Supplementary memorandum submitted by
the Department for International Development
INDONESIA (QUESTION
11)
The Department has no evidence that British
aid funds were a source of enrichment for ex-President Suharto
or his family. The financial controls operated by DFID are sufficient
to ensure accountability for the Indonesia Aid and Trade provision
(ATP) programme funds. In non-ATP aid funded projects, funds did
not pass through the Government of Indonesia.
ARRANGEMENTS MADE
BY THE
REGIONAL DEVELOPMENT
BANKS TO
PROTECT THEIR
RESOURCES AGAINST
CORRUPTION (QUESTION
16)
Asian Development Bank
1. Anti-corruption features in the Asian
Development Bank (ADB) policy documents on good governance. In
1995, the ADB became the first multilateral development institution
to adopt a Board approved policy on governance. In 1998, its Board
of Directors approved the Bank's Anti-corruption policy and the
Bank says that it intends to play an important role in helping
countries in the region to tackle corruption in both the public
and private sectors.
2. DFID's Institutional Strategy Papers
notes the reforms that the Banks have instituted to tackle problems
of internal capacity and integrity of systems. The ADB is regarded
as the most economical of the multilateral development banks,
with the lowest ratio of administrative to programme cost. It
may also be too thinly staffed to tackle its complex and changing
mandate, in particular in the area of governance. To meet these
challenges, the Bank is upgrading the skills of its staff and
proposing to take on additional staff in key areas. DFID is planning
to second a Governance Adviser. In the eighth replenishment of
the Asian Development Fund, non-regional members including DFID
encouraged the ADB to review its system of internal financial
controls and take corrective actions. They recommend strengthened
procurement controls, audits and adequate staffing for the Anti-Corruption
Unit.
ADB's Strategy for Combating Corruption
3. The ADBs anti-corruption policy is centred
upon three objectives:
(i) supporting competitive markets, and efficient,
effective, accountable, and transparent public administration
as part of the ADB's broader work on governance and capacity building;
(ii) supporting promising anti-corruption
efforts on a case-by-case basis and improving the quality of the
ADB's dialogue with its developing member countries on a range
of governance issues, including corruption; and
(iii) ensuring that the ADB's projects and
staff adhere to the highest ethical standards.
The third objective, relating to internal controls,
is elaborated below.
Ensuring ADB Projects and Staff Adhere to the
Highest Ethical Standards
4. The ADB believes that it is essential
that their staff be beyond reproach and that the Bank's internal
regulations and procedures support the highest ethical standards.
Toward this end, the third pillar of the ADB's anti-corruption
policy calls for robust internal measures to enhance the integrity
of ADB operations along the following dimensions:
(i) maintaining the integrity of ADB lending
and Technical Assistance (TA) operations by considering issues
of corruption more explicitly in the formulation of the country
operational strategy and country assistance plan;
(ii) creating and utilising independent internal
reporting mechanisms to address allegations of corruption among
ADB staff or within ADB operations;
(iii) enhancing integrity through project
design and improving the quality of oversight for ADB loans and
TA grants; and
(iv) ensuring that all ADB staff are familiar
with the anti-corruption policy and ADB's Code of Conduct and
act in a manner consistent with both the letter and the spirit
of these statements.
5. ADB staff are required to report any
allegations or evidence of corruption that they receive to the
office of the General Auditor (OGA). ADB staff will, however,
consider generally the impact of corruption on ADB operations
(such as in policy dialogue with DMCs, in ADB programming decisions
and in the administration of ADB projects) in their respective
areas of responsibility.
6. Once the allegation and/or evidence has
been turned over to OGA, it will be screened by the OGA Anti-corruption
Unit to determine its specificity, credibility, seriousness and
implications for ADB operations. Upon a determination by the ADB
that corruption has occurred, the ADB will undertake remedial
action and impose sanctions.
Ensuring Integrity in ADB Lending Operations
7. If the ADB's investigation determines
that corruption has occurred in an ADB-financed loan or TA, then—depending
upon the nature of the violation and the Government's willingness
to act decisively in addressing it—ADB can pursue a range
of options. Breaches of specific loan regulations or covenants
could result in a decision by Management to blacklist the firm
involved, refuse to finance certain expenditures, suspend disbursements,
accelerate the maturities of loans, or cancel the loan. ADB may
request the reassignment, demotion, dismissal or possible prosecution
of personnel associated with various components of the project.
