Transparency Internacional Annual Report 01 08 Print Version

8/3/2019 Transparency Internacional Annual Report 01 08 Print Version

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ANNUAL REPORT 2010


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Editors: Alice Harrison and Michael SidwellDesign: Sophie EverettCover photo: Reuters/Yannis BehrakisEvery e ort has been made to veri y the accuracy o thein ormation contained in this report. All in ormation wasbelieved to be correct as o June 2011. Nevertheless,

Transparency International cannot accept responsibilityor the consequences o its use or other purposes or in

other contexts.

ISBN: 978-3-935711-79-1Printed on 100% recycled paper.

2011 Transparency International. All rights reserved.

TRANSPARENCY INTERNATIONAL I

ORGANISATION LEADING THE FIGHMORE THAN 90 CHAPTERS WORLDWSECRETARIAT IN BERLIN, WE RAISEEFFECTS OF CORRUPTION AND WO

GOVERNMENT, BUSINESS AND CIVIIMPLEMENT EFFECTIVE MEASURES

This report provides a snapshot o how the TransparencyInternational movement was active in the ght againstcorruption in 2010.

For the purpose o conciseness, national chapters, nationalchapters in ormation and national contacts are re erred toas chapters, regardless o their status within TransparencyInternationals accreditation system.

Visitwww.transparency.org/chapters or their current status.

www.transparency.org


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WE ARE A GLOBAL SHARING ONE VISIOA WORLD IN WHICH GO

POLITICS, BUSINESS, CIAND THE DAILY LIVES AREFREE OF CORRUPTIO

DISCOVER HOW WE AROUR VISION INTOREALITY


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During 2010 we continued to seethe terrible cost o corruption. Sixty- ourmillion more people were pushed intopoverty since the nancial crisis struck,according to the World Bank. Such tragediesmake us ever more resolved to make a di erence

through our work. Throughout the year we submitted recommendations tothe Group o Twenty to integrate anti-corruption measuresinto direly needed global nancial re orms. These included astronger en orcement o the UN Convention against Corruption,tackling issues such as nancial havens and stolen assets, and vigorousen orcement o oreign bribery laws. We welcomed the ormation o theG20 Anti-Corruption Working Group, the role o which will be critical todriving this central agenda.

The Bangkok Declaration at the 14th International Anti-Corruption Con erenceissued a call to governments to do more to quell the fow o stolen assets away

rom societies that are mired in poverty. This call was echoed on the streets o Cairo, Tunis and beyond, where the topic o asset recovery is now on everyones lips.

Governments know that their people have a lot to gain rom a transparent, accountablesociety. Our report on the Millennium Development Goals showed that preventingcorruption has a clear development pay-o . But our leaders must also inspire con dencein their integrity. Our 2010 Global Corruption Barometer shone a light on growingpublic distrust o politicians and businesspeople. That goes or countries rich andpoor. Experts surveyed or our 2010 Corruption Perceptions Index perceived a seriouscorruption problem in the public sectors o nearly three quarters o 178 countries.

As we look ahead at implementing our new Strategy 2015, the energy and expertiseo our chapters, individual members, Advisory Council and secretariat will continue toenhance our impact at the global and local level and across sectors, turn the tideon impunity, and bring ever more people into the ght against corruption

As ar as we have come, so long as people still su er the humiliation and indignityo corruption, we will not waver in our commitment to see a world ree o its injustice.

Huguette Labelle, Chair

WELCO

GOVERNMENTS KNOW THAT THEIRTO GAIN FROM A TRANSPARENT, AC


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Corruption is a great injustice a crime against society that moreand more people are standing up against.

One o the astest growing initiatives o ourglobal network o chapters is to provide citizenswith anti-corruption advice. In 2010 thousands o individuals came orward to become drivers not justo personal solutions, but positive change or society.

We also have to make sure that individuals who lead by exampleare not le t to lead alone. One o our Integrity Award winners,Russian whistleblower Sergei Magnitsky, paid too high a price orexposing corruption when he died in prison. The search or justice in thatcase goes on, as will our e orts to secure greater protection or whistleblowersaround the world. Our report on whistleblower protection warned thatadequate channels or reporting crime are lacking in almost all EU countries.

Corruption is an issue that can topple incumbents at election time, and bringspeople into the streets. The grievances that drove the Arab protests that un urledin 2010 bore a striking resemblance to the problems our National Integrity Systemassessments o the region identi ed: lack o accountability, ree speech or NGOsand press, and rampant nepotism that destroyed trust in public institutions.

With our Integrity and Development Pacts we o er politicians a chance to rebuildthat trust by involving civil society and local communities, to ensure transparencyand accountability in such areas as procurement, education and healthcare.

These pacts were born out o the rm belie that to have the greatest e ect againstcorruption we must empower those who are most vulnerable to it.

As we embark on the implementation o our new Strategy 2015, it is the bravery o people who stand up to demand accountability rom those in power who inspireus, and whose sacri ces spur us on.

Cobus de Swardt, Managing Director

IT IS THE BRAVERY OF PEOPLE WHTO DEMAND ACCOUNTABILITY FROWHO INSPIRE US


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CONTENTSENGAGING GOVERNMENT AND BUSINEGovernment and Politics 8True Story: Family A airs 15International Conventions 16

Access to In ormation 20True Story: The Road to Sa ety 23Public Procurement 24True Story: Mafa Land Grab 29Private Sector 30De ence and Security 34Judiciary 38

SECURING BASIC NEEDSPoverty and Development 42Humanitarian Assistance 46

Access to Public Services 50True Story: Captive Mothers 55Natural Resources 56

EMPOWERING CHANGEProtecting and Advancing Rights 60

Anti-Corruption Education 64Recognising Leadership 68Forging Alliances 72

MEASURING CORRUPTIONCorruption Perceptions Index 2010 78Global Corruption Barometer 2010 83

DIAGNOSING CORRUPTIONNational Integrity Systems 84Driving Policy Change 86

BUILDING MOMENTUMContributions 88Financials 90

A GLOBAL MOVEMENT Transparency Internationalaround the World 92Board o Directors 94

Advisory Council 96Individual Members 98

Our Future Direction: Strategy 2015 99

+ POSTER!


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1445

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RETHINKING CORRUPTION IN THEMIDDLE EAST AND NORTH AFRICA

CORRUPTION CHALLENGESFOR A NEW MILLENNIUM

YOUR NAME ISNT ON THE LIST:HUMANITARIAN ASSISTANCE

RACE TO THE TOP:EMPOWERING COMMUNITIES

REDEFINING THE POSSIBLETHROUGH LEGAL ADVICE

HONOURING EXCEPTIONAL COURAGE:INTEGRITY AWARDS

WHAT ARE YOU GOING TO DO?14TH IACC, BANGKOK


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9Government and Politics

PROBLEM / Political corruption is not just a case o rigging elections. Whenprivate rather than public interests take precedent in elections and public policymaking, then the ne ethical line between par ticipatory democracy and statecapture is crossed. Elections can be skewed when individuals or organisations withtheir own agendas give parties large undisclosed sums o money, or when partiesand candidates buy votes instead o winning them through strong campaigncommitments. Once elected, politicians can seriously compromise the quality o government i their decisions bene t those who unded their rise to power, ratherthan the broader public interest. In countries where democratic institutions are

absent or ragile, political corruption can steal scarce resources meant or millionso poor and disadvantaged people. All this has serious implications or trust ingovernments and politicians. O the more than 91,500 people interviewed in our

2010 Global Corruption Barometer , eight out o 10 view political parties as corruptor extremely corrupt (see p.83).

SOLUTION / Political corruption can only be tackled when people demandintegrity and accountability rom their politicians and public o cials. By deliveringon strong anti-corruption commitments, our leaders can improve trust in politicalinstitutions and processes. Through increased levels o transparency, voters areable to make in ormed choices about candidates on voting day and hold themto account once elected. Civil society has a crucial role to play in monitoringelectoral campaigns and the activities o political parties, reporting conficts o interest, tracking abuses o state resources, and advocating or regulations thatcontrol corporate lobbying and the unding o political activities. Companies candemonstrate that their donations are not a means to gain personal or political

avours by publishing their donations policy and all contributions made. Ultimately,everyone stands to win rom corruption- ree elections and accountable publicdecision-making, including politicians.


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10 Transparency International Annual Report 2010

AFRICA AND MIDDLE EAST A new constitution approved by Kenyan citizensin 2010 provides or enhanced public participationin governance and stronger checks and balances.Many o the provisions refect the recommendations

submitted by TI Kenyato the constitutional reviewpanel. The chapter is now advocating or strong lawsand policies to implement the new constitution.

