OECD report – Education at a Glance

13  September 2012

“Education at a Glance” this week’s report published collating education statistics from OECD countries, paints a generally favourable picture of the New Zealand commitment to education. In a surprisingly large number of the statistical evaluations New Zealand is grouped alongside Scandinavian countries.  The systems in Finland which gained media attention earlier this year do not seem to have resulted in a substantially advantageous outcome according to the data collated in this report. New Zealand teachers are better paid than Finland’s although they seem to do about 25% more classroom teaching.

New Zealand seems similar to the Scandinavians in many categories.  New Zealand ranks 4th (7.4%) in the percentage of GDP spent on education. Only Iceland (8.1%), Korea (8%) and Denmark (7.9%) spend more.   However where Australia, Finland, Ireland and Sweden have the highest success rates in the OECD for young people with poorly-educated parents attaining a tertiary degree, New Zealand – and Canada – are the only countries with poorer results than the United States.

Although there is a report on the data for most OECD countries – there is no explanation for the absence of a New Zealand country report.

Kiwiblog itemises some of the particularly notable statistics.

www.oecd.org/education/highereducationandadultlearning/49338320.pdf

www.oecd.org/newsroom/educationspendingrisingbutaccesstohighereducationremainsunequalinmostcountriessaysoecd.htm

www.oecd.org/newzealand/sti-outlook-2012-new-zealand.pdf

www.kiwiblog.co.nz/2012/09/education_spending.html

www.independent.co.uk/news/education/schools/chalk-talk-far-eastern-schools-may-not-be-all-theyre-cracked-up-to-be-8131176.html

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September 13, 2012

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Whistleblowing may have more in common with bounty hunting than integrity

12 September 2012

A 2006 United States federal statute enables tax authorities to pay informants up to 30% of the revenue recovered as a consequence of their whistleblowing. Such payments are not about rewarding people with a sense of civic responsibility. The program is purely fiscal, paying a commission for information that increases the tax take.

The Inland Revenue Service recently made the largest informant payment – of US$104 million – to a banker who had inside information on how UBS ran offshore banking arrangements for US taxpayers.

UBS paid $780 million to avoid prosecution and provided details about more than 4,000 of its account holders who had undeclared holdings in the Swiss bank.

Ironically, the informant is currently serving a prison sentence having been convicted of conspiracy to defraud the revenue, relating to the part he played in UBS setting up secret bank accounts.

A contributor to the New York Times who for more than ten years has written about ethical issues commented recently in his final column on the ethical dilemma he encountered most among his readers. This related to whether there was a ‘duty to report’. Are there circumstances when whistleblowing is an obligation, or is providing information to enforcement agencies optional?  Is it acceptable to be influenced by any financial reward?

The scenario was that “…people who had done nothing wrong themselves were aware of the wrongdoing in others, and they wanted to know when they had an obligation to come forward. The suggested guidance was; “… when someone is acting in a way that presents an imminent, serious threat to other people, you have an absolute duty to come forward…. If you found out that your friend was a pirate and 50 years ago looted a ship and buried pirate gold, you don’t have a duty to the community to set that matter right, to dig up that treasure chest and report your pirate friend. If your friend is about to attack another ship, then you have a duty to come forward.”

The implication is that there is nothing morally wrong in holding on to information until it can be “sold” to an enforcement agency, unless there is an “imminent, serious threat to others”.

The State Services Commissioner’s guidance on Understanding the Standards of Integrity and Conduct for the State Services indicates a more positive duty to report. “…We are aware that public trust is influenced by the perception that the public has of our organisation. This means responding objectively if we become aware of any unlawful activities in our organisation. We appreciate the importance of modelling the standards set by the code of conduct and taking responsibility to support our organisation take decisive action when we learn that standards are being breached…” In practice most agencies that have a code of conduct, are explicit in requiring staff to report misconduct when they become aware of it.

http://online.wsj.com/article/SB10000872396390444017504577645412614237708.html

www.npr.org/2012/08/26/159543077/the-ethicist-explains-how-to-be-good

www.ssc.govt.nz/node/1913

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September 12, 2012

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The Ibrahim Index – not a 9/11 story.

11 September 2012 

An interview with Mohammed Ibrahim was published over the weekend in the Wall Street Journal. He established the Ibrahim Index which measures standards of governance in Africa.  It involves an evaluation of 86 indicators in each of the 54 African states. Ibrahim, originally from the Sudan, gained a PhD in Britain in the 1970s and after establishing cell phone networks in Africa, made about US$3.5 billion when his interests were taken over by a Kuwaiti company.

