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PART III ROLE OF INSTITUTIONS IN FIGHTING CORRUPTION CHAPTER 12 SUPREME AUDIT INSTITUTIONS References Afrobarometer. (2018). Ghana summary of results (2017). Audit. https://ghaudit.org/web/2020/01/28/public-notice- https://afrobarometer.org/sites/default /files/publications/ nation-wide-payroll-and-personnel-verification-audit-nppva-2/ Sommaire%20des%20r%C3%A9sultats/gha_r7_sor_10042019. pdf. Ghana Legal Information Institute. (2017). OCCUPY GHANA VRS ATTORNEY-GENERAL. https://ghalii.org/gh/judgment/ Arthur-Mensah. (2019, Jan 3). Disallowance and Surcharge to Supreme%20Cour t/2017/10/OCCUPY%20GHANA %20%20 Become Part into Audit Process. https://www.ghananewsagency. %20%20VRS%20THE%20ATTORNEY%20GENERAL.pdf. org /economic s /dis allowance -and - s urc harge -to - b ecome - par t- into-audit-process-143681. GII. (2005). Voice of the people Survey – an Urban corruption perception survey in Southern Ghana. CAG. (2010). Report No.19 of 2010. Performance Audit Report on the Issue of Licenses and Allocation of 2G Spectrum by INTOSAI. CBC Workstream in support of Auditing in Complex the Department of Telecommunications. https://cag.gov.in/ and Challenging Contexts (ACCC). https://www.intosaicbc.org/ content /rep or t- no -19-2010 - p er for mance -audit-is sue - licences - accc/. and-allocation-2g-spectrum-union. ISSAI 5700 “Guideline for the Audit of Corruption Prevention”. CAG. (2011a). Report No. 4 of 2011 - Performance and Compliance ht t p s: //w w w.is s ai.o rg /p ro no u nce m e nt s /g uid - 5270 - g uid eline - Audit on Commonwealth Games Government of Delhi. for-the-audit-of-corruption-prevention/. ht t ps://c ag.gov.in /sites /def ault /files /audit _ rep or t _files /Delhi _ CWG_2011_exe-sum.pdf. Jagota. (2013). Goodbye Vinod Rai, The CAG’s Attack Dog. https:// blogs.wsj.com/indiarealtime/2013/05/22/goodbye-vinod-rai- CAG. (2011b). Report No. 6 of 2011 – Performance Audit of XIXth the-cags-attack-dog/. Commonwealth Games. https://cag.gov.in/content/report-no- 6 -2011-%E2%8 0%93 - per for mance -audit-xix th - commonwealth - Ministry of Law and Justice. (2014). The Coal Mines (Special games. Provisions) Second Ordinance, 2014. No.7 of 2014. https://coal. nic.in /site s /upload _file s /coal /file s /c ure nt notice s /291214 _ 2 _ 0. CAG. (2013). Report No.7 of 2012-13, August 2012- Performance pdf. Audit of Allocation of Coal Blocks and Augmentation of Coal Production, Ministry of Coal. https://cag.gov.in/content/report- Mitra. (2011). How the CAG has undergone sea change under no -7-2012-13 -%E2%8 0%93 - per for mance -audit-alloc ation - coal- Vinod Rai. Retrieved from https://economictimes.indiatimes. blocks-and-augmentation-coal. com/how-the-cag-has-undergone-sea-change-under-vinod- rai/articleshow/8273335.cms. CAG. (2016). CAG Performance Report 2014 -2015. https://cag. g ov.in /s ite s /d ef ault /file s /p er for mance _ ac tivit y_ re p or t /C AG _ News Ghana. (2017, Jan 20). Auditor General Agrees with Occupy Performance_Report_2014-15.pdf. Ghana On Disallowance and Surcharge Powers. https://www. newsghana.com.gh/auditor-general-agrees-with-occupy- CAG. (n.d.) Important Judgements. https://cag.gov.in/hi/content/ ghana-on-dis-allowance-and-surcharge-powers/. important-judgements#chapter1. News Line Ghana. (2018, Feb 6). Auditor General blows MDAs’ CDD-Ghana. (2000). The Ghana governance and corruption Cover; Calls for Power to Prosecute. https://newslinegh. survey evidence from households, enterprises and public com/2018/02/06/auditor-general-blows-mdas-cover-calls-for- officials (English). Washington, D.C. : World Bank Group. http:// power-to-prosecute/. documents.worldbank.org/curated/en/749401468253174124/ The-Ghana-governance-and-corruption-survey-evidence- Nyabor, Jonas. (2018, Oct 5). ‘Secret assets declaration by public from-households-enterprises-and-public-officials. officials serves no purpose’ – Domelevo. https://citinewsroom. c o m /2 018 /10/s e c r e t- a s s e t s - d e c l a r a t i o n - by - p u b li c - o f f i c i a l s - Centre for Budget and Governance Accountability. (2014). serves-no-purpose-domelevo/. Reporting in Public Interest: Value and Impact of CAG’s Audits. ht tp://w w w.cbgaindia.org/wp-content /uploads/2016/03/ Press Trust of India. (2012). Govt decides to deallocate two Rep or ting - in - Public- Interes t-Value -and - Impac t- of- C AGs - more coal blocks. https://www.news18.com/news/india/govt- Audits.pdf. decides-to-deallocate-two-more-coal-blocks-524663.html. Damani. (2016). The History of Telecom Spectrum in India: The PRS Legislative Research. (2012). CAG Per formance Audit 2100MHz and 2300MHz Auctions. https://gadgets.ndtv.com/ Summary – Allocation of Coal Blocks and Augmentation of telecom/features/the-history-of-telecom-spectrum-in-india- Coal Production. https://www.prsindia.org/administrator/ the-2100mhz-and-2300mhz-auctions-828448. u p l o a d s /g e n e r a l /13 4 5 2 070 6 3 _ C AG% 2 0 C o a l % 2 0 B l o c k % 2 0 Allocation%20report%20summary.pdf. DFID. (2004). Characteristics of Different External Audit Systems. Briefing. http://gsdrc.org/docs/open/pf31.pdf. Rahman, Kaunain. (2018, Sep 11). U4 Helpdesk Answer 2018:21: Overview of corruption and anticorruption in Ghana. https:// Ghana Audit Service. (2019, Jan 6). OccupyGhana Salutes Auditor- w w w.u 4.n o/p u b li c a t i o n s /ove r v i e w - of- c o r r u p t i o n - a n d - a nt i - General on Disallowances And Surcharges And Urges The corruption-in-ghana-2018-update.pdf. Prosecution Of Persons Found Culpable. https://ghaudit.org/ w e b / 2 019/ 01/ 0 6 /o c c u p y g h a n a - s a l u t e s - a u d i t o r- g e n e r a l - o n - Rajagopal, Krishnadas. (2014). Supreme Court quashes allocation disallowances-and-surcharges-and-urges-the-prosecution-of- of 214 coal blocks. The Hindu. https://www.thehindu.com/news/ persons-found-culpable/ national/supreme - cour t- quas hes -alloc ation - of-all - b ut-four- of- 218-coal-blocks/article6441855.ece. Ghana Audit Service. (2019). Report of the Auditor-General on Special Audits Carried Out on Selected State Institutions in the Republic of Ghana. (2011, Dec 20). National Anti-Corruption Year 2018. https://www.graphic.com.gh/images/pdfs/report- Action Plan (2015-2024). http://sia.arapghana.eu/web/uploads/ of-the-auditor-general-on-special-audits-carried-out-on- documents/NACAP_2015-2024.pdf. selected-state-institutions-in-the-year-2018.pdf Shaban. (2019, May 22). Ghana President Assents to Right to Ghana Audit Service. (2020, Jan 28). Notice of Intention to Disallow Information Bill. https://www.africanews.com/2019/05/22/ and Surcharge – Nation-wide Payroll and Personnel Verification ghana-president-assents-to-right-to-information Enhancing Government Effectiveness and Transparency: The Fight Against Corruption 315

PART III ROLE OF INSTITUTIONS IN FIGHTING CORRUPTION CHAPTER 13 Justice System

PART III ROLE OF INSTITUTIONS IN FIGHTING CORRUPTION CHAPTER 13 JUSTICE SYSTEM Introduction Defining the justice system The justice system is more than a loosely connected set of independent institutions. These The justice system plays a key role in fighting institutions constitute a network of interdependent the various forms of corruption across all sectors. actors. The performance of each of them is affected The justice system is understood to comprise “the by the performance of the others. Courts are at the institutions that are central to resolving conflicts arising core of dispute resolution and are supported in this over alleged violations or different interpretations of function by a range of other justice sector institutions, the rules that societies create to govern members’ including the prosecution service, public defenders, behavior; and that, as a consequence, are central to bar associations, state and civil society legal aid strengthening the normative framework (laws and rules) providers, police, alternative dispute resolution that shapes public and private actions.”1 This normative mechanisms, administrative adjudication and framework includes the rules about preventing and enforcement mechanisms, customary and community- sanctioning corrupt practices. based institutions, anti-corruption and human rights commissions, ombuds offices, judicial academies, and Beyond these rules, the justice system has the more. key task of upholding the rule of law more broadly, including by providing checks and balances on abuse Preventing and sanctioning corrupt of power by the executive and legislative branches practices of government. As the World Development Report 2017 summarizes it, the rule of law at its core is “the The justice system plays both a preventive and a impersonal and systematic application of known rules repressive role in the fight against corruption. On to government actors and citizens alike” and requires the repressive side, it empowers citizens, businesses, that both “be bound by and act consistently with the and other stakeholders to actively fight corrupt practices law.”2 This task is particularly relevant in contexts of by denunciating perpetrators and bringing facts and elite capture and grand corruption, because they result evidence to the attention of relevant justice institutions. in the normative framework itself being skewed. Justice While the starting point may vary and lawsuits in civil institutions then become the last resort to ensure the or administrative courts may proceed, the criminal supremacy of fundamental principles of rule of law, justice chain is generally the one that is ultimately set fairness, and equality. Enhancing Government Effectiveness and Transparency: The Fight Against Corruption 317

PART III ROLE OF INSTITUTIONS IN FIGHTING CORRUPTION CHAPTER 13 JUSTICE SYSTEM in motion to sanction perpetrators. On the preventive held accountable for that, which in turn strengthens side, justice institutions also play a key role in enforcing the effective implementation of this anti-corruption the rules put in place to prevent corruption. Thus, framework. Moreover, the effective functioning of when government officials, for example, do not comply the criminal justice chain sends a strong signal of with transparency requirements, even ahead of yet to deterrence, including by increasing the likelihood of materialize subsequent corrupt behavior, they can be being caught in case of wrongdoing. The roles of the different institutions Justice institutions play different roles in fighting the performance of institutions that participate in their corruption, but each institution’s performance proceedings or contribute to earlier stages of the process counts. While it is important for the overall justice prior to indictment. The effectiveness and quality of the system to perform effectively so anti-corruption efforts investigations led by the prosecution service and/or the can succeed, each institution plays a particular role. police in terms of the comprehensiveness, timeliness, Below is an overview of the role of the key institutions. and quality of evidence, and compliance with legal requirements are ultimately reflected in the quality The courts of the case presented to the court. While the courts have the ultimate decision power, they do not operate For most observers of anti-corruption efforts, one of the in isolation. They depend on a range of other justice most visible moments is when someone is convicted of sector institutions to carry out their mandate. a crime by a criminal court, with or without a jury trial depending on the country. These can be specialized The prosecution service anti-corruption courts, specialized anti-corruption chambers, or just the general criminal courts. The prosecution service is a key part of the criminal justice chain that, on behalf of society and in the public The role of other courts for anti-corruption efforts is interest, ensures the application of the law where the less visible, but nonetheless important. Lawsuits in breach of the law carries a criminal sanction.5 This civil courts can provide an effective complement to includes legislation criminalizing corrupt practices. In more commonly used criminal approaches as a way criminal justice systems, public prosecutors normally (i) to recover stolen assets.3 Insolvency proceedings can decide whether to initiate or continue prosecutions; (ii) be used to recover corruption proceeds.4 Depending conduct prosecutions before the courts; and (iii) may on the jurisdiction, civil or administrative courts can appeal or conduct appeals concerning all or some court hear cases filed by journalists who are denied access decisions.6 Thus, without a well-performing prosecution to information in violation of freedom of information service, the effectiveness of the fight against corruption legislation. More broadly, administrative courts offer a would be seriously undermined, because corruption venue for citizens and civil society to challenge abusive cases may not be successfully brought to the court or or simply illegal (in)actions by public authorities and their the court would not be able to adequately sanction officials. Proving corruption in a public procurement perpetrators, due to the low quality of the indictments. case may be more challenging than proving the illegal nature of an administrative (in)action. While this does Moreover, in many criminal justice systems, public not normally result in a criminal sanction of the public prosecutors also (i) implement the national crime policy; official or the corruptor, the ultimate (in)action sought (ii) conduct, direct or supervise investigations; (iii) by the corruptor can be annulled or declared void this decide on alternatives to prosecution; and (iv) supervise way. the execution of court decisions.7 They carry out their mandate while taking into account both the rights of The effectiveness of courts in fighting corruption is not the individual and the necessary effectiveness of the just a function of their own performance, but also of criminal justice system in the fight against corruption. 318 Enhancing Government Effectiveness and Transparency: The Fight Against Corruption