A ter monitoring Lebanons 2009 parliamentaryelections, the Lebanese Transparency Association watched over campaign nancing during the municipalelections in 2010. About 200 people were deployedin 21 cities to monitor our rounds o voting. Themonitors exposed and reported several violations,such as vote buying and abuse o o cial resources.

The chapter will release its ndings in 2011.

A ter months o sustained pressure by our Palestinianchapter, AMAN, and other civil society organisations,the Palestinian government in 2010 launched the

Anti-Corruption Commission and implemented anupdated Anti-Corruption Law. The government alsoappointed the chapters pre erred candidate to leadthe commission. The decisions came just monthsa ter AMAN participated in a march through Ramallahin support o stronger anti-corruption policies.

In order to promote citizen participation and improvelocal government transparency, our chapter in Senegal ,Forum Civil, established a citizen certi cationprogramme. Citizen committees will evaluate thework o local o cials based on a variety o accountabilityand e ciency measures, including budget and publicaid transparency, asset declarations, adherence toprocurement laws, the number o women in publico ce and access to government in ormation. O cialsand citizen groups will work together to address anyreported weaknesses.

AMERICAS A ter 27 years o uninterrupted democracy in Argentina,our chapter Poder Ciudadano is carrying out the

rst-ever assessment o the development and qualityo democracy in the countrys 23 provinces. Initial

results con rm that the e ciency o provincialdemocratic systems varies, and that legislatures andcourts can be biased due to pressure rom provincialgovernors. Following an investigation o issuesincluding constitutional compliance, election airness,

reedom o expression and the role o women, thechapter will publish its ndings and conduct site visitsto promote them urther.

For the rst time ever, Colombias parliamentaryand presidential elections have been held withthe support o a centralised campaign nanceaccountability system. The Clean Accounts ( Cuentas

Claras ) system, which Transparencia por Colombia donated to the National Electoral Council, requiredcandidates and political parties running in the May2010 elections to submit income and expenditurestatements. Among many signi cant bene ts, thegovernment could review reports more e ciently,and political groups had more real-time control overcampaign income and spending.

The online transparency o Uruguays regionalgovernments is not su cient and needs to beimproved, according to a survey by our chapterUruguay Transparente. Based on 100 indicators,

the survey assessed in ormation on the regionswebsites regarding economic and nancialtransparency, and transparency in service contractingand public works. None o the countrys 19 regionsreceived the highest ranking, 16 were labelledrestricted, two limited and only one received amoderate ranking.

Transparencia Venezuela s Citizens Budget(Presupuesto Ciudadano ) initiative promotestransparency in the allocation o public resources.

The chapter is advising a number o regional andlocal governments, and organisations working in the

elds o education, health, security and de ence onhow they might use the Citizen Budget to designprojects and monitor budget allocation.


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Government and Politics

EUROPE AND CENTRAL AFollowing its detection o campaign nance irregularitiesduring the 2010 elections, TI Bosnia and Herzegovina proposed re orms to ederal elections laws includingthe publishing o campaign contributor in ormation,

enhanced election monitoring and tougher sanctionsor violators. The chapter is working to implementthe re orms with the ederal elections agency, whichsupports the proposals. The chapter has also askedprosecutors to determine whether the Minister o Energy, Industry and Mining improperly receivedprivate unds or his re-election campaign. The caseis being investigated by the Prosecutors O ce.

Engaging in one o the countrys most controversialpolitical issues, TI Germanyjoined three other civilsociety organisations in calling or more transparencyin political party nances. Parliament is yet to act on

the matter, but the chapter is continuing its advocacywork and media outreach.

A ter discovering apparent violations o nancialdisclosure rules, the Center for Anti-CorruptionResearch and Initiative TI Russia called on thegovernment to crack down on public o cials who ailto properly report their income and assets. Accordingto the chapters research, a number o electedDuma members did not submit their required annualdisclosures, and some les contained discrepanciessuch as gaps between income and assets. The chapter,whose ndings received widespread media coverage, is

advocating or illicit enrichment to be penalised. The UK passed an updated anti-bribery law in April2010 that ollowed recommendations rom TI UK,calling on the government to ully comply with theOECD Anti-Bribery Convention. The new UK Bribery

Act, which the chapter has been advocating or thepast 12 years, prohibits bribing a oreign public o cialand makes it illegal or a company to ail to preventa bribe being paid or or on its behal . The chaptercomplemented the law by issuing guidance or companiesbased on our Business Principles or Countering Bribery .

ASIA PACIFIC Taking on the challenge o money in politics,TI Malaysiapublished a book that calls or moretransparency in campaign nancing, strong andindependent regulation, and a reduction in political

parties stakes in corporations. Re orming Political Financing in Malaysia was released at the launch o the chapters campaign to re orm political nancing,attended by more than 100 government o cials,civil society members and journalists. The chapterhas also been asked to serve as a consultant to theMalaysian Anti-Corruption Commission.

Transparency Solomon Islands assisted inmonitoring the countrys August 2010 generalelection, working to ensure it was air, transparentand corruption- ree. Chapter representativeswatched over polling stations and monitored ballot

counting. Though the chapter was generally satis edwith how the election was conducted, it madeseveral recommendations to the national ElectoralCommission, including how to improve voter educationcampaigns and overhaul voter registration lists.

Monitoring the countrys presidential andparliamentary elections in 2010, TI Sri Lanka uncovered widespread misuse o public resourcesby political parties. The chapter released reportsdetailing the improper use o government vehicles,aircra ts and buildings. The reports also includedexamples o public o cials campaigning while on

duty, in violation o regulations. The chapter has madea number o recommendations to improve integrity inthe electoral process, including conducting electionsunder a caretaker government and introducingcampaign nance re orms.


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Transparency International Annual Report 201012

// PUSHING THE G20 TO ACT ON FINANCIALEach year up to US $1.8 trillion in illicit unds derived rom corruption, tax evasionand organised crime circles the globe, skirting nancial regulations. These sumsdwar those earmarked or achieving the Millennium Development Goals. And whilethe global nancial crisis exposed these regulatory shortcomings, it also threatenedto plunge an additional 64 million people into poverty by the end o 2010, accordingto World Bank gures.

Throughout 2010, we continued to call upon the Group o 20 (G20) leadingindustrialised countries to incorporate anti-corruption and accountabilitymechanisms into global nancial regulatory rameworks, in an e ort to curb illicitmoney fows and eliminate tax havens.

The G20 Anti-Corruption Action Plan o ered hope that G20 leaders are listening. Their nine point agenda drew on our recommendations, outlining positive actionon asset recovery, money laundering and visa bans or corrupt o cials. Whilethis commitment is welcome, overall implementation remains unsatis actory. Forexample, our G20 members have still not rati ed the UN Convention againstCorruption, despite its entry into orce in 2005.

We are actively monitoring progress on the implementation o the Action Plan atnational and global levels, and will continue to hold G20 leaders to their pledges.

// ENGAGING THE EU IN THE FIGHT AGAIN The European Union has an opportunity to be a leader in the global ght againstcorruption. It has signi cant infuence in its 27 member states, and as the largest donorto development programmes it can demonstrate good practice worldwide. But theEUs potential is hindered by its lack o a comprehensive anti-corruption strategy.

Our Brussels-based EU o ce works to strengthen the ght against corruptionat the EU policy level. This includes advocating or EU institutions to adopt morestringent codes o conduct and transparency standards. We have repeatedly called

or the establishment o robust lobbyist rules or all EU institutions, including theEuropean Commission, Parliament and the Council. As o 2010 a transparencyregister is being ormulated. Our pressure also helped spark a review o the EuropeanCommissions code o conduct, a key step in reducing potential conficts o interest.

During 2010 we also e ectively advocated or the creation o an EU-wideanti-corruption reporting mechanism in the ramework o the EU StockholmProgramme. This ve-year action plan sets out a strategic course or thedevelopment o reedom, security and justice across the EU.

As part o our engagement with EU private sector policies, we joined EU expertworking groups and cabinet-level meetings on corruption prevention measures orthe private sector, and partnered with several NGOs to call or EU-level regulationon nancial disclosure standards or extractive industries legislation now in thepipeline or 2011.

We continue to provide anti-corruption expertise to EU institutions and keystakeholders involved in the EU enlargement process and the EuropeanNeighbourhood Policy (see p.13), as well as underscoring the importance o integrity and anti-corruption in the success o development projects.


