UNDP Human Development Index

24 November 2011

The purpose of good government is to provide a nation’s people with the environment for their optimum development.

In the run up to a general election, political parties debate environmental characteristics which suit their philosophy. In the New Zealand setting, there is frequent comparison made with other countries when promoting manifesto proposals. Seldom is there a full consideration of the total package in the jurisdictions being compared.

Earlier this month the UNDP released the International Human Development Report – which is published annually – together with the Human Development Index. These provide comparative material about the importance to human development of a healthy environment, of integrating social equity into environmental policies, and critically, of public participation and official accountability. It provides a non economic measurement of well being.

Norway is the clear leader on the Index. The continuing loss of New Zealanders to Australia can be explained by the social advantages underpinning Australia’s place as 2nd on the Index. New Zealand is ranked 5th despite an Inside New Zealand TV documentary on child poverty broadcast this week, indicating that child health is substantially inferior to Sweden – which ranks 10th on the Index. However, Netherlands and the United States have leap-frogged  New Zealand since the 2010 Index, when New Zealand ranked 3rd, after Norway and Australia.

The report notes that “…the HDI was created to emphasise that people and their capabilities should be the ultimate criteria for assessing the development of a country, not economic growth alone. The HDI can also be used to question national policy choices, asking how two countries with the same level of GNI per capita can end up with such different human development outcomes. For example, the Bahamas and New Zealand have similar levels of income per person, but life expectancy and expected years of schooling differ greatly between the two countries, resulting in New Zealand having a much higher HDI value than the Bahamas. These striking contrasts can stimulate debate about government policy priorities.”

African states have the poorest ratings of the 187 participants. Development in Pacific countries is generally more favourable although economic indicators are often quite similar.

UNDP Human Development Index 2011                                            Pacific states

1  Norway                                                                                                     49   Palau

2  Australia                                                                                                  90   Tonga

3  Netherlands                                                                                            99    Samoa

4  United States                                                                                        100   Fiji

5  New Zealand                                                                                         116    FS Micronesia

6  Canada                                                                                                   122   Kiribati

7  Ireland                                                                                                    125   Vanuatu

8  Lichenstein                                                                                           142   Solomon Islands

9  Germany                                                                                                147   Timor Leste

10  Sweden                                                                            (Nauru, Tuvalu and Marshall Islands not rated)

www.stuff.co.nz/national/5900604/NZ-ranks-fifth-in-UN-living-standards-report

http://hdrstats.undp.org/en/countries/profiles/NZL.html

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November 24, 2011

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Is the business of business just profit?

23 November 2011

Principles of public service underpin the actions of government – or should do.

The New Zealand Cabinet Manual expects that employees in State sector will exhibit these principles by “being fair, impartial, responsible and trustworthy”. Public Service chief executives are required to imbue their employees with the spirit of service, and to give effect to the State Services Commissioner’s 18 standards of integrity and conduct. These standards are grouped around “being fair, impartial, responsible and trustworthy”. One of the aspirational standards is “to strive to make a difference to the well being of New Zealand and all its people”.

Should commercial enterprises have a similar public-spirited ethic?

If the intentions of some big businesses are anything to go by, any sense of contribution to national well-being is subordinated to shareholder interests. On a hard to conceive scale, 20 major American companies are reported to have spent more than $1 billion on federal lobbying and political contributions in a campaign to repeat a 2004 tax exemption on repatriated profits from overseas investments.  Lost revenue over the next decade could amount to $79 billion.

Allegedly the companies could anticipate a 14000% return on what has been spent on lobbying if they succeed in having the tax rate reduced, as happened in 2004, from 35% to 5.25%. A Kansas University study calculated that the 2004 enactment produced a 22000% return on the costs of lobbying for the change.

USAction and Public Campaign, the community groups that compiled the report from lobbyists’ disclosure forms, are alarmed at how much influence money has on lawmakers. Research shows that public spending in this way would be one of the least effective ways of creating jobs and boosting the economy.

In Britain, the High Pay Commission has found another detrimental impact on economic growth.  The Commission’s research uncovered that pay for some private sector top executives is 4,000% more than 30 years ago, with inevitable damage to trust in business.  By comparison, average wages in the UK have increased by less than 33% over the same period.

www.ssc.govt.nz/code-guidance-stateservants

http://publicampaign.org/sites/default/files/Tax_Holiday_Report_Final1.pdf

www.telegraph.co.uk/finance/financialcrisis/8906033/High-Pay-Commission-most-people-believe-executive-pay-out-of-control.html

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November 23, 2011

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Anti corruption – real momentum or just a fad?