8. If the ADB consistently encounters problems
within a particular executing agency or sector, it may change
its programming mix and avoid future lending and TA operations
in that area. In consultation with the member country, ADB may
also focus its programming upon strengthening NGOs and civil society
to facilitate greater transparency and accountability in that
sector or to provide alternative means of service delivery.
9. If the ADB determines that corruption
has reached such proportions that it poses a significant impediment
to the probity and integrity of ADB operations or the attainment
of the country's fundamental development objectives, it may elect
to reduce or suspend ADB lending and TA operations to that country
after discussions with the government and in consultation with
the Board. Conversely, where a country has made significant progress
in improving the efficiency, effectiveness and integrity of its
public and private sectors, ADB may elect to accelerate the lending
programme or provide additional TA resources to ensure sustainability
of the reforms.
Anti-corruption Issues in Project Design
10. The ADB is working to ensure that the
design of individual projects pays careful attention to the risk
of corruption within the project as well as supporting good public
sector management. Where feasible, the financial management and
administration of ADB projects are intended to be integrated into
the regular systems of government to prevent "enclaving"—the
creation of quasi-independent units within a broader organisation
with their own accounting and reporting procedures. Projects aimed
at strengthening public institutions are supposed to include components
that enhance their capacity to prevent and detect corruption,
such as improving cash management (particularly in sectors that
generate user fees or other revenues) or their internal audit
and inspector general functions. Appraisal missions are intended
to consider the best means for ensuring the timely submission
of project accounts. Staff are required to give careful co-ordination
to the selection of procurement arrangements (ie international
competitive bidding, local competitive bidding, international
shopping, etc) and to the design of contract packages.
Anti-corruption Issues in Project Monitoring and
Supervision
11. Country portfolio missions, country
disbursement missions and project review missions provide opportunities
to discuss the policies and practices that impede the efficient
implementation of ADB projects. ADB staff are required to use
these opportunities to address ways in which greater transparency,
accountability and efficiency can be achieved within ongoing ADB
operations. Recommendations for future improvements are circulated
to OGA, SPD and Operations Evaluation Office (OEO).
12. The ADB aims to emphasis strengthening
prevention control measures in the implementing agencies, such
as accounting and financial management skills of its staff and
its internal control and accounting systems. Other precautionary
measures include conducting field investigations for major infrastructure
projects; targeted auditing of executing agencies involved in
project implementation; the provision of information in local
languages about ADB's anti-corruption policy; and co-operation
with NGOs in monitoring project implementation.
13. Managers and staff are required to devote
greater attention and resources to project monitoring and implementation
missions for projects that are most at risk. These missions now
include staff with relevant qualifications in the financial, managerial
and policy areas. Financial analysts and project implementation
officers are to receive mandatory training in recognising "red
flags" and areas of potential vulnerability.
Audit
14. ADB intends to undertake measures to
improve the quality of project audits. Specialised training in
forensic accounting and other investigative techniques will be
provided to select OGA staff. Ongoing OGA efforts to streamline
internal work procedures to free up greater resources for audits
of high-risk and high-impact areas will continue. OGA will devote
more time to conducting audits of project procurement-related
activities, which will help prevent and detect corruption or other
forms of fraud. OGA will also institute a programme of random
audits of ADB projects.
15. OGA will strengthen its exchange of
information with supreme audit institutions in the Developing
member countries. Working in collaboration with other ADB departments,
it will play an active role in helping to upgrade the audit capability
of such institutions.
Protection for "Whistle-blowers" and
from False and Malicious Claims
16. ADB aims to protect the safety and reputation
of whistle-blowers. If a staff member's personal safety or career
prospects are in jeopardy, the ADB will arrange a special transfer
or reassignment or other similar measures.
