UN CONVENTION AGAINST CORRUPTION: The International Instrument in National Interest 1 Iftekharuzzaman 2 (draft)

Transcription

1 INTRODUCTION UN CONVENTION AGAINST CORRUPTION: The International Instrument in National Interest 1 Iftekharuzzaman 2 (draft) The main argument of this paper is that it is in the national interest of Bangladesh to sign and ratify the UN Convention Against Corruption. It appeals to the Government of Bangladesh to sign and ratify it without any further delay. The appeal reflects the widespread concern of the citizens at large, especially everyone who shares a vision of Bangladesh in which government, politics, business, civil society and the daily lives of the people would be free of corruption. The paper presents a set of arguments in favour of the above appeal. The paper first puts in perspective the importance of fighting corruption in Bangladesh, which is followed by an analysis of key elements of the Convention. The paper finally puts forward the arguments why Bangladesh should sign and ratify it, and how Bangladesh stands to gain from so doing. CORRUPTION: A KEY NATIONAL CHALLENGE Corruption is a global problem. It takes many forms and dimensions. The word corruption comes from the Latin verb corruptus, which means to break. Corruption is a behaviour or act that breaks away or contradicts from ethical and moral standard, traditions, laws and civic virtues. Corruption is defined by Transparency International and World Bank as abuse of public office for private gain. Most often abuse of power and personal gain, occur in both the public and private domains and often in collusion with individuals or groups of individuals from both sectors. The UN's Global Programme against Corruption (GPAC) defines corruption as the "abuse of power for private gain" and includes thereby both the public and private sector. A more elaborate description of corruption is the abuse of office whether in Government, administration or business (it) is about the giving and seeking of favours, it is about buying political influence, taking kickbacks, bribing officials. It is about subverting public good for private gain 3. An act of corruption may include any or a combination of such behaviours as embezzlement, fraud, bribery, nepotism, abuse of power, abuse and or misuse of public or institutional fund and extortion. Corruption is an insidious menace that breeds and increases poverty, prevents development, undermines democracy and governance, prevents rule of law, distorts market and stifles economic growth, creates and perpetuates social and economic deprivation and inequality, leads to violation of basic constitutional and human rights, breeds crimes, social frustration, discontent and insecurity. As the UN Secretary General Kofi Anan said, This evil phenomenon (corruption) is found in all countries big and small, rich and poor but it is in the developing world that its effects are most destructive. Corruption hurts the poor disproportionately by diverting funds intended for development, undermining a government s ability to provide basic services, feeding 1 Paper presented at the Seminar on UN Convention Against Corruption organized by Transparency International Bangladesh on the occasion of the First UN International Anti-Corruption Day, Dhaka, 9 December Executive Director, Transparency International Bangladesh. 3 Richard North, Corruption: Stopping the Rot in BBC On Air, August 2003, p.10.

