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Corruption in Pakistan

Query

Please provide information about the key sectors affected by corruption in Pakistan, recent initiatives to tackle it, and local institutions and people involved in anti-corruption work. Please also provide any recent corruption diagnostic or survey material available on Pakistan.

Purpose 1 Key sectors affected by To prepare for a forthcoming visit to Pakistan corruption in Pakistan and diagnostic material Content To fully respond to the question as to which sectors are most affected by corruption, both quantitative (through 1. Key sectors affected by corruption in diagnostic material) and qualitative (through reports and Pakistan and diagnostic material direct questioning of international and national experts) 2. Reform initiatives sources have been consulted. Nevertheless, it is worth bearing in mind that some of the reasons that particular 3. Further resources sectors are highlighted more often than others are due not only to objective merits but also to the facts that i) Summary there is more research and survey work done in those areas and ii) public perception and awareness seem to be more vocal as regards those areas. Thus, the exercise of highlighting some of the sectors should be read with the knowledge that corruption in Pakistan seems pervasive across most sectors. With that in mind, it is safe to say that expert sources indicate that the following sectors are among those most affected by corruption (the particular order varies from source to source):

 Police and law enforcement  Judiciary and legal profession Author(s): Anna Hakobyan, Transparency International Reviewed by: U4 Anti-Corruption Resource Centre Date: 9 June 2004 Number: 43

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Corruption in Pakistan

 Power sector A household survey released by TI in December 2002,  Tax and customs reported high levels of corruption in public institutions in  Health and education South Asia. Of the seven major public institutions, the  Land administration police emerged as the most corrupt in all five countries  In addition, Public Procurement seems to be a surveyed (Bangladesh, India, Nepal, Pakistan and Sri major concern across most sectors Lanka). The judiciary was identified as the second most corrupt area in all countries except Pakistan, where These sectors seem to be affected by chains of: land administration and the tax authorities were  petty corruption to access public services or to identified as the second and third most corrupt areas bypass the law (through the direct interaction respectively. Land administration figures prominently in of citizens with the respective authorities and the list of the most corrupt sectors in four out of the five bribe-paying) countries. The TI report identifies high levels of  middle and grand corruption (through corruption encountered by citizens attempting to access corruption in public contracting and seven basic public services. procurement as well as direct misappropriation http://www.transparency.org/pressreleases_archive/200 of public funds by senior officials). 2/2002.12.17.south_asia_survey.html  in addition, political patronage, conflicts of Pakistan Corruption Report, 2002 (this report was the interest, influence peddling and other forms of basis for the regional one listed above) corrupt behaviour are commonplace across the sectors. The survey was conducted by Marketing and Research consultants under the auspices of TI Pakistan. The Diagnostic and survey tools conducted in Pakistan general objective of the survey was to measure the include: nature and extent of corruption being faced by Baseline Survey/Social Audit of Governance and consumers of seven public sector departments Service Delivery, by CIET International and NRB (Education, Health, Power, Land Administration, (National Reconstruction Bureau), conducted in 2001- Taxation, Police, Judiciary). Another objective of the 2002 (published in 2003) survey was to gather information about the particular The social audit was commissioned by the NRB and stages where obstacles are usually being faced, locate supported financially by CIDA, UNDP and UNESCO. the responsible element for creating the obstacles and Set up as a means of monitoring the effects of the the means for overcoming the bottlenecks in the seven devolution of powers to local government levels on sectors under study. delivery of public services and governance, this http://www.transparency.org.pk/documents/csr.pdf baseline survey (piloted in ten districts in 2001 and implemented in the rest in 2002) included more than 50,000 household interviews covering all of Pakistan's 2 Reform initiatives districts. Respondents gave their views and experience At the heart of Pakistan's recent anti-corruption drive of health, education, water, judiciary and police are country's National Anti-Corruption Strategy (NACS) services, local government and others. According to launched in 2002, the National Accountability CIET, the results of this baseline survey (published in Ordinance of 1999 (amended 2002) and the National October 2003) have been shared widely with policy Accountability Bureau - the agency charged with the makers, service providers and communities and are to implementation and overall coordination of the NACS be used as benchmarks. The social audit will be and the Ordinance. A general discussion on these is repeated annually, both monitoring the impact of out of the scope of this U4 answer (there is a bulk of devolution and allowing policies to be adapted information on these general reform efforts widely according to evidence of what works and where. available and some good resources are listed in Part III The full report can be downloaded as a PDF file at the of this answer). following address: In this section, reform initiatives in some of the specific http://www.balochistan.org.pk/pdf/Pak2002baseline.pdf sectors (perceived to be most affected by corruption) Corruption in South Asia: Insights and Benchmarks are listed. Namely, efforts in areas of police and law from Citizen Feedback Surveys in Five Countries, enforcement, judiciary and legal profession and public 2002 procurement are discussed. The second section of Part II lists some reform initiatives in other areas