17. In these cases, the burden of proof
resides upon those who seek to demonstrate that the claim is false
and malicious. If, after investigation, the ADB concludes that
an allegation was both false and malicious, it may reassign, demote,
suspend without pay, or dismiss the staff concerned in accordance
with ADB's Administrative Orders. In the case of procurement or
consulting services, the ADB may terminate the contract award
and/or blacklist the company.
ADB Procurement Guidelines
18. ADB Procurement Guidelines require borrowers
(including beneficiaries of its loans), as well as bidders, suppliers
and contractors under ADB-financed contracts, to observe the highest
standards of ethics in contract procurement and execution.
19. For this purpose, ADB defines corrupt
practice as any misuse of position by which public or private
officials improperly and unlawfully enrich themselves or those
close to them, or induce other to do so. This definition also
covers offering, giving, receiving, or soliciting anything of
value to influence the action of those officials in contract procurement
or execution. In addition, ADB considers fraudulent practice to
include misrepresentation of facts to influence contract procurement
or execution to the detriment of the borrower and collusion among
bidders.
20. The Guidelines state that ADB will not
award a contract to a winning bid if it determines that the bidder
engaged in corrupt or fraudulent practices in competing for the
contract. It also states that ADB will cancel the remaining portion
of a loan for a contract if it is determined that representatives
of the borrower or loan beneficiary engaged in corrupt or fraudulent
practices. In addition, ADB will disqualify a firm from participating
in ADB-financed projects, either indefinitely or for a stated
period, if it determines that the firm engaged in corrupt or fraudulent
practices in competing for, or executing an ADB-financed contract.
African Development Bank (AfDB)
21. The AfDB published its policy on good
governance in January 2000, and this includes an emphasis on encouraging
its member countries to tackle corruption. The 1994 Knox Report
reviewed the AfDB's human resource management, financial management,
project quality and institutional governance. It concluded that
policies were sound but were not always properly applied. The
seventh replenishment of the African Development Fund was delayed
till 1996 due to these concerns. A 1996 study of governance in
the AfDB recommended ways of strengthening the AfDB's financial
soundness and operational effectiveness, and ensuring that appropriate
checks and balances existed between the different decision-making
bodies of the institution. The AfDB has, since 1996, been implementing
a range of reforms in accordance with these recommendations. In
addition, changes have now been made to the Article of the AfDB
to take into account all these points. By 1998, the first stage
of the AfDB's programme of reform was largely completed and a
great deal has been achieved. However, the AfDB still has some
way to go to bring it to level of the other regional development
banks.
AfDB's Strategy for Combating Corruption
22. AfDB has identified four areas of intervention
to address corruption:
(i) prevention and control of corruption
relating to AfDB-financed projects and programs
(ii) reduction of opportunities for corrupt
practices and consideration of initiatives taken to combat corruption,
as a condition for the allocation of concessional resources
(iii) support for research on the nature,
origin, development and impact of corruption on African societies,
and support for civil society capacity in investigating corruption
matters
(iv) assistance for combating corruption
23. AfDB considers combating corruption
as pivotal to the efforts a country can make to promote good governance.
Such considerations are covered in the AfDB's country performance
assessment and decisions on the allocation of concessional ADF
resources. AfDB is committed to encouraging regional member countries
to introduce anti-corruption measures aimed at the detection and
deterrence of fraud and corruption in their own procurements.
24. The Agreement establishing the AfDB
requires it to ensure that the proceeds of any loan made or guaranteed
by it are used only for the purposes for which the loan was granted,
with due attention to considerations of economy and efficiency.
The spirit of this requirement broadly guided the rules of procedure
for the procurement of goods and services laid down by AfDB in
1980. These were significantly revised in 1996 and 1999. It is
now possible for AfDB to cancel part of or an entire loan or grant
if the procurement procedure is tainted by acts of fraud or corruption.
Similarly, AfDB may sanction a firm found guilty of fraud or corruption
following a special audit or judicial decision.
25. The AfDB claims that it has taken steps
to ensure that procurement processes are as transparent as possible
and enable a close monitoring of the awarding of contracts financed
with Bank resources. The AfDB established its Procurement Procedures
Review Committee to receive and examine complaints by bidders
about the way in which their bids were processed by borrowers
or executing agencies. The decision of this independent Committee
can result in the cancellation of the procurement process or the
financing; its decisions are final. Following a lengthy investigation,
the Committee met in 1999 to review the conclusions of a special
audit in 1999, and announced sanctions against three firms.
