EUROPEAN UNION POLICY ADVICE PROGRAMME AND THE COUNCIL OF EUROPE
Council of Europe European Union Conseil de l’Europe Union européenne
Project: “Russian Federation – Development of legislative and other measures for the prevention of corruption” (RUCOLA 2)
FINAL REPORT
Appendices Volume 1: Reports made by international and national experts in the framework of the project
Directorate General of Human Rights and Legal Affairs Council of Europe
EUROPEAN UNION POLICY ADVICE PROGRAMME AND THE COUNCIL OF EUROPE
Project: “Russian Federation – Development of legislative and other measures for the prevention of corruption” (RUCOLA 2)
FINAL REPORT
Appendices Volume 1: Reports made by international and national experts in the framework of the project
Directorate General of Human Rights and Legal Affairs Council of Europe For further information on this report and the Project please contact: Economic Crime Division Technical Co-operation Department Directorate General of Human Rights and Legal Affairs Council of Europe F-67075 Strasbourg Cedex, France
Tel. +33 3 90 21 4506 • Fax +33 3 88 41 2052 E-mail [email protected]
Views expressed in this report do not represent the official opinions of the European Commission or the Council of Europe.
© Council of Europe, 2008
Directorate General of Human Rights and Legal Affairs Council of Europe F-67075 Strasbourg Cedex
First printing: September 2008 (this version, with some small corrections, October 2008) Printed at the Council of Europe Contents
Experience of European countries in the sphere of development and functioning of national anti-corruption strategies ...... 7 Drago Kos, Chairman of the Commission for the Prevention of Corruption in the Republic of Slovenia and Chairman of the Group of States against Corruption – GRECO
Russia’s experience in developing and implementing national anti-corruption strategies. . . . 12 Elena Panfilova, General Director of the Centre for Anti-corruption Research and Initiative Transparency International – Russia
Corruption in the legislative process: an overview of the issues...... 18 Quentin Reed, Lead expert to the RUCOLA 2 project
Corruption risk analysis in the Russian Federation: theory and practice...... 24 Elvira Talapina, Senior scientific expert, Institute of State and Law, Russian Academy of Sciences, Candidate of Law
The issues of formulating the methods of assessing corruption risks in specific policy areas. 29 Larissa Sannikova, Senior scientific expert, Institute of State and Law, Russian Academy of Sciences, Candidate of Law
Overview of the anti-corruption reform measures undertaken by the Duma ...... 32 Vladimir Yuzhakov, President, Institute for Modernisation of the Public (state and municipal) Administration
Experience of European countries in the sphere of creation and functioning of a specialised body responsible for the co-ordination of national efforts in the sphere of combating and prevention of corruption ...... 37 Drago Kos, Chairman of the Commission for the Prevention of Corruption in Slovenia and Chairman of GRECO
The issue of creating in Russia a specialised body/bodies responsible for the co-ordination of national efforts in the sphere of combating and prevention of corruption ...... 43 Elena Panfilova, General Director of the Centre for Anti-corruption Research and Initiative Transparency International – Russia
Corruption in education systems: an overview of problems and solutions ...... 54 Quentin Reed, Lead expert to the RUCOLA 2 project
Corruption risk assessment of the Russian legislation regulating education ...... 61 Larissa Sannikova, Senior scientific expert, Institute of State and Law, Russian Academy of Sciences, Candidate of Law
The prevention of corruption in public procurement: good practice in Europe...... 66 Peter Trepte, Barrister specialising in public procurement law, United Kingdom
3 4 Project “Russian Federation – Development of legislative and other measures for the prevention of corruption” (RUCOLA 2)
Corruption risk assessment of the Russian legislation regulating state and municipal procurement ...... 75 Nina Solovyanenko, Senior scientific expert, Institute of State and Law, Russian Academy of Sciences, Candidate of Law
Perspectives for the development of the corruption risk assessment methodology with regard to the analysis of legislation on public procurement of the Russian Federation...... 81 Vladimir Yuzhakov, President, Institute for Modernisation of the Public (state and municipal) Administration
The basis for the national anti-corruption strategy in the Russian Federation ...... 85 Elena Panfilova, General Director of the Centre for anti-corruption research and Initiative Transparency International – Russia
Corruption and anti-corruption strategies in health systems: an overview of the issues and policy solutions...... 93 Quentin Reed, Lead expert to the RUCOLA 2 project
Joint report on corruption risk assessment of the legislation in the sphere of healthcare. . . 100 Elvira Talapina and Larissa Sannikova, Senior scientific experts, Institute of State and Law, Russian Academy of Sciences, Candidates of Law
Joint report on corruption risk assessment of the legislation in the sphere of education . . . 105 Elvira Talapina and Larissa Sannikova, Senior scientific experts, Institute of State and Law, Russian Academy of Sciences, Candidates of Law
