National Anti-Corruption Strategy Framework

Royal Government of Bhutan

Prepared by: Anti-Corruption Commission @JUNE 2009

DRAFT COPY

TableofContents
1. INTRODUCTION ............................................................................................................... 3 2. BACKGROUND ................................................................................................................. 6 3. POLICY STATEMENT ...................................................................................................... 7 4. DEFINITION OF CORRUPTION ...................................................................................... 8 5. FORMS OF CORRUPTION AND ITS CAUSES .............................................................. 9 5.1 Abuse of Power .............................................................................................................. 9 5.2 Nepotism and Favoritism ............................................................................................... 9 5.3 Misuse of Public Funds.................................................................................................. 9 5.4 Bribery ......................................................................................................................... 10 5.5 Fraud ............................................................................................................................ 10 5.6 Collusion ...................................................................................................................... 10 5.7 Kickbacks..................................................................................................................... 10 5.8 Fronting ........................................................................................................................ 11 5.9 Money Laundering ....................................................................................................... 11 6. IMPACT OF CORRUPTION ............................................................................................ 13 6.1 Sustainable economic development ............................................................................. 14 6.2 Social and Cultural Development ................................................................................ 14 6.3 Good Governance ........................................................................................................ 14 6.4 Conservation of Environment ...................................................................................... 14 7. STRATEGIES.................................................................................................................... 14 7.1 PROMOTE QUALITY LEADERSHIP ...................................................................... 15 7.2 ENSURE SUSTAINED POLITICAL WILL .............................................................. 15 7.3 REVIEW LEGAL FRAMEWORKS TO MAKE CORRUPTION A HIGH RISK OFFENCE .......................................................................................................................... 15 7.4 REVEW AND STRENGTHEN INSTITUTIONAL CAPACITY .............................. 16 7.5 REVIEW AND REFINE SYSTEMS .......................................................................... 17 i. Review and Reform Public Procurement System .................................................. 17 ii. iii. iv. v. vi. vii. Strengthen Public Financial Management System .............................................. 18 Simplify Procedures and Regulations.................................................................. 18 Minimize Discretionary Powers of Decision-makers .......................................... 18 Establish Clear & Transparent Protocol on Policy and Rule Making ................. 18 Enforce Code of Conduct and Ethics .................................................................. 18 Enforce Declaration of Conflict of Interest ......................................................... 19

7.6 DEVELOP LONG-TERM EDUCATIONAL STRATEGY FOR AN AWAKENED CITIZENRY ...................................................................................................................... 19 7.7 PROMOTE PARTNERSHIP WITH STAKEHOLDERS .......................................... 20 i. Media .......................................................................................................................... 20 ii. Private Sector ............................................................................................................. 20 iii. Civil Society & Non Profit Organizations (NGO) ................................................... 21 iv. Spiritual Institutions ................................................................................................ 21 vi. Regional and International Anti-corruption Initiatives ............................................. 21 8. MANAGEMENT AND IMPLEMENTATION AUTHORITY ........................................ 22 9. CONCLUSION .................................................................................................................. 22 9. REFERENCE..................................................................................................................... 23

1. INTRODUCTION
Bhutan has emerged as a peaceful, harmonious and a happy nation with Gross National Happiness (GNH) as her conscience, beacon for her overall development that places peoples voice and their well being at the core. With wise and compassionate leadership of our Monarchs, Bhutan prospered through the ages by responding to the changing needs of changing times. Today as we are on the threshold of a new era of history, we are called upon to respond to new trends to ensure that the nation will continue to survive and strengthen into the future. His Majesty the 4th Druk Gyalpo, in His profound wisdom has placed His trust in the Bhutanese people by introducing democratic governance. With the establishment of parliamentary democracy in the country, His Majesty the 4th Druk Gyalpo decreed that institutions and systems be put in place to ensure that Bhutanese people always enjoyed peace, prosperity, justice and fundamental rights enshrined in the Bhutanese system. These include the important institutions that uphold democratic governance, among them the Anti-Corruption Commission which was established in 2006. Corruption is integral to governance. An effective and a caring system of governance, personified by our wise Monarchs, has been the cornerstone of the governments development policies and strategies as testified by its persuasive drive towards fostering active public engagement in the development process, greater transparency, accountability, efficiency and professionalism in governance. In the past, anti-corruption measures were generally addressed through the good governance policies and the important responsibility of taking anti-corruption initiatives resided in all agencies. However, in the late 1970s till early 1980s, there was an independent body called the Royal Court of Vigilance, which operated as a special audit body with investigative powers and the Royal Audit Authority, which was established in 1977. Corruption as an issue, however, was addressed in 1999, when His Majesty the 4th Druk Gyalpo graciously acceded to the repeated appeals of the ministers to commemorate 25 years of His glorious reign only on condition that the occasion helps enhance the ability of the government to be sensitive and responsive to the needs of the people, that initiatives are taken to raise public awareness and prevent the evil of corruption from taking root in the society and to improve the morale of civil servants. The establishment of internal audit units in the agencies is an outcome of the 1999 commemorative activity, the good governance initiative entitled, Enhancing Good Governance: Promoting Efficiency, Transparency & Accountability for GNH. Fighting corruption as a national agenda featured in 2005 as a review of the 1999 good governance initiative. Corruption is a worldwide phenomenon and it can be traced as far back in the mists of time as we can trace the history of mankind (Hamilton, 2008). It is defined as the misuse of entrusted power for private gain. (Transparency International, 2008). Corruption has challenged every countrys ability to effectively and efficiently combat it. While levels of corruption in Bhutan is relatively low and manageable, with the onset of rapid economic development and ever changing values due to changing lifestyle, corruption poses serious threat to the very foundation of GNH. Further, if we fail to manage the political change well the threat will be aggravated with the imminence of political corruption, a major source of all other forms of corruption.

The Prime Minister in his inaugural address of the National Consultative workshop on the draft National Anti-Corruption Strategy Framework (March 26-27, 2009), highlighted occurrence of corruption in eight domains: political leadership, public administration, judiciary, legislature, business, media, religion and society. Political leadership: Corruption in this domain must surely be the worst and the most cancerous, for it not only has a pervading effect throughout our society but it can compromise national sovereignty and interests, cause despair, breed hatred and fracture the unity of our people. When politicians and leaders are corrupt, they spawn corruption at all levels and sections of society. They undermine the power of the judiciary. Likewise, they deliberately emasculate the institutions such as the Anti Corruption Commission and mute the media. In the process, they betray the people who trusted them and the entire nation suffers. Public Administration or the civil service: When government servants are corrupt, the system is corrupt and little else will remain pure and honest. Politicians and public servants feed on each other at the cost of the people they are meant to serve. When that happens, democracy no longer functions, governance fails and anarchy begins. Good governance will come only when the public administration is clean, just and equitable. The legislature: A true democracy is where the rule of law prevails and where laws are made by honest and loyal representatives of the people for the good of all citizens. When good laws are made by the legislature, where politicians abide by them, where the public servants adhere to and implement them faithfully and where the people are honest and enlightened, the role of the judiciary need not be demanding. But when this highest of bodies in the land becomes corrupt, it makes laws that favor the rich, deprive the poor and the honest. It ultimately becomes impotent and fails not only to make good laws but is least able to serve as the most powerful of the three branches of government to check and balance the other two. The judiciary: Where justice prevails, democracy will live. The role of the judiciary must not only be to interpret the laws made by parliament without fear or favour but to inspire and check the legitimacy with which the parliament and the executive conduct their business. But if the judiciary, as the last recourse and refuge against corrupt leadership and public administration, is corrupt, then the rule of law no longer prevails and all hope is lost and democracy must itself crumble. Business: Trade, industry and commerce are the engine of growth, the main basis of a countrys economy and thus its well being. Corruption within it and collusion by leaders, law makers and public servants, with it causes rust and corrodes the very mettle of the engine. There is no profit for business if, in turning its wheels, the oil must come from officials it has tempted and corrupted. The wheels of trade and industry must be greased by the oil of innovation, hard work, and fair competition. Business nourished by corruption, will ultimately decay and come to a grinding halt. And both business man and the nation shall become poorer. The media: The absence of a free and responsible media marks the absence of true democracy. The more vibrant the media so will democracy be. Without the media, how else would we enjoy the freedom of thought, expression and information that are the very essence of democracy? But as the fourth estate, the media is often seen and envied by 4

