Dr Nihal Jayawickrama

The Minister of Justice has published an Anti-Corruption Bill. Drafted in 2018, it is described as a Bill to give effect to the 2003 UN Convention Against Corruption (UNCAC). However, it is not designed to achieve that objective in any manner or form. UNCAC, noting that the illicit acquisition of personal wealth can be particularly damaging to democratic institutions, national economies, and the rule of law, proceeds to set out in five chapters (i) Preventive Measures; (ii) Criminalization and law enforcement; (iii) International Co-operation; (iv) Asset Recovery; and (v) Technical Assistance and Information Exchange. The only reference to UNCAC in the entirety of this Bill is the designation of the Director-General (who shall not be “a convicted criminal” or a “person of unsound mind”) as the competent authority for the purpose of giving effect to UNCAC.

Asset Declarations

The Bill is 50 pages in length and contains 164 sections. The first 78 sections are concerned with the establishment of a new Commission to Investigate Allegations of Corruption. The next 13 sections require hundreds of thousands of individuals to submit Declarations of their Assets, redacted versions of which will then be made accessible to the public through a centralized electronic system. Those required to submit Declarations include even private staff of Pradeshiya Sabha members, and all staff of newspaper and media companies. Also required to do so are executives of trade unions, Army, Navy and Air Force officers, and staff officers of companies. A person submitting a Declaration is required to include the assets and liabilities of “all persons who share the common household”.

The next 68 clauses define the offences, commencing with the offering of a bribe to a Judge of the Supreme Court, and ending with bribery in private sector entities. Perhaps forgetful that section 88 permits the public to access redacted versions of every Declaration placed on the centralized electronic system, section 95 states that any person who accesses the centralized electronic system illegally will be guilty of an offence punishable with a fine of one million rupees and a sentence of eight years rigorous imprisonment.

Corruption

Twenty five years ago, Transparency International, a “not-for-profit organization” incorporated under German law (which I had the opportunity of serving as Executive Director at its international secretariat in Berlin) defined corruption as “the misuse of public power for private profit”. In that sense, the focus is essentially on the behaviour of officials in the public sector, whether politicians or civil servants, whether policymakers or administrators, through which they improperly and unlawfully enrich themselves, or those close to them, by the misuse of the public power entrusted to them. The reasons why they resort to corruption are many and varied. Some may be driven to it by poverty or the inability to match their expenses to their legitimate incomes. For others, the compelling factor is obviously avarice. Whether caused by human need or human greed, corruption has a devastating effect on the governance of a country.

Corruption involving public officials falls broadly into two categories. Conventional bribery or “petty corruption” occurs when an official demands or expects “speed money” or “grease payments” for doing an act which he or she is ordinarily required by law to do (such as processing an application for a licence, issuing an official document, clearing goods through customs, or providing a utility service), or when a bribe is paid to obtain a service which the official is prohibited from providing (such as tax evasion or avoidance of prosecution, or preferential access to state employment, housing, medical care or education).

A national household survey on corruption in a South Asian country revealed that 41% of households paid a “donation” for the admission of children into schools, while 36% made payments to or through hospital staff or other “influential persons” to secure admission into hospitals. Sixty five percent had bribed land registrars for recording a false lower sale price of a land transaction; 33% paid money to obtain electricity connections, while 32% paid less for water “by arrangement with the meter reader”. Forty seven percent were able to reduce the tax assessment on house and property “by arrangement with municipal staff on payment of money”, while 65% found it impossible to obtain trade licenses without money or influence. Sixty three percent of those involved in litigation had paid bribes to either court officials or the opponents’ lawyers, 89% of those surveyed being of the view that judges were corrupt.