An expert opinion on “Guidelines to experts on the initial assessment of a legislative act for corruption risks” and recommendations for approaches to prevent corruption in the legislative process ...... 109 Quentin Reed, Lead expert to the RUCOLA 2 Project
Recommendations for further action to assess and address vulnerabilities to corruption in the legislative processes of the Russian Federation ...... 113 Quentin Reed, Lead expert to the RUCOLA 2 Project
Proposals on improving legislation on public and municipal procurement ...... 115 Nina Solovyanenko, Senior scientific expert, Institute of State and Law, Russian Academy of Sciences, Candidate of Law
Proposals on improving legislation on public and municipal procurement ...... 118 Elvira Talapina, Senior scientific expert, Institute of State and Law, Russian Academy of Sciences, Candidate of Law
Expert opinion on the legislative proposals in the sphere of public procurement made by the Russian experts to the project ...... 121 Peter Trepte, Barrister specialising in public procurement law, United Kingdom
Proposals on improving the legislation in the sphere of education ...... 124 Larissa Sannikova, Senior scientific expert, Institute of State and Law, Russian Academy of Sciences, Candidate of Law
Proposals on improving the legislation in the sphere of education ...... 126 Elvira Talapina, Senior scientific expert, Institute of State and Law, Russian Academy of Sciences, Candidate of Law
Opinion on proposed measures to tackle corruption in the education system in the Russian Federation ...... 128 Quentin Reed, Lead expert to the RUCOLA 2 project
Final report: Appendices, Volume 1 Project “Russian Federation – Development of legislative and other measures for the prevention of corruption” (RUCOLA 2) 5
Proposals on improving legislation in the healthcare system ...... 130 Larissa Sannikova, Senior scientific expert, Institute of State and Law, Russian Academy of Sciences, Candidate of Law Proposals on improving legislation in the healthcare system ...... 131 Elvira Talapina, Senior scientific expert, Institute of State and Law, Russian Academy of Sciences, Candidate of Law Opinion on proposed measures to tackle corruption in the healthcare system in the Russian Federation...... 134 Quentin Reed, Lead expert to the RUCOLA 2 Project Principles and format of establishing a specialised anti-corruption body in Russia ...... 136 Elena Panfilova, General Director of the Centre for anti-corruption Research and Initiative Transparency International – Russia Expert opinion on the papers prepared by Elena Panfilova concerning anti-corruption strategy and anti-corruption body in the Russian Federation ...... 142 Drago Kos, Chairman of the Commission for the Prevention of Corruption in the Republic of Slovenia and Chairman of the Group of States against Corruption – GRECO Legislative measures to prevent corruption in healthcare ...... 146 Legislative measures to prevent corruption in public procurement ...... 151 National anti-corruption strategy in the Russian Federation ...... 156 Corruption in education in the Russian Federation ...... 164 The creation of the anti-corruption body in the Russian Federation ...... 170
Final report: Appendices, Volume 1
Experience of European countries in the sphere of development and functioning of national anti-corruption strategies
Drago Kos Chairman of the Commission for the Prevention of Corruption in the Republic of Slovenia and Chairman of the Group of States against Corruption – GRECO
The need for prevention
No country is free from corruption – police officers, prosecuted by prosecutors ruption legislation, etc. However, taking everyone, politicians, government officials, and judged by judges. This was sufficient into account all knowing features of cor- business leaders, journalists and neigh- for decades, and then two findings arose: ruption, the recognition emerged that this bours are affected by this social disease. • corruption is much more than a simple phenomenon cannot be fought without Beside economic 1 corruption, it also has sum of so-called corruption offences serious and planned prevention . It took social 2 and political 3 consequences, which listed in the national criminal legisla- some years when this idea was brought into all together hinder or at least slow down tion; there are some forms of this phe- life in certain countries by introducing so- economic and social development of the nomenon, which cannot be called national anti-corruption policies in countries burdened by it. The negative criminalised very simple (i.e. favourit- order to achieve the final goal of the fight effects were not so much recognised until ism, nepotism …); against corruption: to systematically and 1994, when a large increase of govern- • corruption as a type of social illness, consciously reshape a country’s national ments’ and international organisations’ which cannot be repressed by a simple integrity. efforts to raise awareness about the nega- criminal prohibition; it requires a diver- tive impacts became very visible. Fore- sified programme of mechanisms for Only recently did adoption and imple- most, governments and international combating it. mentation of anti-corruption policies organisations have to realise that corrup- It also became very clear that corrup- become an obligation for countries; there- tion is a very dangerous phenomenon. tion is not simply a matter of a domestic fore, a lot of them still lack a co-ordinated Only afterwards, the interests and the