Former Auditor General and President of Transparency Institute Guyana Inc, Anand Goolsarran, participated in a five-day conference of the International Consortium of Government Financial Management in Miami, Florida during the period 18 to 23 May 2014. He presented a paper on the above subject, and from the feedback obtained, the paper was well received among the 300 participants mainly from Africa and the Caribbean.
Today, we are pleased to present the first part of Mr Goolsarran’s paper.
Introduction
Corruption is an insidious plague that has a wide range of corrosive effects on society. It undermines democracy and the rule of law, leads to violations in human rights, distorts markets, erodes the quality of life and allows organized crime, terrorism and other threats to human society to flourish…It hurts the poor disproportionately by diverting funds intended for development, undermining a Government’s ability to provide basic services, feeding inequality and injustice and discouraging foreign aid and investment. Corruption is a key element in economic underperformance and a major obstacle to poverty alleviation and development.
These are the words of former United Nations Secretary-General Kofi Annan in his foreword to the United Nations Convention against Corruption (UNCAC). Mr Annan goes on to state that UNCAC’s adoption will warn the corrupt that betrayal of the public trust will no longer be tolerated and that it will reaffirm the importance of core values such as honesty, respect for the rule of law, accountability and transparency in promoting development, and making the world a better place for all. He suggested that if the Convention is fully enforced, it will make a real difference to the quality of life of millions of people around the world, and by removing the biggest obstacles to development, it can help achieve the Millennium Development Goals.
Corruption is the misuse or abuse of public power for private gain, and in so doing, the public interest is sacrificed in favour of private interest. Corruption results in the misallocation of scarce resources, and areas in genuine need of developmental assistance are overlooked in preference to those that offer the greatest rewards for the corrupt official. Investor confidence is shaken, and countries that are in dire need of foreign investment are deprived of it. As a result, international flow of goods, services and capital is affected, and investment ratios deteriorate. High levels of corruption are associated with low ratio of investment to GDP, low foreign inflows of direct investment and low levels of capital inflows. They also result in the perpetuation of weak governments through the loss of skills.
Inter-American Convention against Corruption
The Inter-American Convention against Corruption (IACAC) came into force in 1997 and is the first international anti-corruption treaty that has influenced the adoption of a number of other international instruments. These include the Inter American Convention on Corruption (29 March 1996); the European Union Convention on Corruption (26 May 1997); OECD Convention on Combating Bribery (27 November 1997); the African Union Convention on Preventing and Combating Corruption (12 July 2003); and the UN Convention against Transnational Crimes (29 September 2003). The main objectives of IACAC are: (a) to promote and strengthen the development of the mechanisms needed to prevent, detect, punish and eradicate corruption; and (b) to promote, facilitate and regulate cooperation among the Member States to ensure the effectiveness of measures and actions in place to fight corruption.
Preventive measures
The most important aspect of the Convention relates to preventive measures. It covers the following key areas:
• Internal controls and maintenance of books of account;
• Written rules and instructions for the proper execution of duties;
• Conservation and proper use of public resources;
• Government hiring and compensation;
• Procurement of goods and services, and the execution of works;
• Revenue collection and control;
• Codes of conduct, conflicts of interest and other ethical considerations;
• Declaration of income, assets and liabilities;
• Participation of civil society;
• Reporting acts of corruption and whistleblower protection; and
• Oversight arrangements.
Other measures
Other aspects of the Convention include measures to combat transnational bribery; illicit enrichment; unauthorized use of classified or confidential information; extradition proceedings; assistance and cooperation among State parties; identifying, tracing, freezing, seizure and forfeiting property or proceeds from corrupt activities; and bank secrecy laws.
United Nations Convention against Corruption
UNCAC came into force in 2005 and is more detailed than IACAC. The related UN resolution referred to the World Summit on Sustainable Development in South Africa in 2002 where corruption was declared a threat to sustainable development of people. Accordingly, the General Assembly expressed concern about “the seriousness of problems and threats posed by corruption to the stability and security of societies, undermining the institutions and values of democracy, ethical values and justice, and jeopardising sustainable development and the rule of law”.
In addition, the General Assembly expressed concern about the links between corruption and other forms of crime, including money laundering; and cases of corruption that involve vast quantities of assets, which may constitute a substantial portion of State resources. It also considered that corruption is no longer a local matter but a transnational phenomenon that affects all societies and economies, making international cooperation to prevent and control it essential.
The General Assembly further stated that it is convinced that the illicit acquisition of personal wealth can be particularly damaging to democratic institutions, national economies and the rule of law. Accordingly, it asserted that the prevention and eradication of corruption is a responsibility of all States. As such, they must cooperate with one another, with the support and involvement of individuals and groups outside the public sector, such as civil society, non-governmental organizations and community-based organizations, if their efforts in this area are to be effective.
Preventive measures
Parties to UNCAC are to develop and implement or maintain effective, coordinated anti-corruption policies that promote the participation of society and reflect the principles of the rule of law, proper management of public affairs and public property, integrity, transparency and accountability. UNCAC specifically refers to the establishment of a body or bodies to promote effective practices aimed at preventing corruption. These bodies should be granted the necessary independence and resources to carry out their functions effectively, free of undue influence.
In relation to the public sector, State parties are to adopt, maintain and strengthen systems for the recruitment, hiring, retention, promotion and retirement of civil servants and non-elected officials based on, among others, efficiency, transparency and objective criteria such as merit, equity and aptitude. In addition, they are ensure that appropriate systems are in place for public procurement, based on transparency, competition and objective criteria in decision-making that are effective in preventing corruption.
Other measures include:
• Establishing criteria concerning candidature for and selection to public office, enhanced transparency in the funding of candidates for elected public office, and funding of political parties;
• Maintaining and strengthening systems that promote transparency and prevent conflicts of interest;
• Facilitating simplified access by members of the public to information on government programmes and activities;
• Strengthening the integrity of the judiciary and prosecution services to prevent opportunities for corruption among its members;
• Enhancing accounting and auditing standards for the private sector, and ensuring cooperation between law enforcement agencies;
• Participation of individuals and groups outside the public sector to raise public awareness regarding the existence, causes and gravity of and the threat posed by corruption.
• Ensuring comprehensive domestic regulatory and supervisory regime for banks and non-bank financial institutions as well as other bodies particularly susceptible to money laundering, including the establishment of a financial intelligence unit;
• Criminalising laundering of proceeds of acts of bribery, embezzlement, abuse of functions and other related acts as well as concealment and obstruction of justice; and
• Freezing, seizure and confiscation of proceeds of crime as well as property derived from such proceeds.
– To be continued –
