Thursday, October 1, 2015

An OECD recommendation for integrity in aid?, by Elizabeth HART

In April, Oskar Karnebäck previewed in this space an initiative by the OECD, partnering with the U4 Anti-Corruption Resource Centre, to gather information toward developing a comprehensive recommendation for integrity in aid. The goal of that effort was to bring together the many strands of policy and practice that constitute a comprehensive approach to controlling corruption risks in development agencies. The report, co-funded by U4, has now been issued, and we found strong support and good material for developing a Recommendation proposal.

Aid donors have long recognised the threats that corruption poses to development goals and have developed an array of policies and strategies to assess and manage the associated risks. At the same time, the OECD has taken a leading role in setting standards for addressing corruption in development work. The 1996 DAC Recommendation on Anti-Corruption Proposals for Bilateral Aid Procurement established a first priority to control corruption in aid procurement, and the 2007 DAC Policy and Principles on Anti-Corruption set out principles for promoting anti-corruption goals more effectively in programming. But there has been a gap between the narrow focus on procurement and the broad focus on more effective anti-corruption programming.

The proposed Recommendation fills this gap with a comprehensive framework for integrity against corruption, drawing on a survey of DAC member countries and observer agencies. (The survey was distributed to 43 entities; 25 responded, including 23 bilaterals and 3 multilateral organizations.) Follow-up interviews were conducted with nine countries’ development agencies. The proposed Recommendation includes basic principles and practices in four main areas, as outlined in the box to the right. 

The information-gathering process highlighted the challenges development agencies face and the progress they are making toward stronger efforts to reduce and manage the risks of corruption. There is far too much good information to cover in a short blog post, but here are some of the most important points I took away:

•    Practitioners see the value of a shared recommendation. It can provide a reference point for those trying to strengthen anti-corruption and integrity within their agencies, and if it promotes harmonisation of policies among agencies, this will reduce the burden of partner governments and fund recipients.

•    But flexibility is essential. Due to the diversity of agencies, mandates, and national legal frameworks, there was little desire to see a highly detailed recommendation. The draft Recommendation will seek to articulate principles of good practice, but not to dictate specific modes of implementation. There’s also wide recognition of the fact that conflict and humanitarian relief settings may require adaptation of integrity practices.

•    Agencies’ own personnel are the first line of defence against corruption, but integrity has to reach beyond internal practices. The first point here is reflected in the fact that nearly all agencies have internal codes of conduct, ethics advisory services, training and awareness raising, and reporting mechanisms for their staff. In fact, when asked which three elements of their integrity system they thought had “the most impact on your agency’s ability to assess, manage and mitigate corruption risks,” survey respondents cited codes of conduct, along with training and awareness raising, most frequently (followed by auditing and investigation). The proposed Recommendation will mainly apply to members of the OECD, but there is no reason why the same standards cannot be taken up by other organizations, either on their own or at the request of OECD funders.

•    The emerging need is to strengthen communications around internal integrity practices, especially to de-mystify potentially intimidating processes like reporting or investigations. Corruption touches on a vast range of knowledge areas, it is open to differences of definition and interpretation, and it can carry with it a fear of making mistakes and incurring sanctions. This puts a premium on providing clear guidance and, more importantly, ongoing communication and safe space to discuss dilemmas and seek advice.

•    Control functions—procurement rules, auditing, investigations and sanctioning—are widely implemented. Other OECD recommendations already exist for procurement integrity and different international standar setting bodies regulate financial auditing, so an OECD Recommendation only needs to incorporate those standards. But there is less space for common approaches to investigations and especially sanctioning due to differences in national legal regimes. Sharing information on investigations and sanctions, as is done by the major multi-lateral development institutions, is probably not a realistic goal for the same reason.

•    Corruption risk management—where internal practices intersect with external context—is the biggest challenge agencies face. Agencies recognize that internal integrity practices cannot reduce the risk of corruption in aid to zero, but they are struggling to implement tools that can be used to assess the context, make meaningful distinctions among types and levels of corruption risk and target mitigation measures more effectively. Keep an eye on the U4 Corruption and Aid theme page for an upcoming Brief that explores this issue further as part of the ongoing partnership between the OECD and U4 on this issue.

Finally, and perhaps the most important point in terms of next steps: Since many integrity frameworks already exist, the added value of an OECD standard will be determined to a great extent by the degree to which agencies can and do adapt their own policies and evaluative frameworks. To this end, we will be discussing the proposed Recommendation at the upcoming OECD Anti-Corruption Task Team meeting and hope to find some partners who will give the recommendation a “test run” against their own frameworks.

The views expressed in our blogs remain those of the authors and do not necessarily represent the views or policies of the OECD or its members