti-corruption framework is yet to develop, there are still huge opportunities for corruption.

    Priorities and Recommendations

    Strengthening of Roles and Positions of Departments

    - Strengthened NPC Oversight of the Government, Judicial and Law-enforcement Agencies

    As legislator, the NPC plays an important part in China’s political system. The People’s Congress system is China’s basic political and democratic system and serves as the fundamental institutional basis for the national integrity system. The tasks of the NPC are to represent the People, to fully exploit the democratic mechanisms for supervising and monitoring the government, to realise good social governance and to struggle against serious corruption within the government. However, due to China’s current financial system, especially its imperfect budget system, NPC deputies’ limited channels for hearing from the people, and the absence of any integrity constraint mechanism on NPC deputies, the oversight role of the NPC, especially its oversight of financial expenditure, has not been brought into full play.

    - Increased Judicial Independence

    The Organisation Laws of the People’s court and the Organisation Law of People’s procuratorate provide that China’s local judiciary must accept the dual leadership of the People’s congresses at the same level and the judiciary at the next higher level. But in reality, as the personnel and financial management systems are mainly tiered, the courts, appointment and removal of judges and judicial personnel and expenses are under the control of government at the same levels. This has led to localisation of judicial power. With respect to procedure, the judiciary has a requesting and reporting system that requires major cases to be reported to the judicial committees within the courts. Although the purpose of establishing such a system is to reduce the number of wrongfully determined cases, it does affect judges’ independent exercise of judicial power, thus making the appeal procedures less meaningful. All these have affected the independence of the judiciary. In order to promote integrity, it is imperative to ensure the independence of the judiciary and guarantee that judges have adequate and independent budget support and a group of specialised personnel with a high degree of integrity.

    - Enhanced Status of Audit Offices

    Audit offices are important components of China’s national integrity system, as they are watchdogs of state assets and expenditures. They are also the institutional guarantee to minimise corruption and abuse of public funds by government departments. The audit offices officially came into being in September 1983, and their roles have not been brought into full play during a considerable period of time. Only at the end of the 1990s did Chinese audit offices begin to display their increasingly important roles. Audit reports began to be made public starting in 1998, exposing violations of financial rules and regulations by government agencies. Every year, the report stirs up a whirlwind, winning popular applause and exerting powerful social pressure on relevant government agencies. Over the past few years, the scope covered by auditing has been expanded and the degree of disclosure has been enhanced. But it is necessary to enhance its status further, giving it responsibility for the legislature, in order for its role to be fully realised.

    More investment should be made in the auditing institutions, including adequate and independent budgets and highly specialised auditors.

    Improvements in the Mechanisms of the National Integrity System

    - Increased Roles for the Private Sector and Civil Society

    China is now living in the transition from centrally controlled planned economy to socialist market economy. Under the planned economy system, public departments possessed all resources in the society while the private sector and civil society were basically in a subordinate position. It was only after 1978, when the country started economic reform and the transition process, that the private sector developed rapidly and civil society also gained some ground. They are expected to play an increasingly important role in China’s public affairs management, as is occurring worldwide. The state should continue to retreat from over-regulating and over-intervening in the economy, giving more space to the private sector and civil society to play their roles. Meanwhile, China’s private sector and civil society have not given enough attention to corruption. If their roles are to be brought into full play, such attention would help promote public oversight but also enhance the restriction on power of the government. This will, in turn, facilitate internal integrity and self-discipline in the private sector and civil society and create a social culture with high probity and integrity.

    - Increased Disclosure and Transparency of Public Service Departments

    Transparency is crucial to increase accountability and deter corruption. In the course of reform and opening up, the Chinese government has introduced a series of measures to open administrative affairs to good effect. But generally, transparency still remains relatively low, constituting a major barrier to oversight of power. Sunshine is the best steriliser. Disclosure and transparency is most important to ensure rational participation in policy decision making by citizens and to realise effective oversight.

    - Reform and Improvement of the Budget and Financial System

    At the beginning of the economic reform, China relaxed control of the financial system, allowing local governments and government departments to create incomes so as to encourage local governments to develop their own economies and ease fund shortages. Although the policy played its due role in a given historical period, it has also caused distortions in the financial system and resulted in the existence of extra-budgetary funds, which provide more opportunities for corruption. At present, the Chinese government is establishing a public finance and public budget system. But due to the problems left over from the past, the reform has encountered great difficulty. This has, perhaps, become the institutional reason why many corrupt activities cannot be curtailed from their roots. Therefore, China should strengthen budget management and reduce off-budget financing.

