Why fight corruption?

By: Carin Norberg, Director, the Nordic Africa Institute. Until December 2005 Programme Manager at Transparency International Secretariat, Berlin.

In November 2005 Transparency International (TI) held its Annual Membership Meeting in Berlin. Peter Eigen received thunderous applause from the around 300 participants as he stepped down from the position as chairman of the international board. From the kitchen-size organisation he founded in 1993 to the worldwide leading anti-corruption NGO he is handing over to the new chair, Huguette Labelle, TI has moved to the centre of global debate. When I joined the Secretariat of TI in Berlin in 2002 the achievements of TI were one factor which attracted me to the organisation. Another was TI’s mission and aim: to create change towards a world free of corruption. Below I will give you some insights into the work of TI, which may explain why TI has been so successful but may also indicate challenges ahead.

Governance and organisational structure
TI was created in 1993 as a non-profit organisation under German law. It is governed by a twelve-member Board of Directors elected on a rotational basis at its annual membership meetings. There are individual members and members representing the National Chapters. As the number of National Chapters has grown over the years the number of individual members has decreased. Every TI National Chapter is a distinct legal organisation, which elects its own board of directors and manages its own finances. An Advisory Council, consisting of around 40 prominent individuals, brings expertise and international experience to assist the organisation. The Board, the Advisory Council, the Secretariat and the National Chapters together form the TI movement.

The core of the TI movement is its National Chapters. A majority of National Chapters have been created from the ground, others were formed within existing NGOs. All national chapters are required to comply with TI’s non-partisan, non-investigative approach. They must also adhere to TI’s basic strategy of coalition-building with government, the private sector and civil society. National Chapters have however a great degree of latitude in determination of their agendas and action plans.

The TI Secretariat supports the Board and the National Chapters and implements the movement’s global agenda. The work of the Secretariat is organised around three areas: advocacy, global programmes and resources.

Resource Persons support both National Chapters and the Secretariat. They are experts from many countries who volunteer their services on a pro bono basis.

The relatively loose structure of the TI movement is, as I see it, one explanatory factor of its success. But with this success also comes a major challenge ahead, the task to keep this rapidly growing movement together. This challenge is reflected in the debates held at the annual membership meetings. Governance issues have been very much at the core of discussion during the last couple of years. The debate has centred on how to create a democratic structure that enables members to influence the policy debate and participate in strategic decisions and, at the same time, to keep the flexibility. An important governance issue is the process of accreditation of new national chapters and re-accreditation of already established ones. What is at stake here is the credibility of the TI name and today’s vulnerability to media exposure. For an organisation set on fighting corruption and infusing transparency and accountability into the global value system its own internal structure must of course meet the highest standards. At the annual membership meeting in Seoul 2003 a new accreditation procedure was therefore adopted addressing precisely this challenge.

TI's approach
From the very beginning, TI has chosen to play the role of catalyst. TI has adopted a holistic form of diagnosis, the National Integrity System (NIS). The system emphasises ‘horizontal accountability’, where power is dispersed and where checks and balances are in place to prevent corruption from permeating the public and private sectors of society. The system is designed to prevent corruption from occurring in the first place, rather than relying on penalties after the event. The TI definition of corruption, “the abuse of entrusted power for private use”, is today an accepted definition in academic circles too.

T I’s advocacy work has been one major contributing factor to the increased awareness of the different faces of corruption. In addition there are, in my view, three decisive decisions, which have laid the foundation for TI’s successes over the years.

One important initial decision was to establish a network of National Chapters in recognition of the importance of civil society providing leadership in the fight against corruption. Government and business are part of the corruption problem themselves and have in many cases neither the political will nor the global reach to do something about it. Civil society on the other hand can form alliances with other national and international organisations to make corruption part of their agenda and pressure governments and international institutions for change.

The second important decision was to recognise corruption’s supply and demand side. Peter Eigen came from a position in the World Bank. In his daily work he had observed the negative consequences of corruption. Grand corruption sprang out of major business contracts with private companies from the developed countries doing business with developing countries. He understood that it was useless to fight corruption at the receiving end if the companies continued to offer various ‘benefits’ in the competition for contracts. TI was therefore a strong supporter of and contributor to the development of the OECD Anti-Bribery Convention and has been actively involved in the work leading up to the UN Anti-Corruption Convention.

