Corruption in Vanuatu illustrates need for strong national integrity systems

25 February 2013

Bryce Edwards’ media review of the political scene on Friday identified how the term “corrupt” though not traditional in New Zealand politics, is now being thrown around by politicians, commentators and editorials. He included a series of quotes by informed commentators that the Government is ignoring rules that protect against the risk of corruption and inappropriate influence; that the Government climbed into Sky City’s pocket in plain sight, and openly waved a white hanky at us from within it; that there is cronyism.

A reason why New Zealand public administration is perceived to be largely free of corruption is because of the media’s ability to comment on suspected conflicts of interest and self interest by those tasked with protecting the public interest, and the independence of enforcement agencies to act where unlawful conduct can be established – the transparency of the checks and balances. Edwards’ article reflects the concern of some, that the Auditor General’s enquiry into the tendering process for a convention centre in Auckland lacked the robustness expected of the champion of checks and balances. The government’s commitment to the rule of law was explored further in a Dominion Post feature today.

The National Integrity System review currently underway by the New Zealand chapter of Transparency International assesses the strength of integrity institutions – the Office of the Auditor General is a major pillar in that integrity framework. Bryce Edwards is assisting in one aspect of the NIS assessment.

Five years ago TINZ and TI Australia supported the preparation of National Integrity System reports for the Pacific Forum countries. The findings were generally disheartening.

Last week Transparency Vanuatu released a statement about the absence of progress in strengthening principles of good government. The National Council of Chiefs has called for weeding out an “avalanche of corruption”. The criticism talks of perpetual indifference to the cancer of corruption. Transparency Vanuatu feels nothing has been done by anyone in authority about any of the burning issues it has raised in the 12 years that it has been operating; “ …something corrupt occurs, the incident is reported in the media, there is an outburst of indignation by journalists and the public in letters to the editor, there is silence and inaction from the Government, and the matter gradually fades into the background…”

The statement highlighted recent media reports, including
• 74 new scholarships being recalled due to abuse of the selection process by the National Education Commission, with awards to family members
• the Prime Minister’s office attempting to remove licences from an independent newspaper and a radio station
• continuing reports about the Phocea, a vessel with false documents apparently owned by ministers, which unloaded cargo secretly, and though the Police Commissioner has said that there is nothing wrong, the investigating police officers were been removed
• the “outrageous” decision by the Minister of Lands to lease customary land although the customary owners who the Minister must consult, have announced they wish to keep the land
• the Police Commissioner’s car being written off by a drunk, unnamed officer – without consequences
• numerous sales of public land to officials despite Ministers deciding in 2010 to stop such sales
• leasing the government interisland vessel in breach of policy and procedures
• appointing the Minister of Agriculture’s brother as human resource manager at the Agricultural college
• setting up a private immigration service by the family of the Director General of Immigration, to which foreigners must make applications
• a roving ambassador being accused of forging a vehicle transfer
• unexplained suspensions of departmental directors

A strong national integrity system has a breadth of mutually supporting agencies and practices which should minimise the likelihood of this type of corruption.

www.transparency.org/news/pressrelease/20130222_its_business_as_usual_for_the_corrupt_despite_all_the_lip_service

www.transparency.org.nz/National-Integrity-System-Assessment-About.htm

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February 25, 2013

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New Zealand tops Open Budget ratings, but whence Australia?

22 February 2013

Last month, the New Zealand chapter of Transparency International was the first off the mark with an announcement of the outcome of the latest Open Budget Index. The index is compiled every two years from responses to 95 questions. (Murray Petrie who compiled the responses is a Deputy Chair of TINZ.) This year 100 countries were involved – another 20 apparently wanted to take part but unless their geography or economies have particular characteristics their involvement was not regarded by the organisers as enhancing the quality of the index.

New Zealand is now the world leader for budget transparency, moving from 2nd place in the 2010 index and switching with South Africa for the top place. Scoring 93 from a possible 100, aspects where New Zealand scores less well relate to public engagement – the extent to which the Executive, Legislature, and the Office of the Auditor General facilitate public participation in budget processes, and public debate on and scrutiny of the pre budget statement. The index compilers however say that “the state of budget transparency around the world is dismal: only a minority of governments publishes significant budget information.”

As in the last index, Australia ( and Japan ) do not feature. Today’s post on the Open and Shut blog seeks to explain why Australian interests have not ensured their national participation. The blogger’s suggestion is that Australia would be near the 100 mark.