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13Government and Politics

// ANTI-CORRUPTION IN THE SOUTH CAUCAWhen governments lack strong anti-corruption policies, people have less chanceto hold their leaders to account. Under the European Neighbourhood Policy acooperation agreement between the European Union and 16 surrounding states 13 countries have committed to Action Plans or improved governance and integrity.

The European Commission reviews these plans yearly, and in 2010 our chapters in Armenia, Azerbaijan and Georgia conducted robust parallel assessments. Amongthe ndings: Azerbaijan has well-cra ted anti-corruption laws on its books but lagsin implementation, while Armenia and Georgia must do more to increase judicialindependence.

By highlighting shortcomings in national anti-corruption legislation and oversight,the reports support ongoing re orm e orts that will help ease the burden o corruption on citizens.

" EIGHT OUT OF 10 PEWORLDWIDE VIEW PO PARTIES AS CORRUPT EXTREMELY CORRUP GLOBAL CORRUPTION BAROMET


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14

RETHINKING

CORRUPTION IN THEMIDDLE EAST ANDNORTH AFRICA

Huge e ort is required to break the belie thatcorruption in daily li e is inevitable. We are workingwith governments, civil society and the private sectorto develop and realise e ective anti-corruption re orms.Central to their success will be strengthening localcivil societys capacity to demand better governanceand monitor change.

Everyone can make a di erence. At the grassrootslevel, we are inspiring people to take action throughthe regions rst anti-corruption legal advice centres.Located in Lebanon, Morocco and Palestine (Gazaand the West Bank), they o er ree legal advice andsupport to victims and witnesses o corruption viacon dential hotlines and meetings, enabling people tohave their cases acted on. The public response hasbeen overwhelmingly enthusiastic. Successes range

rom improving Palestinian laws on tra c nes, toexposing demands or bribes by government revenuecollectors in Morocco. The Lebanese centre helped amother whose child was raped, a ter the police wereallegedly bribed to ignore her.

Each case gives the centres a better understandingo corruption as it truly occurs. This knowledge uelsevidence-based advocacy campaigns that reshapeboth legal rameworks and social norms.

Weve de ed some taboos, in particular againstindividuals openly challenging public bodies, says

Ali. Now theres so much more we can do to stopcorruption rom holding Morocco back.

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FAMILY AFFAtrue story

In an e ort to stamp out nepotism in local government, Guatemalapassed a law in 2002 making it illegal or mayors to employ amilymembers in public o ce. But one citizen could see that this wasnt beingen orced. Juan* had reason to believe that his local mayor had hired around10 relatives, including his wi e, sons and daughters.

Juan took his concerns to his local Controller General O ce, whichaudits the assets, expenditures and payrolls o public o cials andinstitutions. Here Juan was reportedly told that pursuing the casewas unlikely to bring about change, and that he would only be puttinghimsel at risk in doing so. Juan also approached his local journalistsassociation, which re used to help or the very same reason.

Upon reading about our chapter in Guatemala, Juan turned to themor help. On Accin Ciudadanas advice, he wrote to the mayors o ce,

requesting copies o its employment contracts. The o ce allegedlyignored Juans request, so Accin Ciudadana contacted them again, andthis time they provided the documentation.

Juan returned to the Controller General O ce but says they re used toaccept the contracts as proo o nepotism, claiming they had checked thepayroll at the mayors o ce and ound no one related to the mayor on it.

At this point Accin Ciudadana decided to take the case to the capital. They helped Juan report his ndings to the Controller General O cein Guatemala City, and later ollowed up with them to ensure that theyconducted an audit o the mayors o ce in his home town.

While this was a positive step, it brought Juan some unwanted attention.On route to the Controller General O ce, he claims he was pulled o abus by armed men, bundled into a car and driven into the orest, wherehe was robbed and told to abandon the case. On a separate occasion,Juan reported being con ronted by men with guns, who threatened to killhim i he continued to cause trouble.

But Juan bravely stood by the case. Following their investigation, theController General O ce called or the removal o the mayors ve closestrelatives rom o ce. To ensure that the mayor would comply, Accin Ciudadanatook the story to the local media. Five o the relatives soon stepped down.

* Names have been changed

Transparency International provides ree advice and legal support to victims andwitnesses o corruption in almost 50 countries around the world. To date, more than95,000 people have sought help (see p.63).

...HE WAS PULLED OFF A BUS BY ARMED MEN, BCAR AND DRIVEN INTO THE FOREST, WHERE HE TOLD TO ABANDON THE CASE


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AMERICASTransparencia por Colombia is urging politicalleaders to incorporate standards set by globalanti-corruption conventions into Colombiasnational laws and policies. Our chapter has o ered

senior government o cials advice on shaping acomprehensive anti-corruption policy and a proposedanti-corruption bill. The chapters latest indices o national, regional and municipal government revealeddramatic corruption risks, reporting high risks in 44per cent o 159 surveyed national agencies.

Our chapters in nine Latin American and Caribbeancountries have called on o cials to meet theircommitments to the Inter-American Conventionagainst Corruption. The chapters reviewed compliancein Chile, Colombia, the Dominican Republic,Ecuador, El Salvador, Mexico, Nicaragua, Panama

and Trinidad and Tobago in line with the o cialollow-up mechanism and ound it to be inadequate.We have since persuaded governments in the

Americas to allow compliance experts to conducto cial monitoring visits in the region.

The Organization o American States (OAS) hasconsistently upheld anti-corruption as a key priority,but member state commitments are somewhat lessconsistent. All but one o the 34 members rati edthe Inter-American Convention against Corruption,yet not all the states participate in its monitoring.Furthermore, while the 2010 General Assembly

ocused on peace and security, its dra t declarationailed to emphasise corruptions role in exacerbatingcrime and insecurity.

In the run-up to the assembly, we met with OASSecretary General Jos Miguel Insulza to presentrecommendations or strengthening governance,peace and security. These included removing restrictionson civil societys ability to monitor compliance withthe convention, increasing transparency in de enceprocurement, and improving access to in ormationlegislation in all member countries.

ASIA PACIFIC To ensure Taiwans anti-corruption policies meetinternational standards, TI Chinese Taipeicarriedout research into the gaps between Taiwans legalsystem and the UN Convention against Corruption.

The chapter identi ed various shortcomings, presentedits ndings at a workshop o ethics o cials and maderecommendations to the government. TI Chinese Taipeibelieves that improving public in ormation laws is oneo the top priorities or tackling corruption in Taiwan.


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19International Conventions

// FIGHTING FOREIGN BRIBERY: A MINORITDespite positive progress, most o the worlds leading exporting countries are stillnot en orcing a ban on oreign bribery, our 2010 Progress Report on the OECD

Anti-Bribery Conventionrevealed.

The reports sixth edition ound that in 2009, seven o the 36 countries evaluatedwere active en orcers o the convention, which prohibits multinational rms rombribing oreign public o cials during business transactions. This is an improvementover the our active en orcers in the previous edition. Nine other countries showedmoderate en orcement. In the six years o our monitoring, en orcement hasdoubled rom eight to 16 countries, with these active and moderate en orcersaccounting or 51 per cent o world trade.

Alarmingly, 20 countries still had little or no en orcement, meaning a majorityo OECD governments are ignoring their commitment to stop the corrosive e ecto bribery on economic activity. Concern also remains over the trend toward

oreign bribery cases being resolved via negotiated settlements, since theseagreements are o ten opaque.

Additionally, one third o world exports come rom countries that are not partyto the OECD convention, including major players like China, India and Russia.

The OECD should expedite its e orts to bring more countries into the convention,while countries en orcing the convention can exert positive peer pressure onthose lagging behind.

The advance o Denmark, Italy and the UK to active, and Argentina to moderateen orcement was a positive step. More OECD governments must recognise thevalue to their rms o a business environment characterised by transparent,bribe- ree transactions.

" SIGNING UP TO A CO IS ONLY A FIRST STEGOVERNMENTS MUST

THEIR PROMISES INTO


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PROBLEM / In ormation is power. I it is not reely provided and accessible,corruption can thrive. People with privileged access to in ormation might demandbribes rom those seeking access to it, or may pro t rom a veil o secrecythat makes corrupt acts undetectable. When citizens are denied their right toknow, voters make unin ormed choices, politicians cannot be held to account,and corrupt o cials are ree to act with impunity. When government controlor censorship o the media prevents the acts being reported, then the truth isbeing gagged. Withholding in ormation rom the public demolishes trust andaccountability, and breeds discontent. Peoples ability to participate in political li e

is limited, and their understanding o their rights curtailed.