He also established an annual award for which all African heads of state are eligible. Candidates must be democratically elected, have served within their constitutional term limits, demonstrated “excellence” in office and peacefully transferred power within the past three years. When commenting about the prize being awarded on only three occasions since its 2007 launch—to former presidents of Mozambique, Botswana and Cape Verde – Ibrahim indicated that “….If there is no winner, it’s only right to say there is no winner. You have to be credible…”

Ibrahim’s underpinning aspiration is to encourage good government. He regards the lack of emphasis on accountability as a widespread problem in the aid business. Aid too often ends up supporting corrupt or failed leaders. “Sometimes I feel it’s an African hobby to refuse to take responsibility and always blame others for our problems….. We need brutal honesty if we’re serious about moving forward…”

The Ibrahim Index of African Governance, which his foundation publishes every year, provides that honesty. Last year, Mauritius topped the list with an overall score of 82 out of 100 possible points, ranking first in “sustainable economic opportunity” and “safety and rule of law.”  Somalia was the poorest scoring country with eight out of 100 overall and scoring nothing for “rule of law” and “education”.

Discussing previous winners, Ibrahim said that “…it doesn’t matter if you’re low in the index, what matters is where you’re coming from.” When comparing Mozambique and South Africa, he said that Chissano took office during Mozambique’s 16-year civil war and left behind peace and the beginnings of a market economy. Mbeki inherited one of the most secure and developed nations in Africa but let safety, rule of law and civil rights slide.

Ibrahim is disappointed with the current western philosophy. He believes that Western governments “… have relaxed into a cronyism of business loopholes and selective bailouts. …We now see a very strange phenomenon where we have capitalist institutions – companies – that have been allowed to privatise profits and socialise their losses. Is that capitalism?”

www.moibrahimfoundation.org/en/media/get/20111003_ENG2011-IIAG-SummaryReport-sml.pdf

http://en.wikipedia.org/wiki/Ibrahim_Index_of_African_Governance

http://online.wsj.com/article/SB10000872396390444318104577587641175010510.html

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September 11, 2012

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Why do politicians dislike codes of conduct?

10 September 2012

 
Politicians, generally, don’t seem to like being subject to a code of conduct that incorporates meaningful standards. This appears to be the case regardless of jurisdiction or geography. The rationale is that the ballot box is the ultimate monitor of behaviour and that there is no need to otherwise regulate what they do. They are adept at turning a blind eye to scandalous (and not infrequently criminal) abuse of political office to which codes, almost universally, are a reaction .
 
 
A willingness by all politicians to be open about what they do would make any code less relevant – whether in disclosing campaign contributions, the nature of interest groups that seek to enlist their support, the source and scale of all gifts and hospitality, expense claims for their official activities or the costs of their travel and subsistence.
 
 
In New Zealand the private member’s bill for an MPs’ code was not reintroduced onto the order paper following the 2007 general election – and had minimal support when at select committee anyhow. The  same MP apparently has another draft bill awaiting the ballot for introduction – the Members of Parliament (Code of Ethical Conduct ) Bill.
 
 
Last week the Prime Minister indicated support for a private member’s Lobbying Bill currently being considered, “… provided what is sauce for the goose is also sauce for the gander…” meaning that if employee organisations are to be excluded from the scope, so should employer organisations. (Unions consider lobbying for employment conditions and remuneration to be public interest matters, unlike employer concerns which they consider as matters of private interest.)
 
 
In the UK, support for measures to control the lobbying of MPs by registration of lobbyists now reflects the political divide. Ministers are not persuaded by the strength of submissions for extensive and prescriptive regulation at present championed by the Opposition.
 
 
Transparency International reports that in the European Parliament the issue of codes of conduct is a hot topic at the moment, and “…it seems that some members of the European Parliament still are not taking the issue of ethics seriously…” The code imposed on MEPs’ in 2011 may well be watered down, now that the public uproar about payment for votes has died down. Last year’s reforms included tracking the influence of external advice on amendments and legislation, safe channels to blow the whistle on violations, and rules on second jobs, gifts and hospitality.
 
Apparently there is little enthusiasm now for ensuring levels of disclosure required by the code. TI says that a number of MEPs are outraged at the new disclosure rules on gifts and trips and are looking into ways to overturn the decision.
 
