Presentation 1 Introduction

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  • Access to drinking Water vs Corruption Sub-Saharan Africa: This diagram illustrates that there is a correlation between corruption and access to improved drinking water in Sub –Saharan Africa: the more corrupt an country is, the smaller the fraction of its population that has access to improved water (This builds on the corruption perception index in 39 countries developed by TI; data 2005 – clearly a high score on then corruption perception index means you have less corruption – not more !
  • Amongst the new challenges and opportunities at local level are
    greater financial responsibility
    increased discretionary powers
    increased service delivery responsibilities
  • The Public Affairs Centre in Bangalore introduced report cards for citizens to comment on public service agencies. Initially the outcome was pessimistic with low levels of public satisfaction and concerns over corruption, particularly in the need to pay speed money to make progress. People paid a heavy cost for inefficiency of the public sector. But in five years there had been some progress and in a further four years, noticeable progress by all agencies.
  • The introduction of citizen report cards made a difference. Officials better understood what ordinary citizens think; agencies introduced reforms to improve services and Government agencies became more responsive. CRCs were able to act as a catalyst. The key factors in this were 1. use of information by the media and by civil society. 2 there was an active civil society able to take the opportunity, the agencies and particularly their leadership were willing to respond and there was a focused NGO which did what?????
  • Three days after making an application, a leaking pipe was replaced. Previous, complaints had had no response and the pipe had leaked since it was laid.
    Residents asked – under the right to information act - for the status of their earlier complaints, the names of officials, the contract for laying of the pipeline, the completion certificate for the works and names of officials that issued it. Action came within three days.
  • The NGO SEUF found a number of problems in latrine construction: There were undeserving beneficiaries; There was overcharging for construction; poor materials and construction
    In all 20-30% of funds and materials were diverted. It used a mix of strategies to tackle corruption, including providing more information about costs, carried out extra checks and unannounced spot checks, posting information publicly, ensuring that payments could not be authorised without two people signing and acting on complaints at the lowest possible level, with a system of referring problems to the most appropriate place.
  • In Uganda a tracking survey found that only 13% of the money allocated centrally for building schools arrived where it should at the schools. This meant that 87% had been captured on the way. A transparency campaign was launched enlisting the help of the media. Information about grants was published by posting it up in public places, and by giving to the media. It was printed in newspapers and broadcast on the radio. The ‘capture’ of these precious resources was reduced from 87% to 18%. Interestingly it was most effective at schools near to newspapers and communication points where people were better informed.
  • The Kecamatan Development Project in Indonesia is a central government project focusing on poor villages and is highly dispersed.
    This is a high risk environment where corruption is common in all development projects. There are many opportunities and low risks for corrupt civil servants and a historical legacy of impunity.
    There is weak institutional control – with a dysfunctional judiciary, oversight institutions that have degenerated and NGOs that are highly constrained.
    Mapping is a key step in combating corruption.
  • Mapping identified the sources of corruption as shown
  • The solutions identified were mostly process changes that reduced the temptations and opportunities for corruption and increased levels of oversight with increased sanctions.
    The results of an audit show an overall reduction in the hijacking of funds from almost 30% to just over 20%. There was a bigger cut in ‘lost’ materials than in missing wages.
  • Explain ways in which this hardening and shifting can take place.
    Brainstorm what they can do to improve on communication/ publication/information sharing of good and bad practises; merge with IRC list/FAQ 6 and TOP 16 or (http://www.waterintegritynetwork.net !)
  • The focus should be on cleaning up the water and sanitation services that reach the poor because they are the most effected by failures due to corruption. This might mean focusing on small-scale and community manager services rather than the larger utilities.
    Local government is a key level in both WASH services provision and in support and decentralisation offers an opportunity to prevent corruption before it takes root.
    While decentralisation can encourage accountability there is also a danger that weak local agencies may be easier to corrupt. Systems of monitoring in local agencies are often lacking or inadequate.
  • Why the focus on small scale and community-managed systems? Because this is where most people, and especially the poor, get their water.
