ICPS Anti-Corruption Seminar Programme, November 2017 An Introduction Keith Sargent Senior Fellow The Institute for Statecraft www.statecraft.org.uk

What is corruption? Are you corruptible? How Corrupt is your Country?

Corruption Perceptions Index 2016 Malta - 47 Libya - 170 North Korea - 174 Panama - 87 Sudan - 170 Venezuela - 166 Trinidad and Tobago - 101 Angola - 164 Afghanistan - 169

Corruption Causes and Enablers - Considerations Decline in morals and ethics Greed / self enrichment Poor socio-economic conditions Week checks and balances (control, supervision, auditing) Lack of commitment by leadership Mismanagement / inappropriate organisation Prevalence of foreign business Strength of organised crime Regime legacy (e.g. Apartheid) Transition (e.g. liberalisation of travel, emergence of free trade) in an environment that has not yet adapted to it

The Continuum - Maladministration to Corruption* Improper Behaviour Corruption Managing badly Inappropriate personal behaviour (e.g. harassment) Misuse of entrusted power or office for private gain Inefficiency Misuse of government systems Bad judgement and decisions Misuse of government resources (could also be corruption) Incompetence Lack of due process Behaviour that may be administrative misconduct Behaviour that may be criminal * Source: “The Commonwealth’s approach to Anti-Corruption: Anti-Corruption Plan Discussion Paper”, AG’s Department, Government of Australia, 2011

Improper Behaviour Can include: inappropriate personal behaviour misuse of government systems misuse of government resources behaviour that may otherwise breach a national code of conduct (e.g. for the parliamentarians, judges, the public service, etc.)

Maladministration Refers to the making of an official decision in a manner which is: inefficient incompetent contrary to law arbitrary unreasonable without proper justification lacking in procedural fairness made without due consideration of the merits of the matter

Corruption - definitions Corruption ~ commonly defined as the misuse or the abuse of public office for private gain, (WorldBank, 1997, UNDP, 1999). Corruption ~ involves behaviour on the part of officials in the public sector, whether politicians or civil servants, in which they improperly and unlawfully enrich themselves, or those close to them, by the misuse of the public power entrusted to them, (Transparency International). Corruption ~ behaviour which deviates from the formal rules of conduct governing the actions of someone in a position of public authority because of private-regarding motives such as wealth, power or status, (Prof. Mushtaq Khan).

Types / Levels of Corruption 1 (source: Wikipedia) Petty corruption ~ occurs at a small scale and within established social frameworks and governing norms, (e.g. the exchange of small improper gifts or use of personal connections to obtain favours). This is particularly common in developing countries and where public servants are significantly underpaid. Grand corruption ~ occurs at the highest levels of government in a way that requires significant subversion of the political, legal and economic systems. Such corruption is commonly found in countries with authoritarian or dictatorial governments and in those without adequate policing of corruption by anti-corruption agencies. Systemic (or endemic) corruption ~ occurs when corruption is an integrated and essential aspect of the economic, social and political system. It is not a special category of corrupt practice, but rather a situation in which the major institutions and processes of the state are routinely dominated and used by corrupt individuals and groups, and in which most people have no alternatives to dealing with corrupt officials. (Source U4, Anti-Corruption Resource Centre, http://www.u4.no/glossary/systemic-corruption/

Types of Corruption 2 Corruption can also be differentiated in terms of what can be called 'true corrupt intent' and 'necessary corruption‘: true corrupt intent implies bribery in order to obtain a service to which one is not legally entitled. necessary corruption implies bribery in order to obtain a service to which one is legally entitled and it occurs in order to get things done (Facilitation payments would fall into this category).

Types of Corruption 3 Bribery Extortion deemed primary Fraud } See Dictionary provided by the Business Anti Corruption Portal http://www.business-anti-corruption.com/corruption-dictionary   Bribery Extortion  deemed primary Fraud } Embezzlement, (fraudulent intent to deprive an owner of his or her property, often by manipulating accounts or creating false invoices) Misappropriation (or other diversions of property, involves third parties or employees abusing their position to steal from an organisation) Facilitation Payment Collusion (e.g. agreement to limit open competition by deception) Obstruction of Justice Trading in Influence / Influence Peddling (involves offering undue advantage (e.g. attempting to sell a senate seat as per Illinois Governor)) Abuse of office/function (e.g. speculation on basis of information gained in office) Illicit enrichment Money laundering Can be argued that Fraud is not Corruption

The Fraud is Not Corruption Argument Auditors often use the distinction that Fraud is not Corruption “‘Fraud’ consists of deriving undue benefit by bypassing some controls or bending some rules. There remains some evidence in the records to trace the fraud. ‘Corruption’ takes place in the form of bribery, kickbacks, commissions, or other benefits without leaving any trace in the official records”. Source: “ROLE OF AUDIT IN FIGHTING CORRUPTION”, Muhammad Akram Khan, Chief Resident Auditor, United Nations Mission in Sudan (UNMIS), September 2006, http://unpan1.un.org/intradoc/groups/public/documents/UN/UNPAN025122.pdf

How Ethical is your Behaviour? Do you: Act with honesty and integrity? Manage resources appropriately? Use powers responsibly? Explain reasons for decisions? Strive to do things in the best possible way? Act with due regard for fairness, accountability and the public interest?