“Grand corruption” occurs when a person in a high position who formulates government policy or is able to influence government decision-making, seeks, as a quid quo pro, payment, usually offshore and in foreign currency, for exercising the extensive discretionary powers vested in him or her. Grand corruption plays a significant role in four main categories of supply to government: the purchase of aircraft, ships and military supplies; the purchase of capital goods required for major industrial and agro-industrial projects; major civil engineering contracts, such as in respect of dams, bridges, highways, airports and hospitals; and the on-going purchase of bulk supplies, such as oil, fertilizers and cement, where distribution is through a parastatal company, or where there is a need for standardization, such as repeat orders for pharmaceuticals and school textbooks.

There are several reasons why, in respect of such transactions, an official may be bribed. First, a firm may pay to be included in the list of prequalified bidders. Second, it may pay for inside information. Third, a bribe may induce the official to structure the bidding specifications so that the corrupt firm is the only qualified supplier. Fourth, a firm may pay to be selected as the winning contractor. Fifth, once a firm has been selected as the contractor, it may pay to set inflated prices or to skimp on quality. While the amounts involved in these transactions may range from $100,000 to $100 million, a leading commentator with experience of Asian business dismisses the possibility of a five percent commission being paid to a senior official, a permanent secretary, a minister, or a head of state, as a “laughably low rate”.

The actual scale of corruption and the extent to which it exists in a particular country are difficult to quantify or measure in precise terms. Except for petty corruption, which many individuals may experience during their daily lives, most other forms of corruption are not immediately visible. According to an official of the Asian Development Bank, over a period of 20 years, one East Asian country is estimated to have lost $48 billion due to corruption, surpassing its entire foreign debt of $40.6 billion. An internal report of another Asian government revealed that over a decade, state assets had fallen by more than $50 billion, primarily due to deliberate undervaluing by corrupt officials responsible for a privatization programme. Studies of corruption in government procurement in several Asian countries had revealed that 20 to 100% more had been paid for goods and services.

Any decision motivated by excessive greed is likely to be both irrational and short-sighted. Apart from its direct costs in terms of lost revenue, or the diversion of funds from their intended public use into private bank accounts (it was estimated that as much as $30 billion had been deposited in foreign bank accounts by political leaders from some African countries), the indirect costs of corruption are equally disastrous. Few suppliers will be willing to absorb the costs of corruption by reducing their own margins of profit. Instead, the price is increased, or the quality of the goods or services reduced to accommodate the commission demanded.

Consequently, the ordinary citizen has to contend with sub-standard and over-priced goods and services, while the distortion of the decision-making process results in wrong suppliers or contractors being chosen, and wholly unnecessary or inappropriate purchases being made or projects undertaken. Against a background littered with “white elephants”, in an environment of uncertainty, unpredictability, and declining moral values, respect for constituted authority and, therefore, the legitimacy of government, is steadily but surely eroded.

Legal Instruments

The public expects that holders of public office will possess sufficient integrity to be able to deliver to them the services they are entitled to receive from those who govern them. In the United Kingdom, the Nolan Committee (1995) listed seven principles that the British public thought should apply to all aspects of public life. They are Selflessness, Integrity, Objectivity, Accountability, Openness, Honesty, and Leadership. Legislation incorporating these principles is widely perceived as an essential element in any counter-corruption strategy, at least for the purpose of establishing a value system that would contribute to the creation of an anti-corruption culture in the country. Indeed, UNCAC requires states parties to ensure that Codes of Conduct are established for public officials, members of the judiciary, and the prosecution service.

Eliminating corruption is not simply a matter of enacting laws. When laws do exist, they may not be applied at all or, when they are, they may tend to be directed at “small fry” rather than “big fish”, or selectively at political opponents no longer holding public office. Therefore, the mere criminalization of bribery is inadequate and ineffective. The overall objective of utilizing the law must be to convert corruption from being perceived as a “low risk, high profit” activity into one which is generally regarded as “high risk, low profit”; in other words, to increase the likelihood of corruption being detected and punished, and to reduce the likelihood of an individual being able to profit from his or her corrupt acts, whether as bribe giver or bribe receiver. For this objective to be realized, there must not only be comprehensive anti-corruption legislation, but also independent agencies capable of enforcing such legislation against all who breach it, free of political influence. Both the law and its enforcement must, of course, not infringe the internationally recognized minimum guarantees for the protection of human rights.