  • Connecting up solutions mans a mix of strategies. Supply-side measure include high level institutional reforms such as laws on freedom of information and new institutions like anti-corruption commissions
    Demand-side measures include better reporting and complaints systems, with support for civil society and for media reporting.
  • www.waterintegritynetwork.net includes key sources such as presentations at the Stockholm Water Week 2007 by Janelle Plummer and Scott Guggenhiem, and
    Stockholm International. Water Institute (SIWI) papers by Patrik Stalgren and Janelle Plummer
  • Presentation 1 Introduction

    1. 1. Session 1. An introduction to preventing corruption John Butterworth IRC International Water and Sanitation Centre Mael Castellan Water Integrity Network
    2. 2. Contents 1. Key definitions and the importance of this topic: what do statistics tell us? 2. Frameworks for understanding corruption 3. Case studies 4. Designing pro-poor strategies to prevent corruption 5. Links and further information
    3. 3. 1.1 Some key definitions Transparency = sharing information and acting in an open manner Honesty/ Integrity = working and acting in ways that reflect known best practices, and following ethical principles Accountability = objectively holding people and agencies responsible for their performance Corruption = the abuse of entrusted power for private gain
    4. 4. 1.2 Governance, poverty and WASH indicators in 10 selected countriesTransparency International CPI Index (Rank of 163 countries: 1=best, 163=worst) Population below national poverty line, total, percentage (Most recent year with data 1997- 2004) Water supply coverage % (most recent year e.g. 2004) Sanitation coverage % (most recent year e.g. 2004) Children under five mortality rate (per 1,000 live births, 2005) Ghana 70 39.5 75 18 112 Burkina Faso 79 19.2 61 13 191 Uganda 105 37.7 60 43 136 Ethiopia 130 44.2 22 13 164 South Africa 51 Nd 88 65 68 Mozambique 99 69.4 43 32 145 India 70 24.7 86 33 74 Philippines 121 21.5 85 72 33 Honduras 121 29.5 87 69 40 Colombia 59 55.0 93 86 21 Sources: www.transparency.org; http://mdgs.un.org/; http://www.wssinfo.org/
    5. 5. Source: Stalgren, 2006 1.3 Correlation or cause?
    6. 6. 1.4 Key questions Are there causal linkages, as well as correlations, between corruption, WASH sector performance and poverty? Will increased WASH sector investment (to meet MDGS) have the desired impact without better governance? What are the most important forms of corruption and levels at which it occurs? Why might the WASH sector be prone to corruption? How much leakage should we expect to find? What could be achieved with existing investments if we tackled leakage? Should corruption ever be tolerated?
    7. 7. 2.1 Interaction framework Public to public Diversion of resources Appointments and transfers Embezzlement and fraud in planning and budgeting Public to private Procurement collusion, fraud, bribery Construction fraud and bribery Public to Citizen / consumer Illegal connections Falsifying bills and meters Public Officials Public Actors ConsumersPrivate Corruption occurs between public officials and 3 different sets of actors
    8. 8. 2.2 Interaction framework PUBLIC PRIVATE interactions PUBLIC CONSUMER interactions PUBLIC PUBLIC interactions Tendering and Procurement Construction/Operations Payment Systems Policy-making and regulating Planning/budgeting / transfers Management
    9. 9. PUBLIC PRIVATE interactions PUBLIC CONSUMER interactions PUBLIC PUBLIC interactions • Distortions and diversion of national budgets • Administrative fraud • Document falsification • State Capture of policy and regulatory frameworks • Bribery, fraud, collusion in tenders • Fraud/bribes in construction • Bribery/fraud in community procurement • Elite capture • Illegal connections • Speed bribes • Billing/payment bribes
    10. 10. PUBLIC to PUBLIC interactions Planning and budgeting • Corruption in planning and management • Bribery and kickbacks in fiscal transfers Management and Program Design • Appointments, transfers • Preferred candidates • Selection of projects Policy-making/Regulating •Diversion of funds •Distortions in decision- making, policy-making Early warning indicators • Monopolies/tariff abnormalities • Lack of clarity of regulator/provider roles • Embezzlement in budgeting, planning, fiscal transfers • Speed/complexity of budget processes • No. of signatures • % spending on capital intensive spending • Unqualified senior staff • Low salaries, high perks, cf. HH assets • Increase in price of Anti-corruption Measures • Policy and tariff reform • Separation • Transparent minimum standards • Independent auditing • Citizen oversight and monitoring • Technical auditing • Participatory planning and budgeting • Performance based staff reforms • Transparent, competitive appointments
