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ANNUAL REPORT 2009


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TRANSPARENCY INTERNATIONAL (TI) IS THE GLOBAL CIVIL SOCIETY ORGANISATION

LEADING THE FIGHT AGAINST CORRUPTION. THROUGH MORE THAN 90 CHAPTERSWORLDWIDE AND AN INTERNATIONAL SECRETARIAT IN BERLIN, TI RAISES AWARENESSOF THE DAMAGING EFFECTS OF CORRUPTION AND WORKS WITH PARTNERS INGOVERNMENT, BUSINESS AND CIVIL SOCIETY TO DEVELOP AND IMPLEMENT EFFECTIVEMEASURES TO TACKLE IT.

www.transparency.org

Project management: Andr Doren and Michael Sidwell

Text and editing: Stephanie Debere and Michael Sidwell

Contributions: Stephanie Burnett, Sophie Everett,Jesse Garcia, Gypsy Guilln Kaiser and Thomas Quine

Design: Sophie Everett

Cover photo: Mattia Marchi

Printed on 100% recycled paper.

Every effort has been made to verify the accuracy of theinformation contained in this report. All information wasbelieved to be correct as of July 2010. Nevertheless,

Transparency International cannot accept responsibilityfor the consequences of its use for other purposes or in

other contexts.

ISBN: 978-3-935711-53-1

2010 Transparency International. All rights reserved.


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WE ARE A GLOBAL MOVEMENTSHARING ONE VISIONA WORLD IN WHICH GOVERNMENT,

POLITICS, BUSINESS, CIVIL SOCIETYAND THE DAILY LIVES OF PEOPLE

ARE FREE OF CORRUPTION


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FOREWORD2009 laid bare theintegrity decit behind thenancial crisis, bringinginto sharp focus a systemcharacterised by opacityand reckless greed. Theresulting shockwaves havebeen felt around the worldand have cast the future ofmillions into jeopardy.

During the year our Corruption Perceptions Indexhighlighted how many countries public sectorscontinue to be seen as tainted by corruption, whileour Global Corruption Barometerrevealed the publicsgrowing distrust of business and government. Only aglobal nancial architecture rebuilt with transparency,accountability and integrity at its core will guardagainst similar catastrophes and result in growththat benets all of society. This message went tothe heart of our international conference Beyond theglobal crisis: the transparency imperative, and ourkey recommendations to the Group of Twenty on

necessary nancial reform.

With the unprecedented amounts of money used tostimulate economic growth, we increased pressureon world leaders to deliver on their anti-corruptionpromises. TI coordinated a coalition of more than 300civil society organisations advocating for a strongreview mechanism to make the UN Conventionagainst Corruption live up to its potential. Wesucceeded in part, but much work remains to bedone. The complicity of rich countries in fuelling thesupply side of the corruption equation needs to end.TIs 2009 OECD Anti-Briberyreport revealed again

that most leading exporting nations fail to fully enforcea ban on foreign bribery.

As the global economy is beginning to registertentative signs of recovery, we are building on thismomentum to ensure that governments and businessalike live up to their responsibilities. Restoring publictrust is a longer term investment and business asusual is not good enough if we are to achieve asustainable global economy.

Huguette Labelle

Chair

An interconnected worlddemands ever moresophisticated and coordinatedapproaches to ghtingcorruption. Our global networkof chapters meet the challengehead on, combining skills toforge innovative and lastingsolutions to problems thatdon't stop at national borders.

From tackling forestry corruption to protectingwhistleblowers, 2009 was a year of powerful coalitionsamong TI chapters. The expertise of our movementcame together in TIs 2009 Global Corruption Report,which addressed the critical role of the private sector,identifying areas in need of reform and outlining bestcorporate practice.

TI chapters are driving systemic change in education,health and water, critical areas that provide lessonsfor achieving the Millennium Development Goals.Recognising that citizens need to be at the heart ofreform, TIs Development Pacts mean traditionallymarginalised people in some of the worlds poorestcommunities have a voice in decision-making and agreater stake in ghting corruption. Our Advocacy andLegal Advice Centres, now present in every region ofthe world, continue to arm victims of corruption withtheir legal rights, empowering individuals and servingas an antidote to resignation.

As our ever increasing momentum undercuts powerfulvested interests, we are seeing increasing attemptsto sideline and intimidate anti-corruption activists. Wemust strengthen cooperation within the anti-corruptionmovement and beyond to ensure the public discourse

on corruption is not stied.

As 2009 drew to a close, we began a strategic reviewprocess looking forward to 2015. This exercise supportsour trajectory of organisational excellence and an evergreater impact on the ght against corruption. Thetasks we have set ourselves demand nothing less.

Cobus de Swardt

Managing Director


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Engaging government and business

Government and Politics 2

International Conventions 7

Access to Information 10

Public Procurement 13

Private Sector 17

Defence and Security 20

Judiciary 22

Securing basic needs

Poverty and Development 24

Humanitarian Assistance 26

Access to Public Services 28

Natural Resources 33

Empowering change

Protecting and Advancing Rights 36

Anti-Corruption Education and Training 41

Recognising Leadership 43

Forging Alliances 45

Measuring corruption

Corruption Perceptions Index 2009 48

Global Corruption Barometer 2009 50

Diagnosing corruption

National Integrity Systems 53

Driving Policy Change 54

Building momentumContributions 56

Financials 58

A global movement

Transparency Internationalaround the World 60

Board of Directors 62

Advisory Council 64

Individual Members 66

CONTENTS

This report provides an insight into whereand how the Transparency Internationalmovement was active in the ght againstcorruption in 2009.

For the purpose of conciseness, nationalchapters, national chapters in formation andnational contacts are referred to as chapters,regardless of their status within TransparencyInternationals accreditation system.

Please see www.transparency.org/chaptersfor their current status.


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The problemPolitical corruption doesnt just mean electoral fraud;it includes the growing role of private rather than publicinterests in elections and public policy making. Alongwith the increasing inuence of money in politics, thisundermines public trust in democracy and its institutions.Transparency Internationals 2009 Global CorruptionBarometerfound that the general public see politicalparties as the most corrupt domestic institution,followed by civil servants and parliaments. In developingand transition countries, where democratic institutionsremain fragile, political corruption diverts resourcesfrom providing basic social services for millions of poor

and disadvantaged people.

Democracy and good governance are also underminedwhen corruption distorts political party and campaignnancing. Elections can be skewed when individuals ororganisations with their own agendas give parties largeundisclosed sums of money, or when parties andcandidates buy votes instead of winning them throughstrong campaign commitments. Once elected, politicianscan seriously compromise the quality of government iftheir decisions benet those who funded their rise topower, rather than the broader public interest.

The solutionTransparency International (TI) believes the increasinglydiverse forms of political corruption are best tackledby building public demand for integrity in politicaldecision-making, and empowering civil society tomonitor the ow of money in politics. By mobilisingcivil society, political parties, parliaments, electoralauthorities and other stakeholders, TI works towardscorruption-free elections and accountable, publicdecision-making. In particular, civil society has acrucial role to play in monitoring electoral campaignsand the activities of political parties, reportingirregularities, tracking abuses of state resources for

political purposes, and advocating for regulations thatlimit undue inuence on public decision making.

TI chapters continue to identify political corruptionrisks and to develop innovative strategies foraddressing them, working with leading internationalorganisations to develop standards for transparencyin political nancing, and control corporate lobbyingand the funding of political activities.

GOVERNMENT AND POLITICSENGAGING GOVERNMENT AND BUSINESS

Reuters/Finbarr O'Reilly

2 Transparency International Annual Report 2009


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Africa and Middle EastTo promote clean and fair elections, the TI chapter, the Bahrain Transparency Society, teamed up with otherorganisations to monitor elections in the region, including Lebanon and Kuwaits parliamentary elections and theMauritanian presidential elections.

Ahead of the 2010 elections, Transparency Mauritius published a statement in the media advocating for politicalparties to be registered as proper companies (to improve governance and transparency) and for an electoral codeof conduct. More than 150 people attended its workshops on party funding, aimed at party ofcials, the media,universities, trade unions and NGOs.

Centro de Integridade Pblica, the TI chapter in Mozambique, delivered two draft laws to the government.One revising the anti-corruption law so that it deals exclusively with corruption in the public and private sectors;the other, increasing the powers of the Central Ofce for Combating Corruption, so it can initiate corruptioninvestigations and impose legal penalties. Before presenting the laws to the Council of Ministers, the governmentis carrying out extensive public consultations.

The TI chapter in Sierra Leone, the National Accountability Group, is collaborating with the countrysgovernment to review anti-corruption practices and procedures in the Ministry of Local Government, InternalAffairs and Rural Development, the National Fire Force and the Prison Department.

