Steps taken to implement the Anti-Corruption Action Plan for Asia-Pacific

Transcription

1 ADB/OECD Anti-Corruption Initiative for Asia and the Pacific Capacity Development and Governance Division Asian Development Bank Anti-Corruption Division Organisation for Economic Co-operation and Development Steps taken to implement the Anti-Corruption Action Plan for Asia-Pacific Reports to the Steering Group (8th 11th Steering Group meeting) Table of Contents Australia... 2 Bangladesh Bhutan Cambodia P.R. China Cook Islands Fiji Islands Hong Kong, China India Indonesia Japan Kazakhstan Korea Kyrgyz Republic Macao, China Malaysia Mongolia Nepal Pakistan Palau Papua New Guinea Philippines Samoa Singapore Sri Lanka Thailand Vanuatu Vietnam

2 Steps taken to implement the Anti-Corruption Action Plan for Asia-Pacific: Australia 2 Australia Steering Group meeting (May 2006) Steering Group meeting (Nov. 2006) PILLAR 1 DEVELOPING EFFECTIVE AND TRANSPARENT SYSTEMS FOR PUBLIC SERVICE A. Integrity in Public Service 1. Systems of hiring public officials: Systems for compensation Transparent hiring and promotion, independence of the civil service On 5 February 2008, the Australian Government announced new arrangements in the selection of most Commonwealth agency heads, except Departmental Secretaries, and other statutory office holders. All appointments subject to a merit-based assessment process are overseen by the departmental Secretary and the Australian Public Service Commissioner and relevant positions will be advertised under a common framework. The new arrangements and guidelines for their detailed operation are available at: < andtransparency.htm>. Oversight of discretionary decisions and personnel discretionary powers Personnel systems such as rotation of assignments 2. Ethical and administrative codes of conduct: Prohibitions or restrictions on conflicts of interest The Australian Government is strengthening the role and responsibilities of the Australian Public Service Commission (the Commission),

3 Steps taken to implement the Anti-Corruption Action Plan for Asia-Pacific: Australia 3 Steering Group meeting (May 2006) Steering Group meeting (Nov. 2006) particularly in providing guidance and advice on the ethical aspects of the APS Values and the APS Code of Conduct. This will include a Code for Contact With Lobbyists, applicable to Ministers, public servants and the Australian Defence Force (ADF). Relevant officers will only be able to deal with lobbyists who are registered and there will be restrictions on former senior public servants and ADF personnel who seek post-separation employment as lobbyists. Details on the Code and how it will apply to the APS will be publicly available by circular and the Commission s website. In July 2007, the Commission issued updated Post Separation Employment: Policy Guidelines to provide guidance on possible conflicts of interest and other probity issues when employees leave the APS to take up employment in fields aligned to their APS responsibilities. The revised guidelines are on the Commission s website: < htm>. Disclosure and/or monitoring of, for example, personal assets and liabilities In June 2007, following a review of policies requiring senior APS staff to declare financial and other personal interests, the Commission issued revised Declarations of Personal Interest Guidelines requiring public sector decision-makers to maintain an appropriate level of transparency about their personal interests. The revised guidelines are on the Commission s website: < htm>. Systems regulating contacts between government officials and business services users, particularly

4 Steps taken to implement the Anti-Corruption Action Plan for Asia-Pacific: Australia 4 Steering Group meeting (May 2006) Steering Group meeting (Nov. 2006) in corruption-prone areas Promotion, training and supervision of officials viz. codes of conduct The Law Enforcement Integrity Commissioner Bill 2006 was introduced into Parliament and is expected to be passed by June The legislation will establish an independent Australian Commission for Law Enforcement Integrity to investigate corruption issues in the agencies under its jurisdiction. Where the Commission finds evidence of corrupt conduct, it will refer the case to prosecuting authorities and officials responsible for disciplinary or administrative action. The Commission will initially have jurisdiction over the Australian Federal Police and the Australian Crime Commission. The Law Enforcement Integrity Commissioner Act 2006 received royal assent on 30 June The recruitment process for the Commissioner s position is being finalized. The entity is anticipated to be operational by December The Australian Commission for Law Enforcement Integrity (ACLEI) became operational on 30 December Mr. Phillip Moss was appointed the ACLEI Commissioner on 23 July An Acting Commissioner, Professor John McMillan, had handled ACLEI operations prior to this appointment. In July 2006, the Australian Public Service Commissioner reviewed and amended the material in chapters 10 and 14 of the APS Values and Code of Conduct in practice: Guide to official conduct for APS employees and Agency heads (the Guide) to refer explicitly to the offence of foreign bribery and duties for APS employees to report suspected breaches of this offence. The Guide is included in training for all APS employees. The Department of Foreign Affairs and Trade conducts pre-departure training for officers going on overseas posting, relating to foreign bribery, detailing the offence and obligation to report any instances of foreign bribery. DFAT has also conducted outreach to various overseas missions to provide information to DFAT, Austrade, DIAC, AusAID and other officers about the offence of foreign bribery and their obligations to report it. In 2007, Australia chaired the APEC Anti-Corruption and Transparency Experts Task Force in the development of a Code of Conduct for Public Officials. Australia is working toward implementation of this Code. Promoting reporting by officials of corruption and whistleblower protection The Australian Public Service Commissioner recently amended the APS Values and Code of Conduct in Practice: Guide to Official Conduct for APS Employees and Agency Heads to clarify the requirement for employees to report instances of bribery that they observe in the course of their employment, particularly when working overseas.

5 Steps taken to implement the Anti-Corruption Action Plan for Asia-Pacific: Australia 5 Steering Group meeting (May 2006) Steering Group meeting (Nov. 2006) B. Accountability and Transparency Accountability of public service through effective legal frameworks, management practices and auditing procedures: Measures and systems to promote fiscal transparency The Australian Taxation Office has issued guidelines for tax auditors to provide instruction on identifying bribe payments in company records and other practical guidance on bribery matters. International standards and practices to regulate and supervise financial institutions Auditing of the public administration and the public sector Public procurement procedures and adequate simplified administration procedures Institutions for public scrutiny and oversight Availability of information on the processing of applications, funding of political parties and electoral campaigns and expenditure The Australian Government is considering amendments to legal provisions governing donations to political parties, in order to increase transparency of donations and restrict the size and source of donations. Simplification of the business regulatory environment

6 Steps taken to implement the Anti-Corruption Action Plan for Asia-Pacific: Australia 6 Steering Group meeting (May 2006) Steering Group meeting (Nov. 2006) PILLAR 2 STRENGTHENING ANTI- BRIBERY ACTIONS AND PROMOTING INTEGRITY IN BUSINESS OPERATIONS A. Effective Prevention, Investigation and Prosecution Effective measures to actively combat bribery: Sanctions for bribery of public officials In 2005, Australia underwent a mutual evaluation to assess its implementation of the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions. The evaluation report, published in January 2006: acknowledges the Government s strong commitment to combating foreign bribery. commends Australia for undertaking a campaign to raise awareness of the foreign bribery offence. makes a number of recommendations for improving Australia s efforts to combat foreign bribery. The Government is considering these recommendations. The International Trade Integrity Bill 2007 was recently introduced in Parliament. The principal features of the Bill are: Amendments to the Criminal Code Act 1995 to ensure the defence under section 70.3 to a charge of bribing a foreign public official is only available where the advantage paid to a foreign official is expressly permitted or required by written law, regardless of the results of payment or the alleged necessity of payment. The International Trade Integrity Act 2007 received royal assent on 24 September The Act introduced the amendments discussed at the meeting in September The penalties for the offence of foreign bribery are currently under review as part of a wider review of Commonwealth criminal law penalties. Amendments to the Charter of the

7 Steps taken to implement the Anti-Corruption Action Plan for Asia-Pacific: Australia 7 Steering Group meeting (May 2006) Steering Group meeting (Nov. 2006) United Nations Act 1945 to introduce new offences (against legal and natural persons) relating to contraventions of a UN sanction in force in Australia, and to grant investigative powers to the relevant agencies. Amendments to the Customs Act 1901 to introduce new criminal offences for importing/exporting goods sanctioned by the United Nations without valid permission, and for providing false or misleading information when applying for permission to import/export such goods. It is not possible to predict when the Bill will pass, but it is a priority for the Government. Existence and enforcement of anti-money laundering legislation In late 2006, Parliament passed the Anti-Money Laundering and Counter- Terrorism Financing Act The AML/CTF Act will come into force in stages. The legislation regulates certain providers of financial and other services. Consultation in relation to the proposed second tranche has commenced. The AML/CTF Act contains regulatory obligations and civil penalties for their breaches. Criminal money laundering offences are in Division 400 of the Criminal Code. The Australian Transaction Reports and Analysis Centre (AUSTRAC) continues to implement the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (AML/CTF Act). Several sections of the Act came into effect in December From 12 December 2007, all reporting entities are required to have in place an AML/CTF program, as well as customer identification and verification procedures. Reporting entities were also required to submit a compliance report to AUSTRAC by 31 March The compliance reports provide AUSTRAC and the reporting entity with an indication of their progress in implementing their AML/CTF obligations. Reports covered the period from 13 December 2006 to 31 December In December 2007, AUSTRAC released the following tools to assist reporting entities understand their obligations

8 Steps taken to implement the Anti-Corruption Action Plan for Asia-Pacific: Australia 8 Steering Group meeting (May 2006) Steering Group meeting (Nov. 2006) under the AML/CTF Act. a. AUSTRAC Online, an information portal to help entities lodge their compliance reports. b. AUSTRAC Regulatory Guide, a guide to assist reporting entities understand their obligations under the law. c. AUSTRAC Typologies and Case Studies Report 2007, which provides an inside perspective on current money-laundering and terrorismfinancing methods and indicators. d. Introduction to AML/CTF, the first course in AUSTRAC's AML/CTF e- learning program. In April 2008, AUSTRAC released the Public Legal Interpretation series, which interprets the legislation underpinning Australia s AML/CTF reforms. This series complements the other resources developed for reporting entities by the agency. Rules concerning investigation and prosecution of bribery The Australian Federal Police has recently amended its Case Categorisations Prioritisation Model (CCPM) to clearly classify corruption as a category of crime with a high impact. The Australian Federal Police and Attorney-General s Department have recently committed to amending the Guidelines for Referring Politically Sensitive Matters to the AFP and the Commonwealth Fraud Control Guidelines. The amendments will clarify that a politically sensitive matter should be referred to the AFP at the same time the Minister is notified. On 11 September 2006, the Commonwealth Director of Public Prosecutions issued a direction to all prosecutors instructing them that, when deciding whether to prosecute a person for bribing an foreign public official under Division 70 of the Criminal Code, the Director of Public Prosecutions should not be influenced by: Considerations of Australia s or any other country s economic interest;

9 Steps taken to implement the Anti-Corruption Action Plan for Asia-Pacific: Australia 9 Steering Group meeting (May 2006) Steering Group meeting (Nov. 2006) The potential effect upon Australia s relations with another country; or The identity of the persons involved (individuals and corporate entities). This formal direction is not a public document but prosecutors are required to comply with it. Availability of bank, financial or commercial records and secret bank information Inter-agency co-operation In December 2007, the Australian Government established an Anti- Corruption Interdepartmental Committee. The Anti-Corruption IDC provides coordinated advice to Government, and other bodies including the UN and OECD, on policy related to preventing, controlling and detecting corruption. The Anti-Corruption IDC assists the Australian Government to meet its international obligations in relation to corruption, with particular regard to the United Nations Convention against Corruption, the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions and the APEC Anti-Corruption Taskforce. Protection of persons who assist the authorities Training and resources International cooperation including exchange of information and evidence, extradition, and search, seizure, forfeiture and repatriation of assets In July 2005, the Australian Government established a specialist Regional Legal Assistance Unit within the Attorney- General's Department to assist Southeast Asian countries develop legislation to implement international counter-terrorism instruments and to improve legal frameworks for international legal cooperation in the region.

10 Steps taken to implement the Anti-Corruption Action Plan for Asia-Pacific: Australia 10 Steering Group meeting (May 2006) Steering Group meeting (Nov. 2006) In December 2005, Australia and Indonesia co-hosted a regional workshop at the Jakarta Centre for Law Enforcement Cooperation on the practical aspects of making and receiving requests for legal assistance using model documents in a scenariobased exercise. Australia sponsored nine developing countries to attend the workshop. Australia s Anti-Money Laundering Assistance Team AMLAT has assisted Pacific Island countries develop systems to counter money laundering and terrorist financing. A recent AMLAT awareness-raising workshop hosted by the Central Bank of the Solomon Islands included speakers from the Asia Pacific Group on Money Laundering, the Pacific Financial and Technical Assistance Centre and Westpac, and financial intelligence unit experts from the Cook Islands. Australia s Anti-Money Laundering Assistance Team (AMLAT) continued its efforts in assisting Pacific Islands countries in their efforts to curb money laundering: In May 2006, AMLAT ran an AML/CFT awareness raising workshop in Tonga and provided advice on Fiji s draft regulations and reporting guidelines. In June 2006, AMLAT hosted an FIU workshop for representatives from 14 Pacific Island Financial Intelligence Units. Mentoring visits were conducted with the FIU in the Solomon Islands in March, May, July and September In July 2006, AMLAT participated in an IMF mission to PNG to assess AML/CFT technical assistance requirements. AMLAT is currently working with PNG on a plan for implementing AML/CFT legislation. AMLAT advisers visited Nauru in July 2006 to assess Nauru s AML/CFT needs and to develop a plan for AMLAT assistance. In October 2006, an AMLAT adviser visited the Cook Islands to provide guidance to the Cook Islands FIU and Police on a possible money laundering investigation. Australia's Anti-Money Laundering Assistance Team (AMLAT) has continued to assist Pacific Island countries to combat money laundering and terrorist financing: In December 2006, AMLAT ran antimoney laundering (AML) seminars for the Federated States of Micronesia law enforcement and financial sectors, and conducted an awareness-raising workshop in Palau. In February 2007, an AMLAT adviser conducted a mentoring visit to the Cook Islands to provide advice to the Financial Intelligence Unit (FIU). In March 2007, FIU-establishment visits were made to Papua New Guinea and Nauru, with additional follow-up visits for both countries in May and June, respectively. Training for customs officials in AML/CFT was also delivered in the Solomon Islands. An International Crime Cooperation Workshop was held in April 2007, bringing together prosecutors and law enforcement officers from 14 Pacific Island countries to discuss AML, mutual assistance, extradition and proceeds of crime issues. In May 2007, a sub-regional judicial workshop was held in Palau on proceeds of crime matters in the AMLAT Australia's Anti-Money Laundering Assistance Team (AMLAT) has continued to assist Pacific Island countries to combat money laundering and terrorist financing: In November 2007, AMLAT hosted a sub-regional judicial workshop in PNG for judicial officers from PNG, Solomon Islands and Vanuatu, focusing on the adjudication of proceeds of crime matters. In December 2007, AMLAT developed and rolled out a joint pilot toolkit and training project with the Oceania Customs Organisation (OCO), Pacific Anti-Money- Laundering Program and the Fiji Financial Intelligence Unit (FIU) on border currency reporting. AMLAT has continued to provide assistance to countries in the region to strengthen respective FIUs and implement border currency reporting measures, including mentoring visits to FSM in October 2007, Kiribati in December 2007 and Tuvalu and Nauru in April In December 2007, an AMLAT adviser provided mentoring support to prosecutors in Nauru. In April 2008, an AMLAT adviser visited the Solomon Islands to assist

11 Steps taken to implement the Anti-Corruption Action Plan for Asia-Pacific: Australia 11 Steering Group meeting (May 2006) Steering Group meeting (Nov. 2006) region. At the Annual General Meeting of the Oceania Customs Organisation held in Honiara, an AMLAT adviser presented on tradebased money laundering (TBML) and border currency reporting (BCR) in the Pacific. TBML and BCR projects have commenced and will continue in In June 2007, AMLAT co-hosted a workshop with the Australian Federal Police for FIUs and transnational crime units. Representatives from 14 Pacific Island countries attended. AMLAT also provided Pacific FIUs with access to World Check, a database on known fraudsters, politically-exposed persons, and stolen passports. In July 2007, AMLAT hosted a regional Financial Investigation Workshop in Samoa, conducted financial investigation mentoring in the Cook Islands, conducted an FIUestablishment scoping visit to Kiribati, attended the Annual APG Meeting in Perth, and funded the attendance of Papua New Guinea representatives. AMLAT has deployed an adviser and a coordinator to Suva to work in the region. the Financial Intelligence Unit (FIU) and Customs Service on border currency reporting and trade-based money laundering projects. In December 2007, an AMLAT adviser provided mentoring support to prosecutors in Nauru and visited Solomon Islands to assist the Financial Intelligence Unit (FIU) and Customs Service on border currency reporting and trade-based money laundering projects. AMLAT has continued to provide support to Papua New Guinea, including initial training for FIU staff in September 2007, involvement in an AUSTRAC IT needs assessment for the FIU in September 2007, and training for regional reporting entities across PNG in September 2007 and March In February 2008, an AMLAT adviser completed a review of the draft Federated States of Micronesia Financial Transactions Reporting Bill against the FATF recommendations. An AMLAT Adviser has been providing ongoing training and mentoring support to the Fiji Police s Anti-Money Laundering Unit since February In April 2008, AMLAT co-hosted a joint regional workshop with PALP, the Asia-Pacific Group on Money Laundering Secretariat and the International Monetary Fund on the regulation of Non-Profit Organisations in Fiji. In April 2008, AMLAT hosted a regional International Crime Cooperation workshop in Brisbane for prosecutors, police and justice agency officials focusing on extradition, mutual assistance and

12 Steps taken to implement the Anti-Corruption Action Plan for Asia-Pacific: Australia 12 Steering Group meeting (May 2006) Steering Group meeting (Nov. 2006) the proceeds of crime. In April 2008, the second placement of an AMLAT sponsored, regional, ongoing proceeds of crime prosecution pairing program with the Commonwealth Director of Public Prosecutions began with a prosecutor from Vanuatu. A third placement is likely to begin in August AUSTRAC The AML/CTF Act enables the AUSTRAC CEO to exchange AUSTRAC information, including financial intelligence, with foreign counterpart agencies, subject to the provision of undertakings as to confidentiality and use of the information. These undertakings are incorporated in Exchange Instruments, such as Memoranda of Understanding (MOUs). AUSTRAC currently has 49 exchange instruments with foreign counterpart agencies and continues to exchange financial intelligence under these instruments. AUSTRAC has recently finalised a further four MOUs which will be signed in May AUSTRAC is negotiating with a foreign counterpart regarding an MOU for the exchange of regulatory information. AUSTRAC continues to conduct technical assistance and training (TA&T) programs in the South East Asian region under the South East Asia Counter Terrorism Program. AUSTRAC also provides IT assistance to various Pacific jurisdictions, funded through the Australian Agency for International Development (AusAID) Pacific Governance Support Program funding. AUSTRAC s TA&T modules on customer due diligence focus specifically on Financial Action Task Force Recommendation 6, which

13 Steps taken to implement the Anti-Corruption Action Plan for Asia-Pacific: Australia 13 Steering Group meeting (May 2006) Steering Group meeting (Nov. 2006) advises enhanced measures for politically exposed persons. In recognising that persons holding senior positions of public trust are more vulnerable to corruption and, subsequently, are at a higher money laundering risk, AUSTRAC s training is structured to build the capacity of FIUs and reporting institutions to detect and report any such instances. In October 2006, Australia attended the first annual conference and general meeting of the International Association of Anti-Corruption Authorities. B. Corporate Responsibility and Accountability Promotion of corporate responsibility and accountability based on international standards: Corporate governance, internal company controls such as codes of conduct, establishing channels of communication, whistleblower protection and staff training Australia is working within the APEC Anti-Corruption and Transparency Experts Task Force on a Business Code of Conduct (to be announced soon). Australia is also leading a project within the Task Force for a trial implementation of the Code of Conduct. In 2007, the Foreign Bribery Information and Awareness Pack was finalised and distributed, containing information about the foreign bribery offence, reporting foreign bribery and practical guidance on legitimate business practices and avoiding foreign bribery. The pack was distributed to over 900 Australian businesses, including the top 100 companies, over 800 small and medium enterprises and peak industry bodies such as Tourism Australia, the Group of 100 Inc and the Small Enterprise Association of Australia and New Zealand. In 2007, Australia chaired the APEC Anti-Corruption and Transparency Experts Task Force in the development of a Code of Conduct for Business. Australia is also leading a project within the Task Force for a trial implementation of the Code of Conduct.