The third important decision was “to give corruption a face”. In 1995 TI published the first Corruption Perception Index (CPI). The CPI is a poll of polls, reflecting the perceptions of business people and country analysts, both resident and non-resident. The index has become a yearly event and countries eagerly wait to see how they score in comparison with other countries. From a modest start the list has grown to include some 159 countries in 2005. The CPI has not always met with enthusiasm. Both friends of TI and others have been critical. Some TI National Chapters have argued that their efforts to fight corruption are not properly reflected in the index, which is a composite index using an average from three years to avoid sudden fluctuations. TI has therefore developed two additional global indexes, the Bribe Payers Index and the Global Corruption Barometer. TI National Chapters have also developed national indexes to measure actual and perceived corruption at country level or in particular sectors of a given country.

From 'showing' to 'doing'
TI started off with the aim of putting corruption on the global agenda. I think it is fair to say that the organisation has been successful in doing so. Corruption is today much more frequently mentioned, even to the extent that one would think that corruption has increased over the years. The challenge for TI now is to show how corruption risks can be reduced. The most important analytical tool continues to be the NIS. Does this mean that corruption fighters must always address the whole national integrity system?

T I has realised that it is both possible and desirable to address corruption at many different levels seizing the opportunity wherever it is possible. To this effect TI has developed various tools such as the Corruption Fighter’s Tool Kit, Business Principles for Countering Bribery and Integrity Pacts to help governments, business and civil society groups to address corruption. Under an Integrity Pact, to give one example, bidders competing for the supply of goods and services provide a binding assurance that they have not paid, and will not pay any bribes.

Advocacy work continues to play an important role through the dissemination of information about corruption. The annual Global Corruption Report (GCR) includes country reports and the latest research data on corruption but it also presents a selected theme providing specific corruption information and recommendations. The theme of GCR 2006 is ‘Health and Corruption’.

Concluding remarks
In 2004 TI organised an important discussion about measures taken by a number of new governments which had recently come into power on an explicit anti-corruption agenda. Developments during 2005 indicate that there are many obstacles ahead and that the analytical tools as well as actions to be taken have to be further discussed and developed.

In countries with anti-corruption governments there is an obvious risk that so called ‘embedded networks’ continue to make their impact. These networks seem to be extremely hard to uproot as examples from Kenya and more recently from Peru show. For an organisation such as TI, with an explicit strategy of working ‘with’ rather than ‘against’, there is also the risk of collusion between the erstwhile anti-corruption fighters as they become part of the establishment.

Despite the enforcement of the OECD Anti-Bribery Convention in 1999, almost half of the companies – 2,200 out of some 4,500 – investigated by the Oil-for-Food Independent Inquiry Committee (also known as the Volcker Committee) were found to have been paying bribes, according to the report published in October 2005.

In conclusion, it is more important than ever to identify the forces behind and the effects of corruption and to strengthen the countervailing powers. TI can look back on a successful past decade. I hope that civil society, including organisations such as TI, and independent researchers will join forces to unveil the power structures of corruption all over the world.

Facts on Transparency International
Transparency International (TI) was founded in 1993. Its mission is to create change towards a world free from corruption.The TI movement consists of the National Chapters, the International Secretariat, the Board and the Advisory Council. TI has 95 National Chapters (2005) of which 25 are National Chapters in Formation (not yet fully recognised as National Chapters with voting rights at the Annual Membership Meeting).

TI does not expose individual cases but focuses on prevention and reforming systems. TI publishes annually the Global Corruption Report, the Corruption Perception Index and the Global Corruption Barometer.

TI’s International Secretariat is based in Berlin. More information at www. transparency.org

Selected reading
Kututwa, Noel, African Anti-Corruption Commitments: A review of eight NEPAD countries, African Human Security Initiative Paper 7, January 2005.

Local Corruption Diagnostics and Measurement Tools in Africa, Anna Hakobyan and Marie Wolkers, TI (published on www.u4.no).

Muna, Akere T., Understanding the African Union Convention on Preventing and Combating Corruption and Related Offences. Berlin: Transparency International, 2003.

TI Source Book 2000, Confronting Corruption: The Elements of a National Integrity System. TI and Jeremy Pope, 2000.

TI Global Corruption Report 2005 (see also GCR 2004, 2003 and 2001). TI and Pluto Press, 2005.

TI Anti-Corruption Fighter’s Tool Kit, 2003.

TI Education Tool Kit, 2005.

www.transparency.org,TI website (see special section on Africa and TI National Chapters in Africa).

www.u4.no, Utstein Donors’Anti-Corruption Resource Centre.