2 inequality and injustice, and discouraging foreign investment and aid. Corruption is a key element in economic underperformance, and a major obstacle to poverty alleviation and development. 4 Implications of corruption are most pertinent in the Bangladesh context. It is a key national concern and a major political issue. Corruption undermines economic development; increases poverty and exploitation; prevents good governance, accountability and transparency; and creates social and political instability and insecurity. Presence of widespread corruption, and its debilitating impact in the society, polity and economy are acknowledged by all major political parties. At the same time political leaders, from the highest to the lowest levels both in the government and outside, in their public pronouncements commit themselves to fighting corruption and to establishing a corruption free Bangladesh. A glance at the election manifestoes of the major political parties including the ruling Bangladesh Nationalist Party (BNP) and the main opposition party the Awami League (AL) reveals the high level of importance and priority attached to the issue of corruption. The ruling BNP during the 2001 national election pledged to establish a violence and corruption-free prosperous Bangladesh. 5 According to BNP without eliminating the limitless corruption prevailing in the society and state no effort for development and public welfare would be easy. It promised a number of high priority specific actions for uprooting corruption These include appointment of an Ombudsman, establishment of an Independent Anti-corruption Commission by restructuring the Bureau of Anti-corruption, establishing transparency and accountability in sales and procurement of public and governmentcontrolled institutions, establishing strict control of any efforts for abuse of influence, and conduct and publication of accounts of wealth of the Prime Minister, Ministers and all individuals of equivalent status including people s representatives. 6 The AL also attached high priority to fighting against corruption placing it in the context of the party s commitment to establish good governance and pro-people administration that will be accountable to the people, transparent, efficient and honest. 7 The AL promised to set up an Anti-corruption Council aimed at eliminating corruption and setting up an effective constitutional and institutional system. Notably, AL also promised to take necessary firm action to implement recommendations and programs of various international forums including the United Nations in preventing corruption. 8 Fighting corruption also figures prominently in political commitments of other major parties. 9 On the other hand there is a growing public concern and discontent about corruption in the country. There can be no disagreement about a national consensus prevailing in the country about the unbearability of the high cost of corruption and the need to combat it with greatest urgency and priority. Corruption has become a key issue of public discourse in recent 4 The Secretary General, Statement on the Adoption of by the General Assembly of the United Nations Convention Against Corruption, New York, 31 October 2003, 5 Bangladesh Nationalist party, Election Manifesto: National Election 2001, p Ibid, p Bangladesh Awami League, Election Manifesto2001, p Ibid, p See, for instance, Jamyate Islami Bangladesh, Election Manifesto 2001 (Abridged), p. 9, Islami National United Front, 8 th National Parliament Election 2001: Election Manifesto of Islami National United Front, p. 1, and The Eleven Party (left alliance), 8 th National Parliament Election 2001: Election Declaration and Commitment, p. 6. Corruption is the third most important demand of the on-going 9 point movement launched by the major opposition parties led by AL, 11-party alliance, JSD and NAP. 2

3 years not merely because of the debatable annual Corruption Perception Index published by Transparency International which has for the fourth successive year ranked Bangladesh at the bottom of list 10, but also for the growing acceptance of corruption as a major political issue by all major political parties, as well as because of the way corruption affects the lives of the common people especially those without access to power. Whether Bangladesh ranks at the bottom or higher up in international comparison in terms of indices such as CPI, there is hardly any doubt that corruption is pervasive. The World Bank estimated as early as in 2000 that if Bangladesh could reduce its corruption level to those prevailing in countries with highest reputation for honest dealing it could add between 2.1 and 2.9 percent to annual per capita GDP growth. This would contribute to a sustainable reduction in poverty. 11 In a more recent report the World Bank identified corruption as the main predicament against investment in Bangladesh. 