SOLUTION / Access to in ormation needs to be two-way: the state mustproactively disclose it, and citizens need to capture the spirit o demanding it.Disclosure has to be backed up by a proper legal ramework that sets downaccess to in ormation as a key sa eguard in preventing corruption. National accessto in ormation laws have proven invaluable in monitoring areas with speci ccorruption risks, such as water, health and education services, or or running checkson public spending in campaign nances. Citizens have a valuable role to play inensuring that these laws are adhered to. Countries should also adopt and abideby global treaties such as the UN Convention against Corruption, which recognisepublic reporting and access to in ormation as crucial to preventing corruption.

Anti-corruption conventions like these provide a checklist or re orming governmentsand represent a tool or civil society groups to hold their governments accountable.

ACCESSINFORMA

Access to Information


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ASIA PACIFICContinuing its right-to-in ormation campaign,TI Bangladesh held 24 in ormation airs, attendedby nearly 100,000 people 49 per cent o whomwere women. More than 400 government agencies

and civil society organisations sta ed booths at theevents. The campaign ocuses on key public servicessuch as health, education, local government, socialprogrammes and justice. The chapter teachescitizens how to access public in ormation, whilsttraining government o cials on how to release it.

To build public support or a national access-to-in ormation law,TI Sri Lankabegan partnering witha community radio station to produce a programmethat educates citizens about their rights. Debutingon Uva Community Radio in August 2010, Peoples

Voice ( Jana Nada ) connects right-to-in ormation

issues to undamental citizen concerns about ood,water, work, health, education and utilities. Aired inSinhala and Tamil, the show discusses how a lack o in ormation stifes community development.

EUROPE AND CENTRAL ATI Croatialaunched a public advocacy campaignthat coincided with the inclusion o a right-to-in ormationprovision in the countrys constitution. The chapterheld press con erences and distributed fyers in

17 cities to raise citizen awareness o governmentin ormation issues. A roundtable discussion held inMarch was attended by representatives rom politicalparties, civil society organisations, labour unions andlegal groups. In June, the government amended theconstitution to include access to in ormation as a

undamental human right.

Following a report by TI Georgiahighlightingopaque ownership o media companies, the chair o Georgias parliament announced that he would seekmore transparency in the television industry. Theownership o two major media companies and some

smaller television stations is unknown, leading toquestions o possible political bias and manipulation. A vote on the amendments is expected in 2011.

In the lead-up to Latvias 2010 national elections,as the country aced political upheaval and citizendiscontent, TI Latvialaunched a specialised website

ocusing on political accountability and voter education. Visited by nearly 50,000 people, the website www.kandidatiuzdelnas.lv eatured in ormation onpolitical parties, corruption scandals and Latvias so-called oligarchs, as well as candidate statements andvideo blogs. An updated version o the website

is monitoring the new parliaments activities.

AFRICA AND MIDDLE EAST To encourage the media to engage more withcorruption and ethical issues, TransparencyEthiopia initiated a journalist roundtable initiativein cooperation with the Federal Ethics and Anti-

Corruption Commission. Attended by reportersrom prominent print and broadcast media outlets,the discussions ocus on barriers to reporting oncorruption and the need to conduct ongoing anti-corruption sessions. The chapter plans to orm ananti-corruption network o Ethiopian journalists.

As several laws limit government openness, ourSenegalese chapter, Forum Civil, worked withseveral other civil society organisations in 2010 topropose a new law aimed at improving public accessto in ormation. The dra t law calls or time limits torelease in ormation, names who is responsible or

releasing in ormation and, most importantly, wouldestablish an oversight committee to resolve disputes. The countrys Ministry o Communication supportsthe proposal, which the chapter is promoting withadvocacy and public awareness campaigns.

AMERICASPartnering with two ederal agencies, our chapter inEl Salvador has launched an initiative to enhance

scal transparency by subjecting the countrys

budget process to more citizen access and input.Fundacin Nacional para el Desarrollos LetsMake El Salvador Transparent campaign arguesthat greater citizen engagement holds the potentialto improve budget transparency, while boostingeconomic development and reducing inequality.

A range o Latin American experts presentedinnovative ideas on how to improve citizen accessto government in ormation at the ourth internationalseminar on Access to Public In ormation: aGuarantee or Democracy, held in Venezuela.Organised by Coalicin Proacceso, a coalition which

includes Transparencia Venezuela , the event drewdiverse participants who agreed to lobby the National Assembly on a right-to-in ormation law, promote newlocal in ormation access laws and assist citizens inrequesting public in ormation.


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THE ROAD TO true story

This story may end well, but it started tragically. The Czech roadsa ety organisation Drivers Association was concerned that a serieso advertising billboards were putting drivers sa ety at risk along oneparticular stretch o road. Ten people had died there in 12 months.

The Drivers Association brought the accidents to TI Czech Republicsattention. They claimed that the billboards had been positioned closer

to the motorway than Czech sa ety standards allow, and lacked crash-barriers. Similar boards had sprung up across the country, with theauthorities consent.

Following up on reports that a group o politicians had signed o on theplacards in exchange or discounted media coverage during electioncampaigning, TI Czech Republic contacted the motorway authorities,requesting a copy o the contracts made with advertising companies.But it was denied access to the ull document, and given a brie summary instead.

Thanks to TI Czech Republics persistence, an access to in ormationrequest was taken all the way to the Supreme Administrative Court, whichruled that members o the public could no longer be denied access togovernment contracts.

As a result, TI Czech Republic, Drivers Association and other partiesinvolved in the case were able to inspect the contracts or the billboards,and uncovered a series o concerns. They called a meeting with theMinistry o Transport and the Road and Motorway Directorate, which

undertook to terminate the contract and ensure road sa ety standardswere strictly adhered to in the uture. Since then, the Czech Minister or Transport has announced a nationwide ban on all roadside billboards.

Transparency International provides ree advice and legal support to victims andwitnesses o corruption in almost 50 countries around the world. To date, more than95,000 people have sought help (see p.63).

... A SERIES OF ADVERTISING BILLBOARDS WERDRIVERS SAFETY AT RISK ALONG ONE PARTICULOF ROAD. TEN PEOPLE HAD DIED THERE IN 12 MO

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25Public Procurement

PROBLEM / Trillions o dollars are spent every year worldwide on publicly undedprojects everything rom schools and hospitals, to roads and bridges, to powerplants and dams. Corruption in any o these processes increases the cost o services to citizens, reduces the quality o work or services, and ultimately erodespeoples trust in their leaders.

The enormous amounts o money fowing rom government budgets throughprocurement create ideal opportunities or corruption. Contracts can be awardedwithout air competition and politically connected companies can be avouredover competitors. Companies within the same industry can rig their bids, so eachcompany gets a piece o the pie. Our research shows that corruption can add onas much as 50 per cent o a contracts value. Corruption in public procurement isnot just about money though, it can cost lives. Incidences o collapsed buildingsand counter eit medicines have happened in many countries.

SOLUTION / Everyone, rom individual citizens to high-level government o cials,can play a role in ensuring tax payers money is spent on good quality services ata air price or all. Procurement systems need to be transparent and accountable,with regulations that meet international standards. Strong institutions, adequatechecks and balances, e ective reporting and complaints mechanisms, broad accessto in ormation, and the strong en orcement o laws and regulations are required.

Many o our chapters are monitoring procurement and promoting Integrity Pacts , a tool developed by Transparency International a decade ago. Thepacts are agreements between government agencies and bidders or a publicsector contract to abstain rom bribery, collusion or other corrupt practices. Anindependent external monitor ensures the pact is not violated. Pacts have beenapplied success ully in more than 15 countries with the total amount monitorednow well over 300 worldwide. An Integrity Pact manual has been produced incollaboration with the Water Integrity Network to promote them in the water sector.

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AMERICASOur chapter in Argentina conducted research intoestablishing a transparent, accountable and e cientelectronic contracting and procurement system.In order to lay the groundwork, Poder Ciudadano

analysed e-procurement systems in Brazil, Chile,Mexico, and the Argentine cities o Buenos Airesand Morn. They also held educational workshopsattended by government, business and civil societyleaders, dra ted an implementation plan, and sharedtheir research ndings with government o cials.

More than 40 per cent o government agencies inthe Dominican Republicdo not comply with publicprocurement laws, according to research by our chapterParticipacin Ciudadana . To improve the situation,the chapter is advising procurement o cials, privatecontractors, and business and civil society groups.

Four government agencies have asked the chapter toreview their contracting systems. According to chapterresearch, transparency and public accountability isimproving in 12 o 21 key government institutions.

