Corruption & Anti-corruption

54
Corruption & Anti-corruption Iftekharuzzaman Executive Director Civil Service Academy 30 July, 2011

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Corruption & Anti-corruption. Iftekharuzzaman Executive Director Civil Service Academy 30 July, 2011. Part I. Corruption in Bangladesh: Measures, Causes and Impact. Bangladesh – many reasons to be proud of. Steady economic growth: 5-6% since 1990s - PowerPoint PPT Presentation

Transcript of Corruption & Anti-corruption

Page 1: Corruption & Anti-corruption

Corruption & Anti-corruption

IftekharuzzamanExecutive Director

Civil Service Academy30 July, 2011

Page 2: Corruption & Anti-corruption

Corruption in Bangladesh:Measures, Causes and Impact

Part I

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Bangladesh – many reasons to be proud ofBangladesh – many reasons to be proud of

• Steady economic growth: 5-6% since 1990s • Human Development Index (HDI): 0.365 (1980) ►► 0.547 • Multidimensional Poverty Indicator (MPI 2010): Ranked 73rd ,

ahead of India (74) & Nepal (82) • Pop growth: 2.5 (1980s) ►► 1.4 (2005-10) • Gross prim enrollment: 72% (1980)►► 98%• Child mortality: 239/1000 (1970) ►► 69/1000• Maternal mortality: 322/100,000 (2001) ►► 194/100,000• Population in poverty: 59% (1990) ►► 31%• Vibrant private and non-government sector • People have always given their choice for democracy and

integrity

All these - inspite of well-known governance failures and pervasive corruption. (e.g., 77% of people outside the benefit of GDP growth - BBS)

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CORRUPTION• A global problem• Abuse of power for private gain - power in the

government & outside; economic, political, social

Types of Corruption – by process• Coercive corruption• Collusive corruptionTypes of Corruption - by size/volume• Grand corruption• Petty corruptionTypes of Corruption - by key actor• Political Corruption• Public Sector Corruption • Private Sector Corruption• Intellectual CorruptionInstitutionalized/Systemic Corruption

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Sumon Wahed/Age 20 Remember how to spell “honesty”?

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Measuring Corruption Transparency International Tools• Global Corruption Report – Annual research report by

international and country experts on a selected theme, e.g., Climate Change (2011) Environment (2010), Private Sector (2009) Water (2008), Judiciary (2007)

• Bribe Payers Index – Measure of bribe-paying by foreign firms in countries of destination

• Global Corruption Barometer - survey of public attitudes toward and experience of corruption

• Corruption Perceptions Index – international ranking (score) based on Survey of Surveys on perceptions of business, business analysts, investors, investment analysts and country specialists on political and administrative corruption.

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GCB-2010: Highlights

• Opinion & experience survey on people’s perceptions & experience of corruption

• How respondents rate their government in the fight against corruption.

• People’s experiences with bribery when interacting with different public services & reasons to pay bribes.

• Changes in corruption levels in the past 3 years, as perceived by the general public (where applicable).

• Whom does the public trust the most to fight corruption in their country.

• People’s attitudes towards fight against corruption and taking anti-corruption stance

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73%67%

62%57% 57%

51%47% 45% 46%

56%

0%

10%

20%

30%

40%

50%

60%

70%

80%

% o

f res

pond

ents

A Global Problem: Percentage of people who viewed

corruption increased over previous 3 years: Globally, regionally & Bangladesh

Source: TI, Global Corruption Barometer 2010

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Corruption Perceptions Index

• Ranking of countries by the degree to which corruption is perceived to exist among politicians and public officials

• CPI - a Composite index, poll of polls, on corruption-related data from 10-15 surveys by independent and reputable institutions.

• CPI reflects views from around the world, including those of experts who are living in the country and outside on corruption and the capacity of the government to control it.