those who are accountable to the people as the most powerful branch without accountability. When the media is owned by a few with vested interests and profit becomes its sole motive, corrupt practice is inevitable. And when it becomes the instrument of corrupt politics, the essence of democracy is fully compromised. Religion: Religion is the source of spiritual nourishment. Our moral and ethical values spring from religion. But when religious institutions and personalities become corrupt and engage in unethical practices both for material gain as well as to spread their own faith, they threaten the very core of society. Society: When all those I have mentioned are corrupt, will not society itself be corrupt? How can society and any citizen for that matter, speak, report or act against corruption, if they condone it as silent spectators or are involved in corruption themselves? A society that tolerates corruption is devoid of moral strength, and if it does not understand that it will destroy it, it is not wise and will not make progress, much less find happiness. Ultimately, the kind of leaders and government that a society has is a reflection of the society itself and its values. Some common forms of corruption prevalent in Bhutan are abuse of authority, nepotism and favoritism, bribery, misuse of public fund, fraud, collusion and fronting. Corruption breeds because of a tolerant culture and weak leadership which manifests in systemic flaws, weak administration and hence lack of transparency and accountability; high discretionary powers; lengthy procedures; unclear and weak rules and regulations and weaker enforcement; weak accountability institutions including media and citizenry. Fighting corruption is a big challenge as it is a crime perpetrated between willing partners. Therefore, in a move towards engendering sustained concerted and result driven effort, a National Anti-Corruption Strategy Framework (NACSF) has been formulated in close consultation with stakeholders and experts. The Framework is a broad structural guideline and allows greater flexibility to agencies to put in place measures of their suitability within the seven broad strategic considerations, viz.: Promote Quality Leadership; Ensure Sustained Political Will; Review Legislative Framework to Make Corruption a High Risk Offence; Review and Strengthen Institutional Capacity; Review and Refine Systems: o Review & reform procurement system; o Strengthen public financial management system; o Review administrative systems; o Simplify procedures and regulations; o Minimize discretionary powers of decision-makers; o Establish clear & transparent protocols on policy and rule making; o Enforce code of conduct and ethics; & o Enforce declaration of conflicts of interest Develop Long-term Educational Strategy for an Awakened Citizenry; Promote Partnership with Stakeholders o Media; o Private sector; o Civil Society and NGOs; 5

o Spiritual Institutions; & o Regional and international anti-corruption initiatives. The Framework also presents corruption scenario and provides insights into how corruption may impact the four pillars of Gross National Happiness and ultimately the national mission of Gross National Happiness itself. Implementation aspects of the Framework will be overseen by the Good Governance Unit under the Prime Ministers Office and the Anti-Corruption Commission will support the unit wherever necessary.

2. BACKGROUND
Globally, World Bank estimates that more than USD 1 trillion is paid in bribes each year (World Bank, 2004). The research also reveals that the countries that tackle corruption and improve their rule of law can increase their national incomes by as much as four times in the long run and child mortality can fall by as much as 75 percent. Another research by IMF establishes decreased investment patterns by almost 5 percent in countries infested by corruption. The Asian Development Bank found that corruption adds 20-100 percent to the cost of procuring government goods and services in several Asian countries. Bhutan being predominantly a Buddhist country, Bhutanese have, since the arrival of Buddhism in the seventh century, adopted Buddhist values of LHA CHOE GEWA CHU1 and ME CHOE TSANGMA CHUDRU.2 These values have indiscriminately played an important role in keeping corruption low in Bhutan. Corruption as a critical governance issue was noted by our leaders as early as the first theocratic ruler, Zhabdrung Ngawang Namgyal, as evidenced in His statement, Although Bhutan had been once effectively brought under the beneficent influence of strict law and justice, it subsequently, on account of general corruption and laxity on the part of those in authority, became slack in all branches. If this should be allowed to continue, there would be no distinction between right and wrongdoing, no justice and without justice human beings cannot have happiness and peace. Today, as elicited by the Corruption Perception Survey 2007, corruption prevails at all levels of the society and it is growing. With the establishment of the Anti-Corruption Commission, the time also called for a national level strategy to collectively combat corruption in the country. It is in this light that the National Anti-Corruption Strategy Framework is formulated. The Framework
LHA CHOE GEWA CHU refer to: 1) Saving Lives; 2) Not taking what is not given; 3) Avoiding Sexual Misconduct; 4) Not lying; 5) Not sowing Discord; 6) Avoiding harsh words; 7)Avoiding worthless chatter; 8) Avoiding covetousness; 9) Wishing good for others and 10) Avoiding wrong views. 2 ME CHOE TSANGMA CHUDRU refers to: 1) Have respectful confidence & faith in the Triple Gem. 2) Practice self development through body, speech & mind. 3) Show honor & reverence to kind parents. 4) Show respect to the learned & the wise. 5) Honor & respect the elderly & people of nobility. 6) Be honest and kind to all relatives & friends. 7) Be helpful to people in the locality/ neighborhood. 8) Be honest & incorruptible.9) Be always gentle & decent. 10) Live a moderate live free from extreme livelihood. 11) Repay the kindness of the generous. 12) Avoid deceptive conduct & fraud in weights & measures. 13) Avoid jealousy and cultivate friendship with all. 14) Avoid the company of evil & deceptive friends. 15) Avoid the words of bad (wo)men. 16) Be patient, farsighted & capable of enduring hardships in fulfilling ones duties
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provides all-inclusive aspects of corruption; its forms and causes3, as prevalent in the country and recommends appropriate measures to effectively and efficiently tackle corruption from taking deep roots in the country. The formulation of National Anti-Corruption Strategy Framework by the Anti-Corruption Commission is in keeping with the duty bestowed upon it by Article 54(b) of the AntiCorruption Act 2006 and it is in good conjunction with the governments policy of Zero Tolerance to Corruption.

3. POLICY STATEMENT
The main driving force behind fight against corruption came from the Golden Throne. Recognizing the immediate threat corruption posed to the happiness of His people, His Majesty the 4th Druk Gyalpo decreed the establishment of the Anti-Corruption Commission to spear-head the fight against corruption in December 2005. Our Monarchs profound public addresses underpin their deep concern over corruption and the urgent need to fight it.