Marking the rst time that a TI chapter has monitoreda UN con erence, Transparencia Mexicana signedan agreement with the Mexican government and UNagencies to review all administrative and procurementprocedures or the UN Climate Change Con erencein Cancn in 2010. The costs o the Cancn summitwere held to US $100 million.

A 2010 survey by our chapter the Trinidad andTobago Transparency Institute reports thatcorruption is endemic in the countrys constructionindustry. More than one quarter o respondents saidcorruption costs them about 100,000 per year. Agovernment commission has acknowledged manyo the chapters proposals as being important tore orming the industry. Questions have been raisedregarding the governments prestige projects, overseasconsultants, raudulent invoices, project ast-tracking,and weak governance and procurement procedures.

AFRICA AND MIDDLE EASTOur Senegalese chapter, Forum Civil, achieved apartial victory in its e ort to convince the governmentnot to water down procurement rules. The governmentsought to signi cantly weaken the rules in 2010 to reduce

oversight and make it easier to make discretionaryand no-bid contracts. Following advocacy e ortsrom the chapter, the government removed most

o the contracting exemptions and agreed tomaintain balanced oversight committees, with threerepresentatives each rom government, civil societyand the private sector. However, the government hasnot yet clearly de ned state secret projects that arenot subject to bidding or public oversight.

With a large percentage o government spendingsubject to procurement processes, TI Sierra Leone released a handbook to demysti y the countrys

procurement rules. The chapter worked with ederalo cials to writePublic Procurement Made Simple . They held a two-day training session on procurementand budget processes or civil society groups, communityorganisations, and youth and womens groups. Thechapter also ormed monitoring teams to watch overprocurement processes and revenue collection.


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ASIA PACIFICFollowing sustained advocacy by TI Malaysia, thecountrys Ministry o Finance directed all governmentagencies in April 2010 to integrate our IntegrityPacts into their public procurement procedures. The

ministry has issued sample contracts to be signed byall participants in the procurement chain, includingsuppliers, government procurement o cers andtender committee members. The chapter will traingovernment agencies to implement the pacts andeducate companies and industry groups on their newresponsibilities under the agreement.

Large sums o money have been saved as a resulto TI Pakistans role in establishing a monitoringprogramme or public procurement contracts.Hundreds o procurement violations have beenreported to authorities, including 128 cases

opened through the chapters anti-corruptionlegal advice centre, and a number o o cials havebeen prosecuted. In two cases alone, involving theinsurance and utility industries, the Supreme Courthas recovered about US $60 million stemming rommisappropriated unds and contract violations.

EUROPE AND CENTRAL AResearch and advocacy by TI Bulgariahelped todramatically reduce the cost o building a sectiono the countrys Trakia highway. The original 1.5 billioncontract was awarded in 2005 without a public tender

or independent monitoring. A ter evaluating the deal,the chapter asked national and European o cials toreconsider it. With TI Bulgaria serving as an o cialobserver, a new contract was signed in 2010 or 247million. The chapter has also trained 20 other civilsociety groups to use its monitoring system.

Government o cials who attended training sessionsorganised by TI Italylearned how to improve publicprocurement systems and manage European Union

unds. About 100 o cials attended sessions in Romeand Milan to discuss ethical behaviour, sustainableprocurement and our Integrity Pacts, which were

signed in the city o Legnaro in 2010 and are beingconsidered or use in other cities.

With a new website created by TI Slovakia, thepublic can now research all public procurementcontracts worth more than 60,000 that have beensigned since 2005. The Open Public ProcurementJournal at http://vestnik.transparency.sk providesin ormation on private contractors, the level o procurement competition and sector-speci c suppliers.

The site has drawn about 10,000 visits, and more areexpected when an English version is launched.


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//DETERRING BRIBERYAT EXPORT CREDIT AGENExport credit agencies provide credit and insurance

or international business deals. In 2008, these publicand semi-private agencies underwrote more than US$1.5 trillion in transactions, spurring economic activityand contributing to the global recovery. But withthese huge sums o money, the threat o corruption isever-present.

Our 2010 Export Credit Agencies Anti-Bribery Practices report shows that even as a growingbody o good practices emerges in the sector,agencies still have work to do notably in the area o implementing their bribery prevention measures.

There is encouraging progress since the OECD rstadopted detailed anti-bribery measures in 2006. All14 o the export credit agencies surveyed now haveno-bribery declarations, and most o them have

ormal bribe-deterrence policies. But inconsistencies

in policy implementation remain a concern. Forexample, while certain agencies have designatedsta to oversee their anti-bribery measures and havecreated ormal written guidelines and sta trainingprogrammes, others have only ad hoc arrangements.

Overall, while some agencies exhibit good practicesthat others can replicate, so ar there is little evidenceo bribery deterrence policies in operational practice.More must be done to tighten agencies anti-briberycommitments.

" EVEN AS A GROWING BODY OF GOOD PRACTICES EMERGE IN THE SECTOR, AGENCIES STILL HAVE WORK TO DO


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29

Amir and his wi e Fatima* won a government-run auction or a smallplot o land on the outskirts o Karachi, and began saving to build ahouse. With time, the citys boundaries expanded and the site becameprime real estate. As part o the agreement, Amir and Fatima paidregular contributions towards developing the local in rastructure. But theauthorities reportedly ailed to service the land with water and electricity,

and link it to the regional road network.Upon retiring, Amir returned to his plot o land with a view to nally buildinghis home. He was greeted with a wall that had been erected around thesite, watched over by armed guards. Amir claims he was barred romentering, and told that the property belonged to somebody else.

With proo o his ownership in hand, Amir went to the police station to lodge acomplaint. When the police re used to le the report, he turned to TI Pakistan,and together they dra ted a letter to the judiciary. In turn, the judiciarycontacted the police, who lodged the report, hereby giving Amir thego-ahead to process his complaint through the courts.

But the case never came to court. Instead, a ew months later, the wallaround Amir and Fatimas land was mysteriously removed, and theguards vanished. TI Pakistan subsequently learned that a local politicianhad allegedly been involved in the appropriation o Amir and Fatimasproperty, and had likely been deterred rom pursuing the case by TIPakistans involvement.

Land grabbing by the so-called land ma a is reportedly proli c inPakistan, particularly in and around Islamabad, Lahore and Karachi. In

some cases, housing authorities have allegedly colluded with propertydevelopers, who employ private militias to secure the land.

Amirs case highlights how a lack o integrity in property and land issuesin Pakistan can arise. He has been paying service ees or his land since2005, but without water or electricity it remains ill-suited or development.

Nonetheless, TI Pakistan hopes that its success ul intervention in Amirscase will encourage others like him to in orm on illicit practices, and helpbring about positive change.

* Names have been changed

Transparency International provides ree advice and legal support to victims andwitnesses o corruption in almost 50 countries around the world. To date, more than

95,000 people have sought help (see p.63).

HE WAS GREETED WITH A WALL THAT HAD BEENTHE SITE, WATCHED OVER BY ARMED GUARDS

true story

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31Private Sector

PROBLEM / Recent high-pro le scandals have shown that corruption does notalways make or lucrative pro ts, but rather he ty nes, damaged reputations and

jail sentences. Corruption also distorts markets and creates un air competition. Yetbribery in business persists, and is perceived as widespread. Almost a th o morethan 1,000 executives surveyed by Ernst & Young claimed to have lost businessdue to a competitor paying bribes; more than a third elt that corruption was gettingworse. It is not uncommon or domestic rms and multinationals to pay bribes tosecure public procurement contracts. Many companies have opaque subsidiariesand partnerships, or seek to illicitly infuence political decision-making. Others skirt

tax laws, construct cartels and bid-rigging circles or exploit legal loopholes beyondtheir limit. Given the enormous infuence that private interests wield in many publicspheres such as energy, transportation, natural resources and healthcare it is hardto overstate the negative e ect that private sector corruption has on the taxpayer.

SOLUTION / Private sector corruption needs to be tackled through a three-pronged approach: prevention, en orcement o laws and regulations, and thepromotion o greater transparency and accountability. Companies must addresscorruption risks by committing to zero-tolerance o bribery and corruption, andadopting a comprehensive programme o anti-corruption measures. To helpcorporations devise e ective anti-bribery strategies, we continue to build on ourBusiness Principles or Countering Bribery an anti-bribery code thats adaptableto di erent company sizes and settings. Public reporting also sends a strong signalto employees, investors and consumers that a company is serious about cleanbusiness. This should be matched by increased accountability on the part o themarkets and the institutions entrusted with regulating them. Rigorous en orcemento international anti-bribery laws and conventions will help guarantee accountabilityacross borders, and all the way down supply chains.