26. The AfDB has committed itself to organize
meetings with its regional member countries on public procurement
reform in Africa. These conferences provide an opportunity to
raise awareness of the high incidence of corruption in public
procurement, define together the key elements of a strategy to
combat corruption in procurement, and to specify the type of assistance
AfDB should provide. The AfDB is encouraging and assisting governments
to equip themselves with procedures that give priority to open
competition in the award of official contracts, to establish transparent
and well-balanced relations with the business community and to
invest in training.
ARRANGEMENTS MADE
BY THE
UNITED NATIONS
(UN) AGENCIES TO
PROTECT THEIR
RESOURCES AGAINST
CORRUPTION (QUESTION
19)
1. The responsibilities of UN agencies and
their staff for the integrity of their programmes are set out
in the following:
(i) Article 100.1 of the UN Charter states
that staff "shall refrain from any action which might reflect
on their position as international officials responsible only
to the Organisation".
(ii) The UN Staff rules covering all aspects
of staff duties and obligations that, if breached, would allow
the Secretary-General to discipline staff members.
(iii) The UN Code of Conduct (entitled the
"Status, Basic Rights and Duties of UN staff members")
lays down in great detail how staff should act and perform their
duties. There is also the "Standards of Conduct in the International
Civil Service".
(iv) The Financial Regulations and Rules
lays down in clear terms control for the use of the Organisations
funds. It has specific paragraphs dealing with this aspect of
financial control. It also covers the authority under which the
Board Of Auditors can operate. This includes financial and management
audit functions. The Board covers the Funds and Programmes and
peacekeeping operations. The Office of Internal Oversight Services
is also able to carry out audit functions in these areas.
2. The oversight bodies (Board of Auditors,
Office of Internal Oversight Services (OIOS) and Joint Inspection
Unit) have authority to report on management and financial issues,
including irregularities (management or otherwise). The OIOS has
a strong investigation team. Alleged irregularities uncovered
by the OIOS or Board of Auditors are processed through internal
disciplinary systems or, as necessary, the courts, the Advisory
Committee on Administration and Budget Questions and the Fifth
Committee review the findings of both bodies.
3. The Board of Auditors reports on a regular
basis, covering organisations, UNHQ itself and peacekeeping operations.
These reports have a reputation for being thorough. The Board
of Auditors, whose membership includes the UK Comptroller and
Auditor General, acts as external auditor of the accounts of the
UN, its funds and programmes.
4. The reports of the OIOS, Board of Auditors,
Advisory Committee on Administration and Budget Questions and
Fifth Committee are available through the UN Documentation system.
United Nations Development Programme (UNDP)
5. In January 2000, the Executive Board
of UNDP approved a revised set of Financial Regulations and Rules
for UNDP. One objective of this comprehensive revision was to
clarify lines and limits of authority, thereby strengthening the
internal accountability in the organisation.
6. From the biennium 1998-99, UNDP had harmonised
its budget presentation to its Executive Board with the budget
presentations of UNICEF and UNFPA. This harmonised budget presentation
served to provide greater transparency and to strengthen accountability.
Reporting on co-financing has been improved in order to strengthen
UNDP's accountability to its donors.
7. The creation of a culture of accountability
for results is a stated goal in the "Administrator's Business
Plans 2000-03[18].
The former Bureau for Planning and Resource Management and the
former Bureau for Financial and Administrative Services were merged
in early 2000 into the Bureau of Management (BOM) to provide better
co-ordination of human, financial, administrative, legal and information
technology functions.
8. In August 2000, within BOM, an Office
of Legal and Procurement Support (OLPS/BOM) was created with a
number of functions which supports the new culture of accountability.
The new Office is responsible for all legal support functions
to UNDP, which were previously divided between two separate units.
This consolidation ensures greater consistency in the interpretation
of legislation and in the provision of support and guidance of
country offices and headquarters units.
