Decoding the Lokpal Bill: International Experience
Backgrounder No. 2 from Youth for Policy & Dialogue
The survey by Andvig et al (2000, 15 ff.) identifies six forms of corruption:
1. bribery, defined as the payment (the bribe) interchanged in a corrupt transaction—according to Rose-Ackerman (1996) bribes are paid to receive benefits or to avoid costs;
2. embezzlement, which is theft of resources by those who have the responsibility to administer them—described in Shleifer and Vishny (1993) as corruption with theft;
3. fraud, defined as an economic crime involving trickery, swindle or deceit, like deliberate falsification, manipulation or embezzlement of information;
4. extortion, that is money or resources extracted by the use of coercion,violence or threats;
5. favouritism, is the abuse of power which implies a corrupted distribution of resources and thus a violation of allocative efficiency, and
6. nepotism,as a special form of favouritism, where decision are biased in favour of family or clan members.
In the light of the nation wide protests in favour of anti corruption bill or the Jan Lokpal Bill, Youth for Policy and Dialogue aims at studying various successful anti corruption legislations across the world and recommend to the Joint Committee certain solutions. This article looks into the anti corruption laws in Malaysia, Russia, United States of America, United Kingdom and Germany. It also lists down the recommendations of the OECD and United Nations to combat corruption in developing countries.
Corruption in today’s world is not merely a national evil, but it has it roots wide spread all across the globe. As Indian economy goes global with rampant liberalisation, the threat of corruption becomes even larger. The fact that an anti corruption bill has not seen the light of the day in over 42 years is a proof enough that there is a lot that is desired from the Indian government. Now that the Joint Committee has been formed, after the relentless pressure from the civil society, it only makes sense for the committee to study the issue in whole so as to come up with a foolproof strategy to counter corruption. The bill in its current form has a lot of loopholes and even the draft bill, as suggested by certain sections of the civil society, falls short of the requisite framework. A major source of worry is the fact that the policy makers are looking at the bill only as a form to eradicate the scams and bring to the books the miscreants rather than looking at it as a tool to banish all sorts of corruption beyond the scams. A strategy that would consider various global examples and recommendations from various global organisations would serve us better.
Legislations across the world:
MALAYSIA
1959 saw the Police, Judiciary and the the Prime Minister’s Office join hands to uproot corruption in Malaysia. In 1967, the Anti Corruption Agency (ACA) was formed. The ACA was formed to provide more focus to the government’s initiatives against corruption. The agency played an important role in enforcing the Prevention of Corruption Act, 1961. In 2008, the agency was transformed into the Malaysian Anti Corruption Commission. The agency was transformed into a commission because of various doubts that were casted on the independence and the transparency of the agency. The civil society was turning against the agency and it was desired that the agency should make it’s various acts and functions public. The government intends to counter the negative public perception and by going public the commission now enjoys greater powers and staffing. Also it is supervised better as there are five independent bodies that monitor the MACC to ensure its integrity and to protect citizens’ rights. These bodies are managed separately from other government offices in order to provide an independent perspective. The five bodies are: the Anti-Corruption Advisory Board, the Special Committee on Corruption, the Complaints Committee, the Operations Review Panel, and the Corruption Consultation and Prevention Panel.
RUSSIA
Russia’s anti corruption legislation comprises of three laws, 273-FZ, 274-FZ and 280-FZ, which individually establish the general framework of anti-corruption legislation, develop provisions of the main law with respect to certain categories of government employees, such as judges and members of parliament, persons holding state and municipal offices not qualifying as state or municipal service offices and develop the provisions of the main law with respect to state and municipal service and amends the Civil, Criminal and Administrative Codes. Russia has a National Anti- Corruption Strategy that came up with the National Anti-Corruption Plan which seeks to ensure a foolproof legislative and organisational anti-corruption framework, enforcement of legal acts and decisions and compliance with anti corruption provisions. Anti-corruption review is not public in Russia, but the civil society can carry out it’s own anti-corruption review of legal acts and regulation. The institution of the anti-corruption review of legal acts and regulations (their drafts) is being actively developed and over 700 independent experts, both individuals and legal entities have been already accredited. Anti-Corruption Review by the civil society is an efficient tool for enhancing the quality of legislation. It makes obligatory the posting of draft legal acts and regulations on the Internet to allow for an independent review and to ensure the transparency of public authorities’ activities which is close to suo moto disclosures in the RTI act of India. It is a process by which citizens have the opportunity to act as experts provided they have the necessary accreditation.
UNITED STATES OF AMERICA
In 1998 the United States Congress and 33 other countries acted against the bribery of foreign officials, essentially government officials in an attempt to reduce corruption and money laundering through the global financial system. Corrupt political officials and those in high army office were targeted with a view to preventing government officials from exploiting their positions to gain unfair commercial advantage. Foreign Corrupt Practices Act is the most comprehensive anti corruption act in USA besides acts and regulations like SOX, USA PATRIOT Act, OFAC regulations, Travel Act, mail and wire fraud statutes, and anti-money laundering statutes.The Money Laundering Control act criminalises all corrupt activities under its ambit and deals with them through criminal investigation. These statutes make it illegal to conduct certain financial transactions with proceeds generated through specified unlawful activities, such as narcotics trafficking, Medicare fraud and embezzlement, among others. As for the FCPA, the act came into legislation in 1977 and was mainly formed to address corruption through stock exchange and businesses involving foreign entities. The act currently covers all public companies, all U.S. companies, many foreign companies, U.S. citizens working anywhere in the world, foreign citizens working for U.S. companies, foreign citizens working for foreign companies that trade on a U.S. exchange, third parties that act on behalf of an entity subject to the statute. To monitor the FCPA, the US Department of Justice and Securities and Exchange Commission have special investigative task forces and are using traditional law enforcement techniques, as well as cooperation with foreign law enforcement authorities. There is no anti-corruption body per se, but the Department of Justice along with the investigative agencies like the FBI and the CIA monitor the act. In 2009, 130 cases were investigated and fines over $100 million were common.
