EU Accession and the Politics of Anti-corruption

1. EU Accession and the Politics of Anti-corruption Dan Dionisie, Policy Specialist, UNDP Oslo, October 2009

2. EU Progress Reports • Corruption dealt with under Political criteria – Democracy & Rule of Law (Anti-corruption Policy section), occasionally also under Human Rights and protection of minorities (e.g. corruption among prison staff) • Also referred to under Economic criteria (functioning market economy; capacity to cope with competitive pressure within the EU) and other sections: • for candidates: under Ability to Assume the Obligations of Membership (e.g. public procurement, taxation, Judiciary and fundamental rights, customs union, financial control, financial and budgetary provisions) • for potential candidates: under EU standards on Internal Market (e.g. customs&taxation, public procurement), Sectoral Policies (e.g. financial control), Justice, Freedom and Security (e.g. money laundering, fighting organized crime and terrorism

3. 2009 Progress Report - Macedonia • Corruption mentioned 46 times; overall “good progress” • Positive: amendments to Electoral Code, Law on Political Party Financing, Criminal Code; frequent meetings of the Government Council for monitoring implementation of the anti-corruption action plan, underlining the political priority attached to the issue; prison sentenceswere imposed in first instance court decisions in some high-profile cases, including a former Prime Minister, a former Deputy Prime Minister and the former mayor of a Skopje municipality (appeal procedures under way). • SCPC: The databases of the State Commission for Prevention of Corruption (SCPC) and the Public Revenue Office were interconnected, allows swift information exchange and more accurate records of asset declarations. In 2008, 47 procedures for checking officials’ assets were initiated. The SCPC began to implement the action plan on conflict of interest, several cases were initiated, in 11 of them a conflict of interest found. • Negative: Fragmented legal system continued to generate difficulties in implementation. The legislation on financing of political parties and election campaigns has so far not had a substantial impact. The mechanism for following up reports and recommendations from the SCPC and the State Audit Office not fully effective. A consistent track record on checking asset declarations, following up irregularities on election finance thresholds and reporting donations has yet to be developed. Interception of communications is used in a rather low number of corruption cases, notably corruption cases not connected to organized crime. Sentences were suspended in a high number of court decisions on abuse of office. The SCPC is limited by the part-time role of its members, should be more pro-active in pursuing anti-corruption policy. Public trust in the independence and impartiality of the SCPC remains low. • Overall,good progress was made on implementing anti-corruption policy. The electoral code, the law on financing of political parties and the law on conflict of interest were amended to strengthen transparency and new provisions on illicit enrichment were adopted. There were further indictments and convictions in high level cases and cooperation between law enforcement agencies improved. Nevertheless, corruption remains prevalent and continues to be a serious problem in many areas. Continued efforts are needed, in particular as regards implementation of the legal framework.

4. 2009 Progress Report - Turkey • Corruption mentioned 16 times; limited progress in fighting corruption. • Positive: Parliament adopted a law to amend the Penal Code and the Code of Misdemeanours. This is to take account of GRECO recommendations, align with international conventions and to implement the requirements of the OECD Bribery Convention and the recommendations of the Financial Action Task Force (FATF) concerning the prevention of money-laundering. The law strengthens the legislative framework as regards the liability of legal persons, prevention of money-laundering and foreign bribery. For the first time, the Ethics Board for Civil Servants published four decisions, in 2009, concerning non-compliance with ethics rules by public officials, including an elected mayor and managers of public companies. • The government, under the coordination of the Prime Ministry Inspection Board with the participation of other State institutions carried out a broad consultation with stakeholders, including NGOs, with a view to preparing a national anti-corruption strategy. • Negative: The ministerial commission established to enhance good governance and transparency has hardly taken any political initiative in anti-corruption issues. Case of charity association Deniz Feneri. No progress on extending the ethics rules to academics, military personnel and the judiciary. No progress on limiting the immunity of MPs as regards corruption-related cases (the opposition supports measures in this respect). No code of conduct for MPs. Lack of control and verification of asset declarations remains a weak point in protecting the integrity system in parliament and government. No progress on adoption of legislation on the financing of political parties and election campaigns. There is no state body with the authority to audit election campaign financing. No progress towards adoption of the new legislation on the Court of Auditors, which envisages the re-structuring and strengthening of the court. • Turkey needs to finalise an anticorruption strategy and to develop a track record of investigations, indictments, prosecutions and convictions.