9. The internal justice system is being
reviewed (with the participation of staff representatives) to
ensure greater transparency, efficiency and fairness in the processing
of disciplinary cases. It is expected that this review will be
finalised in January 2001, and that the outcome will be a set
of revised procedures.
10. The procurement framework has recently
been clarified and harmonised with other United Nations organisations
in the context of the comprehensive revision of the UNDP Financial
Regulations and Rules. In addition, clear revised limits for the
delegated procurement authority of UNDP Resident Representatives
and heads of Headquarters units were disseminated in July 1999.
The same communication also re-emphasised the principles guiding
UNDP's procurement, particularly the need for effective international
competitive bidding and overall transparency in the procurement
process (supported by, for example, local contracts committees
to be established in country offices). A detailed procurement
manual is being developed and will be published in early 2001.
11. UNDP is strengthening the effectiveness
of its project audits, in particular for those projects that are
executed by national governments. The Office of Audit and performance
Review (OAPR is responsible for the auditing of all parts of UNDP,
as well as for carrying out investigation as a result of suspected
or alleged misconduct. It is the lead unit in the implementation
of the Control Self-Risk Assessment (CSRA) programme, a major
feature of UNDP's accountability framework which enables staff
to identify the risks in their day-to-day work, as well as ways
to manage those risks. It is already in use in a number of countries.
Over 30 facilitators have received training. UNDP Asia is now
planning to launch the programme.
12. A new Audit Advisor function was created
at the beginning of 2000 specifically to follow up on the implementation
of the findings of internal and external audits, and to draw lessons
from such audits which might help in identifying root causes of
management problems (including mismanagement and misconduct with
respect to financial resources). These lessons will be disseminated
to staff as part of the general education and training, and will
also be used in the continued adaptation of the policies and procedures
of UNDP to changing needs.
13. UNDP's new accountability framework
stresses the importance of individual and organisational responsibility,
consistent with the values, mission and mandate of UNDP, and the
need to develop skills and competencies through learning and training
while exercising probity, prudence and transparency.
United Nations Children's Fund
14. UNICEF has tightened internal control
and supervision and is implementing a "management excellence
programme". There is currently one case sub judice
concerning allegations made against a former UN Director. The
allegation is of misappropriating funds while in office—specifically
receiving approximately $500,000 between 1989 and 1996 in kickbacks
on UNICEF furniture supply contracts. He is accused of providing
companies with confidential information enabling them to win contracts.
He has denied the allegations. The case involves nine firms in
Denmark, Sweden, Norway, Iceland, the United States and the United
Kingdom. All are now blacklisted by UNICEF. The UK company involved
in this case was an intermediary company called Sheldon International
based in Selby. Sheila and David Brown of Sheldon International
were arrested by West Yorkshire police in December 1999.
United Nations Educational Scientific Cultural
Organisation (UNESCO)
15. UNESCO's external auditor, the Canadian
Auditor General, qualified his opinion of the accounts for 1998-99
because staff promotions and appointments and decisions in respect
of the so called Participation Programme were taken without regard
to the rules established by the governing bodies. The external
auditor recognised that the new Director-General had embarked
on a process of reform intended to restore respect for rules and
procedures and had taken prompt and decisive action in regard
to the mismanagement of the Participation Programme.
16. The UNESCO Executive Board has recently
endorsed the establishment of an Office of Internal Oversight
recommended by the new Director-General. The arrangements are
based on proposals from the Institute of Internal Auditors and
take account of a special report by the UN Joint Inspection Unit—both
of which were commissioned by the new Director-General. The Director
of Internal Oversight will be John Parsons of the UK National
Audit Office who established the new internal oversight arrangements
at UNICEF. In order to ensure the Director's independence the
Director-General is required to consult the Executive Board on
his appointment and tenure. The Director's annual report is transmitted
to the Executive Board and the External Auditors have automatic
access to all his findings.
United Nations High Commissioner for Refugees
(UNHCR)
17. In the past, concern was expressed about
UNHCR's relationship with its implementing partners in terms of
accountability and supervision. UNHCR spends about 40 per cent
of its income through implementing partners in the field. It is
important therefore that UNHCR obtains proper accounts of expenditure.
