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									                    CORRUPTION IN ADMINISTRATION
                          THE ROAD AHEAD

                                    Justice Saleem Marsoof, PC

What is Corruption?
Etymologically the word "corruption" comes from the Latin verb "corruptus" (to break) and it
literally means broken object. Conceptually, corruption is a form of behaviour, which departs
from ethics, morality, tradition, law and civic virtue. The World Bank and Transparency
International, view corruption as the use of one's public position for illegitimate private gains.
Abuse of power and personal gain, however, can occur in both the public and private domains
and often in collusion with individuals from both sectors. Corruption is one of the most serious
economic crimes and in intrinsically related to indigenous spoliation, which is another.

Indigenous Spoliation is a Form of economic crime which somewhat overlaps, with corruption.
Indigenous spoliation has been defined as “an illegal act of depredation which is committed for
private ends by constitutionally responsible rulers, public officials or private individuals”.
(N.Kofele-Kale, International Law of Responsibility for Economic Crimes, page 10). Spoliation
includes embezzlement, fraudulent enrichment, graft, plundering and corruption, committed for
personal gain in breach of confidence. These activities concern all mankind, since they have the
undesirable effect of impoverishing nations, some of which are at the brink of starvation.

Impact of Corruption
According to the UN Office on Drugs and Crime, the greatest impact of corruption is on the poor
people who are least able to absorb its costs. By illegally diverting state funds corruption
undercuts services, such as health, education, public transportation or local policing, that those
with few resources are dependent upon. Petty corruption provides additional costs for citizens.
Not only are service provision inadequate, but payment is required for the delivery of even
the most basic government activity, such as the issuing of official documentation.

According to Raghavan Srinivasan, Chief Procurement Adviser to the World Bank, corruption
has become a major international concern and a topic of international conferences, policy forums
and ministerial speeches. It is also the subject of a recent OECD Convention and the focus of an
international non-governmental organisation, Transparency International. Corruption is
increasingly cited as a reason for withholding foreign aid or debt relief. If a country’s inability to
pay interest on its loans is due to its leaders siphoning off national earnings into their own bank
accounts, the reasoning goes, surely extending aid or canceling the debt will merely sanction
further graft.

A former president of India K.R.Narayanan, has commented that “Sheer opportunism and
valueless power politics have taken over the place of principles and idealism, relationship
between people, groups and parties………And corruption is eroding the vitals of our politics and
our society………..It seems the people have to be in the forefront of the fight against corruption,
communalism, casteism and criminalisation of politics and life in the country”. (Quoted in Ajay
K Mehra, Criminalisation of Indian Poitics, Ch III, KM de Silva, GH Peiris and SWR de A
Samarasinghe, CORRUPTION IN SOUTH ASIA – India, Pakistan and Sri Lanka, Ed. 2002).

The public is concerned about the issues relating to corruption as endeared by the Petition of
Milap Choraria wherein he proposes legislation to be titled the fore features of the illegal Indian
assets in foreign Banks Act. According to the preamble to the draft bill, about $400 to $1,100
Billion US Dollars (About 16 to 50 Lacs of Crores of Rupees) Indian Money or Assets were
illegally deposited and lying in the foreign Banks including Banks in Switzerland, due to privacy
provided by those Banks to foreign depositors ensuring privacy to their black money. The
suggested law, if enacted, will be extra-ordinary and will deal with the large scale money
transferred illegally to foreign Banks by Indian citizen depriving the people of India from their
economical benefits of democracy, under privacy provided by the Foreign Banks functioning
abroad to protect illegal money earned by various illegal or corrupt means and methods and to
use it in furtherance or other illegal activities causing economical and social damages to the
entire country and its citizens and also to the very fiber of the democracy.”

Sri Lanka is not far behind, if one is to believe a report for Transparency International (TI), a
global non-governmental organisation battling world-wide corruption. The apart speaks of the
risks of large-scale donor funds for Sri Lankan reconstruction being misallocated and states that
unless ”safeguards” are built into tender procedures, there is a danger of money ending up in the
pockets of dishonest politicians and regional power-brokers. There is now mounting evidence
that the United Nations Oil-for-Food program, originally conceived as a means of providing
humanitarian aid to the Iraqi people, was subverted by Saddam Hussein's regime and
manipulated to help prop up the Iraqi dictator. It is suspected that Saddam's dictatorship was
able to siphon off an estimated $10 billion from the Oil-for-Food program through oil smuggling
and systematic thievery, by demanding illegal payments from companies buying Iraqi oil, and
through kickbacks from those selling goods to Iraq--all under the noses of U.N. bureaucrats. The
members of the U.N. staff administering the program have been accused of gross incompetence,
mismanagement, and possible complicity with the Iraqi regime in perpetrating the biggest
scandal in U.N. history. This illustrates the depth of the problem of corruption.

Raghavan Srinivasan blames the more developed countries who have the money to throw about,
for the steady increase in corruption. He observes –

       “Most commentators on corruption — and on the “good governance” initiatives
       instigated to combat it — dwell on developing countries, not industrialised ones. Most
       scrutinise politically-lax cultures in the South, not the North. Most call attention to the
       petty corruption of low-paid civil servants, not to the grand corruption of wealthy
       multinationals. Most focus on symptoms such as missing resources, not causes such as
       deregulation of state enterprises. Most talk about bribe-takers, not bribe-givers.”

He suggests that it is necessary to deal with those who benefit from corruption in their business
activities as much as with the corrupt politicians and public officers.

Strategies to Deal with Corruption
The factors that have accelerated levels of corruption in society may be aoutlined as follows :-

   (a)     Inducements at home and abroad.