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Corruption in Pakistan

Reforms in sectors rated to be Board, to work on overall technical and human resource amongst those most affected by capacity building within the Police. corruption Judiciary and legal profession There is widespread lack of public confidence in the Police and law enforcement institutional legitimacy of the justice system. Access to Corruption in the police and law enforcement is justice and the rule of law are undermined by corruption perceived to be pervasive - creating a culture of and are under a threat. Alongside the corrupt judiciary lawlessness and lack of credibility and trust in is the legal profession with low ethics of lawyers and authorities. The police and law enforcement poor controls of the bodies (such as the Pakistan Bar appointments are often politicised and full of conflict of Council) responsible for maintaining the high standards interest. Criminals and rent-seeking and extortionist that should be required of it. authorities are often the sole beneficiaries of the game. Reform efforts have included: Police reforms were instituted about two and a half years ago by President Musharraf but, according to a) Access to Justice Programme certain expert voices, have been significantly watered The Asian Development Bank (ADB) has in 2001 down by the elected government, which still sees approved Access to Justice Programme loans totalling political patronage of police officers as important. US$ 350 million due for completion towards the end of However, a system of recruitment of better quality and 2004 with Pakistan's Ministry of Law, Justice, Human standards is being implemented with improvements in Rights and Parliamentary Affairs (MOL) as the areas of professional training, competence Executing Agency hosting the programme management development and remuneration. A great deal remains to unit (PMU). The Programme is built around five inter- be done to implement full police reforms including the related governance objectives: (i) providing a legal establishment of public safety commissions and an basis for judicial, policy, and administrative reforms; (ii) effective independent police complaints authority. improving the efficiency, timeliness, and effectiveness in judicial and police services; (iii) supporting greater It is hoped that the reorganisation outlined by the new equity and accessibility in justice services for the Police Order of 2002 and the Police Complaints vulnerable poor; (iv) improving predictability and department will improve the functions of the police and consistency between fiscal and human resource provide relief to the citizens. Reportedly, one of the first allocation and the mandates of reformed judicial and steps taken in the reorganization has been the police institutions at the federal, provincial and local separation of the police force into various branches, government levels; and (v) ensuring greater divisions, bureaus and sections. It is intended to help transparency and accountability in the performance of improve the efficiency but in fact may lead to more the judiciary, the police and administrative justice corruption and less efficiency due to non-cooperation or institutions. lack of coordination. The Police Order of 2002 has also outlined a format for setting up district Public Safety Further links can be found at: Commissions (PSC). The functions of such http://www.pakistan.gov.pk/law-division/policies/ajp.htm commissions will inter alia include investigations of and complaints on excesses and neglect against police officers and encourage greater police-public http://www.adb.org/Documents/Others/PRM_Suppleme participation. The PSCs are to be set up within the nt/ADB_PAK_Governance_Reforms.asp?p=prmnews Federal and Provincial Government and the District and There are mixed signals about the success of the Town Local Governments. There shall also be a reforms. It has been voiced that the efforts are National Public Safety Commission. Further, the Order perceived to be lacking tangible outcomes and that makes provisions for setting up of federal and provincial there have been some challenges in terms of the police complaints authorities for enquiring into serious project implementation itself (sources: NIS country complaints against the members of Federal Law study and an independent expert). Enforcement Agencies. Other measures provided for by the Order include the establishment of the Criminal b) Supreme Judicial Council Justice Coordination committee, to work on the Efforts are underway to activate the Supreme Judicial improvement of the system as a whole and promote Council through international experts working with the good practices, and of the National Police Management