AmericasFollowing its 2008 research on state capture, whichexposed how drug trafckers can effectively controlkey positions throughout government, affectinglegislation, regulations and policies, Transparenciapor Colombia organised an event to build regionalcooperation in tackling the problem. Delegatesincluded representatives from civil society, the mediaand academia from Guatemala and Mexico, whichalso face powerful drug trafcker interests in stateactivity. Participants examined links between drugtrafcking and corruption, their damage to democraticinstitutions, and opportunities for improvement.

Funde,the TI chapter in El Salvador, obtainedcommitments from newly-elected President MauricioFunes on a series of anti-corruption measures. As aresult, the Ministry of Public Works asked the chapterto create a citizens observation platform for theindependent monitoring of public works a traditionallyopaque area involving private companies, thegovernment and other civil society actors. Initialresearch and fundraising have begun, and partnershipshave been established with key institutions.

To promote efcient and participative resource allocation,better access to public information, and civil societymonitoring of budgets and contracting processes,the TI chapter in Nicaragua, Etica y Transparencia,surveyed stakeholders in 20 municipalities, thencarried out a communications campaign and trainedboth civil society and local authorities.

Transparencia Venezuela assessed complianceamong 25 municipal and state election candidateswho had signed its commitments to transparencyduring their election campaigns. Using indicatorsincluding access to information, merit-based contracting,budget transparency and public procurement, thechapter found a signicant commitment to developingtransparency from candidates when in ofce.

CORRUPTION IS ATERRIBLE DISEASETHAT DESTROYS

A COUNTRYFROM WITHINThe New York Times editorial

3Engaging government and business


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Asia PacicFollowing the successful pilot in Latin America ofCrinis(Latin for ray of light), a tool that measuresthe transparency of political nancing, TI replicatedthe survey in Asia. Piloted in Bangladesh, Indonesia,Malaysiaand Nepal,the TI chapters analysed datafrom political parties, election bodies, accountants andexperts, and compared political nance regulationswith practice, providing guidance for overcomingaws in a system. Based on their ndings, thechapters have been working with key stakeholders,including politicians and parties, to develop effectivetransparency measures.

The media gave extensive coverage to TIBangladeshsreport, calling for political partiesto disclose funding proactively. As a result, theElectoral Commission investigated parliamentarianswho reportedly failed to include tax records in

their candidacy applications. TI Indonesiaheldtransparency training for political parties, after itsresearch reported an opaque political nance system,with weaknesses in both regulation and practice.TI Malaysiaalso gained wide media coverage for aconference proposing party funding reforms, attendedby 120 participants from government, politicalparties, civil society, academia and the media. It alsoheld roundtable discussions on reforms and plans anationwide campaign for their adoption. Based onits research, TI Nepalrecommended to the Speakerof the Assembly that the countrys new constitutionaddress legal loopholes and include state funding of

political parties.

Ahead of the country's rst democratic parliamentaryelections, Transparency Maldives ran I Choose toVote, a comprehensive voter education programme.It included an assessment of the electoral system;voter education and train the trainer workshops ondomestic observation; a media awareness campaignand an online complaints database. The chapter alsotook part in voter education TV and radio programmesand made a video used in training and shown onnational TV, on the functions of parliament, how tovote and candidates pre-election conduct.

When TIs 2009 Corruption Perceptions Indexwasreleased, TI Pakistan met with the Prime Minister andproposed recommendations to improve Pakistansfuture score including conict of interest provisionsin public ofces, a freedom of information act andenhanced independent oversight in procurement. ThePrime Minister formed a committee that included thechapter and was chaired by the Finance Minister toassess the recommendations, which the governmentis currently considering.

Europe and Central AsiaTI Bosnia-Herzegovina challenged proposedamendments to the law on conicts of interest,which would have increased opportunities for publicofcials to benet from multiple positions. Parliamentconsequently rejected the amendments, and the

chapter led successful legal challenges againsthigh-prole politicians for conicts of interest. It alsodrafted recommendations for the countrysanti-corruption strategy.

Under its Transparent Local Government project, TISlovakia helped the city of Martin adopt anti-corruptionmeasures in areas such as selling assets, recruitment,civic participation in decision-making, access toinformation and procurement. Information includingcontracts, budgets and investments is now publishedonline. The measures helped the city save aroundUS $200,000 (143,790) or 28 per cent of planned

procurement expenditure in the second half of 2009.Through its City Hall Transparency Index, whichevaluates transparency through 80 indicators, TISpain found that transparency levels in the countrys110 largest city halls improved in 2009 compared to2008. The indexs direct impact on behaviour andattitudes toward transparency was recognised withthe award of the COSITAL Prize from the GeneralCouncil of Local Administration.

TI UK continued 12 years of campaigning for reformof outdated anti-bribery legislation, feeding into a draftBribery Bill in compliance with the OECD Anti-Bribery

Convention. The chapter was cited regularly duringparliamentary debates, and the bill passed into law inearly 2010.

Flickr/rytc



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Harnessing European Union (EU) PotentialThe EU's potential impact in the ght against corruption remains unfullled. It hasthe legal means and the political capacity to act in many anti-corruption-relatedareas either through its own framework or wider international forums. It enjoyssubstantial legislative and political power in its 27 member states, is the biggestdonor of ofcial development assistance worldwide, and has anti-corruption measures

for both the public and private sectors. But these are not optimally applied, and thechallenge remains to integrate anti-corruption provisions into all EU policies andprogrammes.

The absence of a comprehensive EU anti-corruption strategy covering all of thedifferent policy areas in member states limits its ability to promote and improveintegrity levels. TI's EU liaison ofce in Brussels advocates for this latent capacityto be translated into effective anti-corruption policies at EU level, within memberstates and in the Unions external work. But there are notable obstacles. Theabsence of a mandatory lobbyists register encompassing all EU institutionshides the interests at work in the Unions policy-making process, and remains acore governance problem. Despite a concerted push for transparency during theenlargement process, corruption issues have resurfaced following new members

entry into the Union.

To tackle barriers to transparency, TI draws on in-depth knowledge from TI chaptersworldwide and expertise from global research projects. Pushing for integrity andtransparency measures in EU institutions and key European policy areas, includingjustice and home affairs, the private sector, development, enlargement andneighbourhood TI is helping the Union full its potential in the ght against corruption.

The Group of Eight (G8) Summit, LAquila, ItalyIn parallel to engaging the Group of Twenty on the global nancial crisis, TI continuedits advocacy targeted at the G8, culminating with the 2009 G8 Summit in LAquila,Italy. A cornerstone of TIs advocacy efforts was its third annual G8 Progress Reportassessing member states action on key anti-corruption commitments, includingghting illicit money ows, keeping export credit agencies clean and supportinginternational conventions. The report concluded that performance across the boardremained inadequate, raising serious doubts about the G8s true commitment toghting corruption.

On enforcing foreign anti-bribery laws, only Germany and the United States receivedgood marks. Canada, France, Japan and the United Kingdom were found not tohave taken sufcient action to deter illicit payments overseas. Russia was found notto be implementing its anti-bribery commitments under the UN Convention againstCorruption or under the Council of Europe Criminal Law Convention on Corruption.

Germany, Italy and Japan had still not ratied the UN Convention (although Italy

ratied the convention in October 2009) undermining the global anti-corruptionframework. Until the most economically powerful countries truly enforce theircommitments, their political will remains doubtful, said Cobus de Swardt, ManagingDirector at TI.

During its participation in the Civil G8 Dialogue in Rome and the G8 Summit inLAquila, TI consistently called on the G8 to recognise that a failure to addresscorruption risked threatening the sustainability and effectiveness of all G8 agendaitems, including fullment of the Millennium Development Goals.

TI welcomed the second G8 Accountability Report: Implementation Review of G8Anti-Corruption Commitments . But in concert with other civil society organisations,TI joined the call for the evaluation process on commitments to be transparent andinclusive with a consistent methodology and objective criteria.



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Investing in a New Global EconomyIn hindsight, the failings were obvious. A lack ofindustry accountability coupled with insufcientgovernment oversight, allowed nancial actorsto operate in black holes free from regulation. Aninsatiable appetite for high-risk products at any cost

drove the markets to become impenetrably opaque,compounded by fundamentally awed credit ratings.

The ensuing economic instability and bankruptciescaused a spike in global unemployment, impacting onnational economies and hitting those least responsible the worlds poorest hard. The UN MillenniumCampaign reports the ght against poverty has beenpushed back by up to three years. Governments havetapped unprecedented amounts of public moneyto foot historys biggest nancial bailout. But itsnot enough just to stabilise economies. The globaleconomy must be built back better.