14 Steps taken to implement the Anti-Corruption Action Plan for Asia-Pacific: Australia 14 Steering Group meeting (May 2006) Steering Group meeting (Nov. 2006) The Department of Foreign Affairs and Trade publicised the Foreign Bribery Information and Awareness Pack at meetings with industry representatives in all Australian State and Territory capitals. Non tax-deductibility of bribes The Australian Taxation Office Compliance Programme contains comments on foreign bribery and facilitation payments within the following areas: Large Market Segment; Small-Medium Enterprise Segment; and The area that covers international tax issues. The Australian Taxation Office has also recently issued bribery awareness audit guidelines to its staff. The International Trade Integrity Bill 2007 was recently introduced in Parliament and includes amendments to the Income Tax Assessment Act 1997 to: ensure that payments to foreign public officials are tax deductible only where the benefit paid is expressly required or permitted by written law, regardless of the results of payment or the alleged necessity of payment, and align the definition of facilitation payment with that in the Criminal Code Act Transparent company accounting and auditing, and penalties for false accounting The Australian Tax Office, in consultation with key external stakeholders, has prepared Bribes and Facilitation Payments: A Guide to Managing Your Tax Obligations to help businesses manage their tax obligations by providing practical guidance in the area of bribes and facilitation payments.

15 Steps taken to implement the Anti-Corruption Action Plan for Asia-Pacific: Australia 15 Steering Group meeting (May 2006) Steering Group meeting (Nov. 2006) The guide strongly recommends that businesses: have a code of conduct across the business relating to bribes have a strong internal audit function and audit committee, and act to rectify any relevant internal control weaknesses identified and reported to the board by external auditors. Administrative sanctions for bribery of public officials, e.g. denial of licenses or procurement contracts Australia s procurement and license procedures adequately allow for refusal of applications or termination of existing grants or contracts for reason of criminal behaviour. Australia has elected not to create additional procedures specific to foreign bribery. PILLAR 3 SUPPORTING ACTIVE PUBLIC INVOLVEMENT A. Public Discussion of Corruption Encouraging public discussion of corruption through: Channels and forums to discuss corruption In October 2005, the Australian Government set up a public inquiry into the conduct of the Australian companies identified in the Volcker Report on corruption relating to the UN Oil-for- Food Programme. On 24 November 2006, the Hon. TRH Cole AO RFD QC, the Inquiry s Commissioner, presented his Report to the Governor-General. The Government is responding to the Inquiry s recommendations, e.g., the International Trade Integrity Bill 2007 that is before Parliament. Public awareness campaigns The Foreign Bribery Awareness Campaign involved developing an information pack on foreign bribery, In addition to the distribution of the Foreign Bribery Information and Awareness pack by the Attorney-

16 Steps taken to implement the Anti-Corruption Action Plan for Asia-Pacific: Australia 16 Steering Group meeting (May 2006) Steering Group meeting (Nov. 2006) including the impact of bribery on the economy of developing nations, the scope of the Commonwealth offence, and how to report suspected foreign bribery. The information pack will be sent to businesses around Australia. General's Department, DFAT continues to promote awareness of foreign bribery and other forms of corruption as part of is ongoing awareness campaign about the International Trade Integrity Act DFAT maintains a website to provide public information about the implementation of the Act and about UN sanctions in force under Australian law. Since September 2007, AUSTRAC has issued the following AUSTRAC Information Circulars (AICs) on its public website that address general issues relevant to regulated entities. United Nations Security Council Resolution 1803 Regarding Iran's Nuclear Activities (AIC No. 57) Financial Action Task Force (FATF) statement on Uzbekistan, Iran, Pakistan, Turkmenistan, Sao Tome & Principe and the northern part of Cyprus. (AIC No. 56) Reserve Bank of Australia Media Release Sanctions Against Burma (AIC No. 55) Financial Action Task Force (FATF) Statement on Iran (AIC No. 54) Reserve Bank of Australia Media Release - Update to Sanctions Against (the former) Yugoslavia (AIC No. 53) Attorney-General's Department Media Release Three Terrorist Organisations Re-listed (AIC No. 52) The Department of Foreign Affairs and Trade (DFAT) has incorporated foreign bribery into its program of domestic and international outreach activities to Australian businesses trading or operating overseas. DFAT is working with other Commonwealth agencies to broaden awareness of the scope of the offence among Australian overseas

17 Steps taken to implement the Anti-Corruption Action Plan for Asia-Pacific: Australia 17 Steering Group meeting (May 2006) Steering Group meeting (Nov. 2006) officials. Supporting of nongovernmental organizations A number of Commonwealth Government agencies have contributed to the Whistling While They Work: Enhancing Theory and Practice of Internal Witness Management in Public Sector Organisations project. The Project is a three-year collaborative national research project into the management and protection of internal witnesses, including whistleblowers, in the Australian public sector. Further information on the Project is available from: < istleblowing/>. Education programs B. Access to Information Ensuring the general public and the media can receive and impart public information, particularly information on corruption matters: Requirements for justice and other governmental agencies to disclose efforts to promote integrity and accountability and to combat corruption Measures to provide the public with meaningful access to information DFAT continues to promote awareness of foreign bribery and other forms of corruption as part of is ongoing awareness campaign about the International Trade Integrity Act DFAT maintains a website to provide public information about the implementation of the Act and about UN sanctions in force under Australian law. The Foreign Bribery Information and Awareness Pack is also available on the internet.

18 Steps taken to implement the Anti-Corruption Action Plan for Asia-Pacific: Australia 18 Steering Group meeting (May 2006) Steering Group meeting (Nov. 2006) C. Public Participation Encouraging public participation in anticorruption activities: Co-operative relationships with civil society groups The Australian Government s Attorney- General's Department has recently agreed to processes that enhance its relationship with Transparency International Australia. On 16 August 2007, Australia held its most recent meeting with senior representatives of Transparency International Australia. The Attorney-General's Department continues to meet regularly with civil organizations including Transparency International and the Justice and International Mission of the Uniting Church in Australia. Protection of whistleblowers The Australian Government has committed to broadening and strengthening public interest disclosure ( whistleblowing ) systems. Current whistleblower provisions (s16 of the Public Service Act 1999) apply only to APS employees who can make disclosures to their agency head, to the Public Service Commissioner or the Merit Protection Commissioner. The Government considers that there needs to be a broader regime to deal with the handling and disclosure of information in the public interest, by people outside the public sector and to protect all public sector employees where appropriate. The Review will be informed by the outcome of a review Whistling While They Work: Enhancing Theory and Practice of Internal Witness Management in Public Sector Organisations of Commonwealth, State and Territory whistleblower schemes being conducted by Griffith University. Involvement of NGOs in monitoring of public sector programs and activities OTHER Australia was one of the first industrialized countries to ratify the UN Convention against Corruption (UNCAC)

19 Steps taken to implement the Anti-Corruption Action Plan for Asia-Pacific: Australia 19 Steering Group meeting (May 2006) Steering Group meeting (Nov. 2006) on 7 December Australia s assessment of its domestic legislation indicates that Australia meets all of the mandatory requirements in UNCAC and many of the optional provisions. The Australian Federal Police and the Attorney-General s Department are contributing expertise in regional anticorruption investigation and enforcement in Papua New Guinea and the Solomon Islands. This has led to broader understanding across the Australian Government of the challenges of development, as well as raising the profile of the aid program s existing work. A recent AusAID review of its Pacific (excluding PNG) good governance efforts noted that 51% of AusAID s programs and 61% of total Australian aid is focused on good governance activities. In 2005, through the Pacific Legal Knowledge Program, the Pacific Islands Law Officers Meeting welcomed Australia s proposal for a program of workshops on international criminal justice cooperation and legislative drafting for legal officers in Pacific Island countries. The program is focused on improving the knowledge and skills of line officers and junior to mid-level practitioners within the law and justice agencies of Pacific Island countries. Legal officers from around the South Pacific attended the first workshop on international criminal justice cooperation in Vanuatu in December A followup workshop is planned for later this year, along with the first legislative drafting workshop in July legal officers from 11 Pacific Island countries attended the first Pacific Legal Knowledge Program Legislative Drafting Workshop in Canberra in July The purpose of the Workshop was to address challenges facing the Pacific Island countries such as the lack of legal drafting resources, and the need for legislative action due to new international obligations in security, counter-terrorism, corruption and antimoney laundering. There was a high level of attendance at the workshop. Follow-up workshops in international criminal justice cooperation and legislative drafting are planned for In March 2008, the Australian Public Service Commission (the Commission) hosted a Pacific HR Managers conference and workshop focusing on workforce planning and providing sessions on ethics, corruption and accountability. Twenty Pacific HR managers from Nauru, Samoa, PNG, Cook Islands, Tonga, Solomon Islands, Vanuatu, Kiribati, Tuvalu and Niue attended the Conference held in Canberra. The Conference and workshop is part of the AusAID Pacific Governance Support Programme (the Programme). The Commission s objective for participating in the Programme is to contribute to the development of more efficient and effective public services in Pacific Island countries particularly in areas of human resource management reform.

20 Steps taken to implement the Anti-Corruption Action Plan for Asia-Pacific: Australia 20 Steering Group meeting (May 2006) Steering Group meeting (Nov. 2006) The purpose of the 2008 Conference and workshop was to provide an opportunity for the Pacific HR Network, amongst other things, to share strategic thinking about human resource management issues pertaining to workforce planning (including ethics, corruption and accountability) and to hear from Australian public sector subject matter experts on these issues. Australia is currently the Vice-Chair of the Asia Pacific Economic Cooperation (APEC) Anti-Corruption and Transparency Experts Task Force (ACT). Australian representatives participated in a meeting of the Task Force held in Hanoi, Vietnam on 26 February An Attorney-General s Department officer presented a paper on Australia s anti-corruption strategies at the APEC Anti-Corruption and Transparency Workshop on the Denial of Safe Haven, Asset Recovery and Extradition in Shanghai in April The presentation focused on prosecuting corruption and strategies to deny safe haven. In September 2006, Australia took part in an APEC ACT Public-Private Dialogue on Anti-Corruption and Ensuring Transparency in Business Transactions Workshop that looked at ways of working with the private sector to fight corruption. Australia will chair the APEC Task Force in Australia has chaired the APEC Anti- Corruption and Transparency Experts Task Force throughout 2007, hosting two meetings during the year. Australia continues to host APEC In February 2008, Australia took part in a meeting of the APEC Anti-Corruption and Transparency Experts Taskforce in Lima, Peru. Australia gave a presentation to the meeting on the Proposed Project to Implement the APEC Code of Conduct for Business In 2007, an anti-corruption for development policy Tackling Corruption for Growth and Development was developed. This policy underpins high priority anti-corruption development activities in the Asia-Pacific region. In , the Australian aid program is providing $16.7 million to anti-corruption assistance in the Asia-Pacific region, which includes support to targeted anticorruption work in Indonesia, the Philippines, East Timor, Papua New Guinea, Solomon Islands and Vanuatu and contributions to key international and regional anti-corruption initiatives, plus research and analysis of the drivers and costs of corruption The Australian Agency for International Development has amended its standard contractual forms to include an explicit prohibition against contractors or subcontractors offering or giving any benefit that could be considered corrupt or illegal, as an inducement or reward in relation to execution of the contract.

21 Steps taken to implement the Anti-Corruption Action Plan for Asia-Pacific: Bangladesh 21 Bangladesh PILLAR 1 DEVELOPING EFFECTIVE AND TRANSPARENT SYSTEMS FOR PUBLIC SERVICE A. Integrity in Public Service 1. Systems of hiring public officials: Systems for compensation Transparent hiring and promotion, independence of the civil service Bangladesh introduced performance and merit-based promotion for senior positions in government. The government reconstituted the Public Service Commission on 7 May Public Service Commission has approved revised exams for civil servants to make their entry & promotion more transparent and merit based. Oversight of discretionary decisions and personnel discretionary powers Personnel systems such as rotation of assignments 2. Ethical and administrative codes of conduct: Prohibitions or restrictions on conflicts of interest The Ministry of Law, Justice and Parliamentary Affairs (MoLJPA) amended the Anti-corruption Act 2004 to strengthen the investigative activities of the Anti-corruption Commission. The Organogram of Anti Corruption Commission (ACC) has been restructured. 22 Regional Offices of ACC have been set up successfully in Bangladesh. The issue of capacity building of ACC is going on. In addition, ACC has emerged as an independent, impartial & self-governed entity on 22 November 2007 to enjoy full autonomy. Disclosure and/or monitoring of, for example, personal assets and liabilities A circular dated 29 August 2007 required all officials to submit their annual statement of assets and wealth to the relevant heads of ministry or agency. All government officials submitted their annual statement of assets & wealth by 28 February Along with this, all judges of subordinate courts are also subject to submission of annual statement of assets & wealth, which is

22 Steps taken to implement the Anti-Corruption Action Plan for Asia-Pacific: Bangladesh 22 underway. Appropriate action is expected to be taken after scrutiny by the relevant heads of Ministry or Agency. Systems regulating contacts between government officials and business services users, particularly in corruption-prone areas Citizen s charters have been created in some ministries and agencies and are being drafted in others. Citizen s Charters have been actively developed in many ministries & agencies. The government is committed that at least 50% of line Ministries would be able to establish easily accessible grievance-handling mechanisms by June Moreover, the full-blown National Integrity Strategy The government is developing a National Integrity Strategy with the assistance of ADB. National Integrity Strategy is expected to come out by the last quarter of this year. Promotion, training and supervision of officials viz. codes of conduct Bangladesh created a training and career development wing in the Ministry of Establishment to coordinate public sector training and human resources allocation. The government has commenced an initiative to create an Annual Confidential Report system to evaluate the performance of officials. Work Improvement Team is created on 16 August 2007 under each Ministry/Division. The Work Improvement Team is expected to add substantial value in providing service delivery of the Ministry/Division. Career development wing is functioning well under the Ministry of Establishment. The government has attempted to bring about some important reforms on ACR to evaluate performance of officials. The Ministry of Establishment is developing a Policy for Career Development Planning. Promoting reporting by officials of corruption and whistleblower protection The Ministry of Law, Justice and Parliamentary Affairs (MLJPA) has decided to publish the Whistleblowers Protection Act in the official Gazette by The government has agreed in principle to set up a national ombudsman s office by the end of 2009.

23 Steps taken to implement the Anti-Corruption Action Plan for Asia-Pacific: Bangladesh 23 B. Accountability and Transparency Accountability of public service through effective legal frameworks, management practices and auditing procedures: Measures and systems to promote fiscal transparency A Tax Ombudsman Act has been adopted and promulgated. With the assistance of the World Bank, Bangladesh has undertaken efforts to create a more efficient tax administration. International standards and practices to regulate and supervise financial institutions A Committee has been formed to deal with loan defaults. A key priority is to strengthen the central bank s supervision over monetary and exchange rate policy. Some laws were amended to strengthen the capacity of the central bank. Auditing of the public administration and the public sector Public procurement procedures and adequate simplified administration procedures A new Public Procurement Act is being studied by a parliamentary subcommittee before being submitted to the National Assembly for discussion and adoption. In connection with Public Procurement Act 2006, the Public Procurement Rules 2008 have been prepared and both are effective from 31 January Financial limits at different levels for public procurement have been readjusted in view of quick & efficient disposal of procurement proposals. Institutions for public scrutiny and oversight The Anti-Corruption Commission (ACC), inspected several departments, such as the Chittagong Custom House and the ZIA International Airport. It has

24 Steps taken to implement the Anti-Corruption Action Plan for Asia-Pacific: Bangladesh 24 held dialogs with bodies such as the National Board of Revenue, the Bangladesh Police etc. Bangladesh aims to strengthen the capacity of the senior and middle management staff at the ACC. It also intends to improve the operational effectiveness of the ACC in specific sectors. Bangladesh has created a Standing Committee for each Ministry. The Committees are empowered to review the work of Ministries that fall under their jurisdiction and to inquire or examine any irregularities and complaints. Ministers are directly answerable to the relevant Committee. Regulatory Reforms Commission has been established on 30 October 2007 to exercise scrutiny and suggest necessary reforms of existing rules/regulations/acts, etc. Availability of information on the processing of applications, funding of political parties and electoral campaigns and expenditure The Election Commission is actively considering the issues of application processing, and election funding and expenditure. Some important reforms are underway. The Election Commission is effectively working on this issue. Simplification of the business regulatory environment To reduce corruption in tax administration, a committee has begun working on introducing the uniform taxpayer identification (UTI) number for the large taxpayer units by March The UTI will integrate the existing tax identification and business identification numbers that are used for value added tax and customs duty. Preparatory steps have been completed. Better Business Forum under the Chairmanship of Hon ble Chief Advisor (Head of the Government) has been formed on 25 November The Forum is actively working to make the business atmosphere of Bangladesh more attractive and congenial for all. The Privatization Commission has introduced amendments to the Privatization Policy 2001 and finalized the Privatization Rules 2007.

25 Steps taken to implement the Anti-Corruption Action Plan for Asia-Pacific: Bangladesh 25 To deal with the shadow economy, the government has set a deadline for the declaration of undeclared income and sales proceeds. Up to 30 June 2007, a total of persons have declared their unclear income and sales proceeds. The amount recovered is approximately 8.9 billion Taka. PILLAR 2 STRENGTHENING ANTI-BRIBERY ACTIONS AND PROMOTING INTEGRITY IN BUSINESS OPERATIONS A. Effective Prevention, Investigation and Prosecution Effective measures to actively combat bribery: Sanctions for bribery of public officials Bangladesh has recently secured convictions against a former minister, a former president and a former prime minister. Existence and enforcement of anti-money laundering legislation Corruption offenses have been included as offenses under the Money Laundering Prevention Act. Anti Money Laundering Act and Anti Terrorism Act have been their final stages to get approval of the government. The government is actively planning to become a member of the EGMONT Group of Financial Intelligence Units, an informal international gathering of financial intelligence units (FIUs) as well. Rules concerning investigation and prosecution of bribery The Anti-Corruption Commission Rules 2007 require corruption investigations to be completed within 45 days. The period may be extended by 15 days if the investigating officer explains the reasons for the delay. The MLJPA amended the Criminal Law Amendment Act 1958 to introduce a 45- day limit for concluding trials of corruption offenses. If a trial cannot be completed within this period, the trial judge may extend the deadline by 15 days after filing written reasons for doing so.