    - Unified and Renewed Laws, Regulations and Rules Concerning the Integrity System

    A large number of laws, rules, regulations and legal documents have been produced since 1978 by the NPC, the CCP, the government, the Supreme People’s Procuratorate and the Supreme People’s Court. These legal instruments have detailed provisions concerning the integrity of public service personnel. If viewed from this perspective, China is one of the countries in the world that has the greatest constraints on the behaviour of public service personnel. However, due to the fact that some regulations are too strict or have not been renewed in a timely way to respond to the changes in the corruption situation, or that different departments have issued documents with the same contents, some systems cannot, in reality, be implemented strictly. This has affected the authority of the whole integrity system. It is, therefore, necessary for China to sort out existing integrity instruments and make unified laws and regulations, such as an anti-corruption law, to specify the requirements and provisions for building a clean government.

    (See the full report at Transparency International's Asia/Pacific regional "National Integrity System" page.)

    ethics

    Direct Contact: Dr. Guo Yong, Tsinghua University
    School of Public Policy and Management
    Tsinghua University, Beijing 100084
    Phone/Fax: +86-10-6277 2999 Email: guo@mail.tsinghua.edu.cn

    Posted 12/22/06

    Back to Top

    * * *

    South Korea: Transparency and Accountability Update
    TI National Integrity System Report
    To view as .pdf


    On October 25, 2006 Transparency International released its National Integrity System Country Study Report on South Korea. TI and its chapters regularly conducts assessments of the National Integrity Systems of countries around the world (National Integrity System is a term used to encompass the key institutions, sectors or specific activities that contribute to integrity, transparency and accountability in a society) in order to provide provide benchmarks for measuring further developments and a basis for comparison among a range of countries; a starting point for signalling areas requiring priority action; and where the emphasis should be placed on improving the system and what factors are required to support the overall development of the NIS.

    Executive Summary
    Over a period of 10 years, the Republic of Korea (hereinafter called Korea) has made considerable progress in creating and establishing a sound National Integrity System (NIS). This has taken place through the implementation of a regulatory framework of policies and practices designed specifically to curb corruption in both the public and private sectors. Korea has introduced rules and regulations prompted by international trends and public demand, and the general public is increasingly becoming aware of the importance of good governance, integrity and anti-corruption measures. However, while expectations of rapid development are high, at present Korea still ranks low in terms of integrity and anti-corruption activities, failing to do justice to its relative international economic standing and trailing well behind other Organisation for Economic Co- operation and Development (OECD) countries.

    Legal provisions in Korea concerning the governance and integrity of public institutions are meant to ensure an integrated architecture from both inside and outside. Internally, of particular importance is the Anti-Corruption Act, which requires all public institutions to set up codes of conduct for maintaining the integrity of public officials, allows any public official to report acts of corruption conducted by other public officials and enables the public to request audits and inspections of public institutions. The Korea Independent Commission Against Corruption (KICAC), established under the Anti-Corruption Act, handles whistleblowing reports, recommends policies and legislation for combating corruption and also examines the integrity of public institutions.

    The Public Service Ethics Act is designed to prevent high-ranking public officials from enjoying financial gains related to their duties during and after their time of employment. This Act requires high-ranking officials to register their assets, report gifts they receive from foreign entities, and obtain prior approval for employment after they leave office.

    Externally, four key laws prevail and act as check-and-balance mechanisms. The Budget and Accounts Act regulates the procedures of the budget and final accounts of public institutions.The Board of Audit and Inspection Act allows the Board of Audit and Inspection (BAI) to inspect the final accounts of public agencies and job performance of public institutions, while the Act on the Inspection and Investigation of State Administration allows the National Assembly to carry out inspections and examinations of state administration. Lastly, the Act on the Disclosure of Information by Public Agencies requests public institutions to provide information on their job performance. In addition, there are several acts that provide for civil society to participate in public
    administrative affairs.