policy – it is now matter of survival in the and comprehensively satisfying anti-cor- needs for effective national and interna- international arena, since its level has ruption strategies due to still insufficient tional anti-corruption legislation, policies become an index for national competitive- awareness of the corruption problem, not and measures start to develop. ness and international organisations understandable self-confidence, resigna- started to strengthen regulations on tion or even tolerance of corruption, For years, the only way to fight corrup- corrupt countries. Therefore, the need for absence of empirical data and scientific tion was its suppression by law enforce- comprehensive and balanced approach in studies, etc. But, when 15 most developed ment and judiciary. Criminal offences were the fight against corruption slowly European and non-European countries 4 established by different criminal codes; emerged as an internationally recognised were asked what they consider to be most their perpetrators were investigated by standard. At the beginning, there were only effective tools in the fight against corrup- some areas that appeared very promising tion, they have given the following an- 1. Lowering tax revenue, inflating costs of social swers: services, distorting allocation of resources in the in the fight against corruption. Experts private sector. were usually citing the need for integrity, • law enforcement and independent in- 2. Humiliating ordinary citizen and undermining long-term engagement and consistency, social stability. vestigation techniques, 3. Eroding public trust in the government and involvement of all parts of society, im- weakening the state. provement and enforcement of anti-cor- 4. In 1999 by the OECD.
7 8 Project “Russian Federation – Development of legislative and other measures for the prevention of corruption” (RUCOLA 2)
• preventive management methods and • remuneration of public officials. which this task can be comprehensively financial controls, Basically, that means that countries achieved, especially in the form of one doc- • transparency (declaration of assets, started to look systematically in which ument, through overarching anti-corrup- open administration, public exposure), ways the systems and circumstances might tion strategies. • raising the awareness and skills of the provide conditions that restrain the growth officials, of corruption. There is only one way in
United Nations Convention against Corruption and preventive anti-corruption policies
For a long time, international legal instru- view to determining their adequacy to • main principles of these policies are ments did not mention introduction of prevent and fight corruption. asking for their adoption and imple- those policies, or just some of their ele- 4. State Parties shall, as appropriate and in mentation in the way, which will follow ments were mentioned. Only after many accordance with the fundamental princi- and support the rule of law, demand years was this method mentioned and de- ples of their legal system, collaborate with from governments to manage public scribed in an international mandatory legal each other and with relevant international affairs in a transparent, ethical and instrument – in Article 5 of the United and regional organisations in promoting honest way, take care about public own- Nations Convention against Corruption and developing the measures referred to in ership in an open, responsible and fair (UNCAC), it was opened for signature in this article. That collaboration may include manner and to promote general integ- 2003. participation in international programmes rity, transparency and accountability, Article 5 of the UNCAC states: and projects aimed at the prevention of • there are not only policies, which are 1. Each State Party shall, in accordance corruption. important but also practises, which ef- with the fundamental principles of its legal Leaving aside legalistic expressions this fectively prevent corruption, system, develop and implement or main- article is mandatory asking State Parties of • anti-corruption measures have to be tain effective, co-ordinated anti-corrup- the Convention to do the following, and in periodically assessed to determine the tion policies that promote the accordance with the fundamental princi- level of their usefulness, participation of society and reflect the ples of their legal system: principles of the rule of law, proper man- • to ensure not only the adoption but also • international co-operation is very im- agement of public affairs and public prop- the implementation of preventive anti- portant element in the prevention of erty, transparency and accountability. corruption policies; corruption. 2. Each State Party shall endeavour to es- • policies have to be effective and co-or- The above-mentioned conditions have tablish and promote effective practises dinated – in their adoption and imple- to be fulfilled by any existing or a new anti- aimed at the prevention of corruption. mentation, corruption strategy in order to ensure 3. Each State Party shall endeavour to pe- • in these policies the whole society must compliance with the UNCAC, and should riodically evaluate relevant legal instru- be recognised as very important serve as guidance in the preparation of new ments and administrative measures with a element for their implementation, policies or in enhancing the older ones.
