Select Committee on International Development Minutes of Evidence


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;

    —  procurement;

    —  public education, awareness and sensitisation of rights;

    —  public Service Reform;

    —  whistle blowers and witness protection;

    —  media.

  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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