World Governance Indicators: How Brunei ranks within ASEAN

In my previous posting I talked about why Brunei is not in the Transparency International (TI) Corruption Perception Index (CPI) ranking of the least corrupt countries due to the lack of the available data.  As a country we need a minimum of 3 independent surveys and so far I am told there are only 2 sets of independent surveys available. However, the World Governance Indicators (WGI) a research project commissioned by the World Bank did come up with some sort of an indicator known as the Control of Corruption.  The WGI captures six key dimensions of governance (Voice and accountability, Political Stability and Lack of Violence, Government Effectiveness, Regulatory Quality, Rule of law and Control of Corruption) between 1996 and the present.

The Control of Corruption Indicator for Brunei was based on 2 available data, Political Risk Services (www.asiarisk.com) and Global Insight Business Conditions and Risk Indicators (www.globalinsight.com). You can download a full report on Brunei by visiting (www.worldbank.org/wbi/governance) which shows how we fare in all the 6 dimensions of governance. The website provides an interactive database of the whole of the six indicators. However I am more interested to show you how we fare in the "Control of Corruption Indicator". Although the WGI does not rank countries, you can however use its interactive database to make a comparative ranking between the countries surveyed. So I came up with the graph on the left of the 10 countries that make up ASEAN for 2007 to see how we fare amongst our neighbours. We are slightly edging above Malaysia in number two spot but the graph clearly shows that we still have a lot of room for improvement if we were to compare ourselves with Singapore.  

Why is Brunei not on the CPI survey?

I often get queries on why Brunei is not included in the widely-known annual Transparency International (TI) Corruption Perception Survey Index (CPI). I myself have been trying to get Brunei on the Index as I would like to know how Brunei would fare in that ranking. I know I would be shooting myself on the foot if Brunei were ranked badly but it is obviously important we all know on the “perceived” level of corruption in this country. Unfortunately to get Brunei on the Index is not that easy as it may sound as Brunei is in that category of countries that lack the availability of independent surveys. This is because TI relies on other surveys. That is why the CPI is often called as “a survey of surveys”. What TI does is that it uses the data that are provided by other independent surveys conducted by institutions like Columbia University, Economist Intelligence Unit, Freedom House, Information International, International Institute for Management Development, Merchant International Group, Political and Economic Risk Consultancy, United Nations Economic Commission for Africa, World Economic Forum and World Markets Research Centre.
As a country, Brunei needs a minimum of 3 of these independent surveys and to date I am told Brunei  has not met the minimum 3 independent surveys required. I have been in contact with TI which is based in Berlin, to help us on this. At first I thought we could conduct the survey by seeking the assistance of our university as our appointed consultant. However, I was advised by TI that this is not appropriate as it may appear that we might influence on the outcome. I obviously concurred as they do have a point. If the result of the survey was in ACB's favour, the public would say that the survey was not independently done.

My criticism of the CPI Survey was that in the past, the experts surveyed in the CPI sources were often business people from industrialised countries. The viewpoint from the less developed countries was underrepresented. I remember attending a conference once where a delegation from Bangladesh stood-up and was critical on the CPI arguing that it only reflected “perceived” level of corruption at the point of the bribe takers but not at the point of the bribe givers. The person said that, the CPI only looked at the perceived prevalence of bribes on the streets when it was companies from the western world which bribe the nationals of the less developed countries.
As CPI is based on polls, the results are also very subjective, and less reliable for countries with fewer sources. What is legally defined (or perceived) to be corruption also differs between jurisdictions. A political donation legal in some jurisdiction may be illegal in another. Thus, the CPI must be understood quite specifically as measuring a poorly defined public perception, rather than being an objective measure of corruption. TI has now come up with more direct corruption-survey, such as bribe-payer index and the corruption barometer.
I am hoping that Brunei will soon be taken on board this more direct surveys. I am now talking with TI and will keep you updated on it, insyaallah.

Message from Antonio Maria Costa, Executive Director of UNODC

Calls for Greater Financial Integrity on International Day against Corruption

BRUSSELS, 8 December 2009 - On the International Day against Corruption (which falls on 9 December), the Executive Director of the United Nations Office on Drugs and Crime (UNODC), Antonio Maria Costa, called for full implementation of the United Nations Convention against Corruption. The Convention, which came into force in December 2005, includes detailed measures to prevent and fight corruption applicable to both the private and public sectors. There are 128 Parties.

"Governments and banks should make better use of the United Nations Convention against Corruption to restore confidence in the international financial system. The world's anti-corruption treaty should be the basis for strengthening integrity and oversight and curbing economic crime", said the Executive Director of UNODC.