26 Steps taken to implement the Anti-Corruption Action Plan for Asia-Pacific: Bangladesh 26 Availability of bank, financial or commercial records and secret bank information Existing ACC rules allow access to bank, financial or commercial records and secret bank information. Inter-agency co-operation The government has created the National Task Force for corruption investigations, consisting of the police, armed forces, intelligence agencies, and other government officials. The Task Force operates at the divisional and district levels to prevent and investigate corruption. The initiative is ongoing. Protection of persons who assist the authorities Training and resources The government is finalizing a USD 170 million loan from ADB to improve the Anti-Corruption Commission s skills, expertise, and prosecution capacity. The Anti-Corruption Commission s Organogram was amended on 19 August 2007 to increase staffing from 650 to 1273, and to improve logistical support. The Good Governance Program has been implemented since November This program provides training facilities and procurement of resources for capacity building of different ministries/divisions, which are vulnerable to corruption. Capacity building process of ACC tends to be more IT-oriented. The recruitment rule is also finalized for ACC. International cooperation including exchange of information and evidence, extradition, and search, seizure, forfeiture and repatriation of assets B. Corporate Responsibility and Accountability Promotion of corporate responsibility and accountability based on international standards: Corporate governance, internal company controls such as In line with the UNCAC, the government intends to develop its capacity in asset recovery, anti-money laundering, and international cooperation. On 28 August 2007, an inter-ministerial committee was convened to prepare a work plan by February 2008 for this purpose. The accession to the UNCAC by the government of Bangladesh in February 2007 has been a significant and symbolic step. In order to advance this process UNCAC: A Bangladesh Compliance & Gap Analysis has been prepared in January 2008.

27 Steps taken to implement the Anti-Corruption Action Plan for Asia-Pacific: Bangladesh 27 codes of conduct, establishing channels of communication, whistleblower protection and staff training Non tax-deductibility of bribes Transparent company accounting and auditing, and penalties for false accounting The Security Exchange Commission is being streamlined to improve transparency in company accounting and auditing. Measures are also being undertaken for false accounting and other irregularities. The process is ongoing. Administrative sanctions for bribery of public officials, e.g. denial of licenses or procurement contracts This has been addressed in the new procurement rules PILLAR 3 SUPPORTING ACTIVE PUBLIC INVOLVEMENT A. Public Discussion of Corruption Encouraging public discussion of corruption through: Channels and forums to discuss corruption Electronic & Print Media are actively involved in the awareness building process of fighting against corruption and it is getting momentum day by day. Public awareness campaigns The Anti-Corruption Commission, Transparency International Bangladesh and other private organizations are conducting awareness raising campaigns. Ministry of Finance has allocated enhanced budgetary provision for development budget of ACC with sufficient funds to implement its decentralized set-up and its community outreach program. Moreover, ACC Chairman is visiting in the district level to make awareness building to halt corruption in the grass-roots level with all strata of society involved. ACC has also undertaking rally/film show programs at different important locations through involving multisectoral people to make them aware of the anticorruption initiatives.

28 Steps taken to implement the Anti-Corruption Action Plan for Asia-Pacific: Bangladesh 28 Supporting of non-governmental organizations Civil society, NGOs, like Transparency International Bangladesh, are coming up with all out support to fight against corruption. Education programs The government is considering introducing a Code of Ethics and Values in national educational curriculum and in various training institutions. The progress is underway. B. Access to Information Ensuring the general public and the media can receive and impart public information, particularly information on corruption matters: Requirements for justice and other governmental agencies to disclose efforts to promote integrity and accountability and to combat corruption Government Attorney Service and Law of Contempt of Court have been approved on 30 April 2008 to promote integrity and accountability in the legal system. Measures to provide the public with meaningful access to information The Bangladesh government has declared Tuesdays as Meeting Free Day. All officers are accessible by citizens at their desks, while secretaries are encouraged to make field-visits. Thursdays are visitor-less days so that government employees can work without distraction. The Meeting Free Day has been abolished. The Ministry of Information is drafting a Media Act. The government has agreed to publish the Right to Information Act in the official Gazette by Ministry of Law, Justice & Parliamentary Affairs is expected to get approval of the Right to Information Act by June 2008 C. Public Participation Encouraging public participation in anticorruption activities: Co-operative relationships with

29 Steps taken to implement the Anti-Corruption Action Plan for Asia-Pacific: Bangladesh 29 civil society groups Protection of whistleblowers Involvement of NGOs in monitoring of public sector programs and activities OTHER

30 Steps taken to implement the Anti-Corruption Action Plan for Asia-Pacific: Bhutan 30 Bhutan PILLAR 1 DEVELOPING EFFECTIVE AND TRANSPARENT SYSTEMS FOR PUBLIC SERVICE A. Integrity in Public Service 1. Systems of hiring public officials: Systems for compensation Transparent hiring and promotion, independence of the civil service Oversight of discretionary decisions and personnel discretionary powers Personnel systems such as rotation of assignments 2. Ethical and administrative codes of conduct: Prohibitions or restrictions on conflicts of interest Disclosure and/or monitoring of, for example, personal assets and liabilities Systems regulating contacts between government officials A Position Classification System for the civil service has been implemented to promote professionalism, meritocracy, efficiency, fairness, transparency, and accountability. This system addresses issues such as high altitude allowance, difficulty allowance, and other allowances and benefits that are covered in the Civil Service Rules and Regulations. The Civil Service Commission (CSC) is a constitutional, independent and apolitical body. It promotes and motivates potential and competent civil servants through an open, competitive and merit-based promotion system. The CSC ensures that all civil servants have recourse to justice through the Administrative Tribunal established under section 16 of Article 21 of the draft Constitution of the Kingdom of Bhutan. The public service administration and management are decentralized to ministries and agencies. The CSC administers management of senior public servants. It also submits Annual Reports on its policies and performance to the King and the Prime Minister. A civil servant is transferred after 5 years of service in a particular post or organization. The Civil Service Code of Conduct restricts conflicts of interest in discharging official duties. As a preventive strategy, the Anti-Corruption Commission (ACC) is developing a format to declare, manage and monitor conflicts of interest. It also aims to implement existing codes of conduct. A system of assets/liabilities/ income declaration has been in place since the 1980s, and has since been strengthened with the enactment of the Anti- Corruption Act. All public officials are required to file declarations annually and within three months of taking/leaving office. About 500 public officials file declarations with the ACC, while the remaining do so with the heads of their respective organizations. The Private Trade and Employment clause of the Civil Service Rules and Regulations deals with contact between officials and business service users. The Overtime payment system has been put in place for support staff (S5 category and below) on an hourly basis but not exceeding 3 hours on weekdays and 5 hours on holidays. A system of declaration, management and monitoring of conflicts of interest is being developed. Audit Authority conducts compliance auditing with their normal auditing. Database and online submission to the Anti-Corruption Commission (ACC) will be completed by September Gifts Declaration Registers are maintained in public offices (Civil Service Commission, Foreign Affairs Ministry, ACC, etc).

31 Steps taken to implement the Anti-Corruption Action Plan for Asia-Pacific: Bhutan 31 and business services users, particularly in corruption-prone areas head of an organization is responsible for monitoring the clause s implementation. Promotion, training and supervision of officials viz. codes of conduct Promoting reporting by officials of corruption and whistleblower protection B. Accountability and Transparency Accountability of public service through effective legal frameworks, management practices and auditing procedures: Measures and systems to promote fiscal transparency International standards and practices to regulate and supervise financial institutions Auditing of the public administration and the public sector Public procurement procedures and adequate simplified administration procedures The head of organization and immediate supervisor are responsible for supervising their subordinates. The performance of civil servants is monitored in accordance with the Performance Management System in the Civil Service Rules and Regulations. Reporting by public officials is promoted in accordance with Administrative Discipline Procedure of the Civil Service Rules and Regulations. Sections 103 and 114 of the Anti-Corruption Act prohibits any person or entity from taking retaliatory action against an employee or person who reports corruption. Ministry of Finance reports on annual budget and economic achievements to Parliament, including macroeconomic performance, fiscal performance, resources, revenue, expenditure, public debt, trust funds, and projections for the following fiscal year. Annual reports of the Audit Authority and the ACC are submitted to Parliament and distributed to the public. The Audit Authority classifies bodies in the public administration into Categories A-C, depending on the size of the budget allocation. Category A agencies have the largest allocations and are audited annually. Category B bodies are audited every two years, while Category C bodies have the smallest allocation and are audited at least once every three years. Bhutan is a member of the International Organization of Supreme Audit Institutions (INTOSAI) and the Asian Organisation of Supreme Audit Institutions (ASOSAI). Procurement rules and regulations are updated regularly to promote economic growth and to ease the administration of public procurement. The 4th annual engineering conference adopted Engineers code of conduct. Monitoring and evaluation system is under development. Operational Manual and Investigation Strategy address it. The budgeting, treasury and fund management lapses are highlighted in the annual financial and audit reports. The reports are deliberated at the parliament. The agencies and Audit Authority resolved all pending cases as of December Financial Service Bill drafted wherein Financial Intelligence Unit is proposed. A system of issuing Audit Clearance for promotion, training and resignation is in place. The Audit Authority certifies accounts of the agencies. Public Procurement and Policy Division has been created under the Finance Ministry. E-procurement readiness study has been completed. Capacity development courses, which are developed with assistance from the World

32 Steps taken to implement the Anti-Corruption Action Plan for Asia-Pacific: Bhutan 32 Bank, will be operational by January Contract law is being drafted Institutions for public scrutiny and oversight Availability of information on the processing of applications, funding of political parties and electoral campaigns and expenditure Simplification of the business regulatory environment PILLAR 2 STRENGTHENING ANTI-BRIBERY ACTIONS AND PROMOTING INTEGRITY IN BUSINESS OPERATIONS A. Effective Prevention, Investigation and Prosecution Effective measures to actively combat bribery: Sanctions for bribery of public officials Existence and enforcement of anti-money laundering legislation Rules concerning investigation and prosecution of bribery Availability of bank, financial or commercial records and secret bank information Inter-agency co-operation The Audit Authority handled corruption and fraud through a Fraud Alert System until December In 2006, the ACC and three print media were established to promote transparency and accountability. The Web site of the Election Commission provides voters with registration forms, election advisories, voter guidelines, postal ballot application forms, electoral guidelines, and election legislation (rules and regulations, public election fund, guidelines and handbooks). The district offices of the Election Commission provide training through advocacy programs to public, private and local leaders. Micro-business was de-licensed following the 2005 Good Governance Plus recommendations. It was recognized that unnecessary paperwork, unclear and lengthy procedures, and conflicting rules hinder economic growth. These issues are addressed by adapting the Standard Cost Model and the One-Stop-Shop concept, and by applying information and communications technology to deliver services. The Penal Code provides sanctions for bribery of public officials by any individual. The Penal Code and the Royal Monetary Act contain anti-money laundering provisions. The Civil and Criminal Procedure Codes govern the investigation and prosecution of bribery. The Royal Monetary Act and the Prudential Regulations deal with these matters. The sharing of information between the ACC and other agencies are covered by the Cabinet Executive Order on Information Sharing and sections 70(b) and 95 of the Anti-Corruption Act. Bhutan is preparing various memoranda of understanding and guidelines for inter-agency cooperation among the police, public prosecutors, auditors, local leaders, and technical agencies. A framework for coordination exists between Political parties accounts were audited and publicized in the media. The International Standard Cost Model is adapted. Pilot assessment of administrative burden in transport was completed in January Baseline assessment in trade licensing is planned to be completed in May One of the indicators for the 10th Plan is measuring and reducing administrative burden of sectors that have the most citizen interface and dealings. Financial institutions publicise audited reports on balance sheet and profit and loss account annually and submit to the central bank within 14 days of auditing. The erstwhile Planning Commission has been reorganized as Gross National Happiness Commission (GNH Commission). Sectoral GNH Committee and Local Government GNH Committee has been established to act as a platform where

33 Steps taken to implement the Anti-Corruption Action Plan for Asia-Pacific: Bhutan 33 the Commission and local governments. crosscutting issues and policy are discussed and sorted out. Protection of persons who assist the authorities Training and resources International cooperation including exchange of information and evidence, extradition, and search, seizure, forfeiture and repatriation of assets B. Corporate Responsibility and Accountability Promotion of corporate responsibility and accountability based on international standards: Corporate governance, internal company controls such as codes of conduct, establishing channels of communication, whistleblower protection and staff training Non tax-deductibility of bribes Transparent company accounting and auditing, and penalties for false accounting Administrative sanctions for bribery of public officials, e.g. denial of licenses or procurement contracts The Anti-Corruption Act contains provisions dealing with the protection of informers and witnesses. The ACC provides ad hoc training to its staff and other bodies such as the media, government internal audit bodies, attorney offices and financial institutions. The ACC occasionally seeks expert opinions from the Corruption Practices Investigation Bureau of Singapore, the Independent Commission Against Corruption of Hong Kong, China, and the Central Bureau of Investigation of India. These corporate governance matters are addressed under the Companies Act, Guidelines for Boards of Government Corporations and for Government- Appointed Board Directors, and Rules and Procedure for Election of Directors. The government has undertaken an exercise to strengthen corporate governance. External chartered accountants audit all public companies in accordance with the Companies Act Reports are published in the print media. The ACC shares training slots to media, police, internal audits, prosecution office, financial institutions and other key stakeholders. The ACC shares information and experiences with India CBI, Malaysia Anti- Corruption Agency, and Korea Anti-Corruption and Civil Rights Commission. Druk Holding and Investment (DHI) has been established and incorporated under companies act in October It is mandated to manage existing and future investments of public and private sectors through development of a culture of innovation, creativity and enterprise that prevents the spread of corruption, and to rationalize privatization of public agencies. Power plants and public companies report to the DHI. National Tourism Council has been established. Public officials are suspended if a bribery case is registered. Business firms are debarred for a certain period based on contract documents.

34 Steps taken to implement the Anti-Corruption Action Plan for Asia-Pacific: Bhutan 34 PILLAR 3 SUPPORTING ACTIVE PUBLIC INVOLVEMENT A. Public Discussion of Corruption Encouraging public discussion of corruption through: Channels and forums to discuss corruption Public awareness campaigns Supporting of nongovernmental organizations Education programs B. Access to Information Ensuring the general public and the media can receive and impart public information, particularly information on corruption matters: Requirements for justice and other governmental agencies to disclose efforts to promote integrity and accountability and to combat corruption Measures to provide the public with meaningful access to information The ACC organizes public debates on corruption. The public may also report and discuss corruption through web-based interactive sessions and discussion forums. The ACC organizes public awareness programs organized for public servants, local leaders, youth, business community, and citizens. The programs emphasize a collective role and responsibility to fight corruption. The ACC also works closely with the media in this regard. The 2005 Good Governance Plus recommendations underscore the importance of civil society organizations. Consequently, the Civil Society Act was enacted in June The Commission plans to promote public/private organizations and educational institutions as islands of integrity. Television and radio periodically air programs on values, ethics and culture. All service-providing agencies are encouraged to develop service. The standards spell out the agencies commitment, promote obligations to customers, and explain how to redress grievances. A policy guideline on information sharing highlights the type, mechanism and potential benefits of information sharing. It also stresses the need to safeguard privacy, confidentiality and proprietary data. The ACC holds monthly press conferences. The Anti-Corruption Act, draft rules and guidelines, important letters regarding systemic flaws to agencies and Every 9 to 16 December is observed as National Corruption-Free Week. Open feedback session from the public is organized. Quarterly news bulletin has been launched starting April The ACC participated in 3 regional workshops for the private sector and developed a number of business codes of ethics. Monitoring and reporting systems are yet to be institutionalized. TV spots, street shows and radio jingles on political corruption and citizens role in vibrant democracy were well received by the public. Anti-corruption theme song was composed and is in the process of adding visuals. Two public organizations (school and government agency) were selected to promote ethical values. Cases are required to be resolved within 12 months (earlier it was 18 months). Preliminary hearing for criminal cases is 10 days and 108 days for civil cases. Decision of the court is posted in judiciary website. In July 2003 there were 1557 cases and in April 2007 there were 27 cases that were more than 18 months. Public organizations have Legal Divisions. The number of issues of print media increased from one issue to two issues in a week in national and English languages. The number of private radio stations increased from two to four radio stations as of February 2008.

35 Steps taken to implement the Anti-Corruption Action Plan for Asia-Pacific: Bhutan 35 C. Public Participation Encouraging public participation in anticorruption activities: current activities are posted on the ACC s website. Co-operative relationships with civil society groups The Chamber of Commerce and Industries invites the Commission to its annual meeting and other important occasions. The first International Anti-Corruption Day on 9 December 2006 was observed in collaboration with Vast Bhutan, a voluntary organization. Protection of whistleblowers Whistleblower protection is provided under the Anti-Corruption Act of Bhutan. Operational Manual and system of protection of informers are in place. Anonymous complaints can be lodged with the ACC in person or by post, telephone, , or fax. Involvement of NGOs in monitoring of public sector programs and activities Civil society is viewed as a partner to complement government anti-corruption efforts. The Chamber of Commerce appointed anti-corruption focal persons to develop a Business Code of Conduct and to encourage business to incorporate an Integrity Pact in their operations. Debarment/blacklisting rules were drafted in consultation with the Chamber and the private sector. OTHER Bhutan signed the UNCAC in September 2005 and is considering ratifying the Convention.

36 Steps taken to implement the Anti-Corruption Action Plan for Asia-Pacific: Cambodia 36 Cambodia Cambodia was not represented at the 8th, 9th and 10th Steering Group meetings. PILLAR 1 DEVELOPING EFFECTIVE AND TRANSPARENT SYSTEMS FOR PUBLIC SERVICE A. Integrity in Public Service 1. Systems of hiring public officials: Systems for compensation Transparent hiring and promotion, independence of the civil service Oversight of discretionary decisions and personnel discretionary powers Personnel systems such as rotation of assignments 2. Ethical and administrative codes of conduct: Prohibitions or restrictions on conflicts of interest Disclosure and/or monitoring of, for example, personal assets and liabilities Systems regulating contacts between government officials and business services users, particularly in corruption-prone areas The Royal Government of Cambodia (RGC) is strengthening the role and responsibilities of the Council for the Development of Cambodia (CDC). The efforts would allow the CDC to provide guidance and advice to investors, as well as to serve as a One Stop Service Entity for investors to obtain the authorizations that are required for qualified investment projects under a concession contract.

