U4 Helpdesk Query

Helpdesk response

Decentralisation is often used as part of an anti-corruption reform programme, but a poorly designed and implemented decentralisation programme is likely to lead to more corruption and waste of resources, not less. Among the risks encountered are the decentralisation of corruption by increasing the number of corrupt opportunities, political capture of the new local agencies through local elites, a decrease in public service delivery caused by maladministration and insufficient local capabilities, and macro-economic instability caused by red tape and insecurity.

One option for limiting the corruption risks associated with decentralisation is the introduction of special anti-corruption provisions, either in national statutes or in laws applying only to local governments.

Legal anti-corruption tools constitute an important means for showing commitment to reform, but their impact is dependent on the capacity of the enforcing institutions and the quality of accompanying legislative measures that work together to prevent or expose corrupt acts. It is thus essential, when deciding on whether an anti-corruption provision should be part of the national legal framework (and hence apply to all local authorities) or be drafted by or for the respective local authorities (and hence reflect local circumstances and needs more accurately), to consider not only the extent of decentralisation, but also the capabilities of the implementing institutions.

Independently of whether or not a legal provision is of national or local scale, it must be part of a legal framework that provides a reliable basis for corrupt acts to come to light – like access to information, obligations to inform affected parties prior to decisions being taken, access to meetings, agendas, audit reports, transparency provisions for procurement and tenders, codes of conduct and citizens' charters. There is also a need for provisions that substantially heighten the risk of corrupt transactions – like statutes that outlaw and establish punishments for bribery, nepotism and other forms of corrupt behaviour.

A. Commonly Used Preventative Legal Anti-Corruption Measures

1. Codes of Conduct and Conflicts of Interest

Generally speaking, a code of ethics sets out in broad terms those high-level values and principles that define the professional role of the civil service – such as impartiality, legality, integrity, fairness and responsibility. Codes of conduct, on the other hand, usually focus on the application of such principles in practice. They set basic enforceable standards for the day-to-day work of officials, for example in relation to whistleblowing, resolving conflicts of interest, and being accountable for official actions. Codes of ethics and conduct can apply to the entire public sector of a country or sub-national unit, or be tailored to reflect the ethics challenges of specific public agencies only. Codes which support public sector statutes and criminal laws can add to the legal framework.

Some local entities, such as Queensland in its Public Sector Ethics Act (1994) have enacted specific legislation on ethical conduct in the public sector. The Public Sector Ethics Act sets out the framework of ethics obligations within which Queensland’s civil servants operate and demands that they be used as a basis for the elaboration of a code of conduct. Each department's chief executive is obliged to develop and enforce a code of conduct, using the appropriate tools, and to report back to parliament on his or her progress.

http://www.austlii.edu.au/au/legis/qld/consol_act/psea1994210/

Codes, independently of whether they are drafted on the national or local level, should contain conflict of interest regulations that help to identify and to deal with actual, potential and perceived conflicts of interest, such as the employment of friends or family or actions that benefit a public officer’s economic or financial interests. Generally speaking, a conflict of interest arises when the private interests of a public official clash or coincide with the public interest and potentially inhibit the official’s objectivity in the exercise of his or her tasks and duties, and therefore bear the potential of seriously undermining the functioning of an organisation. Qualitative examples for codes addressing conflicts of interest include New South Wales’s Constitution (Disclosures by Members) Regulation of 1983 and Lithuania’s Law on the Adjustment of Public and Private Interests in the Public Service which refers specifically to local officials as well.

The enactment of a code of conduct can help improve the integrity of an organisation and thereby prevent corruption. Again, it is, by itself insufficient as an anti-corruption measure, and needs to be accompanied by a comprehensive training programme for civil servants expected to act under it, by awareness-raising measures to make sure the codes are known by the general public, and maybe even an enforcing body, such as the recently established Standards Board for England. It is responsible for promoting high ethical standards and investigating allegations that local authority’s behaviour may have fallen short of the required standards. It was formally established in March 2001, based on provisions of the Local Government Act of 2000.)