Transparency International (TI) is holding the Groupof 20 (G20) to task, pushing to close the governancegap behind the meltdown and ensure the reformprocess is managed in a transparent and accountablefashion. The role of regulatory authorities needs tobe strengthened, excessive short-term risk-takingprevented and potential conicts of interest exposed.The private sectors responsibility to foster a cultureof integrity and rebuild trust was underlined in TIsGlobal Corruption Report 2009: Corruption and the

Private Sector, which reafrmed the business caseagainst corruption. TI has developed a set of tools

for companies to guard against corruption and policypapers on a range of areas from countering cartelsand building integrity into management systems tostrengthening corporate governance.

Since TI began working on nancial reform in 2008,the G20 has agreed to prioritise transparency andanti-corruption measures in its February and June2010 progress reports, but moving from rhetoric toreality remains a challenge. Transparency measuresthemselves must be implemented transparentlyto rebuild public trust in nancial institutions,with avenues for civil society to engage with key

international institutions responsible for setting riskparameters and adjusting regulation.

One year on from the collapse of Lehman Brothers,representatives from organisations including theEuropean Parliament, the British Serious Fraud Ofce,French bank Socit Gnrale and the OECD joined TIrepresentatives from 90 chapters at the TI conferenceBeyond the global crisis: the transparency imperative.Delegates explored the causes of the meltdown andways to cement transparency as the cornerstone ofa new nancial framework.

While we welcome world leaders efforts to addressexecutive compensation, tax havens and poorlyregulated nancial markets efforts broadly in linewith what we had requested from them we atTransparency International do not believe that it wouldbe honest to welcome a tentative recovery and swiftlyreturn to opaque business as usual, said HuguetteLabelle, TI Chair.

Bold and decisive leadership and support for alasting recovery is needed to truly bring an end tothe era of bank secrecy and embed transparencyand accountability into a new nancial architecture.General amnesia cannot replace stated commitments.The world simply cannot afford it.

Photo: Huguette Labelle, Chair,Transparency International, addressesparticipants at TI's conference Beyond theglobal crisis: the transparency imperative

Sebastian Schobbert

6


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The problemWithout international standards and bindingcommitments underpinning a collective worldwideresponse, corruption can run unchecked acrossborders and nd safe havens in countries with laxrules. International conventions provide a crucialframework for national and cross-border anti-corruption efforts. But once theyve been negotiatedand adopted, the challenge remains to ensurethey are put into practice. For conventions to havetheir intended impact, governments must translatetheir commitments into meaningful reforms. Thisrequires research into how far countries are meeting

convention requirements, and what improvementsare needed. It also means introducing changesin practice, including guaranteeing respect forinstitutional independence, allocating adequateresources, appointing appropriate personnel, carryingout training, making information accessible, andinvolving the public in deciding how conventions areput into practice.

The solutionEffective monitoring systems are essential to ensurethat the requirements of conventions such as the UNConvention against Corruption are met. TransparencyInternational (TI) promotes an effective intergovernmentalreview mechanism for the UN convention, calling foran impartial, transparent and cost-effective processinvolving civil society. Such a review system helpsgovernments meet convention requirements bygiving them expert feedback on their performance andsetting deadlines for compliance. Follow-up reviewsand publicity about performance provide ongoingmotivation, and independent civil society input brings

credibility to review processes. To support this, TIcoordinates a global coalition of more than 300 civilsociety organisations from almost 100 countries, tobring objective insight to review processes, highlightimprovements and deciencies, and promote reforms(www.uncaccoalition.org).

The review mechanism adopted at the UN Conventionconference in Qatar in 2009 is a key step in internationalanti-corruption efforts, and will assess whethergovernments have taken sufcient action in areas suchas law enforcement, whistleblower protection and cross-border cooperation. TI also continues to monitor

enforcement of the OECD Anti-Bribery Convention,targeting cross-border payments by multinationals, whichundermine development and good governance worldwide.

INTERNATIONAL CONVENTIONSENGAGING GOVERNMENT AND BUSINESS

Photo: A TI-headed civil society coalitionmakes their opinion heard at the 2009UN Conference of States Parties

Andrea Figari



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Foreign Bribery:Not Out of Sight, Not Out of MindThe overwhelming majority of the worlds leadingexporting nations is failing to fully enforce a ban onforeign bribery, revealed TIs 2009 OECD Anti-Bribery

Convention Progress Report.The fth edition of the yearly report shows that justfour of 36 countries party to the OECD Conventionare active enforcers. There is moderate enforcementin 11 and little to no enforcement in the 21 remainingcountries. Such performance throws into questiongovernments commitments and threatens todestabilise the denitive legal instrument to ghtinternational bribery.

The rich countries of the world committed to bringtheir house in order, deal a major blow to supplyside corruption and give the ght against poverty

worldwide a real chance to succeed, said Cobus deSwardt, Managing Director at TI. However, unlessthe OECD makes it an urgent, high-level priority for allparties to enforce the convention, inaction by somecountries will encourage backsliding by others.

Statutory and legal obstacles continue to block properenforcement in 26 of the countries covered. Consequently,companies can be undeterred from exploiting thesituation, as illustrated in the report by coverage ofmajor corporations bribery scandals. Another majorobstacle is the use of national security considerationsas a reason for not prosecuting foreign bribery.

It is encouraging that Israel and South Africa havejoined the convention, but China, India and Russiaalso need to be brought into the fold. It is in the bestinterest of these countries to protect their rmsinvestments with anti-bribery measures.

Africa and Middle EastTo assess how well the country's policies andlegislation comply with the UN Convention againstCorruption, TI Kenya participated in an analysis ofthe gaps between convention requirements and the

countrys laws and practices. The chapter will use theresulting report to advocate for stronger policy andlegal frameworks.

AmericasTo celebrate International Anti-Corruption Day andthe 10th Anniversary of the OECD's Anti-BriberyConvention, TI USA hosted more than 100 people atan event opened by Secretary of State Hillary Clinton,with presentations by the Secretary of Commerce,the OECD Secretary General and United States

Ambassador to the OECD.

TI took part in the third round of the follow-upmechanism of the Inter-American Conventionagainst Corruption. The 28 participating Americancountries were evaluated on how they haveimplemented anti-bribery provisions and on illicitenrichment and extradition. The review also checkedhow countries have implemented recommendations

from previous reviews. TI has helped develop thisreview process, advocating for reforms and civilsociety participation. As a result, civil society nowfeeds into the process in many countries althoughurgent reform is needed to prevent countries blockingparticipation: Transparencia Venezuela has beenblocked three times by its government.

To coincide with the 2009 Summit of the Americas inTrinidad and Tobago, TI published a study evaluatinghow nine governments (Argentina, Bolivia, Canada,El Salvador, Mexico, Nicaragua, Paraguay, Peru andTrinidad and Tobago) were implementing summit

mandates regarding corruption. The study highlightsthat states are not effectively translating into actiontheir promises to ght corruption. Serious gaps werefound in the follow-up of anti-corruption commitments,with poor coordination at national and regionallevels. A lack of state reporting on actions taken andcivil society participation in implementation reviewshampers independent monitoring.

Asia PacicTI Chinese Taipei began a research project

sponsored by the Ministry of Justice to study gapsand integration between the UN Convention againstCorruption and Taiwans anti-corruption laws. Thechapter is systematically reviewing current anti-corruption legislation, exploring gaps and integrationproblems and providing recommendations for reform.

After working successfully for the ratication of theUN Convention against Corruption, TI Korea (South)campaigned for its implementation, issuing a jointstatement with 300 NGOs calling for the reinstallationof the independent anti-corruption authority andrestoration of the Korean Pact on Anti-Corruptionand Transparency (K-PACT), which the governmenthad stopped supporting. As a result, the governmentexpressed support for an inclusive, transparent UNConvention review mechanism, but the chapter is stillpushing for K-PACTs reinstatement.

Europe and Central AsiaAfter two years passage between the upper andlower legislative chambers, and much advocacy andpublic campaigning from TI Italy, the country nallyratied and implemented the UN Convention againstCorruption. The chapters sustained campaign included

direct advocacy with the governments anti-corruptioncommissioner and parliamentarians, supported bywidespread media and online work.



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Ending ImpunityUntil recently, heads of state suspected of pillagingnational coffers and lling foreign bank accounts havehidden safely inside their mansions. But in a milestone

challenge, TI France and its partner organisationSherpa are ghting to bring to court a case againstthree African presidents and some of their relatives:Republic of Congos Denis Sassou-Nguesso, TeodoroObiang of Equatorial Guinea and Gabons OmarBongo (recently succeeded by his son). It couldbreak the culture of impunity for leaders suspected ofembezzling vast amounts for personal use overseas.

Lodged in December 2008, the complaint calls foran investigation into how the presidents nancedacquisitions in France worth far more than theyofcially earn. Their lawyers deny any diversion of

public funds. Yet previous police investigations foundPresident Bongo and his relatives owned 39 Frenchproperties, 70 bank accounts and nine luxury cars;President Sassou-Nguessos family, 18 properties and112 bank accounts; and President Obiangs family,4.2 million-worth (US $5.85 million) of luxury cars (hisson, who earns a monthly government salary of US$4,000 (2,875), also has a Malibu mansion worth US$35 million (25 million).