Open Budget Index 2013

Rank Country
1 New Zealand
2 South Africa
3 United Kingdom
4 Sweden
5 Norway
6 France
7 United States
8 South Korea
9 Czech Republic
10= Russia
10= Slovenia

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February 22, 2013

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Working across government for “collective impact”

21 February 2013

The Deputy Prime Minister in his annual address today to the Institute of Public Administration (IPANZ) reiterated his drive for effectiveness in government. Speaking to the topic of Better public services and the need to stay focused he said that service delivery that is good for New Zealanders is also good for the economy. Not only are services proving more effective, but he highlighted how in 2008 the projected cost of government services this financial year was $76 billion. The actual figure will be about $72 billion. That includes costs of inflation. What is important is that the public sector has increasingly focused on doing things that make a difference.

In the last week he had seen how about a third of agencies were redirecting their capacity to pursue effectiveness. He observed that agencies have known what their budgets were since 2010 – unlike anywhere else in the Western world – enabling them to shape their operations. He warned anyone who thought that they could wait for better times not to bother; they would find that the campaign for the next election would see parties competing over the extent to which they would reduce government borrowing. There is no more money.

Mr English spoke of the purpose in setting the Better Public Services results. Although these reduced the freedom of Ministers, they had real meaning for New Zealanders. He referred to an expression he had previously used, that “we know who they are” when talking of supporting vulnerable children, reducing reoffending and reducing long term welfare dependency. The task of agencies was to focus on effective solutions for those individuals. Supporting a released prisoner so he doesn’t reoffend saves $100,000 a year, providing the help to avoid someone needing the invalid’s benefit saves a fortune.

The Minister indicated that notions of Whole of Government were confusing. Most activities did not require all agencies to be involved. Similarly he found notions of collaboration unhelpful. Collaboration might improve relationships but accountability was diminished. A current expression he did favour was “collective impact” -which reinforced the notion of contributing for effect. An expression he wanted eliminated from Cabinet Papers was “culture change”. What was needed was to do things differently if that was how to be effective.

Pursuing effectiveness was going to involve uncertainty. Ultimately agencies might not make a difference. He implied that spending that made no difference could then be redirected. We can have cheaper failure. He alluded to centralising data specialists as a way of improving understanding and use of information – perhaps an illustration of “collective impact”?

The Minister believes IT is the essence of change. It is core to the way agencies use their special knowledge. He had been surprised in the past at the number of senior officials who had so little understanding of this key to effectiveness. Using information was the substantive uniqueness of agencies. Their value depended on how they used that information. Imminent legislative changes would improve the information framework but there seemed a reluctance by agencies to respond to Ministers’ expectations. The role of the chief government information officer would be strengthened.


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February 21, 2013

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Are personal ethics tarred by the activities of national institutions?

20 February 2013

There always seems to be a Chinese example reported by the media of human greed and an organisational enthusiasm to exploit others for personal advantage. It appears that few sectors in China are not tarred by the brush of corruption. The entrepreneurship of the commercial sector can be painted almost as a facade for the deceit and opportunism of the hundreds of millions it engages. The new Chinese leadership seems to be as aware as its predecessor of the importance of resisting corruption, but commentators are not convinced the integrity demanded of all officials is backed by a genuine expectation.

Transparency International didn’t rate the Chinese public sector too badly in December 2012 – although acknowledging that if fell to 80th place (of 179) – five places down from 2011 , but “scoring” less than 40 out of the possible of 100. New Zealand shared the top spot with 90.

But can anything more be expected? If a state institutionalises corrupt practices on an industrial scale, are its citizens unavoidably channelled into a similarly corrupt existence?

This week’s news is that Unit 61398 of the Chinese People’s Liberation Army has spent more than a decade engaged in a cyber-attack on United States businesses, downloading incredibly extensive quantities of data, and applying that information to strengthen Chinese competitiveness. This operation implies that the government has no genuine commitment to ethical conduct. American spokespeople are adamant that the results of monitoring show that Chinese Government denials can have no credibility. The BBC has reported that one of its reporters was detained when inquiring about the Shanghai building from where the cyber-attacks are launched.

The purported values of an organisation are only window dressing if they are not central to the way the organisation operates, are not modelled by all managers, are not demanded of all staff, and are not respected and aspired to, by all.


www.washingtonpost.com/world/report-ties-100-plus-cyber-attacks-on-us-computers-to-chinese-military/2013/02/19/2700228e-7a6a-11e2-9a75-dab0201670da_story.html

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February 20, 2013

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Agencies remain slow in making information available

19 February 2013

The report of the Government Administration Committee on the financial review of the Office of the Ombudsmen was published in January. It picked up some of the Ombudsmen’s oft repeated concerns about agencies disregarding their statutory obligations.