Anti-corruption policies in theory and practice
Policy papers (strategies) usually have spe- the area they are dealing with – they serve There are some more features according to cific forms, which are the same if they are more to political purposes in a way that which one anti-corruption policy can differ drafted in the same country. Those forms politicians are trying to convince their from the other in many different points, have been developed through decades of voters. This is always a very short-term ex- mainly regarding: drafting and implementing of different ercise, and in the end, real and strong poli- • the institution responsible for drafting policy papers, and depend on the aims of cies are not adopted and the previous lists and/or changing of the text of the policy 2 those papers. Sometimes they are just lists of good wishes abandoned . Policies are (in some countries policies are drafted 1 of intents of the country in a specific area, most often followed by action plans, which by NGO’s, or by a group of experts of the other times they are very strong and are usually using the structure generally one branch of power – usually the exec- more concrete documents with an easily following the structures of the policies in utive one, by multidisciplinary group of recognisable goal to really change circum- order to ensure their implementation. experts from the public and/or non- stances and conditions in the area, which governmental sector, or by representa- they are dealing with. “Lists of intents” tives of politics), usually do not bring any practical results in 2. For example, that was a case with Croatia, which • the institution responsible for the adop- first adopted an ”empty“ and general anti-corruption strategy, which was replaced by a very solid docu- tion of the policy (government or the 1. They are also called “lists of good wishes”. ment in 2006 parliament),
Final report: Appendices, Volume 1 Project “Russian Federation – Development of legislative and other measures for the prevention of corruption” (RUCOLA 2) 9
• the institution(s) responsible for the im- • the level of inclusion of civil society in legal documents, etc. – can be given in plementation of the policy and its – the preparation and implementation of a very short and concise manner. their powers (just co-ordination or also the policy, etc. • the following crucial points of the strat- sanctioning), Despite the fact that the decision on the egies must also not be forgotten; it has structure of strategies is with their respec- to be clearly indicated, which authority • basic goals of the policy (only law en- tive authors, serious policy papers would adopts them, under which procedure, forcement ones, preventive ones, com- have to have at least the following elements which authority is authorised for their bined), and characteristics: implementation, what is the procedure • areas of the policy (law enforcement, • the most important part of the strate- that will ensure their implementation, prevention, education, raising of aware- gies should be their goals given in an ab- and what are the liabilities for no imple- ness, combinations), stract form and actions (needed to mentation or bad implementation of achieve these goals) in a concrete form. the strategies. General time span for • sectors in which the policy should be The rest – introduction, principles, de- their implementation and necessary re- implemented (public sector only, some scription of the situation, its reasons vision should also be given. or all sectors of society), and consequences, description of the
European countries and anti-corruption policies
European countries have started to work Some examples of anti- ernment in 2005 for the period 2005-2007. on their anti-corruption policies years corruption policies General objective of the strategy is defined before the adoption of UNCAC. Due to as “to prevent and counter corruption by this fact policies had a different content Lithuania refining and rigorously implementing the and quality, but at least they served as an Lithuanian national anti-corruption policy legal framework, through legislative coher- incentive for some activities in the area of was adopted by the Lithuanian parliament ence and stability, and by institutional corruption prevention. In a short period of in 2002 for a long term period of 7 to 10 strengthening of the entities with impor- time, after the adoption of UNCAC in years. General objective of the strategy was tant tasks in the field”. August 2006, at least 22 European coun- defined as “reducing the level of corruption National strategy was completed by the tries had their own anti-corruption policy to the point where it no longer undermines