22 November 2011

 

The Director of the UK Serious Fraud Office commented last week on the speed with which anti corruption measures are developing.  He felt that commitments made at this month’s G20 meeting should have got more coverage although the problems with the Eurozone, understandably, grabbed the headlines. A G20 media release highlights this international momentum in tackling corruption;

  • ratification by India of the United Nations Convention against Corruption (UNCAC);
  • decision by Russia to join the OECD Convention on Combating Bribery of Foreign Public Officials
  • entry into force in China of a law criminalizing international corruption
  • adoption by the European Commission of the Anti-Corruption package in June 2011;
  • entry into force in South Korea of a law protecting whistleblowers;
  • creation of a national anti-corruption agency in Saudi Arabia;
  • entry into force of a new law on international corruption in the United Kingdom;
  • enactment of the Dodd-Frank Act in the United States.

Anti corruption movements seem to be “catching on” almost in tandem with the Arab Spring.  Communities worldwide are reacting to abuse of power by Governments and their officials. Any corruption undermines public trust and, as exposed in numerous surveys, the effects are particularly damaging in emerging economies. Public services fall apart, infrastructure collapses and the institutions lose any credibility. That is why the United States Government exerts diplomatic pressure on countries to sign up to UNCAC (and cajoles them to give effect to convention obligations.)

 

http://www.g20-g8.com/g8-g20/root/bank_objects/Fighting_Corruption.pdf

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November 22, 2011

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Is there a fourth – Integrity – branch of government?

21 November 2001

 

One of the keynote addresses at the 3rd Australian Public Sector Anti Corruption Conference held in Fremantle last week was by the Chief Justice of Western Australia. He spoke of the importance of having an anticorruption agency focusing on public sector corruption – however defined. He argued that it is generally a mistake to deny the need to create an anti-corruption agency on the basis of a lack of evidence of widespread corruption.

“There is a growing awareness around the World that evidence of corruption is unlikely to be gathered in the absence of an agency specifically focused upon its detection….”  And “experience shows that when anti-corruption agencies are created in any jurisdiction, they become extremely busy.”  Communities which had laboured under the illusion that corruption in their public sectors, or police forces, was extremely limited and exceptional have had those illusions shattered after agencies have been created”. These notions seem to reflect the Maori Party manifesto!

The Chief Justice also expanded on a notion which Justice Spigelman of the Australian High Court has previously considered, of there being a fourth branch of government – the Integrity Branch. This would encompass agencies created over the last 15 –30 years whose functions do not fall neatly or conveniently within any of the three, traditionally recognised, branches of government. Justice Spigelman has spoken of this additional, Integrity, branch of government, corresponding roughly with the centuries old structure of government which evolved in imperial China. This censorial or supervisory function was referred to by Kubla Khan, a 13th century emperor, as his right hand of goverment. ( It has a shadow in modern day China where the Ministry of Supervision monitors compliance with Communist Party policy.)

This Integrity Branch would include tribunals created to review administrative decision-makers – ombudsmen, privacy commissioners, agencies enforcing freedom of information legislation, auditors-general, agencies enforcing public sector ethics standards, together with anti-corruption agencies.

The Chief Justice commented that the task of the Integrity Branch is to promote awareness of standards and to enforce those standards. “It is my view that public education and prevention, by encouraging an ethos of integrity within the public sector is, by far, the most effective means of discouraging misconduct within that sector.”

　

www.supremecourt.wa.gov.au/publications/pdf/UWA_and_IPAA_-_Corporate_Governance_Seminar_24062008.pdf

www.lawlink.nsw.gov.au/lawlink/supreme_court/ll_sc.nsf/pages/SCO_spigelman080905

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November 21, 2011

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They’re changing guard…

18 November 2011

The UK Government has selected its Head of the Civil Service to undertake one of the functions of the retiring Sir Gus O’Donnell. Cabinet Secretary responsibilities have been split from the role. Sir Robert Kerslake worked in local government before joining the Civil Service in 2008 to lead housing and over the last year, local government agencies. He will remain as permanent secretary of the Department of Communities and Local Government. This operational experience may relate well to the Government’s plan to decentralise and “contract out” as part of the “Big Society” – the transfer of power from Whitehall to local government.  Being neither a career career civil servant nor having a history in policy development distinguishes his skills from those of Jeremy Heywood who has been appointed as Cabinet Secretary. GOD (Gus O’Donnell) is no longer the super mandarin.

ww.localgovernmentexecutive.co.uk/news/sir-bob-kerslake-head-civil-service-20118610

www.cabinetoffice.gov.uk/big-society

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November 19, 2011

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What to do with gift horses…..