PART III ROLE OF INSTITUTIONS IN FIGHTING CORRUPTION CHAPTER 13 JUSTICE SYSTEM BOX 13.1 Romania’s National Anti-Corruption Directorate (DNA) For a long time, Romania’s DNA was a success story in the fight against corruption. The EU has praised the DNA for being effective and proactive and credited it with significant achievements in cracking down on corruption. The DNA increased the number of indictments by 50% between 2012 and 2017.8 An evolving political environment and subsequent justice sector reforms negatively affected this positive record.9 The Group of States against Corruption (GRECO), the Council of Europe’s anti- corruption body, has voiced deep concerns in a 2018 report criticizing the justice system reforms adopted by the Romanian parliament, undermining the effectiveness of the fight against corruption.10 For example, public prosecutors have to scrutinize the individual’s fundamental rights and freedoms; and (iv) lawfulness of police investigations at the latest when provide assistance and service functions to the public.12 deciding whether a prosecution should commence or Whatever the exact relationship between the police and continue. the prosecution service in a given jurisdiction,13 weak performance of the police will result in the prosecution These considerations apply to prosecution services in service not being able to proceed with indictments general, but also to anti-corruption agencies that some for corruption. Illegal police actions, in particular, are countries have chosen to equip with such prosecution likely to jeopardize the chances of indictments being functions.11 Whether general prosecution services or successful or of indictments being brought to court by specialized agencies with prosecutorial functions, units the prosecution service. with specialized and multi-disciplinary expertise within these institutions are often created to ensure adequate Other justice institutions prosecutorial expertise in highly technical areas, for example in financial matters. The performance of the courts, the prosecution service, and the police as the primary institutions of the criminal The effectiveness of the prosecution service in fighting justice chain in the fight against corruption is more corruption depends on the effectiveness of the whole or less directly affected by the performance of other justice system. Where the political environment is justice sector institutions as well. Without going into adversely affecting the justice system, the public detail, they include bar associations (often tasked with prosecution service will be impacted. This is illustrated taking disciplinary measures to sanction lawyers who act by Romania’s National Anti-Corruption Directorate as vehicles for corruption),14 judicial and prosecutorial (Box 13.1) councils (often tasked with managing the performance of judges and prosecutors or with disciplining them The police for corrupt behavior), the Ministry of Justice (often tasked with setting national policies and managing The police is a also a critically important justice judicial infrastructure, including facilities and ICT for institution in the fight against corruption, intervening courts), judicial inspections, forensic institutions, and mainly in the preparatory phase of the criminal justice judicial training institutions, which play an important chain. Under the rule of law, the main purposes of role in providing training relevant for the fight against the police in this context are to (i) detect crime; (ii) corruption. prevent and combat crime; (iii) protect and respect the Enhancing Government Effectiveness and Transparency: The Fight Against Corruption 319

PART III ROLE OF INSTITUTIONS IN FIGHTING CORRUPTION CHAPTER 13 JUSTICE SYSTEM What specifically causes weak performance of justice sector institutions in the fight against corruption? Capacity constraints and under-resourcing in regimes, the capacity in the criminal justice chain terms of financial and human resources as well and the level and quality of resources (e.g. financial as infrastructure, particularly in low-income resources, human resources, ICT, and infrastructure) countries, pose severe constraints to the effective tend to be relatively higher because, based on the elite operation of justice sector institutions. At the bargain in place, criminal justice institutions are needed same time, the World Development Report 2017 on to maintain the status quo. But the incentives will then Governance and the Law has identified weakness in not result in this capacity to be prioritized for the fight institutional performance not primarily as a function against corruption. of weak capacity, but as a result of the elite bargain in place.15 Institutions are often meant to be weak for a These issues result in often observed performance reason. Were well-functioning justice institutions and weaknesses in justice institutions, whose strong the fight against corruption a priority within the existing performance is needed in the fight against elite bargain, the institutions would be resourced, corruption. These weaknesses include delays at all equipped, and managed as a matter of priority, albeit stages of the process, from police to prosecution to the within the country’s overall limitations in terms of GDP courts. The low level of effectiveness of the police in and capacity. While a complete and nuanced list of investigating corrupt practices results in very few cases, what specifically causes weak performance of justice if any, reaching the prosecution service. The same institutions in different country settings is beyond ineffectiveness there and in the courts often means the ambition of this analysis, the following provides a that nobody, other than maybe political opponents, summary of some key aspects. is ever convicted for corruption. The population knows the situation and therefore has no reason to First, the governance of justice sector institutions initiate cases with the objective of holding anybody relevant to the fight against corruption is often accountable for wrongdoing. They understand that deficient. Courts and the prosecution service are applicable legal frameworks are deliberately kept weak not sufficiently independent and free from undue and that even when they are improved, for example interference based on capture, cronyism, corruption, upon donor insistence, their application is likely to and political relevance. In authoritarian environments, remain unpredictable, biased, and selective, without these institutions as well as the police protect the generating results, unless there is a change in political interests of those in power and are actively utilized to will. It is not uncommon for countries to instill fear in crack down on opposition, including at times under order to keep people in place by threatening them with the pretext of fighting corruption. Beyond the actual jailtime or fines for challenging state institutions and influence on specific decisions, capture, cronyism their officials.16 and corruption also impact appointments to relevant positions and promotions within the justice institutions Aspects of the weak performance of justice themselves, resulting in a playing field skewed against institutions not only limit the effectiveness of anybody who would challenge the status quo. To the fight against corruption elsewhere, they also the extent that these institutions are not needed to create a market for corruption within justice support the elites in place, they are not managed for sector institutions themselves. This is especially true performance and service delivery is weak as a result. for cases that are of no particular political relevance. Systemic delays, arbitrary application of the law, and Second, justice sector institutions in many lack of performance accountability offer opportunities developing countries are chronically under- for petty corruption to speed things up, slow things resourced, though that is not necessarily true for down, or influence the outcome of cases, depending all parts of the system. Higher echelons of the system on the needs of the corruptor, thus further weakening are generally better resourced, because those working the credibility and effectiveness of the police, the at that level are part of the ruling elites. In authoritarian prosecution service and the courts. 320 Enhancing Government Effectiveness and Transparency: The Fight Against Corruption

PART III ROLE OF INSTITUTIONS IN FIGHTING CORRUPTION CHAPTER 13 JUSTICE SYSTEM How can justice sector institutions improve their performance in fighting corruption? Implementation of laws to fight corruption must potential for improvements through purely technical be backed by political commitment. Based on the approaches is marginal at best, leading to a gap findings of the World Development Report 2017 on between the beautiful laws on the books and the weak Governance and the Law, the performance weaknesses implementation on the ground. Such a system is like a are primarily the result of the elite bargain in place. A “Potemkin village” with institutions potentially designed paradigm shift to improve the effectiveness of justice based on international best practice, but merely as institutions in fighting corruption in truly systemic a façade that conceals what is really happening, as terms therefore primarily requires strong commitment explained in Box 13.2 below. at the political level. Without such a commitment, the BOX 13.2 Specialized Anti-Corruption Courts: Political Commitment or Implementation Gaps Despite the benefits of specialized anti-corruption courts, technical solutions to address corruption will fail unless there is political commitment because of an implementation gap. A 2016 survey has identified roughly 20 countries that have implemented specialized anti- corruption courts worldwide.17 Additional courts have been created since, notably in 2019, in Albania, Ukraine, and Madagascar.18 From a technical point of view, there are arguments in favor of and against specialized anti-corruption courts. Advantages are that the institution is created from scratch and can more easily receive preferential treatment in terms of resourcing (financial resources, human resources, ICT, and infrastructure) so they are adequately equipped for the fight against corruption. Doing this for the entire court system or focusing such resources on the parts of the broader system that are particularly relevant for the fight against corruption is more challenging. At the same time, it takes time for new institutions to be established and perform, increases institutional complexity and overheads, and can lead to disagreements about jurisdiction. Politically, the establishment of specialized anti-corruption courts can send a strong signal of government commitment. While some of these specialized anti-corruption courts were successful and had strong local ownership, international donors have played a pivotal role in the creation of many of these institutions, for example as conditions to the provision of budget support. At times, this results in a lack of ownership translating into a significant implementation gap, with these externally imposed institutions often looking impressive on paper but falling short of achieving their declared objectives due to a lack of political commitment.19 Enhancing Government Effectiveness and Transparency: The Fight Against Corruption 321

PART III ROLE OF INSTITUTIONS IN FIGHTING CORRUPTION CHAPTER 13 JUSTICE SYSTEM If the commitment at the political level exists, it The overarching goal is for the entire justice requires an adequate communication strategy as system to work properly, and in today’s world, this well as sound technical solutions to translate it into requires international cooperation. Domestically, the tangible improvements. Putting in place an adequate justice system is based on the mandates of the police, normative framework to fight corrupt practices is often prosecution service and the courts within the given a starting point, but it is at the level of implementation jurisdiction. But in an increasingly interconnected world, through justice institutions where the rubber really hits mutual legal assistance and other forms of international the road to translate the political commitment into cooperation between jurisdictions are crucial to results on the ground. In the case of the Philippines, effectively fight against cross-border corruption, as Box such results have not materialized and in the case of 13.4 explains. Indonesia these results, while initially promising, are disappointing (Box 13.3). BOX 13.3 Specialized Anti-Corruption Courts in the Philippines and Indonesia The Philippines’ Sandiganbayan is the oldest specialized anti-corruption court in the world. It has operated since 1979 without interruption and witnessed several amendments since its creation. Sandiganbayan is at the level of a Court of Appeals, but functions as a court of first instance. It has original jurisdiction over anti-corruption cases provided they are (1) brought against a senior public official; and (2) involve a sufficiently large amount of money. Its decisions may be appealed to the Supreme Court. The Office of the Ombudsman has exclusive authority to bring cases to the Sandiganbayan. In addition to the political signal to the population, the main declared rationale in creating Sandiganbayan was to expedite anti- corruption cases. They have struggled to meet that objective. Sandiganbayan experienced, over the years, substantial inefficiencies and delays in deciding anti-corruption cases, in part due to limitations at the Office of the Ombudsman.20 In 2002, Indonesia’s specialized anti-corruption court, known as the Tipikor, was established at the same time as the Corruption Eradication Commission, known as the KPK. Due to a Constitutional Court ruling in 2006, criticizing the legal dualism established by these specialized institutions, the entire anti-corruption judicial system underwent a major legal reform in 2009. Initially, there was one Tipikor court in Jakarta. Only the KPK had competence to bring cases before this court, while the public prosecution brought cases only before the general courts. The Tipikor had a conviction rate of 100% in 250 cases, while only 51% of cases prosecuted by the public prosecution resulted in a conviction. The 2009 reform decentralized the system by creating 34 Tipikor courts, one in each Indonesian province. Both the KPK and the public prosecution can bring cases. Prior to the 2009 reform, the integrity of the specialized judges before the Tipikor was not questioned. They were perceived as rather overzealous in achieving a 100% conviction rate. With the decentralization and the convictions of several specialized judges for corruption, the belief that these judges are clean and trustworthy outsiders to the system has been undermined.21 The recent KPK law risks reducing the institution’s effectiveness at attracting high-quality employees and its independence in gathering information. This could partly reverse the remarkable progress in controlling high-level corruption since the institution’s establishment. 322 Enhancing Government Effectiveness and Transparency: The Fight Against Corruption