    11. 11. Early warning indicators • Same tender lists • Bidders drop out • Higher unit costs • Variation orders • Low worker payments • Single source supply • Change in quality and coverage Anti-corruption Measures • Simplify tender documents • Bidding transparency • Independent tender evaluation • Integrity pacts • Citizen oversight and monitoring • Technical auditing • Citizen auditing, public hearings • Benchmarking • SSIP support mechanisms PUBLIC to PRIVATE interactions Procurement • Bribery, fraud, collusion in tenders Construction • Fraud/bribes in construction Operations • Fraud/bribes in construction
    12. 12. PUBLIC to CONSUMER interactions Construction • Community based WSS – theft of materials • Fraudulent documents Operations • Admin corruption (access, service, speed) Payment systems • meter, billing and collection – fraud and bribery Early warning indicators • Loss of materials • Infrastructure • failure • Low rate of faults • Lack of interest in connection campaigns • Night time tanking • Unexplained variations in revenues Anti-corruption Measures • Corruption assessments • Citizen monitoring and oversight • Report cards • Transparency in reporting • Citizen oversight and monitoring • Complaints redressed • Reform to customer interface (e.g. women cashiers)
    13. 13. 2.3 Chain of impacts
    14. 14. 2.4 Local governance Specific governance challenges at local level require different approaches Decentralisation brings new challenges and opportunities Corruption has more immediate and corrosive impact Improvements may also be more rapid and wide reaching In WASH, community management as a key paradigm Tackling poverty is a key issue
    15. 15. 3.1 Decentralization versus centralization in India Davies (2004) identified high levels of corruption Petty corruption (falsify meter reading, speed repairs etc) Kickbacks from contractors Transfers within administration Decentralisation linked to higher levels of corruption. Why? Opportunity to plan activities linked to decentralisation programmes
    16. 16. 3.2 Report cards in India Public Affairs Centre (PAC) in Bangalore developed report cards for citizens to rank performance of public service agencies (including water) Monitored public satisfaction with staff behaviour, quality of service, information, and corruption (speed money) Initially showed lows levels of public satisfaction, agencies not citizen friendly, lacked customer orientation, corruption a serious problem Second survey 5 years later revealed limited improvements Third survey 4 years later showed noticeable progress by all agencies
    17. 17. 3.2 Report cards in India Report cards influenced key officials in understanding perceptions of ordinary citizens Public agencies launched reforms to improve the infrastructure and services Government agencies showed greater transparency and more responsiveness CRCs acted as a catalyst in the transformation of services in Bangalore
    18. 18. 3.3 Using freedom of information laws India adopted a Right to Information Act in 2001 The citizens group Parivartan in Delhi has been active in supporting its use There have been examples where an application under the act has brought immediate results on a water issue Source: Earle & Turton
    19. 19. 3.4 Lesotho Highlands Water Project Largest international water transfer was from Lesotho- South Africa Construction contracts awarded fraudulently Foreign companies paid bribes Successful prosecutions set precedents Source: Earle & Turton
    20. 20. 3.4 Lesotho Highlands Water Project Precedents from prosecution Bribes are still illegal even if not acted on after corrupt agreement Jurisdiction can be taken where the impact is felt Crucially, courts can gain access to Swiss bank accounts Source: Earle & Turton
    21. 21. 3.5 Pipe manufacturers in Colombia Procurement is vulnerable to price fixing and collusion Private sector pipe manufacturers in Colombia introduced self-regulation Adopted an integrity pact not to pay or accept bribes Support given by professional association, Transparency International and government Half of 167 manufacturers have signed up Prices have reduced by 30%