It is the responsibility of every Bhutanese to act against corruption in our country. -Fourth Druk Gyalpo

The rise of corruption in Bhutan is a challenge we face. How big the challenge is, will depend on how soon and how strongly we decide to oppose itthere is no room for corruption - it is as simple as that, not now and not in the futureIt is not enough to be honest - there is no substitute to living by a simple rule I will not be corrupt and I will not tolerate corruption in others. -Druk Gyalpo.

In keeping with the deep concern of our Monarchs, the ruling government embraced the policy of Zero Tolerance to corruption. The seriousness to fight corruption is evident from the abstract of the governments manifesto.

3 Forms and causes of corruption in the country are based on the Corruption Perception Survey 2007 and the complaints received by ACC till date.

We will promote public education, including in schools and special advocacy programmes to increase peoples awareness as a strategy for prevention of corruption. We will ensure transparency and accountability and institute check and balance instruments. Concerted efforts will be made to expedite the process of investigation, prosecution and trial and the uniform application of the laws on all citizens alike Systematic reviews and simplification of the rules and regulations will be undertaken as an important anti-corruption strategy. We will support the ACC and the RAA to identify the cause and forms of corruption .. so that a comprehensive and realistic anti corruption strategy and implementation plan can be formulated. ----Manifesto----Druk Phuensum Tshogpa

4. DEFINITION OF CORRUPTION
There is no universal definition of corruption. According to Transparency International4 (TI), Corruption is operationally defined as the misuse of entrusted power for private gain. (Transparency International, 2008) The ruling governments manifesto refers to corruption as the bane of society,an incurable cancera social evil that impedes economic growth, induces inequality, deepens povertyand results in the exploitation of the poor. (Druk Phuensum Tshogpa, 2008) The Anti-Corruption Act, 2006, defines the corrupt as Any person with a corrupt intention accepts or obtains or agrees to accept or attempt to obtain; gives or agrees to give or offers any gratification to any person or entity as an inducement or reward for doing or forbearing to do an act relating to the exercise or non-exercise of power in office or in the course of official duty, rendering the gratification an undue gratification. (AntiCorruption Act, 2006) In essence, corruption is an act by an individual5 who unlawfully6 and wrongly7 uses his/her official position to benefit himself/herself or someone related or close to him/her at the cost of others.
4

Transparency International is a global civil society organization that leads the fight against corruption in the world.
Individuals means- a person or a group of persons

5. FORMS OF CORRUPTION AND ITS CAUSES

Corruption exists in various manifestations and its causes are diverse; socially, culturally, economically and politically. Forms of corruption and their causes as established from the findings of the Corruption Perception Survey 2007 are presented below. Enquiry/survey conducted by Centre for Bhutan Studies (Rabten, 2009) and the complaints received by the Anti-Corruption Commission corroborate the information from the Survey. The forms and causes of corruption illustrated below are by no means exhaustive or exclusive.

5.1 Abuse of Power

Abuse of power is a common threat that runs through all forms of corruption. When public servants in positions of authority are corrupt, organizations and systems are rendered weak and ineffective, which potentially stakes public trust in the government besides other consequences of corruption. Corruption in positions of authority can occur in policy formulation, legislation of laws, formulating development plans, award of works, project management, personnel administration, enforcement of laws and policies and misuse of resources including human resource. The main causes for abuse of power are weak recruitment system for leadership positions (wrong people being appointed), discretionary power, poor accountability, weak mechanism for detection and punishments, weak oversight, general failure in the implementation of Code of Conduct and Ethics, weak media for exposure, tolerant culture and social obligations.

5.2 Nepotism and Favoritism

Nepotism and favoritism by nature involve abuse of power. Such abuses generally occur when someone closely linked to a public official through family, friends, marriage, party8 or communal association is given undue preferential treatment. It normally prevails in personnel matters such as recruitment, promotion, training, transfer and administrative sanctions, services delivery and award of contracts. Major causes of this form of corruption are absence of a system of declaring perceived and potential conflict of interest, which is emanating from the general failure in the implementation of Code of Conduct and Ethics including training of employees for conscious compliance of the same, lack of proper check and balance mechanisms, absence of a transparent and institutionalized system of grievance re-dressal avenue without fear for reprisals and discretionary power.

5.3 Misuse of Public Funds

Misuse of public funds is embezzlement. Embezzlement or illegal money use or siphoning takes place through deception, breach of trust, forgery, fraud and falsification or tampering of documents and information.
6 Unlawfully means- anything that is illegal such as abuse or misuse of public resources and abuse of authority. 7 Wrongfully means- anything that is wrong from the perspective of common sense like unethical and dishonest act, theft and so on. 8 Party refers to political parties

Embezzlement commonly occurs in accounts, procurement and revenue sections, project payments and in human resources divisions. The common modus operandi adopted is false muster roll payments through double bookings, false DSA/TA/DA/porter/pony claims, manipulation in stock and cash balance adjustments and excess payments to contractors and suppliers. Major causes of embezzlement are non-compliance of financial norms, general failure in the implementation of Code of Conduct & Ethics, poor moral values, lack of proper check and balance mechanisms, poor accountability and general weakness in administration, weak leadership without supervisory accountability but with discretionary power.

5.4 Bribery
Bribery is an act of giving, taking or soliciting bribes. The act involves offering, taking or soliciting a benefit or a gratification that directly or indirectly affects the action of a public servant. The act is very often disguised and camouflaged in the form of gifts, which are considered customary tradition and other gratification such as employment and scholarship for the public officials relatives, holiday and hospitality. Bribery takes place due to lengthy procedures, unclear and multiplicity of rules with loopholes for manipulation, lack of information and transparency of rules & procedures, discriminatory application of laws and rules, general failure in the implementation of Code of Conduct and inefficient service delivery.

5.5 Fraud
Fraud is deceiving somebody to get a benefit. Fraud is mostly prevalent in the area of claiming and disbursing payments like travel bills, medical bills and daily subsistence allowance bills, contract bills and labor payments. It is also common in bank guarantee facilities. Major causes of fraud are the absence of a proper check and balance mechanism and general weakness in the administration. Poor moral values may be an important factor in committing fraud.

5.6 Collusion
Collusion is a secret deal between parties to deceive government or somebody through a dishonest act for their benefits. Collusion generally happens in government procurements through bid rigging, leakage of privileged information and unprofessional bid assessment. The main causes of collusion are lengthy procedures, unclear and multiplicity of rules with loopholes for manipulation, discretionary powers, weak oversight and monitoring, lack of transparency and accountability, non-application of the rule of rotation of staff, general failure in the implementation of Code of Conduct & Ethics and inefficient service delivery. Collusion may also be attributed to poor moral values and social ties.

5.7 Kickbacks
Kickbacks refer to payments made by suppliers to representatives of the procuring agencies in exchange for contracts secured through unfair means.

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The main causes of kickbacks are systemic flaws, lengthy and vague rules, lack of check and balance mechanisms, poor supervision, lack of transparency and accountability, absence of service standards and general failure in the implementation of Code of Conduct & Ethics.

5.8 Fronting
Fronting is an agreement executed between a legitimate licensed company/business enterprise and unlicensed individuals/groups for running the business for a certain consideration9. Fronting in Bhutan is generally associated with retail businesses, mining operations, software and manufacturing industries and procurement. The main causes of fronting are absence of an effective monitoring system, weak laws and weaker enforcement and absence of Business Code of Conduct and Ethics.