• TI Secretariat, Berlin, conducts the research based on raw data from international surveys – international group of experts

• TI-Bangladesh and/or any other TI Chapter has no role in CPI

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Results CPI 2010 – the top & the bottomCountries where corruption is perceived to be lowest

Rank Country Score1 Denmark, New Zealand, Singapore 9.32 Finland, Sweden 9.33 Canada, Holland, Australia,

Switzeland, Norway8.6-8.9

Countries where corruption is perceived to be highest

Rank Country Score176 Chad, Burundi, Eq Guinea, Angola 1.7-1.9

Sudan, Turkmenistan, Uzbekistan 1.6178 Iraq 1.5179 Afghanistan & Myanmar 1.4180 Somalia 1.1

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0.4

1.2 1.31.5

1.72.0 2.0

2.1

2.4 2.4

0.0

0.5

1.0

1.5

2.0

2.5

3.0

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

CP

I Sco

re

Source: Transparency International, www.transparency.org

Corruption Perception Index (CPI) Bangladesh's score from 2001 to 2010 (in a scale of 0-10)

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CPI: Performance of South Asian Countries 2009-2010

SlCountry Score Rank (from below)

2009 2010 2009 2010

1 Bangladesh 2.4 2.4 ► 13 12 (134) ▼ 2 Afghanistan 1.3 1.4 ▲ 2 2 (176) ►3 Pakistan 2.4 2.3 ▼ 13 11 (143) ▼ 4 Nepal 2.3 2.2 ▼ 12 10 (146) ▼ 5 Maldives 2.5 2.3 ▼ 14 11 (143) ▼ 6 India 3.4 3.3 ▼ 23 21 (87) ▼ 7 Sri Lanka 3.1 3.2 ▲ 20 20 (91) ►8 Bhutan 5.0 5.7 ▲ 36 44 (36) ▲

(n-th out of 178 countries)

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TIB Tools of Measuring Corruption

• National Household Survey on Corruption (in the service sector - experience-based not perception or opinion)

• Diagnostic Studies• National Integrity System Monitoring –

Parliament Watch• Citizens Report Cards• Corruption Database• Issue-based studies – UNCAC, Ombudsman,

RTI, Humanitarian Assistance, Human Security, Water Integrity, Political Funding

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Source: TIB: National Household Survey 2007, 2010Source: TIB: National Household Survey 2007, 2010

Percentage of households who experienced corruption*

84.2

34.1

10.1

15.3

17.5

19.2

33.2

43.9

45.3

45.9

51.3

71.2

79.7

88.0

66.7

35.5

13.5

39.2

44.1

33.2

25.9

52.7

96.6

47.7

28.7

0 10 20 30 40 50 60 70 80 90 100

Overall

Others

NGO

Education

Banking

Insurance

^Health

Local Government

Agriculture

Electricity

Income Tax, VAT & Customs

Land Administration

Judicial Services

Law enforcement Agencies

% of HHs

2010 2007

*Bribery plus other forms of harassment

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Average rates of bribe in Taka collected per service recipient

TIB: National Household Survey, 2007-2010TIB: National Household Survey, 2007-2010

4834

6804

168

310

463

549

913

1834

1928

3352

3949

6116

6734

7918

0 1000 2000 3000 4000 5000 6000 7000 8000 9000

Overall

Others

Education

Agriculture

^ Health

NGO

Local Government

Electricity

Banking

Law enforcement agencies

Insurance

~ Land Administration

Income tax, VAT & Customs

Judicial Services

TK

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In substance Corruption has a bias against the Poor

• Key challenge against development, democracy and rule of law - more than CPI ranking

• Opportunity Cost: @ 2-3 percent higher GDP growth

• Key institutions of democracy (NIS) rendered ineffective – justice and rule of law jeopardized

• The poor are most adversely affected– access to public services like education, health,

justice, utilities and individual safety became a function of the capacity to make unauthorized payments.

