EuropeAid The View from Inside Anti- Corruption Authorities (ACAs): Evaluating Performance and Challenges nti-Corruption Seminar, Prepared for the EuropeAid A nti-Corruption Seminar, Brussels, October Brussels, October, 2010 Francesca Recanatini Senior Economist The World Bank

EuropeAid Motivation Empirical observation and for policy guidance 1980s and 1990s: international standards and agreements and parallel mushrooming of ACAs Increased support of ACAs by multi- and bilateral donors Observed limited “impact” (Meagher (2005), Doig et al.(2005), Heilbrunn (2004), U4 (2007), UNDP (2005), Pope (1999))

EuropeAid Observed lifecycle of ACAs Public Awareness & Political Consensus on Corruption Crisis Anti-Corruption Commitments are made (usually by politicians) ACA is established – work begins with high expectations ACA unable to meet unrealistic expectations, gets stuck Loss of credibility of ACA plus increasing political pressure Funding cut; attention goes down ACA quietly expires (Honduras, Peru, Guatemala) or is suddenly dismantled by the top leadership (SL, Nigeria, Zambia) Time Perceived level of corruption in the country remains the same

EuropeAid Questions Can ACAs be (or become) an effective tool in the fight against corruption? If so, are there are policies that can be used to make ACAs more effective? => Starting point: a more systematic analysis of ACAs and of “factors” that can affect their functioning and effectiveness

EuropeAid Methodology Anti-Corruption Authority: a specialized agency, body, unit or department established by a government that has the mandate of addressing corruption. Initial information based on Workshop (March 2010) with 10 ACAs Factual information from 30 ACAs collected through a mailed-in survey Plus 5 case studies (in-depth interviews in the field) On going

EuropeAid Latvia (2002) Sri Lanka (1994) Singapore (1952) Uganda (1986) Estonia (1918) Anti-Corruption Authorities Sampled Philippines (1987) Senegal (2003) Peru (2010) Tanzania (2007) Botswana (1994) South Korea (2002) Indonesia (2004) Brazil (2001) Guatemala (2008) Malawi (1997) Zambia (1982) Slovakia (2004) Costa Rica (2004) Haiti (2004) Slovenia (2004) Sierra Leone (2000) Rwanda (2003) Kenya (NA) Mozambique (2004) Lesotho (NA) Case Studies: Rwanda, Indonesia Ethiopia, Mongolia, Slovenia Mauritius (2002) Namibia (2006) Ethiopia (2001) Mongolia (2007)

EuropeAid Outline 1.Challenges 2.Structure and mandate of ACAs 3.Institutional structure and relation with other agencies 4.Resources and internal organization 5.Independence, oversight and accountability 6.External stakeholders and expectations

EuropeAid Results (1): Challenges of ACAs Critical: to have the key institutions and laws in place jointly with support of the leadership Tension between prevention and prosecution Big fishes or small ones? Importance of outreach and education Perceived unfair evaluation of ACAs and need for more focus on measuring prevention activities as a measure of success Engaging the private sector Politics and ACAs

EuropeAid Results (2): Structure and mandate ACAs can take many forms and display different functions and mandates, from prevention to investigation and prosecution, policy and research and outreach. There is a tension among practitioners when it comes to the functions that ACAs should have. Organizational theory recommends single mandate to increase effectiveness. In our sample => “effective” ACAs among both single function agencies and multi-function agencies (Hong Kong, Brazil vs Slovenia).

EuropeAid “Single Agency” Investigate, prosecute, prevent & educate “Hong Kong Model” Argentina, Bosnia- Harzegovina, Botswana, Guinea, India, Mauritius, South Korea, Indonesia Models of ACAs “Multi-Agency” Separate offices with separate mandates USA (OGE) India, EU, “Investigative” Focus on investigation and enforcement “Singapore Model” Lithuania, Latvia “Parliamentary” Focus on prevention Australia (New South Wales), Mongolia

EuropeAid ACAs and functions

EuropeAid KPK’s Anti-Corruption Mechanisms Mandates Article 6 To coordinate Article 7 To supervise Article 8 To pre-investigate, to investigate, to prosecute Article 11 To prevent Article 13 To review systems Article 14 1.Attorney General's Office 2.Police 3.Supreme Audit 4.All Inspectorate Generals 5.Others 1.Attorney General's Office 2.Police 3.Supreme Audit 4.All Inspectorate Generals 5.Others 1.Agencies which render public services 1.All powers granted to other LEA by the Law of Procedures 1.Certain powers which are not granted to other LEA

EuropeAid Results (3): Institutional structure and relations with other agencies Clear mandate leads to better coordination among different agencies Need for clear agreements among agencies Important to understand who was performing some of the functions that the ACA is taking over and why it was not working Good examples of “links” with central banks, judicial agencies and revenue monitoring agencies Less common => relations with regulatory agencies especially agencies regulating natural resources Remaining challenge: de jure versus de facto

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Investigating corruption cases: Indonesia The Supreme Audit Board (BPK) Provide the Investigative audit report, initial data, state loss estimation Financial Intelligence Unit (PPATK)‏Provide the Suspicious Transaction to support investigation process Bank and Insurance CompaniesProvide the Financial Statement to support investigation and asset tracing process Other Departments (National Land Agency, Immigration, Department of Law and Human Rights, etc) Provide supporting data related to the case (People Movement System, Company Profile, etc)‏

EuropeAid Colombia: Agencies with Jurisdiction

EuropeAid Results (4): Resources and internal organization Critical to get the technical and organizational foundations established. But… …resources are a constraint. Potential factors : o Lack of a long term horizon commitment o Unskilled staff o Donors’ involvement Strategy for coping with limited resources (ex. triage of allegations, focus on innovation and IT)

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Results (5): Independence, oversight and accountability Importance of legislative set up Independence: selection/removal of ACA leadership and freedom of action

EuropeAid Appointment of ACA head

EuropeAid Results (5): Independence, oversight and accountability Importance of legislative set up Independence: selection/removal of ACA leadership and freedom of action Reporting line Accountability: administrative and judicial Established mechanism to show results. But… Political interference remains the key challenge

EuropeAid Monitoring performance: selected examples Mongolia: number of cases investigated and solved under the law, percentage of public officials who submitted income and asset disclosure forms, number of actions plans adopted by public organizations and local governments Indonesia: number of cases investigated and conviction rate Brazil: number of internal investigations completed and penalties enforced, number of companies suspended or debarred, data portals and number of visits, number of training delivered and of participants

EuropeAid Results (6): External stakeholders and expectations To manage expectations and to balance sensationalism with prevention work are key (SL, Nigeria, Kenya, Indonesia) Citizens and the media are powerful tools that can create an enabling environment. But… …the ACA needs: o Continuous engagement with public and with the media for inputs and for feedback (KPK) o To provide unrestricted access to information o To have communication strategy to avoid risks linked to political pressure (Slovenia)

EuropeAid Main messages ACAs can have an impact. The challenge may be to be able to measure it. Replication of “successful experiences” should be done only with caution, after having carefully understood and integrated country- specific factors Political pressure, vested interests and State Capture are the key challenge Finally, there is a need for further analytical work based on a broader set of countries.

EuropeAid Going forward to support ACAs Importance of peer-to-peer network and support but avoid duplication of efforts (International Association of Anti-corruption Authorities) Review of UNCAC Prevention is key (Doha, November 2009) Importance of involving more actively private sector counterparts Importance of a long term vision/plan for the success of these ACAs