According to last year's audit report, UNHCR has received audit
certificates from over 70 per cent of implementing partners. UNHCR
is committed to continuing to improve this compliance rate. UNHCR
also has its own Inspection Department, which oversees and inspects
programme planning and implementation, as well as an Evaluation
Department—both of whom regularly visit programmes.
18. A major initiative to improve budgetary
transparency and thereby reduce any opportunities of corruption
has been UNHCR's introduction of a unified budget from January
2000. This replaces a complicated system of general and supplementary
programmes, where funding for programmes could come from a number
of budgets and money was hard to track. Now all country programme
and headquarters budgets are part of the unified budget—the
only exception covers emergencies during the year which now are
financed from the Operational Reserve.
19. The National Audit Offices of the member
states of UNHCR take turns to undertake the external audits. The
UK's National Audit Office will undertake this year's audit (2000).
External auditors verify the internal audit. Spot check audits
are made of a wide selection of UNHCR country programmes and central
headquarters departments, as well as a summary review carried
out of all UNHCR accounts world wide. The audit report is made
public and is presented to both UNHCR Executive Committee (EXCOM)
and the UN General Assembly's Fifth Committee for consideration
every year. Any recommendations for action within the audit report
are "tracked" by the auditors who, at the end of the
year, produce a follow-up report detailing progress and points
still to address. The EXCOM members were satisfied this year that
all the major recommendations of last year's report had been acted
upon.
World Health Organisation(WHO)
20. In May 1999 the World Health Assembly
called for further improvements in transparency, accountability
and effectiveness of the financial systems of WHO in accordance
with best management practice. According to the Financial Report
and Audited Financial Statements for 1998-99 and the Report of
the External Auditor to the World Health Assembly, progress has
been made. Standardised business rules and procedures for programme
implementation and monitoring have been developed and these have
been implemented from January 2000. An Activity Management System
now serves as the basis for preparing and monitoring work plans
where it is available. All documents now require an Activity Management
System code in order to be processed. This enables the Secretariat
to systematically account for its financial transactions in terms
of programme outputs and products for the first time. In addition,
progress towards the achievement of expected results will be monitored
technically and financially on a continuous basis.
21. An internal audit is carried out annually
by WHO's own Office of Internal Audit and Oversight. This is then
verified by an independent external auditor at the end of each
biennium, whose concluding opinion for 1998-99 was to provide
an assurance of material and financial propriety.
World Bank
The World Bank has recently produced its own
account of its efforts in this field. It is entitled: "Helping
Countries Combat Corruption: Progress at the World Bank since
1997" (June 2000). (Not printed).
GOOD EXAMPLES
OF ANTI-CORRUPTION
STRATEGIES (QUESTION
28)
Uganda
1. The Government of Uganda introduced its
first anti-corruption strategy in 1998. The President launched
the second strategy and action plan in July 2000. Throughout the
President has given these efforts his personal backing and that
is crucial.
2. The second strategy will run from 2000
to 2002. It reflects an assessment of progress with the first
strategy. It identifies four priority fields of action:
— creating workable rules for improved
management of public resources and the use of public authority;
— assuring compliance by building institutional
capacity and providing necessary resources;
— promoting voluntary compliance by
reinforcing ethics, minimising opportunities and reducing temptation;
— creating mechanisms in government
and civil society to monitor and supervise implementation.
3. The Minister of Ethics and Integrity
has a central role in promoting implementation of the plan. She
is located in the President's office and, in this case, that location
increases the authority of her post. Her department will be strengthened
to increase its capacity for supervision and monitoring. The Minister
chairs and anti-corruption inter-agency forum that co-ordinates
activities and high level cases.
4. Another key agency is potentially the
Inspectorate General of Government. It is an independent body
reporting to Parliament and has powers of investigation and prosecution.
The budget of the Inspectorate General has been increased by 47
per cent and that of the Auditor General by 39 per cent. Both
bodies have the independence, status and powers to carry out their
functions effectively and are becoming increasingly important
institutions in the front line of the fight against corruption.