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EUROPE AND CENTRAL A As a service to help companies improve their anti-corruption policies, TI Belgiumhas begun o ering aCorporate Package that includes trainings, practicaltools, research and access to TI experts. The

chapter launched the initiative during a Novembercon erence attended by judicial, academic and WorldBank experts. The event ocused on corruption risksand sanctions, and oreign perceptions o Belgiancompanies. The chapter is planning additionaltrainings or company executives, industry groups,public o cials and scholars.

Following a 2010 report by TI Moldovathat identi escorruption risks in the countrys energy industry,national o cials put in place a new energy strategydesigned to improve the e ciency o the system.

The chapters report, The Energy Sector: Corruption

or Bad Governance? , raised many concerns,including a lack o transparency in energy supply andtransportation contracts, infuence by interest groups,discretionary energy allocations and inadequatepublic access to in ormation.

Most businesses in the city o London acecorruption risks because they are poorly in ormedabout the UKs new anti-bribery law, according to TIUK. Moreover, nearly hal o surveyed experts believebusinesses would sometimes pay bribes, and onlyone in 10 said corporate anti-corruption e orts arevery success ul, according to the chapters report,

Avoiding Corruption Risk in the City: The Bribery Act 2010 . Overall, the study ound a relatively high degreeo complacency about bribery and corruption.

AFRICA AND MIDDLE EASTOur chapter in Lebanon, the LebaneseTransparency Association, ounded the Instituteo Directors, which provides research, corporategovernance training, con erences, workshops and

other services or corporate board members andexecutives. In March 2010, about 30 owners anddirectors o small- and medium-sized companiesattended a con erence on corporate governanceand business ethics. The Institute has produced ourpublications on corporate governance, ethics andwhistleblower issues, and is developing corporategovernance guidelines or state-owned enterprises.

AMERICASNinety-three per cent o Colombian companydirectors surveyed report that bribes are paid inthe course o their business activities, accordingto a study by Transparencia por Colombia andthe Externado University o Colombia. The secondnational survey on practices to prevent bribery inColombian companies interviewed a total o 611directors o small, medium and large companies,

rom the agricultural, mining, business, transport andindustry sectors. Sixty-seven per cent o respondentssaid the anti-bribery practices proposed by thesurvey were use ul.

ASIA PACIFICMalaysian business leaders supported International

Anti-Corruption Day 2010 by signing a pledge toght corruption. Largely written by TI Malaysia, the

pledge was signed by chambers o commerce andindustry groups at an event planned by the Malaysian

Anti-Corruption Commission and attended by PrimeMinister Najib Razak. Use o the voluntary pledge,which incorporates key international standards, willbe monitored by government agencies in cooperation

with TI Malaysia. The chapter will also advisecompanies on anti-corruption strategies.

Despite New Zealands reputation as being amongthe most corruption- ree countries in the world,

ewer than hal o major companies have policiesthat explicitly prohibit bribery which is less thanin the UK and the US. This is among the ndings o

As Good As We Are Perceived? , a report by TI NewZealand that examines how companies deal withbribery and corruption. The chapter recommendsthat the New Zealand Exchange should incorporatebribery and acilitation payments into their code o ethics to encourage listed companies to ramp uptheir anti-corruption policies.


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Private Sector

//RESISTING EXTORTIONBribery and extortion impede both air and opentrade vital or a healthy global economy. Companiesnow have a new tool to counter the problem:an expanded edition o Resisting Extortion and

Solicitation in International Transactions (RESIST). A practical toolkit that helps companies trainemployees to respond appropriately to a variety o solicitation and extortion, RESIST is a joint initiativeby Transparency International, the InternationalChamber o Commerce, the UN Global Compactand the World Economic Forum Partnering againstCorruption Initiative.

This expanded edition o RESIST includes 22 real-li escenarios. It provides guidance on how to respondin such cases as when a bribe is demanded or therelease o perishable goods at customs, and on wayso dealing with a tax inspector requesting a kickbackagainst a tax discharge.

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35Defence and Security

PROBLEM / World military expenditure is estimated to have reachedUS $1.6 trillion in 2010, according to SIPRI. Such sums o money and a reputation

or secrecy makes the de ence and security sector particularly vulnerable tocorruption. National security concerns have o ten been used to keep national de enceestablishments rom public scrutiny. However, the secrecy that necessarily characterisescertain de ence activities is o ten used to veil much more than can be justi ed.

Corruption not only diminishes the operational e ectiveness o countries armedorces and public trust in military and security activities, it undercuts economic

growth, resources and security. The opacity and size o national de ence budgetscan make them an easy target or corrupt politicians looking or re-election unds.Corruption can have a destabilising e ect on peace support and state-building,undermining national and international e orts to provide security and stability orhard-hit populations.

SOLUTION / To guard the sector against corruption risks, greater transparencyneeds to be built into international arms trans ers, de ence contracting andde ence and security institutions. While secrecy may be warranted in certain areas,increasing transparency in de ence policy, budget, spending and procurementshould not compromise national security.

Corruption risks are best tackled through strong commitments and cooperationbetween governments, armed orces, industry and civil society. As de ence salesand purchases are linked to government policy, national security considerationsand industry capacity, anti-corruption e orts need to be consistent acrosspurchasing de ence ministries, exporting governments and contracted companies.Momentum needs to be built on progress already made, such as the de enceindustrys introduction o codes o conduct and common industry standardsacross di erent regions o the world.

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//DEFENCE AGAINST CORRUPTIONOur De ence and Security programme, led by TI UK, brings governments, de encecompanies, multilateral organisations and civil society together in a commondrive to reduce corruption in de ence and security establishments worldwide. Wesupport national anti-corruption re orms, promote transparency in arms trans ers,

and work to infuence de ence and security policy.One area that receives little attention because o its complexity and opacity is o sets.

These are arrangements made by purchasing governments with their suppliers,requiring the contractors to reinvest a percentage o the value o the deal in theimporting country. For example, i a deal is worth US $100 million, the governmentmight require the contractor to invest an additional US $50 million into developinggoods or services in the country. O sets are estimated to make up as much as 20per cent o world trade, but international trade statistics do not track them, and countrieso ten conceal them. This means that the risk o bribery and infuence peddling is high.

Taxpayers can end up paying or low priority or even inappropriate services simplybecause someone was able to infuence the deal in exchange or an o set reward.

Our De ence O sets: Addressing the Risks o Corruption and Raising Transparency report explores the issue o o sets and ocuses on practical, preventive anti-corruptionmeasures to increase their transparency and reduce scope or abuse. We encouragede ence companies to introduce codes o conduct, compliance and business ethicsprogrammes into their operations, and extend these to their sub-contractors.De ence industry associations should develop and publish guidance on what ahigh transparency o set package should look like, as well as gathering industryexperience and encouraging discussion on corruption issues in o sets.

Since 2008, we have run a course on building integrity in cooperation with NATOand the UK De ence Academy. Aimed at senior o cers and de ence o cials, theweek-long course has been held in ve countries and has involved more than 300participants rom 22 nations.

October 2010 saw a pivotal stage in the progress o the course it received ormalaccreditation by NATO. This is the rst time that NATO has partnered with an NGO,and its lessons will a ect all NATO members and candidate states. The courseaims to strengthen the oundation or leadership, good governance, and changemanagement in the approach to countering corruption within the de ence andsecurity sector.

2010 also saw an important stage in negotiating an international arms tradetreaty at the UN to regulate international arms trans ers. It is hoped that a treatystrengthening transparency in arms trans ers will be agreed in 2012.

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" WORLD MILITARY EXPENDITURE IS ESTIMATED TO HAVE REACHED US $1.6

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39Judiciary

PROBLEM / A unctioning judiciary is the guarantor o airness and a power ulweapon against corruption. But peoples experiences in many countries all arshort o this ideal. In some countries the majority o those who had contact withcourts encountered bribe demands, and the total amount paid in bribes canreach staggering proportions. Corruption in the judiciary goes beyond the bribingo judges. Court personnel are paid o to slow down or speed up a trial, or tomake a complaint go away. Judges are also subject to pressure rom above, withlegislators or the executive using their power to infuence the judiciary, startingwith skewed appointment processes. Citizens are o ten unaware o their rights, or

resigned, a ter so many negative experiences, to their ate be ore a corrupt court.Court e ciency is also crucial, as a serious backlog o cases creates opportunitiesor demanding unscheduled payments to ast-track a case.