5. 2009 Progress Report - Montenegro • Corruption mentioned 50 times; there has been progress in the fight against corruption • Positive: Greater emphasis on monitoring implementation of AC measures from the action plan against organized crime and corruption. The national commission for monitoring implementation of the action plan produced its 4th and 5th reports. Adoption of the new Criminal Procedure Code, the Law on Prevention of Conflicts of Interest in Performing Public Functions, the Law on Internal Financial Control and the Law on Financing the Election Campaigns for the President, Mayors and Presidents of Municipalities. Progress on further enhancing preventive and investigative anti-corruption bodies. AC training for police, border police, customs officers, prosecutors and judges. 12 corruption charges were brought against 13 police officers as a result of internal investigations. Criminal charges for corruption and abuse of office were brought against three judges. Two NGOs participated in the work of the national commission for fighting corruption and organized crime and in screening related draft legislation. • The resources of the Directorate for Anti-Corruption Initiatives (DACI) have been strengthened and its co-operation with the police has been enhanced. It intensified its training activities for administrative bodies and the public, as well as the realization of reports and researches related to corruption. DACI, NGOs and the media conducted awareness activities. • Negative: National legislation not fully aligned with international AC instruments. GRECO recommendations not fully implemented. Local AC action plans adopted by 11 municipalities, but implementation has begun only in two. Absence of strong and independent supervisory authorities to evaluate asset declarations and financing of political parties and to monitor and exercise control over expenditure in the public sector, notably on public procurement, spatial planning and privatization. New Law on the Prevention of Conflict of Interests in Performing Public Functions has serious shortcomings and loopholes, e.g. a significant exemption for MPs, who are allowed to hold executive powers in public companies or executive agencies. The administrative bodies for detecting and investigating corruption still lack sufficient staff with appropriate skills. The number of final convictions remains low. The investigative capacity of law enforcement bodies remains weak due to shortfalls in expertise, specialized equipment and working conditions. Inter-agency cooperation needs to be enhanced. • Overall, good progress has been made on strengthening the strategic, legislative and administrative framework. However, corruption remains prevalent in many areas and continues to be a particularly serious problem.

6. Summing up… • There is always progress (some, good, limited) • Positive: political will; laws adopted/amended; institutions established/strengthened; reports issued; meetings held (input-type); investigations initiated (but usually not finalized with court convictions) • Negative: lack of political will; legal and institutional frameworks still deficient, not aligned to int’l standards; lack of convictions; insufficient monitoring of politicians (e.g. asset declarations, MPs exemptions); reference to specific corruption cases

7. Lessons learned in New Member States • Corruption was high on their accession agenda as well, AC efforts monitored through Progress Reports • Romania (4 benchmarks on judicial reform, fight against corruption) and Bulgaria (6 benchmarks on judicial reform, fight against corruption and organized crime) still monitored through the Cooperation and Verification Mechanism • reports issued every 6 months (until mid 2009), next due in summer 2010

8. Lessons learned in New Member States (II) • “The approach, recommendations and requirements of the EC in the arena of anti-corruption policy in candidate States have been focused on elites, top-down anti-corruption strategies pursued with adequate “political will”, enforcement of criminal law and establishment of functioning control mechanisms mainly to control the use of EU funds” • general orientation towards control paradigm (strong emphasis on criminal enforcement) • expectations of immediate results • the Commission lacks a clear sense of what it means by corruption, and therefore what would constitute successful anti-corruption policy • EU lacks benchmarks for assessing corruption in member States… absence of clearly binding acquis in the area of corruption • …does not appear to employ a consistent approach across candidate countries when citing survey data… some ambiguity in the Commission’s interpretation of statistics… unspecified evidence • The Commission’s assessments of the prevalence of corruption, in which the seriousness of corruption in candidate countries is classified according to statements ranging from “relatively limited problem” through “area of concern” to “widespread and systemic” are clearly intuitive. Monitoring the EU Accession Process: Corruption and Anti-corruption Policy, OSI-EUMAP, 2002

9. Some issues with the Commission’s approach • assessments are highly political, rather than technical / objective • emphasis on law enforcement (vs. prevention) • overall legalistic approach • emphasis on showing quick results (vs. systemic improvements) • “Some fundamental improvements are needed, although the first priority should be to deliver results irrespective of structural deficiencies” – CVM report for Bulgaria, July 2008 • tendency to over-emphasize political will • shortcuts vs. normal procedures (e.g. fast-track adoption of laws, govt decrees) • Romania example (“Opriti codurile!”, 2009) • issue of sustainability (when political will disappears) • risk of politicization of anti-corruption • emphasis on government’s driving role (may undermine the role of legislative, judiciary)