"Not only is corruption destroying jobs, productivity and markets in the developed world, it is stealing development assistance from the world's poorest people in developing countries, making it harder to achieve the Millennium Development Goals", said Mr. Costa. "If more governments and businesses implemented the Convention we wouldn't be in such a mess", he said.

Mr. Franz-Hermann Brüner, Director General of the European Anti-Fraud Office (OLAF) underlined the growing operational collaboration between OLAF and the UN. "It is a privilege for OLAF to contribute to UNODC's international campaign against corruption because raising public awareness of this problem - also with the support of the OLAF Anti-Fraud Communicators Network (OAFCN) - is a key to bringing about its prevention", said Mr. Brüner.

Mr. Martin Kreutner, Chair of the European Partners against Corruption (EPAC) and Director of the Austrian Federal Bureau for Internal Affairs highlighted international cooperation as "a key component in the fight against corruption since corruption hits us all". He stressed the need for partnership, "not only for the investigational side of the phenomenon but also for the preventive and educational spheres."

In addition to trying to prevent corruption, the UN is helping states recover money that has been stolen. One year ago, the World Bank and UNODC launched the Stolen Asset Recovery Initiative (StAR) to help developing countries recover stolen assets and the developed world - particularly financial centres - to eliminate barriers to returning these assets. "The barriers to asset recovery are coming down: the days of banking secrecy are over", said Mr. Costa.

To train a new generation of corruption busters, an International anti-Corruption Academy will open in Laxenburg, Austria in 2009.

Link to UNODC campaign " Your 'no'counts"

Courtesy of UNODC

official message in conjunction with the International Anti Corruption Day 9 December 2008

Bismillahirrahmanirrahim.  We are grateful to Allah SWT the Almighty for granting us this opportunity to celebrate this auspicious event, the International Day Against Corruption in Brunei Darussalam together with other communities all over the world.  On this special occasion, I wish to recall the Titah of our beloved ruler, His Majesty the Sultan and Yang Di Pertuan of Brunei Darussalam, given in conjunction with the commencement of the New Year 2008. Amongst others, His Majesty stressed that every member of the society in Brunei Darussalam must be united in their effort to combat the scourge of corruption. Corruption according to His Majesty is like a disease, it will eventually erode and damage our national and social progress if we fail to close all the doors that will provide the opportunity for it to flourish. Furthermore, His Majesty also reiterated that any act of corruption or bribery should not be taken lightly even though the amount involved may seem to be small and insignificant. His Majesty added that, it is the duty and responsibility of every member of the Public Service to ensure that the administration and management of the Public Body is really clean from any form of corruption.  The Anti-Corruption Bureau (ACB), Brunei Darussalam which was founded in 1982 is now 26 years old. Ever since its establishment, ACB has faced diverse challenges while at the same time we have also achieved some commendable progress with regard to our duties and undertakings as one of the many entrusted law enforcement agencies in Brunei Darussalam.  In 2008 ACB to date has received 189 information and complaints from members of the public out of which 64 Investigation Papers were opened. Meanwhile, 14 completed Investigation Papers were forwarded to the office of the Attorney General and 4 cases investigated by ACB were referred to various Ministries and Departments for their appropriate action. This year ACB has also succeeded in having several cases dealt with by the judiciary. A total of 15 cases are now being heard or ‘on trial’ out of which 4 cases are those completed and forwarded this year.  At this juncture, I would like to take the opportunity to express my sincere and utmost appreciation to all the members of the Civil Service as well as members of the public and individuals, who have relentlessly extended their support and trust upon the Anti-Corruption Bureau in our duty to detect and eradicate corrupt practices in Brunei Darussalam. It is hoped that such assistance and strong support can be further enhanced for the purpose of improving the image, integrity and credibility of Brunei Darussalam which we all love dearly. I also wish to reiterate our commitment to investigate into any cases of corruption in a just and fair manner without fear or favour. Members of the public can also be rest assured that ACB will deal with their information and complaint with utmost confidentiality and impartiality.  As a result of the rapid progress in the globalisation of trade and services, ACB has therefore faced several new challenges, especially in ensuring that the much cherished peace, progress and prosperity of our nation are not threatened and compromised by any elements that would take advantage to enrich and profit themselves by criminal means, especially through bribery and corruption. Meanwhile, in the midst of rapidly expanding use of ICT as well as the reasonably easy and cheaper means of travelling abroad, the margin of success for an enforcement agency such as the ACB will be much curtailed and its effort become less effective in dealing with cases which involve the use of sophisticated electronic and communication devices and at the same time where the perpetrators are no longer constrained within a single geopolitical boundary. Therefore, future successes will also depend on the ACB being able to acquire mutual support and partnerships with other regional and international like minded agencies. The exchange of knowledge, expertise and best practices with such foreign partners go a long way in enhancing our overall effectiveness, success and credibility. Touching on this issue, we are grateful that the ACB has been successful in establishing close relationship and cooperation with both regional and international partners and organisations. For instance, through our Bilateral Cooperation with the Anti-Corruption Agency, Malaysia as well as the Multilateral Cooperation with anti-corruption agencies from seven countries within ASEAN namely, Malaysia, Philippines, Singapore, Thailand, Cambodia, Vietnam and the Republic of Indonesia which are presently grouped under the name of South East Asia Parties Against Corruption or SEA-PAC. It is hoped that one day all the relevant anti-corruption agencies from all members of ASEAN will be partners in this worthy cause.  Meanwhile, in the international perspective, we are very grateful that by the consent of His Majesty the Sultan and Yang Di Pertuan of Brunei Darussalam, last year ACB was admitted as a member of the International Association of Anti-Corruption Authorities (IAACA) which comprises 137 anti-corruption agencies from all over the world.  In addition, Brunei Darussalam signed the United Nations Convention (UNCAC) against Corruption on 11 December 2003 during the High Level Political Meeting for the Signing of the United Nations Convention against Corruption in Merida, Mexico. In December 2005, UNCAC became the first legally binding, global anti-corruption agreement. His Majesty the Sultan and Yang Di Pertuan of Brunei Darussalam in October this year has graciously consented for Brunei Darussalam to ratify the United Nations Convention Against Corruption. Therefore with such participations and partnership established both regionally and internationally, ACB will be able to become a more dynamic, effective and credible agency in its endeavour to fight against the scourge of corruption either within or outside Brunei Darussalam.  Finally, let us be united and continue to work together and improve our effort towards ensuring that our beloved country Brunei Darussalam will continue to enjoy lasting peace, harmony and prosperity which are free from the threat that comes from bribery and corruption. This is also in keeping with our national pillar of Melayu Islam Beraja, whereby in Islam, it is clearly stated that Allah SWT the Almighty, condemns and abhors any form of bribery and corruption.  Thank you and say ‘NO’ to Corruption.  ‘Together In Building the Nation by Avoiding Corrupt Practices’