The Select Committee indicated that it, too, was concerned about the apparently low awareness of responsibilities under the Ombudsmen Act and the Official Information Act in some agencies and Ministers’ Offices. The Committee indicated that “…some agencies and offices need to increase their knowledge of their obligations under these Acts, which are integral to transparent decision-making in Government…”

This shared concern implies endorsement of the consideration being given by the Ombudsmen to launching an investigation into delays in responding to Official Information Act requests. Having been provided with a list of outstanding complaints for each agency, the Committee noted that there had been a large increase between 2008 and 2012 in the frequency of late responses by local authorities in particular, and by both the Earthquake Commission and the Ministry of Education.

The Ombudsmen’s Office has been asked to provide the Select Committee with regular updates “…to build a better picture of which agencies are performing their obligations adequately and those which need to improve their performance…”

The Committee indicated disagreement with Government policy relating to the mixed-ownership model proposed for state-owned energy companies, the introduction of charter schools, and changes to the State Sector Act to the extent that the proposals appear to diminish the ambit of the Ombudsmen. The Committee considers that these entities should continue to be subject to the Official Information Act and the Ombudsmen Act.

www.parliament.nz/NR/rdonlyres/7D38DF7A-F15F-496F-92D4-DA492989AD7E/261343/DBSCH_SCR_5710_201112financialreviewoftheOfficeoft.pdf

www.ombudsman.parliament.nz/system/paperclip/document_files/document_files/540/original/requests_for_information_regarding_ministerial_conflicts_of_interest.pdf?1359586803

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February 19, 2013

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Fraud survey shows need for integrity focus

18 February 2013

KPMG has published its Australia and New Zealand fraud survey for the last 20 years. The findings of the latest survey suggest that there may be a reduction in the frequency of fraud but the amount involved in each incident is increasing.

The survey involves self-reporting by private and public sectors in both countries. The financial sector remains most prone to large scale fraud, but fraud against the public sector is not diminishing.

You may see someone who fits the average profile – but would you suspect someone like them is a fraudster? The KPMG survey indicates that men are three times more likely to fit the fraud offender profile than women. They are most likely to be aged between 25 and 44 – although there is an increase in the number of offenders aged over 55. Their motivation will be greed not need. In 91% of cases, there was no knowledge of previous offending. While there was a 17% drop in identified fraudsters earning less than $100,000, there was a 94% increase in offenders with income greater than $100,000. Where the fraud is by people working within the organization, 25% of offenders are non-management employees, 19% are managers, and 7% are identified as executive.

The characteristic of offending may be changing. The survey shows an increase over the last year in the extent to which there is collusion, with 29% of incidents involving at least one other person – up 6% in the year since the previous survey.

Organisations uncover fraud mainly through internal controls with employee reporting of suspicions being the second most common means.

These findings indicate that organisations must have standards reinforcing a culture where everyone rejects dishonesty. The recruitment process needs to verify that appointees are of unquestioned integrity (including a check that they have no criminal record) and are financially sound. There should be continuing promotion of organisational culture, with staff discussion of values, and managers exemplifying the behaviour expected of everyone.

Processes that provide structure to transparent and honest behaviour must well understood by all – including the full and accessible disclosure of gifts,hospitality and potential conflicts of interest.

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February 18, 2013

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New Zealand keeps its place for press freedom

15 February 2013

In an interesting disconnect the countries with the most free media are not renown for the quality of their journalism. The Reporters without Borders Press Freedom Index 2013 has continued to rate Scandinavian countries (and New Zealand which seems to rank as a honorary Scandinavian) as having the least regulated media.

The survey this year assessed media freedom in 179 countries. The most poorly ranked states are not a surprise – with those at the bottom of the index being Iran, Somalia, Turkmenistan, North Korea and Eritrea, descending in that order.

What obviously is reflective of authoritarianism is that countries rated 173rd to 175th were Cuba, Vietnam and China.

Half of the EU member states rate in the top 30, but Italy, Hungary and Greece score comparatively poorly. Reportedly press freedom has deteriorated markedly in Canada, United States and Japan.

On the Press Freedom Index 2013 the top ten are:

1 Finland
2 Netherlands
3 Norway
4 Luxembourg
5 Andorra
6 Denmark
7 Liechtenstein
8 New Zealand
9 Iceland
10 Sweden

There is a little movement in New Zealand’s place from year to year. It slipped from 8th in 2011 to 13th last year and back to 8th place in 2013.