10. The political will narrative… • In the pre-accession period candidate countries were under external pressure • …thus, had “political will” to act on corruption… • …and did the right thing (and promised to do more) • but after joining the EU there was no more pressure and “political will” vanished… • they backtracked on promises and even reversed some AC measures • Slovenia - lawmakers have been trying to close down the commission for the prevention of corruption, run by Drago Kos, arguing that it is expensive and unnecessary; at all public watchdogs staff salaries were cut by a third • Latvia – politically motivated attempt by the PM to replace the head of KNAB in 2007 • (later replaced in 2008 by Parliament with stronger justification) • Slovakia – the Justice minister called the special AC court a "fascist institution“, eventually succeeded in having it deemed unconstitutional. • Romania – replacement of Monica Macovei as Justice minister three months after joining EU • Bulgaria – no high-level corruption conviction, none of the 120 mafia killings solved, large scale fraud with EU funds

11. …is not supported by measured perception

14. Explanations? • Eastern and Central Europe continues to perform relatively well on the Global Integrity Index despite widespread perceptions of weak anti-corruption and good governance mechanisms in the region. • The gap between negative public perceptions of government accountability and Global Integrity's positive assessments of national anti-corruption mechanisms may signal the presence of a dynamic civil society and media which are capable of bringing issues of good governance into the public spotlight. • It is likely that recent reforms in the ECE region are linked to demands made by Western countries as part of the recent EU and NATO accession processes. Whether these reforms "stick" in the long-run is the real question, but for now the structural reforms undertaken are real and impressive. • Global Integrity data are not designed to capture every possible governance or anti-corruption issue at play in a given country. For example, organized crime issues play a major (if not dominant) role in shaping perceptions of corruption in Bulgaria but are not reflected in the battery of indicators fielded by Global Integrity. Source: Global Integrity Report

15. Other highlights • What does the Global Integrity Index measure? Category I Civil Society, Public Information and Media I-1 Civil Society Organizations I-2 Media I-3 Public Access to Information Category II Elections II-1 Voting & Citizen Participation II-2 Election Integrity II-3 Political Financing Category III Government Accountability III-1 Executive Accountability III-2 Legislative Accountability III-3 Judicial Accountability III-4 Budget Processes Category IV Administration and Civil Service IV-1 Civil Service Regulations IV-2 Whistle-blowing Measures IV-3 Procurement IV-4 Privatization Category V Oversight and Regulation V-1 National Ombudsman V-2 Supreme Audit Institution V-3 Taxes and Customs V-4 State-Owned Enterprises V-5 Business Licensing and Regulation Category VI Anti-Corruption and Rule of Law VI-1 Anti-Corruption Law VI-2 Anti-Corruption Agency VI-3 Rule of Law VI-4 Law Enforcement Data under links: Bulgaria

16. Sustainability of AC reforms - Slovakia Controversy and sustainability of anticorruption reforms in Slovakia Source: Miroslav Beblavý (2008)

17. What determines sustainability? • 13 case studies researched in Slovakia in 2007 and 2008, each focused on a policy reform that was postulated to have impact on corruption. • Corruption can be decreased; substantial sector-based decrease in corruption is possible even in a country where the corruption is extensive. • In Slovakia, anticorruption reforms focused on decreasing benefits of corruption rather than increasing costs of corruption and effective reforms have usually done more than increase transparency and availability of information – they also used one of the following three approaches: liberalisation/privatisation, limiting discretion and increasing supply/decreasing demand. The Slovak experience of 1998-2006 shows that sustained effort can bring about significant improvements in corruption if it is linked with overall reform of the economy and governance structures. • In Slovakia, despite the importance of the process of EU accession, the role of external actors was much more important in policy transfer and technical assistance than in forcing the reform through conditionality. Even the strongest of conditionalities was present only in a minority of reforms and the political will to enact the reforms was mostly home-grown. On the other hand, the role of external actors in inspiring and/or designing reforms was crucial and was present in ALL the reforms that were graded as having high or medium effect on corruption. • The level of controversy is not a good guide to sustainability of the reforms. Surprisingly, the ideologically charged changes have high levels of sustainability even when they were initially controversial and the steps that have proven to be less sustainable are those where specific interest groups remain opposed and where the reform has not managed to create a powerful constituency in favour of the new status quo.

18. Conclusions • The focus on corruption should not divert from the broader PA and Governance reforms. • AC efforts that shortcut existing institutions and governance systems may be counterproductive (fragility of institutions may be bigger/deeper problem than corruption) • Quick fixes may not be sustainable • Institutionalize reforms, secure constituency • Risk of politicization of AC (AC instrumentalized for political purposes)

19. What can ACAs do? • Take ownership of the AC agenda, don’t let it be driven by Progress Reports • Adopt long term AC strategy with strong prevention focus, linked with overall reform programmes • Avoid excessive legalistic focus, also look at informality, actual practice; • research to understand corruption patterns • Always work through your institutions, not against them, don’t cut corners, don’t bypass checks and balances • Better slower, sustainable progress than temporary fixes and quick results that don’t stick • Monitor credibly your AC strategy, involve civil society • Evaluate impact • Communicate

20. Thank you! Comments? Questions?