Select Committee on International Development Appendices to the Minutes of Evidence

Attachment 1

Topic Briefing for British Council staff


Issued by the Governance Team, Manchester

  The purpose of this topic briefing is:

    —  to inform British Council staff, primarily those working outside the UK, about the topic of Corruption; and

    —  to help them plan British Council initiatives in this field.

  The document provides an overview of issues internationally but is written from the viewpoint of experience in the UK. It provides information on key resources and information sources and recommended further reading. It suggests three model project ideas for British Council office.

  The briefing is primarily intended as an internal document for Council staff. If it is felt useful to use it with external contacts and partners there is no reason not to. It is a public document, has been issued in simple paper format to Council offices and is posted on the Council's governance web pages. It can be edited and reprinted locally as necessary.

  The paper has been commissioned by the Governance Team in Manchester and was written by Jon Moran of The Unit for the Study of White Collar Crime at Liverpool John Moores University.



  At its most basic corruption is a breach of the trust placed in individuals by the public. This trust may be given to a public official or someone working in the private sector. The public trusts that individuals concerned will perform their duties impartially and properly. Corruption occurs when someone in a position of trust abuses this trust for private gain. Corruption is a problem because it destroys trust and distorts normal public and private sector administration. Corruption undermines fair administration of life affecting everything from local government services to national politics.

Corruption in the Public Sector

  Public sector officials including government officials, elected politicians, local government officials and others involved in the provision of public services are expected to perform their duties fairly, professionally and on the basis of their existing salaries. When public officials seek other benefits for doing their job this is corruption. Such actions may include requesting money for performing their job, or even not performing their job (bribery) taking resources for their private use (theft, embezzlement) or promoting or recruiting friends or relatives (nepotism).

Corruption in the Private Sector

  Corruption in the private sector is just as much of a problem as public sector corruption. We give the private sector our trust paying money for services which we expect to be properly performed. Corruption in the private sector may include tax evasion, smuggling, insider trading, fraud, theft, embezzlement and so forth. An important area of corruption is where the public and private meet for example when the government contracts services for transport or construction or health or where the government grants permission for private sector activities such as building or foreign investment.

  Whether in the public or private sector, corruption is a breach of public trust, a breach of public responsibility and is usually a breach of some law.

Why is corruption of interest to The British Council?

  Target audiences for the Council in government, the private sector and in NGOs will have concerns about corruption and how it affects them in their work and daily life. Britain has particular experience of the effects of corruption. This issue provides a good opportunity to work with partners on the basis of sharing an experience which is not always exemplary. The UK government, through the FCO, DFID and DTI, and international agencies take a keen interest in the effects of corruption. The World Bank and other international agencies put considerable resources into tackling corruption.


  Corruption distorts the normal processes of government, public administration and economic activity. The effects are overwhelmingly negative. In some countries corruption may be seen as part of everyday life but there is strong evidence that it is at a high economic and financial cost.

  High level corruption involves major regional and national organisations and individuals.

Examples of high level corruption

Political corruption: where politicians attempt to control the political process and gain extra benefits. They demand bribes and siphon money from the public sector to fund election expenses or enrich themselves and their supporters. They promote political supporters to the public administration, judiciary, police and local government. This has the effects of promoting inefficiency in government politicising public administration and reducing trust by the public in the government.

  Corruption in public administration: where civil servants seek extra income for themselves or to pass on to their political supporters. They demand money or other rewards for the performance or non-performance of their duties, embezzle or steal funds. This promotes inefficiency, poor decision-making and the unfair provision of services. Private investment may be undermined by government officials' demands for bribes; resources may to into unproductive activities; the private sector turns to corruption to get things done.

  Corruption in the legal system: where judges, lawyers or police seek extra income or promotions. They take bribes from citizens, public officials, politicians or powerful groups. This leads to the abuse of the judicial process, inefficiency and delays for those who cannot pay bribes and abuse of human rights by police in the pay of politicians, powerful business or criminal groups.

  Low level corruption occurs in areas where services are provided locally such as the police or health. Low level officials demand bribes from citizens or take bribes from local powerful groups or individuals. Citizens, especially poorer citizens, are especially affected by this. They do not receive a fair service, those who cannot afford bribes lose out; inefficiency is commonplace. Wider effects can be a lack of faith in the government, the political process and public administration.

  Corruption in the private sector: Public-private corruption in procurement affects fairness in the awarding of contracts. Contracts can be awarded to inefficient bidders. Rigging markets and contracts can affect the willingness of other private companies to set up or invest. The embezzlement of company funds or companies which deliberately bankrupt themselves can affect trust. Offences like smuggling and tax avoidance deprives the state of funds for the provisions of services.