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Corruption in Pakistan

Attorney General, the Chief Justice and the President's Federal Government, can take such measures and office. exercise such powers as may be necessary for c) Accountability Courts improving governance, management, transparency, accountability and quality of public procurement of In 1999, following the coup, Accountability Courts goods, services and works in the public sector. It may (lapsed as of 1994) have been once again set up monitor application of the laws and procedures; throughout the country to decide cases under the recommend revisions in or formulation of new laws, amended National Accountability Bureau Ordinance. rules and policies in respect of or related to public These Accountability Courts were established for procurement; make regulations and lay down codes of speedy disposal of cases involving corruption and ethics and procedures for public procurement, corrupt practices, misuse, abuse of power, inspection or quality of goods, services and works; misappropriation of property, kickbacks, commissions monitor public procurement practices and make and the matters connected and ancillary or incidental recommendations to improve governance, thereto. The Accountability Courts have so far transparency, accountability and quality of public announced judgments in several high profile corruption procurement; monitor overall performance of procuring cases. Criticism with regards to selective accountability agencies and make recommendations for and political motives has been voiced in terms of the improvements in their institutional set up and other. courts on a number of occasions, while the NAB and some others have been counter-arguing in defence of Some reports (such as NACS related sources) suggest the integrity of the practices. that the agency, however, has not been properly staffed and needs capacity building if it is to perform the Public sector procurement and intended functions. contracting b) Resolution related to procurement There have been major concerns in this area. There is standards large-scale corruption in procurement and contracting In 2002, the National Accountability Bureau as a part of affecting government and development aid funded its study in preparing the NACS organised an programmes, public works, etc. Some of the systemic international workshop, resulting in the stakeholders weaknesses have included the lack of a standardised adopting a resolution related to ensuring transparency procurement regime (sets of clear, transparent rules in Public Procurement in Pakistan. This resolution was and legislation) along with absence of repository of incorporated in the NACS report and was approved by procurement expertise in the government. Grounds and the Ministerial Cabinet and the President of Pakistan in opportunities for corruption are provided at every stage October 2002. Amongst others, the recommendations of the procurement process (from preparation to tender, provide that: bid evaluation, negotiations, and contracting).  the Standard Procedures for Procurement of Some of the reform efforts include: Works, Goods and Consultants should be a) Establishment of a public procurement revised by the Public Procurement Regulatory regulatory authority Authority. Either the World Bank or PEC by- laws should be uniformly implemented in all For years, several agencies and groups have been government and semi government recommending the establishment of a single regulatory departments till such time the PPRA prepares authority for public procurement, such as the WB in its its own Guidelines; Country Procurement Assessment report of 1997, as well as TI during its country mission in 2002. In June  to ensure transparency and public 2002, the PPRA was promulgated by the President for participation, the Transparency International- regulating procurement of goods, services and works in Pakistan tool 'Integrity Pact" should be made the public sector and for matters connected therewith or an integral part of all tenders; ancillary thereto; and extended to the whole of  for every new project, public hearings should Pakistan. The PPRA, which comprises the Secretary, be made mandatory for scrutiny of necessity of Finance Division (chair), and the Secretaries of Ministry the project and for the environmental of Industries and Production, Defence Production assessment, prior to concept clearance Division, Ministry of Water and Power, Ministry of approval; Housing and Works, Ministry of Communications and  evaluation Committees for Pre-qualification three members from private sector nominated by the and Award of Contracts must include at least two departmental members, and a minimum of