PART III ROLE OF INSTITUTIONS IN FIGHTING CORRUPTION CHAPTER 13 JUSTICE SYSTEM BOX 13.4 International Cooperation and Mutual Legal Assistance (MLA) The legal basis required for states to provide MLA can come either from domestic law, rogatory letters, or multilateral and bilateral agreements.22 For instance, China adopted the Internal Criminal Judicial Assistance (ICJA) into law in 2018.23 The ICJA provides for both rules on domestic anti-corruption enforcement and rules for China’s cooperation with foreign authorities in connection with criminal investigations and prosecutions. The ICJA is intended to fill the gap for countries where China does not have MLA treaties and clarifies the terms, roles and responsibilities of relevant government agencies in the process of providing or requesting judicial assistance. Cross-border plea deal settlements reached in cases like Airbus and Odebrecht show that this cooperation is key. Airbus: In 2020, Airbus struck a deal with the UK, France and the United States by signing a corporate plea deal to settle several probes into allegations of bid-rigging and bribery in exchange for aircraft contracts.24 Courts in all jurisdictions with open investigations have approved the Airbus settlement that totaled EUR 3.6 billion. The signed settlement was published and acts as a powerful deterrent to multinational companies not to engage in future corruption, both to avoid high financial fines and significant reputational damage. Odebrecht: When Operation Car Wash,25 a codename for the biggest corruption scandal in Brazil, became public in 2014, it shone a light on the misconduct of this Brazilian conglomerate active in the fields of engineering, construction, chemicals and petrochemicals in Latin America. It also challenged the independence of judges and revealed bribes paid to elite high officials. The Odebrecht case led to multiple settlements amounting in total to USD2.6 billion and to prison sentences issued against its senior officials. Moreover, this case unraveled a network of bribes spreading all through Latin America, involving, notably, a Colombian Senator, the Vice President of Ecuador, the President of Venezuela, and four former Presidents of Peru.26 More than USD10 million in bribes were paid in Mexico. Former Brazilian President Luiz Inacio Lula da Silva was convicted of bribery charges and served a prison sentence. Operation Car Wash had numerous repercussions around the continent and the way jurisdictions cooperated. Intensive MLA played a crucial part in untangling these corruption cases in Latin America. Transparency International counted 484 MLA requests mostly related to the Odebrecht case, between 2014 and June 2018, made by Brazil (250 requests) and 55 other countries (234 requests).27 An adequate communication strategy needs to communicating the political will and actively engage support the anti-corruption effort, externally with all those who in the end will implement the with the population and internally with justice technical solutions. Lack of communication can leave stakeholders. Externally, it is absolutely key to internal resistance unaddressed and result in delays continuously inform the population about measures with implementation or in derailed technical solutions. Thus, to the extent possible stakeholders need to be taken and the impact they have. This builds trust in on board, for which effective communication with them and among them in support of the reform effort is a key the leadership of the anti-corruption effort and in requirement. the judicial system. Internally, continuous dialogue with and among stakeholders is required to continue Enhancing Government Effectiveness and Transparency: The Fight Against Corruption 323

PART III ROLE OF INSTITUTIONS IN FIGHTING CORRUPTION CHAPTER 13 JUSTICE SYSTEM Addressing the challenges at three levels Justice institutions need to address performance Reforms at this highest level to increase performance and internal corruption challenges in order to in the fight against corruption should also target the strengthen their fight against corruption. At the process of selection, evaluation, and promotion level of implementation, justice institutions need to of judges, prosecutors and court staff. Indeed, maintain a dual focus on (1) improving their performance the selection process needs to be as merit-based in the fight against corruption, and (2) fighting and apolitical as possible, for example through corruption within the justice institutions themselves. involvement of a broader range of stakeholders other Tackling these challenges effectively is vital as weak than politicians, including justice professionals, civil institutional performance undermines the effectiveness society and academia with high technical credentials. of the justice system as a whole. The challenges should Other reforms seek to create islands of excellence in be addressed at three levels: system-wide, at the parallel to an existing institutional landscape, whose criminal justice chain level, and at the institutional level. performance may take too long to improve in the eyes of reformers. Often driven by the need to show 1. System-wide national level quick results, they focus on establishing specialized anti-corruption agencies, prosecution services, Domestically, the first level is the system-wide courts or a combination thereof, instead of trying national level, i.e. the government, including senior to fix the existing institutions in the criminal justice leadership of the judicial branch. At this level, chain in charge of the fight against corruption. All of questions regarding the governance of the justice these reforms are likely to require constitutional and/ system need to be addressed; for example: How or legislative changes. best can judicial and prosecutorial independence be ensured so that decisions are made without Questions of adequate resourcing and equipment undue interference, while encouraging judges and also need to be addressed at this level. The question prosecutors to be accountable to the public for of resources includes the overall level of resourcing, their performance, including for non-compliance but also the allocation and availability of the required with integrity requirements? The sequencing here resources in all relevant parts of the system. is important. If there has been a regime change with justice system officials compromised through 2. Criminal justice chain level involvement in abuse of power, cronyism and corruption, a vetting may be warranted as a first The institutions of this chain need to be effectively step. The second step is to increase independence, interconnected and bottlenecks in inter-institutional but only hand in hand with greater accountability communication addressed effectively through a to the public for performance. Many countries have joint committee or roundtable at the institutional made the mistake of increasing independence as a leadership level. This provides a forum where inter- first step. It meant that the second step of creating institutional challenges can be raised and addressed accountability mechanisms was much more difficult right away and where progress can be monitored or even impossible to implement. Putting in place towards achievement of joint performance targets a performance measurement and management to be agreed upon between all of them, targets that system to ensure performance accountability to the can be adjusted over time. Other relevant justice public may then encounter resistance that becomes institutions should be involved as needed. insurmountable, not least because judges at the Supreme Court or Constitutional Court themselves 3. Institutional level tend to have the last word in case of disagreement between branches of Government. It is therefore Each institution itself needs to diagnose two important to have the right pool of personnel and things: (1) its performance bottlenecks, and (2) then balance independence and accountability. the corruption challenges it faces internally. The Providing independence unconditionally as a first performance weaknesses of any one institution step is not the way to go. 324 Enhancing Government Effectiveness and Transparency: The Fight Against Corruption

PART III ROLE OF INSTITUTIONS IN FIGHTING CORRUPTION CHAPTER 13 JUSTICE SYSTEM BOX 13.5 Court User and Multi-Stakeholder Justice Surveys Court user surveys generate data about the experience of court users, which is one of the best proxies to measure the quality of services. If designed correctly, they can capture all kinds of service delivery bottlenecks, including the vulnerabilities for corruption. In places where it is known that there are challenges, such surveys tend to be resisted by those supplying justice services, i. e. judges, prosecutors and administrative staff. Multi-stakeholder justice surveys provide opportunities for all stakeholder groups to participate and to share their view, thus making it easier for professionals in the institution to accept that users are also consulted. The triangulation of the data and the analysis of the discrepancies of views then offer an opportunity to start a dialogue and to reach an agreement on challenges. The World Bank has carried out such multi-stakeholder justice surveys in the context of the EU accession process in 2014 in Serbia28 and 2018 in Montenegro.29 A series of cross-country multi-stakeholder justice surveys are currently under implementation in countries of the EU’s Eastern Neighborhood. of the criminal justice chain weakens the chain society, with the aim of agreeing on what specific as a whole, because the chain can only be as actions will be taken to address the challenges (by strong as its weakest link. So overall institutional whom, by when, with what resources). To ensure performance matters. The very first step in this effective implementation of these actions, they should process is for the institution to acknowledge that be captured in a performance improvement action plan. these challenges actually exist. Court user and A key aspect at the institutional level is a commitment multi-stakeholder justice surveys have proven to to manage the institution for improved integrity and be a useful tool in this diagnostic phase (see Box performance in terms of service delivery. A strong 13.5). Indeed, justice institutions themselves are initial signal of such a commitment is full transparency not exempt from corruption and capture that affect about the survey findings. Transparency along the the broader public sector. Police is a common first implementation process, including the communication interface for citizens with the justice system and of whether and to what extent reform targets have surveys worldwide indicate that many citizens in been reached, remains critical for reformers to retain developing countries have had experience with credibility with the public. police corruption, for example with police stopping or arresting vulnerable people in particular to Measures to increase the institutional performance extort a bribe or other favors. Corruption among can focus on the processing of identifiable judges and court staff often involves the speeding corruption cases by prosecution services and the up and slowing down of case processing, or other courts. They can be tracked, monitored, and prioritized, manipulations of case files. Surveys also indicate potentially supported by ICT-based case management that many developing countries struggle with a systems and performance dashboards. However, lack of integrity among judges and prosecutors, measures should not focus on such identifiable cases influencing their decision-making. alone, because the “anti-corruption” segment of an institution is not necessarily an easily distinguishable Once the challenges are identified and workstream separate from its overall work. Broader acknowledged, consultations will be needed. Such solutions can cover a very wide range of activities, from consultations should involve the relevant institutional business process reengineering followed by automation stakeholders, if possible in conjunction with civil to backlog and delay reduction programs, workflow Enhancing Government Effectiveness and Transparency: The Fight Against Corruption 325

PART III ROLE OF INSTITUTIONS IN FIGHTING CORRUPTION CHAPTER 13 JUSTICE SYSTEM improvements through better spatial arrangements, is often overlooked. Examples include: capacity building, tools to improve the coherence of adjudication, improvements in the management for • Establishing effective complaint mechanisms as service delivery of financial and human resources as well well as disciplinary systems as ICT and infrastructure, and support to disadvantaged court users through simplified procedures for small • Strengthening institutions investigating and claims, effective provision of free legal counsel to the sanctioning integrity breaches (e.g. judicial indigent, self-help guides for specific types of cases and inspection) groups with access challenges, and legal information for various types of court users to only name a few. • Preventive measures, such as asset and income There is no blueprint for that. This is a broad field and disclosure requirements of justice sector officials much depends on the specific challenges in the local and strengthening of conflict of interest legislation context and the resources available to address them. One aspect that remains key in any context, however, • Information and communication technology is the commitment to achieving real improvements and the implementation of technically sound solutions. • Random assignment of cases to judges and prosecutors based on an adequate algorithm.30 When it comes to measures to specifically address This can eliminate or limit the ability of parties, their corruption challenges within justice sector lawyers, or those in the system assigning cases to institutions themselves, the range of options is judges and prosecutors (e.g. administrative staff in narrower. Some tend to feature prominently across the intake office or court presidents), to ensure that many countries, while the potential of other measures the case reaches the “right” decision maker in the system (see Box 13.6 below). BOX 13.6 Trade of Influence in the Judiciary The ability of parties to “shop” for specific judges deemed to be favorable to their cause undermines the integrity of the judicial process. Moreover, the ability of people inside the judicial system to allocate specific cases to specific judges to ensure particular outcomes creates opportunities for corruption. In Bulgaria, for example, the European Union’s Cooperation and Verification Mechanism highlighted this kind of trade of influence in the judiciary as a major risk,31 but the phenomenon is widely spread. The Quality of Judicial Processes Index of the World Bank’s Doing Business report and its chapter on Enforcing Contracts therefore includes the criterion of the existence of an automated random case assignment system to make such trade of influence more challenging.32 326 Enhancing Government Effectiveness and Transparency: The Fight Against Corruption