    22. 22. 3.6 Phnom Penh, Cambodia Transformation of a public utility under difficult post- conflict (civil war) conditions High levels of illegal connections and unaccounted for water, including bribery of utility officials Indicators 1993 2006 Staff per 1,000/connections 22 4 Production Capacity 65,000 m3 /day 235,000 m3 /day Non Revenue Water 72% 8% Coverage area 25% 90% Total connections 26,881 147,000 Metered coverage 13% 100% Supply Duration 10 hours/day 24 hours/day Collection Ratio 48% 99.9% Total revenue 0.7 billion riels (US$180,000)1 34 billion riels (US$8.7 million) Financial situation Heavy subsidy Full cost recovery
    23. 23. 3.6 Phnom Penh, Cambodia Corruption was tackled effectively, due to • Leadership • Culture of change • External support Led to reform and new investment
    24. 24. 3.6 Phnom Penh, Cambodia Human resources management improved Revenue collection improved Rehabilitation of services achieved harnessing local resources Illegal connections were tackled, reducing unaccounted for water Tariffs were increased
    25. 25. 3.7 Sanitation in Kerala The NGO SEUF targeted diversion of funds to reduce costs (by ½ to ⅔) in latrine construction Mix of strategies to tackle corruption: • more information • extra checks & spot checks • public postings • double signatures • action on complaints at lowest level • referral of problems
    26. 26. 3.8 Money diverted from education in Uganda  Public expenditure tracking (PET) survey in Uganda  Tracked central funds allocated for school construction  Only 13% of funds arrived at schools  Transparency campaign published, information about the grants  Led to capture being reduced from 87% to 18%  Schools near newspaper and communication points did better in receiving their funds Source: Reinikka, R. and Smith, N. Undated
    27. 27. 3.9 Kecamatan Development Project (KDP)  Tackling grassroots corruption in a large rural development project  KDP – a central government project focused on poor villages and highly dispersed  Very high risk environment  Weak institutions for control  Mapping is a key step in tackling this Source: Guggenheim (2007)
    28. 28. 3.9 Kecamatan Development Project (KDP) Mapping identified sources of corruption • Bribing officials to get projects • Cuts taken at high levels • Illicit fees • Under-delivery of materials/ work • Embezzlement by staff
    29. 29. 3.9 Kecamatan Development Project (KDP) Solutions identified • Reducing discretion • Reducing transactions • Promoting competition • Lowering costs of acquiring information • Promoting social controls • Strengthening formal oversight • Applying sanctions Effect of Audits on Percent Missing Wages Wages Materials Materials 0% 5% 10% 15% 20% 25% 30% 35% Control Audits PercentMissing
    30. 30. 4.1 Pro-poor anti-corruption strategies Are all information, transparency and accountability initiatives likely to benefit the poor? Could they even be harmful? Evidence shows that anti- corruption actions can harden and shift its forms Source: Janelle Plummer (2007)
    31. 31. 4.2 Diagnose  A key starting point is to understand what types and level of corruption exist  Frameworks can be used to map different types of corruption and help to identify appropriate solutions  Severe lack of diagnosis of corruption and its impacts on the poor in the WASH sector  Poorly informed anti-corruption activities risk merely hardening or shifting it to other forms  Look before you leap Diagnose Monitor Target Mitigate Connect solutions
    32. 32. 4.3 Target  Focus on water and sanitation services that reach the poor  May include small-scale providers and community managed systems  Local government a key level in WASH - an opportunity to prevent corruption before it takes root  Decentralisation to service providers and agencies that are closer to communities can encourage more accountability  Weak local agencies may be more susceptible to being corrupted than stronger State agencies  Diagnose Target Connect solutionsMitigate Monitor
    33. 33. 4.4 Example: Indonesia 15% get water directly from utility networks 20% get water indirectly or illegally 65% rely on community-managed systems, self-supply and small-scale providers
    34. 34. 4.5 Connect solutions Effective anti- corruption programmes combine a mix of strategies. Supply side measures include high level institutional reforms to tackle corruption Demand side measures strengthen the ability of poor people to seek improvements Diagnose Target Connect solutionsMitigate Monitor