    Generally speaking, central public institutions have improved their governance and integrity systems. As a top priority in the current reform agenda, the president has shown eagerness to address corruption during his term of office on the one hand and promote the governance and integrity of public officials on the other. Central government agencies have largely complied both with the president’s request for action and with provisions for increasing public consciousness. However, constitutionally independent institutions such as the legislative and the judicial branches have not shown the same level of enthusiasm in addressing corruption, although they too have a mandate to establish plans and programs to guarantee the integrity of their organisations. Meanwhile, on the regional level, local autonomous institutions reveal serious problems in their governance and integrity, with significant increases in corruption.

    While the introduction of the Anti-Corruption Act was long regarded as a cornerstone in the anti- corruption movement in Korea, increasing concern remains over the lack of investigative authority of the KICAC, its limited authority and the ineffective nature of whistleblowing mechanisms, raising doubt over the applicability and efficacy of the Act. As for the Public Service Ethics Act, the provisions regarding assets registration and post-employment fail to provide clear guidelines, rules and standards that would discourage and ultimately prohibit officials from enjoying unfair financial gains. In addition, high-ranking public officials continue to be reluctant to comply fully with asset registration and post-employment restrictions. Public-official ethics committees, in charge of overseeing and examining the various provisions of the Public Service Ethics Act, also remain too lenient in fulfilling their duties.

    Corruption in Korea has long sparked intense debates in both political and social spheres. For the political leadership, proclaiming engagement in the fight against corruption, especially in the public sector, has become a norm rather than an exception. Current legislation regarding anti-corruption mechanisms remains focused on the public sector, while legislative and voluntary efforts are increasingly concentrating on the non-public sector as well.

    Korea’s NIS continues to undergo rapid transition. Over a relatively short period of time, it has achieved significant improvement in governance and integrity through political leadership and public demand. What remains at this juncture is the need to address apparent shortcomings.

    Recommendations:

    The government must carry out the following:

    · Enhance monitoring mechanisms to proactively prevent wrongdoing and reactively follow up to sanction the same. This will ensuring the highest degree of accountability and integrity from a holistic point of view, resulting in an active interplay between all stakeholders of society.

    · Strengthen enforcement and obedience of the regulatory framework that surrounds the country’s NIS.

    · Empower anti-corruption institutions with more investigative powers, enabling the government to oversee and act on corrupt practices within the system as a whole.· Introduce a special bureau of investigation of high-ranking public officials.

    Priorities and Recommendations
    The NIS of Korea continues to undergo rapid transition. Over a relatively short period of time, Korea has achieved significant improvements in governance and integrity through political leadership and public demand. However, Korea at this time needs to address its apparent shortcomings to attain national integrity in congruence with its economic and social status. Rather than addressing priority areas within each pillar, it is important that, in the case of Korea, emphasis be placed on the fundamental effectiveness of its regulatory environment. Thus, efforts should first of all be channelled into three areas: enhancing monitoring mechanisms, strengthening law enforcement and empowering anti-corruption institutions.

    · Enhancing Monitoring Mechanisms
    The current status of Korea’s governance and integrity reveals that, so far, it has failed to institute effective monitoring mechanisms. The narrow emphasis on externalities such as social status and job performance has obscured the basic functioning of the monitoring of governance and integrity. Korean public institutions now have to focus their efforts on strengthening their monitoring systems. At the core of this construct are well-functioning checks-and-balances systems that proactively prevent wrongdoing and reactively follow up to sanction the same. Both horizontal and vertical organisational structures and entities need to be subject to monitoring and checks and balances, including constitutionally independent institutions and non-public organisations. Only then will it be possible to ensure the highest degree of accountability and integrity from a holistic point of view, resulting in an active interplay among all stakeholders of society.

    · Strengthening Law Enforcement
    In Korea, stringent rules and regulations are well in place that are meant to strengthen the country’s NIS. Yet, in many sectors, the country continues to tread the borderline between corruption and integrity. Korea’s courts and prosecutors have been criticised for their inability and shortcomings in enforcing legislation. Thus, for Korea, the key to success will primarily lie in the strict enforcement and obedience of the regulatory framework that surrounds the country’s NIS. Given the prosecutors’ and the courts’ constitutional independence, law enforcement cannot be strengthened without their commitment. Rigorous internal rules and regulations in addition to professional ethical behaviour will also help prosecutors and the courts to attain fairness and independence in fulfilling their jobs.