adoption of a detailed action plan for the of a very different quality again. It is also social, economic and democratic develop- implementation of the strategy. worth mentioning that in some countries ment”. There are three priority areas of the strat- the strongest initiative for the drafting of There are three main and equally im- egy: anti-corruption policies came from the portant elements of the strategy in terms of • prevention, transparency, education, civil society. In Bulgaria the first 1 ever prevention, law enforcement and public • combating corruption (by means of law strategy was prepared by the NGO. education, and with the additional ones in enforcement and judiciary) and Council of Europe’s Group of States against a form of increase in the effectiveness of • internal co-operation and international Corruption – GRECO as the strongest corruption investigations, involvement of co-ordination. monitoring body in Europe in the area of the society, development of the anti-cor- anti-corruption found out in its first evalu- Implementation of the strategy is mon- ruption teaching programmes. ation round 2 that countries like Bulgaria, itored by the “Council for the co-ordina- The strategy calls for increased trans- Finland, Greece, the Netherlands, Norway, tion of the implementation of National parency in the funding of political parties, Poland, Portugal, Slovenia, Spain, Sweden anti-corruption Strategy 2005-2007” or- for improvement of the current system of and USA still lack a co-ordinated and com- ganised under the authority of the Prime land acquisition, and provides measures to prehensively satisfying state programme of Minister and co-ordinated by the Minister curb corruption in the politics and in the anti-corruption strategies. Only a year or of Justice. The assessment of the imple- public administration (with special two after the evaluation at least Bulgaria, mentation takes place every year in No- concern to tax, customs, public procure- Poland and Slovenia adopted their strate- vember according to the indicators listed ment, privatisation, healthcare and law en- gies and fulfilled their international obliga- by the action plan. Every second year forcement). tions. Even countries with existing Romania is also informing the European Public institutions have to report on the strategies GRECO has recommended Commission on the progress recorded in implementation of the strategy to the par- several improvements in order to achieve the implementation of the strategy. liament, which may oblige executive the highest possible level of compliance branch of power to implement specific Slovenia with international standards and practice. anti-corruption measures. The strategy is Slovenian anti-corruption policy was seen as a dynamic document and may be adopted by the parliament in 2004 for an reviewed, at least, every two years. indefinite period. The policy mentions Romania several general objectives: 3 1. A very comprehensive and qualitative one. Romania’s last national anti-corruption 3. The previous one was in force for the period 2. In the period between 2000 and 2003. policy was adopted by the Romanian gov- 2001-2004
National anti-corruption strategies: Drago Kos 10 Project “Russian Federation – Development of legislative and other measures for the prevention of corruption” (RUCOLA 2)
• the establishment of appropriate ethical • the creation of a ubiquitous system of economy, civil society, media and general standards, zero-tolerance towards all acts of cor- public. Measures are divided into legisla- ruption. tive, institutional and practical ones. • the long-term and permanent elimina- General objectives are completed by the Policy provides for the establishment of tion of conditions and circumstances list of strategic social developments, which the specialised anti-corruption commis- conducive to the emergence and devel- were expected to follow as the result of im- sion and for the adoption of an action plan opment of corruption, plementation of the strategy. for its implementation. All public institu- • the establishment of a suitable legal and Policy provides for more than 170 tions have to report on the implementation institutional environment for the pre- measures for curbing corruption in the fol- of the strategy to the commission, which vention of corruption, lowing areas: politics, public administra- has to report to the parliament. tion (with special concern to public The strategy is seen as a dynamic docu- • the consistent assignation of responsi- finances, health sector and public procure- ment and maybe reviewed at least every bility for unlawful acts, ment), law enforcement and judiciary, three years, in urgent cases any time.
