anti corruption day

7/29/2019 anti corruption day

http://slidepdf.com/reader/full/anti-corruption-day 1/26

PRESENTATION ON

ANTI-CORRUPTION DAY



THE CHALLENGE

• Inefficient use of existing water sector finances

• Lack of investment

• Millions dying from lack of clean water and basic

sanitation: Reaching the MDGs is unlikely• Degradation of water resources and ecosystems

• Unjust distribution of water services and resources

• Lack of democratic influence for stakeholders

Corruption affects who gets what water when, whereand how. It determines how costs are distributed between different actors and the environment.



HOW BIG IS THE CORRUPTION PROBLEM?

• Varies across the sector and

national/sub-national governance

settings

• World Bank estimates of project

corruption in ‘highly corrupt’ countries

could be 30-40% prior to anti-corruption

initiative

• If 30% is correct –

US$20 billion could be lost in thenext decade to meet the MDGs

for WSS in Africa*

• Much need for diagnostics!

WSS in South Asia

• False readings: 41% of

customers had paid a bribe in last

6 months

• Illegal connections: 20% of households admitted paying a

bribe to utility staff

• Contractors: 15% excess cost

because of collusion

• Kickbacks: 6-11% of contracts

value

(Davis,WSP Study, 2003)



WHAT IS CORRUPTION?

Definitions

• ‘the use of public office for private gain’ (WB)

• ‘the abuse of entrusted power for private gain’ (TI)



CORRUPTION COMES IN MANY FORMS

• Bribes: payments to public officials to persuade themto do something (quicker, smoother or more favorably).

• Collusion: secret agreement between contractors to increase profit margin

• Fraud: falsification of records, invoices etc.

• Extortion: use of coercion or threats. E.g. a payment to secure / protect ongoing service – (cf.collusive corruption where both sides benefit)

• Favoritism/Nepotism in allocation of public office

• ‘Grand’ corruption: high level, political corruption

• ‘Petty’ corruption: corruption in public administration and/or during implementation or continuing operation and maintenance



EXAMPLES OF CORRUPTION IN THE WATERSECTOR

• Falsified meter readings

• Distorted site selection of boreholes or abstraction points

• Collusion and favouritism in public procurement

• Bribes to cover up wastewater and pollution discharge

• Kickbacks to accept inflated bills in production• Nepotism in allocation of public offices in water administration

• Bribes for diversion of water for irrigation

• Bribes for preferential treatment (spead, service level etc)



CAUSES OF CORRUPTION IN THE WATER SECTOR

Complementing perspectives

• Incentives: Cost/benefit ratio of engaging in corruption. Economic and non-economicrewards.

• Institutions: Dysfunctional institutions - stucture and capacity – creates opportunity andlowers risk of getting caught.

• Norms: Setting expectations and limitations for legitimate behaviour.



CAUSES OF CORRUPTION

Corruption = Monopoly + Discretion –

Accountability

HIGH HIGH LOW



It combines high riskcharacteristics:

• Monopolistic behavior

• Large flow of PUBLICmoney

• High cost of sector assets

• Assymmetry of power and

information• Sector/ technical complexity

It is similar to :

• Typical civil service behavior

• The construction industry (mostcorrupt sector?)

IS THE WATER SECTOR UNIQUE?



2. A FRAMEWORK FOR UNDERSTANDING

CORRUPTION IN THE WATER SECTOR



AN INTERACTION FRAMEWORK

• Public to public

• Diversion of resources

• Appointments and transfers

• Embezzlement and fraud in planning andbudgeting

• Public to private

• Procurement collusion, fraud, bribery

• Construction fraud and bribery

• Public to citizen / consumer

• Illegal connections

• Falsifying bills and meters

PublicOfficials

Public

Actors

Consumers Private

Corruption occurs

between public officials

and 3 different sets ofactors



Early warningindicators

•Same tender lists

•Bidders drop out

•Higher unit costs

•Variation orders

•Low worker

payments

•Single source

supply

•Change in quality

and coverage

Anti-corruptionMeasures

•Simplify tender

documents

•Bidding

transparency

•Independent tender

evaluation

•Integrity pacts

•Citizen oversight

and monitoring

•Technical auditing

•Citizen auditing,

public hearings

•Benchmarking

•SSIP support mechs

PUBLIC toPRIVATE

interactions

Procurement • Bribery, fraud, collusion

in tenders

Construction

• Fraud / bribes in

construction

Operations

• Fraud / bribes in

construction

•



PUBLIC toCONSUMER

interactions

Construction• Community based WSS –

theft of materials

• Fraudulent documents

Operations• Admin corruption

•(access, service, speed)