To counter systemic corruption, a package of laws may be required, comprising most, if not all, of the following:A law that criminalizes the offering and soliciting, and the giving and accepting, of a bribe. There is no justification for drawing a distinction between “active” and “passive” bribery. The anti-social nature of the act requires that both parties be penalized.

A law that criminalizes the possession of unexplained wealth, described in some jurisdictions as “Illicit Enrichment”. This offence introduces a rebuttable presumption that a person who holds, or has held public office, who is, or has been, maintaining a standard of living, or is in possession of money or property significantly disproportionate to his official emoluments, is presumed to have acquired such money, property or other wealth through corruption.

A law that enables the tracing, seizure, freezing and forfeiture of the illicit earnings from corruption. Such a law should also render a contract induced by corruption both void and unenforceable, and a licence or permit obtained through corruption void; and disqualify from tendering for public contracts any person, whether natural or legal, who has been convicted of corruption.

A law that requires the regular declaration of the assets, income, liabilities and lifestyles of decision-makers and other public officials who hold positions where they transact with the public and are well-placed to extract bribes. The public must have the right and the opportunity to access such declarations, and there must be in place an effective system for independent verification and regular monitoring of the declarations.

A law to identify, and prevent or resolve, a conflict of interests. A conflict of interests will arise when the private interests of a public official clash or even coincide with the public interest and is sufficient to influence or appear to influence the exercise of official duties.

A law to enable the citizen to obtain information in the possession of the state, i.e. an access to information law. The right to know is inextricably linked to accountability.

A constitutionally entrenched Bill of Rights. A Bill of Rights based on the two international human rights covenants may enable the citizen to counter corruption from a different perspective. For instance, privileged treatment secured by an individual by the payment of a bribe to a public official is an infringement of the principle of non-discrimination.

The common law principles of administrative law. These require that a public official, when exercising a discretionary power, should, for example, pursue only the purposes for which the power has been conferred, or be without bias and observe objectivity and impartiality, considering only factors relevant to a particular case.

A strong recovery mechanism under the civil law (as distinct from the criminal law). The Heath Special Investigating Unit in South Africa demonstrated that this is very effective in dealing with the consequences of corruption. In the civil court, the burden of proof is not as demanding (“balance of probabilities” rather than “beyond a reasonable doubt”). The reach of the civil law is broader and may extend to undoing “trusts” and “gifts” in the name of, or to, family members, friends, and lawyers, where illicitly acquired assets are safely lodged; while judgments obtained in civil courts are usually enforceable in foreign jurisdictions to which assets may have been moved.

Minimizing Opportunity

Unlike many other forms of criminal activity, the benefits of corruption flow to those on both sides of the equation, the payer, and the receiver. Experience, however, demonstrates that corruption can be curbed by limiting the situations in which it can occur and by reducing the benefits to both recipient and payer (i.e., by rendering both more vulnerable to detection and sanction). Therefore, since corruption takes place where there is a meeting of opportunity and inclination, a strategy to contain corruption must address both these elements.

Opportunity can be minimized through systemic reform such as: Narrowly defining the discretionary element in decision-making. Discretionary power is a powerful source of potential corruption. The wider the discretion, the greater the opportunity for corruption. While it is unrealistic to envisage, and indeed undesirable to create, a situation where the discretionary element is altogether eliminated, it is nevertheless possible to limit the scope for abuse by providing clear, public guidelines containing objective criteria for the exercise of discretion; and by instituting a swift and appropriate appeal mechanism.

Re-designing, if not discontinuing, the mass of rules, regulations, procedures, and formalities. This is the raw material on which corrupt officials thrive. There is a direct connection between the complexity of the organization of government and the levels of corruption within it. The more steps there are to be taken and the more approvals needed before a business can be commenced or a building constructed, the greater the number of people involved and the greater the number of “gatekeepers” who are able to exact a toll from those who cannot wait or who believe it is necessary to provide sweeteners. Many rules and regulations serve no broad public purpose, and many procedures and formalities are unnecessarily complex and cumbersome.