12 That corruption is a key predicament against good governance in Bangladesh is also beyond any dispute. Corruption must be fought comprehensively and strategically. FIGHTING CORRUPTION: SOME GOVERNMENT INITIATIVES Corruption, when it is pervasive, does not appear overnight. It does take time to entrench, it takes connivance and participation of people in positions of power people who are powerful politically, economically and socially - whether at the national or local levels, whether in the public sector or private. If its proliferation is not stopped and prevented at early stage, it takes a dynamics of its own to gradually engulf bigger and bigger sections of those in positions of power. By the same token it can t also be addressed overnight without comprehensive efforts and without the fullest commitment of those in positions of power. For obvious reasons, it is incumbent upon the Government to lead the process. The Government has indeed taken some notable steps recently, which include the setting up of the Anti-Corruption Commission. There is a long way to go before the Commission is meaningfully operational, and more importantly to meet the public expectation that it would be truly independent and effective. 13 Nevertheless, it may be viewed 10 For details on CPI including its methodology, see, For an excellent critical review of the CPI, see, Nurul Islam, Looking Outward: Bangladesh in the World Economy, UPL, Dhaka, 2004, pp The World Bank, Corruption in Bangladesh: Costs and Cures, Dhaka April 7, The World Bank, Improving the Investment Climate in Bangladesh Other international and national organizations that have expressed informed concern about corruption in Bangladesh include United States Trade Center of the US Embassy (2003), Japan Chambers of Commerce and Industries (Sokokai), UNCTAD World Investment Report 2003, Federation of Bangladesh Chambers of Commerce and Industries: Cost of Doing Business in Bangladesh Development partners of Bangladesh including the World Bank, ADB and members of the Bangladesh Development Forum have been expressing concern over the spread of corruption, and its implications on governance in Bangladesh. See for details, TIB, Corruption Data Base, 29 September 2003, 31 August The Anti-corruption Commission was set up on November 21, Prospect of the Commission s independent functioning has became subject of intense public debate. See for instance, Jugantor 28 Nov 2004, Ajker Kagoz 28, 29 & 30 Nov 2004, Inquilab, 27 Nov, 2004, Bhorer Kagoj, 27 & 28 Nov 2004, Janakantha, 24, 28 & 30 Nov 2004, Shangbad, 27 Nov 2004, Banglabazar Patrika, 27 Nov 2004, Dainik Manabjamin, 24 Nov 2004, The Bangladesh Observer, 24 Nov 2004, Prothom Alo, 24 Nov 2004, The Independent, 29 Nov 2004, The Daily Star, 24 Nov One of the key public concerns is that the Commission is apparently going to work by absorbing all the staff of the erstwhile Bureau of Anti-Corruption, whose credibility has been subject of debate. Prothom Alo, 2 Dec This is contrary to the public expectation and a provision in the Anti-Corruption Commission Act 2004 (35-2-1) that only those members of the staff who would be considered qualified as per selection procedure established by the Commission will be retained. In any event, thanks to the high level of public expectation, there is no doubt that the Commission and its work will draw close public interest and scrutiny. 3

4 as a step forward, especially if it can soon establish credibility by maintaining distance from government influence and acting independently. At the same time, the degree to which the Commission is allowed to function independent of Government intervention will be a key test of how genuine is the Government commitment to fight corruption. At this stage, expectation has been heightened not so much by the setting up of the Commission per se, as by some pronouncements by the Chairman of the Commission who promised to deliver effectiveness within a month. He also promised, that no pressures will be tolerated against fulfillment of the desired goals of the Commission. 14 The Chairman further said, failure of the commission for any reason will bring misfortune to the people of the country, 15 bringing into focus the enormity of the task ahead for the Commission. At other levels the Government has also taken some notable steps such as an anticorruption unit in the LGRD Ministry and an inquiry commission in the Chittagong port, both apparently in response to reports on corruption released by TIB, and extensive media coverage of the same 16. Internationally also, Bangladesh is among the 23 Asia-Pacific countries that have joined the ADB OECD Anti-Corruption Action Plan for Asia-Pacific, that articulates the participating countries objectives in building sustainable legal and institutional frameworks to fight corruption, and determines the approaches to put the same into practice. 17 There are three pillars of the Action Plan: i) Developing Effective and Transparent Systems for Public Service, which includes a) Integrity in public service; and b) Accountability and transparency; ii) Strengthening Anti-Bribery Actions and Promoting Integrity in Business Operations, which includes a) Effective Prevention, Investigation and Prosecution, b) Corporate Responsibility and Accountability; and iii) Supporting Public Involvement, which includes a) Public Discussion of Corruption; b) Access to Information; and c) Public Participation. 