Australia ranks 26th on the index having moved up from 30th last year.

http://en.rsf.org/press-freedom-index-2013,1054.html

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February 15, 2013

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Economist’s bouquet to New Zealand

14 February 2013

The Econonist last week included a report listing countries by the quality of their governance. The assessment was a collation of six international surveys carried out in 2012. These evaluated;
Global Competitiveness (World Economic Forum)
Ease of Doing Business (World Bank)
Global Innovation (INSEAD)
Corruption Perceptions (Transparency International)
Human Development (UNDP)
Prosperity (Legatum)

New Zealand “scores” well on most of these surveys, resulting in a high average, placing New Zealand 6th over all. Scandinavian countries top the list followed by Switzerland and New Zealand. A lack of global competitiveness affects New Zealand’s placing.

Countries seen to have a low level of corruption rate well for governance overall. That characteristic is reflected similarly in prosperity. A number of other surveys not forming part of this good governance report reinforce these finding – whether for sustainable development, open governmence, budget transparency etc.

www.economist.com/news/special-report/21570835-nordic-countries-are-probably-best-governed-world-secret-their

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February 14, 2013

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Wellington ethics lecture by IBE president

13 February 2013

Dame Philippa Foster Back OBE, the President of the Institute of Business Ethics (UK) spoke about ethics to a Wellington meeting yesterday. Kensington Swan, one of four New Zealand sponsors of the IBE, provided the forum for Dame Philippa to explore ethics, related values and the commitment of organisations to integrity, openness and transparency.

Dame Philippa, who is the Chair of the UK-Antarctic Heritage Trust had taken part in the centennial celebration at Oamaru over the weekend marking the return from the ice of the remanent of Scott’s Antarctic expedition in 1913. The vessel had arrived off Oamaru on Waitangi Day 1913 from where a telegram about Scott’s fate had been relayed around the world. (Dame Philippa is a granddaughter of an expedition survivor.)

The presentation included an outline of the benefits of making ethical values explicit in an organisation;
• increasing staff loyalty, commitment and morale
• attracting high quality staff
• enhancing reputation
• facilitating a more open and innovative culture
• decreasing risks – and costs of insurance
• generating goodwill in the communities in which the business operates.

Dame Philippa indicated that the IBE advocated a three facetted process for establishing “applied” business ethics. This required identifying and defining core values and ethical values of the business. These are most commonly identified as integrity, honesty, openness, respect, fairness and equality.

These needed to be drawn up into a code – making a statement about “the way we work”. The code then needed to be embedded. This seems to be similar to the World Bank guidance adopted by the State Services Commission as the “6 trust elements” . The expectations of State Services agencies is that they –
• have standards,
• promote them,
• integrate them into the way the organisation works,
• managers model the standards,
• staff knowing there are consequences for breaches of the standards,
• organisations taking decisive action when breaches occur.

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February 13, 2013

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Steady as she goes on UK civil service reform

12 February 2013

Last week the British Government responded to the Lords Constitution Committee report on the accountability of civil servants. The response contains a number of assertions, indicating that there is little belief that any substantial change is necessary to enhance the responsiveness of Departments. These included:

• The existing model of Ministerial accountability should continue, with civil servants accountable to Ministers who are in turn accountable to Parliament.

• There is an important distinction between ministerial accountability and direct personal responsibility of Ministers for the actions of their Department.

• Ministers cannot sensibly be held responsible for everything which goes on in their Department.

• Secretaries of State must be involved at all stages of the selection process for all Permanent Secretaries, meeting candidates, providing feedback, and having their views considered where there is uncertainty about the merit order.

• The relevant Minister, and ultimately the Prime Minister, retain the power of veto over Permanent Secretary appointments
.
• All appointments to the Civil Service, including temporary appointments, must meet the requirements of the code of conduct including political impartiality but Ministers have a role in appointments to expert roles.

• No additional powers are required for the civil service to act as a check on the constitutionality of ministerial actions. “Ministers have a duty to give fair consideration and due weight to informed and impartial advice from civil servants”.

• Responsibility for the management and conduct of special advisers rests with the Minister who made the appointment.

• When civil servants give evidence to a select committee, they are doing so to contribute to the process of ministerial accountability to Parliament, and on behalf of their Ministers.
.
• The management and discipline of civil servants is a matter for the relevant Department.

• The public expects Ministers to be accountable for Arm’s Length Bodies, and to put public functions back into the hands of Ministers.

A fuller report is available on the following link.

www.parliament.uk/documents/lords-committees/constitution/GovernmentResponse/GovernmentresponseACS.pdf

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February 12, 2013

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