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National estimate of bribery*

TIB: National Household Survey, 2007-2010TIB: National Household Survey, 2007-2010

3184

1818

0

500

1000

1500

2000

2500

3000

3500

2010 2007

Tak

a

Per household

5443.4

9591.6**

0

2000

4000

6000

8000

10000

12000

2010 2007

Cro

re T

aka

National

* Petty corruption only, at the service delivery end in selected sectors

****1.4% of GDP, 8.4% of national budget 2009-101.4% of GDP, 8.4% of national budget 2009-10

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(Bribery in Education, health, land administration, police, justice, income tax)Source: TIB National Household Survey 2010

Corruption – bias against poor Ratio of Household Income lost to Bribery

3.12

2.50

3.204.11

00.5

11.5

22.5

33.5

44.5

Low Income(<72,000)

Middle Income(72,000-140,000)

High Income(140,000+)

Total

Income category by annual income in Taka

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Causes of corruptionStructural/Institutional factors• Range of discretion - absence of checks & balances• Inadequate and ineffective rules, laws and institutions • Lack of, or low level of, transparency, disclosure,

accountabilityPersonal factors• Incentives, Compulsion, Opportunities Need-based,

►► Greed-based • Cost-benefit calculation - Benefits of corruption higher

than risks/costs• Low citizens awareness, involvement

– Sense of Disempowerment– Lack of forum & channel

• Value erosion ►►way of life ►►culture of impunityPolitical Economy • Investment ►Gresham’s Law; Confrontation ►►Zero-

sum Game

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5th Parliament 6th Parliament 8th Parliament 9th Parliament (Sessions 1-7)

Zero-sum game: Boycott of Parliament by the Opposition Party

(0-80%)

Percentage of working days

(34%)(43%)

(60%)

(74%)

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Battle for political space …

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Battle for political space …

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Political economy … “Its our turn” …

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Enforcement deficit -Flouting regulations

Political economy

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Enforcement deficit -Logging freestyle

Political economy

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Political economyPolitical economy

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Development expenditures:

Who gets what?

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Part II

Combating Corruption:

A strategic & multidimensional approach

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FIGHTING CORRUPTION FIGHTING CORRUPTION • Highly challenging because of links of

corruption with power.• Complete eradication of corruption is not

realistic, nor can corruption be controlled in short term by any magic formula.

• Needed a comprehensive strategy having 4 main inter-related elements:– Political will – without fear or favour– Making corruption punishable– Strengthening the institutions of NIS– Citizens awareness and demand – Ethical

infrastructure

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Anti-corruption infrastructure

Sustainable Development

Poverty

Reduction Rule of

Law

N a t i o n a l I n t e g r i t y S y s t e m

Le

gis

latu

re

Ex

ecu

tive

Ju

dic

iary

Au

dit

or

Gen

eral

Ele

cti

on

Co

m.

Pu

blic

Se

rvic

e

Wat

chd

og

s B

od

ies

Me

dia

Civ

il S

oci

ety

Pri

vat

e S

ecto

r

Inte

rn’l

Co

op

- U

NC

AC

Citizens Voice and Demand ► Political Will

Core Moral and Ethical Values – Honesty, integrity, Patriotism, Equality, Caring and Sharing …

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Does it work – National level • Demand creation backed by

credible research – corruption at the core of public discourse and political agenda, election manifesto

• Institutional & policy reforms– Anti-Corruption Commission – Election Commission &

Electoral law reform– Public Service reform – UNCAC – Right to Information Act– Whistleblower Protection Act– NGO Governance – Anti-Corruption education– MP Code of Conduct/Conflict of

Interest (proposed)– Integrity Pact (proposed)

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Does it work – local level Social accountability tools at work

• CRC – Citizens Report Card/Score Card

• Advice & Information Service (RTI)

• Street Theatre• Citizens Charter• Participatory Budget• Budget tracking• FtP – Face the Public• Island of Integrity

►Integrity Pledges

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The young generation - We can do it for sure …

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Location of CCC-YES

Madhupur

Chakariaia

Muktagasa

Patia

Sreemongal

Nalitabari

CCC-YES

Myanmar

India

India

India

DMCH

Savar

Bay of Bengal

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Part III

The UN Convention against Corruption:

State of Enforcement

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• Name: The UN Convention against Corruption (UNCAC)