5.9 Money Laundering

Money laundering is the practice of disguising illegally obtained funds so that they seem legal (Wikipedia,, 2001). In actual sense, criminals disguise the origin of money that they obtained through illegal means. On socio-cultural front, money laundering can promote criminal activity and encourage drugs, commercial sex and disrupt other social norms. And, on the economic front, it can distort market. One of the main causes of money laundering is lack of adequate legislation and law enforcement. In the absence of anti-money laundering programme, regulations and growing financial market, Bhutan is vulnerable to money laundering. The table below presents peoples perception of causes of corruption (Corruption Perception Survey 2007).

Consideration would include payments/commissions/profit sharing for rentals of licenses.

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figure is pe eoples perception of f forms of co orruption fro Peoples om The following f ude urvey 2008. Attitu towards Corruption and ACC Su

f atrix outlines types and c causes of co orruption alon with poss ng sible risks: The following ma
TypeofC Corruption Abuseofpower f Ca ause Weak recruitment system fo W or leaders, discretion nary powers, poo or ac ccountability,wea akmechanismfo or de etection and pu unishments, weak ov versight, genera failure in the al im mplementation o the Code o of of Co onduct and Eth hics, weak media an ndtolerantcultur re. Un ncontrolleddiscr retionarypower. Ab bsence of a sys stem of declaring co onflict of inter rest. Failure to co omply with the code of conduc ct an ndethics.Absenc ceofpropercheck an balance mec nd chanisms in the sy ystem and lack of grievance re e dr ressalavenues. La of proper ch ack heck and balance mechanisms. Weak m kleadership,high h di iscretionary power. Non n co ompliance with the financial laws t s. Po oorsupervision. Risk Area It runs though all form of corru h uption. In all in nstitutions. Risk O Organization

Nepotism m Favoritis sm

Centra agencies al Planned deve elopment activities s. Autono omous agencies Project imple ementation Project ts, Recruitment, transfer, promoti and ion training. Local g governments

and

Misuse of public funds

Financial app proval and disburse ement. Revenue collection both at cen ntral and local level

Govern nment, Corpora ation, Dzongk khags and Geogs.

12

 Bribery/Kickback

Fraud

Collusion between public & private in procurement Fronting

Uncontrolleddiscriminatorypower Nonuniform application of laws, rulesandnorms. Unclear and lengthy procedures, lack of information and transparency. Failure to implement codeofconductandethics. Inefficientservicedelivery. Socialdemandsandobligations. Systemicflaws Unlimited wants lengthy procedures, unclear rules, weak supervision and lack of check and balance. General administration weakness andpoormoralvalues Nonapplication of the rule of rotation, lack of transparency and accountability, discretionary powers, weak oversight body, failure in the implementation of Code of Conduct and Ethics. Inefficientservicedelivery. Poormoralvaluesandsocialties.

Contract administration Services delivery organizations Recruitment, promotions, transfer and trainings. Adjudication of cases Elections

Central agencies Autonomous agencies Projects Judiciary Legislative

Academic transcripts, bank guarantees, TA/DAs, Bills and other government clearances

Government employment, Banks, School admission. Construction and mining industries.

Government procurement system Foreign investments Processing of mining leases and rights Hiring of machineries and vehicles

Procurement section Licensing divisions Trade division Natural resources regulatory agencies

Moneylaundering

Weakentrepreneurialcapacity. Lackofresources. Lackofmonitoringsystem. AbsenceofBusinessCodeofEthics. Socialnetwork Lackofintegrity Weakregulatorysystems Lackofadequatelegislationandlaw enforcement. Globalizationoffinancialmarkets

Retail and whole sale business in border towns. Manufacturing industries. Deployment machinery of and construction

Whole sale businesses

and

retail

Manufacturing construction industry. equipment and Natural resources sector

and

Banking and transactions

other

financial

Banks and institutions

financial

6. IMPACT OF CORRUPTION
Corruption retards sustainable economic development; it degrades the environment and its resources; it disrupts social harmony and obstructs good governance initiatives and the rule of law. It undermines security and political stability. For Bhutan, corruption can be the greatest impediment to achieving the national goal of Gross National Happiness. Corruption betrays public trust and confidence in the government and public officials. Corruption is anti-GNH, as elicited below: 13

6.1 Sustainable economic development

Corruption has negative impact on economic growth, investment, international trade and price stability (Herzfeld, 2005). Empirical studies by institutions like World Bank, IMF and ABD reveal that corruption on an average reduces economic growth in a country by 0.5-1% a year (Shepotylo, 2009). For Bhutan, corruption can reduce government revenue through leakages and tax evasions. It can discourage foreign direct investments and international aid to the country. Corruption can discourage level playing fields in private sector and distort the market conditions. Corruption can increase cost of doing business due to pay-offs, bribes, kickbacks, which in turn can negatively impact employment and inflation.

6.2 Social and Cultural Development

Corruption can disrupt equity and harmony in a society by widening gap between the rich and the poor. This gap can create social tension. Corruption can also be a threat to the national identity as it erodes social, cultural and moral fabric of the society.

6.3 Good Governance

Drawing on the international experiences, corruption undermines state legitimacy and the rule of law. In a country like Bhutan, where parliamentary democracy has been just introduced, political corruption can threaten the nascent democracy itself. Electing incompetent candidates of political parties through exchange of votes for concessions is one such example. Similarly, political masters can also bring incompetent and corrupt officials into public service through nepotism and favoritism and also legalize corruption through policies and laws. The nexus between government and big businesses, which provide support to political parties, can manipulate national budget allocation resulting in unbalanced development. Such business houses can become shadow policy makers and legislators. Corruption in judiciary can distort judgments of the courts. Judicial corruption is the worst form of corruption since there is no corrective mechanism. Such a situation can disrupt the fundamentals of justice and liberty in a country, the very foundation of democracy.

6.4 Conservation of Environment

Pristine environment and natural resources is a national asset. Environmental degradation risks the very essence of life. Therefore, it is important that sustainability of the environment is ensured for future generations. Corruption allows indiscriminate exploitation of environment and natural resources, distorting ecological balance, causing disasters and poor health conditions of people and entrenches poverty.

7. STRATEGIES
In order to fight corruption effectively and aggressively, the following strategic considerations have been emphasized. These strategic considerations are broad, interrelated and provide a platform for entry points for programs and activities by ministries, autonomous agencies and other stakeholders. The strategies are in no way exhaustive. 14

7.1 PROMOTE QUALITY LEADERSHIP

As presented in the survey findings, a common cause for corruption is weak leadership and hence weak administration. Good leadership is vital in fighting corruption. It is required not only to demonstrate and epitomize ethical conduct but also to bring changes in organizational culture that supports good values, promotes integrity and professionalism. Systems are as strong or as weak as the leaders. Leaders should lead the way. Good leadership must be promoted as a good governance measure. Therefore, emphasis shall be placed on appointment of right people at the right place on the principle of meritocracy through appropriate and robust recruitment and institutionalization of effective performance accountability systems.

7.2 ENSURE SUSTAINED POLITICAL WILL

Political will is a critical precondition in fighting corruption. Political will is not only of the government and the leadership alone but of the people, oversight institutions such as the media and civil society. However, government has to lead the way and create conducive environment for fighting corruption. Political will must manifest itself in mainstreaming anti-corruption strategies and programs into the overall plans of the government. The support from the government is crucial because without actual political will and support, any anti-corruption agency will be ineffective. Political will must be nurtured and sustained by successive governments in future. Political will of the people and oversight institutions should forge alliances to foster a culture of absolute intolerance for corruption.