Meanwhile 75 per cent of Equatorial Guineas populationlives below the poverty line, as does half of Congosand 40 per cent of Gabons a middle-income countrythanks to oil revenues. A courageous Gabonesecitizen, Gregory Ngbwa Mintsa, joined TI France inlodging the complaint, seeking redress for personaldamages and damages suffered by the entire nation.

In May 2009, a magistrate accepted the lawsuit,opening the way for an investigation into how theassets were acquired. TI Frances head, DanielLebegue, praised the decision as a considerablebreakthrough in international law. Previous lawsuits

brought by the chapter had been rejected by thecourts, but this time it was accepted as a plaintiffbecause the claims of the complaint directly harm itsinterests, namely ghting corruption. But Mintsas caseas a taxpayer was dismissed. He declined to appealon grounds of personal safety.

Within two days the public prosecutors ofceappealed the May ruling, blocking the judicialinvestigation. In October, the complaint was foundinadmissible. But TI France will appeal before theSupreme Court, with recent precedents supportingthe complaints admissibility. The chapter believes

Frances obligations under the UN Convention againstCorruption oblige the court to hear the case.

Whatever its outcome, the case has broken thetaboo against questioning leaders assets, attractingmassive worldwide support, including a statementof endorsement from 14 African TI chapters andpartners. TI France hopes its complaint will eventuallylead to the implementation of the right to restitution(a pillar of the UN convention), which would allowentire populations to recover stolen assets truly aprecedent for ending impunity.

Christopher Grotewww.ickr.com/photos/cgrote/

A CONSIDERABLEBREAKTHROUGH ININTERNATIONAL

LAWDaniel Lebegue, Chair, TI France



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The problemIf information is not freely provided and accessible,corruption can thrive. Withholding information from thepublic demolishes trust and accountability, and breedsdiscontent as shown by several recent electionswhere results have been delayed or not published.Opaque processes in aid distribution or publiccontracting for infrastructure projects also creates asense of apathy and exclusion.

Access to information needs to be two-way: thestate proactively discloses information and citizensrequest it in areas where proactive disclosure does not

occur. Without adequate information, citizens cannotmake informed decisions about their lives, such ason health or education entitlements. Information alsoaffects whether and how citizens monitor the deliveryof campaign promises by elected representatives. Inturn, proactive disclosure can create trust and builda solid platform for citizens and the government toengage in a constructive dialogue.

The solutionTransparency International (TI) believes that the rightto information must be anchored in a proper legalframework if it is to be respected. It advocates forcountries to adopt and abide by the UN Conventionagainst Corruption, which recognises public reportingand access to information as key pillars in preventingcorruption, and provides a global framework for these.Access to information laws can be used to monitorareas with specic corruption risks, such as water,health and education services, or for monitoring publicspending in campaign nances.

More than 40 TI chapters have campaigned foraccess to information laws to be adopted in theircountries, and where successful, have gone onto participate in monitoring how thoroughly theirrequirements are carried out. As part of its coalition-building approach, TI is active in the Freedom ofInformation Advocates Network, a civil societyplatform for experts to share learning and information.

ACCESS TO INFORMATIONENGAGING GOVERNMENT AND BUSINESS

Panos Pictures/Peter Barker



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Asia PacicSeventy participants from foreign missions, the privatesector, government, civil society, academia andthe media attended a two-day regional conferenceorganised jointly by TI Malaysia and the Centrefor Independent Journalism, which highlighted the

urgent need for a freedom of information act. Thechapter also held roundtable discussions with 12citizens groups to maintain momentum and map outstrategies towards legislation.

To make publicly available information moreaccessible, Transparency Thailand developed anelectronic database of politicians asset declarations,legally required of every Thai politician. Users such asjournalists, activists and academics can search forand easily compare data. The chapter donated thedatabase to the National Anti-Corruption Commission,which will keep entries up to date.

Europe and Central AsiaTI CroatiasWe Have the Right to Know! campaignfocused on presidential elections and citizens rightto hold public ofcials accountable. Chapter staffvisited towns across the country to inform peopleabout the Freedom of Information Act, and held apress conference with partner organisations outsideparliament on International Right to Know Day. Theyhighlighted the acts restrictions on citizens right toprotest, gaining wide media coverage, including ontelevision and social networks.

To assess whether the country's freedom ofinformation law is functioning properly, TI's partnerin Montenegro, MANS, requested documents frominstitutions at all levels. MANS submitted almost10,000 requests in 2009, but reports receivingresponses to less than half of their requests. Thechapter also conducted public campaigns to encouragecitizens to submit their own requests for information.

Africa and Middle EastTogether with several partners, the TI chapter, theLebanese Transparency Association, establishedthe National Network for the Right of Access toInformation, which includes representatives ofgovernment, the public and private sectors, civil

society and the media. The network aims to enhancetransparency, accountability and civic participationthrough access to information and whistleblowerprotection, and has submitted a draft law to parliamenton rights to information. The chapter also helped trainpublic servants and is developing manuals on accessto information and whistleblower protection.

To enhance transparency and cit izens access toinformation, the TI chapter in Palestine, AMAN,organised a public hearing for the Minister of Financeto present the 2009 budget and the governmentscommitments towards Gaza. The event was attended

by representatives from government, the privateand public sectors, academia, civil society andinternational NGOs.

AmericasTo help people access public information frommayors ofces and municipalities, Transparenciapor Colombia created an electronic programme,Internet for Accountability, to provide timely andreliable information and services. More than 1,000municipalities have adopted the programme for theirofcial websites. New sections were added in 2009,on revenue (encouraging local governments to provideclear information on revenues received and how theyare spent) and on women and gender equality (solocal governments provide information from a genderperspective, enabling women to full their rights). Thechapter donated the programme to the governmentand it now forms part of the Online GovernmentProgramme - www.iprc.org.co.

Having been instrumental in the passage of thecountrys access to information law, the TI chapterin Guatemala,Accin Ciudadana, is working toensure it is properly implemented. Public demand for

information under the law is strong, but some publicofcials refused to disclose requested information,falsely claiming exemption under the law. To protectcitizens rights,Accion Ciudadana has taken legalaction, successfully resulting in ministers providing therequested information.

As part of the Coalicin ProAcceso (Coalition forAccess), Transparencia Venezuela co-organisedthe Third International Seminar on Access to PublicInformation, designed to strengthen understandingof access to public information as a right. Delegatesdiscussed the future of access to information as a way

to increase justice and social inclusion for citizens andoblige public ofcials to work more transparently.



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TRUE STORY

Cold ComfortThe construction of gas pipelines would have normallybeen welcomed by rural Moldovans, who strugglethrough freezing winters. Instead of providing a betterstandard of living, though, the construction projectbrought hundreds of them a series of unexpected costs.

Although the government paid for the provision of amain gas pipeline to the city, the citizens were requiredto pay for a connection between the pipeline and theirown homes. Soon after pipeline construction began,members of several communities were struck by the

lack of transparency in the project details. First, therewas no available information on the planned cost ofthe design and construction of the pipeline. Second,members of these communities were unable toaccess information on the origins and the allocationof nancial resources for the project. Third, theywere given no explanation for the amount of moneycollected from them by the construction company.

As the project proceeded, the situation worsenedas sub-contractors began defaulting on contractualobligations. This led to an unexpected increase inthe cost of construction work, which in turn fell to

the community members to supplement, signicantlydraining their already limited resources.

Members of several communities contactedTransparency International Moldova to voice theirsuspicions that the money they had contributed forthe gas pipeline was being misused.

Based on this complaint, TI Moldova urged theAgency of Construction and Territory Development,a specialised national institution, to carry outa detailed study of the project's expenses. Ascommunity members had suspected, the real costof the completed works in several rural localities was

lower than the amount of money the constructioncompanies had taken from them.

The company undertaking the work was ordered topay back all "personal contributions" that exceededconstruction costs, which on average amounted toone month's salary per person. A series of workshopswere also held for the benet of the complainants andinformation on the construction project's nances wasnally made available.

This case is one of thousands processed by

Transparency International's Advocacy and Legal

Advice Centres. The centres, now in more than 40

countries, provide assistance to victims and witnesses

of corruption, helping them to pursue their complaints.

THE CONSTRUCTIONPROJECT BROUGHTHUNDREDS OF RURALMOLDOVANS A SERIESOF UNEXPECTEDCOSTS



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PUBLIC PROCUREMENTENGAGING GOVERNMENT AND BUSINESS

The problemPublic procurement affects everyones lives, whetherthrough road or dam construction, health and educationservices, the award of telecommunications concessionsor licences for exploiting natural resources, or theprivatisation of public assets. Corruption in any ofthese processes increases the cost of services tocitizens, reduces the quality of work or services, andultimately erodes peoples trust in their leaders.