For further information on codes of conduct for local government authorities, please refer to:
Nelson, Mike, 1999:The Challenge of Implementing Codes of Conduct in Local Government Authorities

This paper examines the challenges involved in developing and implementing an effective Code of Conduct for Local Government Authorities. Different types of codes are discussed, as well as different approaches to formulating a code. Crucial elements of the effective implementation of a code are: Corporate, Strategic and Operating Planning Processes and Leadership. There are several operational areas where a well developed Code of Conduct can enhance organisational performance, including: procurement and supply; human resource management; and customer service. Finally, the paper suggests means of dealing with breaches of the Code.

2. Access to Information Laws

Knowledge of what government and governmental institutions do is fundamental to the power of the people to hold government and governmental institutions accountable.

Information is the prerequisite for effective civil society participation and monitoring of government activities. Free access to information enables citizens, the media and law-enforcement agencies to uncover cases of corruption and maladministration. More importantly, however, the transparency herewith achieved acts as a deterrent to bad governance as the risk of detection of illicit or otherwise questionable practices increases. Freedom of information is thus an essential element of sustainable corruption control.

Laws establishing the right to access on sub-national levels are particularly important as people will generally be more inclined – and able - to hold local leaders to account than to address malfeasance on the national level. Local access to information laws can also contain provisions that go further than national access to information laws.

Access to information provisions for the local level can be contained in local government statutes (for example, the UK’s Local Government Act contains provisions on the openness of meetings) or be enacted by local government entities (e.g. Scotland’s Freedom of Information Act of 2002 ). They can - and should - be complemented by measures to increase awareness of the provisions both among civil servants and the general public (through, for example, training seminars and the dissemination of user handbooks), and can be furthered by the introduction of mechanisms that increase accountability (through citizen participation, as is the case in Porto Allegre’s participatory budget system ), transparency (through facilitation of access to information by, for example, instituting a system of e-government as Seoul has done - this is, of course, only feasible if the internet and PC penetration of the population is high) and the quality of records management.

For further information on principles relevant to the effective implementation of access to information acts, please refer to:

Article 19, 1999: The Public’s Right to Know. Principles on Freedom of Information Legislation.
http://www.article19.org/docimages/512.htm

Article 19 has produced this set of international principles to set a standard against which anyone can measure whether domestic laws genuinely permit access to official information. The principles set out clearly and precisely the ways in which governments can achieve maximum openness, in line with the best international standards and practice.

Article 19 Model Law
www.article19.org/docimages/1112.htm

This Model Freedom of Information Law is based on best international practice, as well as a number of freedom of information laws from around the world. It is intended to respond particularly to the freedom of information needs of the countries of South Asia, and as such reflects a common law drafting style. At the same time, it represents global standards in this area and, therefore, is also relevant to civil law countries.

3. Declaration of assets held by local public officials

Asset declaration is a measure whereby public officials (and sometimes members of the judiciary and the legislature) are required to periodically declare their personal income and wealth for scrutiny by a state authority. It often also includes the income and assets of family members.

Asset declaration provisions are either incorporated into anti-corruption laws or adopted as stand-alone legislation or codes of conduct, in particular in many western democracies that are relying instead on traditions of institutional ethics, efficient income tax systems and public access to information. In drafting the legal provisions, particular attention should be paid to respecting legitimate aspects of privacy.

Apart from the legal framework for the declaration of assets, monitoring is crucial to the effectiveness of this provision. Monitoring can be done by already existing agencies, such as the ombudsman’s office or an anti-corruption agency, or through a system of random checks on accuracy of declarations, which can be a cost-effective addition to the conventional monitoring mechanisms.

Two good examples of national legislation on asset declaration referring explicitly to local authorities are Belize’s Prevention of Corruption in Public Life Act of 1994.
http://www.ti-bangladesh.org/cgi-bin/cgiwrap/Wtiban/bpvoview.cgi?../BP_PDFfiles/Monitoring_Assets_and_Life-Styles_of_Public_Officials/981295982__d8.html
and Thailand’s Declaration of Assets and Liabilities, Chapter 10, Part 1 of the 1998 Constitution http://www.ti-bangladesh.org/cgi-bin/cgiwrap/Wtiban/bpvoview.cgi?../BP_PDFfiles/Monitoring_Assets_and_Life-Styles_of_Public_Officials/981129946__thai.pdf

For further information on principles relevant to the effective implementation of access to information acts, please refer to:

Pope, Jeremy, (2000): TI Source Book 2000. Confronting Corruption: Elements of a National Integrity System, Chapter 20 - Monitoring Assets, Berlin, Transparency International

http://www.transparency.org/sourcebook/20.html

Increased concern about corruption and the decline of confidence in both integrity and capacity of public administration has prompted many governments to review their approaches to ethical conduct. Integrity of public officials can come under pressure in a variety of ways, and it is thus essential that ethical codes are tailored to the society's conditions. Integrity testing can have a role to play, and the assets and liabilities of officers at particular risk may need to be monitored.