5. The key changes in recent years have
been:
— to conduct surveys of the extent
that corruption bears down on ordinary Ugandans and to promote
increased public awareness about the need to avoid and report
on bribery by corrupt officials;
— to reduce opportunities for corruption
by reducing the degree of state ownership and involvement in the
economy, for example through well-managed privatisation of utilities
and by the introduction of improved public expenditure management
systems;
— a major reduction in the incentives
for corruption by raising average salaries in the public sector
by 300 per cent in real terms over 1993-97 which has brought incomes
closer to a living wage. Primary teachers' pay increased by 930
per cent, nurses' by 1,175 per cent, police officers' by 1,004
per cent and Permanent Secretaries' by 42,464 per cent over this
period. This has been accompanied with strenuous efforts to improve
payroll management resulting in a reduction in ghost workers and
savings of approximately US $3.9 million per annum;
— introduction of more open budgeting
processes which have made detailed spending plans public and the
use of expenditure tracking surveys to ensure that public resources
are used for intended purposes. This has made it more difficult
for budget holders and local government to divert resources to
other uses and has ensured that budgeted funding, eg for primary
education, is more effectively utilised. In 1991-95 less than
30 per cent of non-salary spending actually reached schools but
by 1998 a repeat survey showed a major improvement;
— to increase constraints by strengthening
Parliament and reducing controls on media reporting of corruption
cases, and by strengthening prosecuting authorities. This pressure
has been instrumental in ensuring investigations and sanctions
against corrupt individuals. There are also plans for a sector-wide
approach to justice and order which should tackle corruption in
the police and judiciary as well as enhancing their capacity and
effectiveness;
— strengthening of key institutions.
Considerable effort (not wholly successful) has been made to improve
tax administration systems and to reduce tax avoidance, evasion
and corrupt payments to collectors. There are also plans for a
sector-wide approach to justice and law and order which should
tackle corruption in the police and judiciary as well as enhancing
their capacity and effectiveness.
6. All these measures are desirable in their
own right as contributions to development by improving governance.
They are also key to effective anti-corruption efforts and they
need to be followed through and completed.
7. Governments are also judged by their
willingness to prosecute politically embarrassing cases of corruption,
especially those involving high ranking members of the Government.
Junior ministers and senior officials of government have been
prosecuted and more senior members have left government reputedly
because of connections with corrupt activities. Many of these
charges arise out of comprehensive investigation into the whole
process of privatisation by a parliamentary committee that has
been targeting inefficiency and abuse by Ministers and public
employees. Early in 2000, a former Justice Minister and Attorney
general was jailed on fraud and theft charges. Parliament has
recently been pressing the case against major General Salim Saleh,
the President's half-brother, over his secret purchase of the
Uganda Commercial Bank and alleged involvement in the acquisition
by the armed forces of a defective fleet of military helicopters
from Belarus. Also in late 1998, censure papers against the Minister
of Finance, Planning and Investment were sent to the President.
The Minister was allegedly involved in the deliberate under-evaluation
of Uganda Airways prior to privatisation while having an interest
in one of the companies bidding at the time. At the same time,
a highly revealing inquiry into Corruption in the Police Force
has forced the resignation of the former CID director.[19]
8. What impact have these measures had on
levels of corruption? As yet ordinary Ugandans may have felt little
change. Many of the measures are recent, can only be implemented
to the extent that resources allow and will take time to become
embedded. There are also areas of continuing weakness including
the need to tackle corruption in local government. New measures
requiring local government to publicise the allocation of funds
in the districts for which they are intended are giving local
groups the information with which to challenge corrupt authorities.
9. The financing of political activities
is the probably major reason for corruption in most countries
and Uganda is not immune. As Uganda moves towards multi-party
democracy it is important that this issue is addressed by political
parties.
10. Overall, Uganda scores highly for commitment,
for its broad vision of anti-corruption activities and governance
reform and for the measures that it has implemented. The priority
is to fully operationalise the anti-corruption strategy.
11. DFID has responded to the Government's
strong lead by supporting its action plan. DFID is:
(i) finalising documentation for a £2
million programme of support to the GOU Anti-Corruption Action
Plan;
(ii) contributing £1.5m to strengthen
financial accountability systems in national and local government;
(iii) contributing £1m to strengthen
the Government's independent audit capacity;
(iv) working with the EU and World Bank partners
to strengthen government procurement systems; and
(v) developing a fully integrated and costed
plan for the Government's agencies in the Justice Law and Order
sector.