37 Steps taken to implement the Anti-Corruption Action Plan for Asia-Pacific: Cambodia 37 Promotion, training and supervision of officials viz. codes of conduct Promoting reporting by officials of corruption and whistleblower protection B. Accountability and Transparency Accountability of public service through effective legal frameworks, management practices and auditing procedures: Measures and systems to promote fiscal transparency International standards and practices to regulate and supervise financial institutions Auditing of the public administration and the public sector The RGC has established the independent National Audit Authority to audit accounting records, management systems, operation controls and programs of the RGC s institutions. Legislation also provides for internal audits within each RGC Ministry, institution and state-owned enterprise. Public procurement procedures and adequate simplified administration procedures Institutions for public scrutiny and oversight The RGC restructured the Anti- Corruption Unit (ACU) on 22 August The ACU s mandate is to implement UNCAC by providing coordinated policy advice to the RGC and other bodies on preventing, detecting and controlling corruption. It is the RGC s representative for cooperation with regional and international anti-corruption bodies. Availability of information on the The National Election Committee was

38 Steps taken to implement the Anti-Corruption Action Plan for Asia-Pacific: Cambodia 38 processing of applications, funding of political parties and electoral campaigns and expenditure established as an independent, neutral and impartial body. The Committee seeks to ensure that all political parties have equal status, rights and opportunities during electoral campaigns. Simplification of the business regulatory environment PILLAR 2 STRENGTHENING ANTI-BRIBERY ACTIONS AND PROMOTING INTEGRITY IN BUSINESS OPERATIONS A. Effective Prevention, Investigation and Prosecution Effective measures to actively combat bribery: Sanctions for bribery of public officials Articles 37, 38 and 58 of the United Nations Transitional Authority in Cambodia Law sanctions various forms of corruption. Also applicable are the Law on Customs and Excise, Law on Taxation, Law on Land Traffic, Law on Forestry, Law on Fisheries, and Law on Land Management. The RGC hopes to adopt a new Anti-Corruption Law soon. Administrative sanctions were imposed against 39 customs officers, police officers, and civil servants who were involved in issuing authorizations and illegally importing 184 vehicles with right-sided steering in November One official and one private individual are being prosecuted for extorting money from a foreign company. Existence and enforcement of anti-money laundering legislation Rules concerning investigation and prosecution of bribery

39 Steps taken to implement the Anti-Corruption Action Plan for Asia-Pacific: Cambodia 39 Availability of bank, financial or commercial records and secret bank information Inter-agency co-operation Protection of persons who assist the authorities Training and resources International cooperation including exchange of information and evidence, extradition, and search, seizure, forfeiture and repatriation of assets Cambodia signed the Memorandum of Understanding on Preventing and Combating Corruption on 11 September Seven other ASEAN member countries are also signatories. B. Corporate Responsibility and Accountability Promotion of corporate responsibility and accountability based on international standards: Corporate governance, internal company controls such as codes of conduct, establishing channels of communication, whistleblower protection and staff training Non tax-deductibility of bribes Transparent company accounting and auditing, and penalties for false accounting Administrative sanctions for bribery of public officials, e.g. denial of licenses or procurement contracts

40 Steps taken to implement the Anti-Corruption Action Plan for Asia-Pacific: Cambodia 40 PILLAR 3 SUPPORTING ACTIVE PUBLIC INVOLVEMENT A. Public Discussion of Corruption Encouraging public discussion of corruption through: Channels and forums to discuss corruption The ACU held a Student Debate Forum on the importance and necessity of anti-corruption education and law enforcement. Public awareness campaigns The ACU continuously promotes awareness of bribery and other forms of corruption through advertisement. The ACU conducted anti-corruption awareness raising at different locations, including airports, sea ports and land border checkpoints. The ACU distributed model letters for reporting corruption. Complainants may mail such letters free of charge. Supporting of non-governmental organizations Education programs B. Access to Information Ensuring the general public and the media can receive and impart public information, particularly information on corruption matters: Requirements for justice and other governmental agencies to disclose efforts to promote integrity and accountability and to combat corruption Measures to provide the public with meaningful access to On 13 July 2007, the Ministry of National Assembly-Senate Relations and Inspections began drafting a paper

41 Steps taken to implement the Anti-Corruption Action Plan for Asia-Pacific: Cambodia 41 information entitled A Policy Framework for Cambodia. The paper will propose policies to increase the quantity and quality of information flowing between government institutions and citizens in the most cost-effective manner. C. Public Participation Encouraging public participation in anticorruption activities: Co-operative relationships with civil society groups Protection of whistleblowers Involvement of NGOs in monitoring of public sector programs and activities OTHER

42 Steps taken to implement the Anti-Corruption Action Plan for Asia-Pacific: P.R. China 42 P.R. China PILLAR 1 DEVELOPING EFFECTIVE AND TRANSPARENT SYSTEMS FOR PUBLIC SERVICE A. Integrity in Public Service 1. Systems of hiring public officials: Systems for compensation The government is further promoting its work on standardizing allowance and subsidies. It has also begun to standardize allowance and subsidies in 40 central and state organs. The government is carrying out the second phase of standardization of allowance and subsidies in central and state organs. Transparent hiring and promotion, independence of the civil service The Law on Civil Servants came into force on 1 January Public servants will be recruited through public admission and examination; officials will be appointed and promoted by public selection and competition. P.R. China is now reforming the wage system for civil servants. Salaries will be raised to reduce the temptation to engage in corruption. Oversight of discretionary decisions and personnel discretionary powers Following the entry into force of the Law on Administrative Licensing in July 2004, central departments and local governments have repealed or adjusted one out of two administrative licenses and license procedures. The Central Commission for Discipline Inspection of the Communist Party of China (CPC) and the Organization Department of the Central Committee of the CPC have established special inspection units. The units have completed inspections of 31 provinces and the Xinjiang Production and Construction Corps in the first round, as well as 15 provinces and the Corps again in the second round. Also inspected were 9 banks under the jurisdiction of the central government, 4 corporations administering national assets, 4 state-owned insurance The Regulations on Inspection Tour of Communist Party of China are being drafted. The inspection tour has been extended from the provincial level to the county level. Pilot inspections of central and state organs, state-owned enterprises, schools and major projects are under way. More inspection teams have been set up and more efforts have been made to inspect financial agencies.

43 Steps taken to implement the Anti-Corruption Action Plan for Asia-Pacific: P.R. China 43 companies, 2 state-owned securities companies, and 5 important stateowned enterprises. Provincial (regional and municipal) inspection units have also completed their first round of inspections of the cities (localities, prefectures and leagues) within their jurisdiction, covering 293 departments, counties (cities, districts and banners), 59 state-owned enterprises, and 26 higher-learning institutions. Personnel systems such as rotation of assignments 2. Ethical and administrative codes of conduct: Prohibitions or restrictions on conflicts of interest On 30 May 2007, P.R. China promulgated and implemented certain regulations of the Central Commission for Discipline Inspection of the CPC on Strict Prohibition on the Use of One s Position to Gain Improper Interests. The provisions specify eight prohibitions and prescribe limits on economic and social communications of public servants. To enhance probity and self-discipline, the leaders of state-owned enterprises are prohibited from: 1. Using their positions to obtain, through business transactions, improper benefits for themselves or persons with whom they have special relationships; 2. Providing benefits to other leaders of state-owned enterprises in the same field, or to their family members or persons of special relationships. 3. Obtaining personal gain during mergers or when strategic investors invest in the enterprise. 4. Serving as unauthorized mortgage, guarantee or commissioned financing persons. 5. Using internal information for themselves or leaking it to persons with whom they have special relationships, so as to benefit from the enterprises initial public offering, merger, reorganization etc. 6. Ordering or forcing accountants in their enterprises to prepare false financial reports.

44 Steps taken to implement the Anti-Corruption Action Plan for Asia-Pacific: P.R. China Approving salaries, allowances or subsidies that are contrary to laws or regulations. On 8 July 2007, the Supreme People s Court and the Supreme People s Procuratorate jointly issued Opinions on Some Issues Concerning the Applicable Laws of Handling Criminal Bribery Cases. The Opinions are judicial interpretations of the previouslymentioned legislative provisions and solidify judicial opinions on the application of 10 new criminal bribery offenses. Disclosure and/or monitoring of, for example, personal assets and liabilities Systems regulating contacts between government officials and business services users, particularly in corruption-prone areas In early 2007, the Ministry of Commerce publicized the Administration of Credit Information in Business Transactions. A system of credit information of enterprises was established on 1 October 2007, and contains detailed information on 518,000 enterprises. Promotion, training and supervision of officials viz. codes of conduct The State Council has promulgated the Regulations on Administrative Sanctions for the Public Servants in State Administrative Organs and implemented the Regulations on 1 June The Regulations enhance the ability to investigate behavior that is harmful to the public interest. They also improved the self-reporting obligations of officials on important personal matters. The Regulation on Senior Officials in State-owned Enterprises has been amended. The Integrity Education and Training Program for Public Officials has been promulgated. Promoting reporting by officials of corruption and whistleblower protection The government revised the Regulations on Letters and Visits. The amendments established grassroots Reporting Centers, and explored the system of assigning responsibility for the first visit. They also improved systems for leaders to receive visits

45 Steps taken to implement the Anti-Corruption Action Plan for Asia-Pacific: P.R. China 45 and for cadres to visit people at the grassroots level to promptly resolve local conflicts. B. Accountability and Transparency Accountability of public service through effective legal frameworks, management practices and auditing procedures: Measures and systems to promote fiscal transparency To accelerate reform of the financial management system, the government aims to speed up budgetary reform in state departments and pursues a system of centralized revenue and expenditure by the State Treasury. In cooperation with the relevant departments, the Ministry of Supervision (MOS) has taken the following measures recently: Deepening the work of departmental budgets; Reforming government revenue and expenditure classifications; Expanding the scope of the treasury s centralized receipt and payment system. In January-April 2007, the central departments added more than 200 local units for reforming the treasury s centralized receipt and payment system. The added units involve budgetary funds of more than CNY 140 billion and accumulated non-tax income of CHY billion (an increase of 183.7% over the previous year); Reforming the government s collection management methods for non-tax revenue. International standards and practices to regulate and

46 Steps taken to implement the Anti-Corruption Action Plan for Asia-Pacific: P.R. China 46 supervise financial institutions Auditing of the public administration and the public sector The National Audit Office carried out an audit storm for all central government organs in Public procurement procedures and adequate simplified administration procedures The Law on Government Procurement of June 2002 has improved specific operational procedures. In departments under the Central Government, 70% of official purchases are now made through government procurement. In the view of the Chinese authorities, implementation of the Law on Tendering and Bidding of 1998 has brought tangible improvements, especially in public construction projects. Sponsored by the U.K., the Ministry of Supervision and Transparency International developed a new project called Promoting Transparent Procurement and Enhancing Enterprises Social Accountability. The MOS and Transparency International continue to implement the project Promoting Transparent Procurement and Enhancing Enterprises Social Accountability. By the end of 2007, management agencies for government procurement have been set up in the financial departments of governments at the county level and above. Centralized procurement agencies have also been established in 30 provinces and most of the cities in P.R. China. P.R. China has implemented a mechanism to separate the management and operational aspects of government procurement. The two functions are assigned to different agencies. The aim is to provide mutual supervision and separate regulation of management and procurement agencies. The MOS and other relevant departments have taken the following measures: Organizing various regions to conduct special inspections on tendering and bidding in government-invested projects and selective examinations of major construction projects;

47 Steps taken to implement the Anti-Corruption Action Plan for Asia-Pacific: P.R. China 47 Improving the coordination mechanism between the supervisory agencies and the competent departments; Investigating and prosecuted breaches of tendering and bidding laws and regulations; Implementing a system to transfer prospecting and mining rights by tendering, auction and listing; Promoting the construction of a system to monitor information on transactions involving state-owned property rights; Expanding the scope and scale of government procurement. Institutions for public scrutiny and oversight P.R. China intends to strengthen capacity-building of anti-corruption institutions and personnel. On 27 August 2006, the Law on the Supervision by Standing Committees of People s Congresses at Various Levels was adopted. The law enters into force on 1 January It explicitly stipulates that the Standing Committees of the National People s Congresses at various levels exercise supervision over governments, courts and the prosecuting agencies. The law is conducive to the improvement of supervision mechanism, and enhances the work of supervision and its effectiveness of the Standing Committees. The first phase of the Strengthening Integrity Project was held in cooperation with UNDP. The project lasted for 3 years and was recently completed. The second phase of cooperation has begun. The second phase of the Strengthening Integrity Project held in cooperation with UNDP is continuing. Availability of information on the processing of applications,

48 Steps taken to implement the Anti-Corruption Action Plan for Asia-Pacific: P.R. China 48 funding of political parties and electoral campaigns and expenditure Simplification of the business regulatory environment To improve the government investment control system, the Central Government issued the Decisions on the Reform of the Investment System to improve the mechanism for making investment decisions. To improve its decision-making system, the government has introduced elements of public participation, expert consultation and collective decision-making. Superior hierarchies in the government must standardize the decision-making procedures, increase transparency, clarify responsibility, reduce mistakes and guard against abuse of power. The government has also tightened supervision over state-owned assets by improving related laws, regulations and management systems. P.R. China is implementing the Decision on the Reform of the Investment System and to promote reform of the investment system. By the end of June 2007, about 80% of the enterprises in P.R. China have implemented a record-keeping system for investment projects. PILLAR 2 STRENGTHENING ANTI-BRIBERY ACTIONS AND PROMOTING INTEGRITY IN BUSINESS OPERATIONS A. Effective Prevention, Investigation and Prosecution Effective measures to actively combat bribery: Sanctions for bribery of public officials P.R. China has developed a program to build and strengthen a system for sanctioning and preventing corruption, which seeks to enhance education

49 Steps taken to implement the Anti-Corruption Action Plan for Asia-Pacific: P.R. China 49 efforts; cultivate and raise a culture of ethics; raise consciousness among leading officials etc. The overall objective is to accomplish a basic framework for punishing and preventing corruption by P.R. China intends to strengthen capacity-building of anti-corruption institutions and personnel. Sanctions such as resignation and accountability for dereliction of duty have been widely applied against public officials. P.R. China has developed a program to build and strengthen a system for sanctioning and preventing corruption, which seeks to enhance education efforts; cultivate and raise a culture of ethics; raise consciousness among leading officials etc. The overall objective is to accomplish a basic framework for punishing and preventing corruption by Between January and June 2006, cases were filed by the supervisory organs at various levels across the nation, cases were closed, and 34,998 individuals disciplined under administrative regulations. The public procuratorial organs have discovered and dealt with over clues of bribery cases in business transactions of them are under investigation, cases being prepared for prosecution, and 674 cases have been brought to court. From January to June 2007, the national supervision organs filed investigations and prosecutions, closed cases, and imposed administrative sanctions (including two against provincial ministerial level cadres). Some time ago, the MOS investigated and seriously dealt with the case of Zheng Xiaoyu, the former head of the State Food and Drug Supervisory Administration. The case involved serious dereliction of duty, abuse of power, and endangerment of health and safety. Zheng Xiaoyu has since been executed. In 2008, P.R. China will focus on investigating the following types of corruption: collusion between businessmen and officials; power-formoney deals; cases causing severe harm to the public interest; fake tendering and bidding for engineering and construction projects; illegal grants of land use rights; underselling stateowned land use rights; changing land use planning for gain; improper approval of prospecting and mining rights; illegal purchase of shares for the exploration of mineral resources; illegal granting and cancellation of loans and disposal of assets; concealing, possessing and shifting state-owned assets; severe violation of the Communist Party s organizational and personnel discipline; bribery in the judiciary; malpractices for selfish ends; and acting as umbrellas for criminals. The Legislative Affairs Office of the State Council is studying a revision of the Anti-monopoly Law, Anti-unfair Competition Law, and Construction Law. It is also drafting rules to implement the Practicing Pharmacist Law, the Tender Invitation and Submission Law and the Government

50 Steps taken to implement the Anti-Corruption Action Plan for Asia-Pacific: P.R. China 50 Procurement Law. Existence and enforcement of anti-money laundering legislation A Law on Anti-Money Laundering was recently submitted to the National People s Congress for deliberation and approval. The Law on Anti-money Laundering was endorsed on October 31st, 2006 and enters into force on 1 January The law aims to prevent and monitor money laundering. It also aims to curtail money laundering and related crimes (such as smuggling, drug trafficking, bribery and corruption) in order to maintain financial order and the economic security of the country. It includes four major systems: identification; record keeping; reporting of large and suspicious transactions; and internal supervision. For the first time, proceeds from financial crimes, bribery and corruption are clearly designated as targets of anti-money laundering supervision. In June 2007, P.R. China became a full member of the Financial Action Task Force. Rules concerning investigation and prosecution of bribery Availability of bank, financial or commercial records and secret bank information Inter-agency co-operation Protection of persons who assist the authorities Training and resources International cooperation including exchange of information and evidence, extradition, and search, seizure, forfeiture and repatriation of assets P.R. China has intensified cooperation with regional and international organizations such as ADB, AOA, APEC, OECD, TI, and UNDP. In 2006, it completed the Capacity Building in Clean Government in China, sponsored by UNDP. In April 2006, P.R. China and the United States co-sponsored the APEC ACT Workshop on Denial of Safe Haven in Shanghai. It has also established a mechanism for On October 2006, participants from 137 countries/regions attended the First Annual Conference and General Meeting of the International Association of Anti- Corruption Authorities. The conference focused on the implementation of UNCAC. In January 2007, a Chinese delegation attended the OECD Working Group on Bribery in Paris, France as an observer.

51 Steps taken to implement the Anti-Corruption Action Plan for Asia-Pacific: P.R. China 51 consultation and cooperation with the United States. Bilateral expert meetings were held in Washington, D.C. in June 2005 and in Beijing in February The parties have agreed to further develop anti-corruption cooperation, strengthen mutual cooperation to deny safe haven, repatriate suspects of corruption and assets, and lay a favorable foundation for cooperation. The 6th Sino-U.S. Joint Liaison Group (JLG) Meeting was held in Beijing in June 2007, followed by the third JLG Anti-corruption Expert Group Meeting in Washington D.C. in August During the meetings, the parties discussed how to improve bilateral anticorruption cooperation generally and in specific cases. P.R. China dispatched delegations to the International Anti-corruption Conference, the World Forum to Combat Corruption and Build a Clean Government, the World Forum to Government Reforms, the first session of the Conference of States Parties of the UNCAC, and APEC anti-corruption workshops. Corruption prevention programs The Ministry of Supervision and the Canadian International Development Agency (CIDA) are negotiating the launch of a Cooperation Project on Corruption Prevention. The Ministry of Supervision and the Canadian International Development Agency (CIDA) continue to negotiate the launch of a Cooperation Project on Corruption Prevention. The National Bureau of Corruption Prevention of was established in September It is the first national agency specializing in the prevention of corruption. The Law on Corruption Prevention is being drafted. B. Corporate Responsibility and Accountability Promotion of corporate responsibility and accountability based on international standards: Corporate governance, internal P.R. China has begun a drive to tackle The Chinese Government laid out a To control commercial bribery, the

52 Steps taken to implement the Anti-Corruption Action Plan for Asia-Pacific: P.R. China 52 company controls such as codes of conduct, establishing channels of communication, whistleblower protection and staff training business bribery. The government has identified six priority areas: tangible construction projects; property right transactions; land transfer; sales promotion of medicine; resources development and marketing; and other areas, such as finance and credit, securities and futures, commercial insurance, publication and distribution, etc. Six measures are being taken: creating a sound and healthy business culture, and establishing a fair, just, honest and lawful competing environment; rectifying unfair trading practices; investigating and punishing business bribery cases; enhancing the role of supervision; making effective and comprehensive programs; and improving legal systems. strategy to fight bribery in business transactions on 8 February To strengthen the leadership over this taskforce, the central government has set up a leading body under the Ministry of Supervision. government set up a Central Management of Commercial Bribery Leading Group Office in June By June 2007: Public institutions and enterprises, and departments in charge of industry had recovered improper proceeds totaling CNY billion, an increase of CNY 776 million in October P.R. China had resolved commercial bribery cases, involving CNY billion (22.2%) of the cases involved civil servants, including 110 local-level cadres and 946 county-level cadres. P.R. China had established a longterm mechanism to prevent commercial bribery. P.R. China is considering revising implementation ordinances of the Anti-Unfair Competition Law, Construction Law, Administrative Supervision Law, and Audit Law. It is also considering the enactment of ordinances to implement the Tendering and Bidding law, investment regulations, and procurement law. Promoted the construction of social credit system. Improved the information system for the credit of enterprises. Non tax-deductibility of bribes Transparent company accounting and auditing, and penalties for false accounting Administrative sanctions for bribery of public officials, e.g. denial of licenses or procurement contracts

53 Steps taken to implement the Anti-Corruption Action Plan for Asia-Pacific: P.R. China 53 PILLAR 3 SUPPORTING ACTIVE PUBLIC INVOLVEMENT A. Public Discussion of Corruption Encouraging public discussion of corruption through: Channels and forums to discuss corruption Two new taskforces were created in One will evaluate government performance, while the other will deal with the administration of the taxi industry. One of the features of the taskforce is to rely on the citizenry to supervise the behavior of government. A survey by the National Bureau of Statistics indicates that citizen satisfaction and recognition of the government s anti-corruption work is 64.4% and 87.4% in the first half of The figures represent increases of 12.5% and 10.9% respectively from The respondents concern over corruption and building a clean government dropped to eighth from third in Public awareness campaigns P.R. China is establishing a new Corruption Prevention Bureau with sole responsibility for corruption prevention. The State Corruption Prevention Department will be set up in the second half of The Department will be directly answerable to the State Council and be responsible for the organization, coordination, planning, policy formulation, inspection and guidance of national corruption prevention. This includes responsibility for international cooperation in corruption prevention. Since 2007, advertisements relating to commercial bribery have been played on China Central Television for over 1,000 times. Supporting of nongovernmental organizations Education programs On 30 March 2007, the Opinions of the Ministry of Education on Conducting Comprehensive Integrity Education in Primary and Middle Schools and

54 Steps taken to implement the Anti-Corruption Action Plan for Asia-Pacific: P.R. China 54 Colleges was implemented. B. Access to Information Ensuring the general public and the media can receive and impart public information, particularly information on corruption matters: Requirements for justice and other governmental agencies to disclose efforts to promote integrity and accountability and to combat corruption Measures to provide the public with meaningful access to information To promote transparency of government affairs, P.R. China established the Chinese Government Web site ( in early 2006 so as to publish government affairs and provide online services. Local governments at various levels have their own Web sites. Enterprises and villages are also required to use various measures to publicize their affairs. In May 2007, the State Council promulgated the Regulations on Open Government Information. As a result: 55 departments of China's State Organs have established leadership and organizations responsible for administrative openness 36 departments have made regulations on publicity of governmental affairs 10 departments and units have set up administrative service halls 75 departments and units have established news release systems and Web sites 12 departments have prepared or are preparing publicity for The Regulations on Disclosure of Government Information came into effect on 1 May The Regulations aim to safeguard the lawful access to government information by citizens, legal persons and other organizations; increase transparency of the government s work; and promote lawbased administration. Before the formal implementation of the regulations, pilot projects for government information disclosure have been carried out in 14 provinces and 16 large cities. Some detailed regulations have been laid down and which apply to government organs at every level.