    · Empowering Anti-Corruption Institutions
    While the establishment of the KICAC was hailed as another cornerstone in the fight against corruption, the firm positioning and true value of the KICAC to the NIS of Korea has yet to be fully realised. Concern has mounted over the introduction of independent investigative authority, the ineffective nature of whistleblowing mechanisms and the limited authority of the KICAC.

    The mere existence of such an anti-corruption body is not enough. To carry out substantive duties for the benefit of the Korean NIS, the KICAC should be equipped with more authoritative and/or investigative powers. The introduction of an investigative authority for the Act constituted one of the major items that civil society requested when the Act was finally passed in 2001; yet, the current Act does not include such a provision. To effectuate the whistleblowing system, the KICAC needs to come up with practical plans to protect whistleblowers from tangible and intangible retaliation. In addition, the Act should be expanded to cover constitutionally independent institutions and non-public sectors as well. Only then will it be possible to oversee and act on corrupt practices within the overall national integrity system.

    · Introduction of a Special Bureau of Investigation of Corruption by High-Ranking
    Public Officials Since 2000 there have been talks of introducing and establishing a special bureau of investigation of high-ranking public officials as there was a continuous stream of scandals involving high-ranking officials that came to an end without clear investigations and judgments. This issue constituted one of the major promises that both the ruling party and the main opposition party presented during their 2002 presidential election campaigns. However, by the end of 2005, the initial plan to introduce an Act establishing such a bureau was stymied in the National Assembly, and the talks shifted to establishing a standing special investigation system under an anti-corruption–related public institution.

    In addition, promoting professional ethics and raising public awareness are further areas that need to be actively tended to as the foundation of a solid NIS. More fundamentally, the NIS is based on the rationale that people serving both public and non-public organisations must abide by professional codes of ethics, recognizing that authority must be accompanied by conduct accountable to the public and society’s stakeholders.

    For now, however, the main challenge for Korea’s anti-corruption efforts and reforms will be the dependence on and sustainability of political commitment towards a coherent and sound anti- corruption framework. Addressing the aforementioned issues would significantly enhance and contribute to a strengthened NIS, which, in turn, would add credibility to and confidence in the country’s social, political and economic standing and future prospects.

    Posted 10/30/06

    Back to Top

    * * *

Tools for Measuring Corruption and Governance in Latin American Countries


A new report, Corruption and Governance Measurement Tools in Latin American Countries, produced by Transparency International (TI) and commissioned by the United Nations Development Programme (UNDP), presents the international, national and local tools used to measure corruption and good governance in Latin American countries. The report includes nearly 100 different corruption measurement tools in 17 countries: Argentina, Bolivia, Brazil, Chile, Colombia, Costa Rica, Ecuador, El Salvador, Guatemala, Honduras, México, Nicaragua, Panamá, Paraguay, Perú, Uruguay and Venezuela.

These tools include public opinion surveys, public sector diagnostics, private sector surveys, combined surveys, and multi-country tools such as the World Bank’s World Business Environment Survey/Investment Climate Assessment.  In the “Key Findings" section, the report analyses the uses, value, and impact of each type of tool (public opinion surveys, institutional diagnostics, and multi-country tools). It also comes to several conclusions about the impact of corruption on the poor and across gender, which are reproduced below:

Findings on Poverty and Gender
Concerning the Poverty Dimension, Similarities in the Findings Include:

- Many surveys show that corruption in absolute terms seems to affect the poor less than the non- poor: People with higher income have more often had experience with corruption and also spend higher sums on bribes. Nevertheless, when seen in relative terms, the burden of corruption weighs heavier on the poor: Low-income households bear a larger burden of corruption when burden is measured as the bribes/income ratio.

- A similar pattern can be found for micro-enterprises: They spend a larger share of their revenue
on bribes.

- Poor households are not meeting essential requirements such as food, health, and education partly because of the direct cost of corruption. Thus for the poor, the marginal utility of a currency unit paid as a bribe is greater than for the non-poor.