• Adopted: 31 October 2003 by the UNGA

• Opened for signature: 9 December 2003• Signatories: 140• State Parties: 154 (May 2011)• Entry into force: 14 December 2005• Bangladesh Acceded: 27 February 2007• Notable non-ratifiers: Japan, Germany,

New Zealand, Ireland, Saudi Arabia, BhutanSource: www.unodc.org

UNCAC in brief

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Bangladesh in UNCAC

• TIB commenced advocacy on UNCAC on 9 December 2004

• After over 2 years of campaign Bangladesh became a state party on 27 February 2007

• GAP Analysis (GIZ/IGS)• Implementation Plan adopted in 2009• Significant progress made • Long way to go …

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State Parties to UNCAC are committed to: – Criminalise corruption in politics & public sector – Criminalize corruption in private sector, and even

private-to-private through due judicial process– Corruption prevention through Institutional and legal

reform (NIS)– International cooperation

• Asset recovery• Technical support• Mutual Legal Assistance

UNCAC – Highlights of Implications

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CRIMINALIZATION OF CORRUPTION

Criminalize Public Sector Corruption: – Embezzlement, misappropriation of public

property (Art 17)– Trading in influence (Art 18)– Abuse of functions (Art 19)– Illicit enrichment (Art 20) – Obstruction of Justice (Art 25)– Bribery (Art 15)

• Offering or giving and seeking or accepting undue advantage and bribes in exercise of official duty

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INTEGRITY IN PUBLIC SECTOR

• Transparency, competition and objectivity in Public Procurement (Art 9)– Laws, regulations, rules for integrity– Disclosure and dissemination– Integrity of officials involved in procurement

• Transparency and accountability in management of Public Finance (Art 10)– Procedures and reporting on revenues and

expenditures– Accounting and auditing standards and oversights– Risk management and internal control– Integrity of Financial record, books and accounts– Stringent punitive measures for lapses in financial

integrity

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INTEGRITY IN PUBLIC SERVICE

• Transparency in appointments, promotions, transfers (Art 7)

• Positive and Negative Incentives (Art 8)– Salaries & benefits, performance-based rewards,

punishments– Zero tolerance against abuse and bribery,

internal/systemic self-control, updatable asset declaration and monitoring

– Strict Code of Ethics & Conflict of Interest policy – Disclosure of sources of income, assets and

liabilities– Stringent disciplinary measures for violations

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INSTITUTIONS, LAWS & POLICIES • Systemic/Institutional Reform for

– Independence and integrity of the Judiciary to prevent corruption in judiciary and beyond

– Judicial services rules of conduct (Art 11)– Criteria for candidacy, and election to, public

office (Art 7)– Transparency in funding of candidates and

political parties, campaigns and elections (Art 7)– Prevent Conflict of Interest (Art 7)– Integrity of other institutions of NIS, Watchdog

bodies – ACC, Ombudsman (Art 6)• Right to Information (Art 9, 10, 13, 33) including

whistleblower protection

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PRIVATE SECTOR INTEGRITY

• Private Sector Corruption (Art 12, 21, 22, 23)– criminalize private-to-public and private-to-private

corruption– Bribery, Embezzlement, Laundering – establish transparency of ownership

• Corporate Crime/Liability (Art 26)– Enforce criminal, civil or administrative liability

for companies involved in corruption. A Company, not just person acting on his/her behalf can be directly responsible for a crime

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Private sector integrity (Art 12, 21)

• Standards & procedures for private sector integrity– Codes of conduct in business practices – Rigorous internal controls– Transparent contractual and commercial

practices with the State and among businesses• Preventing violation & misuse of Rules and

Procedures• Preventing conflicts of interest - restrictions on

employment or professional service of former public officials in private sector relevant to areas served

• Enhance accounting standards and disclosure of financial statements and records

• Punishment for non-compliance

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Linking National with International Money Laundering (Art 23, 51) • Strengthened legal and institutional regulatory and supervisory

frameworks to prevent money laundering Asset Recovery (Art 55) • Return of assets and funds with the help of the host State Parties -

to ensure that there is no place for stolen richesForeign Bribery (Art 16)