18 More pertinently, the Action Plan provides a good opportunity for Bangladesh to work with the governments of developed countries and their business communities to rigorously enforce the OECD Convention, which criminalises the payment of bribes to foreign public officials throughout the world. This is particularly important because of a perceived international linkage of corruption in Bangladesh. The Finance Minister, who is highly critical of the practice of international ranking of countries in terms of corruption 19, but candidly acknowledges the presence of widespread corruption 20, is particularly concerned about the international connection. He was quoted as saying that bribery and corruption have 14 Justice Sultan Hossain Khan, Chairman of the Anti-Corruption Commission, quoted in Jugantor, 30 November Ibid. 16 News Today, Bhorer Kagoz, Shangbad, Jugantor of July 22, 2004, and Prothom Alo, 30 October The Action Plan together with its implementation plan, is a legally non-binding document which contains a number of principles and standards towards policy reform which interested governments of the region politically commit to implement on a voluntary basis. 18 Visit for details, 19 Bangla BazarPatrika, 15 September 2002, More recently, Mr Saifur Rahman met with Transparency International officials in Berlin to express his concern about the CPI ranking and seek clarification on the methodology thereof. See, UNB report, published in the Daily Star, New Age and other newspapers of 28 November, Some of the sectors that the Finance Minister identified to be most affected by corruption are: health, education, banking, local government and projects related to food aid. See, Bangla Bazar Patrika, 15 September 2002, The Bangladesh Observer, Manabjamin, and Janakantha, of 28 October 2002, Arthanity, 4 April 2002, Ittefaq, 8 August

5 come to this country from the western world and are hampering economic progress here 21, and that big companies (multinationals) taught us how to indulge in corruption in the form of offering bribes first for getting work. 22 The need for international cooperation is clear enough. NEED FOR INTERNATIONAL COOPERATION The above steps taken by the Government are important. But there is a much longer distance to go which would be possible through a comprehensive strategy that harmonizes national efforts with international legal and other instruments and initiatives. It is in this context that the relevance of the UN Convention against Corruption that embodies a comprehensive set of standards, measures and rules that State Parties can apply in order to strengthen their strategic and policy framework, legal and regulatory regimes, and institutional capacities is pertinent. The UN Convention The United Nations General Assembly adopted in 1996 the UN Declaration Against Corruption and Bribery in International Commercial Transactions. Subsequently the UN Convention on Transnational Organized Crime was successfully negotiated which came into force in September Corruption was a key focus of both. However, by then in view of the growing international concern about widespread corruption and its adverse effects on peoples and societies the UN was already actively recognizing the need to establish a separate comprehensive instrument against corruption. In December 2000 the General Assembly established an Ad-hoc Committee to negotiate an anti-corruption convention which would be universal, binding, effective and efficient on the one hand, and flexible enough on the other, so as to take into account the legal, social, cultural, economic and political differences between member countries. After two years of negotiations the General Assembly adopted on October 31, 2003 the United Nations Convention Against Corruption (UNCAC), which was subsequently signed on 9 December 2003, in Merida, Mexico. The Convention is the first global legally binding instrument on corruption and a comprehensive document that includes measures on prevention, criminalisation and international cooperation. Representing an international response to corruption as a "transnational phenomenon that affects all societies and economies, making international cooperation to prevent and control it essential" (Preamble), the UNCAC breaks new ground in many of its provisions. The Convention recognizes the transnational dimension of corruption and affirms that international cooperation is essential to prevent and control it. The three purposes of the Convention are (Article 1): a) to promote and strengthen measures to prevent and combat corruption more efficiently and effectively; b) to promote, facilitate and support international cooperation and technical assistance in the prevention of and fight against corruption, including asset recovery; and c) to promote integrity, accountability and proper management of public affairs and public property. The following are some of the highlights of the Convention. 23 a) Preventive Measures 21 The News Today, 1 October The Bangladesh Observer, 1 October See for more on the UNCAC, 5

6 The Convention recognizes that while corruption can be prosecuted after it takes place, prevention is highly important. Accordingly, the UNCAC provides for specific preventive measures directed at both the public and private sectors. With regard to the public sector, it calls for the establishment of anti-corruption bodies and enhanced transparency in political finance. It stresses on public service safeguards such as merit-based recruitment, codes of ethics and disclosure of assets. An important provision to address the issue of conflict of interest is restrictions on the employment of retired public officials in the private sector. The UNCAC requires transparency and accountability in public finance and public procurement, and other critical areas of the public sector, such as the judiciary. The