- The kinds of services in which bribes are common are more important to the poor

- In the provision of many services, public officials are more likely to disadvantage low-resource
users and ask them for bribes. It is exactly small businesses and the poor who don’t posses
alternatives in their demand of public services. Agencies ridden by corruption are more likely to
discriminate against the poor by limiting access to basic services.

- Some studies give additional information on income-specific aspects for example, bribery is
directly and positively associated with income: the wealthier the respondent, the more likely s/he
will have heard of any act of bribery.

- Concerning the impact of corruption on gender, the studies show that men are more likely to be victims of corruption than women. A possible explanation could be that it is males, especially in Latin America, who are more often involved in official transactions than females. One should underline that similar conclusions have been drawn in other regions.

- Results are inconsistent when it comes to the perception of corruption across gender. While some studies indicate that women perceive their country to be less corrupt than their male counterparts, other studies suggest that males and females have very similar perceptions of the prevalence of corruption; or even that women are more preoccupied by the phenomenon of corruption than men.

- These findings are important but one should still draw attention to the fact that only a limited number of tools and initiatives (about 20%) are addressing gender and poverty dimensions. There may be an explanation, which can be related to the type of tools. In order to disaggregate per gender and per income, you need a large sample size, which is not the case for most of the tools.

- There may nevertheless be a need to encourage the development of more specific tools addressing those issues with the ultimate aim to better equip policy makers. This could be done by the inclusion of more specific questions targeting the poor or women for instance. If some surveys with very large sample size like the survey on living conditions of Peruvian households (3.1.19) carried out among 18598 households offer the possibility to cross the information collected on corruption to other socioeconomic dimensions and highlight the connection between poverty and incidence of corruption, others, such as the corruption survey conducted by TI Mexico among 16000 household, had still very limited sub-analysis on income or gender.

Conclusion
The report concludes that “tools to measure corruption and governance are very useful tools and are able to create change, but can only do so if all stakeholders are invited to discuss the findings and if sustained education-sensitization efforts are carried out by the media, civil society organisations and also the public sector. Strong civil society organizations and political will are pre-conditions for enhanced use of the findings of empirical research in these areas”

For the full report and mapping of tools visit Transparency International’s website, www.transparency.org or click here.

Back to Top

Posted 8/16/2006

* * *

.

Fighting Corruption: What Approaches Work?

Experiences with Anti-corruption Action Plans at the National Level.

Case studies from:

Poland

Ghana

Slovakia

Latvia

Nepal

Mongolia

Paraguay

Case studies highlighting best practices and lessons learned relating to diverse issues concerned with corruption, including developing a pragmatic toolkit, raising public awareness, the media, public procurement, privatization, election monitoring.

Over the past four years the Partnership for Transparency Fund (PTF) has provided small grants (maximum amount $25,000) to NGOs across the developing world to assist in the development of specific anti-corruption initiatives. Full details of the projects and PTF’s work can be found on its website. Below are a series of cases, highlighted in summary form, which provide insights into what works. The experiences gained by the NGOs that have pursued these initiatives can assist other organizations around the world as they prepare their own specific anti-corruption projects.

UNDP Evaluation Praises PTF                                 

"PTF is an extremely effective instrument for support of small but important anti-corruption projects" says Alex Shakow, a former World Bank senior executive in an evaluation report to UNDP. "PTF’s  track record is very impressive.  The vast majority of its projects have been designed and implemented well and achieved valuable results. Given the difficulties of working in this highly sensitive area, the PTF success rate is a great tribute to the many courageous people implementing these programs across the globe, and to the PTF leadership for its commitment, professionalism and good sense.  There are lessons to be learned but, by and large, this volunteer operation sets very high standards and meets them.”

POLAND
Citizen’s Anti-Corruption Legal Toolkit

A project by TI Poland (TIP) assisted by PTF (www.transparency.pl)

The project established a Citizens’ Anti-Corruption Toolkit as a means of strengthening the implementation of TIP’s citizens’ legal aid Intervention Program.

The program arose in reaction to requests for legal support submitted to TIP from all around the country. Individuals, citizen groups, associations and councilors’ groups were asking for support in solving cases involving corruption or suspicion of corrupt practices. Most of the requests came from small towns where counteracting corruption is particularly difficult.