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Corruption in Pakistan

three independent experts, (One each from public servants, enhancing the capacity in key the Pakistan Engineering Council, Institute of ministries/agencies which are in the forefront of Chartered Accountants and FPCCI), and designing, implementing and monitoring policy reform. others. It will also aim to strengthen some key regulatory c) Integrity pacts agencies, specifically NEPRA (National Electric Power Regulatory Authority), OGRA (Oil & Gas Regulatory An important part of the recommendations of the NACS Authority) and PTA (Pakistan Telecommunication is the incorporation of the TI Integrity Pacts in all Authority). contracts for goods and services where the estimated cost of the project is over Rupees 5 million for Public sector financial management consultancy and over Rupees 50 million for It is suggested that some of the weaknesses may be Construction Contracts. This has been a major addressed by the government's Project to Improve breakthrough in the efforts of TI-Pakistan whereby all Financial Reporting and Auditing (PIFRA). The World major contracts will not only provide for the "Integrity Bank has carried out a country Financial Accountability Pact" but also include all other recommendations, Assessment in December 2003 (the report is available which have been put out in the NACS Document on WB Pakistan's website at www.worldbank.org.pk or (outlined above). An example of the Integrity Pact in can be emailed by the U4 helpdesk upon request). use is to be found in the Greater Karachi Water Supply Further, the ADB has approved a US$ 204 mln loan Scheme (KIII Project) project. An integrity pact, with a (part of a wider sequence) to support the Government formal no-bribery commitment, was signed by KWSB, of Punjab. Among other objectives, the programme consultant bidders and TI Pakistan. It resulted in a aims to improve the effectiveness and accountability of successful bid of Rs 62 million ($1.04m) against the financial management by bringing in transparent and reserved fees of Rs 249m ($4.2m). The project adopted user-friendly budgets and accounts, and financial and the least costly selection method. The bidding process procurement systems was monitored by Transparency International- Pakistan Financial oversight bodies to ensure it is clean and transparent. In the event of a breach of the Integrity Pact, sanctions come into force The Supreme Audit Institution of the country (the against the bidders and officials, including liability for Auditor General's office) is trying to reform itself by damages, and blacklisting from future tenders. The following international best practices, such as those of procurement process is to be followed by monitoring of the International Organisation of Supreme Audit the contract by civil society, specifically TI Pakistan. Institutions (INTOSAI), as part of its reform agenda. It The Karachi government had expressed plans to apply has been noted that there seems to be some progress the same transparent process to other projects. in reorganizing the department with a view to adopting modern techniques of audit and reporting formats. It has initiated a capacity building program under the Reform initiatives in other areas project to improve Financial Reporting and Auditing While, as mentioned above, detailing all general reform (PIFRA). Some of the other reform efforts include the efforts in Pakistan over the last few years is out of the design of diagnostic tools, such as a "Financial scope of this U4 answer, below are summaries of Government Rating Index (FGRI)" and an "Internal reform efforts in some additional sectors and areas that Quality Rating (IQR) for its departments, etc. might be of interest for the purposes of this query. The Public Accounts Committee: the PAC was for a number listing is by no means exhaustive; there are other of years operating as an ad-hoc body in need of serious general reforms and we thus recommend to consult the reform efforts. In December of 2003, a Standing further resources listed in Part III, in addition to this U4 Committee on Public Accounts was finally established answer. comprising about 18 members including the present Public Service Minister for Finance (ex-officio). Efforts are under way on the part of the government to Independent Anti-Corruption Agencies reform the Federal and Provincial Public service The Government of Pakistan has undertaken a number commissions, particularly with regards to capacity and of steps to strengthen the Anti-Corruption Agencies, competence building. Further, the World Bank has and has especially concentrated on the National approved a US$55 million IDA credit in May 2004 for Accountability Bureau for its reforms. The reforms Public Sector Capacity Building Projects that will fund include the creation of NAB as the sole Anti Corruption the training and professional development of over 500 Agency at the Federal level; adding the functions of