17 November 2011

There is controversy in the United States about the entitlement of Federal Government employees to be entertained and to receive gifts from lobbying / PR firms. The consultation period about a proposal for new rules has been extended because of the polarised responses. The Office of Government Ethics website is publishing submissions.

Some see the move as “criminalizing efforts by government officials …to learn about business trends.” This is the view of industry groups. They oppose any constraints which would limit the ability to involve officials in trade shows where the opportunity arises to broaden decision-makers understanding of the particular industry.  Officials, of course, enjoy the freebie travel and hospitality. Lobbying groups say that the rule may change the way they network, upsetting well established but low key forms of hospitality.

“Good government” organisations welcome moves to fracture what they see as a cozy relationship between Government and the lobbying industry. At present Federal officials can receive gifts from lobbyists worth less than $20 (up to a maximum of $50 per year) and all travel expenses associated with attending trade gatherings. The rule would overturn these practices.

The proposals are a response to the activities of Jack Abramoff, released recently from 3 years imprisonment for corruption. He bought influence, including regular outings for some, jetting privately to great golf destinations like St. Andrews. He commented recently that he spent millions of dollars each year as a ticketmaster for decision-makers.

A good summary of the New Zealand position was set out recently in “Avoiding improper influence” in the New Zealand Lawyer. This identifies pertinent guidance from the Auditor General and the State Services Commissioner. It is not the total picture, but if Treasury officials had stuck to these longstanding rules, they would not have brought the disrepute which their agency so publicly experienced earlier this year.

The article summarises obligations as follows;

  •  Gifts or hospitality should only be accepted following a transparent process of declaration and registration (SSC, Understanding the code of conduct – Guidance for State servants);
  • Ceremonial gifts should remain the property of the organisation (SSC, Understanding the code of conduct – Guidance for State servants);
  • Offers of gifts or hospitality must always be assessed in terms of the purpose of the donor (SSC, Understanding the code of conduct – Guidance for State servants);
  • Gifts or hospitality should not be accepted where the acceptance has the ability to alter an entity’s or individual’s decision making (OAG, Controlling sensitive expenditure: Guidelines for public entities);
  • Staff should only be allowed to acquire infrequent and inexpensive gifts that are openly distributed by suppliers and clients (OAG, Controlling sensitive expenditure: Guidelines for public entities);
  • All other gifts or hospitality should be disclosed, recorded in a gifts register, and remain the property of the entity (OAG, Controlling sensitive expenditure: Guidelines for public entities).

www.oge.gov

www.nzlawyermagazine.co.nz/CurrentIssue/Issue172/172F6/tabid/3789/Default.aspx 17 November 2011

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November 17, 2011

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Equal before the law….

16 November 2011

The State Services Integrity Survey, conducted in 2007 and again in 2010, measures the extent to which agencies are giving effect to the “6 Trust Elements”.  These are the characteristics seen as essential for establishing a reputation for trustworthiness. They are the way that organisations build public trust. That trust is earned by working professionally and with integrity. The State Services Commissioner’s guidance is emphatic that “Agencies must want integrity and explicitly state that integrity is a priority”.

The trust elements anticipate that agencies will have standards and make sure staff understand them, and that managers will live the standards and quickly sort out any problems.  The outcome will be a strengthening of public trust in government and fulfilment of the State Sector Act aspiration that all agency employees are “imbued with the spirit of service”.

But Benjamin Franklin’s observation about trust being hard earned and quickly spent has continuing relevance. A Dominion Post editorial last week questioned the reluctance of the State Services Commissioner to act decisively when standards appear to have been breached by one of his chief executives.

The Integrity Survey results show that harassment is the most commonly seen misconduct in the State Services. Agencies need policies to eliminate it, training programmes to reinforce that it is unacceptable, managers to lead by example in combatting it, and an unswerving commitment to act decisively whenever it occurs.  There are 472 uses of the words “harassment” and “bullying” on the State Services Commission website – reflecting the extent of concern.  But references to leadership and integrity are substantially more frequent.

The “6 Trust Elements” provide the armoury for attacking misconduct.  But in a Hamlet-like way, the State Services Commissioner may risk being hoist on his own petard.

www.ssc.govt.nz/node/5390

www.ssc.govt.nz/publications-and-resources/986/all-pages

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November 16, 2011

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Knowing how to blow the whistle

15 November 2011
 
It was 15 months ago that the State Services Commissioner published findings of the 2010 Integrity Survey.  Eight practices were recommended that would improve traction of the code of conduct. A primary requirement is that agencies publish and promote their protected disclosures policy and republish it at regular intervals, as required by the Protected Disclosures Act; ie what was required is that agencies comply with the law!  
 