55 Steps taken to implement the Anti-Corruption Action Plan for Asia-Pacific: P.R. China 55 government affairs. More than 95% of the country s colleges and universities and over 90% of the primary and secondary schools have publicized their operations. C. Public Participation Encouraging public participation in anticorruption activities: Co-operative relationships with civil society groups Protection of whistleblowers Involvement of NGOs in monitoring of public sector programs and activities OTHER P.R. China has ratified the UNCAC on 27 October 2005 and stepped up efforts to harmonize China s legal system with the Convention s provisions. The Chinese Government has set up an inter-ministerial coordination mechanism to study and implement the UNCAC. The Ministry of Supervision leads the mechanism, which comprises 24 departments including the Standing Committee of the NPC (SCNPC), the central government, the Supreme People s Court, and the Supreme People s Procuratorate. In June 2006, the Ministry of Supervision set out a plan to make the national legal system compatible with the UNCAC. The work includes adopting measures to prevent corruption, revising the Criminal Law and Criminal Procedure Law, and drafting Laws on Anti-Money Laundering Law and Legal Assistance and International Cooperation. In particular, the SCNPC is revising the Criminal Law to (1) make bribery and embezzlement predicate offences for money laundering, and (2) amend the

56 Steps taken to implement the Anti-Corruption Action Plan for Asia-Pacific: P.R. China 56 definition of taking and accepting bribes, corruption and misappropriation.

57 Steps taken to implement the Anti-Corruption Action Plan for Asia-Pacific: P.R. China 57 Cook Islands PILLAR 1 DEVELOPING EFFECTIVE AND TRANSPARENT SYSTEMS FOR PUBLIC SERVICE A. Integrity in Public Service 1. Systems of hiring public officials: Systems for compensation Remuneration bands for all positions in the public service were set as a result of a job sizing evaluation exercise in 2001 under the auspices of the Public Service Commission (PSC). The PSC is reviewing and updating the last report. This includes taking into account complaints received from the Crown Law Office, Ministry of Health and the Audit Office that the remuneration bands are insufficient for attracting experienced solicitors, doctors and auditors/accountants. The job sizing review commission made recommendations to Cabinet on the salary levels for heads of ministries. A further review will cover other positions. Transparent hiring and promotion, independence of the civil service Developments in recruitment have focused on individual positions. As the last three appointments to the Public Service Commission were political appointees and hence the Cook Islands have concluded that there is a need to address the appointment process. The Ombudsman is expected to provide input to a draft of the government s code of conduct which was prepared three years ago. A new Public Service Commissioner with vast experience in the area of public service reform and development was appointed in July The Cook Islands thus expect the completion of the legal institutional strengthening project (see previous Cook Islands reports). This raft of legislation also includes provisions which provide for the transparent hiring of public officials by way of an independent National Appointments Committee. Oversight of discretionary decisions and personnel discretionary powers Personnel systems such as rotation of assignments

58 Steps taken to implement the Anti-Corruption Action Plan for Asia-Pacific: P.R. China Ethical and administrative codes of conduct: Prohibitions or restrictions on conflicts of interest Disclosure and/or monitoring of, for example, personal assets and liabilities Systems regulating contacts between government officials and business services users, particularly in corruption-prone areas Promotion, training and supervision of officials viz. codes of conduct Promoting reporting by officials of corruption and whistleblower protection B. Accountability and Transparency Accountability of public service through effective legal frameworks, management practices and auditing procedures: Measures and systems to promote fiscal transparency The Cook Islands have taken various measures to review and oversee public expenditure. Parliament formed a Committee on Public Expenditure Review that has resumed operation since January The Committee reviewed the Ministry of Health and will being reviewing the Ministry of Education. The Remuneration Tribunal determined the remuneration of various Parliament officials, including that of the Prime Minister and the Speaker. The report is now in an Order-in-Council. New members of the Public Expenditure Review Committee (PERC) focus on non-investigative responsibilities of PERC under the PERC Act, e.g. processes for managing public funds. The PERC may consider concentrating on these other responsibilities as opposed to investigations, given that complaints or allegations on the misuse of public funds are competently investigated by the Audit Office and the Ombudsman. International standards and practices to regulate and The policies of the Financial Supervisory Commission are under

59 Steps taken to implement the Anti-Corruption Action Plan for Asia-Pacific: P.R. China 59 supervise financial institutions review to ensure conformance with the Basel Commission Papers. Auditing of the public administration and the public sector There has been ongoing reform of the state audit process with the objective of reducing the size of the public service. Public procurement procedures and adequate simplified administration procedures Although the recommendations of the ADB/OECD procurement report have not yet been implemented by the Cook Islands, the Tender Committee has toughened procedures by ensuring that all Ministry of Finance and Economic Management instructions on tendering are strictly complied with. In the past, minor infractions were oftentimes excused. Institutions for public scrutiny and oversight In April 2006, a commission was set up to review whether the Ombudsman s office should be abolished. The Committee came to the conclusion that the Office should not be abolished and recommended that the position of Ombudsman be advertised and that the office be monitored thereafter for 18 months. The Cabinet is now considering the proposal. A new Ombudsman took office on 15 November 2006 after the position was publicly advertised for the first time in the Office s history. The government had accepted the recommendations of the Ombudsman Committee, which was set up to consider the future of the Ombudsman s office. The Ombudsman s office has started hiring new staff. It has also received assistance from New Zealand and Australia. The Ombudsman faces many challenges to improve the Office s profile, reputation, public confidence and credibility. Present initiatives include formulating the structure and parameters of the Office; studying the creation of Ombudsman offices in other Asia-Pacific jurisdictions; and submitting leadership codes of conduct to Cabinet for approval before tabling them in

60 Steps taken to implement the Anti-Corruption Action Plan for Asia-Pacific: P.R. China 60 Parliament. Availability of information on the processing of applications, funding of political parties and electoral campaigns and expenditure Simplification of the business regulatory environment PILLAR 2 STRENGTHENING ANTI-BRIBERY ACTIONS AND PROMOTING INTEGRITY IN BUSINESS OPERATIONS A. Effective Prevention, Investigation and Prosecution Effective measures to actively combat bribery: Sanctions for bribery of public officials The Crown Law Office, the Audit Office and the Police of the Cook Islands prosecuted a former Minister of Police in November Existence and enforcement of anti-money laundering legislation Implementation of the Proceeds of Crime (POC) Act remains difficult mainly due to: a lack of understanding of the Act; a lack of experience and training; the need to change the traditional focus of seeking a conviction instead of forfeiture; failure of the police to advise prosecutors and administrators of the POC Act of cases in which proceeds could be confiscated. The first restraining and production orders have been filed under the Proceeds of Crime Act. The financial intelligence unit and the Financial Services Commission have conducted on-site inspections to enforce regulations concerning customer due diligence and fitness of owners. Rules concerning investigation and prosecution of bribery Availability of bank, financial or

61 Steps taken to implement the Anti-Corruption Action Plan for Asia-Pacific: P.R. China 61 commercial records and secret bank information Inter-agency co-operation Protection of persons who assist the authorities Training and resources New Zealand and other international partners have provided assistance in the form of forensic accounting. Earlier this year, an independent committee headed by a former New Zealand Police Commissioner and comprising other New Zealand experts reviewed the police. Stakeholders expressed concerns over police performance. The Prime Minister s Office received the committee s report in October but has yet to release it. However, the Government has begun implementing the report s recommendations relating to finance and budget management by recruiting a private accounting consultant who set up appropriate budget systems and trained finance personnel in the Ministry of Police. A former Inspector of the New Zealand Police has been appointed to head the Cook Islands Police. The police is expected to implement recommendations on staff performance. International cooperation including exchange of information and evidence, extradition, and search, seizure, forfeiture and repatriation of assets The Cook Islands completed one extradition request to New Zealand. It received several mutual legal assistance requests, of which 4 are outstanding. The Cook Islands believe that there is a need to set up a process and training to speed up MLA request procedures. B. Corporate Responsibility and Accountability Promotion of corporate responsibility and accountability based on international standards: Corporate governance, internal company controls such as codes of conduct, establishing channels of communication, whistleblower protection and

62 Steps taken to implement the Anti-Corruption Action Plan for Asia-Pacific: P.R. China 62 staff training Non tax-deductibility of bribes Transparent company accounting and auditing, and penalties for false accounting Administrative sanctions for bribery of public officials, e.g. denial of licenses or procurement contracts PILLAR 3 SUPPORTING ACTIVE PUBLIC INVOLVEMENT A. Public Discussion of Corruption Encouraging public discussion of corruption through: Channels and forums to discuss corruption Public awareness campaigns An Official Information Bill has been drafted and is currently with the Prime Minister s Office. After the review of the Official Information Bill has been finalized, the Ombudsman plans to raise awareness of the role of her office. The cost of the campaign has been budgeted. Supporting of nongovernmental organizations Education programs B. Access to Information Ensuring the general public and the media can receive and impart public information, particularly information on corruption matters: Requirements for justice and

63 Steps taken to implement the Anti-Corruption Action Plan for Asia-Pacific: P.R. China 63 other governmental agencies to disclose efforts to promote integrity and accountability and to combat corruption Measures to provide the public with meaningful access to information An Official Information Bill has been drafted and is currently with the Prime Minister s Office. The Ombudsman hopes the Bill will be passed in C. Public Participation Encouraging public participation in anticorruption activities: Co-operative relationships with civil society groups Protection of whistleblowers Involvement of NGOs in monitoring of public sector programs and activities OTHER

64 Steps taken to implement the Anti-Corruption Action Plan for Asia-Pacific: Fiji Islands 64 Fiji Islands PILLAR 1 DEVELOPING EFFECTIVE AND TRANSPARENT SYSTEMS FOR PUBLIC SERVICE A. Integrity in Public Service 1. Systems of hiring public officials: Systems for compensation Fiji is restructuring its personnel in the civil service, including at senior levels. Transparent hiring and promotion, independence of the civil service Oversight of discretionary decisions and personnel discretionary powers Personnel systems such as rotation of assignments 2. Ethical and administrative codes of conduct: Prohibitions or restrictions on conflicts of interest Disclosure and/or monitoring of, for example, personal assets and liabilities Systems regulating contacts between government officials and business services users, particularly in corruption-prone areas Promotion, training and supervision of officials viz. codes of conduct A draft Leadership Code/Code of Conduct Bill has been completed and awaits consideration by the incoming government. The Cabinet approved the Leadership Code/Code of Conduct Bill in November As a next step, the First Parliamentary Counsel and the Cabinet Sub-Committee on Legislation will scrutinize the bill before introducing The First Parliamentary Counsel and the Cabinet Sub-Committee on Legislation is scrutinizing the Leadership Code/Code of Conduct Bill before introducing it into the House of Representatives. Cabinet had approved

65 Steps taken to implement the Anti-Corruption Action Plan for Asia-Pacific: Fiji Islands 65 it into the House of Representatives. the Bill in November Promoting reporting by officials of corruption and whistleblower protection B. Accountability and Transparency Accountability of public service through effective legal frameworks, management practices and auditing procedures: Measures and systems to promote fiscal transparency International standards and practices to regulate and supervise financial institutions Auditing of the public administration and the public sector Public procurement procedures and adequate simplified administration procedures Institutions for public scrutiny and oversight In November 2006, the Committee of Officials reported to Cabinet on anticorruption laws and the establishment of the Anti-Corruption Authority. The Office of the First Parliamentary Counsel and the Cabinet Sub- Committee on legislation will scrutinize the proposals. Further steps will require the approval of the Attorney-General and the Minister of Justice. The Office of the First Parliamentary Counsel and the Cabinet Sub- Committee on Legislation is scrutinizing the proposals on anti-corruption laws. The Committee of Officials made these proposals in November Fiji has established an Independent Commission Against Commission. The Commission s legality has been challenged in court, resulting in a temporary setback. Fiji seeks advice from members of the ADB/OECD Initiative on this matter.

66 Steps taken to implement the Anti-Corruption Action Plan for Asia-Pacific: Fiji Islands 66 Availability of information on the processing of applications, funding of political parties and electoral campaigns and expenditure Simplification of the business regulatory environment PILLAR 2 STRENGTHENING ANTI-BRIBERY ACTIONS AND PROMOTING INTEGRITY IN BUSINESS OPERATIONS A. Effective Prevention, Investigation and Prosecution Effective measures to actively combat bribery: Sanctions for bribery of public officials Fiji is reviewing its Penal Code and Criminal Procedure Code, a project expected to be completed by end The Fiji Law Reform Commission will soon complete the review of the Penal and Criminal Procedure Codes, which will result in proposals for the following new laws: Crimes Act; Criminal Procedure Act; Penalties and Sentencing Act; Police Powers Act; and Public Orders Act. The Commission will submit its report and recommendations to the Attorney-General and Minister for Justice by late December 2006 for final endorsement. The Fiji Law Reform Commission continues to review the Penal and Criminal Procedure Codes. The review aims to produce proposals for the following new laws: Crimes Act; Criminal Procedure Act; Penalties and Sentencing Act; Police Powers Act; and Public Orders Act. The Commission was expected to submit its report and recommendations to the Attorney- General and Minister for Justice by late December 2006 for final endorsement. In early November 2006, the High Court sentenced a former Permanent Secretary of the Ministry of Agriculture, Fisheries and Forest to 4 years jail for abuse of office by mismanaging F$8 million of public funds.

67 Steps taken to implement the Anti-Corruption Action Plan for Asia-Pacific: Fiji Islands 67 In October 2005, Fiji hosted the annual APG Typologies Workshop. A World Bank assessment team on Anti-Money Laundering and Combating Terrorist Financing visited Fiji in February The team released its Report to the Government of Fiji in March 2006; the final report is expected to be available in July Existence and enforcement of anti-money laundering legislation In October 2005, Fiji hosted the annual APG Typologies Workshop. A World Bank assessment team on Anti-Money Laundering and Combating Terrorist Financing visited Fiji in February The team released its Report to the Government of Fiji in March 2006; the final report is expected to be available in July The Attorney General issued the terms of reference to the Fiji Law Reform Commission for a holistic review of the Charitable Trust Act. NZAid is assessing and evaluating a project paper for the purpose of funding the review. The professional staff of the Fiji Law Reform Commission is conducting internal legal research on the project. A similar review is being conducted on the Religious Bodies Registration Act. The review has not progressed further due to budget constraints. The Fiji Law Reform Commission has, however, completed a Discussion Paper which will be reviewed by an expert before it is circulated to stakeholders for further consultation. An expert continues to review a Discussion Paper by the Fiji Law Reform Commission on this topic. The Paper is expected to be circulated to stakeholders for further consultation. Formation of the National Anti-Money Laundering Council under the Financial Transaction Reporting (FTR) Act Rules concerning investigation and prosecution of bribery Availability of bank, financial or commercial records and secret bank information Implementation of Border Currency Reporting mechanism as required under the FTR Act Memorandum of Agreement signed by Financial Intelligence Unit (FIU), Department of Immigration, Inland Revenue Service/Customs (FIRCA), and Fiji Police Implementation of all international electronic fund transfer transaction reporting framework and $10,000

68 Steps taken to implement the Anti-Corruption Action Plan for Asia-Pacific: Fiji Islands 68 cash transaction reporting framework Establishment of the Financial Intelligence Unit under the FTR Act of 2006 Implementation of the Financial Transaction Reporting Regulations Inter-agency co-operation Protection of persons who assist the authorities Training and resources International cooperation including exchange of information and evidence, extradition, and search, seizure, forfeiture and repatriation of assets Review of Extradition Act with traditional partners (UK, Australia, New Zealand and the United States) B. Corporate Responsibility and Accountability Promotion of corporate responsibility and accountability based on international standards: Corporate governance, internal company controls such as codes of conduct, establishing channels of communication, whistleblower protection and staff training A bill to amend the Capital Markets Development Authority (CMDA) Act is intended to be tabled in Fiji s new Parliament in November 2006 and is expected to be in force by January The bill will encompass extensive coverage and amendment to prohibited dealings including insider trading and market manipulation. It will give more powers to the CMDA to institute both civil and criminal offences. The bill is also expected to establish a principle of fostering a culture of good corporate governance and replace the present prescriptive laws and regulations. The bill to amend the Capital Markets Development Authority (CMDA) Act has not been passed due to resource constraints within the office of the First Parliamentary Council. Non tax-deductibility of bribes

69 Steps taken to implement the Anti-Corruption Action Plan for Asia-Pacific: Fiji Islands 69 Transparent company accounting and auditing, and penalties for false accounting Administrative sanctions for bribery of public officials, e.g. denial of licenses or procurement contracts PILLAR 3 SUPPORTING ACTIVE PUBLIC INVOLVEMENT A. Public Discussion of Corruption Encouraging public discussion of corruption through: Channels and forums to discuss corruption Public awareness campaigns Supporting of nongovernmental organizations Education programs B. Access to Information Ensuring the general public and the media can receive and impart public information, particularly information on corruption matters: Requirements for justice and other governmental agencies to disclose efforts to promote integrity and accountability and to combat corruption Measures to provide the public with meaningful access to information

70 Steps taken to implement the Anti-Corruption Action Plan for Asia-Pacific: Fiji Islands 70 C. Public Participation Encouraging public participation in anticorruption activities: Co-operative relationships with civil society groups Protection of whistleblowers Involvement of NGOs in monitoring of public sector programs and activities OTHER For financial reasons, Fiji has decided to put in place domestic administrative / legal measures in lieu of ratifying the UNCAC. To this end, Fiji has commenced implementing a Leadership Code and the Anti- Corruption Authority.