Without effective prevention and control measures, theenormous amounts of money owing from governmentbudgets through procurement create ideal opportunities

for corruption. Risks are exacerbated when procurementexpenditure is allocated without competitive bidding.

Nearly US $2.3 trillion (1.6 trillion) 17.4 per centof GDP is spent on public procurement in OECDmember states. Yet less than a fth of this expenditureinvolves open competitive bidding processes anddeveloping countries are unlikely to do better. Corruptioncan add 20 to 100 per cent to government procurementcosts in several Asian countries, according to theAsian Development Bank.

The solutionOptimum use of public funds requires transparent,accountable procurement systems, with regulationsthat promote integrity and meet international standards.Transparency International (TI) advocates for publicprocurement practices based on transparency andaccountability, which give all stakeholders, includingcivil society, the opportunity to improve the system.This requires strong institutions, adequate checksand balances, effective reporting and complaintsmechanisms, broad access to information, and thestrong enforcement of laws and regulations.

Many TI chapters are monitoring procurement andpromoting Integrity Pacts, a tool developed by TI adecade ago, involving agreements between governmentagencies and bidders for a public sector contract toabstain from bribery, collusion or other corrupt practices.An independent external monitor ensures the pact is notviolated. Pacts have been applied successfully in morethan 15 countries, with ve new chapters adoptingthem during 2009 and collaboration with the WaterIntegrity Network to promote them in the water sector.

At a global level, TI advocates for reform and stronginternational engagement in improving national

procurement systems used to channel development aid.By training public ofcials in procurement best practice,identifying corruption risks and engaging the private sector,TI is committed to promoting integrity in procurement.

Flickr/AstridWestvang



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Africa and Middle EastTI Kenya signed a memorandum of understandingwith the Kenya Private Sector Alliance on trainingMicro and Small-scale Enterprises (MSEs) in publicprocurement, to raise the number of MSEs participatingin public tenders, increasing competition and reducingcorruption. More than 170 participants from MSEs andcivil society were trained in procurement proceduresand how to access and monitor public tendering.Many are now participating in tendering processesand monitoring public contracting procedures.

Although it welcomed several provisions in agovernment decree on public procurement, the TIchapter in Morocco,Transparency Maroc, highlightedserious weaknesses at regular meetings and publicdiscussions. The decree lacks independent reviewand the ability to suspend individuals or companiesfrom the procurement market; project owners retainexcessive discretionary power, and provisions relatingto supervision and auditing are ineffective.

AmericasThe TIArgentinian chapter, Poder Ciudadano,signed a transparency agreement with a municipalityin Buenos Aires province to implement an IntegrityPact in waste service contracting, which accountsfor a quarter of municipal spending. A Social Witness

(an expert with technical and ethical expertise) wasappointed to observe the contracting process,from preparing terms and conditions to awardingthe contract. More than 200 citizens participated ina public hearing on the terms and conditions andhalf their recommendations were included. Suchtransparent participation saved three million pesos(more than US $800,000 /575,000).

Transparencia Mexicana, the TI chapter in Mexico,was invited by the federal government to monitor thepublic bid process for the Mexican citizen identitycard. The main objective of this project it is to restore

public condence that their identity wont be seizedor used for illicit purposes. The contract was worthapproximately US $83 million (59.7 million).

The TI chapter, the Trinidad and TobagoTransparency Institute, took part in a commissionof enquiry set up to investigate alleged corruptionin state-owned construction enterprises carryingout the governments building programme. Throughwritten submissions and televised public hearings, thechapter gave an independent analysis of public sectorprocurement, provided evidence on how corruptionoccurs in construction and made recommendations

for much-needed reform. Its online corruption surveyof industry professionals found many perceivecorruption to be widespread and would welcomeconcerted action to promote integrity in the industry.The chapter will use these results to help build an anti-corruption alliance in the infrastructure sector, and toraise public awareness of the issues.

TI USA launched a project to assess whether theAsia-Pacic Economic Cooperation's ProcurementTransparency Standards are being upheld in Indonesia,Mexico, Peru and Vietnam. Under the project, localexperts assessed relevant laws and regulations tosee whether they meet required standards. Chaptersthen consulted local and international business peoplefor a private sector perspective on the regulationseffectiveness. The project will make country-specicrecommendations for increasing transparency andblocking corruption in procurement, to be used inadvocacy with relevant trade and procurement ofcialsand other stakeholders.

MILANS COUNCILLOR

FOR PUBLIC WORKSSAID THE PACTSHAD ALLOWED THECITY TO ADDRESS

UNFAIR TENDERSWORTH MORE THAN122 MILLION



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Asia PacicTI Indonesia has implemented Integrity Pacts in 20 areas, signing memoranda ofunderstanding with local leaders on ghting corruption, increasing transparency,independent monitoring, sanctions, complaint-handling mechanisms and whistleblowerprotection. Village meetings were held to address the specic needs of each region,identifying potential members of a TI-sponsored independent monitoring network.

The chapter also mobilised support for public monitoring through communitytheatre, media engagement and a lm on corruption in public procurement.

As part of its efforts to monitor public procurement, TI Pakistan pursued reportsof corruption by public organisations, asking agencies for information, tenderdocuments and evaluation reports, and sending copies to the National AssemblysPublic Accounts Committee and other regulatory bodies for investigation. As aresult, top executives in three major corporations were charged, and considerablesavings made in public procurement.

Europe and Central AsiaItalys Minister for Public Administration awarded

the Municipality of Milan an anti-corruption prize forimplementing Integrity Pacts with support from TIItaly. Milans Councillor for Public Works said thepacts had allowed the city to address unfair tendersworth more than 122 million (US $170 million).

As part of an Integrity Pact agreed with the Ministryof Culture in 2005, TI Latvia organised three widelypublicised discussions on the National Libraryconstruction project, challenging the overall costs,risks stemming from budget cuts, inated contractestimates and non-transparent sub-contractors.Attended by the Library Director, the Minister of

Culture, construction company representatives andprofessional experts, the discussions attracted mediaattention and resulted in the parties involved in theproject improving their terms of cooperation.

Transparency Serbia highlighted government failuresin implementing new public procurement legislation,launching an initiative with the constitutional courtto declare outdated decrees still used by the police,the army and the secret service for undercoverprocurements as illegal the result of which is stillpending. It also recommended improvements toprocurement-related laws on budgeting and reporting,

and was invited by the Ministry of Finance to helpprepare new legislation.

Flickr/bartb_pt



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PRIVATE SECTORENGAGING GOVERNMENT AND BUSINESS

The problemIt is increasingly recognised that resorting to corruptpractices to secure business puts companies at risk.Firms caught red-handed in recent years have seentheir executives put behind bars, paid record nes andsuffered tarnished reputations. Yet bribery in businesspersists and is perceived as widespread. Almosta fth of more than 1,000 executives surveyed byErnst & Young claimed to have lost business due toa competitor paying bribes; more than a third felt thatcorruption was getting worse. Facilitation paymentsto ease or speed up business transactions remaincommon practice in many countries, corroding thecommercial fabric and burdening the general public.

Transparency Internationals 2009 Global CorruptionReport on corruption and the private sector, offers astark reminder that corruption can surface within acompany, through governance or risk managementfailures; between companies, as business to businesscorruption; or in the marketplace, where cartels, price-xing and bid-rigging increase costs for consumersand society.

The solutionTransparency International (TI) tackles private sectorcorruption through a three-pronged approach:prevention, enforcement of regulations, and thepromotion of greater transparency and accountability.Above all, companies must address corruptionrisks by committing to zero-tolerance of briberyand corruption, and adopting a comprehensiveprogramme of anti-corruption measures. To helpcompanies devise effective anti-bribery strategies, TIcontinues to rene and develop a suite of tools basedon its Business Principles for Countering Bribery.

Central to its private sector work is TIs drive for morerigorous enforcement of laws and conventions againstbribery. During 2009, France, Germany, Norway andthe United States all stepped up their enforcement,with a record number of prosecutions in the UnitedStates. As business must play a role in ghtingcorruption, TI helps companies work together withstakeholders to devise voluntary codes, methodsfor tackling bribery and corruption, and initiatives topromote transparency, which need to be externallyveried to be credible.

TI chapters also work to develop context-specic

approaches to private sector corruption, especiallyin developing countries, enabling TI to maximise itsimpact in squeezing corruption out of business.

Reuters/Nir Elias



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Trust through TransparencyLeading publicly listed companies around the world arefar from demonstrating embedded anti-corruption practicesin their operations, revealed TIs Transparency in Reportingon Anti-Corruption a Report of Corporate Practices.