PART III ROLE OF INSTITUTIONS IN FIGHTING CORRUPTION CHAPTER 13 JUSTICE SYSTEM Increasing transparency The establishment of prosecutorial and judicial Providing parties with clear information and databases and systematic publication of decisions guidance can also limit the need for parties to with online access for lawyers and the general resort to petty corruption. “Facilitators” in many public and a well-performing search function developing countries offer their services at the court increases transparency. This also supports judges building and promise effective access to the relevant and prosecutors in their effort to provide legal staff and prompt processing against additional certainty through consistency in decision making and remuneration. If the pathways are simple with adequate adjudication. The ability of artificial intelligence (AI) signage and adequate information and required forms to process large amounts of data also provides an provided to parties online or at a physical helpdesk additional tool for analyzing the consistency of decision (e.g. about procedural steps to file a claim, required making, and to identify biases as well as inconsistency documentation, court fees), the journey becomes more among specific judges and prosecutors. Some law predictable and parties less prone to intimidation firms tout the ability to identify “friendly” judges due by those who are eager to market their services. In to their knowledge about the judges and their practice, this respect, legal aid can make a big difference in but the potential for specifically using AI in the fight empowering poor and marginalized populations to against corruption seems to remain largely unexplored even just dare to engage in the process of claiming their for now.33 However, simple solutions such as the rights. establishment of forms for common types of cases and provision of standard building blocks for formulating Identifying corrupt practices requires considerable decisions in these cases gently increases the pressure effort, but the results make it worthwhile. While it on judges and prosecutors not to make changes to the is challenging to root out corrupt practices in justice forms unless there are good reasons for digressing. institutions and elsewhere, such efforts contribute to improving service delivery, enhancing transparency, Audio and/or video-recording of proceedings can and increasing accountability for performance to the also increase transparency. A common face of general public. Communication to the population corruption in the courts is that those in charge of the about the commitment, actions taken, and their impact minutes are biased towards one party and draft the will contribute to rebuilding trust in the institutions. records accordingly. Or the minutes are deliberately of such poor quality that the judge retains discretion on which facts and evidence, if any, to retain. Recordings accessible to the parties of the trial provide an objective basis for appeals in case the decision is not based on facts or evidence provided. Insufficient attention is given to judicial infrastructure. In many developing countries, adjudication takes place in judges’ chambers, thus limiting access of the public and transparency. Reorganizing the spatial arrangements can have an impact on corruption practice, e.g. by limiting access of lawyers or the public to the area of the court where the judges and prosecutors have their offices. In modern courthouses, there is a functional separation of spaces, establishing entirely separate pathways for the general public and lawyers, judges and prosecutors, and detainees, pathways that only intersect in the courtroom.34 Enhancing Government Effectiveness and Transparency: The Fight Against Corruption 327

PART III ROLE OF INSTITUTIONS IN FIGHTING CORRUPTION CHAPTER 13 JUSTICE SYSTEM Conclusion Policy makers today have access to an arsenal internally as well as externally to the broader public. of tools that justice reform practitioners have For courts and prosecution services, this can be a tricky developed to improve the way justice sector question due to the need for adequate protection of institutions contribute to fighting corruption, judicial and prosecutorial independence. Ultimately, including corruption within justice institutions this independence is less a privilege of the individual themselves. As outlined above, many lessons have official, but an entitlement of the population: the been learned over the last couple of decades, right of citizens to an impartial judge and prosecutor. including about areas and sequencing of reforms. Four Transparency is a key ingredient for this accountability lessons, however, truly stand out. They revolve around to be effective. transparency, accountability, the role of civil society, and – above all – political will. Role of civil society Transparency Strengthening the role of civil society organizations and free media is important for accountability Increasing transparency is absolutely paramount mechanisms to deploy their full potential in the fight for the success of anti-corruption efforts. In terms of against corruption. While they do not require major transparency about the operation of justice institutions, funding either, they need a sufficiently open space there is a broad range of entry points. Publishing to operate in. The potential and actual beneficiaries relevant performance data can be done at low cost of the justice system are very dispersed, they are not and dissemination requires only basic technology like a well-organized group with adequate agency. Civil a website. The same is true for providing authoritative society organizations and free media are therefore key guidance to users on what is needed to access and to act on behalf of the broader population to uncover navigate services. The use of ICT, however, is a game- wrongdoings and ensure that adequate sanctions are changer, but these solutions can be costly and may imposed on the perpetrators. not be implementable within the short term. ICT has a tremendous potential for truly transformational Political will impact. Technology standardizes practices and can limit the ability of individuals to manipulate business Finally, while technically sound solutions are a key processes without leaving a trace, for example through requirement for success, the breadth and depth of an ICT-based case management system in the courts or impact ultimately hinges upon the extent of commitment prosecution service. Technology can increase people’s at the political level, both outside and inside the justice ability to access information about what is happening system. While it is important for policy makers to be within a justice institution, and for the institution to able to show short-term victories to citizens and other collect and disseminate performance data to the public. stakeholders to maintain or increase the momentum In terms of transparency about the people working in of anti-corruption efforts, the sustainability of these justice institutions, the establishment of mechanisms reforms is not primarily a function of the soundness for asset and income disclosure of justice officials can of the technical solutions. Long-term impact and its be impactful. sustainability depend on the extent to which the fight against corruption has become part of the DNA of the Accountability political system. Even the most successful reforms, such as the Romanian Anti-Corruption Directorate, fade Increasing accountability is of fundamental importance away when the commitment at the political level dries for successful anti-corruption efforts and does not up. Integrity achievements are not a one-time victory. require major allocation of resources. The important Maintaining them requires a renewed social contract question is: Who needs to be accountable to whom and that fully embraces this dimension and holds those to for what? There is a need for accountability of justice account who try to find ways around it. officials for compliance with ethics and rules, both 328 Enhancing Government Effectiveness and Transparency: The Fight Against Corruption

PART III ROLE OF INSTITUTIONS IN FIGHTING CORRUPTION CHAPTER 13 JUSTICE SYSTEM Notes 1. Hammergren, Linn; Dory Reiling and Adrian Di Giovanni 16. See one example of many: BTI (2018), Ber telsmann (2007), Justice Sector Assessments – A Handbook, World Transformation Index, Morocco Country Report 2018 (under Bank (Washington, DC: 2007), available online at http:// Political Participation – Freedom of Expression). Available siteres o urces.wor ld b ank .org /INTL AWJUS TINS T/Res o urces / online at https://www.bti-project.org/en/reports/country- JSAHandbookWebEdition_1.pdf. reports/detail/itc/MAR/. 2. World Bank. 2017. World Development Repor t 2017: 17. See Matthew C. Stephenson (2016), “Specialised Anti- governance and the law: Main report (English). World corruption Courts: A comparative mapping”, Series editor: Development Report. Washington, D.C.: World Bank Sofie Arjon Schütte U4 Issue December 2016 No 7, p 7. Group. ht tp://documents.worldbank.org/curated/ en/774441485783404216/Main-report. 18. In 2019, Albania, Ukraine, and Madagascar have established specialized anti-corruption courts. See Exit News (2019), 3. For details see World Bank (2014), Public Wrongs, Private Special Anti-Corruption and Organized Crime Courts Actions – Civil Lawsuits to Recover Stolen Assets (Washington, Established in Albania, available at ht tps://exit.al/ DC: 2014), available online at https://star.worldbank.org/ e n / 2 019/12 /19/s p e c i a l - a n t i - c o r r u p t i o n - a n d - o r g a n i z e d - publication/public-wrongs-private-actions. crime- courts-established-in-albania/. See UNIAN (2019), “Ukraine launches High Anti-Corruption Court’, available at 4. For details see World Bank (2019), Going for Broke: Insolvency ht t p s: //w w w.u nia n.info/p oli t ic s /10 5134 61- u k r aine - lau nc he s - Tools to Support Cross-Border Asset Recovery in Corruption high-anti-corruption-court.html. See Florian Schatz (2019), Cases, (Washington, DC: 2019), available online at https://star. “Madagascar’s Specialised Anti-Corruption Court: The quest worldbank.org/publication/going-for-broke. to end impunity”, Series editor: Sofie Arjon Schütte, U4 Brief 2019:2, pp1-2. Available at https://www.u4.no/publications/ 5. Council of Europe (2000), Recommendation Rec(2000)19 of madagascars-specialised-anti-corruption-court-the-quest-to- the Committee of Ministers of the Council of Europe on the end-impunity.pdf. Role of Public Prosecution in the Criminal Justice System, available online at https://rm.coe.int/16804be55a. 19. For example, in Afghanistan, Albania, Indonesia, Madagascar, Malaysia, Nepal, Palestine, Uganda, and Ukraine, see Matthew 6. Ibidem. C. Stephenson (2016), p. 8-9. 7. Ibidem. 20. Matthew Stephenson (2016), Specialised Anti-Corruption Courts: Philippines, U4 Brief, July 2016:3. 8. See Emerging Europe (2018), The Fight Against Corruption is in Romania’s DNA, June 23, 2018 available at https://emerging- 21. Sofie Arjon Schutte (2016), Specialised Anti-Corruption europe.com/interviews/the-fight-against-corruption-is-in- Courts: Indonesia, U4 Brief, July 2016:4. romanias-dna/. 22. Several multilateral treaties have dispositions on MLA, such 9. See News Europe (2018), The Corruption of Romania’s Anti- as the Inter-American Convention against Convention (article Corruption fight, December 17, 2018, available at https://www. XIV), the OECD Anti- Bribery Convention (article 9), and the neweuro p e.eu /ar ticle/cor r uptio n - ro manias - anti - cor r uptio n - UN Convention against Corruption (UNCAC, article 46). See fight/ Marie Terracol (2015), Mutual Legal Assistance and corruption, No 2015:17, available at https://www.u4.no/publications/ 10. See GRECO (2018), Ad hoc Report on Romania (Rule 34) mutual-legal-assistance-and-corruption.pdf. adopted by GRECO at its 79th Plenary Meeting, (Strasbourg, 19-23 March 2018) available at https://rm.coe.int/ad-hoc- 23. See Hughes Hubbard & Reed (2019), Alert - FCPA & Anti- re p or t- o n - ro mania - r ule -34 - ad o pte d - by- gre co - at- it s -79 t h - Bribery, p 150, available at https://files.hugheshubbard.com/ plenary-/16807b7717; see Romania Insider (2018), Council files/HHR-Fall-2019- FCPA-Alert.pdf#page=13. of Europe anti-corruption body slaps Romania on justice changes, April 12, 2018, available at https://www.romania- 24. See Transparency International (2020), Airbus Briber y insider.com/greco-slaps-romania-justice-changes/. Investigation Highlights Power of International Cooperation in Tackling Corruption. https://www.transparency.org/news/ 11. Not all anti-corruption agencies have prosecution functions, p re s s releas e /air b us _ b r ib er y_ inve s tigatio n _ hig hlig ht s _ as this depends on the specifics in each jurisdiction. power_of_international_cooperation. 12. Council of Europe (2001), Recommendation Rec(2001)10 of the 25. See Watts (2017), Operation Car Wash: Is this the biggest Committee of Ministers to member states on the European corruption scandal in history?, The Guardian, June 1, 2017 Code of Police Ethics, available online at https://rm.coe. available at https://www.theguardian.com/world/2017/jun/01/ int/16805e297e. brazil-operation-car-wash-is-this-the-biggest-corruption- scandal-in-history. 13. There are countries where the police are placed under the authority of the public prosecution or where police 26. Anthony Faiola (2018). The corruption scandal started in investigations are either conducted or supervised by the public Brazil. Now it’s wreaking havoc in Peru, The Washington prosecutor. In other countries the police are independent of Post, available here https://www.washingtonpost.com/world/ the prosecution service. the_americas/the-corruption-scandal-started-in-brazil-now- its-wreaking-havoc-in- peru/2018/01/23/0f9bc4ca-fad2-11e7- 14. For examples from Mongolia as well as South and East Africa 9b5d-bbf0da31214d_story.html. see Transparency International (2007), Judicial Corruption Report 2007 – Corruption in Judicial Systems, Cambridge 27. See Gillian Dell and Andrew McDevitt (2018), Exporting University Press (Cambridge, NY: 2007). Available online at Corruption, Progress Report 2018: assessing enforcement https://www.transparency.org/whatwedo/publication/global_ of the OECD Anti-Briber y Convention, Transparency corruption_report_2007_corruption_and_judicial_systems. International, p 109 https://www.transparency.org/whatwedo/ publication/exporting_corruption_2018. 15. World Bank. 2017. World Development Repor t 2017: governance and the law: Main report (English). World Development Report. Washington, D.C.: World Bank Group. ht tp://documents.worldbank.org/curated/ en/774441485783404216/Main-report. Enhancing Government Effectiveness and Transparency: The Fight Against Corruption 329

