1. BUILDING INTEGRITY & REDUCING CORRUPTION Defence procurement & Parliamentary oversight Leah Wawro Transparency International UK Defence & Security Programme

2. WHAT WE DO Our vision is a world where Defence Ministries, Security Ministries, Armed Forces, Security Forces and arms transfers are transparent, accountable and free from corruption. Defence Ministries & Armed Forces; police and security forces Defence companies & industry associations Civil society & media Research Tools and training Others: parliamentarians, intl. organisations

3. IMPACT DANGEROUS Corruption undermines military effectiveness. Poor equipment risks the lives of troops. DIVISIVE Corruption destroys citizens’ trust in government and the armed forces. WASTEFUL The defence sector is worth $1.7 trillion a year. The waste from corruption is in billions of dollars. Why does corruption matter- a citizen’s perspective

4. IMPACT Defence officials tell us that corruption: Wastes scarce resources Hurts operational effectiveness Diminishes public trust Corruption is a strategic issue for defence & security forces. Why does it matter to the military and defence officials?

5. HOW DOES CORRUPTION HAPPEN IN DEFENCE MINISTRIES & ARMED FORCES? POLITICAL PERSONNELPROCUREMENT Defence & Security PolicyLeadership BehaviourTechnical Requirements/Specifications Defence Budgets Payroll, Promotions, Appointments, Rewards Single Sourcing Nexus of Defence & National AssetsConscriptionAgents & Brokers Organised CrimeSalary ChainCollusive Bidders Intelligence Services ControlValues and StandardsFinance Packaging Export ControlsSmall BribesOffsets FINANCEOPERATIONS Contract Award & Delivery Asset DisposalsDisregard of Corruption In-CountrySubcontractors Secret BudgetsCorruption Within MissionSeller Influence Military-owned BusinessesContracting Illegal Private EnterprisesPrivate Security Companies

6. GOVERNMENT DEFENCE ANTI- CORRUPTION INDEX 2013 Assesses vulnerability to corruption 5 key areas: political, personnel, operations, financial, procurement Tool to help guide reform Independent assessment with MOD input

7. RESULTS: EUROPE & CENTRAL ASIA

8. GI FINDINGS: CROATIA CROATIA: BAND C 66%53%63%45%31% POLITICAL FINANCIALPERSONNEL OPERATIONS PROCUREMENT + Parliamentary Defence Committee generally transparent + No evidence of off-budget expenditure, contingency funds small + Well-established payment system -Defence budget lacks detail; limited time to review prevents strong parliamentary scrutiny -Lack of transparency in Military-owned businesses -No provisions to protect and encourage whistleblowing in defence sector -Procurement legislation has exemptions for defence and intelligence -Low levels of competitive, open bidding

9. PROCUREMENT: GOOD PRACTICE Good Practice Transparent, detailed procurement process available to public Procurement based on well-defined defence strategy Controls on tender boards Competitive procurement: single-sourcing approx.10% or less Transparency and due dilligence in offsets High standards for companies Control of agents and brokers Controls on sub-contractors and subsidiaries Anti-collusion mechanisms

10. GOOD PRACTICE EXAMPLES: PROCUREMENT Brazil Agents and brokers banned Procurement is generally competitive, not single-sourced By law, financing package must be published before contract is signed Poland Transparency in full procurement cycle; Details of tender proceedings available online Transparency for both competitive and single-sourced procurement Clarity in asset disposals, including what funding received goes to Greece Following scandals, Greece plans to phase out offsets by end 2014 Ongoing offset contract subject to extensive due diligence through State Audit Council Potential tool: Defence Integrity Pacts Independent Monitor Technical support team: local and international Timescale: from procurement announcement to end; include offsets Funding: directly by government; regional fund; clause in contract

11. PARLIAMENTARY OVERSIGHT Good practice: Defence committee with strong powers of scrutiny over budget Scrutiny of acquisition planning, defence procurement; no items exempt Access to audit reports Parliamentary committee provided with extensive information on secret items ; line-item description of expenditures and audits Power to scrutinise and oversee intelligence services Disclosure of past and future purchases

12. GOOD PRACTICE EXAMPLES: PARLIAMENTARY OVERSIGHT Australia Joint Standing Committee on Foreign Affairs, Defence & Trade can call witnesses and have full access to relevant documents. This may be at the call of Ministers or the Legislature. Committee can ask government decision- makers to publicly justify rationale for defence spending “AusTender” website has extensive detail on plans, contracts awarded South Korea Tiered system for balancing security and budget transparency. Three categories: A.Budget items presented in full to entire national assembly; B.Disaggregated items available without restriction to members of defence committee only; C. Disaggregated items revealed to defence committee only with some restrictions Proposed and final budget available online Potential tool: Defence Expert Consulting Group Challenge: technical complexity of defence Group of experts from diverse backgrounds. Source of expertise, assist parliamentarians. Independent of the military (though may include retired military personnel). Well-respected group member will help raise public awareness and support.

13. WHAT CAN BE DONE?. 1.Engage leadership, build confidence 2.Analyse and understand the risks 3.Use good diagnostic tools, surveys and metrics 4.Develop a counter-corruption plan 5.Training on counter-corruption 6.Clear Codes of Conduct 7.Procurement reforms; use of monitors 8.Engage media, civil society 9.Work with defence and security contractors 10.Establish an anti-corruption Director & unit

14. Questions, comments, feedback? www.ti-defence.org Leah Wawro: leah.wawro@transaprency.org.ukleah.wawro@transaprency.org.uk