While companies may often cite high-level, strategiccommitments to prevent corruption, the reportillustrates that the majority of the almost 500 leadinglisted companies from 17 countries do not providemeaningful details on the support systems required.

Only seven companies achieved the highest possibleve star score. The strongest performance was foundin companies based in Canada, the Netherlands,Switzerland, the United Kingdom and United States,with a three-star ranking. While companies based inBelgium, China, Japan, Russia and Taiwan achieveda one-star ranking on average. The report also showsthat Chinese, Indian and Russian companies in high-risk sectors are falling far behind their competitors in

other countries when it comes to reporting practices.

Public reporting is an essential link in theaccountability chain and it is crucial for combatingcorporate corruption, said Jermyn Brooks, Chair ofTIs Business Advisory Board. In the aftermath of thenancial crisis, transparency is a key ingredient forcompanies seeking to restore public trust, but this canonly happen if policies are implemented and reported on.

Just reporting on the existence of anti-bribery systemsdoes not necessarily correspond to their actualeffectiveness, yet such disclosure can be a strong

indicator of the quality and comprehensiveness of acompanys efforts to address bribery and corruption.TI is working with the companies to ensure that thenext edition of the report will show improved performance.

Transparency International continues to workwith the UN Global Compact, the worlds largestcorporate responsibility initiative with some 7,700participating companies and organisations, chairing ataskforce on reporting progress in implementing the10th Principle against Corruption. To support companiesin their efforts to report on their anti-corruption policiesand actions, TI led a UN Global Compact working groupto develop practical reporting guidance. Successfullytested by 19 organisations around the world, the guidancesets a new benchmark for reporting on anti-corruptionand was launched on International Anti-Corruption Day.

Ahead of the 2009 UN Convention against CorruptionConference of States Parties in Doha, Qatar, TI, theUN Global Compact and other partners launcheda campaign for the establishment of an effectiveconvention review mechanism. Signed by CEOs ofleading companies, the petition was addressed toUN Secretary General Ban Ki-moon who presented it

at the Doha conference. More than 130 CEOs havesince signed the petition to demonstrate their supportfor curbing corruption and creating a level playing eld.

Global Corruption Report 2009Transparency Internationals 2009 Global CorruptionReport analysed corruption risks in the private sectorand strategies for preventing them. Published in thewake of the 2008 nancial crisis which emphasisedthe interdependence of the private sector, economicprosperity, political stability and the sustainability of

societies the report highlighted the private sectorspotential to be a source of dynamic innovation andgrowth. But when corruption goes unchecked, thesector can become a destructive force, underminingfair competition, stiing economic growth and politicaldevelopment and ultimately jeopardising its ownexistence.

With the rst generation of anti-corruption regulations,compliance programmes and corporate responsibilityinitiatives underway, the report recognised the nancialcrisis as a watershed, allowing the private sector totake stock of anti-corruption efforts and chart

strategies forward. It brought together more than 80experts, businesspeople and scholars to present acomprehensive analysis of corporate corruption andsuccessful remedies for tackling it worldwide. The reportexamined all spheres of business activity, from corruptioninside enterprises (including corporate fraud andconicts of interest) to commercial bribery, collusionand cartels, and regulatory and policy capture.

Published by Cambridge University Press andlaunched at an event in New York, the report wasdistributed to 2,800 stakeholders in more than 100countries. Within six months after the launch, the

English language version was downloaded 27,000times. It is also available in French and Spanish.

THE HIDDEN COSTSOF CORRUPTION AREALMOST ALWAYSMUCH HIGHER THANCOMPANIES IMAGINEThe Economist



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Asia PacicThrough the Asia-Pacic Economic Cooperation (APEC),TI Australia coordinated a programme for Small& Medium Enterprises (SMEs) with TransparencyThailand and TI's chapter inVietnam,TowardsTransparency, which both held workshops in their

capitals and provinces. Participants learnt about thecorruption-related pressures faced by local agenciesand companies, increasing their understanding ofthe causes of bribery and the best ways forward forSMEs, such as forming an association or supportnetwork and adopting a code of conduct.

Europe and Central AsiaTI Czech Republic called for a police investigationinto the potential bribing of doctors by a drugproducer. Although the case was not brought to court,the chapter was invited to roundtable discussionsbetween pharmaceutical sector stakeholders toredesign marketing rules and prevent the bribing ofdoctors. There is now higher public awareness of theissues, and greater responsiveness from authorities ininvestigating corrupt practices among pharmaceuticalcompanies.

In response to insufcient anti-corruption measuresamong Norwegian businesses, TI Norway publisheda handbook on creating and implementing a corporateanti-corruption programme. Protect your business!addresses risks such as bribery, facilitation payments,political contributions, gifts and conicts of interest.

To help reduce corruption risks in nancial markets,TI UK published a report on the anti-money launderingregime in the United Kingdom and its overseasterritories. Combating Money Laundering andRecovering Looted Gains Raising the UKs Gamecontains more than 20 recommendations, including theneed for greater transparency about the owners of trusts.

Africa and Middle EastIn order to strengthen nancial regulators oversightcapacity and to promote a transparent and accountableenvironment, TI Kenya conducted a study on integrityin the countrys nancial sector. The resulting report

identies several weaknesses, and will be used toadvocate for increased transparency among nancialactors.

The TI chapter, the Lebanese TransparencyAssociation, launched several publications aimedat improving corporate governance, carried outgovernance assessments of three Lebanesecompanies and held quarterly awareness-raisingevents. It also held two pilot training courses targetingowners, directors and advisers of companies, andworked on a corporate governance code for state-owned enterprises.

AmericasTransparencia por Colombia developed a nine-moduletool for strengthening ethical behaviour in Small andMedium Enterprises (SMEs), one of which is TIsBusiness Principles for Countering Bribery. In 2009,the chapter worked with larger companies to ensurethat SMEs in their supply chains also implement theinitiative. As a result, 82 companies joined (with a totalof 7,500 employees), making a total of 328 companiesthat are working with the chapter to strengthen integrity

in business building their reputations while preventingnancial losses through corruption. The programmesimpact on our organisation has been extremelyvaluable, said a representative of one participatingcompany. Our clients trust us completely. They knowexactly what to expect and the relationship with oursuppliers couldnt be better.

To help ensure accountability in private sector socialinitiatives, Mexicos TI chapter, TransparenciaMexicana, collaborated with a leading pharmaceuticalcompany to monitor an initiative under which aproportion of prot from each product funds NGO

projects to improve child nutrition. The chapterfollowed fundraising arrangements and the selectionof NGO projects, and is developing an accountabilityscheme for NGOs that receive funds.

Flickr/Frederic Poirot



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The problemEstimated by SIPRI to be worth more than US $1.5trillion (1.1 trillion) a year and synonymous with secrecy,the defence and security sector is particularly vulnerableto corruption. National security concerns have oftenbeen used to shroud national defence establishmentsfrom public scrutiny. However, the secrecy thatnecessarily characterises certain defence activities isoften used to veil much more than can be justied.

In addition to diminishing the operational effectivenessof countries armed forces and public trust in military

and security activities, corruption in defence undercutseconomic growth, resources and security. The opacityand size of national defence budgets can open themto abuse by politicians looking for re-election funds.Corruption can have a destabilising effect on peacesupport and state-building, undermining national andinternational efforts to provide security and stability forhard hit populations.

The solutionGreater transparency in international arms transfers,defence contracting and defence and securityinstitutions is needed to reduce corruption risks andincrease integrity in the sector. While secrecy may bewarranted in certain areas, increasing transparencyin defence and security policy, budget, spending andprocurement should not compromise national security.

Corruption risks are best tackled through strongcommitments and cooperation between governments,armed forces, industry and civil society. As defence

sales and purchases are linked to government policy,national security considerations and industry capacity,anti-corruption efforts need to be synchronised acrosspurchasing defence ministries, exporting governmentsand contracted companies. Momentum needs to bebuilt on progress already made, such as the defenceindustrys introduction of codes of conduct and commonindustry standards across different regions of the world.

DEFENCE AND SECURITYENGAGING GOVERNMENT AND BUSINESS

stockphoto.com/ Ziva_K



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Asia PacicTI Korea (South) is promoting transparency in thecountrys defence sector, regarded as one of itsmost vulnerable to corruption. A key member andformer Secretary General of the TI chapter is leading

three ofcial ombudsmen for the countrys DefenceAcquisition Program Administration, helping it toincrease transparency in defence acquisition projects.

Transparency Internationals global Defenceagainst Corruption programme, led by TI UK, aimsto build integrity and reduce corruption in defenceand security establishments worldwide. Workingwith governments, defence companies, multilateral

organisations and civil society, the programmesupports national anti-corruption reforms, promotestransparency in arms transfers, and works to inuencedefence and security policy.