7.3 REVIEW LEGAL FRAMEWORKS TO MAKE CORRUPTION A HIGH RISK OFFENCE

Laws form the first and last line of defense against corruption. The policy of Zero Tolerance to corruption should legislate stringent and clear laws to make the offence of corruption as highly risky and costly without any benefit. This is the first step in deterring corruption. The Anti-Corruption Act 2006 (ACA 2006) was the first act on corruption. The ACA 2006 is useful in terms of providing definitions of corruption and conferring power to the Anti-Corruption Commission. However, for penalty provisions for the corrupt acts, the Act refers to the Penal Code of Bhutan 2004 (PCB 2004). There are mismatches between both the definition and the penalty provisions in ACA 2006 and PCB 2004. As corruption needs stringent penalties, PCB 2004 is mild on penalty clauses for corrupt acts. For some of the corrupt acts defined in ACA 2006, there are no corresponding penalty clauses in PCB 2004. Comparing the penalty provisions in PCB 2004 and other laws, most of the offences described by ACA 2006 fall within or below misdemeanor. Corrupt officials sentenced for offences of misdemeanor or below can pay in lieu of imprisonment. This system of sentencing based on the penalty clauses of laws sends a message that one can be corrupt and if one has money one can pay and be free. Hence, the laws are not strong enough to bring effective deterrence on corruption. 15

Favoritism and nepotism, by nature, committed with conflict of interest result in serious corrupt acts. However, these forms of corruption, though rampant, the PCB 2004 has no penalty clauses for them. If such offences are dealt under misuse of authority, the penalty is official misconduct, which is a misdemeanor. Favoritism, nepotism, conflict of interest and misuse of authority cause huge losses and damages to the government. Besides strong laws on such issues, there also has to be a cultural shift to recognize these as serious problems. Bribery is a rampant form of corruption. According to sections 291 and 293 of PCB 2004, the grading of bribery is done based on the value of bribe at the time of crime. Under value-based sentencing of section 18 (d), bribery will be classified as petty misdemeanor if the value or the amount of bribe paid is less than the total amount of the daily minimum national wage rate10 less than seven years at the time of crime. By this calculation, anyone giving or receiving a bribe of Nu. 252,000.00 or below at a time will fall under petty misdemeanor. The sanction for petty misdemeanor, according to section 14 of the PCB 2004, is a maximum of less than a year and minimum of a month of imprisonment. With the current level of economic development, Nu. 252,000.00 is a huge temptation to resist when the penalty is minimal at less than a years imprisonment, which works out Nu. 36000 as Thrimthue. The PCB 2004 and ACA 2006 have to be reviewed for harmonization and more importantly to make corruption highly risky and costly. Apart from the PCB 2004 and ACA 2006, there are other complementary legislations (e.g. civil service, environment, forestry, tax & customs, procurement, banking, etc.) to curb corruption. These legislations must be examined and amended, if necessary, to make them at par with the main anti-corruption acts. In addition, with the need of the changing times, new acts must be formulated, particularly those vital to curbing corruption such as Contract Act, Access to Information Act and Anti-Money Laundering Act. In the strategic and collective fight against corruption, the importance of clear and stringent laws cannot be over-emphasized. These laws must make corruption a high risk, high cost and low benefit offence. The review of laws must be done on a regular basis to update them with the need of the changing times. The review of PCB, CCPC and ACA has already been initiated by the National Council and ACC.

7.4 REVEW AND STRENGTHEN INSTITUTIONAL CAPACITY

Institutional capacity plays a key role in promoting efficiency in government. Without institutional capacity, the inefficient bureaucracy is highly prone to corruption. Without undermining importance of other institutions, institutional capacity of the Judiciary, Anti-Corruption Commission, the Office of the Attorney General, Royal Audit Authority, internal audit units, media and civil societies must be reviewed and strengthened. The Royal Court of Justice is a premier institution that adjudicates corruption cases. In order to dispense justice by the court with efficacy, the institutional capacity of the judiciary must be strengthened wherever required.
10

Daily minimum national wage rate is the rate fixed by the Government from time to time. The current national wage rate is Nu. 100 per day.

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The capacity of the Office of the Attorney General should be strengthened on prosecuting corruption cases in courts. For the Royal Audit Authority, capacity should be developed on sensing and detecting corrupt conduct during their regular auditing. The Anti-Corruption Commission, being the lead agency in fighting corruption, needs institutional capacity development in areas of investigation, prevention and public education. ACCs capacity development in intelligence and networking for detection of corruption is very important. In ministries, departments, autonomous bodies, corporations and educational institutions capacity must be developed to undertake corruption risk assessment, to plug systemic loopholes, to implement anti-corruption policies and strategies and to promote professional ethics in employees.

7.5 REVIEW AND REFINE SYSTEMS

Timely review of the system is one critical factor to reconfirm its rationale and validity to prevent corruption. At the moment, there is no standard timeframe for review of systems. As a result, systems sometimes become obsolete and inadequate, providing opportunities for corrupt practices to thrive. As the same time, the extent of compliance with the rules will also have to be ascertained. The government, through the internal audit units, shall initiate a mechanism to review systems prevailing in all agencies at appropriate regular intervals. Opportunity for corruption grows with systemic flaws. Therefore, reviewing and refining systems is an important preventive measure for curbing corruption. Systems review must examine flaws or inadequacies in the system and devise measures to plug them. Through a systemwide review, the following broad programs or systems will be reviewed:

i.

Review and Reform Public Procurement System

Public procurement for works, goods and services has a huge budget outlay. Any lack of trained professionals, weak regulation and weaker enforcement would result into huge loss to the public exchequer. Hence, it will be a major proactive anti-corruption strategy to review and refine the public procurement system as a whole. The system review must provide a public procurement system which is easy to implement, with mechanisms of transparency and accountability of decisions made including avenue to channel contractors/suppliers grievances. The review must bring in efficiency in terms of resources spent and the quality of the products purchased. As recommended by the Pay Commission, (Pay Commission, 2008) Procurement Division has been created to professionalize procurement. The revised Procurement Manual and the Standard Bidding Document for works are in force. However, with the urgent need for public advocacy, capacity development and bid protest regulation, there is also a need to look into the whole system of public procurement. As recommended by the Pay Commission (Pay Commission, 2008) as one of cost cutting measures, centralized procurement system needs to be studied.

17

ii.

Strengthen Public Financial Management System

Financial rules have served their purpose in the past. With the changing times, financial rules have to be reviewed and updated. In consultation with the Royal Monetary Authority and the Ministry of Finance, financial institutions must review and explore ways to strengthen the public financial management system. There is an immediate need to reduce direct cash dealings in financial transactions. The human interaction in financial transactions must be reduced to the lowest level to curb bribery and other malpractices and to detect the money path when such acts are committed. Information Communication Technology (ICT) will be used wherever necessary to reduce the human factor in financial transactions.

iii.

Simplify Procedures and Regulations

Administrative procedures and regulations should be customer friendly and cost effective. Lengthy procedures and hard-to-follow regulations encourage people to take shortcuts through grafts and bribes. Vague regulations and lengthy procedures are some of the main causes of corruption. Therefore, an effort has to be made to simplify regulations and procedures in all agencies. This can be done through the Standard Cost Model. The Standard Cost Model (SCM) is a tool to assess administrative burdens and help simplify procedures in public service delivery. One-stop-shop and service standards are also some tools that are being implemented to make procedures simple and transparent. The process for institutionalization of the above tools has begun through a multi-sectoral task force based in the RCSC.

iv.