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Corruption in Pakistan prevention through research and monitoring and public including Pakistan's National Anti-corruption Strategy awareness and coalition building with civil society to document, the Draft National Integrity System County NAB's mandate; provisions on appointments of ACAs Study report, as well as resources compiled at (from the elected opposition members) and security of Pakistan's government's websites and those of tenure of key office bearers of the ACA and others. international multilateral agencies. In addition, the Further reforms and restructuring are in the process. following experts have been consulted: Jeremy Carver, Local Government Jeremy Pope, Shahzadi Beg (all three are UK based experts with experience in certain areas of anti- The Devolution programme (forming part of the local corruption reforms in Pakistan) and Shaukat Omari government plan built around decentralization of (head of TI Pakistan). The answer thus combines administrative authority, de-concentration of elements endorsed from the consulted resources and management functions, diffusion of the power-authority experts along with research and analytical input by the nexus, and distribution of resources to the district level) Helpdesk researcher. of handing over local governance to the local levels and the people is deemed to be progressing satisfactory. The Devolution programme is coordinated by the 3 Further information and National Reconstruction Bureau. Some survey tools (mentioned in Part I of this U4 answer) have been contacts of relevant developed in cooperation with CIET International to institutions measure progress and the impact of the process on public service delivery at local levels. Further information http://www.nrb.gov.pk/ The following strategic reports and country studies Civil society and public participation: It has been noted provide detailed and comprehensive information about that civil society and non-governmental organisations corruption in Pakistan and reform efforts. are being engaged in government's committees, task forces and other advisory and oversight roles. So, for Pakistan's National Anti-corruption Strategy example, the local government is now required to (NACS), 2002 establish various bodies that are to act as "watchdogs" This is a very comprehensive country strategy, which and contribute inter alia towards the fight against contains sections on the assessment of the corruption. These are to be set up in each town where weaknesses of relevant institutions and the system as a citizens can take part in the direct monitoring of the whole, proposes the strategic reform agenda and the Police, Judiciary, the District Government and others. implementation plan. The strategy was the product of These include the district Public Safety Commission to extensive stakeholder consultations across various prevent unlawful or motivated use of police by the sectors and the public. The process was driven by District Nazim; a Police Complaints Authority which will Pakistan's NAB, with input from international experts address serious complaints against police; Citizens (supported by the DFID, UK). Community Boards (comprising of civil society representatives) for energizing the community for The document can be downloaded in full at development and improvement in service delivery http://www.nab.gov.pk (please see "important through voluntary and self help initiatives as well as for documents" section on the right hand side) carrying out citizen monitoring of the local government; Pakistan: DRAFT National Integrity System Country local Ombudsman schemes and other bodies. Study report, 2003 Freedom of Information and Media: Several ordinances This is another detailed report assessing the pillars of have been promulgated in 2002, including the Freedom the NIS in Pakistan and providing an overview of their of Information Ordinance, the Press Council of Pakistan present state and reform efforts. Parts of the report text Ordinance and others. While this legislation has scope have been borrowed from country's National Strategy for major improvements, it is a reasonable first step to (NACS); others reflect some developments post-2002, build on. after the strategy was drawn. ======This document is in draft form and is not available for During the course of the research for this query, a public circulation yet. The enquirer has been circulated number of resources have been examined at length, a working copy from TI-S.