4. Public Procurement

Legal provisions to ensure integrity, transparency and openness in local public procurement are important since local governments spend a large part of their budget on contracts with the private sector for the delivery of goods and services. At the same time, procurement contracts generate immense opportunities for corrupt payoffs with a comparatively low risk of detection and punishment.

A sound and consistent legal framework establishing the basic principles and practices for a fair and transparent procurement process is therefore advisable (such as Article 187 of South Africa’s 1994 Constitution at
http://www.ti-bangladesh.org/cgi-bin/cgiwrap/Wtiban/bpvoview.cgi?
../BP_PDFfiles/Public_Procurement/981297191__i10.html ), and will, if accompanied by open practices for conducting the procurement process (like, for example, Mexico’s COMPRANET http://www.compranet.gob.mx/ that automates the different stages of the contracting process and includes both information and transactions), be crucial in keeping corruption in procurement under control.

For further information on anti-corruption provisions for public procurement, please refer to:

Pope, Jeremy (2000): TI Source Book 2000. Confronting Corruption: The Elements of a National Integrity System, Chapter 22 - Public Procurement: Where the Public and Private Sectors Do Business, Berlin, Transparency International. http://www.transparency.org/sourcebook/22.html

This document, which forms part of the Transparency International Source Book on Fighting Corruption, provides a comprehensive overview of the issues involved in corrupt public procurement. It sets out the principles for fair and efficient procurement, discusses measures to combat corruption in procurement and draws up a list of indicators for assessing integrity in public procurement. The document is a useful resource for those involved in reforming procurement systems, but also for the general public seeking to learn about the link between corruption and public procurement. It contains a great number of cross-references to case studies.

Strombom, Donald (1998): Corruption in Procurement. In: Economic Perspectives. 3, No . 5

http://usinfo.state.gov/journals/ites/1198/ijee/ijee1198.pdf
Strombom looks at the ways in which corruption manifests itself in the different stages of the procurement process, reviews current international efforts to tackle the problem and offers an assessment of the difficulties associated with dealing with it. The more entrenched corruption is in the institutional culture of procurement agencies, the more difficult it is to curb it. Strombom concludes that corruption in procurement – just as in other fields – can not be fought in isolation: it needs to be part of a holistic anti-corruption strategy.

B. Sanctions for Corrupt Behaviour

The examples, listed above, for legal anti-corruption measures applicable to local governments, are not exclusive. The extent to which they are applied, and the nature of complementary steps taken to support the implementation of the law and to promote good local governance, will depend on the respective circumstances. It is, in any case, important to set out in the legal framework appropriate sanctions for those found guilty of corruption and related behaviours.

The definition of sanctions in cases of corrupt misconduct is designed to act as a deterrent for people to engage in corrupt actions, but the simple prohibition of corruption, even if accompanied by sanctions, is by itself insufficient to effectively and sustainably curb corruption on the local (or national) level. Legal definitions of corrupt behaviour are restrictive to be enforceable, and prosecutions are costly, as is the enforcement of sanctions. What is more, corruption is notoriously difficult to prove, since both parties will have a vested interest in keeping their illicit dealings quiet.

Where the stress is more on the sanctions for “serious corrupt conduct” (dismissal, temporary suspension, fines, etc) than on the prevention of corruption, it is unlikely that corruption will be curbed. It is thus advisable that the criminalisation of corruption and/or the threat of sanctions in case of capture be accompanied by a comprehensive and enforceable legal framework covering all aspects considered important to control corruption on the local level, and that the institutional capacity of the local authorities be taken into account when tailoring and sequencing reform and the introduction of new legislation.

NB:Local entities that have adopted efficient and effective anti-corruption strategies include:

Hong Kong
http://www.icac.org.hk/eng/main/

Seoul Metropolitan Government: http://english.metro.seoul.kr/government/policies/anti/
New South Wales
http://www.icac.nsw.gov.au/local_gov/local_gov.cfm