PART III ROLE OF INSTITUTIONS IN FIGHTING CORRUPTION CHAPTER 13 JUSTICE SYSTEM References 28. MDTFJSS (2014). Experiences and Perceptions of Justice Anthony Faiola (2018). The corruption scandal started in Brazil. in Serbia: Results of the survey with the general public, Now it’s wreaking havoc in Peru, The Washington Post, enterprises, lawyers, judges, prosecutors and court h t t p s: // w w w.w a s h i n g t o n p o s t .c o m / w o r l d / t h e _ a m e r i c a s / t h e - administrative staff. http://www.mdtfjss.org.rs/archive//file/ corruption-scandal-started-in-brazil-now-its-wreaking-havoc- Experiences%20and%20Perceptions%20of%20Justice%20 in-peru/2018/01/23/0f9bc4ca-fad2-11e7-9b5d-bbf0da31214d_ in%20Serbia%20-%20EN.pdf. story.html. 29. Svircev (2018). Experiences and Perceptions of Judicial BTI (2018), Bertelsmann Transformation Index, Morocco Country Performance in Montenegro. World Bank. http://documents. Report 2018 (under Political Participation – Freedom of worldbank.org/curated/en/6738815258710780 07/pdf/ Expression). Available online at https://www.bti-project.org/en/ E x p er iences -and - Perceptions - of- Judicial - Per for mance -in - reports/country-reports/detail/itc/MAR/. Montenegro.pdf. Council of Europe (2000), Recommendation Rec(2000)19 of the 30. The effectiveness of random case assignment requires the Committee of Ministers of the Council of Europe on the Role consideration of other factors as well. If the court fees are of Public Prosecution in the Criminal Justice System, available very low and the system does not prohibit multiple filing, online at https://rm.coe.int/16804be55a. the lawyer can play the random case assignment lottery until the case is assigned to the right judge. All duplicate cases Council of Europe (2001), Recommendation Rec(2001)10 of the would then be withdrawn. Where multiple filing with the same Committee of Ministers to member states on the European party names is impossible, lawyers may resort to changing a Code of Police Ethics, available online at https://rm.coe. letter in the name of the parties until they “win” in the case int/16805e297e. assignment lottery, withdraw the other cases, and then correct the spelling mistake as a clerical error. Building a waterproof Emerging Europe (2018), The Fight Against Corruption is in system requires an in-depth understanding of local practice. Romania’s DNA, June 23, 2018 available at https://emerging- europe.com/interviews/the-fight-against-corruption-is-in- 31. See EU (2011). EU Progress repor t Bulgaria Februar y romanias-dna/. 2011 (COM(2011)81), available at https://ec.europa.eu/ transparency/regdoc/rep/1/2011/EN/1-2011-81-EN-F1-1.Pdf. Exit News (2019), Special Anti-Corruption and Organized Crime Courts Established in Albania, available at https://exit.al/ 32. See ht tps://w w w.doingbusiness.org/en/methodology/ en/2019/12/19/special-anti-corruption-and-organized-crime- enforcing-contracts. courts-established-in-albania/. 33. France recently passed a law criminalizing the analysis of data UNIAN (2019), “Ukraine launches High Anti-Corruption Court’, about the decisions of individual judges to prevent profiling. available at https://www.unian.info/politics/10513461-ukraine- See Tashea (2019). France bans publishing of judicial analytics launches-high-anti-corruption-court.html. and prompts criminal penalty. https://www.abajournal.com/ news/article/france-bans-and-creates- criminal-penalty-for- Florian Schatz (2019), “Madagascar’s Specialised Anti-Corruption judicial-analytics. Cour t: The quest to end impunity”, Series editor: Sofie Arjon Schütte, U4 Brief 2019:2, pp1-2. https://www.u4.no/ 34. That does not prevent meetings in the parking lot or elsewhere, public ations /madagasc ar s - s pecialised -anti- cor r uption - cour t- but the threshold for this is higher. the-quest-to-end-impunity.pdf. Gillian Dell and Andrew McDevitt (2018), Exporting Corruption, Progress Report 2018: assessing enforcement of the OECD Anti- Bribery Convention, Transparency International, p 109 https:// w w w.t r a n s p a r e n c y.o r g /w h a t w e d o/p u b li c a t i o n /ex p o r t i n g _ corruption_2018. GRECO (2018), Ad hoc Report on Romania (Rule 34) adopted by GRECO at its 79th Plenary Meeting, (Strasbourg, 19-23 March 2018) available at https://rm.coe.int/ad-hoc-report-on-romania- rule-34-adopted-by-greco-at-its-79th-plenary-/16807b7717 Hammergren, Linn; Dory Reiling and Adrian Di Giovanni (2007), Justice Sector Assessments – A Handbook, World Bank (Washington, DC: 2007). http://siteresources.worldbank.org/ INTLAWJUSTINST/Resources/JSAHandbookWebEdition_1.pdf. Hughes Hubbard & Reed (2019), Alert - FCPA & Anti-Bribery, p 150, available at https://files.hugheshubbard.com/files/HHR- Fall-2019-FCPA-Alert.pdf#page=13. Marie Terracol (2015), Mutual Legal Assistance and corruption, No 2015:17, available at https://www.u4.no/publications/mutual- legal-assistance-and-corruption.pdf. Matthew C. Stephenson (2016), “Specialised Anti-corruption Courts: A comparative mapping”, Series editor: Sofie Arjon Schütte U4 Issue December 2016 No 7, p 7. Matthew Stephenson (2016), Specialised Anti-Corruption Courts: Philippines, U4 Brief, July 2016:3. 330 Enhancing Government Effectiveness and Transparency: The Fight Against Corruption

PART III ROLE OF INSTITUTIONS IN FIGHTING CORRUPTION CHAPTER 13 JUSTICE SYSTEM MDTFJSS (2014). Experiences and Perceptions of Justice in Serbia: Results of the survey with the general public, enterprises, lawyers, judges, prosecutors and court administrative staff. ht tp://w w w.mdt fjss.org.rs/archive//file/Experiences%20 and%20Perceptions%20of%20Justice%20in%20Serbia%20 -%20EN.pdf. News Europe (2018), The Corruption of Romania’s Anti-Corruption fight, December 17, 2018, available at https://www.neweurope. eu/article/corruption-romanias-anti-corruption-fight/. Romania Insider (2018), Council of Europe anti-corruption body slaps Romania on justice changes, April 12, 2018, available at https://www.romania-insider.com/greco-slaps-romania-justice- changes/. Sofie Arjon Schutte (2016), Specialised Anti-Corruption Courts: Indonesia, U4 Brief, July 2016:4. See EU (2011). EU Progress repor t Bulgaria Februar y 2011 (COM(2011)81), available at https://ec.europa.eu/transparency/ regdoc/rep/1/2011/EN/1-2011-81-EN-F1-1.Pdf. Svircev (2018). Experiences and Perceptions of Judicial Performance in Montenegro. World Bank. http://documents.worldbank. o r g /c u r a t e d /e n /673 8 81525 871078 0 07/p d f / E x p e r i e n c e s - a n d - Perceptions-of-Judicial-Performance-in-Montenegro.pdf Tashea (2019). France bans publishing of judicial analytics and prompts criminal penalty. https://www.abajournal.com/news/ ar ticle/f r ance - bans -and - c reates - c r iminal - p enalt y-for- judicial - analytics. Transparency International (2007), Judicial Corruption Report 2007 – Corruption in Judicial Systems, Cambridge University Press (Cambridge, NY: 2007). Available online at https://www. t r a n s p a r e n c y.o r g / w h a t w e d o/p u b li c a t i o n /g l o b a l _ c o r r u p t i o n _ report_2007_corruption_and_judicial_systems. Transparency International (2020), Airbus Bribery Investigation Highlights Power of International Cooperation in Tackling Corruption. https://www.transparency.org/news/pressrelease/ air bus _ br iber y_ inves tigation _ highlight s _ power_ of_ international_cooperation. Watts (2017), Operation Car Wash: Is this the biggest corruption scandal in history?, The Guardian, June 1, 2017 available at https://www.theguardian.com/world/2017/jun/01/brazil- operation-car-wash-is-this-the-biggest-corruption-scandal-in- history. World Bank (2014), Public Wrongs, Private Actions – Civil Lawsuits to Recover Stolen Assets (Washington, DC: 2014), available online at https://star.worldbank.org/publication/public-wrongs- private-actions. World Bank (2019), Going for Broke: Insolvency Tools to Support Cross-Border Asset Recovery in Corruption Cases, (Washington, DC: 2019), available online at https://star.worldbank.org/ publication/going-for-broke. World Bank. 2017. World Development Report 2017: governance and the law: Main report (English). World Development Report. Washington, D.C.: World Bank Group. http://documents. worldbank.org/curated/en/774441485783404216/Main-report. Enhancing Government Effectiveness and Transparency: The Fight Against Corruption 331

COUNTRY SPOTLIGHT Malaysia’s Approach to Fighting Corruption Evolution, Failures and Successes of Malaysia’s Anti-Corruption Efforts

COUNTRY SPOTLIGHT: MALAYSIA’S APPROACH TO FIGHTING CORRUPTION Overview Malaysia’s case study highlights both the party that had been in power for over 60 years. The new opportunities and challenges of building and government—a loosely formed coalition of opposition sustaining an effective anti-corruption drive parties led by a former Prime Minster— stressed over time. Despite having a rich history of public the “rule of law” and took upon itself to revitalize the administration since independence and drawing on institutions that were put in place to fight corruption and to re-establish limits on the power of the Prime Minister. international best practices, Malaysia continued to Yet, without the parliamentary majority needed to make changes in the Constitution, the scale of changes was fair badly in global perception surveys on corruption. necessarily limited. The actions taken by the Pakatan Harapan (PH) government during its two years in office Indeed, many of the institutions that were set up to boosted Malaysia’s ratings in global surveys of corruption perceptions. With the collapse of the PH government detect and sanction corruption became gradually in March 2020, there is uncertainty whether the anti- corruption reform momentum will be sustained. compromised with increasing concentration of political power. Only when the magnitude and scale of corruption in the 1MDB sovereign wealth fund became widely known to civil society and the global media, did citizens become so outraged that they voted out the political Background Malaysia’s anti-corruption institutional framework, establishment of the Anti-Corruption Agency (ACA) dating back to the 1950s, has evolved through in 1967. In 2004, the National Integrity Plan (NIP) was the years and to a large extent has been shaped introduced with an aim to improve the effectiveness of at any point in time by the country’s political and the anti-corruption efforts. The NIP traced factors that economic developments. As shown in the table below, might undermine integrity among individuals, including government systems and procedures, the structure graft prevention efforts started back in the 1950s with of institutions, and the culture of organizations. To the Prevention of Corruption Ordinance and led to the Year Trajectory of Anti-Corruption Laws and Agency Evolution in Malaysia 1950 The Prevention of Corruption Ordinance replaced previous laws introduced in the Federated Malay State, State of Johor and that Straits Settlement. 1959 Corruption Prevention Unit formed 1961 Prevention of Corruption Act 1967 Formation of Anti Corruption Agency (ACA) 1970 The Emergency (Essential Powers) Ordinance 1973 Introduction of National Bureau of Investigation 1982 Anti-Corruption Agency (established by PCA 1961) 1997 Anti-Corruption Act 1997 Anti-Corruption Agency (established by PCA 1961) 2009 Malaysian Anti-Corruption Commission Act 2009 Malaysian Anti-Corruption Commission reports to Prime Minister 2019 Malaysian Anti-Corruption Commission reports to Parliament Enhancing Government Effectiveness and Transparency: The Fight Against Corruption 333