TIP reports that the people who applied for help frequently stressed that they go to TIP because they have trust. This trust is founded on a recognition that TIP is a reliable, politically unbiased, and independent organization, which does not avail itself of government funds. The Intervention Program has been carried on since January 2000. Although it is not advertised in any way, its growing good reputation, coupled with the inefficiency of state institutions, is resulting in a rapid increase of the number of cases taken on. Through its legal education and assistance program TIP has been creating public awareness of the people’s rights. In this way, dishonest public officers are being discouraged from taking advantage of people’s ignorance.

The proposed toolkit was to serve three purposes: (i) to support TI Poland’s legal Intervention Program; (ii) to be used by individuals and groups in their own cases; (iii) to enable groups and organizations to start their own legal intervention programs. The toolkit was to have six different components:

  • Software in the form of program management applications, internet discussion groups for program collaborators, frequently asked questions and application forms for people looking for help)
  • Software to provide legal help by internet (web page, discussion group, help on-line)
  • Practical anti-corruption guides accessible for citizens (published on paper, CD and website),
  • Intervention program working procedures and instructions providing legal help – based on TIP’s experience,
  • internet center for practical anti-corruption help,
  • anti-corruption toolkit on CD


The project has been successfully completed. At the start, the project team prepared instructions and forms for the collection of data on the ‘tricks’ used by authorities, then collected the data and reviewed a number of court cases. This has lead to the creation of database of the tricks used. Their subsequent analysis allowed the preparation of a compendium of the most frequently used tricks in public administration institutions. The project team has constantly updated the database. Three of the most interesting court proceedings were selected for further observation, recording court proceedings, collecting information and evidence, and providing legal help. A practical toolkit for a citizen in court was then prepared. The project team consulted local citizens’ groups and individuals in the preparation of the toolkit.

The project team reviewed the existing anti-corruption legal guide-books. This revealed an absence of such guidebooks and therefore this particular subject became the focal point for subsequent work. In addition, the team noted a lack of awareness of access to public information. A set of manuals was prepared, and a new dedicated website established. This included printing and distributing 1000 copies of a practical toolkit for a citizen in court, with tips for a citizen on how to perform in a court, mostly based on observations from the Legal Aid Program cases and court proceedings.  Also, counseling by phone was successfully tested. The “first contact” instruction has been prepared for volunteers’ contacts of with people looking for legal help.

TIP’s review revealed an absence of guidebooks on access to public information. Moreover, their other work indicated a general lack of awareness on access to  public information. In result a manual on access to public information was prepared and 2000 copies printed and distributed.

Copies of all manuals can be found on TIP’s website; the demand for these products has been considerable. In addition, some 100 CD copies of TIP’s Anti-Corruption Toolkit have been ‘burned’ and distributed.

***

GHANA

 Raising Public Awareness of Corruption

 A project of the Ghana Integrity Initiative (GII) assisted by PTF

The project involved a survey of corruption in four major cities as a tool for raising public awareness and to provide a robust basis for civil society to engage with the government on ways to reduce corruption. The key objectives were:

  • To measure the perceived degree of bribery and corruption in the country
  • To find out the most corrupt institution(s) in the country.
  • Find out why people involve themselves in bribery and corruption.
  • To find out the categories of perpetrators of bribery and corruption in the country.
  • To measure the perceived level of corruption in the government, metropolitan, municipal and district assemblies in the country.
  • To assess government commitment to fighting bribery and corruption.
  • To find out whether respondents are aware of the institutions fighting bribery and corruption in the country.
  • To solicit proposals from the public on ways to minimize bribery and corruption.

A “voice of the people” survey – an urban household corruption perception survey was conducted in Kumasi, Sekondi-Takoradi and Accra-Tema areas (Southern Ghana) from 10th to 26th March 2005. The survey, using face-to-face interviews and a structured questionnaire, captured the views of 900 residents of households on their perceptions of corruption, personal involvement as well as other people’s involvement in bribery and corruption, underlying reasons for corruption, institutions and officials perceived to be affected by corruption and suggestions on how to deal with the problem of corruption. GII prepared and disseminated a report summarizing the findings of the survey with a view to strengthening civil society’s advocacy of specific measures to fight corruption.

GII believes that the findings of the survey, with all its limitations, provide the public and policy makers with useful information on the perceived state of corruption in the country, and th