Making a case against corruption in the private sector: Your NO also count!

Just earlier this year His Majesty the Sultan and Yang Di-Pertuan in his new year Titah (speech), had made it clear that fighting corruption is everyone’s responsibility. Here I want to make a case that fighting corruption should also be borne by the private sector. Your NO to corruption also count.  

In 2004, at the UN Global Compact Leaders Summit it was announced that the UN Global Compact should include a tenth principle against corruption. The principle states that  "Businesses should work against corruption in all its forms, including extortion and bribery."  This principle makes it clear that the business community must also play its part in the fight against corruption.  It’s all too easy for one to blame that it is inefficiencies and too much red tape in the delivery of public service that encourage corruption in the public sector.   Whilst I do not deny this fact but I have seen that the resulting corruptions are often described as petty bribes which of course are still punishable under our laws. I find it however very difficult to attach the same blame when it comes to corruptions that occur in the procurement sector.  All too often I am seeing that it is pure greed that drives why business vendors are willing to commit corrupt practices.  There are those who are willing to go all the way at any cost to ensure that they would get the Government tenders even at the expense of ignoring whether their conduct is ethical or not.  Their argument is simple “if we don’t do it, others will”

There are more businesses in Brunei which are registered as self-proprietorships under the Business Names Act as opposed to companies registered under the Companies Act. Few actually audit their accounts and the businesses registered under the Business Names Act are not required to file any tax returns.  Good governance is therefore still a foreign word to most of these businesses let alone having anti-corruption policies. I realise convincing these businesses to place ethical business conduct such as having anti corruption policies as part of their core business values would be an uphill task.  However, all is not lost. Bigger companies here especially big MNCs like international financial institutions which have branches here and the international oil companies have already put in place good business ethics as part of their core values and internal policies.  I am hoping that they will become examples in this good cause.  Already we are constantly engaging the private sector through the chambers of commerce and inculcate in them on the need to jointly fight corruption. We are encouraging companies to disclose what they pay in accordance with internationally generally accepted accounting principles. Here, I am laying out my case to businesses and business owners alike on why you must get on board and jointly fight with us against corruption.