 
 
 
 
 
 

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September 11, 2012

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Extent of tipping may confirm level of corruption

 
9 September 2012
 
 
Countries where a wide range of occupations expect to be tipped are more corrupt than countries where tipping is not commonplace. This is the finding of Harvard research into the relationship between corruption and tipping.

The research supports a theory that tips and bribes amount to the same thing. “Both are gifts intended to strengthen social bonds and each is offered in conjunction with advantageous service. The main difference between the two acts is merely the timing of the gift: tips follow the rendering of a service, whereas bribes precede it.”

The research compared the Corruption Perceptions Index with another index on tipping – made up of 33 occupational groups and whether it is customary to tip those workers in a given country.

Countries where tipping is more prevalent ie the number of occupations where tips are commonly received, have a less satisfactory rating on the Transparency International Corruption Perceptions Index. The research explored the effects of sex and racial factors, for example analysing and applying the different attitudes of Indians and Canadians, and of men and women.

New Zealand, Iceland, Denmark and Sweden which score well on the CPI have few occupations that are tipped. Finland and Japan are the two outliers – with Finland, largely corruption free having a tipping custom for many occupations, and Japan with few occupations that receive tips nevertheless being rated as much more corrupt on the CPI.  Singapore was not referred to in the research although it is currently rated on the CPI as having the second least corrupt public sector.

The United Kingdom, Germany, France, Austria and Canada are similar in the extensiveness of tipping and the perceived levels of corruption in their public administrations. An outlier is the United States where tipping is more prevalent but corruption is at similar levels and Belgium where fewer occupations receive tips but public sector corruption is more common.

The researcher indicates that much more remains to be learned about the link between tips and bribes.  But if a tip is a bribe in drag, an unsolicited gift, which presumably amounts to a tip must also be a bribe. Is this why the Auditor General states that public employees may acquire, infrequently, only inexpensive gifts, openly distributed, and of no value “…like pens, badges and calendars..” 

http://dash.harvard.edu/bitstream/handle/1/9491448/Here%27s-a-Tip_Torfason%2cFlynn%2cKupor-Tipping-and-Bribery-6-6-12-SPPS.pdf?sequence=1

https://integritytalkingpoints.com/2012/03/22/unacceptability-of-gifts-is-it-the-principle-or-the-value/

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September 10, 2012

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Enforcement of Anti Bribery Convention improving according to Transparency International

7 September 2012

Transparency International has published a report about enforcement of the OECD Convention on Combating Bribery of Foreign Public Officials – the Anti Bribery Convention. This is its eighth annual “progress” report.
 
The 39 Member states are required to make foreign bribery a crime and are subject to periodic review of their implementation by other Members. Nine to ten country reviews are issued each year. ( new Zealand was last reviewed in 2006.)  The annual TI review is independent of the OECD and based on reports from its national chapters. Countries are classified in four enforcement categories this year: Active, Moderate, Little and No enforcement.
 
The report indicates a rising rate of prosecutions and more serious outcomes for offenders. There were 144 new prosecutions in 2011, with a further 286 matters still under investigation.

“The growing momentum behind anti-bribery enforcement is making it harder to get away with the use of graft to win business” according to TI. This perspective is supported by data showing that 27% of business executives surveyed believe that bribery by a competitor resulted in direct costs to their business in the last 12 months.

A criticism is that of Member states, only seven seem to have an active concern about enforcing bribery law, and half have not yet prosecuted any instances of cross-border corruption, A particular concern is the lobbying that is underway in a number of jurisdictions to weaken statutory provisions.

United States and German prosecutors have been the most active over the last year.  Australia, Canada and Austria are recognised in the report for conducting their first major case in 2011. Conversely Japan and France, as large exporters, are criticised for inactivity.

In the report, New Zealand is lumped among No Enforcement countries, together with Czech Republic, Estonia, Greece, Ireland, Israel, Poland and South Africa. There is recognition of measures by the Ministry of Justice to establish an anti bribery profile through an August 2011 paper on “Strengthening New Zealand’s Resistance to Organised Crime”, but the TI concern is that “…It appears that awareness within New Zealand of foreign corruption prohibitions and risks is low. The Serious Fraud Office and other agencies should support public-awareness efforts and encourage the reporting of suspected foreign bribery, as it is understood the Serious Fraud Office and police have received few, if any, such complaints.” Of course New Zealand is a very small fish with on,y 0.2% of World exports.