Common elements of existing anti-corruption policies
Thorough analysis of the above mentioned sion, graduality, transparency of the political, legal, etc., reasons. Countries and other anti-corruption strategies, it project, planned monitoring of the im- which do not include this part, find reveals a very simple fact; basically, they plementation, possibility of changes, excuses for that decision in a political have the same structure and the same sub- etc. highly sensitive substance, which has to stantial consisting parts. There are only • Goals: they can be given in a very ab- be given here. two differences amongst them; in the stract form and in such a way that they • Consequences of corruption: if they are number of those parts (some of them have don’t need any additional explanation. given in an abstract way, they usually do all, some only few), and in the level of ab- Sometimes the list of goals is given not cause any problems. Nevertheless, straction in which those parts are given. which is split into two parts – the main if the concrete consequences in a The parts are the following ones: ones (i.e.: the establishment of appro- certain country are described, some • Introduction : it usually gives a very priate ethical standards, the long-term serious problems in adoption of such short description of reasons why the and permanent elimination of condi- document might appear. 1 anti-corruption policy has to be tions and circumstances conducive to • Actions (measures) for the prevention adopted and of its goals. What is impor- the emergence and development of cor- and suppression of corruption: this is tant is that sometimes the definition of ruption, the establishment of a suitable usually the longest and the most impor- corruption is also given in this part. legal and institutional environment for tant part of any policy. Some countries Countries which do not have the defini- the prevention of corruption) and the divide preventive and repressive meas- tion of this phenomenon in their legal additional ones (i.e. identification of the ures, others give the list of actions to be acts, are usually using this opportunity sectors most susceptible to corruption, implemented in accordance with the to define it. Having in mind that there is the transparent and legal funding of po- area of implementation. Sometimes only one international legal instrument, litical parties, successful reform of the these measures are divided into legisla- which defines corruption – the Council state administration, overcoming con- tive, institutional and practical ones. of Europe Civil Law Convention on flicts of interest in public office, guaran- The areas often mentioned are usually Corruption – and does it as this would teeing the legal, professional and the following ones: be the same as a common bribery; this responsible adoption of decisions, es- – politics (measures in the area of financ- is not a very easy task. Sociological def- tablishment of appropriate mechanisms ing of political parties, limitations and initions of corruption are quite for reporting suspected acts of corrup- regulations on conflicts of interest for common but not the legal ones. If the tion. functionaries, lobbying, reporting of policy against “corruption” is to be • Data on the existence of corruption in financial assets of functionaries, codes adopted, people will have to know what the country: in order to underline of ethics for functionaries, limitations they are talking about. reasons for the adoption of the policies, on acceptance of gifts by the function- • Basic principles: They are simply the list some of them are giving statistical and aries …); of the most important features needed, other (from different domestic and/or – public administration (actions in the and then followed by the policy given in international surveys) data on the area of the system of civil servants, 2 a short manner. This part is important extent of corruption and on the areas limitations and regulations on conflicts since it glances over the main charac- heavily stricken by it. of interest for civil servants, limitations teristics of the policy. Some of the prin- • Reasons for corruption in the country: if on acceptance of gifts by civil servants, ciples usually cited are respect of corruption needs to be suppressed, the human rights, political will, co-opera- reasons for its emergence and develop- 1. Representatives of the politics might feel embar- tion of all sectors of society in its adop- ment have to be known. Here, coun- rassed by the list of consequences, which can easily be related to their actions and/or omissions. tion and implementation, long-term tries, which include this part, usually 2. Recruitment, promotions, impartiality, integrity, orientation, prevention before repres- mention economic, social, historical, responsibility, monitoring, etc.
