U4 Helpdesk Query

Content

• Part I emphasizes the need to tailor anti-corruption strategies to the specific context, and what that might mean in Mozambique;
  
• Part II discusses where to start in devising an anti-corruption strategy, and what to include;
• Part III offers guidelines for measures to prevent corruption in development cooperation; and
  
• Part IV includes examples of measures to take when corruption within programmes or projects emerges.
  
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U4 helpdesk reply

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A previous U4 Expert Answer on tackling corruption within projects sets out information about measures agencies take to prevent corruption and mismanagement in donor-supported development projects and programmes. It presents a selection of donor mechanisms geared towards discovering corrupt practice in donor-supported projects and programmes and it addresses possible responses to corruption and mismanagement uncovered in donor-supported development projects and programmes. This U4 Expert Answer is highly recommended reading as it directly addresses some of the questioner's concerns.

Part I

Tailor Your Strategy to the Conditions in Mozambique
There is no general blueprint. In devising an anti-corruption strategy it is important to bear in mind the particular challenges and types of corruption present in Mozambique, particularly in wake of the legacy of civil war. Because corrupt practices among warring factions were tolerated in order to attain peace, transparency in political and business affairs may still be severely limited. Tackling the problem of corruption and creating the political will to tackle corruption involves understanding the links between corruption and the perpetuation of poverty and conflict in Mozambique. In this context an anti-corruption strategy is an essential component of a broader package of reforms to reduce poverty and contribute to peace and development in Mozambique.

The "Anti-Corruption Strategies Project" run by the Institute for Security Studies (ISS) in South Africa has developed a draft document "Three strikes against graft: Key recommendations for effectively combating corruption in Southern Africa. Assessing the impact and nature of groundbreaking corruption cases in Lesotho, Mozambique and South Africa" (2003). The document offers a very useful assessment of the kinds of anti-corruption efforts needed in Mozambique. It states:

• Mozambique has a dated penal code and strategies to combat corruption still need to be developed, including laws tackling corruption with an appropriate punishment.
  
  
• There needs to be a legislative framework to address corruption in private sector (even if the act constitutes a criminal offence there may be technical difficulties in prosecuting such offenders).
  
  
• Protection of whistle-blowers is essential (there is no unit in place to deal with protection of whistle-blowers).
  
  
• Efficient law enforcement and an effective independent judiciary should be prioritized to strike at the culture of impunity.
  
  
• There is a need to focus on the rural-urban division: corruption is often ignored in rural areas
  
  
• Reform in the office of the Attorney General and the creation of a specialised anti-corruption unit signifies a break with the past. It may however be worthwhile considering the possibility of empowering this unit with functions similar to the SA "Scorpions".
  
  
• Evidence from criminal proceedings should be immediately followed up on. i.e. the closure of Unicambios
  
  
• Investigators must be equipped with the means to institute a successful investigation (gathering of evidence in corruption cases very difficult; often linked to other forms of crime).
  
  
• Transparency in civil service is critical: open counters/name tags may help to curb corrupt practices amongst civil servants.
  
  
• The regional co-operation and harmonisation of legislation is required as well as regional co-operation to recover funds that have disappeared.
  
  
• Rushed privatisation processes do not allow for sufficient time to analyse the companies involved in the buying process, which impacts negatively on the process.
  
  
• Co-operation amongst media organisations as well as other institutions must be promoted: regional exchange of information needed - this has assisted investigative journalists in the past.
  
  
• As a result of weak regulation politics and business is intertwined as a result many business and political relations are characterised by a conflict of interest. The media now finds it more difficult to denounce corrupt activities of many of the powerful business groups and individuals.
  
  
• Public opinion and pressure essential in advancing criminal investigations into corruption. Need to engage the public in debate, learn from the open judicial process in the Cardoso murder trial.
  
  
• Research capacity is key: information on nature and extent of corruption is needed to effectively fight it.
  
  
• The lack of information and denial of access to information must be remedied (i.e. it is necessary to create a register of assets for members of the executive as well as a law that guarantees public access to it).
  