The purpose of the Protected Disclosures Act is to facilitate reports of serious wrongdoing  by agency staff and to protect them from retribution, as far as is compatible with fairness and justice. But staff need to know about the policy if they are to be encouraged to report wrongdoing. 
Other jurisdictions have much greater faith in the effectiveness of whistleblowing.  This is well illustrated by new measures by the United States Securities and Exchange Commission.  SEC has set up an “Office of the Whistleblower” with a published policy on the rewards that will be paid for providing information that results in convictions. “The Commission is authorized by Congress to provide monetary awards to eligible individuals who come forward with high-quality original information that leads to a Commission enforcement action in which over $1,000,000 in sanctions is ordered. The range for awards is between 10% and 30% of the money collected….”
 
The New Zealand character seems unwilling to blow the whistle within organisations. Collegiality seems to predominate.  Agencies that have set up hotlines have experienced minimal use. SEC bounty-type schemes are not likely to have any greater effect.  Interestingly, the Auditor General’s report on the public sector Fraud Survey published last week indicates that across the sector a very high percentage of agencies have a protected disclosures policy.  In almost all agency types, this is substantially higher than the 35% of State servants who said that they were aware of their agency having a policy, when responding to the 2007 integrity survey.

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November 15, 2011

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Does joining UNCAC reduce corruption?

14 November 2011

Ireland ratified that UN Convention Against Corruption last week, with the Minister for Justice Equality and Defence stating that “ratification of the Convention sends a clear signal to the international community of our determination to prevent and punish corruption”.

Interestingly Transparency International in welcoming the Irish commitment has flagged the need for Ireland to demonstrate a willingness to live up to the principles of UNCAC. This alludes to a series of public scandals including banking and property sector corruption. There are now 140 member states to UNCAC. A comparison of member states with the Corruption Perceptions Index – covering 178 countries – is not a heartening reflection of the commitment many of those states must have to the UNCAC principles. With Ireland’s ratification, there are now only three OECD countries that have not become UNCAC members – New Zealand (1st= on CPI), Germany (15th) and Japan (17th). When Transparency International publishes the 2011 CPI on 1 December, these three are likely to remain among the parts of the world seen to be less corrupt than most.

The map on the UNDOC link below indicates that most states that have not joined UNCAC are the small states of the Pacific and the Carribean. Most of Africa is part of UNCAC with notable exception of Botswana which is the least corrupt country in the continent (CPI 33rd) and the very poorly ranked Eritrea (173rd) and Somalia (178th).

www.justice.ie/ga/JELR/Pages/PR11000221

www.unodc.org/unodc/en/treaties/CAC/signatories.html

http://transparency.org/policy_research/surveys_indices/cpi/2010/results

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November 14, 2011

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Fighting fraud

11 November 2011

It may be Armistice Day but the war on fraud is unending.
International Fraud Awareness week – with which the US Association of Certified Fraud Examiners has tagged the November 6 -12 period – is not promoted in New Zealand, but this has been a week where fraud has had a high profile.
The launch of the public sector Fraud Survey provided a platform for the Auditor General, Director of the Serious Fraud Office and  an Assistant Police  Commissioner, together with Transparency International and Pricewaterhouse Coopers spokespeople,  to advocate the need for a continuing  campaign against fraud across government agencies and the importance of  arming these agencies with an ethical culture  to minimise the opportunities for corruption.
By coincidence, enforcement action against a number of fraudsters during the week has highlighed the susceptibility of all organisations.  Offenders in the news this week have included a bank manager, a jet-setting escort, a lawyer, an accountant and a Crown entity finance officer. Yesterday the SFO charged a former company director with a $103 million fraud.
This week, the New South Wales Independent Commission Against Corruption published its half yearly bulletin “Corruption Matters”.  This includes a disturbing report on the corrupting influence of low value gifts and hospitality provided by suppliers to the employees of 110  State and local authority agencies. Full details of the public enquiry conducted during October will finalised over the next few months.
A wide range of enforcement agencies also took part this week in an  Australian  anti money laundering conference.  This highlighted the extent of fraud  – estimated by the World Bank at $US 2 trillion annually  – and the importance of following the money as the most effective combative strategy.

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November 11, 2011

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