    35. 35. 4.6 Mitigate In some places petty corruption may be a necessary evil to get access to services Anti-corruption measures take away this coping strategy Programmes should do no harm put back what is lost identify alternatives so that the poor do not need to engage in petty corruption Diagnose Target Connect solutionsMitigate Monitor
    36. 36. 4.7 Monitor WASH sector has little experience in reducing levels of corruption Vital to observe which strategies are effective and which aren’t Implementation programmes should be flexible and build on what works best Diagnose Target Connect solutionsMitigate Monitor
    37. 37. 4.8 Key messages Be informed and anticipate Be inspired by examples and success stories Use multiple strategies to improve access to information, transparency and accountability…and prevent corruption Act in partnerships Learn what works
    38. 38. 5.1 Links and further information  www.waterintegritynetwork.net is the website of the Water Integrity Network based at Transparency International in Berlin  www.irc.nl/transparency includes materials from the IRC International Water and Sanitation Centre and links to other useful sources  www.transparency.org is the website of Transparency International, a global civil society organisation in anti- corruption
    39. 39. 5.2 Links and further information Astana, A.N. (2004). ´Corruption and decentralization: evidence from India’s water sector´. In proceedings of the 30th WEDC International Conference, held at Laos, 2004.Loughborough, London, WEDC. Balcazar, A.R. 2006. The establishment of an anti-corruption agreement with pipe manufacturing companies: a Colombian experience [online] Available at www.waterintegritynetwork.net/page/238 (A 5 minute video about the Colombian integrity pact between pipe manufactures can be viewed at www.waterintegritynetwork.net/page/254) Davis, J. (2004). ´Corruption in Public Service Delivery: Experience from South Asia’s Water and Sanitation Sector´. In: World Development, vol. 32, no. 1, pp. 53–71, UK, Elsevier Ltd. www.elsevier.com/locate/worlddev González de Asís, M., O’Leary, D., Butterworth, J. & Ljung, P. (forthcoming) Training modules for the Programa para mejorar la transparencia, la rendición de cuentas y el acceso a la información en el sector del agua en Honduras y Nicaragua. World Bank Institute. Available in English and Spanish (forthcoming) Gonzalez de Asis, M. (forthcoming) Reducing Corruption at the Local Level. World Bank. Plummer, J., & Cross, P., 2006 A framework for tackling corruption in the water and sanitation sector in Africa. In proceedings of the 32nd WEDC International Conference held in Sri Lanka, 2006. Loughborough, London, WEDC. Plummer, J. 2007. Making Anti-Corruption Approaches Work for the Poor: Issues for consideration in the development of pro- poor anti-corruption strategies in water services and irrigation. Swedish Water House, SIWI and WIN. [online] Available at www.swedishwaterhouse.se Satyanand, P.M. and Malick, B. 2007. Engaging with citizens to improve services: overview and key findings. Water and Sanitation Program-South Asia, New Delhi, India [online] Available at www.wsp.org Shordt, K., Stravato, L., & Dietvorst, C. 2007. About Corruption and Transparency in the Water and Sanitation Sector. Thematic Overview Paper 16. IRC International Water and Sanitation Centre, the Netherlands [online] Available at www.irc.nl Sijbesma, C., Mathew, S., and Balachandra Kurup, K. (forthcoming) Preventing corruption in sanitation: A case from Kerala, India. World Bank Institute, Washington. Sohail, M & Cavill, S. 2007. Accountability arrangements to combat corruption – case study synthesis report and case study survey reports. Partnering to combat corruption series. [online] Available at www.lboro.ac.uk/wedc/publications/ Stålgren, P. 2006. Corruption in the Water Sector: Causes, Consequences and Potential Reform. Swedish Water House Policy Brief No. 4, SIWI, Stockholm, Sweden [online] Available at www.swedishwaterhouse.se TI & UN-Habitat. 2004. Tools to support transparency in local governance. Urban governance toolkit series [online] Available at www.transparency.org/tools/e_toolkit/ TI. The 2008 Global Corruption Report is focused on the water sector. Forthcoming at www.transparency.org Woodhouse, A. 2002. Village corruption in Indonesia: Fighting corruption in the World Bank’s Kecamatan Development Program. World Bank, Washington.
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