  

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Part II

Where to start and what to include

1. Format
   Some general comments about format: in developing, for example, a logframe exercise to collect and clarify your activities you may find that you duplicate a lot of the activities you have planned. This is understandable in the early stages of developing your strategy but the final action plan should be streamlined and strategically focused.
   
   
2. Content and process
   Get buy-In from all actors. To undertake anti-corruption reform it is essential to have extremely strong political will amongst the governing class. In a country like Mozambique that still bears the scars of a deeply divisive civil war you should consider the challenges of getting buy-in from a range of politically divided actors. In the Embassy Strategy it is noted that you have a threefold strategy which includes "political dialogue". This is an essential element of getting buy-in for your anti-corruption strategy.
   
   Invest in capacity-building before you start anti-corruption reform. What is the state of the Public Financial Management system in Mozambique? Is there the capacity to follow-through on monitoring promises? Is there a functioning tax system? Is there an effective customs? What is the state of civil society in Mozambique? The strength of government systems and civil society organisations will influence your ability to carry through successful, sustainable anti-corruption reforms.
   
   Mozambique is a huge country: what is the state of local government in Mozambique? The end of the civil war left an institutional and regulatory vacuum. It was in such an environment that many foreign companies rushed to invest in Mozambique. The local government structures struggled to cope with this business interest. Capacity-building of local government should be prioritised in a similar fashion to that of central government.
   
   One of the challenges for an anti-corruption strategy is to make sure that, at a minimum, international anti-corruption conventions are upheld in relation to foreign business practices within the country.
   
   Access to Information is crucial. It is essential to appreciate the current state of press freedom and access to information in Mozambique. In 2000 the well-known journalist Carlos Cardosa, who was investigating the country's biggest financial scandal since independence, was murdered. Recently efforts to bring his murderers to justice have been made although there has not always been a strong will on the part of the authorities to seek justice in this case. A recent article, as well as archives, dealing with this case may be found on the "Reporters without Borders" website. Please follow the below link: http://www.rsf.org/article.php3?id_article=17688.
   
   
3. Sequencing
   In cooperating with the Mozambican government to develop and design anti-corruption policies for Mozambique, donors can draw apt advice from Edgardo Buscaglia's work on sequencing of anti-corruption policies. This may be found in "Judicial Corruption in Developing Countries: Its Causes and Economic Consequences" at page 3.
   
   Below is the relevant extract:
   
   Sequencing the Design of Anti-Corruption Policies:
   The following steps are recommended in the design of anticorruption policies:
   
   
   1. Perform a diagnostic analysis within a country identifying, within a priority list, the main institutional areas where systemic corruption arises. This identification must be conducted through surveys of users of government services, businesses, or taxpayers. The survey should be applied to each government institution (e.g., customs, judiciary, tax agencies, and others).
      
      
   2. Once a priority list of areas subject to systemic corruption is derived, develop a data base for each of these institutions containing objective and subjective measures of corruption (e.g., reports of corruption, indictments related to fraud, embezzlement, extortion, or bribery in that agency, prices charged by the agency) and other variables that are thought to explain corruption. Gather information on procedural times in the provision of government services; users' perceptions of efficiency, effectiveness, corruption, and access related to that agency; procedural complexity in the provision of services; and so on.
      
      
   3. Conduct a statistical analysis clearly identifying the factors causing corruption in a specific government agency. Identify whether any of the economic, institutional, and organizational factors mentioned above are related to corruption.
      
      
   4. Once the diagnostic and identification stages are complete, civil society should become involved in implementing and monitoring the anticorruption policies. The action plan should be developed through consensus between civil society and government and contain problems, solutions, deadlines for implementation of solutions, and expected results. This approach has been applied at the judicial and municipal levels in many countries with significant results (Buscaglia and Dakolias 1999). Those cases used the following steps: First, a survey was conducted of those users applying for specific permits from their local government (county office, in Venezuela). Those users were interviewed just after finishing the application procedure and were asked to rank the efficiency, effectiveness, level of access, quality of information received, and corruption in the administrative procedure used to obtain construction and industrial license permits. Next, numerical and qualitative data were gathered to identify those variables affecting the public's responses to the survey by applying statistical analyses. The results of this diagnostic study were then shared with representatives of civil society and local government at a workshop. In this workshop, representatives of civil society and local government could agree or disagree with the results.
      