  Corruption in Britain is an issue in three areas. They show the importance of corruption as a political and economic issue.

    —  public sector corruption: political corruption in the form of "sleaze" became a big issue in the 1990s with allegations of politicians taking money or gifts from businessmen to ask questions in parliament or affect legislation.

    —  public sector corruption: local government saw scandals with local government politicians committing fraud and taking bribes. In the police there were accusations of corruption and officers taking bribe money from criminals.

    —  private sector corruption: following financial deregulation in the City of London, a series of scandals occurred including large fraud and insider trading cases.

Tackling corruption in the UK

  To respond to these problems the UK used three main strategies:

(a)   Existing agencies

  The National Audit Office examines public spending on behalf of the UK Parliament. It is independent of Government. It audits the accounts of all government departments and a wide range of public bodies. It targets areas of government expenditure where waste, misappropriation or fraud are risks. It provides corruption prevention advice. The NAO reports to the Public Accounts Committee, an independent parliamentary committee which calls departments to account for their procedures and practices.

  The Audit Commission audits local government and the National Health Service. It reports on value for money, efficiency and levels of public service. It has an anti-fraud unit which publishes manuals on fraud and corruption prevention and detection and which monitors trends and risks.

  Parliamentary Committee on Standards was set up to implement new rules on the conduct of Members of Parliament. It asks for reports on MPs financial interests, the gifts they have received from domestic or foreign bodies and makes reports on individual MPs. It can recommend their suspension from the House of Commons.

  Parliamentary Ombudsman deals with complaints from citizens on government maladministration.

(b)   Official Inquiries

  Inquiries were made into specific problems. Official enquiries can be headed by a judge or other public figure. The Committee on Standards in Public Life, known as the Neil Committee, monitors conduct across the public sector including both elected office holders and non-elected officials.

(c)   Anti-Corruption Agencies

  The Serious Fraud Office was established in 1988 to look into large, complex frauds in the private sector. It has tackled fraud and embezzlement by a number of large companies in the UK. The CIB3 organisation was established to tackle corruption in the Metropolitan Police through investigations, internal discipline, integrity testing and providing evidence for prosecution.


  The Parliamentary Committee on Standards has successfully subjected Members of Parliament to scrutiny. The publication of its findings has placed pressure on MPs to explain their conduct. The Audit Commission successfully contributed to the reform of some corrupt local governments by providing information for prosecutions, internal local government discipline or public reports which increased pressure on corrupt individuals. The CIB3 has successfully gathered intelligence on the scope and type of corruption in the Metropolitan Police and has weeded out corrupt officers through forced retirement or prosecution.


  The large number of bodies concerned with corruption in the UK makes overall co-ordination difficult. Many authorities have overlapping roles and responsibilities for example the tax authority, the Serious Fraud Office, Customs and Excise and the Police can all deal with similar offences. The stress on self regulation for many areas of UK life such as the finance industry has not worked and has made the development of agencies like the Serious Fraud Office an expensive and time consuming way to control financial corruption.


The rise of corruption as an international issue

  Many countries have been affected by recent economic and public administration reforms which have diluted financial controls and presented opportunities for corruption. The end of the Cold War brought an expansion of opportunities for trade and investment but corruption became apparent as a major block to stable economic development in transitional countries. The growing evidence of corruption undermining aid programmes added to international interest in tackling the issue. The USA has enacted anti-bribery legislation which covers American companies operating abroad and is keen for other developed countries to enact similar legislation.

International organisations tackling corruption and their polices


  The OECD Convention Combating the Bribery of Foreign Public Officials in International Business Transactions makes it necessary for member states to pass legislation which makes it a crime for companies based in their countries to pay bribes to foreign governments. It came into force in 1998 and matches the Foreign Corrupt Practices Act passed by the USA in 1977. It represents the belief that corruption in developing countries could not be tackled until it was made a crime for companies from developed countries to pay bribes. The OECD also demands that its member countries match internationally recognised standards in accountancy, financial record keeping and bank management and procurement.


  The United Nations as a whole has become increasingly concerned with corruption and organised crime. Corruption issues are often dealt with through the United National Development Programme which researches on the causes and effects of corruption in developing countries and provides assistance to countries trying to establish or improve basic financial management and accountability. The UNDP has also collaborated with civil society initiatives such as supporting the Centre for Investigative Journalism in the Philippines. UNCTAD also undertakes work which is linked to anti-corruption such as assisting countries in introducing new computer systems for information management in customs services.