COUNTRY SPOTLIGHT: MALAYSIA’S APPROACH TO FIGHTING CORRUPTION coordinate, advise and monitor the efforts of the NIP, an intent to empower the anti-corruption body with the Malaysian Institute of Integrity (IIM) was established greater independence and autonomy to investigate in 2004 (later rebranded to INTEGRITI in 2015). cases. It could secure documents and witnesses, Together, the NIP and INTEGRITI were to form the arrest and prosecute offenders, and propose reforms crux of a national integrity system for comprehensive that would insulate key decisions from undue political reform in Malaysia. The approach stressed individual interference. The reforms that took place in 2009 were and institutional ethics, beyond formal laws and partly in response to the growing frustration from regulations, with a goal of maximizing integrity at all the public and civil society over the overall quality levels as a prophylactic against corruption. INTEGRITI of government, level of service delivery, problems has assumed a new role under the current National around red-tape and lack of anti-corruption efforts. Anti-Corruption Plan (NACP). It was not until 2009 that However, for several reasons, including gaps in policy the ACA was converted from a government agency or implementation (discussed later in the case), most into a commission—the Malaysian Anti-Corruption of these reforms fell short of achieving the desired Commission (MACC). The MACC was established with outcome. Boost to governance reforms: 2018 Malaysia’s anti-corruption efforts received a major NACP include mandatory asset declaration for Cabinet boost in 2018 with the election of the Pakatan Ministers and the Prime Minister’s Directive on the roles Harapan government that came to power with the and responsibilities between ministers and secretaries- promise of a clean, accountable and transparent general to improve the accountability framework of the regime that resonated well with people following administration. Some of the key initiatives and reform the 1MDB scandal. One of the first steps in this effort efforts that are underway and in line with the objectives was to set up the National Centre for Governance, of the plan, but not necessarily limited to the NACP, are Integrity and Anti-Corruption (GIACC), as secretariat listed below: of the Special Cabinet Committee for Anti-Corruption (JKKMAR), reporting directly to the Prime Minister. 1. Strengthening the Parliament: Reintroducing the The GIACC, in consultation with other agencies Parliamentary Services Act 1963, to provide greater and departments, formulated and launched the independence and autonomy to parliament to National Anti-Corruption Plan (NAPC) and is currently ensure checks and balances on the functioning of overseeing its implementation. The main enforcement the executive.  agency continues to be the Malaysian Anti-Corruption Commission (MACC), the two together being the main 2. Asset Declaration: The policy for asset declaration anti-corruption bodies in the country. is now in place for all executives and is being extended to members of parliament (MPs). The The NACP outlines the government’s strategies Asset Declaration information has been published and measures around combating corruption, on the MACC portal. The next step is to ensure its strengthening governance, integrity and extension to all the elected MPs. transparency in government operations. The five- year plan has a total of 115 initiatives, categorized under 3. Prime Minister’s tenure: The initiative to limit the 6 strategic thrusts: (i) strengthening political integrity, Prime Minister’s tenure to no more than two terms (ii) accountability and effectiveness of public service requires amendments to the Federal Constitution, delivery, (iii) efficiency and transparency in public a process that has not yet started. procurement, (iv) enhancing the credibility of the legal and judicial system, (v) institutionalizing the credibility 4. Procurement reform: Efforts on various procurement of law enforcement agencies, and (vi) inculcating good reforms are on track with a plan to table the governance in corporate entities. Early initiatives of the Procurement Act in the Parliament in 2020. 334 Enhancing Government Effectiveness and Transparency: The Fight Against Corruption

COUNTRY SPOTLIGHT: MALAYSIA’S APPROACH TO FIGHTING CORRUPTION 5. Strengthening the Judiciary: Special courts have 11. Organisational Anti-Corruption Plan (OACP) been established to expedite trials on corruption and Anti Bribery Management System (ABMS): cases. It is compulsory for all government agencies to have an OACP specific to their workflow and the 6. Strengthening the Electoral System: The Election implementation of ABMS has been launched Commission is reviewing the entire electoral government-wide after a pilot project last year. system, including the area of political financing, with the aim of publicizing all the political funders. While GIACC functions as an anti-corruption planning unit focusing on policy design, 7. Independent Police Complaints and Misconduct implementation, monitoring and assessment, Commission (IPCMC): The draft IPCMC Bill is under enforcement is under MACC and other enforcement discussion with the Chambers of Attorney General. authorities. One of GIACC’s key roles is monitoring the progress of the JKKMAR’s decisions, from inception 8. Ombudsman: The Ombudsman Act, in draft to completion. JKKMAR members include the prime stages, is meant to replace the Public Complaints minister as chair, the deputy prime minister as deputy Bureau with the aim of improving the management chair, senior ministers, the chief secretary to the of public complaints in Malaysia. government, the director-general of the Public Service Department, the secretary-general of the Treasury, 9. Reform of Government-Linked Companies (GLC): the attorney general and auditor general, the director- The Ministry of Finance is finalizing guidelines for general of the GIACC, chief commissioner of the the appointment of senior management, Chairman MACC, and all secretaries-general of ministries. The and Board of Directors in GLCs and subsidiary JKKMAR met monthly for the first 6 months following companies, banning all political appointments in its establishment, and every two months thereafter. GLCs. GIACC presents progress reports to the JKKMAR at regular intervals, using “traffic light” (green, yellow, 10. Support Letters: A new policy that forbids politicians red) status indicators. from issuing support letters for government tenders and projects has been introduced. Key changes with some early results Malaysia’s performance on international indicators gave Malaysia a marked improvement score for 2020 and rankings on governance, accountability and for improvements in electoral process and pluralism, transparency have improved as a result of some where it received 9.17 out of 10 in the Democracy Index. of these reforms and other on-going efforts. Its It had scored only 7.75 in 2018. ranking has improved from 61st in 2018 to 51st in 2019 on Transparency International’s (TI) Corruption Perception Malaysia has also been recognized for its efforts to Index (CPI). On the Edelman Barometer on Trust in pursue corporate governance reforms and broader Government, Malaysia shot up by 20 points in 2018 to institutional reforms that complemented the anti- 60 points from 40 points in 2017. Press Freedom also corruption and governance reforms agenda. Based saw an improvement from being ranked 145th in 2018 on the ACGA Corporate Governance Watch 2018, the to 123rd in 2019. Malaysia moved from 15th to 12th in the aggregate company scores moved most significantly for World Bank’s Doing Business 2020 Ranking. The Asian Malaysia, where improvements in the Enforcement sub- Corporate Governance Association (ACGA) placed category and optimism about political change drove Malaysia 4th out of 12 Asian economies in 2018, up from scores up 7% from 2016. Malaysia’s ranking of 12th in the 7th place in 2016. The Economic Intelligence Unit (EIU) World Bank’s Ease of Doing Business 2020 Report is a Enhancing Government Effectiveness and Transparency: The Fight Against Corruption 335

COUNTRY SPOTLIGHT: MALAYSIA’S APPROACH TO FIGHTING CORRUPTION testament to the ongoing reform initiatives to enhance the private sector, but also to public officials who are competitiveness, productivity and governance for sitting on Boards of corporate entities. It is here that the businesses. The improvement in the Democracy Index Executive and Legislative Branch must contend that any is a result of some of the electoral reforms and changes political appointments made to statutory bodies and/ in political campaigning guidelines. Despite the or GLCs must be cognizant of the fiduciary duties and improvement in overall ranking, Malaysia still features liabilities of such appointments under the Act. in the “flawed democracy” segment, but it has for the first time moved into the top half of the category. The Malaysian Government’s resolve to take swift Another step to address financial crimes was the setting action on corruption scandals is on-going, as can be up of the National Anti-Financial Crime Centre (NFCC) seen from some of the high-profile cases that are and Corporate Governance Committee to track and being pursued. The strong mandate, independence and report dubious financial transactions. The NFCC Act resources accorded to the GIACC and MACC to carry 2019 provides the NFCC with the legal provision to out their roles and functions constitute an important coordinate and collaborate with enforcement agencies step towards the strengthening of institutions. The in matters related to the reporting and prevention of commitment outlined in the 5-year national plan financial crimes. around anti-corruption enabled the reforms to bear early results. Key areas like political funding, public Another key reform was the amendment of the procurement and political interference are being MACC Act in 2018 to incorporate, among others, addressed by putting in place more transparent a new Section (17A) on corporate liability for systems and processes with a robust monitoring and corruption. The new Section not only establishes a evaluation plan. The government moved swiftly to new statutory corporate liability offense of corruption follow up on some of the big scandals like the 1MDB, by a commercial organization under Malaysian law, but Federal Land Development Authority (FELDA), KWAP also deems any director, controller, officer, partner or (Statutory Body for Public Sector Pension) and Tabung manager of a commercial organization to be personally Haji (Haji Pilgrims Fund Board) to name a few. This was liable for the same offense if the commercial organization followed by the arrest of several political leaders and is found liable, unless the relevant individual can prove figures who were later charged by MACC for abuse of that the offense was committed without his or her power, corruption and money laundering, and brought consent, and that he or she had exercised the requisite to the courts. Several concurrent cases involving the due diligence to prevent the commission of the offense. highest echelon of leadership in the country prior to This change was expected to be fully enforced in June the 2018 general elections are currently being heard in 2020. It is key that the relevance and consequences of the courts. this change are communicated effectively not only to Shortcomings of the previous reform efforts Previous national level reform efforts on than on bringing about structural changes. The anti- governance and anti-corruption had a limited corruption institutions were focused on mid-level impact for several reasons. In 2004, the government corruption rather than grand corruption involving introduced the National Integrity Plan (NIP) and set up the highest echelon of government leadership. The NACP for that reason has singled out political the Malaysian Institute of Integrity (IIM) to coordinate, interference as one of the major impediments of past reform efforts. The interference affected prudence in advise on and monitor initiatives outlined in the NIP. administrative and financial management in areas such as public procurement and resulted in half-hearted The NIP tried to trace factors that might undermine implementation of reforms. integrity among individuals, systems and procedures, structure and institutions, and culture. The impact was limited as the focus was on advocacy rather 336 Enhancing Government Effectiveness and Transparency: The Fight Against Corruption

Enhancing Government Effectiveness and Transparency: The Fight Against Corruption 337

COUNTRY SPOTLIGHT: MALAYSIA’S APPROACH TO FIGHTING CORRUPTION The anti-corruption institutional framework complaints were likely to be registered. This resulted suffered from limitations, including a lack of in less than encouraging rates of whistleblowing from independence and autonomy granted to key the system. Since 2018, the MACC has been working on institutions mandated with the task. There was streamlining procedures and institutional arrangements over-centralization of power in the Executive, and both for a more effective discharge of the whistleblowing the MACC and Attorney General’s Chambers lacked and witness protection act. the independence to deal with grand corruption cases, such as the 1MDB and FELDA when they were initially Efforts were made to limit the role of politicians unearthed. The MACC Act lacked the teeth to accord a in statutory bodies and GLCs, and the government mandatory minimum sentence for offenders, resulting successfully implemented this in all GLCs with in lighter punishments. The Auditor General’s reviews the exception of Khazanah Nasional. The GLC were limited to government agencies and auditing of Transformation Plan, which was introduced in 2008, GLCs and government-linked investment companies attempted to make GLCs more performance-based, only in the event of a complaint. including in the appointment of senior management and members of the board. However, transparency While the introduction of the Whistleblower of board and senior management appointments Protection Act in 2010 was a step in the right with clear performance tied to these appointments direction, it was incapacitated by the weak witness remained elusive. Lack of institutionalization of these protection infrastructure. Agencies tasked to oversee reforms by way of law and regulations has resulted the whistleblower act and witness protection policy in the dismantling of some of the reforms previously were placed under the Prime Minister’s Department and introduced. Political appointments continued to be enforcement agencies. This institutional arrangement made to board and chairman positions, making it resulted in a low trust environment and the fear of difficult to separate political and business interests. retaliation by the very authorities against whom the Unfinished reforms The recent change in government in March 2020 some state governments. Further reforms, including, has resulted in some changes at the top level but not limited to, procurement, political funding, asset and the key is to maintain the momentum and declaration, politically-linked board appointments in continuity of the reforms around anti-corruption statutory bodies, and effectiveness of the oversight and governance. The change in government led to of regulatory bodies, need to be taken to their logical the resignation of the Attorney-General and the Chief conclusion. Reforms carried out in the judiciary, Commissioner of the MACC. It has resulted in the parliament, election commission and the public service changing of the guard in several GLCs and government- provide a good foundation for institutionalizing the linked investment companies. However, the new changes. Reform efforts taking place at the Federal level government has formed its Cabinet and has signalled need to be cascaded to other levels of government, that it is committed to carrying forward these reforms, namely states and local authorities. which are still being led by the Cabinet Committee on Anti-Corruption, the GIACC, and the MACC and others An early stage reform to ensure responsible and under the framework outlined in the NACP. These credible media reporting has been initiated by plans are not clear yet, but of critical importance is for setting up the National Media Council. The next Malaysia to review the regulations of all its statutory step will be to set up governance structures around bodies, develop clear regulatory and oversight bodies the quality and authenticity of journalism and media that will oversee corporate governance, and drive reporting. Media can be a very powerful tool for the political governance and anti-party hopping laws government to reach its citizens and for the citizens to which caused the fall of the federal government and hold the government accountable. 338 Enhancing Government Effectiveness and Transparency: The Fight Against Corruption