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Part III

Guidelines for measures to prevent corruption in development cooperation
Below is a series of measures to prevent corruption in development cooperation taken from a Transparency International publication on "Corruption and Development Aid" which is still in the process of being revised. For further information on these issues please contact Catherine Woollard (Programme Manager, Poverty and Development Programme) cwoollard@transparency.org and Aled Williams (Senior Research Coordinator, Policy and Research) awilliams@transparency.org.

To protect aid from corruption, by joint agreement between aid donors and recipients in each country, potential measures include:

1. Complete country financial accountability and procurement assessments and elaborate credible, monitorable and time-bound action plans for reform of budgeting, accounting, audit and procurement systems.
   
   
2. Establish in cooperation with civil society effective monitoring and public expenditure tracking systems.
   
   
3. Decide on a case by case basis whether to transfer aid in the form of project support or direct budget support, etc.
   
   
4. Link aid disbursements to progress on reform.
   
   
5. Ensure that all aid funds are reflected in recipient government budgets and subject to legislative and other oversight mechanisms.
   
   
6. Increase the transparency of public income and expenditure management and of all aid transactions and related monitoring systems.
   
   
7. Institute public sanctions against corrupt contractors, such as debarment, and require bidders to demonstrate effective implementation of internal anti-corruption policies.

By joint agreement among aid donors some advisable measures are:

1. Expand aid directed at strengthening national integrity systems, including building public financial management capacity and reinforcing legislative and civil society oversight mechanisms.
   
   
2. Develop tools and training programmes for incorporating corruption assessments into project and programme appraisal criteria, similar to environmental and social safeguard requirements.
   
   
3. Establish a clear, common system of incentives and sanctions linked to anti-corruption reform performance of aid recipients. Impose targeted sanctions against governments in proven cases of corruption involving aid funds, e.g. penalties for mis-procurement due to corruption.
   
   
4. Enforce the OECD Anti-Bribery Convention and the UN Convention Against Corruption with regard to private sector companies headquartered in donor countries and adequately resource the appropriate investigation and prosecution agencies.

To ensure that aid does not stimulate corruption:

1. Develop special strategies for combating corruption in disaster relief and debt relief programmes.
   
   
2. Integrate evaluation of potential impact on rent-seeking or corruption behaviour into reform proposals.
   
   
3. Support the strengthening of the oversight and accountability capacity of legislatures to monitor both budget allocations, actual expenditure and service delivery.
   
   
4. Promote civil society and aid beneficiary participation in carrying out corruption assessments and aid tracking and monitoring.
   
   
5. Use parallel non-governmental channels for aid when unavoidable (e.g. special funds like the Global Fund for AIDS/Malaria or through NGOs), but develop corresponding accountability mechanisms.

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Part IV

The World Bank produced in 2003 an "Anti-Corruption Guide: Developing an Anti-Corruption Program for Reducing Fiduciary Risk in New Projects. Lessons from Indonesia". This includes seven steps for developing an anti-corruption plan. Element six, in particular, advises how to "clearly define and announce remedies" for corruption that has occurred in projects. It in particular discusses measures to take if there is corruption or mismanagement in procurement processes.

The Danida Anti-Corruption Action Plan has three components, the first two of which consist of measures to improve procedures, rules and processes within Danida itself and implementing partners. Component 2 in particular mentions measures to prevent corruption. Such measures could include

1. Drafting a set of standard sanctions which will typically apply in case of corruption. These sanctions could include disbarment for a European company or cases being handed over to police.
   
   
2. A reporting mechanism for individuals to be able to report if corruption has occurred.

At the following link you will find further discussion of Danida's approach: http://www.um.dk/en/menu/DevelopmentPolicy/AntiCorruption.