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Web resources Main donors with active project portfolio Pakistan Anti-Corruption Resources in governance and anti-corruption fields: An OECD website with rather extensive links to Asian Development Bank - Islamabad contacts Pakistan's corruption related government resources, The Bank has been in active in governance and anti- legislation as well as links to international organisations corruption related projects in the country, including legal active in anti-corruption and good governance in and judicial, public service, public sector management Pakistan. and other reforms. http://www1.oecd.org/daf/ASIAcom/countries/pakistan.h Mr. Marshuk Ali Shah, Country Director tm Overseas Pakistanis Foundation Building, Pakistan Development Forum 2004 Sharah-e-Jamhuriyat, G-5/2, Islamabad, Pakistan Tel: + 92 51 282 5011 to 16 The Development forum (hosted by the Government of Fax: + 92 51 282 3324/227 4718 Pakistan annually to provide an opportunity to the donor E-mail: [email protected] community to hear the Government's development Web Site: http://www.adb.org/PRM/ priorities and to learn about Pakistan's future strategic directions) was held in May 2004. The following WB United Nations Development Programme - page contains all the background papers and Islamabad contacts information, including 2004 speeches and assessments The UNDP has a number of programmes in the area of of Pakistan's most sectors and the development good governance. It has also been particularly active in initiatives. local government devolution related initiatives. http://web.worldbank.org/WBSITE/EXTERNAL/COUNT Mr. Khurram Masood, External Affairs/Liasion RIES/ Office: 61-A, Jinnah Avenue, 9th, 10th & 13th Floors, Saudi Pak Tower, Islamabad SOUTHASIAEXT/PAKISTANEXTN/0,,contentMDK:201 Tel: (051) 280.0133-42 88146~pagePK:141137~piPK:217854~theSitePK:2930 Fax: (051) 280.0031,280.0034 52,00.html Email: [email protected] http://www.un.org.pk/undp/ Contact information of locally active international and national institutions World Bank - Islamabad contacts Pakistan authorities and government institutions: The World Bank has a major portfolio in Pakistan, National Anti-Corruption Bureau - Islamabad including areas of public sector management and Attaturk Avenue G-5/2, Islamabad governance. Tel: 051-9202182 Mr. Shahzad Sharjeel Fax: 051-9214502-03 20-A, Shahrah-e-Jamhuriat [email protected] Ramna 5, (G-5/1) http://www.nab.gov.pk Islamabad Offices in 5 other cities (contacts details of all offices Tel: (051) 279-641 are on the website) Fax: (051) 279-648 Email: [email protected] Other government institutions http://www.worldbank.org.pk Web addresses of most government agencies and Canadian International Development Agency websites are listed in Annex 1 of the NIS draft country (CIDA) - HQ contacts study (that has been circulated to the enquirer). A CIDA has a number of programmes. A substantial part selection is also available at Pakistan government's of its governance portfolio seems to consist of local central website at http://www.infopak.gov.pk governance related and Pakistan NGO support and citizen participation aimed initiatives. 200 Promenade du Portage Gatineau, Quebec K1A 0G4

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Tel: (819) 997-5006 Tel: (92) 51-2270590 Fax: (819) 953-6088 Fax: (92) 51-2275436 E-mail: [email protected] Email: [email protected] http://www.acdi- cida.gc.ca/CIDAWEB/webcountry.nsf/VLUDocEn/Pakist an-Overview

International non-profits active at field level: Transparency International Pakistan Karachi contacts (National Chapter in Formation) TI has been active in a number of fields, including procurement, service delivery (report cards), diagnostic work and other fields. Mr. Shaukat Omari Managing Director, HI-aqua 83-Q, Khalid Bin Waleed Road, Block-II P.E.C.H.S. Karachi Tel: +92-21 454 4400 Fax: +92-21 455 9152 Email: [email protected] http://www.transparency.org.pk/ National Democratic Institute for International Affairs (NDI) – HQ contacts

NDI has been active in a project on Government Accountability and Transparency. NDI expects to continue to work with the Pakistani parliament on institutional responses to the problems of corruption and parliamentary instability. Makram Ouaiss Senior Program Officer 1717 Massachusetts Avenue, NW Fifth Floor Washington, DC 20036 Phone: (1 202) 328-3136 Fax: (1 202) 939-3166 Email: [email protected] The Asia Foundation - Islamabad contacts The Asia Foundation has been programming in Pakistan since 1954. Over the past decade, The Asia Foundation has supported good governance programs in Pakistan. Julio A. Andrews, Representative Greg Alling, Assistant Representative P.O. Box 1165 Islamabad, Pakistan

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