Final report: Appendices, Volume 1 Project “Russian Federation – Development of legislative and other measures for the prevention of corruption” (RUCOLA 2) 11
introduction of different tools for im- – economy (actions in the area of intro- awards for best anti-corruption articles provement of ethics in the public duction of responsibility of legal …); sector, 1 different systems of licensing, persons for criminal offences and limi- – public awareness (actions in the area of accessibility to information of public tations for persons convicted for cor- permanent anti-corruption campaign, nature, public finances, anti-corrup- ruption offences, introduction of anti- anti-corruption handbooks for differ- tion measures in different parts of corruption clauses in the contracts, ent categories of citizens, introduction public sector, 2 whistle-blowing and codes of ethics for private sector, stock- of anti-corruption contents in the whistle-blowers’ protection, camou- exchange market, insurance sector, school curricula, …). flage, secrecy of official document; gambling sector, self-engagement of – law enforcement (actions in the area of private companies in the fight against • International co-operation in the area of proper resources, proper staffing, in- corruption …); anti-corruption : includes acceptance dependence, impartiality, proper – civil society (actions in the area of inclu- and implementation of international payment, reporting duties, introduc- sion of civil society in the decision- legal instruments, co-operation in re- tion of multidisciplinary investigations, making processes, systems of conces- gional and global anti-corruption initia- proper investigative powers, responsi- sions for non-governmental sector, tives and organisations, etc. bility of law enforcement officers …); regulations on public financing of civil • Implementation of the policy : in this – judiciary (actions in the area of proper society, transparency of financing in part, responsible institutions, their resources, proper staffing, independ- the civil society, self-engagement of the roles and powers have to be mentioned ence, impartiality, proper payment, NGOs in the fight against corruption and basic procedures for the assurance criminal procedure, witness protec- …); of the implementation given, also tion, burden of proof …); – media (actions in the area of independ- general sanctions for non-implementa- ency, transparency of media owner- tion or weak implementation must be ship, codes of ethics for journalists, provided. separation of different 3 roles of media, 1. Such as: codes of conduct and/or integrity plans. 2. Such as: public procurement, healthcare, taxes, judicial assistance in acquiring infor- 3. Providing of information versus commercial ac- customs, state subsidies, etc. mation of a public nature, annual tivities.
Conclusion
As previously said, it is always the decision ence and forms of corruption. Adoption of Eastern Europe , Project PACO Impact, of a certain country and its experts that a national anti-corruption policy is a final Strasbourg, July 2006. impacts how the national anti-corruption proof in their eyes that somebody, usually • Eser, Albin, dr. and Kubiciel Michael, policy will look like. After the adoption of the government, has decided to fight this dr: Institutions against Corruption, A UNCAC, at least basic features of it have to phenomenon vigorously. And, if after some Comparative Study of the National be respected. Since even these features can years there are no tangible results, the dis- Anti-corruption Strategies reflected by be respected in very different ways, it is appointment will be even bigger than GRECO’s First Evaluation Round , Stras- clear that there are no fixed rules on the before the adoption of the policy, the trust bourg, November 2004, goals, format, structure and content of into the leading authorities will fall, and such policies. It is also normal that features sometimes a vicious circle of social • OECD: Public Sector Corruption, An In- (geographical area, number of population, changes will start. ternational Survey of Prevention Meas- ures , Paris, 1999. the form and level of federalism) of the Therefore, there is only one basic and fixed country will influence any policy, including rule in the area of anti-corruption strate- • OSCE: Best Practices in Combating the anti-corruption one. Every country has gies; if the government’s intention on Corruption , Vienna, 2005. to find answers to these crucial questions adoption and implementation of the sub- • United Nations ODCCP and Naif Arab (on the goals, format and structure of the stantially best possible anti-corruption Academy for Security Studies: Global strategy and on the areas, which need to be policy are not real and sincere, it is better to Programme against Corruption , covered) even before making an effort to abandon all efforts at the beginning Vienna, 2002. draft, adopt and implement any strategy. already. Anti-corruption policies are a very sensi- • National anti-corruption Policies of tive issue since they are always connected Sources Lithuania, Romania, Slovenia . with large expectations of the population, • Council of Europe: Anti-corruption • United Nations Convention against which is always very annoyed by the exist- Strategies and Action Plans in South- Corruption .