71 Steps taken to implement the Anti-Corruption Action Plan for Asia-Pacific: Hong Kong, China 71 Hong Kong, China PILLAR 1 DEVELOPING EFFECTIVE AND TRANSPARENT SYSTEMS FOR PUBLIC SERVICE A. Integrity in Public Service 1. Systems of hiring public officials: Systems for compensation Transparent hiring and promotion, independence of the civil service Oversight of discretionary decisions and personnel discretionary powers Personnel systems such as rotation of assignments 2. Ethical and administrative codes of conduct: Prohibitions or restrictions on conflicts of interest To manage conflicts of interest, ICAC has assisted the civil service bureau to enhance respective guidelines. It has also commented on the review of the civil service concerning retirees who work in the private sector. Service-wide guidelines on matters of conduct, such as declaration of investments by civil servants, acceptance of advantages and entertainment, and conflict of interest etc., are constantly reviewed to ensure that they remain clear and adequate. In February 2007, the Civil Service Bureau updated the circulars on accepting advantages by civil servants in their private and official capacity. The central guidelines on accepting sponsored visits are under review. In November 2007, the Civil Service Bureau (CSB) updated the central circular on acceptance of sponsored visits to state, in explicit terms, that as a general principle, sponsored visits offered by entities under the regulation of a Bureau or Department or by private commercial organizations should be declined to avoid any actual, potential or perceived conflict of interest. Disclosure and/or monitoring of, for example, personal assets and liabilities The central guidelines require civil servants in designated posts, notably those at the upper echelons of the service, to regularly declare their private investments in and outside Hong Kong, China. In 2006, a review of the list of designated posts at the highest level was completed. A review of the central The central guideline on the declaration of investments by civil servants was revised in December 2006 to update and clarify its content. Action completed.

72 Steps taken to implement the Anti-Corruption Action Plan for Asia-Pacific: Hong Kong, China 72 guidelines on declaration of investments by civil servants is in progress. Systems regulating contacts between government officials and business services users, particularly in corruptionprone areas ICAC regularly reviews government procedures in areas such as law enforcement, government regulation and licensing. A total of 96 reviews on public sector systems and procedures were completed in In the first nine months of 2006, 82 reviews on public sector systems and procedures were completed. In 2006, 96 reviews on public sector systems and procedures, particularly in corruption-prone areas, were completed. In the first six months of 2007, 48 reviews were completed. In 2007, 92 reviews on public sector systems and procedures, particularly in corruption-prone areas, were completed. In the first three months of 2008, 21 reviews were completed. Promotion, training and supervision of officials viz. codes of conduct The Independent Commission Against Corruption (ICAC) works with the Civil Service Bureau (CSB) and other government departments to promote integrity management. Recent efforts include: New examples of acts of misconduct that staff are advised to avoid were uploaded to the electronic Resource Centre on Civil Service Integrity Management on the CSB intranet. The site provides a one-stop resource for reference materials on integrity management. More examples will be uploaded in 2006 and As part of the ongoing efforts to enhance the content of the Resource Centre on Civil Service Integrity Management (RCIM), new examples of acts of misconduct were uploaded onto the RCIM in June The examples covered solicitation/acceptance of advantages without permission, acceptance of entertainment from persons with official dealings, unauthorised loan from persons with official dealings, supervisory responsibility, and misconduct in public office. CSB is working on more sample cases for uploading onto the RCIM, which will cover such important areas as neglect of duty, illegal gambling, breach of housing benefit rules, etc. Outreach visits to departments are being conducted under a Civil Service Integrity Entrenchment Programme jointly launched by the CSB and the ICAC to foster closer collaboration in promoting an ethical culture in the civil service. As of August 2006, the outreach team has visited 34 departments. Two more visits to departments will be made in 2006/2007. Under the Civil Service Integrity Entrenchment Programme launched in 2004, the outreach team comprising directorate officers from CSB and the ICAC visited 34 bureaus and departments (with a total of staff) to discuss practical issues relating to integrity management. Based on the experience and views shared, ICAC and CSB jointly launched the Ethical Leadership Programme in late The programme aims to establish a platform for sharing experience among departments on ethical governance and integrity management. Ethics Officers, who are senior directorate officers in bureaus or departments, will map out strategies and work plans of their organizations and be the focal point and coordinators of integrity-related Under the Ethical Leadership Programme (Programme), an Ethics Officer (EOs), a senior directorate officer, has been appointed in each of the bureaus/departments (B/Ds) as the focal point for all integrity-related activities and is responsible for mapping out the strategy and work plan that suit the individual needs and priorities of his organisation. The EOs are assisted by Assistant Ethics Officers (AEOs), who are mostly departmental secretaries, in the day-to-day implementation of integrity management programmes within their organizations. A network of about 150 EOs and AEOs is now in place. To help CSB and ICAC better focus on the needs of B/Ds, EOs are also tasked to submit regular reports on their integrity management and

73 Steps taken to implement the Anti-Corruption Action Plan for Asia-Pacific: Hong Kong, China 73 activities in the years to come. promotion efforts. The inaugural meeting of the Ethical Leadership Programme was held in April At the meeting, each EO was provided with an Ethics Officer Manual, which is a management tool to facilitate his planning on integrity promotion and enhancement having regard to the circumstances of his B/D. To support the work of EOs, CSB and ICAC organised two workshops on Administration of Staff Discipline for Ethics Officers and Service Contract Management in October 2007 and March 2008 respectively. The next workshop on investigative techniques on staff misconduct has been scheduled for June Thematic workshops will continue to be organised for EOs, AEOs and responsible staff in B/Ds on a regular basis. To solicit greater support from senior management on integrity management in their organisations, CSB and ICAC have conducted joint visits and presentations to individual B/Ds under the Programme. In 2007, CSB and ICAC paid a joint visit to the senior management of the Lands Department and organised two presentations for its senior professional staff and directorate staff. Similar visits and presentations are being planned for other departments. To further enhance communication between EO/AEOs, CSB and ICAC are developing a dedicated intranet website which will be commissioned by phases in The EOs of bureaus and departments have drawn up work plans on enhancement of integrity and ethics for their staff and will implement the plans in 2008 with the assistance of ICAC.

74 Steps taken to implement the Anti-Corruption Action Plan for Asia-Pacific: Hong Kong, China 74 CSB and ICAC are assisting the Works Branch of the Environment, Transport and Works Bureau to launch an enhanced integrity management program for the works group of departments, focusing on the risks in these departments contexts, so as to enhance staff awareness of corruption prevention and integrity issues. The Development Bureau (formerly the Environment, Transport and Works Bureau) organized an enhanced integrity management program. Over 150 workshops were conducted for some managers, professional staff and site supervisory staff from October 2006 to April The Development Bureau plans to produce a self-training CD ROM with ICAC to strengthen the message on integrity management. The production of a self-learning CD ROM on integrity management as a tool to enhance staff integrity is underway. Upon its completion, the CD ROM will be distributed to the staff of works departments for raising their awareness of corruption risks. CSB is producing a booklet on the offence of misconduct in public office to enhance vigilance against the offence. The Civil Service Bureau is still drafting a booklet on the offence of misconduct in public office. Drafting of the booklet on the offence of misconduct in public office is in progress. A series of workshops on integrity management and core values in the Civil Service have been organized for staff on non-civil service contract terms as part of their induction program. The workshops on integrity management and core values have been extended to cover new recruits and staff on non-civil service contract terms. By July 2007, 6 workshops have been organized and 986 staff have attended. The workshops on integrity management and core values have been extended to cover new recruits and staff on non-civil service contract terms. By May 2008, 8 workshops have been organized and 1,467 staff have attended. Starting from July 2006, the Efficiency Unit and the CSB have jointly organized workshops and experience-sharing sessions for middle managers and frontline supervisors who are responsible for monitoring outsourced government non-works service contracts. The initiative focuses on measures in preventing and handling corruption and malpractice cases. By July 2007, 405 middle managers and frontline supervisors have attended the workshops and experience-sharing sessions organized by the Efficiency Unit and the CSB. Another series of similar workshops are scheduled to take place before the end of By May 2008, 798 middle managers and frontline supervisors have attended the workshops and experience-sharing sessions organized by the Efficiency Unit and the CSB. Another series of similar workshops are scheduled to take place before the end of Promoting reporting by officials of corruption and whistleblower protection Public officials are required to immediately report to the ICAC all instances of attempted bribery which they come across in their official or personal capacities. Breaches of this requirement may result in disciplinary action. In the first 9 months of 2006, 145 cases of suspected corruption were referred to the ICAC by various In the first 6 months of 2007, 321 cases of suspected corruption were referred to the ICAC by various government departments for investigation. During 2007, 149 cases (excluding 462 election related cases) were referred to the ICAC by various government departments for investigation.

75 Steps taken to implement the Anti-Corruption Action Plan for Asia-Pacific: Hong Kong, China 75 government departments for investigation. B. Accountability and Transparency Accountability of public service through effective legal frameworks, management practices and auditing procedures: Measures and systems to promote fiscal transparency The annual budget is presented to and the relevant Appropriation Bill is scrutinized by the Legislative Council (LegCo) as required under the Public Finance Ordinance (Cap. 2) (a copy of the Ordinance is available at htm). In addition, major changes to the annual Estimates of Expenditure, additional funding required for implementation of Government projects and programmes are subject to the approval of the Finance Committee of LegCo. LegCo Members are at liberty to query or offer suggestions on the spending of public monies. LegCo and its Finance Committee hold their meetings in public and their papers and records of proceedings are available to the public (see International standards and practices to regulate and supervise financial institutions The financial regulators have been adhering to international standards and practices in regulating the financial market. They have promulgated guidelines and guidance notes on a large variety of issues including internal control and management of financial institutions. The Mandatory Provident Fund (MPF) system is also regulated and supervised in accordance with international standards and best practices. The MPF Schemes Authority (MPFA) is an active contributor to the work of the

76 Steps taken to implement the Anti-Corruption Action Plan for Asia-Pacific: Hong Kong, China 76 International Organisation of Pension Supervisors including its work on setting principles for private pension supervision and more recently the development of its working papers on risk based supervision. Through participation in such fora, the MPFA is able to effectively benchmark its practices against international colleagues. Auditing of the public administration and the public sector Under the Basic Law of the Hong Kong Special Administrative Region (HKSAR) of China, the Audit Commission functions independently and is accountable to the Chief Executive of the HKSAR. The Audit Commission, as the external auditor of the Government accounts, conducts regularity audits and value for money (VFM) audits in accordance with the Audit Ordinance (Cap.122) (see htm) and agreed VFM audit guidelines respectively. In regularity audits, the Audit Commission examines the annual Government accounts submitted by the Director of Accounting Services; and provides assurance that the Government s financial and accounting transactions are proper and conform to accepted accounting standards. For VFM audits, the Audit Commission aims to provide independent information, advice and assurance about the economy, efficiency and effectiveness with which any bureau/ department/ public body/ audited organisation has discharged its functions. VFM audit reports are tabled biannually at the LegCo and considered by the Public Accounts Committee (PAC) of LegCo (see The PAC conducts public hearings on selected VFM audit subjects to obtain evidence, information and explanations

77 Steps taken to implement the Anti-Corruption Action Plan for Asia-Pacific: Hong Kong, China 77 from government officials and senior staff of public organisations concerned. The PAC draws its own conclusions and recommendations through its reports. Both the Audit Commission and the PAC play an essential role in auditing the public sector and achieving public accountability. For the year , the Audit Commission submitted two reports on VFM audits (consisting of 15 audit subjects) and one report on the accounts of the Government to LegCo. Public procurement procedures and adequate simplified administration procedures ICAC regularly reviews government procedures in areas such as public procurement, and public works. The Financial Services and the Treasury Bureau (FSTB) regularly reviews government procedures in public procurement with a view to streamlining them. In March 2008, the ICAC published a Best Practice Package on management of service contracts for reference by government officers with a view to helping them in putting in place corruption prevention safeguards. In the first six months of 2007, the ICAC completed 48 reviews on government procedures in public procurement and public works to institute corruptionresistant procedures and to enhance transparency and accountability. ICAC completed 92 reviews in 2007 and 21 in the first three months of 2008 on public sector procedures, such as public procurement and public works, to institute corruption prevention measures which help enhance transparency and accountability. Institutions for public scrutiny and oversight Availability of information on the processing of applications, funding of political parties and electoral campaigns and expenditure

78 Steps taken to implement the Anti-Corruption Action Plan for Asia-Pacific: Hong Kong, China 78 Simplification of the business regulatory environment The Companies (Forms) Regulations were amended in April The list of persons who can certify documents and translations of documents submitted by overseas companies to the Companies Registry has been expanded to include practicing certified public accountants, professional company secretaries, and officers of the companies. The amendment should ease compliance with the Companies Ordinance (CO). The measures have been effectively implemented since April 2007 and will be kept under review in the context of the rewrite of the CO. In late August 2007, the Companies Registry will add to its Web site a section on compliance and a service to remind companies to file their annual returns. In late August 2007, the Companies Registry introduced on its web site a new thematic section on "Compliance" to promote the awareness of companies and their officers in respect of their statutory filing obligations under the Companies Ordinance. A free Annual Return e-alert Service is also now provided for subscribers to receive notifications for filing their annual returns. Legislative amendments to Part XI of the Companies Ordinance will be implemented in the fourth quarter of The amendments will simplify the procedure for registering non-hong Kong, China companies and increase the publicly-searchable information about these companies. Legislative amendments to Part XI of the Companies Ordinance were implemented in December The amendments help modernise the registration regime for non-hong Kong companies, simplify the procedure for registering non-hong Kong companies and increase the amount of information about these companies available for public search. Legislative amendments in relation to new procedures for incorporating companies in Hong Kong will be implemented in the second half of The amendments will streamline incorporation procedures for local companies by introducing new incorporation forms. It will also make details of newly incorporated companies available for public search following incorporation.

79 Steps taken to implement the Anti-Corruption Action Plan for Asia-Pacific: Hong Kong, China 79 PILLAR 2 STRENGTHENING ANTI- BRIBERY ACTIONS AND PROMOTING INTEGRITY IN BUSINESS OPERATIONS A. Effective Prevention, Investigation and Prosecution Effective measures to actively combat bribery: Sanctions for bribery of public officials In the first nine months of 2006, 33% of the corruption reports received concerned government departments and 7% related to public bodies. 28 public officials were charged and 101 public officials were recommended for disciplinary action. In the first six months of 2007, 27% of the corruption reports received concerned government departments and 7% related to public bodies. 12 public officials were prosecuted and 71 public officials were recommended for disciplinary action. In 2007, 27% of the corruption reports received concerned government departments and 7% related to public bodies. 30 public officials were prosecuted and 123 public officials were recommended for disciplinary action. Legislation is being amended so as to include the offences of accepting bribes under the Prevention of Bribery Ordinance in the schedule of the Organised and Serious Crimes Ordinance. The amendment should enhance the ability to confiscate proceeds of corruption. In addition to offences of offering bribes under the Prevention of Bribery Ordinance which have already been included in the schedule of the Organised and Serious Crimes Ordinance, the offences of soliciting or accepting bribes under sections 4, 5, 6 and 9 of the Prevention of Bribery Ordinance were added in the above schedule with the enactment of the Organized and Serious Crimes Ordinance (Amendment of Schedule 2) Order 2007 on 7 December The Order allows the law enforcement agencies to apply to the court for orders to freeze, seize or confiscate proceeds or property derived from the corruption offences in question. Existence and enforcement of anti-money laundering legislation Hong Kong, China is a member of the Typologies Working Group of the Asia/Pacific Group on Money Laundering (APG). The Working Group met in Paris in January and May A Central Co-ordinating Committee on Anti-Money Laundering and Counter

80 Steps taken to implement the Anti-Corruption Action Plan for Asia-Pacific: Hong Kong, China 80 Financing of Terrorism chaired by the Financial Secretary was set up in April 2008 to strengthen Hong Kong s strategic response to the changing money laundering and terrorist financing landscape. To align with the Financial Action Task Force on Money Laundering (FATF) standards, the Organized and Serious Crimes Ordinance was amended in January 2007 whereby the threshold for the requirements concerning verification of customer s identity and record keeping for both remittance and money changing transactions will be lowered from HK$ 20,000 to HK$ 8,000. Furthermore, if the sender and the instructor in a remittance transaction of HK$8,000 or above are not the same person, a remittance agent will be required to record both the sender s and the instructor s particulars (i.e. name, identity card number, telephone number and address). Rules concerning investigation and prosecution of bribery The Interception of Communications and Surveillance Ordinance was enacted in August The ICAC has updated its procedures to ensure consistency with the legislation and the Code of Practice issued by the Secretary for Security. Availability of bank, financial or commercial records and secret bank information The cases involving the private sector are generally rather complex and therefore there is a need for ICAC to further enhance its professional capability in areas such as forensic accounting. In June 2006, the ICAC established an additional Financial Investigation Section to augment and complement existing resources in the investigation of complex corruption-related financial frauds. Inter-agency co-operation The ICAC continues to maintain regular operational liaison with overseas and local law enforcement agencies. Protection of persons who assist the authorities In the first 9 months of 2006, the Witness Protection and Firearms Section of the ICAC s Operations The ICAC continues to provide protection, where necessary, to witnesses under the WPP.

81 Steps taken to implement the Anti-Corruption Action Plan for Asia-Pacific: Hong Kong, China 81 Department operated 10 Witness Protection Programs (WPP), some of which required 24-hour close protection measures. In June 2006, a barrister was convicted for attempting to disclose the identity of a participant in the WPP. Training and resources The ICAC continues to send officers to courses and attachments with other agencies, including: The Metropolitan Police Asset Recovery Agency Royal Canadian Mounted Police Australian Federal Police Hong Kong Police Force To enhance cooperation and liaison, the ICAC held its annual Chief Investigators Command Course in October- November The course was attended by representatives of law enforcement from Hong Kong, China, Australian Federal Police, Australian Customs Service, Australian New South Wales ICAC, Corruption and Crime Commission of Western Australia, Anti- Corruption Bureau of Brunei, New Zealand Police, Royal Canadian Mounted Police, Singapore Corrupt Practices Investigation Bureau, Singapore Police, and counterparts from China s procuratorates. Through established liaison, the ICAC continues to send officers of all ranks to courses and attachments with local and overseas agencies, including: Hong Kong Police Force; The Metropolitan Police of the United Kingdom; The Royal Canadian Mounted Police; Australian Federal Police; Singapore Police Force; and International Law Enforcement Academy. The 27th Chief Investigators Command Course organized by the ICAC in November-December 2007 was attended by representatives of law enforcement from Hong Kong, and counterparts from Mainland China, Macao, the Asia Pacific region and Europe. In mid-2007, the ICAC is moving its offices into a new building that is dedicated solely to the Commission. Construction work of the ICAC Headquarters building has been completed. By the end of 2007, all three departments of the ICAC will work in one building for the first time. All departments of the ICAC now work under one roof in the ICAC Building and this helps enhance coordination and efficiency. International cooperation including exchange of information and evidence, extradition, and search, seizure, forfeiture and repatriation of assets ICAC held the third ICAC Symposium on Corporate Corruption, Integrity and Governance on 9-11 May The ICAC handled 29 and 72 incoming and outgoing requests for assistance in January-August The ICAC handled 40 incoming and 92 outgoing requests for assistance in the first six months of The ICAC handled 91 incoming (including 4 under the Mutual Legal Assistance Ordinance) and 214 outgoing (including 2 under the Mutual Legal Assistance Ordinance) requests for assistance in 2007.