The ethical argument

Corruption is inherently wrong and you dont have to wait until the Bureau catches you.  You can look in any religion or faith or in any language that you know, it is just plainly unethical. It undermines the integrity of all involved and damages the fabric of the society to which you belong. The reality that laws making corrupt practices criminal may not always be enforced is no justification for accepting corrupt practices.  Just like being honest and trustworthy as universal values that everyone must have irrespective of your religious view, fighting corruption in all its forms is simply the right thing to do.

The business argument

There are many reasons why it is in any company's business interest to ensure that it does not engage in corrupt practices. All companies, large and small, are vulnerable and the potential for damage to them is considerable. The following are just key reasons on why you should avoid involvement in corrupt practices:

Risks of getting caught

Regardless of what form a corrupt transaction may take, there are obvious legal risks involved. The Bureau places strong emphasis on law enforcement as an effective deterrent measure.  We will detect corrupt practices where ever they occur and we will strike hard.  This is an intended strategy.  We want to send a strong message that you will get caught and once you get caught, you can be guaranteed on the prospect of you facing the court and jail term plus hefty fines and possibly your assets confiscated.  You will lose your reputation as an honest businessman and your family will also suffer consequently.  The message is all too clear: DO NOT GET INVOLVED IN CORRUPTION!

Reputational risk

Based on the experience of recent years, companies whose policies and practices fail to meet high ethical standards, or that take a relaxed attitude to compliance with laws, are exposed to serious reputational risks. Often it is enough to be accused of malpractice for a reputation to be damaged even if a court subsequently determines that they have not been involved in corrupt practices. It is of critical importance for a company to be able to quickly quash any unfounded allegations by demonstrating that it acts in a transparent manner and has in place policies and procedures designed to prevent corruption. The argument that although what they may have done may have been against the law or international standards, it was simply the way business was done.  Nor is it good enough to claim that other companies and competitors have engaged in similar practices. 

Financial costs
There is now clear evidence that in many countries corruption adds upwards of 10 per cent to the cost of doing business and that corruption adds as much as 25 per cent to the cost of public procurement. Your cost of doing business  would increase unnecessarily.  I often heard that in our neigbouring countries you can be sure to add between 10-15% in your business overheads simply to pay for “entertainment costs” which are basically bribes-in-disguise.  To the Government, the costs of corruptions would simply divert public resources from legitimate sustainable development. Just imagine if $100 million was allocated for public development and 25% of that amount was taken out just to pay bribes to various public officials then the Government would have lost in terms of an opportunity cost of using that 25% ($25 million) for other useful projects. For a start a school could be built for $5-10 million or a school computer lab for less than $1 million each!

'Known as clean' and repeat demands
There is a growing evidence that a company is less likely to be under pressure to pay bribes if it has not done so in the past. Once a bribe is paid, repeat demands are possible and the amounts demanded are likely to rise. Once you have the habit of paying bribes, you have become a habitual accomplice in the wrongful enterprise and it will become more difficult for you to say NO.  Conversely a company which takes a firm and principled stand against all forms of corruption will become known for this and the risk of its employees being exposed to demands will lessen.  'Zero tolerance is the only practical solution'. 

What goes around will come around
If a company engages in or tolerates corrupt practices, it will soon be widely known, both internally and externally. Unethical behavior erodes staff loyalty to the company and it can be difficult for staff to see why high standards should be applied within a company when it does not apply in the company's external relations. Internal trust and confidence is then eroded.  If you as the business owner can cheat the Government or behave dishonestly then your employees will then try to justify that they can also cheat or behave dishonestly against your company too.

Companies have a vested interest in sustainable social and economic development as part of nation building as it will also benefit you in the long run
It is now clear that corruption has played a major part in undermining the world's social, economic and environmental development. Many poorer countries are getting poorer because of rampant corruptions.  In fact the World Bank estimates the the worldwide cost of corruptions now exceed $1 trillion. If countries are poorer and the people are poorer, what business opportunities could there be?  Would you be willing to set up your businesses in the most corrupt countries say in Rwanda or Chad?   So it is in everyone’s interest to ensure that Brunei remains and continues to be prosperous.    I have visited many countries and see for myself on the impact of corruption that  affect  the very person on the street.  Resources were diverted to improper use and the quality of services and materials used for development seriously compromised. Businesses have a vested interest in social and political stability and in the economic growth of the country. Just look at the countries around us, many of their peoples have lost confidence in their Governments because of their corrupt officials and people in power.  This has led to countless public discontent and numerous public demonstrations. Once that happen the countries become destabilized and foreign investors lost their confidence.  The business opportunities would therefore become reduced.  

So please, come and join me.  Say NO to corruption!