   (b)     Dependency on foreign trade and arms.

   (c)     Lack of transparency

   (d)     High electioneering expenditure

   (e)     Low public sector salaries

   (f)     Deteriorating moral standards and social values

   (g)     Lack of patriotism and civic sense

   (h)     Lack of social awareness and education

   (i)     Inadequacy of legal provisions

   (j)     Week administrative and investigative mechanism

   (k)     Bank secrecy and ease of money laundering

   (l)     Absence of political will to deal with the menace

Any strategy to deal with the incidence of corruptions must include the following measures :-

   (1) Stringent measures against corrupt multi-national corporations and their officials.

   (2) Have Peace and not War – Arms Dealers will leave you alone!

   (3) Develop international co-operation particularly in banking sector.

   (4) More transparency in the privatization process.

   (5) More transparency in procurement and tender procedure.

   (6) Electoral Reform.

   (7) Code of Conduct for politicians, particularly Ministers and MLAs.

   (8) Civil Service Reform.

   (9) Code of Conduct for public officers.

   (10) Enhancement social awareness and will to combat corruption.

   (11) Legal Reform – including law enforcement.

   (12) Establish independent and strong anti-corruption authority.

   (13) Money laundering measures.

The UN Convention Against Corruption signed in Merida, Mexico in 2003 is emphatic that
while corruption can be prosecuted after the fact, first and foremost, it requires prevention. An
entire chapter of the Convention is dedicated to prevention, with measures directed at both the
public and private sectors. These include model preventive policies, such as the establishment of
anticorruption bodies and enhanced transparency in the financing of election campaigns and
political parties. States must endeavour to ensure that their public services are subject to
safeguards that promote efficiency, transparency and recruitment based on merit. Once recruited,
public servants should be subject to codes of conduct, requirements for financial and other
disclosures, and appropriate disciplinary measures.

Although the motive for crime may not always be profit making, taking the profit out of crime,
by preventing the wrongdoer from enjoying the proceeds of his crime, is an important means
through which a major proportion of criminal activity can be deterred. This can be done through
(i) Criminal provisions; and (ii) Civil provisions.

Sri Lanks’s Anti-Corruption Laws
The following legislation deals with corruption in Sri Lanka :-

 The Public Bodies (Prevention of Corruption) Act No. 13 of 1950

 The Bribery Act No 11 of 1954 (as amended by Act No. 20 of 1994)

 The Declaration of Assets and Liabilities Law, No. 1 of 1975.

 The Commission to Investigate Allegations of Bribery or Corruption Act, No. 19 of 1994.

Section 70 of Bribery Act defines the offence of corruption as follows :-

       “Any public servant who, with intent, to cause wrongful or unlawful loss to the
       Government, or to confer a wrongful or unlawful benefit, favour or advantage on himself
       or any person, or with knowledge, that any wrongful or unlawful loss will be caused to

       any person or to the Government, or that any wrongful or unlawful benefit, favour or
       advantage will be conferred on any person-

       (a)     does, or forbears to do, any act, which he is empowered to do by virtue of his
               office as a public servant

       (b)     induces any other public servant to perform, or refrain from performing, any act,
               which such other public servant is empowered to do by virtue of his office as a
               public servant ;

       (c)     uses any information coming to his knowledge by virtue of his office as a public
               servant ;

       (d)      participates in the making of any decision by virtue of his office as a public
               servant ;

       (e)     induces any other person, by the use, whether directly or indirectly, of his office
               as such public servant to perform, or refrain from performing, any act,

       shall be guilty of the offence of corruption.”

It is important to note that section 28A(1) of the Bribery Act (introduced in 1994) empowers a
court, to make order that “any movable or immovable property found to have been acquired by
bribery or by the proceeds of bribery, be forfeited to the State free from all encumbrances” The
section further provides that, in determining whether an order of forfeiture should be made, the
Court shall be entitled to take into consideration whether such an order is likely to prejudice the
rights of a bona fide purchaser for value or any other person who has acquired, for value a bona
fide interest in such property.

Apart from criminal sanctions it is also important to be able to trace property acquired from
proceeds of corrupt activities. In Attorney General for Hong Kong v. Charles Warwick Reid
(1994) 1AC 324 Lord Templeman observed –“When a bribe is offered and accepted in money or
in kind, the money or property constituting the bribe belongs in law to the recipient. Equity,
however, which acts in personam insists that it is unconscionable for a fiduciary to obtain and
retain a benefit in breach of duty. The provider of a bribe cannot recover it because he
committed a criminal offence when he paid the bribe. The false fiduciary who received the
bribe…. must pay and account for the bribe to the person to whom that duty was owed.”

The biggest challenge making bribery and corruption unprofitable, with a view of deterring this
criminal activity, is a daunting task. Not only politicians and public officers that directly profit
from corrupt deals, but also banks and financial institutions which benefit from the inflow of
money, are likely to resist any attempt to control the flow of dirty money through established
channels of business. The task becomes even more difficult in the context of the modern
technological advances, which have facilitated the movement of money through different
markets, economies, and jurisdictions.

As Jack Weatherford observes-

   “By moving at the speed of light, electronic money has become the most powerful financial,
   political and social force in the world. Money has become even more like God: totally
   abstract and without corporal body.” (Jack Weatherford. The History of Money (New York,
   New York: Three Rivers Press, 1997, 248).

The challenge then is to find legal mechanisms embodying sound financial norms that can cope
with strong resistance on the part of banks and other financial institutions as well as their
customers in the context of a facilitative environment. It is only through sound financial
practices backed by rational modes of enforcement that one can deal with the menace of
organized crime, terrorism and the plundering of national assets.


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