Tanzania
12. Tanzania was amongst the first African
countries to address corruption seriously. The hard-hitting Warioba
Commission report was published in 1996. By late 1999 Tanzania
had developed and published a comprehensive and broad-ranging
national Anti-Corruption Strategy and Action Plan. The Strategy
identified the following seven priority areas:
— rule of law and legal framework;
— financial discipline and management;
— public education, awareness and sensitisation
of rights;
— whistle blowers and witness protection;
13. progress so far is as follows:
— it is planned to review the legal
framework and restore confidence in the judiciary and enforcement
authorities.
— new legislation (the public finance
and procurement bills) will bring about improvements in financial
management by clarifying roles and responsibilities.
— procurement is a key area to control
corruption. Again legal changes (the Procurement Bill) will bring
improvements.
— on publicity, education and awareness
of rights, DFID is assisting PCB to develop a communication strategy
for anti-corruption. April 2001 is the likely launch date of this
strategy.
— Tanzania has developed a comprehensive
Public Service Reform programme. It provided a wider and supportive
programme of governance reform. It included reductions in the
opportunities for corruption by eliminating from the public sector
activities that were more appropriate for the private sector or
not required; it has reduced the incentives for corruption by
raising public sector pay towards a living wage and by introducing
concept of performance management, delegation to agencies and
improvements in financial management.
— protection of whistle blowers and
witnesses: no progress reported to date.
— media: some civil society groups
have undertaken activities independently, for example the training
for journalists.
There are also commitments in Tanzania's Poverty
reduction Strategy Paper to addressing corruption in sector strategies.
14. Tanzania has mapped out a viable strategy
but there are problems with its implementation. The main criticisms
include some retreat on public sector pay which has declined by
30 per cent in real terms over the last three years. Questions
have also been raised about the independence, authority and effectiveness
of Tanzania's anti-corruption bureau. In the last three years
only 12 civil servants have been prosecuted. The National Strategy
identified political will as "the critical and paramount
starting point" for further progress.
15. DFID has been actively engaged in most
aspects of the anti-corruption strategy. This includes co-financing:
— activities around the National Anti-Corruption
Strategy and preparation of a communication strategy;
— the public sector reform programme;
— capacity building in civil society
and the media.
Anti-Corruption Commissions
16. International experience suggests that
strengthening oversight and sanctions through independent, well
resourced and powerful public bodies, such as audit offices and
anti-corruption commissions have a role in reducing corruption.
A number of countries including Kenya, Uganda, Malawi and Tanzania
have projects underway, which DFID is supporting, to strengthen
and corruption laws and establish independent anti-corruption
commissions. UK support is directed to building up the capacity
of these commissions to educate state institutions on anti corruption
techniques, to detect and investigate instances of corruption
and to prosecute corrupt officials and ministers. To be successful,
anti-corruption agencies need real political commitment, administrative
autonomy; independence from the police; adequate financial resources;
power to investigate and prosecute; power to recruit directly;
relevant laws and a functioning judicial system[20].
In practice commissions tend to lack some of these features, but
they can continue to provide a focus for anti-corruption strategies.
We expect their powers and performance to improve over time, in
part, owing to international pressure. But commissions will only
ever be part of the solution.
Department for International Development
December 2000
18 "The way forward: the Administrator's Business
Plans, 2000-03" presented to the UNDP Executive Board at
its First regular Session, January 2000 (Document No. Dp/200/8).
See particularly paragraphs 67-79. Back
19
Information supplied in Dolg, Alan: "Desk Review 3: Anti-corruption
Initiatives", Corruption and Anti-Corruption Strategies Research
project (DFID), Unit for the Study of White Collar Crime, Liverpool
Business School. Back
20
Experience with these initiatives captured in Doig, Alan: "Desk
Review 3: Anti-Corruption Initiatives". Corruption and Anti-Corruption
Strategies research Project (DFID), Unit for the Study of White
Collar Crime, Liverpool Business School. Back
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