A Transparency International NZ media statement about the report indicates that New Zealand contribution was made by Fiona Tregonning (Bell Gully), and Aaron Lloyd (Minter Ellison Rudd Watts).

www.scoop.co.nz/stories/PO1209/S00086/still-not-enough-action-on-foreign-corruption-by-nz.htm

www.transparency.org/whatwedo/pub/exporting_corruption_country_enforcement_of_the_oecd_anti_bribery_conventio

www.transparency.org/news/pressreleases

www.justice.govt.nz/policy/criminal-justice/copy_of_bribery-and-corruption

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September 7, 2012

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Northern Ireland marks more than just the Titanic centenary

6 September 2012 

At Stormont yesterday afternoon, the Public Accounts Select Committee of the Northern Ireland Assembly was considering issues relating to  safeguarding of the province’s historic buildings.  A classic illustration of the abuse of current practice is the fate of the courthouse in Crumlin Road, where the Diplock trials –without jury – were conducted in the 1970s and 1980s.  That building was “sold” to a developer for one pound, in anticipation of redevelopment as a  five star accommodation.  In the event there was no development, the building was trashed, and ncinerated and is now a liability.  The purchaser is being prosecuted for failing to redevelop in line with the sale agreement.

 One of the issues which arose at the Select Committee which I observed yesterday related to a complaint about the Government’s inaction on an allegation that the European Union had been defrauded of between 2.5 and  3 million pounds in a redevelopment. The circumstancwes arose in the mid 1990s.  The Administration found there was little that it could do.  The PAC had reports from the Auditor General and the relevant department.  The Auditor General’s Office and the department seemed reluctant to act on the complaint.

 When questioned by the committee chair, the responses of the  chief execdutive and the Auditor General were interesting.   The Auditor General indicated that the passage of time since the mid 1990s made the issues too old to investigate; there was insufficient evidence to make a determination. When asked if he was “…not then going to do something”, the Auditor General indicated that was “…more or less the case…”.

The select committee then  drilled down into an interesting matter.  A problem in this case  was that a manuscript record taken by an official at a contentious meeting was subseqently converted to an electronic record.  The manuscript note was destroyed and  was unavailable when the electronic record was challenged.  The issue became the status of a disputed report based on that record, if the record is no longer available? Although desirable to keep the manuscript note, if the content is fully transcribed, must it be kept?

The PAC appreciated that the complaint was likely to be referred to the European Commission.  It directed that no record be destroyed so that any subsequent consideration of the case would not be muddied by lost “evidence”.

 Renewed confontation in a small part of Belfast between  community factions, leading over the last 4 nights to more than 60 police injuries, seems less likely to occur tonight….  so far there has been none of the noise of helicopter surveillance of earlier in the week, and none of the chorus of emergency vehicle sirens of last night.  The excitement is likely to have a connection with the centenary, on 28 September, of the signing  by Carson of the Ulster Covernant objecting to the Home Rule Bill.

 

www.niassembly.gov.uk/Assembly-Business/Committees/Public-Accounts/Forward-Work-Programme/September-2012/

http://en.wikipedia.org/wiki/Diplock_courts/www.bbc.co.uk/news/uk-northern-ireland-19495137

www.independent.co.uk/news/uk/home-news/police-fire-baton-rounds-during-serious-disorder-in-belfast-8103708.html

http://en.wikipedia.org/wiki/Ulster_Covenant

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September 6, 2012

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Integrity concerns in Australia and Northern Ireland

5 September 2012

The Melbourne Age has been carrying stories about the erosion of Australia’s border security as a consequence of officials being corrupted by organised criminal groups. Enforcement agencies and parliamentary committees have also been warning about Australia’s airports and waterfront being infiltrated by organised crime.

 The concerns escalated in March when more than two dozen border officials were investigated for drug trafficking and misusing sensitive agency information. And in late August a customs officer, arrested together with two drug couriers, was charged with trafficking offences, receiving bribes and abusing public office for personal advantage.

 Apparently the customs chief, “on the eve of retirement’ was shattered to learn of the staff member’s help in smuggling 14 kilos of pseudoephedrine, as were colleagues at Sydney Airport.