Establishing improved, readily accessible, and transparent public procurement procedures. The opening of bids should be public, and all decisions should be fully recorded. Indeed, records should be maintained to explain and justify all decisions and actions, thereby ensuring accountability.

Privatization (the removal of state-run enterprises to the private sector). Private sector accounting methods and the need to operate on a commercially viable basis are strong incentives to adopt and implement internal anti-corruption strategies. However, there ought to be sound social, economic and political reasons for privatization, apart from the need to curb corruption, since the creation of monopoly situations through privatization may bring with it other equally abusive practices.

Administrative reforms that minimize the opportunities for corrupt practices. For example, by providing rival sources of supply, such as establishing several offices for the issue of driving licences, the monopoly power of bureaucrats could be reduced. Similarly, the problem of disappearing records in a court registry may be met by ensuring that authenticated records are supplied to the litigants as well.

The “demystification of government”. This is achieved by rendering the decision-making processes transparent by, for example, publishing a tax collector’s handbook.Protection for Whistleblowers. “Whistleblowing” is the act of reporting to an authority an illegal conduct, a violation of professional ethics, or an act which endangers public health or safety. Whistleblowers serve the interests of society by encouraging lawful behaviour and public accountability and, therefore, need to be protected from victimization.

A meritocratic civil service. A civil service recruited on the basis of merit, adequately remunerated, and assured of career advancement solely on the basis of merit, is, of course, a sine qua non for minimizing the opportunities for corruption.

Reducing Inclination

To reduce the inclination to engage in a corrupt transaction, it is necessary to strengthen the processes by which corruption is intended to be curbed. These processes constitute the integrity system of a country. It is the national integrity system that delivers the checks and balances and the accountability factor that are critical to any efforts to contain corruption. The “pillars” that support a country’s integrity system include an elected legislature; an independent, impartial and informed judiciary; a free media; an independent prosecuting agency; an Auditor-General with responsibility for auditing government income and expenditure; an Ombudsman who receives and investigates allegations of maladministration; and an independent commission against corruption charged with the implementation of anti-corruption legislation. These pillars are interdependent. If one pillar weakens, an increased load is placed on the others. If several weaken, their load will tilt, and the integrity system may collapse altogether.

Conclusion

For an anti-corruption strategy to succeed in the contemporary context, it should begin with an immediate focus on the re-shaping of attitudes, not only of the people whose comfortable co-existence with corruption was rudely shaken by the recent financial crisis, but also of their political leaders. A genuine political commitment and determination to combat corruption is essential. As the section of society that bears the brunt of corruption on a daily basis, civil society is best placed to reverse the public apathy and tolerance of corruption. If ordinary people expect to pay bribes and are accustomed to dealing with the State through payoffs, a radical change in attitudes will be necessary before any anti-corruption strategy can get off the ground. The third partner in the coalition is the private corporate sector. The most compelling reason for it to be involved is self-interest: neither customer confidence nor their good reputations prevail against a rival who has bribed the decision-maker.

The emphasis of an anti-corruption strategy should also be on reforming systems, not indulging in “witch-hunts”. It is important to define the most promising areas and to focus on them. Initial success in one area will lend credibility to the reform process. It is often suggested that the key to change is the “frying of big fish”. Since it is wholly unrealistic to expect a government to make a sacrificial offering of its own “big fish”, the “biggest fish” available for frying will invariably be from the opposition. Indeed, a pre-occupation with prosecutions and inquiries into the present or the past will detract from the urgency of an anti-corruption strategy that involves legal and institutional change. It often makes sense to wipe the slate clean and look forward into the future rather than remain focused on the past.

Dr. Nihal Jayawickrama, as a Consultant to the UN Office on Drugs and Crime, participated in the drafting of UNCAC and later prepared the Implementation Guide and Evaluative Framework for Article 11 relating to the Judiciary and the Prosecution Service.