82 Steps taken to implement the Anti-Corruption Action Plan for Asia-Pacific: Hong Kong, China 82 B. Corporate Responsibility and Accountability Promotion of corporate responsibility and accountability based on international standards: Corporate governance, internal company controls such as codes of conduct, establishing channels of communication, whistleblower protection and staff training The ICAC s Advisory Services Group provides advice to private companies on promoting corporate governance and internal controls that safeguard against corruption and malpractice. Over 310 requests were received in the first 9 months of The ICAC responded to all requests within two working days as pledged. In the first half of 2007, the ICAC s Advisory Services Group (ASG) received over 165 requests for advice on corruption prevention. The ICAC responded to all requests within two working days as pledged. The ICAC s ASG received over 360 requests from private companies for corruption prevention advice in 2007 and over 150 such requests in the first three months of The ICAC responded to all requests within two working days as pledged. In the past year, the ICAC and trade associations developed and promulgated two Best Practice Modules to help businesses in the hotel and tourism industries to establish sound management practices and control. In March 2007, the ICAC published a Best Practice Package to assist restaurant operators in strengthening their internal control systems in areas such as procurement, stores management and staff administration. A seminar was held to promulgate the best practices to the operators. In December 2007, the ICAC joined hands with the Consumer Council to promulgate a Best Practice Package to help operators of supermarkets to enhance internal control and establish sound management practices. In 2008, the ICAC will launch two Best Practice Modules separately on handling of insurance claims and good corporate governance practices for listed companies. The two Modules will be promulgated jointly with the respective regulators. ICAC conducted a Business Ethics Promotion Program in 2004 and It visited over 700 listed companies to convince them to draft codes of conduct. Over 65% of companies listed in Hong Kong, China now have such codes. ICAC also spoke to over 35,000 employees in these companies about anti-corruption legislation and the need for ethical practices. After the Business Ethics Promotion Program was concluded in 2005, the ICAC continued to approach newly listed companies to provide maintenance services for supportive listed companies. So far, 66% have formulated/reviewed their staff codes of conduct and 27% have arranged talks by the ICAC. Over 42,000 managerial and frontline staff of these companies have attended talks and educational activities on anti-bribery law and ethics management. Out of the around 1,300 listed companies in Hong Kong, we have contacted 880 companies. Among them, about 70% have formulated or reviewed their staff code of conduct and 26% have received talks by the ICAC. About 53,000 managerial and frontline staff of these companies have attended talks and educational activities on antibribery law and ethics management. A two-year Preventive Education Programme for Entrepreneurs of Small- The joint publication by the ICAC and the GDPP entitled Corruption

83 Steps taken to implement the Anti-Corruption Action Plan for Asia-Pacific: Hong Kong, China 83 Medium Enterprises (SMEs) will be launched in The objectives are to help entrepreneurs of transnational SMEs to understand the anti-corruption legislation of P.R. China and Hong Kong, China, and to equip them with corruption prevention and staff integrity management skills. One of the major components of the Programme is a joint venture with the Guangdong Provincial People s Procuratorate to produce by early 2008 a corruption prevention guide for SME entrepreneurs investing in Guangdong and Hong Kong, China. Prevention Guide for SME Entrepreneurs Investing in Hong Kong and Guangdong was launched in April 2008 at a business ethics conference jointly organized by the ICAC and the GDPP together with nearly 20 chambers of commerce and SME trade associations. Targeting at cross boundary SME operators and their company managers, the conference comprised keynote addresses, a discussion forum and a luncheon speech by Hong Kong and Mainland officials as well as prominent business leaders. Issues such as the anti-graft laws in both places, how to minimize corruption risks when conducting cross boundary businesses and how to practise ethics management to enhance competitiveness were discussed at the conference. Non tax-deductibility of bribes Bribes in the guise of commissions or fees made to public officers or any person are not allowable deductions for Profits Tax purposes under the Inland Revenue Ordinance (Cap. 112) (a copy of the Ordinance is available at htm). Transparent company accounting and auditing, and penalties for false accounting Pursuant to a July 2006 ordinance, Hong Kong, China is establishing the Financial Reporting Council (FRC) whose objective is to investigate auditors' irregularities and accounting non-compliances with respect to corporations and collective investment schemes listed in Hong Kong, China. This will upgrade the financial reporting framework of Hong Kong, China to international standards. The FRC is expected to begin operation in early The Financial Reporting Council (FRC) came into operation on 16 July 2007 following appointments of its Chairman and Members in December 2006 and Chief Executive Officer in February One of the main functions of the FRC is to investigate complaints of accounting irregularities of companies listed in Hong Kong, China. The FRC has been functioning effectively. In April 2007, a new regime for the revision of accounts and reports in the The measures have been effectively implemented.

84 Steps taken to implement the Anti-Corruption Action Plan for Asia-Pacific: Hong Kong, China 84 Companies Ordinance was implemented pursuant to the Financial Reporting Council Ordinance. This enables company directors to revise accounts voluntarily if the original accounts did not comply with the Companies Ordinance. This avoids prolonged reliance on inaccurate accounts. Administrative sanctions for bribery of public officials, e.g. denial of licenses or procurement contracts Government departments are reminded through regulations and circulars to identify and review work areas which are vulnerable to corruption and to seek advice from the Corruption Prevention Department of ICAC on measures to plug corruption opportunities. As far as government procurement is concerned, there are procedures under which a contractor may be suspended from bidding for future contracts should he be convicted of an offence under the Prevention of Bribery Ordinance (Cap. 201). To ensure the quality of site supervision of public works projects, an individual with conviction records or poor performance records, or being investigated or prosecuted by ICAC should not normally be accepted as Resident Site Staff. PILLAR 3 SUPPORTING ACTIVE PUBLIC INVOLVEMENT A. Public Discussion of Corruption Encouraging public discussion of corruption through: Channels and forums to discuss corruption ICAC has a regional office network to allow citizens to ask questions, make complaints and discuss corruption issues. The mass media is used to promote anti-corruption work.

85 Steps taken to implement the Anti-Corruption Action Plan for Asia-Pacific: Hong Kong, China 85 Public awareness campaigns Supporting of nongovernmental organizations Education programs In March 2008, the ICAC, joining hands with local universities, launched a new corruption prevention program with a view to promoting corruption prevention awareness among future construction professionals. Under the program, sessions on construction related corruption risks, the preventive measures, and professional ethics are incorporated in the curriculum of the final year construction related undergraduate courses. The ICAC will assist the universities in designing the content of the corruption prevention module as well as delivering it in the classes. B. Access to Information Ensuring the general public and the media can receive and impart public information, particularly information on corruption matters: Requirements for justice and other governmental agencies to disclose efforts to promote integrity and accountability and to combat corruption Measures to provide the public with meaningful access to information C. Public Participation Encouraging public participation in anticorruption activities: Co-operative relationships with civil society groups The Hong Kong Ethics Development Centre (HKEDC) organized seminars in Apart from arranging workshops/seminars for members of

86 Steps taken to implement the Anti-Corruption Action Plan for Asia-Pacific: Hong Kong, China to assist new professional bodies (e.g. business valuation) to enhance their professional standards. professional bodies (e.g. Hong Kong Institute of Certified Public Accountants, Hong Kong Institution of Engineers, Hong Kong Institute of Architects, Hong Kong Business Valuation Forum, Hong Kong Institute of Chartered Secretaries and Hong Kong Institute of Directors), the Hong Kong Ethics Development Centre (HKEDC) also utilized their networks to promote ethical governance through publishing feature articles in their newsletters/journals and serving as a supporting organization for their territory-wide conferences on corporate governance and business ethics. The HKEDC is developing a directors training module in collaboration with the relevant regulators and professional associations. A pilot forum in mid-2007 will aim to unite the stakeholders efforts to promote corporate governance through enhancement of ethical standards of company directors. Subsequent seminars/workshops will be held regularly. The Hong Kong Ethics Development Centre is organising a directors ethics training programme with the relevant regulators, professional bodies and major chambers of commerce. The pilot forum will be held on 14 September 2007 for participants to interact with corporate and government leaders, and examine the evolving ethical challenges and practices. Subsequent seminars/workshops will be held regularly. HKEDC organized the Ethics The Core Value of Leadership 2007 Directors Forum on 14 September 2007 to kick off the training programme for company directors. To sustain the impact of the Forum, HKEDC will produce a video on the common ethical problems faced by company directors for use in its training programme, launch a tool kit to help company directors practise ethical leadership and organize thematic workshops on topical ethical issues. The ICAC s training programme has been incorporated into the Continuing Professional Development Course for estate agents. A short training film to encourage corruption reporting was developed for a similar course for financial intermediaries. In February 2007, ICAC extended its training to the Skills Upgrading Scheme for outbound tourist guides run by the Travel Industry Council. New contents for ICAC s training programme for Continuing Professional Development Courses have been developed for life insurance managers and intermediaries. Managing staff integrity messages are added to the managers version while the frontline practitioners version has enhanced messages on the importance of professional ethics and dire consequences of committing corruption. A new training film to facilitate discussion during the talks has also been developed. Protection of whistleblowers

87 Steps taken to implement the Anti-Corruption Action Plan for Asia-Pacific: Hong Kong, China 87 Involvement of NGOs in monitoring of public sector programs and activities OTHER

88 Steps taken to implement the Anti-Corruption Action Plan for Asia-Pacific: India 88 India India was not represented at the 9th and 10th Steering Group meetings. PILLAR 1 DEVELOPING EFFECTIVE AND TRANSPARENT SYSTEMS FOR PUBLIC SERVICE A. Integrity in Public Service 1. Systems of hiring public officials: Systems for compensation In India, salaries along with other allowances are provided to public servants according to a pre-determined pay scale. Compensations are provided to public servants if the servant is required to vacate the post before the expiry of an agreed period. The 6th Pay Commission has recently submitted its recommendation/report to the Government. The Commission has been set up to work out a comprehensive pay package for public servants that is suitably linked to promoting efficiency, productivity and economy through rationalization of structures, organizations, systems and processes within the government, with a view to leveraging economy, accountability, responsibility, transparency, assimilation of technology and discipline. Transparent hiring and promotion, independence of the civil service India introduced internal control mechanisms including mandatory training for promotions. Public officials are hired through the Union Public Service Commission and State Public Service Commissions established under the Constitution of India. These two independent bodies conduct competitive examinations, and public officials are appointed based on

89 Steps taken to implement the Anti-Corruption Action Plan for Asia-Pacific: India 89 merit. Subordinate officials are hired on the same pattern through the Staff Selection Commission. Article 311 of the Constitution of India provides that no person who is a member of a civil service of the Union or State or an all-india Service or holds a civil post under the Union or a State shall be dismissed or removed by an authority subordinate to that by which he was appointed and without giving him a reasonable opportunity of being heard. Oversight of discretionary decisions and personnel discretionary powers The Comptroller & Auditor General of India (C&AG), during audit of expenditure and revenues of the Government of India, goes beyond the accounting of such transactions and conformity with the laid down procedure, to the underlined wisdom with which the expenditure have been incurred. The C&AG undertakes performance audits on various programmes of the Government to identify gaps, if any, between planned and actual achievements for possible correction. Personnel systems such as rotation of assignments India introduced internal control mechanisms including the rotation of officials. There is an established rotational policy. Officials on sensitive posts are rotated every two/three years to avoid developing vested interests. As per rotational policy an officer of the level of Director/Deputy Secretary is rotated after 5 years, Under Secretary after 7 years, Section Officers after 10 years and Assistants etc. after 12 years. 2. Ethical and administrative codes of conduct: Prohibitions or restrictions on Rules are in force to promote integrity

90 Steps taken to implement the Anti-Corruption Action Plan for Asia-Pacific: India 90 conflicts of interest and to prevent conflicts of interest. Public officials are restricted from taking private employment after their retirement from public service. Rules are in force to promote integrity and prevent conflicts of interest. As per the Central Civil Services (Conduct) Rules and All India Services (Conduct) Rules, no public servant shall use his/her position or influence directly or indirectly to secure employment for members of family or near relatives in companies or firms directly or indirectly with which the officer has official dealings. No public servant is permitted to accept gifts/lavish hospitality from any individual, industrial or commercial firms with which he/she is having official dealings, engage directly or indirectly in private trade or employment, take part in politics or canvassing, acquire property outside the country without the prior approval of the Government and enter into any transaction with any foreigner, foreign Government/ organization for acquisition of any movable or immovable property. Disclosure and/or monitoring of, for example, personal assets and liabilities Rules are in force to require reporting on employment, investments, assets and properties, gifts etc. As per provisions of the Conduct Rules, every public servant holding a Group A or B post at the time of appointment is required to declare his assets/liabilities and is also required to submit an annual return giving full particulars regarding the immovable property inherited by him or owned/acquired by him in his own name or in the name of any member of his family. Any violation of these provisions attracts disciplinary action.

91 Steps taken to implement the Anti-Corruption Action Plan for Asia-Pacific: India 91 Systems regulating contacts between government officials and business services users, particularly in corruption-prone areas India is implementing an e-government scheme to take advantage of technology. It aims to deliver services to all citizens through an IT for all scheme by These include access to land records, citizen service centers, e-enabled office processes and computerization of treasuries, banking operations, commercial taxes etc. No public servant is permitted to accept gifts/lavish hospitality from any individual, industrial or commercial firms with which he/she is having official dealings, engage directly or indirectly in private trade or employment, take part in politics or canvassing, acquire property outside the country without the prior approval of the Government and enter into any transaction with any foreigner, foreign Government/ organization for acquisition of any movable or immovable property. The Central Vigilance Commission has recently recommended adoption of the Integrity Pact in major government procurement. The Pact essentially envisages an agreement between the prospective vendors/bidders and the buyer committing the persons/officials of both the parties, not to exercise any corrupt influence on any aspect of the contract. Entering into this Pact is a preliminary qualification for bidding. Independent External Monitors (IEM) are appointed to review independently and objectively, whether and to what extent parties have complied with their obligations under the Pact. Promotion, training and supervision of officials viz. codes of conduct There is a code of ethics for the judiciary. India has a well-structured public administration based on an established system of recruitment, clear and

92 Steps taken to implement the Anti-Corruption Action Plan for Asia-Pacific: India 92 transparent policies of promotion and elaborate conduct rules for maintaining absolute integrity and devotion to duty. The Conduct Rules specify the do s and don t s for the Government servants. Any violation of these Rules attracts disciplinary action. Promoting reporting by officials of corruption and whistleblowing protection Protection of whistle blowers is provided under a Resolution dated 21st April 2004 where under the Central Vigilance Commission (CVC) has been designated as the authority to receive complaints or disclosure from whistle blowers. Under the Resolution, the identity of the complainant is kept secret unless the complainant himself discloses the same to any other authority. Adequate legal protection is also available to whistle blowers. If the whistle blower is victimized for making a complainant or disclosure, he may seek redressal from the designated authority that shall issue appropriate direction to the concerned authorities. B. Accountability and Transparency 1. Accountability of public service through effective legal frameworks, management practices and auditing procedures: Measures and systems to promote fiscal transparency India has enacted the Fiscal Reforms and Budget Management Act, 2003 as an important institutional expression to ensure fiscal prudence and support for macro economic plans. The constitutionally appointed Comptroller and Auditor General (CAG) oversees the accounts of the Union and the States (Chapter V, Articles , Constitution of India). The reports of the CAG relating to the accounts of the Union are laid before each house of the Parliament and those relating to the

93 Steps taken to implement the Anti-Corruption Action Plan for Asia-Pacific: India 93 accounts of the State are laid before the Legislature of the State. The Parliamentary Accounts Committee (PAC) of parliamentarians with a member from the Opposition Party as Chairperson, the Standing Committees and the Legislative Accounts Committees in the States, oversee the functioning of the executive conduct detailed examination and hearings and can call for all documents related to any decision or procedure. A system of checks and balances is built in at each level of Government to ensure transparency in the process. There is local fund audit for local bodies and these reports are also laid before the State Legislative Assemblies. There are detailed systems of Internal Audit and control with Integrated Financial Advisors and audit and accounting standards. International standards and practices to regulate and supervise financial institutions The Reserve Bank of India (RBI) has been continuously making efforts to ensure convergence of its supervisory norms and practices with the international best practices with a view to aligning standards adopted by the Indian Banking System with the Global standards. With a view to eliminate bias in compliance with the Accounting Standards, detailed guidelines have been made available for the guidance of Banks. The RBI is also responsible for continuously updating the standards and practices in accordance with the international norms in its role to regulate and supervise financial institutions and banks. India s banks having persons outside India and foreign banks operating within India have been asked to migrate to the standardized approach for credit risk and the basic indicator approach for operational risks under BASEL II WEF.

94 Steps taken to implement the Anti-Corruption Action Plan for Asia-Pacific: India 94 March 31, All other scheduled commercial banks are encouraged to migrate to approaches under BASEL II for alignment with them, but in any case not later than March 31, Auditing of the public administration and the public sector An independent Constitutional Audit agency is in place which audits the public accounts of the government with a view to oversee the legality and effectiveness of public spending. Its findings are placed before the Parliament and reviewed by a specially constituted Committee of Parliamentarians, the Public Accounts Committee, whose Chairman is invariably a Member of the Opposition party. In the States, the Accountants General conduct the audit of transactions of the Consolidated Fund of the State and the findings are submitted to the state legislature. As regards the public sector undertakings, the Companies Act 1956 provides for statutory framework, which governs various processes within a company. Section 211 of the Act requires every company to prepare its accounts to reflect true & fair view of the company as per prescribed accounting principles/ standards. Statutory auditors appointed under the Act audit the accounts of the companies. Observations of the statutory auditors, that the affairs of the company have been conducted in a manner prejudicial to the company s interest, creditors/shareholders interest etc. or any financial irregularities have been committed by the company s management, are required to be made specifically qualifying the accounts of the company with appropriate qualificatory remarks in their audit report. These qualificatory remarks are required to be explained by the

95 Steps taken to implement the Anti-Corruption Action Plan for Asia-Pacific: India 95 company management/board of Directors in the Directors Report to be annexed to the balance sheet as per statutory requirements of the provisions of the Companies Act. The balance sheet and profit and loss account of every company are required to be adopted by members in the general meeting on an annual basis and are also required to be filed with the Registrar of Companies. These documents are available for inspection by the public in the office of Registrar of Companies. Besides, there are other mandatory documents, which are required to be filed by companies with the Registrars of Companies viz. Annual Return, changes in directors particulars, changes in registered office of the company and other event based returns. Public procurement procedures and adequate simplified administration procedures India is implementing an e-government scheme to take advantage of technology. It aims to deliver services to all citizens through an IT for all scheme by These include access to public procurement tender opportunities. The Central Vigilance Commission with a view to bringing greater transparency and accountability has issued various guidelines with regard to public procurement procedure, its simplification, etc. The salient features of these initiatives are as follows: In addition to the existing rules and practices regarding giving publicity of tenders through newspapers, trade journals and providing tender documents manually and through post etc. the complete bid documents along with application form shall be published on the web site of the organization. It shall be ensured by the concerned organization that the

96 Steps taken to implement the Anti-Corruption Action Plan for Asia-Pacific: India 96 parties making use of this facility of web site are not asked to again obtain some other related documents from the department manually for the purpose of participating in the tender process i.e. all documents up to date should remain available and shall be equally legally valid for participation in the tender process as manual documents obtained from the department through manual process. The complete application form should be available on the web site for the purposes of downloading, and application made on such a form shall be considered valid for participating in the tender process. The concerned organization must give its web site address in the advertisement/nit published in the newspapers. If the concerned organization wishes to charge for the application form downloaded from the computer then they may ask the bidding party to pay the amount by draft/cheques etc. at the time of submission of the application form and bid documents. All major organizations are required to publish a summary every month, of all the contracts/purchases made above a certain thresholds value on their web site. The details to be provided include the date of publication of the tender, type of bid, last date of receipt of tender, number of tenders received, names of parties qualified after technical evaluation and names of those not qualified, value of contract, whether contract was awarded to L-1 and the name of the contractor. It is compulsory to bring to the notice of the boards of the respective PSUs the details of all works awarded on

97 Steps taken to implement the Anti-Corruption Action Plan for Asia-Pacific: India 97 nomination basis for their scrutiny and vetting bedsides having them checked by and audit committee on random basis. All CVOs to ensure documentation and update of works/purchase manuals especially in those organizations where procurement activities were substantial. Institutions for public scrutiny and oversight The institutions entrusted with the task of public scrutiny and oversight are Comptroller and Auditor General of India, Public Accounts Committee and Standing Committees of the Parliament. Availability of information on the processing of applications, funding of political parties and electoral campaigns and expenditure The Representation of the Peoples Act and relevant rules for notification to the Election Commission provide transparency in campaign financing. The Representation of the Peoples Act, 1951 as amended from time to time and relevant rules for notification of the Election Commission provide for transparency in funding of political parties and electoral campaigns and expenditure. Under the Act, all political parties, before the due date every financial year, are required to furnish a return of its income to the Election Commission. Every candidate at the time of filing his/her nomination paper for any election to the Council of States, Houses of the People, Legislative Assembly of a State or the Legislative Council of a State having such a council, shall furnish full and complete information in regard to the following five matters: Whether the candidate is convicted/acquitted/discharged of any criminal offence in the past if any, whether he/she is punished with imprisonment or fine.