Minimize Discretionary Powers of Decision-makers

Monopoly and discretionary power accompanied by lack of accountability and transparency, is another cause of corruption. Therefore, the government in partnership with the concerned agency will study the discretionary power enjoyed by public officials and concentrate on limiting it to as low as possible. This can be done by putting in place a clear regulations and legal frame works to guide institutional conduct. The system of declaring conflict of interest will be made mandatory in all decision making processes.

v.

Establish Clear & Transparent Protocol on Policy and Rule Making

Clear and transparent protocol of formulating policies and rules has to be established. Clear processes with responsible actors will be spelt out for initiating any policy or rule, consultation including public engagement as policies and rules impact on their lives, approval, enforcement and review for relevance, efficiency and transparency.

vi.

Enforce Code of Conduct and Ethics

The Code of Conduct and Ethics is the ultimate terms of reference for all employees. It is a useful written guide for ethical behavior in organizations. Although civil servants are governed by BCSR 2006 Code of Conduct and Ethics11, it is vital that every institution has its own code of conduct and ethics incorporating its own values. No two institutions
11

Chapter 2 (page 2) of BCSR-2006 spells out the generic code of conduct and ethics of all civil servants bestowed with the privilege of honour to serve the Tsawa Sum.

18

are alike in their functions and mandates. An emphasis will be made on proper compliance by drawing up an appropriate redressal and punitive mechanisms. It is also important to align provisions of the Code of Conduct and Ethics to the functions and mandate of the respective organizations.

vii.

Enforce Declaration of Conflict of Interest

A conflict of interest is a situation where an individual, or the organization he /she represents, has some sort of real, potential or perceived conflict of interest (both positive and negative) with the activities he/she undertakes. Although there is a need to declare conflict of interest according to section 8 of Chapter 2 of the BCSR-2006, there is hardly any record of agencies complying with it. Therefore, all agencies will have a system of declaring conflict of interest while discharging official duties, especially during important decision making processes like policy formulation, contract evaluation and award thereof, promotion meetings and employment. The purpose of conflict of interest laws is to prohibit public employees from personally benefiting or favoring/punishing someone at the expense of the public interest. Where a conflict of interest exists, the employee must publicly announce the interest creating the conflict, and must also disqualify himself/herself from involving in the decision making process. There will also be a system within the code of ethics to appropriately punish nondeclaration of conflict of interest.

7.6 DEVELOP LONG-TERM EDUCATIONAL STRATEGY FOR AN AWAKENED CITIZENRY

Corruption needs long-term solutions. Corruption cannot be controlled unless there is a change in public attitude towards corruption from taking it for granted to total intolerance. Changing peoples attitude to embracing clean culture is very critical to fight the social menace. A strong, awakened citizenry that upholds clean society and rule of law over any other interests is necessary to combat corruption through long term education and learning processes. While public advocacy and awareness program development and dissemination is important, to build a society based on integrity and values needs a different approach. Hence, there is a need to develop comprehensive long-term educational programs and learning materials for students, civil servants and the general public. Programs on integrity and ethics for youth are critically essential to build future citizens with high integrity and professionalism. The Education Ministry, Royal University of Bhutan and Ministry of Labour & Human Resources, in collaboration with other stakeholders, need to review/introduce and strengthen curricular content on value education and professional code of conduct and ethics in the schools, training institutes and colleges. Programs on integrity and values are necessary for public officials to orient them on the costs and risks of unethical and corrupt conducts. Such programs may be imparted at both pre-service and in-service levels. Organizations like the Royal Civil Service Commission (RCSC) and Royal Institute of Management (RIM), in collaboration with other relevant stakeholders, need to review and develop relevant courses on integrity and professionalism for public officials and make it a mandatory part of human resource development and career advancement.

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Since there cannot be a clean government with a corrupt private sector or vice versa, integrity program is equally important for private businesses. The Ministry of Economic Affairs and Bhutan Chamber of Commerce and Industries (BCCI), in collaboration with other stakeholders, need to promote integrity and ethical conduct of businesses. Mandatory courses on code of ethics, integrity pacts, risks and costs of unethical conduct etc. need to be developed in the private sector training programs. An integrity and value education program through joint and collaborative efforts is absolutely necessary to build an awakened citizenry. With high integrity, moral values and professionalism, corruption will decrease taking the people closer to Gross National Happiness.

7.7 PROMOTE PARTNERSHIP WITH STAKEHOLDERS

Fight against corruption must be a collective one. Solidarity and partnership among stakeholders must be nurtured as the foundation of fighting corruption. Effort will be made to forge alliances with all stakeholders - citizens, media, private sector and spiritual institutions.

i. Media
Media as the fourth arm of the government has an important role in building a strong democracy through sensitizing citizens on rule of law, bringing citizens voice to the fore and holding government and public officials accountable for their action or inaction. Incorruptible and professional media12 is one of the most important partners in fighting corruption. Media not only informs citizens on all aspects of corruption but also can expose corrupt individuals/groups through independent and professional investigative journalism. Partnership with media needs to be built through establishment of an information network and support their institutional and legal roles through facilitation of access to information. Capacity building, especially in the field of investigative journalism, needs to be encouraged in various media houses. It is also important for the media fraternity and the regulators to build high standards of professionalism, integrity and accountability in media organizations and professionals.

ii. Private Sector

Private sector is another important stakeholder in fighting corruption. Private sector must play an important role in promoting clean business ethics and practices. Government has to create the environment for healthy competition in markets by encouraging level playing field. Private sector as an important development partner should not only restrain from bribery and collusion but exert pressure on the government for clear and transparent policies and rules and efficient services that encourage economic growth. The concept of Integrity Pact must be adopted by the private sector as a commitment to abide by clean business ethics. Avenues will be created for private sector voices to be heard and for timely redressal.

12

Media includes written papers, TV, Radio, cinemas and internet

20

iii. Civil Society & Non Profit Organizations (NGO)

Constitution vests the sovereign power in the citizens and by that virtue they have to be empowered through access to information and education to exercise their power and make governments and public officials accountable. Ironically, citizens are also the victims of corruption and hence they have the biggest stake to fight corruption. Civil societies through their collective voices against corruption have a critical role to play in fighting corruption. Active partnership with civil societies and NGOs will be useful in creating awareness in the citizenry on corruption and its consequences. Even programs of common interests may be worked out and delivered with better efficiency. The power of collective strength as demonstrated through the ballot box can be an equally effective tool against corruption. A knowledge-based civil society that is equipped with the skills to analyze the issues on corruption will direct its forces against corruption. An awakened citizenry will be nurtured to pave the way for a collective voice against corruption. Ultimately what will sustain is the citizens drive in building a culture of intolerance for corruption.

iv. Spiritual Institutions

GNH is firmly founded on spiritual values such as interdependence, impermanence, compassion with wisdom and integrity. These values are integral to the Bhutanese society, which may be threatened by unprecedented material progress and prosperity. Corruption is a symptom of erosion of such values and morality, which has to do with the mind that directs the body to commit corrupt acts. Spiritual teachings and techniques such as meditation that trains and enlightens the mind has great significance in fighting corruption from within and beyond. Fight against corruption has to first begin with self. Therefore, building on the spiritual programs in schools in close concert with enlightened spiritual leaders with a focus on values such right view, right action, right livelihood and right conduct will build a strong foundation not only for anti-corruption drive but also for sustaining peace, harmony and happiness in the country.