TIs 2009 report on codes of ethics and businessconduct for defence and military ofcials illustratedthat approaches to ethics varied widely, and mostcountries lack any form of training processes. Basedon these ndings, TI developed a set of generalprinciples for a best-practice code and recommendationson specic issues, including bribery, gifts and hospitality,conicts of interest, and private sector employment of

former public servants.Afghanistan, Bosnia-Herzegovina and Ukraine trialledTIs ve-day anti-corruption training course, withlectures by international staff from governmentsand institutions. The course has now been takenby ofcials from more than 20 countries and coverscorruption risks in the defence sector, militaryoperations and peacekeeping, as well as the role ofthe media in tackling defence corruption.

In October, the UN General Assembly agreed atimetable for talks on a proposed Arms Trade Treaty toregulate the global trade in conventional arms. During

negotiations, TI representatives gave a presentation oncorruption risks and the arms trade, and have sincebeen working with partners towards the inclusion ofstrong anti-corruption controls in the treaty, to reducethe likelihood of illegal arms transfers or arms beingdiverted to unintended recipients such as terroristorganisations.

As a result of TIs drive to raise standards, global defencecompanies formed the International Forum on BusinessEthical Conduct, through which associations representingEuropean and United States aerospace and defenceindustries have agreed on a set of global principles on

business ethics. TI is supporting them to develop theprinciples for the inclusion of other countries.

TI continues to engage inuential international actorsthrough such forums as a major NATO conferenceto assess progress on the joint Building Integrity inDefence Establishments initiative, and at a workshopfor senior African government and defence ofcials,which focused on building integrity and cuttingcorruption in Africas defence institutions.

www.defenceagainstcorruption.org

THE SECRECYTHAT NECESSARILYCHARACTERISESCERTAIN DEFENCEACTIVITIES ISOFTEN USED TOVEIL MUCH MORETHAN CAN BEJUSTIFIED



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The problemA functioning judiciary is the guarantor of fairnessand can be a powerful weapon against corruption.However, peoples experiences in many countriesfall far short of this ideal, eroding belief in the ruleof law. In some countries more than 90 per cent ofthose who had contact with courts encountered bribedemands. And the total amount paid in bribes canreach staggering proportions. Justice for sale is nojustice at all.

Corruption in the judiciary goes beyond the bribing ofjudges. There are bribes paid to other court personnel

to slow down or speed up a trial, or to make a complaintgo away. Judges are also subject to pressure fromabove, with legislators or the executive using theirpower to inuence the judiciary, starting with skewedappointment processes.

Citizens are often unaware of their rights, or resigned,after so many negative experiences, to their fate beforea corrupt court. Court efciency is also crucial, as aserious backlog of cases creates opportunities fordemanding unscheduled payments to expedite a case.

The solutionJudicial appointments and promotions should beoverseen by an independent body and be basedon merit, rather than favouritism. Similarly, salariesand pensions should be fair and reect experienceand performance, and a track record for integrity.Information on appointments needs to be open forcivil society analysis.

Judges must also be protected from excessive risksthat would keep them from ruling fairly when powerfulinterests are in play. This should include limited liabilityfor decisions but also rigorous investigations when

there are credible allegations against judges. In instanceswhere corrupt behaviour can be proven, a fair andtransparent removal process should be employed.

JUDICIARYENGAGING GOVERNMENT AND BUSINESS

Jess Loughboroughww.sunfacethirteen.co.uk



27/72

Asia PacicTI Philippines recruited 195 integrity championsfrom the Criminal Justice System in 2009 andproduced 18 integrity initiatives through a series ofworkshops, as part of a joint project with the PhilippineCivil Service Commission to build integrity andenhance a culture of good citizenship. The initiativesincluded the production of the book OrganizingIntegrity Circles: A Manual for Transformational

Leaders, the participation of TI Philippines in theAccess to Information Network, lobbying for passageof the Freedom of Information Bill, and the chapterslead role in monitoring the Philippines compliancewith the UN Convention against Corruption.

Europe and Central AsiaTI Romania formed a working group with TIchapters inAlbania, Bosnia-Herzegovina, Bulgaria,

Macedonia (FYR), Moldova and Serbia to identifyregional challenges in ghting high-level corruption,improve regional law-enforcement capacities andalign national and international standards. The groupsurveyed judges, prosecutors and police ofcersdealing with high-level corruption. Its report identiedseveral challenges within the regions judiciary (suchas low implementation of regulations and insufcientnancial resources), and made recommendationsincluding the adoption of international anti-corruptionstandards, increased participation of legal practitionersin setting national legal frameworks, higher salariesand better resource management.

Africa and Middle EastMoroccos National Integrity System study calledfor reform in the judiciary, after reporting executiveinterference in judicial matters, the non-adaptationof national legislation to international conventions,and the lack of prosecutors independence from

the Minister of Justice. In response, TI's chapterin Morocco, Transparency Maroc, launched anadvocacy campaign to raise awareness of the lack ofjudicial independence and to mobilise civil society, theprivate sector, donors and the media behind reformsto strengthen judicial power. With 10 partners, thechapter is drafting a memorandum on judicial reform,aimed at decision-makers and public opinion, whichmakes recommendations on transparency, access toinformation and ghting corruption.

TI Zambia published How 2 Avoid Corruption WhenAccessing Judicial Services part of its How 2

series, produced in collaboration with public serviceproviders. A thousand copies were widely distributedto teach people court processes and to inform individualsof their rights when dealing with the judiciary.

AmericasTransparencia por Colombia was one of 12organisations which joined forces in the VisibleElection Alliance, created to promote independenceand transparency in the justice system. During 2009,the alliance worked to bring transparency to theselection of six Supreme Court magistrates and theAttorney General. As a result, the magistrate openingswere advertised in the national media, there was apublic hearing with the candidates, and the timetablefor the process was made public. The alliance alsogenerated debate on the requirements of the AttorneyGenerals position, resulting in the Supreme Courtrejecting the presidencys shortlist and a new shortlistbeing compiled. The process is ongoing.

JUSTICE

FOR SALEIS NOJUSTICE

AT ALL



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POVERTY AND DEVELOPMENTSECURING BASIC NEEDS

The problemTransparency Internationals worldwide public opinionsurvey, the Global Corruption Barometer, conrmseach year that corruption hits poor people hardest.It prevents them from participating equally in politicaldecisions, from enjoying equality under the law, fromseeing their needs reected in policies and budgets,and from accessing public goods and services.

Corruption is acknowledged worldwide as afundamental cause of social and economic exclusion,conict and confrontational politics. Decisions on foodand energy security, natural resources, technology

and investments are often compromised by corruption with fatal consequences. In Sub-Saharan Africa,nearly 555 million people live on less than US $2(1.40) a day, which according to World Bank gureshas almost doubled from 1981. Despite high growthrates, South Asia still has 600 million people livingbelow the poverty line.

More than ever before, national and global integrityfailures combined in 2009 to jeopardise progresstowards the Millennium Development Goals. Theundue inuence of private interests in governments,policy making and regulatory frameworks undermines

existing investments in poverty reduction.

The solutionTransparency International (TI) believes that thevoices of disadvantaged people must be heard whendevelopment agendas are set and decisions takenthat affect their lives. Poor peoples views informTIs global positions on equitable and sustainabledevelopment and aid effectiveness.

Focusing on the benets that transparency andaccountability brings to development, TI has broughttogether elected and administrative public ofcials,civil society and disadvantaged groups in a commondrive to prevent corruption. Through high-level political

advocacy, TI supports development agencies inensuring the inclusive and informed participation ofpoor people in development processes.

Increasingly TIs anti-corruption tools, such as itseasily adaptable Development Pacts, are recognisedby public ofcials as helping them to achievepoverty reduction targets. Building on traditionalpartnerships with anti-corruption commissions, TIchapters are working with elected representativesand administrations keen to demonstrate integrityin development work. This helps to ensure greateraccountability to disadvantaged people in contexts

ranging from political decentralisation to reforms inhealth, education and water.

Flickr/tfpeng



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Africa and Middle EastThrough the Poverty and Corruption in Africa project,launched in 2009, TI chapters in Ghana, Liberia,Mozambique, Sierra Leone, Uganda and Zimbabweare working to empower local communities to demandtransparency and accountability in basic service delivery.The project helps people living in poverty engagedirectly with local ofcials so that their priorities arereected in local budgets, and they are able to holdauthorities to account.

