Good governance, ethics and transparency

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• Good governance, ethics and transparency
• Presentation at the National Meeting of
  Economists, AMECON, Maputo 12 April 2005
• By Gro Skaaren-Fystro, Special Adviser, TI Norway

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Overview

• Good governance, ethics and transparency -
  definitions
• The evil of corruption
• Challenges for private and public sector
• Good practices and lessons learnt
• Toolkit
• Business Principles for countering bribery
• Integrity Pacts

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• Good governance
• The authorities capacity and willingness to
  pursue policies that benefit the people.
• Ethics
• The principles of conduct governing an
• individual or group concerns for what is right
• and wrong, good and bad
• Transparency
• Openness, honesty and accountability in
• public and private transactions

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• Corruption is a major challenge for good
  governance, ethics and transparency.

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Transparency Internationals definition of
corruptionCorruption is abuse of entrusted
power for private gain".
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Distinguish between

• petty corruption and grand corruption
• active corruption and passive corruption

• .

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Corruption is not just about the money

• Nepotisme
• Favouring friendship
• Patronage
• Partydisiplin
• Influence-peddling

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Corruption Perception Index (CPI)

• It ranks countres in terms of the degree to which
  corruption is perceived to exist among public
  officials and politicians.
• The 2004 CPI ranks 146 countries.
• Mozambique is ranked at 90.
• It is a composite index, drawing on a number of
  polls and surveys from independent institutions
  carried out among business people, the general
  public and country analysts.

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African Union Convention on Preventing and
Combating Corruption

• Concerned with the negative effects of corruption
  and impunity on the political, economic, social
  and cultural stability of African States and its
  devastating effects on the economic and social
  development of African peoples.

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Why fight corruption?

• Corruption undermines good governance.
• It fundamentally distorts public policy.
• It leads to the misallocation of resources.
• It harms the private and public sector
  development.
• It particularly hurts the poor.

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Sectors most prone to bribery

• Public works/construction
• Arms and defence
• Oil and gas
• Real estate/property
• Telecoms
• Power generation/transmission
• Mining
• Source TI Bribe Payers Index

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Challenges for companies and public institutions

• Lack of knowledge on legislation
• Too much authority
• Sloppy application of internal rules
• Lack of transparency in decisionmaking
• Unclear responsiblities
• Whistleblowers are not taken seriously
• Red flags get no attention

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Red flags

• Potential customer/ partner
• demands cash or transfer to third party.
• demands payment to bank in tax paradise
• demands advance payment
• demands payment for services that are not defined
  or seem extraordinary
• has familymember in political position
• has bad reputation (by credible sources)

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Fighting corruption works

• Lesotho Highland Water Project

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Lessons learnt from LHWP (Lesotho)

• Procecuting international companies engaged in
  bribery is possible
• Legal aspects of corruption has been thoroughly
  tested.
• Both sides of a bribery are equally held
  accountable (briber and bribe taker)
• World Bank debarment of a major international
  company

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New anti-corruption governments The challenge of
delivery. (Kenya, 2004)

• Government procurement
• Building integrity in Government Institutions
  (police, judiciary, tax, customs, budget, audit)
• Prosecution of crimes and recovery of assets

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Transparency Internationals mission

• To curb corruption by mobilising a global
  coalition to promote and strengthen international
  and national integrity systems.

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Tool-kit in the fight against corruption

• Business Principles
• Integrity Pact
• Publish What You Pay

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Business Principles for Countering Bribery

• Aim
• To enhance corporate governance and ethical
  behaviour in relation to combating bribery and
  corruption in business life.

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The principles

• Maintain high standards for preventing and
  combating bribery
• Prohibit bribery in any form
• Create and maintain a trust-based internal
  culture in which bribery and corruption are not
  tolerated.
• Openly commuicate details of anti-corruption
  efforts under way thus building support.
• Develop and implement programme to achieve aims
  of principles

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The programme

• Publish clear anti-bribery policies
• Implement and monitor adherence to these policies
• Implement sanctions in case of non-adherence
• Publish good and bad results
• Conduct outreach programmes to local business and
  NGOs.
• Lobby governments to improve standards
• Work with industry competititor to level playing
  field.

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Integrity Pact

• The Integrity Pact (IP) is a tool to help
  governments, businesses and civil society which
  are prepared to fight corruption to do so in the
  field of public contracting.
• It establishes contractual rigths and obligations
  of all parties to a government contract.

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The Integrity Pact is aiming at

• Enhance public trust in government contracting.
• Improve credibility of government procedures and
  administration.
• Enable bidders to abstain from bribing
• Help authority reduce high cost and distortionary
  effects of corruption on public contracting.

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• http//www.publishwhatyoupay.org

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www.transparency.no

• Gro Skaaren-Fystro
• gskaaren_at_online.no