vi. Regional and International Anti-corruption Initiatives

International and regional anti-corruption drive is a recent movement. At the national level, some countries have made commendable anti-corruption impact, which have become models for many countries particularly in the developing world. Experiences of India, S. Korea, Singapore and Hong Kong in particular have helped Bhutan in establishing a strong anti-corruption agency and effective anti-corruption strategies. Sharing information and experiences build confidence and determination and saves resources. Further, with globalization, corruption is increasingly becoming a sophisticated, complex and international crime that is compelling and necessitating countries to forge alliances through capacity building, networking, sharing of information, harmonizing laws, etc. to fight it. ADB-OECD Anti-Corruption Initiative for Asia and Pacific and United Nations Convention against Corruption (UNCAC) are some instruments towards forging that alliance. Bhutan is a member of the ADB-OECD Anti-Corruption Initiative and is a signatory to the UNCAC. The government will not only initiate process for ratifying UNCAC but also explore bilateral and regional cooperation for greater efficacy of its national anti-corruption drive and in building confidence through a greater sense of

21

common regional/global agenda to fight corruption resolutely for the well being of all peoples.

8. MANAGEMENT AND IMPLEMENTATION AUTHORITY

The National Anti-Corruption Strategy Framework (NACSF) is broad and applies to all arms of the government and sections of society. Preparing plans under strategic considerations and their implementation shall be the responsibilities of all concerned agencies. The strategic considerations described in this document may be used as entry points for programs and activities by different partners and stakeholders. Agencies must take ownership of the Framework and they may also enrich the programs and activities for greater impact. The Government Secretaries under the body of the Committee of Secretaries (COS) shall monitor the implementation of NACSF. The COS will provide assistance that is necessary to achieve the objectives of NACSF through the implementation of its programs and activities by the ministries and other stakeholders. The Anti-Corruption Commission will provide technical support in the form of tools and expertise, if required.

9. CONCLUSION
Bhutan, as a small nation that aspires for eternal peace, security and happiness for her people, cannot afford to tolerate corruption and be complacent. Corruption undermines justice and equity, the very essence of democracy. It traps people in a vicious cycle of poverty, causes social, economic, environmental and political crises, which may potentially stake national security and sovereignty. Zero Tolerance to corruption shall mean that corruption shall be dealt collectively, aggressively and resolutely through NACSF. An effective monitoring and evaluation system shall be put in place. While every agency will have to consciously implement the anti-corruption program and activities, it is critical that citizens are empowered to fulfill their sacred and fundamental duty to fight corruption as enshrined in the Constitution and in making governments and public officials accountable. Anti-corruption agencies including the media shall be enabled to perform effectively, without fear and favor. Bhutan has been acclaimed internationally for her novel and profound development philosophy, the wise policies that have given better quality of life to her people. She enjoys a unique advantage when corruption is rendering governments ineffective, allowing societies to degenerate and destroying nations. The new political dispensation of parliamentary democracy offers great opportunities and challenges. Bhutan is endowed with the right conditions and the great opportunity to be the cleanest in the world and be a role model to the world. His Majestys Coronation address to the nation states, As citizens of a spiritual land you treasure the qualities of a good human being: honesty, kindness, charity, integrity, unity, respect for our culture and traditions, love for our country and for Dharma. The future is neither unseen nor unknown. It is what we make of it. What work we do with our two hands today will shape the future of our nation. Our childrens tomorrow has to be created by us today. Bhutan enjoyed unprecedented peace and progress under the caring, wise and visionary leadership of her successive Monarchs and now it is the people, in whom the Constitution 22

vests the sovereign power, who must take the country forward towards greater happiness, stability and prosperity. Indeed, as His Majesty the 4th Druk Gyalpo always said, Destiny of the country lies in the hands of the people.

9. REFERENCE
Anti-Corruption Annual Report (2006,2007) Galay, K. (1999). Corruption in Bhutan & Areas of Improvement. Thimphu: Centre for Bhutan Studies. & 2008) Anti-Corruption Act. (2006). Anti-Corruption Act. Thimphu: ACC. Hamilton, T. (2008). An ICAC perspective on the effective detection and investigation of corruption. Doha Anti-Corruption Conference, (p. 3). Doha. Herzfeld, A. D. (2005, june). The Economic Costs of Corruption: A Survey and New Evidence. Retrieved 2009, from http://129.3.20.41/eps/pe/papers/0506/0506001.pdf: http://129.3.20.41/eps/pe/papers/0506/0506001.pdf Shepotylo, O. (2009). The Economics Effects of Corruption. Retrieved 2009, from The Ukrainian Observer: http://ukraineRabten, P. (2009). Good Governance and Gross National Happiness. Thimphu : Center for Bhutan Studies. observer.com/articles/228/991?PHPSESSID=59356de0ecf897fc2b6f72a106f13b7e Thinley, J. Y. (2009). Keynote Address. Thimphu: ACC. Tshokpa, D. P. (2008). Party Manifesto. Thimphu: DPT. Wikipedia,. (2001, Jan. 10). Money Laundering. Retrieved June 3, 2009, from Money Laundering: http://en.wikipedia.org/wiki/Money_laundering World Bank. (2004, April Wednesday). News and broadcast. Retrieved June Wednesday, 2009, from Worldbank: http://web.worldbank.org/WBSITE/EXTERNAL/NEWS/0,,contentMDK:20190187%7E menuPK:34457%7EpagePK:34370%7EpiPK:34424%7EtheSitePK:4607,00.html Crown Agents (2007). Review of the Anti-corruption Commission and Progress on the Development of a National Anti-Corruption Strategy. Thimphu: Crowns Agent. Department of Public Service and Administration (2002). Public Service Anti-corruption Strategy. South Africa. Government of Sierra Leone (2005). National Anti-Corruption Strategy. Sierra Leone: Government of Sierra Leone 23

Royal Government of Bhutan (2004). The Penal Code of Bhutan. Thimphu: Royal Government of Bhutan. Swiss Agency for Development and Corporation. Fighting Corruption. SDC Strategy. The Directorate of Preventive Service. KACC. Guidelines for the Preparation of an AntiCorruption Policy for Public Institutions. The Government of Bulgaria. The National Anti-Corruption Strategy. The National Accountability Bureau (2002). National Anti-Corruption Strategy. Pakistan: The National Accountability Bureau. The Transparency International (2007). Anti-Corruption Training Manual. Transparency International (accessed in February, 2009). Anti-corruption Handbook. <http://transparency/org/ach/index.html> UNDP(2008). Asia-Pacific Transforming Lives. UNDP. Human Development Report. Tackling Corruption,

Voskanyan, F. ( 2000). A Study of the Effects of Corruption on Economic and Political Development of Armenia: Armenia. Pay Commission. (2008). The First Pay Commission Report. Thimphu: Pay Commission, Royal Government of Bhutan.