COUNTRY SPOTLIGHT: MALAYSIA’S APPROACH TO FIGHTING CORRUPTION The Public Service Act, which is at the draft across the different branches of government. stage, is another vehicle to accord greater transparency and accountability and separation The reform of the GLCs and state-owned of powers between elected representatives enterprises is on-going and it is unclear if the and public officials. This includes clarity and next stage of reforms would include those at the accountability in the approval process, appointments, subnational levels. This is a complex and politically difficult but important reform area, given its centrality in rewards and performance management, amongst the Malaysian economy. It is also an area that standard setting bodies must develop to assist countries with others, and strong governance structures, including complex and tiered public sector structures. gender mainstreaming. This would ensure an apolitical public service with greater clarity and accountability Lessons learned from Malaysia The Malaysian experience in combating corruption strong mandate from the country’s top leadership and improving governance provides three important to coordinate the implementation of the National lessons. Anti-Corruption Plan. The GIACC was also assigned as the secretariat of the Cabinet Committee on 1. A well-functioning institutional framework that Anti-Corruption, which provided it with a high- provides for checks and balances in government level top leadership platform to discuss, monitor is key. When the anti-corruption and governance and report on the implementation status of the bodies—the GIACC and MACC—were accorded NACP. more powers and resources to deliver their mandate without undue political interference, 3. It is important to have a broader coalition of the message and intentions were clear. Grand reformers that is not limited to public institutions corruption cases could be investigated with and other formal institutions of government. The greater autonomy and independence and brought role played by civil society groups, the media, to trial. Likewise, the passage of the Public Services businesses, academia, international partners and Act and the Ombudsman Act and institutionalizing other concerned parties also complemented some of the on-going reforms will be important for the efforts of the MACC and GIACC to combat their sustainability in the long run and will minimize corruption. Their involvement was not just on the the risk of reversal with a change in government. technical front; at times they also provided the needed support to keep the reform agenda on 2. Strong support and a clear mandate from the top track. leadership is a pre-requisite to pursue difficult reforms. The newly created GIACC was given a Enhancing Government Effectiveness and Transparency: The Fight Against Corruption 339

Conclusions

CONCLUSIONS Political realities will always constrain the menu of instruments and institutions that may have previously policy responses from which leaders may choose, been ineffective, can be injected with new life and but they need not be a permanent barrier in the revived to achieve the desired results. fight against corruption. Several cases in this report show that technical solutions alone are insufficient to Unfortunately, the impact of focused anti- have an impact on corruption, nor can they be merely corruption initiatives may not always be measured transplanted from one country context to another. in quantifiable savings or a jump in global survey The World Bank’s 2017 WDR emphasized that the rankings. Each of the cases featured in this report power asymmetries in societies—rich and poor alike— has demonstrated a positive contribution to the fight constrain the policy making environment. The impact against corruption, as reflected in the views of public of this “elite bargaining” is so strong that governments officials, local media reports, or citizen groups. Yet none are rarely able to pursue the policies that would bring of the cases has included an empirical study that would optimal development outcomes. As a result, countries allow one to see the quantitative change in corruption remain “stuck” in sub-optimal development trajectories before and after the intervention. Such studies are because well-positioned elites are unwilling to risk rare because of the difficulty of establishing a credible their loss of power. Change is nearly impossible to baseline on the magnitude of corruption prior to the achieve unless influential actors agree for it to happen. policy action, and the equal difficulty of quantifying it However, all is not lost, as the WDR acknowledged, after the intervention. Enterprise surveys conducted by “elites may voluntarily agree to limit their influence in the World Bank have helped give a quantitative aspect their own self-interest.” Citizens can play an important to measurements of corruption, but they only focus role in applying pressure to influence the outcome. The on a narrow range of actions. Likewise, international WDR further states that one particular policy—fiscal indices, such as the Worldwide Governance Indicators transparency—is effective because it “ties not only the are too aggregated to reflect the impact of a single hands of current elites but also those of successors.” intervention. Because of this measurement challenge, reform champions may need to develop other tools Corruption is stubborn but not intractable, and to gauge public sentiment about the trajectory of the dozens of cases presented in this report corruption in their country or the impact of a reform in demonstrate that progress is possible. The a specific government function or service. contemporary news may tempt one to believe that corruption is impossible to curtail and that citizens Grand corruption has proven to be a particularly have no choice but to accept it. Yet, while it is true that challenging area for public officials and citizens new schemes and vulnerabilities emerge daily, with to address, notwithstanding the progress made in ever higher monetary costs (e.g., Malaysia’s “Billion- confronting petty corruption. Automation and the Dollar Whale”), there is an often-untold reality that streamlining of bureaucratic procedures have enabled governments are tightening the marge de manœuvre many countries to lower the incidence of small bribes at for many would-be corruptors. What emerges from this the point of service delivery. However, grand corruption report is that the progress governments make is not is usually the most difficult to address precisely because necessarily from the large government-wide initiatives those who are most empowered to take action may also that garner extensive press coverage. Nor do they be the ones who benefit from the system. Elite capture necessarily result in high-profile arrests or convictions, is typically one of the biggest barriers to effective though some do. Rather, the cases of anti-corruption action against grand corruption, where public officials documented in this report show that the more focused and private interests see mutual benefit from the status efforts of governments may sometimes go unobserved. quo. However, we see through the case studies that They evidence how governments seize an opportunity even when there is strong vested interest, there are within a specific sector or function to enhance a few factors that, when combined, can contribute to governance. They also highlight how specific policy greater accountability among stakeholders. Enhancing Government Effectiveness and Transparency: The Fight Against Corruption 341

CONCLUSIONS Sharpening the anti-corruption toolkit Effective anti-corruption strategies typically of GovTech tools can be used to strengthen the capacity include multiple measures, often combining sector- of core institutions, as well as enhance the effectiveness specific interventions with transparency and of tools such as asset and interest declarations and accountability measures that apply to the whole beneficial ownership registries. Similarly, the most of the public sector. Corruption manifests itself in promising opportunities to limit corruption in public specific functions and sectors of government, and infrastructure, public procurement, and SOEs rely upon the report emphasizes the relevance of this sector- strong institutional oversight, coupled with technology based perspective. A better understanding of the platforms that allow enhanced transparency in potential entry points and opportunities for corruption government dealings. Strong ACAs have contributed within a specific sector or function helps develop an to the effectiveness of asset and interest declaration appropriate risk mitigation strategy. The incentives that systems. Data analytics and machine learning are drive corrupt behavior, as well as the political economy also enabling tax administrations to contribute more constraints to address them, will surely vary by sector effectively to anti-corruption efforts through the or function within each country context. On the other identification of illicit wealth and tax evasion. hand, the evidence is overwhelming in this report, that sector specific interventions alone are generally Many of the strategies suggested are cross- insufficient. Corruption at the sectoral level may flourish cutting and are relevant to more than one sector or because of broader social norms and a governance function. For example, the issues and recommendations ecosystem that either tolerates or encourages offered for public procurement are also relevant for the corruption. Broader governance measures may include provision of public infrastructure. Potential measures to both strengthening the institutions that help to combat mitigate corruption risks in SOEs can also be informed corruption and implementing specific tools or policy by the discussions on public procurement given the measures that make it harder to hide corrupt activity large volume of procurement that SOEs themselves (and the associated proceeds). Governments need to undertake, though often under different regulatory critically examine the effectiveness of an instrument or provisions than ministries and agencies. The lessons on a strategy in their country-context. The chapters in this PPPs in infrastructure point back to the need to manage report have highlighted some of the lessons learned the whole of the procurement cycle from tendering about what does and does not work. to contract management. Beneficial ownership transparency may help reduce conflict of interest in Strengthening core institutions and targeted public procurement as well as in the business of SOEs. policy actions are mutually supportive and should Transparency and citizen engagement have proven be adopted in tandem. Transparency and openness, critical in encouraging integrity in the operations for example, should be embedded in many of the policy of SOEs, as well as in the implementation of public instruments and institutional approaches; and a number infrastructure projects. What drives effective corruption approaches? While many factors may contribute to the some combination in each of the cases. Why are they effectiveness of anti-corruption, there are six so important? cross-cutting drivers of anti-corruption reforms that are worth noting: Political Leadership, • Strong and determined political leadership is Institutions, Incentives, Technology, Transparency, often needed to provide vision for reform and a and Collaboration. Not every driver is evidenced in commitment to support increased integrity in the face of opposition from vested interests.  every case study, but these six elements are present in 342 Enhancing Government Effectiveness and Transparency: The Fight Against Corruption

CONCLUSIONS • Countries benefit as institutions become more capture comprehensive data that helps establish capable, contributing to checks and balances and accountability for a wide range of transactions. fostering accountability. Without strong institutions to assure implementation, reforms risk being short- • Transparency can promote greater compliance lived or only superficial. and improve human behavior. Open government policies and access to information help make • Incentives drive behavior and the entry points for corrupt actions harder to hide and contribute to corruption vary across functions of government. their prevention, particularly when they are linked Therefore, corruption needs to be tackled at a to engaged and empowered communities and micro-level, with a focus on its manifestations in official processes. specific sectors or functions and changing the incentives of those who assess the benefits and • We increasingly, see that effor ts that foster risks of corrupt activity. collaboration among multiple stakeholders, including across international borders, to pursue a • Technology is enabling countries to standardize common goal achieve greater success. processes, minimize human interaction, and Political leadership Political leadership drives the reform process in chapter also highlights the importance of political several of the case studies and its importance leadership. Reform may not always be as dramatic is emphasized in virtually all of the sectors as in Georgia and Rwanda, but as the Madagascar featured in Part I. Leadership manifests itself in and Afghanistan case studies show, reforms in the different ways. The chapters on Procurement, Public sector take time and reformers within the customs Infrastructure, and SOEs, for example, highlight that administrations require sustained political support to leadership from the most senior level is necessary show results. because the economic decisions related to investments in these areas are often influenced by those in high Leadership also manifests itself in setting a tone positions and there is a risk that proceeds are used and culture of openness and transparency that is for political party financing. Changing the “rules of required for some technocratic policy responses the game”, reducing the opportunities for political to be effective. Policy instruments featured in Part II, influence in economic decisions, and enforcing the such as asset and interest disclosure, in particular, have regulatory framework on conflict of interest require implications for who may hold a position in government. strong political leadership. The case study on SOEs in Moreover, institutions that shine the spotlight on Angola, as well as the procurement case study in Chile, suspicious activity need to be supported at the political demonstrate the impact of political leadership. While level, rather than undermined. Broader initiatives such there is a risk that reform actions taken after a change of as open government, fiscal transparency, and citizen government will risk being seen as a ‘settling of scores’ engagement are also dependent on the direction and or politically motivated rather than a genuine reform of culture that are set by senior government officials. the system. Similarly, a change of government can lead Similarly, assuring the independence and capacity to a reversal of positive reforms. Thus, what may matter of the justice system requires leadership at the most most is the institutionalization of those reforms so that senior levels. Astute leadership within an organization they will not be reversed so easily. The case studies in can also be transformative in building capacity and the AID chapter (Romania and Ukraine) highlight that voice, as seen in the SAI cases taken from Ghana and anti-corruption initiatives are vulnerable to changes in India. the political environment. The customs administration Enhancing Government Effectiveness and Transparency: The Fight Against Corruption 343