98 Steps taken to implement the Anti-Corruption Action Plan for Asia-Pacific: India 98 Prior to six months of filing of nomination, whether the candidates is accused in any pending case, of any offence punishable with imprisonment for two years or more, and in which charge is framed or cognizance is taken by the court of law. If so, the details thereof. The assets (immovable, movable, bank balances etc.) of a candidate and of his/her spouse and that of dependents. Liabilities, if any, particularly whether there are any over dues of any public financial institution or government dues. The educational qualifications of the candidate. The Election Commission of India has laid down model Code of Conduct for the guidance of Political Parties and candidates. Under this Code, all parties and candidates are required to avoid scrupulously all activities which are corrupt practices and offences under the Election Law, such as bribing of voters, intimidation of voters, impersonation of voters, etc. After announcement of Election dates, the Party in Power is required to ensure that no cause is given for any complaint that it has used its official position for the purposes of its election campaign. For example, the Ministers and other authorities in power are not supposed to announce any financial grants in any form or promises, make any promise of construction of roads, provision of drinking water facilities etc. or make any ad-hoc appointments in Government, Public Sector Undertaking etc. Simplification of the business regulatory environment With the liberalization of Indian economy since 1991, the list of items

99 Steps taken to implement the Anti-Corruption Action Plan for Asia-Pacific: India 99 requiring compulsory licensing policy has been considerably brought down. At present, only six industries require compulsory licensing mainly on account of the environmental, safety and strategic consideration. Similarly, there are only three industries reserved for the public sector. No industrial approval is required for industry not requiring compulsory licensing. Promotion of foreign direct investment forms an integral part of India s economy policy. A liberal and transparent foreign investment scheme has been put in a place where most activities are open to foreign investment on automatic route without any limit on the extent of foreign ownership with progressive liberalization of the Indian Economy. The Role of the Government has been transformed from regulation and administration of the industrial sector into facilitating investment and technology and monitoring industrial development in the liberalized environment. The Government has also set up an independent regulatory bodies such as the Central Electricity Regulatory Commission, the Telecom Regulatory Authority of India, Insurance Regulatory and Development Authority (IRDA), SEBI etc. PILLAR 2 STRENGTHENING ANTI-BRIBERY ACTIONS AND PROMOTING INTEGRITY IN BUSINESS OPERATIONS A. Effective Prevention, Investigation and Prosecution 1. Effective measures to actively combat bribery: Sanctions for bribery of public officials Discipline and Appeal Rules allow for dismissal of officials where there are serious corruption charges.

100 Steps taken to implement the Anti-Corruption Action Plan for Asia-Pacific: India 100 The Prevention of Corruption Act, 1988 has comprehensive provisions for criminalizing bribery and other acts of corruption covering all public servants including those from judiciary, military, local bodies and elected representatives holding public offices and performing public duties. Under the Act, any public servant taking gratification other than legal remuneration in respect of an official act is liable to be punished with imprisonment which shall not be less than 6 months but which may extend to five years and shall also be liable to fine. Discipline and Appeal Rules allow for dismissal of officials where there are serious corruption charges. Existence and enforcement of anti-money laundering legislation The Prevention of Money-Laundering Act, 2002 is the legal mechanism to prevent money-laundering and provides for confiscation of property derived from, or involved in, money-laundering. Under the Act, whosoever directly or indirectly attempts to indulge or knowingly assists or knowingly is a party or is actually involved in any process or activity connected with the proceeds of crime and projecting it as untainted property shall be guilty of offence of money-laundering and shall be punished with rigorous imprisonment for a term which shall not be less than three years but which may extend to seven years and shall also be liable to fine which may extend to five lakhs rupees. The Foreign Exchange Management Act, 1999 has been put in place with the objective of facilitating external trade and payments and for promoting the orderly development and maintenance of foreign exchange market in India. Under this Act, save with the general or special permission

101 Steps taken to implement the Anti-Corruption Action Plan for Asia-Pacific: India 101 of the Reserve Bank, no person is permitted to deal in or transfer any foreign exchange or foreign security to any unauthorized person, make any payment to or for the credit of any person residing outside India in any manner or receive otherwise through an authorized person, any payment by order or on behalf of any person resident outside India in any manner. Rules concerning investigation and prosecution of bribery The Prevention of Corruption Act, 1988 and the CVC Act, 2003 provide for effective investigative machinery to look into the offences of corruption. The Central Vigilance Commission and Central Bureau of Investigation are the centralized agencies for combating corruption. States also have their independent set up for investigation, prosecution and overall monitoring of the anti-corruption efforts. The Central Vigilance Commission is an autonomous statutory body and exercises superintendence over the functioning of the Central Bureau of Investigation with respect to investigation under the Prevention of Corruption Act, The Central Bureau of Investigation is entrusted with the responsibility for investigation of cases under the Prevention of Corruption Act, The Prevention of Corruption Act, 1988 has specific provisions for conducting speedy trials. Section 4(4) of the Act provides that notwithstanding anything contained in the Code of Criminal Procedure, 1973, a Special Judge shall, as far as practicable, hold the trial of an offence on day-to-day basis. Similarly, Section 6 provides for summary trial of cases. The trials under all Statutes/Acts are conducted as per the provisions of the Cr. P.C.

102 Steps taken to implement the Anti-Corruption Action Plan for Asia-Pacific: India 102 Availability of bank, financial or commercial records and secret bank information Section 12 of the Prevention of Money Laundering Act, 2002 makes it obligatory on the part of all banking companies, financial institutions and intermediary to maintain records of all financial transactions of prescribed nature and value and furnish information to the Designated Authority. Inter-agency co-operation A Financial Intelligence Unit (FIU) has been set up as the Central, national agency responsible for receiving, processing, analyzing and discriminating information relating to suspect financial transactions to enforcement agency and foreign FIUs. It is also responsible for coordinating and strengthening efforts of national and international intelligence, investigations and enforcement agency in pursuing the global experts against money laundering and related crimes. Protection of persons who assist the authorities Whistle blowers are extended protection against victimization in accordance with the Resolution of Government of India issued in April Training and resources Specialized training is given to the personnel of investigating agencies by the respective Departments. International cooperation including exchange of information and evidence, extradition, and search, seizure, forfeiture and repatriation of assets International cooperation for mutual legal assistance is depended upon the existence of bilateral agreement. The Code of Criminal Procedure, 1973 already provides for mutual assistance in criminal matters subject to signing of bilateral agreement to give effect to such agreement. Extradition Act, 1962 has provisions for dealing with extradition.

103 Steps taken to implement the Anti-Corruption Action Plan for Asia-Pacific: India 103 B. Corporate Responsibility and Accountability 1. Promotion of corporate responsibility and accountability based on international standards: Corporate governance, internal company controls such as codes of conduct, establishing channels of communication, whistleblowing protection and staff training The Companies Act 1956 provides the statutory framework, which governs various processes within a company. The Act is based on disclosures and provisions to protect the rights of the stakeholders. The Act contains provisions for punishments for companies, which violate provisions of the Act. The provisions of the Act also contains adequate measures to ensure that companies carry out their functions in a manner which is fair, participative /democratic and transparent/disclosure based. Clear and unambiguous provisions to this effect have been provided for in the Act. Decisions by companies are required to be made by way of passing of resolutions. The companies are required to maintain minutes/record of proceedings of meetings of Board of Directors and Shareholders. The minutes of shareholders meetings can be inspected by any member of the company. Whistleblowing protection is also available to employees of Public Sector Undertakings under the Resolution dated 21st April 2004 whereby the Central Vigilance Commission has been authorized to receive complaints from whistle blowers. Non tax-deductibility of bribes Under the Income Tax Act, no tax deduction is allowed for bribery amount which is an offence under the Prevention of Corruption Act,1988.

104 Steps taken to implement the Anti-Corruption Action Plan for Asia-Pacific: India 104 Transparent company accounting and auditing, and penalties for false accounting The Companies Act 1956 provides for statutory framework, which governs various processes within a company. Section 211 of the Act requires every company to prepare its accounts to reflect true & fair view of the company as per prescribed accounting principles/ standards. Statutory auditors appointed under the Act audit the accounts of the companies. Observations of the statutory auditors, that the affairs of the company have been conducted in a manner prejudicial to the company s interest, creditors/shareholders interest etc or any financial irregularities have been committed by the company s management, are required to be made specifically qualifying the accounts of the company with appropriate qualificatory remarks in their audit report. These qualificatory remarks are required to be explained by the company management/board of Directors in the Directors Report to be annexed to the Balance sheet as per statutory requirements of the provisions of the Companies Act. The balance sheet and profit and loss account of every company are required to be adopted by members in the general meeting on an annual basis and are also required to be filed with the Registrar of Companies. These documents are available for inspection by the public in the office of Registrar of Companies. Besides, there are other mandatory documents, which are required to be filed by companies with the Registrars of Companies viz. Annual Return, changes in directors particulars, changes in registered office of the company and other event based returns. The provisions of the Companies Act, 1956 and the three Acts pertaining to

105 Steps taken to implement the Anti-Corruption Action Plan for Asia-Pacific: India 105 corporate professionals viz the Chartered Accountants Act, 1949, the Cost and Works Accountant Act, 1959 and the Company Secretaries Act, 1980 ensure that companies carry out their functions and activities in a manner which is fair and transparent. The provisions of the Companies Act, 1956 provide for punishment for company as well as its officers, who are in default, in case any such company contravenes any of the provisions of the Companies Act, Company is also liable, as a separate legal entity, for compliance of all other laws of the country (viz. India Penal Code, Code of Criminal Procedure etc.) Administrative sanctions for bribery of public officials, e.g. denial of licenses or procurement contracts The Central Vigilance Commission has recommended adoption of the Integrity Pact in major government procurement. The Pact essentially envisages an agreement between the prospective vendors/bidders and the buyer committing the persons/officials of both the parties, not to exercise any corrupt influence on any aspect of the contract. Entering into this Pact is a preliminary qualification for bidding. Independent External Monitors (IEM) are appointed to review independently and objectively, whether and to what extent parties have complied with their obligations under the Pact. PILLAR 3 SUPPORTING ACTIVE PUBLIC INVOLVEMENT A. Public Discussion of Corruption 1. Encouraging public discussion of corruption through: Channels and forums to discuss corruption Under the Constitution of India, every citizen of India has freedom to speech and any organisation, body or media

106 Steps taken to implement the Anti-Corruption Action Plan for Asia-Pacific: India 106 have the freedom to discuss issues related to combating of corruption. Public awareness campaigns Initiatives taken by the Government to curb corruption are given wide publicity through media, newspapers, television, web-sites of Ministries etc. In addition, Vigilance Awareness Week is observed every year with a view to make people in general, and the stakeholders of the respective organizations in particular, aware of the various preventive measures/systems improvement that had been introduced by the Organisation to reduce the scope of corruption, and in catalyzing action to fight corruption. Supporting of nongovernmental organizations Non-Governmental organizations function within the legal and administrative framework for their functioning. Education programs B. Access to Information Ensuring the general public and the media can receive and impart public information, particularly information on corruption matters: Requirements for justice and other governmental agencies to disclose efforts to promote integrity and accountability and to combat corruption The preamble of the Right to Information Act, 2005 recognizes that democracy requires an informed citizenry and transparency of information which are vital to functioning of democracy and also to contain corruption and to hold Governments and their instrumentalities accountable to the governed while underlining the expediency of providing information to citizens who desired to have it. Measures to provide the public with meaningful access to All citizens of the country have the right of information under Section 3 of the

107 Steps taken to implement the Anti-Corruption Action Plan for Asia-Pacific: India 107 information RTI Act. It shall be a constant endeavour of every public authority to take a step for providing as much information suo motu to the public at regular intervals through various means of communications, including the internet, so that the public have minimum resort to the use of this Act to obtain information. Information includes any material in any form including records, documents, memos, s, opinions, advices, press releases, circulars, orders, contracts, reports, papers, samples, models, data materials held in any electronic form and information relating to any private body which can be accessed by a public authority in any other law for the time being in forms. Public Authority includes any authority or body or institution of self-government established or constituted by or under the Constitution, by any other law made by Parliament or State Legislature, or by notification issued or order made by the appropriate Government, and includes anybody owned, controlled or substantially financed as well as the NGOs substantially financed directly or indirectly by funds provided by the appropriate Government. C. Public Participation Encouraging public participation in anticorruption activities: Co-operative relationships with civil society groups The Constitution of India has mandated a critical role of civil society in the form of 73rd and 74th Amendment that provide for local Self-Government, both in the rural areas and the urban centers securing the direct participation of the people in the decision making process. There is an increasing recognition of the role of NGOs in implementation of various development programmes

108 Steps taken to implement the Anti-Corruption Action Plan for Asia-Pacific: India 108 including those pertaining to basic services like health, education, rural development, empowerment of weaker and minority sections of the society etc. for ensuring effective delivery of services with direct participation of the beneficiaries. Protection of whistleblowers Protection of whistle blowers has been provided under a Resolution in April 2004 with the CVC as designated authority to whom complaints or disclosure can be made. The identity of the complainant will not be revealed unless the complainant himself has disclosed the same to any other authority. The whistle blower is protected against victimization. A bill for protection of whistle blowers is under consideration. Involvement of NGOs in monitoring of public sector programs and activities

109 Steps taken to implement the Anti-Corruption Action Plan for Asia-Pacific: Indonesia 109 Indonesia PILLAR 1 DEVELOPING EFFECTIVE AND TRANSPARENT SYSTEMS FOR PUBLIC SERVICE A. Integrity in Public Service 1. Systems of hiring public officials: Systems for compensation The Ministry of National Education has implemented an Allowance Program for Teachers which aims to increase teachers prosperity, devotion and professionalism. In addition to a basic salary, teachers now receive a performance-based allowance. The government of Indonesia has implemented bureaucratic reform in in three main agencies, which are BPK (External Supreme Auditor), Ministry of Finance (including tax and custom offices) and Judicial office under the Supreme Court. The Judicial office under authority of the Supreme Court has implemented bureaucratic reform by increasing judge's salary more than 300 percent, following the restructuring of human resources and measures to enhance institutional capacity. The process of reform is still ongoing. The same reform is also being implemented by Ministry of Finance (including tax and customs offices) and BPK by increasing significant allowance for their officials (more than 300 percent in average higher than other government officials salary). However, there are still misleading bureaucratic reforms that focused mainly on increasing salary rather than a comprehensive package of reform. Transparent hiring and promotion, independence of the civil service In , the National Land Agency (BPN) has selected strategic officials at Echelon II and III levels. Candidates were assessed by a consultant to ensure transparency and accountability. BKN (The Government Administration Office) has launched decree no 30 year 2007 on government official's recruitment guideline which regulates : open vacancy using widely electronic and printing media

110 Steps taken to implement the Anti-Corruption Action Plan for Asia-Pacific: Indonesia 110 The Corruption Eradication Commission (KPK) carried out a tender in order to meet its human resources requirements for The outcome of the tender was announced in October comprehensive assessment and selection process involving universities computer-based processes The agency also took important role in managing promotional instruments, defining job competencies, and establishing an independence assessment team (BAPERJAKAT) at central level. The KPK as the role model of human resources development system in Indonesia has been implementing open and transparent hiring process involving independent and professional consultants in every step of recruitment. The system refers to the most current HR System such as Job Competencies, Salary Scale, Training and Promotion System, HR Computer Based System (MSDM), etc. Oversight of discretionary decisions and personnel discretionary powers Personnel systems such as rotation of assignments The National Land Agency has introduced the new rotation and assignment system namely profiling test (fit and proper test) involving independent consultants. The profiling test has been applied equally to echelon II, III, IV and V officials in order to fulfill recent job competencies requirements. 2. Ethical and administrative codes of conduct: Prohibitions or restrictions on conflicts of interest The Ministry of State Owned Enterprises has issued letter no 154 Year 2007 on the prohibition of compliance with improper demand from State Owned Enterprises Officials. The Ministry of State Owned Enterprise has also issued several regulations on

111 Steps taken to implement the Anti-Corruption Action Plan for Asia-Pacific: Indonesia 111 promoting transparency and good corporate governance. A typical example of institutional defensive approach is shown by the Code of Ethics applied by the Supreme Court which covers philosophical points of view on the present condition of judiciary. One of the best practices is the Code of Ethics applied to the commissioners of KPK which does not only rule the do s and don ts of the commissioners in their position as public officials, but also as individuals in their daily life. Disclosure and/or monitoring of, for example, personal assets and liabilities State officials are obliged to report their personal wealth, according to Law No. 28/1999 on Clean State Officials Free from Corruption, Collusion, and Nepotism, as amended. In the six months to 30 June 2007, the number of reports increased as follows: Mandatory reports: 4.45% Disclosed reports: 8.24% Reports published in the State Gazette: 4.74% Law no 28 Year 1999 states officials who are obliged to report their wealth regularly, namely: 1.State Functionaries in the State Supreme Institution; 2.State Functionaries in the State High Institutions; 3.Ministers; 4.Governors; 5.Judges; 6. Other State Functionaries under the Regulations and Legislation in force; 7. Other Functionaries having strategic functions in relation to the Organizing of the State under the Regulations and Legislation in force. Graphic of Wealth Report Compliance Progress

112 Steps taken to implement the Anti-Corruption Action Plan for Asia-Pacific: Indonesia 112 Number of Mandatory Reporters Number of Stated Administrators who have submitted LHKPN (wealth report) System regulating contacts between government officials and business services user, particularly in corruption prone areas Corruption Eradication Commission (KPK) has studied and observed the administration of public service system, presumed to be corruption prone in several public service departments, and made recommendations in order to ameliorate the system in minimizing the contact between government officials and business service users. Directorate General of Immigration has made initial actions to avoid direct contact between government officials and business service users, such as biometric passport system and e-office implementation. Promotion, training and supervision of officials viz. codes of conduct Directorate General of Taxes Office has launched regulation No 1 Year 2007 concerning the officials code of conduct, which should be implemented by the entire government officials in the area of Directorate General of Taxes. Promoting reporting by officials of corruption and whistle blower protection Indonesia has drafted the Government Regulation concerning the Implementation of Internal Control System for Government Institution. The Regulation will oblige government officials to implement internal controls in daily operations. Corruption Eradication Commission has conducted a series of awareness-