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IMPLEMENTATION PLAN
Proposed Strategy/Activity Objective Output Proposed timeframe

Responsibility

StrategicConsideration1.Promotingleadership
Includeintegrityasan integralpartofrecruitment process,especiallyfor leadershippositions.Institute robustrecruitmentprocesses withappropriatetools includingeffectiveselection panelsforleadership positions. Tohavecredible leadersincivil service organizationswho canbelookedupto asrolemodels. RoyalCivil Service Rightpeoplein Onregularbasis therightplaceand forrecruitments Commissionand attherighttime andpromotions useragencies.

StrategicConsideration2.EnsureSustainedPoliticalWill
InaccordancewithHis Majestysvisionofcorruption freeBhutan,Governmentto adoptandsustainadefinite policyoncorruption. Tomainstreamanti corruption strategiesinto programsand activities. Adefinitepolicy oncorruption (manifesto alreadycontains it) Continuityofthis policy Throughout10th Government FiveYearPlan (July2008July 2013)

StrategicConsideration3.ReviewofLegalFrameworkstomakeCorruptionHigh RiskOffence.
ReviewPenalCode,ACCAct& CCPCforcorruptionoffences andsanctionsthereinand alsoreviewotheranti corruptionlegislationinthe Kingdom(inprogress). Draftnewlawssuchas Contract,Accessto InformationandAntiMoney LaunderingActs(1st&2nd alreadyinitiated). Tomakecorruption highcost,highrisk andlowbenefit offence Todeterpeople fromcorruptionby clearandstringent laws AconsolidatedAct oncorruption or Harmonized clausesinlawson corruption Tobereadied for2010 Parliament session Good Governance Committeeof theNational Council& Legislative committeeof theNational Councilin collaboration withtheAnti Corruption Commission

25

 StrategicConsideration4.ReviewandStrengthenInstitutionalCapacity

Agenciesshouldreviewtheir institutionalcapacityinline withtheirrespective mandatesandworkloadsto improveitbasedonthe identifiedweaknessesand gaps(capacitytoimplement anticorruptionpoliciesand strategiessuchasassessment ofcorruptionrisks,pro activenessinaddressing systemicloopholes,sensing anddetectingcorrupt conductandensuring complianceofprofessional ethicsbyemployees). Tobuildarobust institutionswith adequate manpower,skills andknowledge. Cleaninstitutions withprofessional capacityand credibility. ByJuly2012 Byrespective organizations andGovernment tosupportin termof budgetary needs.

StrategicConsideration5.ReviewandRefineSystems
Procurement: Reviewandreformof GovernmentProcurement System,developtrainingand advocacyprogramand institutegrievanceredressal mechanism. Strengthenpublicfinancial managementsystem: ExamineICTasaviable optiontoreducehuman interactionsinfinancial transactionsandalsolookat antimoneylaundering measures. Todevelopasimple andtransparent procurement systemforgoods, worksandservices Astandardand transparent procurement rules. Anefficient financial management systemwithless human interactions. ByJuly2010 Ministryof Finance

Toreducehuman interactionsin financial transactionstocurb fraud,briberyand embezzlement+ Reducedmoney launderingactivity. Toreducecostof servicesdelivery andincidencesof briberyandgraft.

ByJan2012

Allfinancial institutionsin collaboration withRMAand MoF

Simplifyproceduresand regulations: Reduceredtapeusing effectivetoolssuchasSCM, RIA(regulatoryimpact assessment)tomeasure Administrativeburden(AB).

Clear,simpleand effective regulationswith reducedcosts

Institutionalize SCMby200910 andcontinue thereafter.

RoyalCivil Service Commissionin coordination withall concerned agencies(MSTF tofacilitate)

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Enhancetransparency& efficiencyinservicedelivery throughdevelopmentof servicestandardsand establishmentofOSS. Minimizediscretionarypowers ofdecisionmakers: Reviewcurrentdecision makingprocess,examine transparencyandcollective decisionmaking. Introducedecisionmaking protocol. PolicyandRuleMaking Protocol Establishclear&Transparent ProtocolonPolicyandRule Making. Enforcecodeofconductand ethics: Agenciesshouldformulate theirowncodeofconduct andenforceit. Trainemployeesto understandthecode,its enforcementprocessand theirobligations. Enforcedeclarationofconflict ofinterest: Implementacompulsory systemofdeclaringconflictof interestsandenforceit. Trainemployeestoensure compliance.

Toreducemisuseof Cleardecisionrule powerandauthority makingprotocols.

ByJuly2010

Allconcerned agencies

Toimprove efficiencyand transparency.

Clearcutprotocol onpolicyandRule making

ByJuly2010

Cabinet Secretariat

Toreducegeneral corruptconduct throughfixing accountability.

Appropriatecode ofconductwith sanctionsinif violated

ByJan2010

Allconcerned agencies

Toreducegeneral corruptconducts through transparency mechanism

Acompulsory systemof declaringconflict ofinterests

ByDecember 2009

Allconcerned agencies

StrategicConsideration6.LongtermEducationalStrategyforanAwakened Citizenry
Improveschoolscurricular Toinculcatemoral ByFebruary Ministryof

27

contentonvalueeducation includingdelivery. Developcurricularcontenton valueeducationand professionalethicsintraining institutesandcolleges. Drawanddesigntrainingfor inservicecivilservantson integrityandprofessional ehtics. Drawanddesignmass educationprogramonvalue andintegrity.

valuesthrough educationsystemto buildanawakened citizenry. Tobuildan incorruptiblecivil service. Todisseminate informationto generalcitizen aboutthemenaceof corruption.

An,awakened citizenrythatdo nottolerate corruption.

2012forvalue educationand professional ethics curriculum.

Ongoingandto continueon regularbasis

Education,Royal Education council,Royal Universityof Bhutan.Ministry labor&Human Resources,RCSC &RIM. ACCfor corruption education program

PromotingPartnershipwithStakeholders.

I.Media. Coordinateandcollaborate withallmediahouses. Asamediumof publiceducation, publicexpressions andtoexpose corruption. Toencourageclean businesspractices throughenhanced businessethics. Improved businessethics Mediareportson corruption Onregularbasis ACC&Media Onregularbasis ACC&BCCI

ii.Privatesector. Coordinateandencourage businesshousestoresist, refrainandreportcorruption

iii.CivilSocietyandNGO. Coordinate,educateand encourageCivilSocietyto opposeandreport corruption.(fundamental dutyasenshrinedinthe Constitution)

Toexertpressure anddefycorruption inthesociety.

Externalcheck andbalanceinthe systemandbuild onthecultureof intoleranceto corruption.

OnregularBasis

ACC&Civil Society Organizations

iv.SpiritualInstitutions ValueeducationlikeTHA DHAMTSE&LAYJUMDRAY inallreligiousdiscourseand discouragecorruption.

Toeducatepeople thatcorruptionis badandthatone shouldnotindulge init

Betterand informed citizenship

Onregularbasis

Dratshang Lhentshog. &ACC

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v.Regional&international anticorruptioninitiatives. Collaborateandassociate withcounterpartagencies, regionalinternational initiatives. RatifyUNCAC

Toinculcategood international practicesandfight transnational corruption

Bettertooland effectivemeasures UNCACratified

Onalltimebasis 2011

ACC, Ministryof ForeignAffairs

Implementation

Monitorandevaluatethe implementationofthe proposedstrategic considerations toensureproper implementationof thisstrategy Corruptionfree society Monitoringon alltimebasis andevaluation in2012 Good Governance Unit,PMOffice

29