Convention attaches special importance to the promotion by States Parties of civil society participation in fight against corruption, awareness-raising among the public about the problem being a key task. It also requires that the public is given effective access to information, and channels for reporting offences. Of practical importance is the requirement that States Parties are to provide protection to whistleblowers (informers) and witnesses. With regard to the private sector, the UNCAC requires that measures be taken by States Parties to enhance accounting and auditing standards, with adequate penalties for failure to comply. Among other preventive measures are promotion of private sector codes of conduct; obligations of disclosure by corporate entities of the identities of those involved in their business establishment and management; and prevention of the misuse of procedures regarding subsidies and licences granted by public authorities for commercial activities. States Parties are also required under the Convention to institute a comprehensive regulatory and supervisory regime in order to detect and deter money laundering. b) Criminalisation of Acts of Corruption The Convention requires States Parties to incorporate a wide range of corrupt actions as criminal offences. These include basic forms of corruption such as bribery and the embezzlement of public funds, and at the same time other acts like trading in influence, concealment, abuse of functions, illicit enrichment and laundering of the proceeds of corruption. Subject to criminalisation are acts in support of corruption like obstructing justice. The Convention goes deeper and wider by including in its scope corruption within the private sector and makes provisions for States Parties to criminalise private-to-private bribery and embezzlement, although some offences in this arena are kept as optional due to differences in national law. Another form of bribery that will be treated as criminal are bribery of foreign public officials and officials of public international organizations. c) International cooperation A key aspect of the Convention is that States Parties agree to cooperate with one another in every aspect of the fight against corruption. These include prevention, investigation, and the prosecution of offenders. It also obliges States Parties that they must render to each other specific forms of legal assistance in gathering and transferring evidences for judicial use, and to facilitate extradition of offenders. Of particular importance is the requirement that the States Parties undertake measures for tracing, freezing, seizure and confiscation of the proceeds of corruption. It should be noted that legal assistance may be refused on a number of grounds, specially if the requested State Party considers that execution of the request is likely to prejudice its sovereignty, security and/or other national interest. 6

7 d) Recovery of Assets Recovery of assets has been recognized as a fundamental principle of the Convention. This was one of the issue areas of intense negotiations, following which a consensus was reached on mechanisms to facilitate the process of recovery. This is a key issue for many developing countries that experience substantial plundering of resources with the participation or connivance of corrupt officials. The ground-breaking aspect of the agreement on this chapter meant that the needs of countries seeking the return of assets were reconciled with the procedural safeguards of the countries whose assistance is sought. Consequently a range of provisions are in place specifying how cooperation and assistance should be rendered. While these provisions have great potentials for the States Parties to redress the worst effects of corruption, these also send a strong signal to corrupt individuals that there will be no place to hide their illicit assets. e) Looking Ahead As of November 2004, the UNCAC has been signed by 113 countries and ratified by ten. For the commitment and promise of the UNCAC to be translated into a reality, the countries around the world must promptly ratify the Convention - which needs 30 ratifications to come into force. As it is true for any international legal instrument, the key challenge is to follow up signing and ratification by adoption of all necessary legislations for implementation. In terms of impact of the Convention, much will obviously depend on a practicable and effective monitoring mechanism to be adopted by the Conference of the States Parties. Anti-corruption practitioners and activists must unite all available forces and means toward moving in these directions, in which the Government must lead by signing and ratifying the Convention without any further delay. WHY BANGLADESH SHOULD BE A STATE PARTY TO THE UNCAC? There are strong reasons for Bangladesh to internationalize its strategy to face the challenges of corruption. Apart from political recognition of the international linkage of corruption, which by itself justifies international cooperation, Bangladesh has also endorsed the ADB-OECD Asia-Pacific Action Plan Against Corruption. As a member of the Commonwealth, Bangladesh has already been a party to high profile recognition of the need for international cooperation in fighting corruption for more than a decade. At their meeting in Durban in November of 1999, Commonwealth Heads of Government emphasised that