World Bank

  The World Bank has since the mid-1990s made corruption a major issue. As part of its package of assistance to countries the Bank usually requires them to implement reforms to the financial sector to improve regulation. It also encourages civil service reform which include administrative and organisational reform, the removal of "ghost" workers, changes in job description and performance appraisal. The Bank sees privatisation and deregulation as an important anti-corruption reform.

Transparency International

  TI was established in 1993. It is an NGO which has "Chapters" in individual countries which monitor and report on corruption and anti-corruption initiatives and work to develop media and public relations strategies to highlight corruption. Local chapters also work to develop anti-corruption strategies.

The UK Department for International Development

  The Department for International Development (DFID) approach links anti-corruption to poverty alleviation. It focuses on low-level public corruption eg in local government service provision which prevents citizens having access to basic resources. The DFID approach seeks to increase local participation in the management of local resources, increase local government transparency and responsiveness to civil society groups.


  Tackling corruption is not easy. Reforms can take years to have an effect. Corruption brings benefits to certain groups. It leads to a "race to the bottom" as other people begin to realise they must be corrupt if they are to achieve anything. It may develop from an existing culture of gift giving and so it can quickly become embedded in a society.

Legal strategies

  Laws can be passed to deal with corruption. This may include a law specifically defining corruption, or laws covering offences which can be grouped under the term corruption such as bribery, fraud, embezzlement, conflict of interest, money laundering, insider dealing and so forth.

  Laws have to be enforced. There is a choice whether to leave this to the existing agencies such as police, tax or customs authorities or whether to establish a special Anti-Corruption Organisation to enforce these anti-corruption laws. The most famous example is the Independent Commission Against Corruption in Hong Kong. This was set up in 1974 to tackle corruption in the police and other public services and also covers the private sector. The Corrupt Practices Investigation Bureau in Singapore is similar. Other countries which have Anti-Corruption Organisations include Australia, Botswana, Lithuania, Malaysia and Pakistan. An Anti-Corruption Organisation often performs community relations and public education functions and provides advice about preventing corruption.

  Legal reforms can encounter difficulties as the effective enforcement of law depends on a number of factors such as an independent and efficient judiciary, a professional and trained police force and a functioning prison system. Legal strategies involving investigations, trials and prison are also very expensive.

Non-legal strategies

  Much attention recently has focused on non-legal approaches to controlling corruption, which involve preventing corruption rather than waiting to use laws and the police to punish corruption after the offence. Such strategies can include:

      Public sector organisational reforms

    Adopting a formal anti-corruption policy

    Marking out job roles clearly

    Performance appraisal

    Storing and managing record properly

    Securing property and access to buildings

    Having a written code of conduct

    Appointing anti-corruption/ethics officers to hear complaints

    Educating staff in anti-corruption

    Making a whistle blowing policy

    Financial reforms

    Having effective internal and external audit

    Having a clear policy on procurement

    Storing and managing records properly

    Training staff in fraud investigation

    Strengthening civil society.

Reforms involving civil society

  It has been accepted that citizen participation is an important anti-corruption tool. Reforms should not be top-down and directed by officials. Citizens can be effective monitors of services and corruption and can actively organise to change national and local polices. Citizen initiatives can include:

    —  Establishing monitoring groups to provide citizen reports on central and local government services eg Public Affairs Centre, Bangalore, India.

    —  Incorporating citizen participation in local government decisions.

    —  Helping citizens to manage local resources (water, land) known as Common Property Resource Management.

    —  Helping local citizens to collectively pay utility bills reducing the scope for corruption by officials.

    —  Strengthening the media through training.

    —  Establishing a chapter or links with Transparency International.

Developing an anti-corruption strategy

  There are few new ideas, the important thing is the way they are put together. Anti-corruption initiatives must take account of context. For example, there is little point adopting a legal approach if a country cannot effectively investigate and prosecute offences. There are five basic steps:

  1.   Gather intelligence: Whatever the focus of anti-corruption work within a country be it an organisation, a region or a type of corruption, time must be given to find out what the corruption is, where it is, what are its effects, and what steps have been taken to tackle it.

  2.   Planning: Develop a strategy to tackle the corruption which takes account of context. What can reasonably be achieved? Who is going to implement the strategy (officials, police, citizens)? What resources are there?

  3.   Implementation: How is the strategy to be implemented, for example over what time span? What benchmarks are to be used?

  4.   Evaluation: Who will evaluate the strategy? What will be the criteria?

  5.   Sustainability: What are the costs of the programme? How will the strategy be supported in the long term?

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Prepared 5 April 2001