SOLUTION / Judicial appointments and promotions should be overseen byan independent body, and based on merit rather than avouritism. Salaries andpensions should be air and refect experience, per ormance and a track record orintegrity. In ormation on appointments needs to be open or civil society oversight.Judges must be protected rom excessive risks that would keep them rom ruling

airly when power ul interests are in play. This should include limited liability ordecisions but also rigorous investigations when there are credible allegationsagainst judges. I corruption can be proven, a air and transparent removal processshould be employed. We work to raise awareness o compromised judicialindependence and to mobilise civil society, the private sector and the media behindre orms to bring increased integrity to the courtroom.

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AFRICA AND MIDDLE EASTMarking a victory or judicial independence, our chapterin Palestine, AMAN, worked with the Judicial

Authority to adopt codes o conduct or judgesand prosecutors. The codes apply to judges at

our judicial levels, sta o the High Judicial Counciland the public prosecution. The chapter held 13workshops to educate o cials about the codes, whichwere attended by 144 people. The codes will also beused by the High Judicial Councils training institute.

ASIA PACIFICRespondents to a TI Bangladesh survey reportthe judiciary to be the countrys most corruptinstitution. Among people who have interacted withthe courts, 88 per cent said they were exposedto corruption, according to the chapters National Household Survey 2010 on Corruption in the ServiceSectors . The survey sparked discussion in the legalcommunity and the Chie Justice appointed a specialcommittee to look into the ndings.

EUROPE AND CENTRAL ASIASeeking to improve judicial transparency, TI Romania is researching the activities o Romanian courts andrequesting in ormation on budgets, personnel andinternal regulations. The initiative was launched a tera debate the chapter organised with the Romanian

Association o Magistrates, which was attendedby 20 judges, prosecutors, civil society membersand anti-corruption o cials. Among the chaptersconcerns, individuals requesting court les whichare technically open to the public must have alegitimate reason or wanting the in ormation.

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41Judiciary

//STATUTES OF LIMITATIONS: CALLING TIMCorruption is a hidden crime with long-term impacts. Detecting and prosecutingcorruption is made challenging not only by its clandestine nature, but also by statuteso limitations which set a maximum time period or ling charges. When investigatorsmust work against the clock, corrupt people can and do get away with their crimes.

Our report, Timed Out: Statutes o Limitations and Prosecuting Corruption inEU Countries , ound that impunity or corruption o ences is a signi cant issueacross the European Unions 27 member states. Law en orcement and judicialsta requently lack the expertise and human resources to root out complex, o tentransnational corruption cases.

When corruption is unearthed, lengthy legal proceedings and short statutes o limitations can prematurely close o prosecutions. In Greece, Italy and Portugal,proceedings can run out o time even when o enders are ound guilty in the rstinstance. In Italy, since 2005 one in 10 criminal proceedings was dismissed duringthe prosecution phase. In France and Spain, insu cient time is allowed to ensuree ective prosecution. Some lawyers knowingly exploit these loopholes.

Although weaknesses were ound in most European statutes o limitations regimes,there are positive signs. Recent re orms in several countries have extended

limitation periods. Austria has no absolute limitation periods, while Portugalprioritises cases at risk o being dismissed due to time limits. Many jurisdictionsnow have mechanisms to accommodate the late discovery o cases, and someapply limits only to the investigative phase, allowing trials time to run their course.

In November 2010, ormer Italian High Court judge Gherardo Colombo, OECDanti-corruption expert Leah Ambler and MEP Monica Macovei joined TransparencyInternational representatives in Brussels to launch the report. By showcasinge ective practices rom across the EU, the report will in orm the improvement o statutes o limitation policies in and beyond the region.

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43Poverty and Development

PROBLEM / Year in, year out, our Global Corruption Barometer (see p.83)con rms that corruption hits poor people hardest. The bribe randomly extortedby a police o cer may mean that people cant a ord to pay school ees or theirchildren or even eed their amilies. In Sub-Saharan A rica alone, nearly 555 millionpeople live on less than US $2 ( 1.40) a day. And the problem is not going away.Rising ood prices drove an estimated 44 million people into poverty in developingcountries between June and December 2010 (World Bank). Corruption notonly makes the poor poorer, but through the misallocation o resources it alsoundermines initiatives that are meant to provide or peoples basic needs, such

as sanitation and healthcare. As 2015 approaches, the undue infuence o privateinterests in governments, policy making and regulatory rameworks continues to jeopardise the attainment o the Millennium Development Goals (see p.45).

SOLUTION / The voices o the worlds poor must be heard whendevelopment agendas are set and decisions taken that a ect their lives. Bybringing disadvantaged groups together with their elected representatives andadministrations they can work in unison to stamp out corruption. Involving localcommunities in policy and budgetary decision-making will help ensure thatpoliticians keep to their word, and that poor citizens needs are heard. Similarly,community participation in election monitoring and service provision oversight willreduce opportunities or corrupt abuse. Governments, international donors andmultilateral agencies have begun to recognise that the ght against poverty andcorruption are not twin agendas, but should be integral components o the samestrategy. But much work remains to be done to integrate anti-corruption plat ormsinto international development agendas.

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//PUTTING COMMUNITIESDRIVING SEATCorruption strikes disadvantaged communities harderthan most, orcing people to pay or services thatshould be or ree, and undermining development.

To address this issue, we are working in six Sub-Saharan A rican countries to build communitycapacity and empower vulnerable individuals so thatthey can take a lead in the ght against corruption.

By bringing service providers and receivers together,local o cials can demonstrate their commitment totheir communities, and the public can hold them toaccount. We believe that this collaboration is criticalto creating a more e ective and sustainable plat orm

or change.

In 2010, communities in Ghana and Sierra Leone ormed monitoring groups to enhance transparency

in the provision o basic services and the work o public o cials. InLiberia, citizens implemented povertywatch councils that engage with government agenciesto identi y how poverty alleviation e orts can beimproved. Our chapter in Mozambique partneredwith community radio stations to broadcast call-inconversations between service providers and citizensreporting abuses.

In all six countries, local communities receivedtraining in how to plan, shoot, direct and edit theirown lms. These participatory videos are power ultools or demonstrating how corruption a ectspeoples lives, and what they want to see changed.

AFRICA AND MIDDLE EASTOur chapter in Mozambique is working withpartners ranging rom community-basedorganisations to high-ranking government o cialsto reduce poverty and improve citizen access to

critical services. Centro de Integridade Publica has built relationships with o cials who oversee thecountrys poverty reduction strategies. Locally, thechapter works with civil society groups to improvethe delivery o medical, water, education and otherbasic services, conduct anti-corruption trainingand enhance local governance. Community radiostations interview citizens about perceived abuses byauthorities, and local campaigners use participatoryvideoing to ensure that citizens concerns are heard.

AMERICASIn August 2010, Guatemalas ConstitutionalCourt sided with Accin Ciudadana by rulingthat the chapter should be granted access to thebene ciaries list o a government social programme.

The chapter was concerned that the My Family isMaking Progress ( Mi Familia Progresa ) initiative which pays parents to send their children to school,and pregnant women to go to the doctor wassubject to clientelism and corruption. The chapter ispleased to receive access and hopes that the appealchallenging the con dentiality o this in ormationwill set a precedent or many as-yet unprocessedin ormation requests.

ASIA PACIFICOur Development Pacts (see p.54) have been signedin the Indian states o Bihar and Chhattisgarh. Ledby TI India, the agreements encourage poor andmarginalised people to monitor water, healthcare,transportation and other public services. Regularreviews on the progress o the pacts are made

available or public review. An additional pact wasnegotiated at local government level in the stateo Rajasthan.

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45Poverty and Development

CORRUPTION

CHALLENGESFOR A NEWMILLENNIUM

Our research shows that countries with higher levelso transparency, accountability and integrity havea better chance o meeting key UN goals. Pay-o shave been witnessed in six A rican countries, wherepublicly accountable school management has resultedin better per orming schools. In Guatemala, auditsby our chapter Accin Ciudadana seek to improvethe oversight o wel are programmes or extremelypoor amilies. And Transparency Uganda works withcommunities to report corruption in healthcare andagriculture.

These and other ndings are documented in The Anti-Corruption Catalyst: Realising the MDGs by 2015 . In this report we call on all countries toimplement the UN Convention against Corruption,which has speci c provisions related to advancingthe Millennium Development Goals. Aid fows, publicrevenues and expenditures need to be transparent,and individuals must be prevented rom demandingand paying bribes to secure donor- unded projects.