The Age alleges that the Government has failed to act despite a select committee on law enforcement warning that organised crime infiltration of airports and docks ”poses a very real threat to Australia”.  That was the Polaris waterfront corruption and crime taskforce finding that “… rampant corruption involving government officials, port workers and organised criminals is wrecking efforts to control an epidemic of drugs and arms smuggling on Australia’s wharves…”

A similar eroding of standards appears to be occurring in Northern Ireland, where the Belfast Telegraph reported yesterday on a senior Housing Executive official with responsibility for allocating 200 million pounds in maintenance contracts, enjoying “excessive hospitality” from a contracting firm which has been awarded substantial contracts. Not surprisingly, processes to maintain integrity and avoid conflicts of interest were found by the Auditor General to be inadequate. 

www.theage.com.au/national/customs-officer-facing-drugs-bribery-charges-20120904-25cm6.html

www.belfasttelegraph.co.uk/news/local-national/northern-ireland/nihe-slammed-over-maintenance-deals-16206268.html

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September 5, 2012

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The Fortune 500 view on gifts and entertainment

4 September 2012

Ethisphere recently published data about the codes of conduct of the companies comprising the Fortune  500. The authors have further summarised the data to identify the gift and hospitality standards specified in those codes. 

For businesses with a United States operation the good practice disclosed is helpful in determining how to avoid breaching the Foreign Corrupt Practices Act. The Act makes any offer, promise, or payment of value to a foreign government official an offence if the purpose is to obtain an improper business advantage. But the Act does not outline when things like gifts, entertainment, hospitality and travel amount to corruption. And there is no United Nations agency guidance associated with the UN Convention Against Corruption or OECD guidance on the Anti Corruption Convention which gives much help. The acceptability of facilitation payments can be a particular challenge.

Of the Fortune 500 codes of conduct reviewed, only 19 prohibit facilitation payments, although another 22 companies strongly discourage them.

But gifts and entertainment form part of almost all codes with 33% setting a value limit on gifts and 11% setting entertainment limits.

About a quarter of all companies limited gifts to a maximum value of US$100. Another 8% had the limit at US$250. Only 3% permitted gifts of more than US$250 (remembering that 66% had no gift specifications).

The companies generally had a substantially higher limit on entertainment expenditure.

The policies that do not give a specific monetary gift or entertainment limit typically require that gifts and entertainment be of “nominal” or “modest” value, “reasonable and customary,” or “not excessive in value.”  It is hard to determine whether that means more or less than the codes where values are specified.

The State Services Commissioner’s guidance indicates that gifts and hospitality can be accepted by State servants unless there would be a perception that someone  could benefit from influencing that official or their organisation… “… In all cases, it is expected that gifts will only be accepted following a transparent process of declaration and registration. To avoid misperceptions, it is essential that the process is public….”

The Auditor General’s guidance remains less pragmatic.  This is set out in paragraph 8.26 of the Sensitive Expenditure Guidelines – “ …We expect entities to:

  • require receipt of gifts, except for inexpensive gifts that are openly distributed by suppliers and clients, to be disclosed, to be recorded in a gifts register, and to remain the property of the entity;
  • allow staff to personally acquire only infrequent and inexpensive gifts that are openly distributed by suppliers and clients (for example, pens, badges, and calendars); and
  • have policies defining “infrequent” and “inexpensive” in relation to receiving gifts…”

http://ethisphere.com/rankings-and-ratings/

www.law.com/jsp/cc/PubArticleCC.jsp?id=1202569122050&Corporate_Anticorruption_Compliance_by_the_Numbers

www.ssc.govt.nz/sites/all/files/UnderstandingtheCode-April2010.pdf

http://oag.govt.nz/2007/sensitive-expenditure/part8.htm

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September 4, 2012

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No rose tinted specs as PIF reviewers see red

3 September 2012

The release of the Performance Improvement Framework report on the Ministry of Defence is another “curate’s egg” assessment. The reviewers, as with the last published report on the Ministry of Justice, seem to be saying that we know it is a difficult and complex business, the agency is trying hard, but you are not yet making enough difference.

In the MOD report there is almost an apology for the allocation of traffic lights. As with the MOJ report, the reviewers were unable to give a “Strong” rating to any of the 18 capability elements. Four were rated “Well placed” and two were not rated at all.  The reviewers continue with their approach of not pulling punches.  Two thirds of the ratings were  “Weak” or “Needing development”

It would be interesting to see what traffic light would be given by a plain English evaluator to the Central Agencies’ response,  which proposes  “…supporting MOD and the security sector to take a more systemic approach to creating greater depth and resilience within their organisations and to embed in MOD more sophisticated systems and processes to support whole-of-life capability management…”

www.ssc.govt.nz/sites/all/files/pif-mod-review-sept12.pdf

www.ssc.govt.nz/pif-factsheet5

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September 3, 2012

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