Under the project, the TI chapter, Ghana IntegrityInitiative, has helped communities select monitoring

and evaluation teams and a focal person to liaisewith local authorities, and has trained people insocial auditing and how to demand transparencyand accountability from ofcials. To engage with localauthorities and other stakeholders, a Poverty WatchCouncil representing diverse poor communitieswas set up by the TI chapter in Liberia,CENTAL,promoting participation by poor people in developmentinitiatives. The TI chapter in Sierra Leone, the NationalAccountability Group, trained people living in povertyin two rural districts to monitor public services andincrease transparency, helping them challenge andhold to account local ofcials. TI Uganda helped

communities monitor service delivery in what theyidentied as the most corrupt sectors, such as healthand agriculture, and to demand accountability fromlocal leaders, based on their ndings. As a result,improvement has been made in the authoritiesresponsiveness and transparency.

Because women are often more economicallyvulnerable than men, they are the main victims ofvote-buying. The TI chapter in Senegal, Forum Civil,has launched a project to improve womens accessto credit and increase their economic independence.Through the establishment of mutual funds, more

than 800 women have received credit to set up theirown businesses, so they can afford not to exchangepolitical support for gifts or bribes.

AmericasAt TI Canadas symposiumAid versus corruption:getting your dollars to the worlds poor, speakers fromthe social and corporate sectors examined key issuesin development aid, including the role of corruptionand principles that could reduce it. The conferenceincluded reports on how corruption and the lack of

transparency can prevent aid from reaching those whoneed it, and the detrimental effects of counterfeit drugs.

TI Guatemala,Accin Ciudadana, carried out asocial audit to monitor and evaluate the transparencyand accountability of the countrys cash transfersocial programme Mi Familia Progresa (my familyis making progress). The programme helps more

than half a million households living in extremepoverty in the countrys poorest municipalities,focusing on pregnant women and those with childrenunder 15 years. Through citizen participation, theaudit evaluated the quality of health and educationservices, and monitored recipients compliance withprogramme conditions. It highlighted programmestrengths and weaknesses and ranked municipalitiesby their performance. Recommendations includedstrengthening controls and improving beneciarycomplaint mechanisms.

Asia PacicAfter its 2008 corruption study found that poor ruralhouseholds paid signicant bribes each year to accessfree government services, TI India began a grassrootsinitiative to facilitate access to public services andstate welfare schemes for 8,000 rural families livingin poverty. The chapter raised awareness amongrural people, government ofcials and civil societygroups about local governance processes, the rightto information, the citizens charter and social audits.It also facilitated procedures for ensuring transparentaccess to basic services and welfare schemes.

As a result, thousands of families are now receivingtheir basic entitlements.

IF REDUCING

POVERTY IS ASOCIAL PRIORITY,CONTROLLINGCORRUPTION MUST

BE AN EVENGREATER ONEAjit Mishra, Development Economist

25Securing basic needs


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The problemTransparency International believes that the mostdamaging impact of corruption is the diversion ofbasic resources from poor people. Corruption inhumanitarian aid is the worst form of this, deprivingthe most vulnerable among the poor the victimsof natural disasters and civil conicts of essentialresources. Although humanitarian assistance aims tosave lives and alleviate peoples suffering in times ofcrisis, it is not immune from corrupt abuse as shownduring humanitarian responses to the Asian tsunamiand more recently in Afghanistan, Iraq, Liberia,Somalia and Sudan.

Relief is delivered in environments and circumstancesoften conducive to corruption. The injection oflarge amounts of resources into resource-pooreconomies where institutions have been damagedor destroyed by conict or natural disasters canincrease opportunities for the corrupt abuse of power.There is often pressure to spend aid money rapidlyand immense organisational challenges in suddenlyexpanding the scope and scale of programmedelivery. Commonly, countries where humanitarianaid is delivered already suffer high levels of perceivedcorruption prior to an emergency.

The solutionTransparency International (TI) offers humanitarianagencies and key stakeholders guidance and concretemethods for integrating anti-corruption remedies intotheir programme planning and delivery, and advocatesfor appropriate policies to support them. It worksto improve accountability to emergency-affectedaid recipients and to strengthen the integrity andeffectiveness of humanitarian operations, maximisingthe aid resources that reach intended beneciaries.

To build momentum, TI cooperates closely withthe humanitarian community. TI's programme

has improved the understanding of corruptionrisks in humanitarian assistance by engaging keyhumanitarian organisations as partners, supportedby academic experts in humanitarian policy research.The resulting Handbook of Good Practices forPreventing Corruption in Humanitarian Operationswas developed during 2009, involving extensive peerreviews and workshops, and distributed throughoutthe humanitarian community in 2010.

To strengthen the role of accountability to aid recipientsin addressing corruption, TI is now targeting otherhumanitarian aid providers and local civil society

stakeholders, who can monitor corruption risks andprevention efforts on the ground in emergency responses.

HUMANITARIAN ASSISTANCESECURING BASIC NEEDS

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Europe and Central AsiaAfter the 2008 Georgia-Russia conict, internationaldonors pledged US $4.5 billion (3.2 billion) in aid toGeorgia. TI Georgia monitored use of these funds,in particular the governments shelter programme forGeorgias 250,000 internally displaced people (IDPs).At an EU-led conference, the chapter presentedresearch reporting that the government IDP housingpolicy was often implemented without planning. Itsubsequently worked with the ministry responsible toimprove accountability and transparency in IDP aidprogrammes.

Following corruption cases that have weakenedcondence in humanitarian and developmentNGOs, TI Switzerland adapted TIs BusinessPrinciples for Countering Briberyinto anti-corruptionguidelines for the Swiss development sector. It alsoheld a roundtable meeting where NGO delegatesacknowledged the sectors lack of experiencein implementing anti-corruption strategies in itsprogrammes, and the need to talk openly aboutcorruption if they are to successfully combat it.

Africa and Middle EastFollowing the Israel-Lebanon conict in 2006, the TIchapter, the Lebanese Transparency Association,is involved at all levels of reconstruction, starting withemergency relief. Around 5,000 people signed thechapters petition for transparency in aid distribution

and reconstruction, and it monitored specicrebuilding projects, including housing and bridges.The resulting report will be released during 2010.

AmericasThe TI chapter in Peru,Protica, has continued tobring transparency to the reconstruction processfollowing the 2007 earthquake. In 2009, it focusedon improving communication channels to strengthencitizen oversight of the process. The chapterheld public hearings, published a monthly local

newspaper column, helped establish a weekly radioprogramme and developed a website giving statisticson what had been done. The chapter also formedcommittees that visited construction sites to validateofcial information, and carried out research in twocommunities showing that despite waiting for twoyears, only around 19 per cent of affected people hadcomplete houses.

CORRUPTION INEMERGENCY AIDIS A MATTER OFLIFE AND DEATHChristiaan Poortman,Director, Global Programmes,

Transparency International

Hector Emanuel/American Red Cross

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ACCESS TO PUBLIC SERVICESSECURING BASIC NEEDS

The problemWeak institutions and insufcient oversight allow thediversion of funds meant for public services such ashealth and education. Public expenditure trackingsurveys in some countries have found that as muchas 80 per cent of non-salary funds, transferred fromnational to local level, do not reach health facilities.

At the delivery end, poor governance often means thatpublic servants, such as head teachers or hospitalstaff abuse their positions to extort bribes from thevery people they should be helping. For the victimsthis can mean deciding whether a family can afford the

bribes to send their child to school. And where familiesare unable to pay for multiple children to attend, it isoften girls that are denied an education.

In healthcare an even more damaging type of corruptioncan cost lives, when counterfeit or adulteratedmedications are sold to hospitals after being expeditedacross borders and along the supply chain. The result:critical medications are useless and patients can die.And even where no fatalities occur, efforts to combatthe major health challenges facing the world today,including malaria and HIV/AIDS, are severely undermined.

The solutionFunds for public services and institutions, includingschools, hospitals and infrastructure must be subjectto budget transparency, so that citizens, activists,investigators and journalists can track funds andprevent them being siphoned off. Information shouldbe accessible and easy to understand. In addition toraising awareness of the problem among the broaderpublic, citizens must also be encouraged to demandaccountability and transparency at a local level, whetherit is scrutinising the budgets for public schools or simplyknowing about the ofcial charges for public services.

Increasingly governments seek to include civil societyand citizens in consultations on national sectorpolicies and at local government levels in the planningand implementation of services. Where participationis not informed, institutionalised and inclusive, though,it fails to prevent corruption in the use of funds andcontinues to exclude already disadvantaged groupsfrom the delivery of vital services.

In many cases, the solution goes beyond nationalborders and requires cooperation between countries.To tackle counterfeit drugs, a holistic approach isnecessary - working with customs, suppliers and

medical institutions in country and initiating mutuallegal assistance to get to the source, usually abroad.

Nancy Palus/IRIN



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Africa and Middle EastTI continued its Transparency and Integrity in ServiceDelivery in Africa programme in Cameroon, Ghana,Kenya, Nigeria, Senegal, South Africa, Ugandaand Zambia. Ba

ti annual report web

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