At the UN Millennium Summit in 2010, we deliveredthis message. The summit ended with a stronganti-corruption message in the UNs o cial report, amajor step orward in the recognition o corruption asa brake on development. The challenge now is to getdecision-makers to deliver on their promises. In thewords o UN Secretary-General Ban Ki-moon: Wemust not ail the billions who look to the internationalcommunity to ul l the promises o the MilleniumDeclaration or a better world. Let us keep the promise.

Our new millennium opened with heads o statepledging to honour the right o all people to reedom,dignity and a basic living standard without hungeror violence. In September 2000 at the largestmeeting o world leaders ever held 189 UN membercountries spoke with one voice to promote theprinciples o equality, tolerance and solidarity.

These undamental ideals were distilled into whatbecame known as the Millennium DevelopmentGoals. Representing the most signi cant promiseever made to help the worlds most vulnerablepeople, leaders pledged by 2015 to end poverty, put

every child in school and win the battle against HIV/ AIDS, among other development aims.

Signi cant progress has been made toward achievingsome o these goals. But this progress has been uneven.Without a major push orward, many o the goals arelikely to go unmet in most regions o the world.

One major obstacle threatening the ul lment o theMillennium Development Goals is corruption. Nearlyhal o the parents we surveyed in seven A ricancountries reported paying illegal ees to send theirchildren to school. Healthcare workers in Moldova Europes poorest country claim bribes aredemanded or routine care that should be ree, whilescholarship programmes in Bangladesh allegedlyrequire in ormal payments.

These acts o corruption come in many orms. They can be explicit, such as embezzlement byministry, school or clinic sta ers; implicit, as whenillegal payments are demanded or clean water,schools and healthcare; or hidden, such as chronicabsenteeism by teachers and doctors.

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PROBLEM / It is di cult to overstate the tragedy o corruption in humanitarianresponses. Essentially it is robbing resources rom people or whom it couldmean the di erence between li e and death, dignity and desperation. Whenlarge amounts o money and resources are pumped into damaged economies,o ten through un amiliar channels, the risk o corruption is high. Amid the chaoso conficts or natural disasters, it is immensely challenging to monitor how aid isbeing distributed or where it ends up. Bags o grain, bottles o water and medicalsupplies can be intercepted and sold on the black market, never reaching thepeople who need them most. Housing or displaced amilies is likely to be sub-

standard i it is built by companies who were contracted because they paid thelargest bribe to a procurement o cial to secure the contract. Cash may go missingbecause o chaotic or opaque nancial systems. Humanitarian aid may be used tobuy votes or bene t cronies; all-too-o ten power ul groups and embedded corruptnetworks are the ones that pro t.

SOLUTION / Discussion o corruption in humanitarian aid needs to be broughtinto the open, with a clear emphasis that addressing it is not the same as condoningit or implying an agencys particular vulnerability to it. Aid agencies should ensurethat corruption risks and local power dynamics are analysed as part o emergencypreparedness and sta training, that codes o conduct and strong nancialcontrols are in place, and that in ormation on registration lists and entitlements ismade accessible. On-site monitoring deters and detects corruption, but requiresadequate sta and unding. Con dential and culturally appropriate complainthandling systems are needed, so that sta and bene ciaries can report corruption

reely. Meanwhile, the humanitarian community should systematically sharein ormation on their experiences with corruption and address the problem together.

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AFRICA AND MIDDLE EAST As drought once again approaches crisis stagein East A rica,TI Kenyahas been working withgovernment institutions, humanitarian organisationsand UN agencies to identi y and remedy integrity

loopholes in the various types o ood and securityprogrammes in the region. This will involve eldresearch on corruption risks in direct ood delivery,

ood vouchers and cash trans er programmes, whichwill be undertaken in 2011.

AMERICASSince the devastating January 2010 earthquake inHaiti, our chapter La Fondation Hritage pour Hati has carried out a detailed mapping o corruption risks

a ecting the delivery o relie and reconstruction aid,as well as a context-speci c strategy or engaginglocal communities in monitoring the implementationo the aid programmes. The chapter also has ahotline so that citizens can report complaints that willbe re erred to the appropriate national authorities.

" CORRUPTION IS ROBBING RE FROM PEOPLE FOR WHOM IT CTHE DIFFERENCE BETWEEN L DEATH, DIGNITY AND DESPER

ASIA PACIFIC A ter Pakistans 2010 monsoon foods le t more than20 million people homeless and without livelihoods,TI Pakistan quickly convened a major workshop

or government o cials, aid agencies, donors and

civil society. The chapter urged nance and aido cials to involve a ected communities includingwomen and vulnerable groups in relie decisions,establish independent monitoring o aid programmes,en orce existing national anti-corruption policiesand respond to complaints o abuse. In parallel, thechapter is running an anti- raud hotline to monitorthe implementation o a multi-million dollar aidprogramme.


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Available digitally, in print and as an abridged pocketguide in several languages, the handbook shows howmuch aid agencies can do to avoid corruption. Some70 tools address subjects as diverse as leadershipsignals, accountability policies, the selection o

local partners and aid distribution, supported bycase studies and re erence documents. Tacklingcorruption is seen as integral to good managementand aid e ectiveness, allowing vital measures suchas whistleblowing mechanisms, joint interagencyresponses and better monitoring.

We recognise the sometimes conficting demands thatagencies ace. There are trade-o s, says Roslyn. Theneed or speed can be used as an argument againstestablishing essential oversight mechanisms. You needthe right balance or each context. The handbookhelps humanitarian sta address such dilemmas.

The handbook is also being used in individual countriesacing disaster. It has provided a ramework or an

innovative approach to engaging a ected communitiesin monitoring corruption in the provision o post-earthquake aid in Haiti. It is also being used to rameour research on ood security programmes in Kenya.

We encourage public and private humanitarianagencies to disclose unding and project details and towork with local oversight bodies. The handbook will becontinuously updated with their input. Only by makingsure the taboo o corruption is truly broken can the worldensure that humanitarian aid reaches those who need it.

Your name isnt on the listThe computer swallowedyour card. West A rican re ugees interviewed byhumanitarian agencies shed light on a thrivingblack market in humanitarian aid. Food, tents andregistration cards that should have been ree wereamong the items on sale. Some aid workers were evendemanding sexual avours in return or relie supplies.

Such exploitation compromises emergency operations

to help the worlds most vulnerable people thosecaught in conficts or natural disasters.

Large injections o aid fowing into poor societies o ten already su ering high levels o corruption dramatically increase opportunities or the abuseo power, says Transparency International senioradviser Roslyn Hees. Theres a eeling that in suchchallenging environments, corruption is inevitable and a ear that discussing it means admitting to it,damaging an agencys reputation. Corruption is still ataboo topic in the humanitarian sector.

A ter the response to the Asian tsunami, we set aboutdiagnosing corruption risks speci c to humanitarianoperations and developing power ul preventivemeasures. Working with leading aid agencies andinternational research organisations, we mappedpotential corruption risks in emergency operations.

These vary hugely, rom the diversion o ood andmedicines, to bribery and collusion in procurement, tonepotism and cronyism in sta recruitment. We oundthat many agencies have a number o measures toprevent corruption, but had never addressed the issuestrategically, nor shared their practices.

Our Handbook on Preventing Corruption in HumanitarianEmergencies does both. Launched in 2010, it containsa user- riendly set o tools to reduce corruptionthroughout aid operations. Drawing on experience

rom across the humanitarian sector, as well as romother NGOs, the private sector and the TransparencyInternational movement itsel , the tools cover thepolicies and guidelines needed to prevent corruption,as well as practical measures to take in the eld.

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51 Access to Public Services

PROBLEM / Where institutions are weak and oversight insu cient, unds meantor public services such as health and education can easily disappear. Public

expenditure tracking surveys in some countries have ound that as much as 80per cent o non-salary unds, trans erred rom national to local level, do not reachhealth acilities (World Bank).

At the delivery end, poor governance o ten means that public servants, such ashead teachers or hospital sta , abuse their positions to demand bribes rom thevery people they should be helping. For the victims, this can mean deciding whethera amily can a ord the bribes to send their child to school. When amilies are unableto pay or multiple children to attend, it is o ten girls that are denied an education.In healthcare, corruption can cost lives when counter eit or adulterated medicationsare sold to hospitals a ter being expedited across borders and along the supplychain. The result: critical medications are useless and patients can die. Even whenno atalities occur, e orts to combat major health challenges, such as malaria andHIV/AIDS, are severely undermined.

SOLUTION / Budgets or public services and institutions, including schools,hospitals and in

Documents

Transparency Internacional Annual Report 01 08 Print Version