CONCLUSIONS Institutional capacity Reforms need to be institutionalized if they are constitutional changes which were not possible. to be sustained, and increasing the capacity of Following a change of government in early 2020, it is integrity institutions is central to legitimizing now unclear whether the momentum on anti-corruption a country’s anti-corruption strategy. Part III of reforms will be sustained. the report discussed the role that key institutions can play in supporting anti-corruption efforts, while Oversight bodies have a vital role to play in ensuring acknowledging the challenges that confront them in that reforms are institutionalized. For the technical doing so. For example, the SAI examples of Ghana reforms in procurement and public infrastructure to and India start with a historical backdrop in which their be effective, the relevant oversight bodies need to be role was quite limited, but with the right intervention sufficiently equipped and empowered to be able to they became re-energized and their audit findings had act on the information at hand. In public infrastructure, greater impact. In the two AID examples, the newly for example, they need to be able to ensure that strong and independent institutions in the countries project identification and selection is based on merit were critical to making the asset disclosure system and that changes proposed by contractors during more than just a requirement on paper and giving implementation are well justified and not merely a it real “teeth”. The importance of a well-functioning method to enrich themselves in exchange for bribes. justice system to enforce the rule of law and impose Moreover, as digitalization expands across the public sanctions on those responsible for corrupt activity sector and creates an audit trail for government is obvious—without a well-functioning enforcement transactions, one needs capable institutions with well- system, all the preventive mechanisms become trained staff to be able to analyze the data, detect essentially toothless. red flags, and then to act on those findings through appropriate enforcement channels. The procurement The country spotlight on Malaysia underlines how and infrastructure chapters highlight how the advances policy responses to corruption can be put at risk in e-GP systems are improving the ability to detect without the corresponding institutionalization of informality and irregular activity, but they need to be processes and rules. The country has gone through further exploited. Colombia’s experience highlights several reforms, including those initiated by the a positive example of innovations in the procurement government that came into power in 2018. Some of platform that are increasing competition and value. the reforms could not be completed as they required Incentives Of course, corruption is driven by incentives, because the information was already public. In Ukraine, where the perceived benefits of corrupt activity major changes to the health financing system upended outweigh the perceived risk of being caught. Many the incentives that had previously been in place to of the initiatives in this report are aimed at increasing extract bribes from patients and from prospective the risk of detection, though some are also focused on medical school students. Though the system is far from reducing the benefits or opportunities from corruption. perfect, it has helped to constrain one of the channels In the Madagascar customs example, the performance for corruption that had endured for decades. pay approach aimed to increase the benefits of good behavior, but tough sanctions for bad behavior At times, government officials need to seek proved to be a stronger incentive, especially when out an alignment of incentives among different stronger data monitoring raised the risk of detection. stakeholders if they hope to tackle corruption. In Automation of land records in Rwanda helped reduce the case of Nigeria’s ports, the international shippers’ the value of paying bribes to land registry officials association had strong commercial incentives to 344 Enhancing Government Effectiveness and Transparency: The Fight Against Corruption

CONCLUSIONS reduce corruption, while the UNDP and three of they have now made the legal entities who represent the government’s anti-corruption agencies were all companies liable for the updating and confirmation of motivated to show positive results. This alignment of beneficial ownership information on their clients. This objectives helped foster collaboration on reforms. A shifts the compliance burden from the state to the similar alignment of incentives is evident in Slovakia’s corporate representatives, who are ultimately better approach to developing and maintaining beneficial placed to obtain and confirm the corporate data, and ownership registries. Through a change of regulations, risk suffering a reputational risk if they do not. Technology Information technology is a common driver of digitization of information in the public and private reform in many of the cases, because of the key role sectors. Brazil’s federal court of accounts (TCU) has it plays in enhancing transparency and reducing applied AI as a decision support tool for identifying human discretion. Applying an appropriate level of transactions and payments ex ante that are at a high risk technology—adapted to the country capacity—brings for fraud and corruption. India’s Andhra Pradesh (AP) increased benefits when part of a broader policy state has progressively leveraged digital government change. For example, in low capacity environments, platforms and emerging technologies to improve public such as Madagascar and Afghanistan, automation of services, while also reducing the opportunities for customs clearance procedures has been an important fraud and corruption in key areas, such as taxation and foundation of reform, but it has been accompanied construction permitting. They have used a combination by other efforts to prevent “gaming the system.” In of tools that included drones, GIS mapping, processing Ukraine, a digital eHealth platform connected to the with artificial intelligence, E-governance dashboard, reimbursement system was established, to ensure etc., to provide an integrated picture of government greater transparency in payments for health services. services. Even in very advanced countries, there is a In Nigeria, the Corporate Affairs Commission (CAC) need to remain vigilant and to anticipate new schemes will be relying on modernization of its data systems that may emerge. For example, Singapore developed and online reporting tools to help the government an AI application to help flag fraudulent training implement new beneficial ownership disclosure providers in its SkillsFuture program (a several million- requirements on all 3.1 million registered Nigerian dollar grant program for training). The GovTech chapter companies. of this report details many tools that governments may avail themselves of, but the ability to leverage them Reformers must also take advantage of the is often impeded by silos within government and the opportunities that emerging technologies may broader ecosystem of “analog” processes and culture offer, especially to leverage the rapidly growing that are harder to reform. Enhancing Government Effectiveness and Transparency: The Fight Against Corruption 345

CONCLUSIONS Transparency Transparency has been a cornerstone of many Reducing corruption in public procurement and of the reform efforts, but it is made even more public infrastructure is particularly challenging, impactful when accompanied by increased citizen and most of the measures that are promising engagement. The AID cases in Romania and Ukraine rely on transparency and citizen engagement, in both rely on public access to wealth declaration conjunction with data. Each of the CoST examples forms as a central characteristic to making them an from Honduras, Thailand, and Ukraine embodies effective anti-corruption measure. When the content mechanisms for transparency in contract management, of the declarations was known only to a few officials coupled with a multi-stakeholder group to enhance in government, the requirement had little impact. But the accountability of government officials and private once civil society and the media had access to the companies. Reflecting the specific challenges to information, the level of scrutiny increased significantly, managing PPP contracts for public works and the risk making it harder for corrupt individuals to hide. Positive of unjustified cost-escalation, governments such as experiences with beneficial ownership transparency Chile, Australia, and the EU are defining transparent are emerging in the cases of Slovakia, UK, and Nigeria, processes and frameworks for renegotiation subject though at different speeds. Such information is critical to external audit. The cases of Colombia, Chile, and to identify potential conflicts of interest in public Bangladesh show how e-GP systems have been used as procurement, as well as to support tax administrations a foundation for introducing greater transparency in the in flagging potential profits from illegal activities. public procurement system. While there are differences Supreme audit institutions in Ghana and India have in their stages of development, each of the countries enjoyed a stronger contribution to anti-corruption in has seen an increase in competition as information their countries due to the public accessibility of their going to potential bidders becomes more standardized audit findings and the public outcry that has resulted. and trust in the system has increased. Andhra Pradesh’s And while the experiments with participatory budgeting experience involves extensive investment in technology, in Ethiopia and Kenya were not directly aimed at but with the aim of increasing transparency on property fighting corruption, they have nevertheless helped to tax assessments on the one hand, and in construction increase the accountability of local officials to citizens permitting on the other. and reduce the scope for bribes in public service provision that comes from lack of public knowledge. Collaboration Collaboration among stakeholders is an across agencies and resolving data inconsistencies will increasingly important success factor in anti- governments be able to exploit the benefits of machine corruption efforts; and better collaboration learning and to flag irregularities. As noted in chapter amongst public agencies is a starting point. 10, tax administrations have significant untapped The success of AP’s reforms depended also on potential to aid in the fight against corruption by accessing third-party data from across government inter-agency collaboration, pulling together data agencies and beneficial ownership registries to identify illicit financial flows. Where data held by tax from many sources to develop an accurate status of authorities can be accessed by justice-related bodies, on the other hand, it may enhance governments’ ability service provision on which to act. Indeed, for many to prosecute individuals who have engaged in corrupt activities. Prosecution of corruption is a critical final governments seeking to leverage the benefits of leg in the anti-corruption platform, and the chapter on justice systems emphasizes how all three pillars— digitalization and emerging technologies, it is essential that they break down the institutional silos that impede effective data sharing. Important data may be spread across different agencies, who have created their own constraints to sharing. Only by tapping into databases 346 Enhancing Government Effectiveness and Transparency: The Fight Against Corruption

CONCLUSIONS police, prosecutors, and courts—need to work well between government, civil society, and the private together. Similarly, anti-corruption agencies (ACAs) sector to be effective. rely on collaboration with other public institutions to be most effective; countries setting up or refining the Finally, collaboration can extend beyond national mandate of their ACAs should take into account their borders to combat the globalization of corruption roles and competencies relative to other bodies. and the shifting of assets offshore. Countries can gain inspiration from Brazil’s success in detecting and Collaboration with external stakeholders— prosecuting corrupt activity in the Odebrecht case, journalists, civil society, and the private sector— which stemmed in large part from their ability to is also an important theme across the cases. In collaborate with other financial investigative units across Nigeria, private firms found a common interest with national boundaries. Indeed, as schemes become more anti-corruption bodies to work together on governance complex and the channels for hiding and moving assets of ports. For the countries who are using CoST to become more sophisticated, governments will need to improve infrastructure governance, social accountability leverage collaborative agreements with other countries mechanisms are an integral part of their strategy to link and develop forensic capacity to use the trove of data the interests of the public and private sector. In the available through international conventions. Stopping Columbia EPM case, the quality of SOE governance corruption at its source will always prove elusive, but first began with legislative foundations for corporate governments can benefit from emerging technologies responsibility, but what enabled EPM to stand out as to detect illicit financial flows and to provide evidence an SOE was its commitment to public engagement needed to recover stolen assets. Collaboration among and transparency with customers, communities, and national law enforcement agencies is also becoming shareholders. Moreover, anti-corruption instruments, increasingly important to the pursuit and prosecution such as asset and interest disclosure and beneficial of corrupt individuals, who are otherwise able to move ownership transparency rely heavily on collaboration assets across jurisdictions with ease. Looking ahead to sharper tools Sustaining the momentum for corruption- sectors that absorb substantial public resources and mitigating reforms is not easy, but it could be aided have an impact on development. But the best designs by having better ways to measure their impact. As for anti-corruption strategies will be able to establish noted earlier in this report, the current tools that are the bridge between the corruption entry points that used internationally to measure corruption have the are common to a sector generally and those that are common problem of relying on the perceptions of specific to that sector/function in country X and at a experts. While there is some benefit from such surveys specific point in time. The incentives for corruption and as a broad proxy, they are not a substitute for having a the vulnerabilities that can be exploited need to be more quantitative or evidence-based set of indicators. better understood first at a sectoral/functional level, Enterprise surveys are one of the few such evidenced- before drilling down to a specific national/local level. based tools, but they only track a narrow range of Some CSOs and international organizations are already services, mostly targeting bribes for public services. A beginning to mine this area for insights, but more work future research agenda for the international community remains to be done. could be to develop other types of survey approaches that would expand the breadth of corruption Countries’ urgent responses to the COVID-19 monitoring. pandemic should not be at the expense of the ongoing fight against corruption. There is an understandable More also needs to be known about how corruption pressure to address immediate and urgent needs in manifests itself within specific sectors and/ healthcare, social safety nets, and economic stimuli. or functions. Part I of this report provided a brief Responding with speed may mean that the standard overview of corruption entry points in a few specific procurement and other accountability procedures Enhancing Government Effectiveness and Transparency: The Fight Against Corruption 347

CONCLUSIONS have to be relaxed. As such, government officials must balance the need for discretion in public spending with maintaining accountability and transparency mechanisms. Simplification of procedures may be necessary, while at the same time preserving sufficient records to permit an accurate stock-take and review of expenditure after the crisis is over. Yet, the risks of corruption are real; countries should be wary that in accelerating public expenditures, public procurements could be captured by well-connected elites and fraudulent agents. In the medium term, governments should quickly restore those systems that are critical for integrity and not do lasting damage to the systems of checks and balances that have been put in place. In this time of dislocation and uncertainty, the core tools of fiscal transparency, citizen engagement, and social accountability become ever more important. Achieving long-term economic growth and shared prosperity depends upon governments, companies, and communities working together to address corruption and its corrosive impacts. We are reminded in this report that the challenges to confronting corruption are deep-rooted, but not impossible to overcome. Each case study gives evidence of impact in reducing the risk of corruption, spanning a variety of country contexts: fragile states, low-income, and advanced countries. Public policy practitioners and civil society advocates will want to adapt this menu of approaches to their own political economy contexts. But in the not-too-distant future, as digitalization expands across the public sector and disruptive technologies become more commonplace, the tools with which to detect corrupt activities and to track down illicit financial flows should become even sharper. When that happens, the ‘disinfecting effect of sunlight’ will be even more powerful than it is now. 348 Enhancing Government Effectiveness and Transparency: The Fight Against Corruption