UNITED KINGDOM
The Bribery Act, 2010 of the United Kingdom is considered as the toughest anti-corruption legislation in the world. The Act repeals all previous statutory and common law provisions in relation to bribery, instead replacing them with the crimes of bribery, being bribed, the bribery of foreign public officials, and the failure of a commercial organisation to prevent bribery on its behalf. It also removes the requirement for Attorney-General consent to prosecution; proceedings may now only be brought at the instigation of the Director of a relevant prosecuting authority. The Act does not have retrospective effect so will apply only to offences committed after it comes into force. Penalties for individuals under the Act will be more severe than they are at present. The maximum term of imprisonment has been increased from seven to ten years, in line with other fraud offences. There is also the prospect of an unlimited fine for individuals or commercial organisations convicted of the two general bribery offences or the offence of bribing a foreign public official and for organisations convicted of the offence of failure to prevent bribery. The Act focuses on improper performance rather than corrupt intent. Yet again, like USA, there is no organisational body to check corruption. Rather the laws have been made more stringent to prevent the wrongdoers from escaping.
GERMANY
Transparency International's 2009 Progress Report on the OECD Anti-Bribery Convention rated Germany as having "Active Enforcement" of the treaty, making it one of only four countries with that status out of 36 surveyed. In Germany, unlike in the US (FCPA), only individuals and not the companies involved can be subject to criminal prosecution. The OECD and UNCAC (United Nations Convention Against Corruption) recommendations have been robustly followed in Germany and the German authorities have shown the willingness to cooperate with their international peers. German anti-corruption legislation is already strong but will be tightened in foreseeable future. Germany has signed several international anti-corruption conventions (Council of Europe Criminal Law Convention on Corruption, Additional Protocol to the Criminal Law Convention on Corruption, EU Framework Decision on Combating Corruption in the Private Sector and theUN Convention against Corruption) without, as yet, implementing them in German Law. A draft bill integrating these conventions and the provisions of auxiliary laws (EUBestG and IntBestG) into the German Criminal Code was introduced by the federal government but is yet to be passed.
Recommendations of the OECD Anti Bribery Convention can be found on the following link:
http://www.oecd.org/dataoecd/11/40/44176910.pdf
Recommendations of the UNCAC can be found on the following links:
Text - http://www.unodc.org/documents/treaties/UNCAC/Publications/Convention/08-50026_E.pdf
Legislative Guide -http://www.unodc.org/documents/treaties/UNCAC/Publications/LegislativeGuide/06-53440_Ebook.pdf
Conclusions:
1. Malaysia is a classic example where an agency, independent of the government, had to be transformed into a commission because of the growing unrest among the people. So if an organisation or an office, created to look into matters of corruption, attains a a position not under the ambit of the government, it raises serious threat to democracy. In a country like India where people are protesting ‘for’ such an organisation, a day might well come when there might be a protest against it.
2. Anti Corruption reviews is a good way to proceed on the road to tackle corruption. In Russia, the reviews made by the government are not made public and the civil society can carry the reviews at its own expense. The Joint Committee may well think of this as an ice breaker. The government reviews may be made public while keeping intact the rights of civil society to carry one on their own.
3. The FCPA is good example wherein the Act in itself is deemed complete. The amendments in the act are regularly made and an alert civil society with prompt actions by the investigative agencies and the judiciary ensure that the Act is enforced effectively. There is a lesson for the Joint Committee which might want to look beyond the Lokpal Office and see how effectively anti corruption laws can be enforced in the country if the judiciary and the investigative agencies are beefed up.
4. The Bribery Act of UK has a similarity with the demands made by the civil society in India in the sense that it removes the requirement for Attorney-General consent and the proceedings can be instigated by a Director of a relevant prosecuting authority. The Act has also increased the maximum term of imprisonment from seven to 10 years. There is a clear indication that the law that comes into force has to provide the concerned office enough powers to execute strictly the required checks.
5. The Bribery Act stands out because it focuses on improper performance rather than corrupt intent. Such a law makes it mandatory for the holder of any office to execute his duties with the expected level of efficiency.
6. Germany has adopted various international anti corruption laws which has helped fortify its anti-corruption legislation. The Joint Committee might want to go through the OECD and UNCAC recommendations to strengthen its own legislation.
YPD believes that the civil society has a lot to offer to the bill. In this series of documents we intend to bring forward a host of suggestions and recommendations for the Joint Committee. There is clearly a long way to go in this legislation and considering the media attention that this issue has received, we invite our readers to form an opinion and comment.
Your opinion matters.
Authors:
Bhanu Joshi bhanu@youthpolicy.in
Shashank Shekhar Rai shashank@youthpolicy.in
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