Payment systems

•

• meter, billing and

collection – fraud and

bribery

•

Early warningindicators

•Loss of materials

•Infrastructure

•failure

•Low rate of faults

•Lack of interest inconnection

campaigns

•Night time tanking

•Unexplained

variations inrevenues

Anti-corruptionMeasures

•Corruption

assessments

•Citizen

monitoring and

oversight

•Report cards•Transparency in

reporting

•Citizen oversight

and monitoring

•Complaintredressal

•Reform to

customer

interface (e.g.

women cashiers)



7 sets of anti-corruption measures

► Measuring and diagnosing

► Transparency and access to information

► Improving accountability

► Institutional and policy reform

► Enforcement and regulation

► Education and advocacy

► Integrity

IDENTIFYING ANTI-CORRUPTION MEASURES



AREAS TO EXPLORE

• What is the viability of specific sector interventions?

• How can decentralization be harnessed as an

anti-corruption strategy?

• How are these measures different from current reform efforts?

• How do we make anti-corruption work for the poor?



3. MAKING ANTI-CORRUPTION

APPROACHES WORK FOR THE POOR



MAKING ANTI-CORRUPTION WORK FOR THE POOR

• Why pro-poor anti-corruption approaches?

• Understanding the poor’s interaction with corruption

• Identifying hotspots in the water sector

• Developing responses to bring benefit to the poor



WHY PRO-POOR ANTI-CORRUPTION APPROACHES?

Why pro-poor?

• disproportionate impact – regressive

• differentiated impact – the affect on the poor varies

• unpredictable impact – not much is known

• Loss of water assets and services – diversion

• User pays and cost recovery principles – double cost

• Risk of fallback – tightening and shifting – effects?

• Growth, efficiency of services, better governance…all these things supportpoverty reduction …



UNDERSTANDING THE POOR’S INTERACTION WITH

CORRUPTIONWhat are the impacts of corruption on the poor?

• Short term issues – access to water

• Differentiated – Marginalisation or empowering

• Coping strategies

• Bribery decreases financial assets but increases short term water assets, healthassets

• Long term issues – efficiency and effectiveness

• Marginalisation

• Decrease in physical assets

• Loss of options




CORRUPTION

1. Indirect… (does not involve the poor in interaction)

• Political corruption, state capture

• Diversion and distortion in the allocation of funds

• Embezzlement from state, sector, local government budgets

• Procurement fraud, fraud in construction

• Elite capture




CORRUPTION

2. Direct… (the poor are involved in the interaction)

• Poor users offer bribes or bribes are extorted

• to access water (for irrigation, drinking water etc)

• for quality, maintenance

• to get a fair price

• Poor officials use their public office for private gain

• To provide access, quality and price

• To enable elite capture

• To defraud program / project funds

• Act in organizational chain of fraud/ bribery

or as an individual or middleman



IDENTIFYING HOTSPOTS

A flow of corruptinteractions…

…in which the poor arepaying bribes to stay inthe system

…and receiving bribes (asofficials or de-facto officials)

…which ones matter most?



IDENTIFYING HOTSPOTS IN THE WATER SECTOR

… In the poor’s water context … what matters most?

• Paying bribes at the point of service delivery

• To access assets – for WSS/irrigation/drainage control (one-off)• To access ongoing services – for repair / operation (recurrent cost)

• To get the right price – for legal or illegal aupply

• Taking and extorting bribes and defrauding projects either individually or as a part of a group

• Assets captured, controlled by officials

• Services and Payment systems controlled by officials

• Procurement and execution controlled by officials



IDENTIFYING HOTSPOTS IN THE WATER SECTOR

… In the poor’s water context … what matters most?

• The sub-sector – WRM, water supply, sanitation

• What characteristics make for more corruption?

• The ‘public good’ finding

• The system

• Where do the poor get their water? The spectrum of water providers

• The location

• Opportunities for corruption at low access points

• The actors

• Relationships between poor and leaders / social elite

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