corruption has become global in reach and that it must be tackled comprehensively through action at both national and international levels. In furtherance of that goal, at that same meeting leaders welcomed the Report of the Commonwealth Expert Group on Good Governance and endorsed the Framework for Commonwealth Principles on Promoting Good Governance and Combating Corruption, which had been developed by the Expert Group. Since the adoption of the Framework, the Commonwealth Secretariat has been delivering an assistance program aimed at helping member countries to implement the principles of the framework in domestic law. At their meeting in Abuja in December of 2003 Heads of Government issued the Declaration - Development and Democracy: Partnership for Peace and Prosperity. In it they welcomed the adoption of the UNCAC, and urged the early signature, ratification and implementation of it by member states. Annex I shows the status of Asia-Pacific countries with respect to signature, ratification, accession, endorsement and implementation of the international instruments against 7

8 corruption including the UNCAC. It is important to note in the South and Southeast Asian region Bangladesh is among only a handful of countries e.g., Bhutan, India, Myanmar and Cambodia who haven t yet signed the Convention. Among SAARC countries Pakistan, Nepal and Sri Lanka have signed it while Sri Lanka has also ratified the Convention. Against the above backdrop, the imperative for Bangladesh to follow their example and sign and ratify the treaty with topmost national priority and urgency is clear. The main benefits of signing the Convention can be summarized as follows. a) By becoming a State Party to the Convention Bangladesh will send a strong signal nationally and internationally about its recognition of importance of addressing corruption with a comprehensive framework and through coordination of national efforts with international. It will at the same time confirm that the level of political commitment against corruption is high. b) Bangladesh will have ensured for itself access to an extensive range of ways, means and standards for preventive measures for public and private sectors. In accordance with the fundamental principles of our own legal system, we will have the opportunity to collaborate with other State Parties and relevant international and regional organizations in promoting and developing the preventive and curative measures against corruption. Such collaboration will include scope of our participation in international programs and projects aimed at prevention of corruption. c) It will facilitate mutual learning and experience sharing including latest knowledge and information about best practices on transparency and accountability in public finance and public procurement, and other critical areas of the public sector. d) Thanks to a ground-breaking provision the Convention will facilitate asset recovery for the first time on a global basis. e) It gives us access to a comprehensive international cooperation framework for mutual law enforcement assistance, notably extradition and investigations. f) Thanks to the Convention Bangladesh will have recognised the role of the private sector-to-private sector corruption as an important part of the problem, and inclusion of the same in the category of criminal act. At the same time it will entitle effective and proportionate civil, administrative or criminal penalties for corruption in the private sector; and establishment of accounting and auditing standards for private sector. g) By signing the Convention Bangladesh will give greater recognition to the role of civil society and citizens at large in fighting corruption. By the same token Government will be committed to ensure protection of witnesses, reporting persons and victims of corruption, and in particular recognition of the right of entities or persons who have suffered damages from corruption, to initiate legal proceedings for compensation. h) One of the key achievements of the Convention is the establishment of the right of the public to access to information.finally Bangladesh will have access and entitlement to special needs, if any as a developing country. 8

9 It should be mentioned that the Convention provides sufficient safeguards for sovereign and independent policy and decision making of States Parties with respect to implementation of provisions of the Convention. Article 4 clearly states that States Parties shall carry out their obligations in a manner consistent with the principles of sovereign equality and territorial integrity of States and that of non-intervention in the domestic affairs of other States. It goes on to confirm that Nothing in this Convention shall entitle a State Party to undertake in the territory of another State the exercise of jurisdiction and performance of functions that are reserved exclusively for the authorities of that other State by its domestic law. In any event signing and ratifying the Convention as such will not bring a panacea to the problem of corruption in Bangladesh. In the ultimate analysis it will depend on how effectively and comprehensively the Government moves ahead to implement the international convention as well as national laws against corruption and to what extent the Government facilitates and allows effective functioning of the relevant institutions already in place. 9