Bribery of foreign officials including those of international organizations is a crime irrespective of country of origin

OthersMutual Legal Assistance (Art 46), Transfer of Criminal proceedings (Art 47), Law enforcement cooperation (Art 48), Joint Investigations (Art 49), Return and disposal of Assets (57) Bilateral & Multilateral arrangements (Art 59) Training &Technical Assistance (60, 61, 62)

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State Parties are committed to:• Recognize and promote participation of citizens

– in the prevention of, and the fight against, corruption

– to raise public awareness regarding the existence, causes and gravity of and the threat posed by corruption leading to non-tolerance of corruption

– in decision-making • Ensure effective public access to information -

respect, promote and protect the freedom to seek, receive, publish and disseminate information

• Promote public education programmes, including school and university curricula

ROLE OF CITIZENS (Art 13)

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Parallel Review – Implementation Reviewed Article 15: Bribery of national public officials Article 16: Bribery of foreign public officials and officials of public

international organizations Article 17: Embezzlement, misappropriation or other diversion of

property by a public official Article 20 : Illicit enrichment Article 23: Laundering of proceeds of crime Article 26: Liability of legal persons Article 29: Statute of limitations Article 31: Freezing, seizure and confiscation Article 32 Protection of witnesses, experts and victims Article 33 Protection of reporting persons Article 35: Compensation for damage Article 40: Bank secrecy Article 42: Jurisdiction Article 46: Mutual legal assistance

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Review Process/Method Reviewed and analysed relevant country laws, reports,

articles, etc. Collected information through interview on compliances,

gaps and deficiencies, challenges and successes Information collected from government bodies was

cross-checked with legal expertsSources of information Government Bodies: Ministry of Law, Justice and

Parliamentary Affairs, Ministry of Foreign Affairs, Bangladesh Bank

Anti-corruption Commission Legal Experts Relevant website and other media

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Notable inadequacies/concerns

Political will not enforced without fear or favour Partisan consideration in anti-corruption agenda Initiative to amend the Anti-Corruption Act Corruption cases void on technical/political grounds Much to be desired from the justice system Public service, Police, Justice system subjected to

partisan political influence Amendment to Public Procurement Act & the like Insufficient knowledge & awareness about UNCAC Low level of coordination & monitoring of

implementation, low capacity of focal point Shrinking space for critical/dissenting voice

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• Government

• Political parties and political leaders

• Pillars of NIS

• The UN and other international actors – development partners, bilateral, multilateral, multi-nationals

• Citizens - NGOs, CBOs, CSOs – people at large

UNCAC Stakeholders

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Whom do people trust more to fight corruption?Globally and in Bangladesh

22

11 9

25

8

25

60

3 3

16

710

0

10

20

30

40

50

60

70

Governmentleaders

Business/Private sector

NGOs-NongovernmentalOrganizations

Media Internationalorganisations[eg UN, World

Bank, IMF etc.)

Nobody

% o

f res

pond

ents

Global

Bangaldesh

TI: Global Corruption Barometer 2010TI: Global Corruption Barometer 2010

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Role of people in the fight against corruptionGlobally and in Bangladesh

62

7973

81

45

79 80

60

69

93

60

9490 88

71

93

76

89

71

95

31

79 81 81

53

7370 71

49

90

0

10

20

30

40

50

60

70

80

90

100

Asia

Pac

ific EU+

Latin

Am

eric

a

Mid

dle

East

and

Nor

th A

mer

ica NIS

+

Nor

th A

mer

ica

Sub-

Saha

ran

Afric

a

Wes

tern

Balk

ans

+Tu

rkey

Glo

bal

Bang

lade

sh

% o

f res

pond

ents

…think that ordinary people can make a difference in the fight against corruption

…would support their colleagues or friends if they fought against corruption

…could imagine themselves getting involved in fighting corruption

Ban

glad

esh

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Thank [email protected]

9862041, 01711-548717

Youthpower

(Corruption)

www.ti-bangladesh.org