National anti-corruption strategies: Drago Kos Russia’s experience in developing and implementing national anti-corruption strategies
Elena Panfilova General Director of the Centre for Anti-corruption Research and Initiative Transparency International – Russia
Summary
As of autumn 2006 there is no comprehen- fragmentary and non-systematic. A well- media, civil society). Besides no compre- sive unified national strategy of corruption defined anti-corruption strategy is still hensive assessment of the level of corrup- prevention in Russia. In this context cor- missing in Russia for the following reasons tion and its components has been ruption prevention strategy means a clear- (the same reasons may become an obstacle undertaken in Russia. The legislative and cut work programme, officially adopted to adopting and implementing the strategy executive authorities are faced with a ne- and publicly approved, aimed at decreasing in the future): lack of sustainable political cessity to develop a national anti-corrup- level of corruption in RF through eliminat- will to carry out systematic anti-corruption tion strategy in line with Russia’s ing its causes, exercising adequate law en- reform in the country, systematic and insti- international commitments and based on forcement measures as well as anti- tutional character of corruption, bureau- the general principles and approaches corruption education. The attempts taken cratic obstruction and weak democratic already defined. to develop such a strategy for Russia were institutions (political competition, mass
Introduction
Developing, adopting and implementing content and effectiveness of implementing specifying objectives or people and institu- national strategies of preventing corrup- anti-corruption strategies. 1 tions responsible for implementation; no tion became an issue at the end of the 20th If we sum up all the approaches to clear-cut monitoring system in place. Such century due to a growing worldwide forming a national anti-corruption strat- strategies most often appear in the coun- concern about a corruption level in differ- egy, two main types can be clearly distin- tries with obvious lack of political will to ent countries. In the last 20 years or so anti- guished: declaratory and practical achieve tangible results in combating cor- corruption strategies were developed and strategies. ruption. (e.g. Programme on combating implemented in over 30 countries. All of Declaratory strategies are mainly aimed corruption in the Ukraine,1998-2005). them are either countries with transition at formulating general tasks of combating Practical strategies, on the contrary, are economy or developing countries. corruption – “decreasing the level of cor- known for their technocracity – when the In some cases an international organi- ruption and creating the atmosphere of declaratory part is minimised. The docu- sation helping a country-initiated develop- corruption intolerance in the society” – ment is more about detailed description of ment of such strategy (e.g. Ghana, Uganda, mentioning general principles, but not planned measures with specific goals, Zimbabwe), sometimes the country itself people in charge and timeframes (e.g. anti- did (with support of international organi- 1. E.g. Franklin Stevens, Alan Russo. Anti-corrup- corruption strategy of Estonia, 2003). sations and institutions) to be in line with tion programmes in post-communist transition Often it is supplemented by a detailed countries and changes in the business environment, international anti-corruption standards (e. 1999-2002. EBRD, Working Papers # 85, October action plan (anti-corruption strategy of g. Estonia, Latvia, Romania and Bulgaria). 2003; Alain Doig and Stephen Riley. Corruption and Romania, 2004). However the most com- A good number of analytical materials anti-corruption strategies: issues and case studies prehensive document of this kind – from developing countries, 2002; Daniel Kaufman. were written on the subject of structure, Revisiting anti-corruption strategies: tilt towards in- National anti-corruption strategy of Paki- centive-driven approaches? 2002 stan (2002). It is probably the most system-
12 Project “Russian Federation – Development of legislative and other measures for the prevention of corruption” (RUCOLA 2) 13 atic document, including a thorough – Raising the level of transparency in dis- – Private sector analysis of the structure and peculiarities tributing state resources • Anti-corruption education, contribu- of the corruption in the country; it also – Maintaining ethical culture of public tion of society clearly describes the action to be taken by officials – Civil education and information cam- all the national institutions and public – Clear standards and behaviour pattern paigns bodies with a view of combating corrup- – Internal accountability procedures – Engaging in regular dialogue and con- tion. – Identifying and solving conflict of in- sultations with civil society institutions Based on the analysis of existing practi- terest – Involving public opinion leaders cal national strategies of combating cor- – Declaring income of public officials – Representation of civil society in anti- ruption some foundational principles can – Declaring financial contribution to po- corruption bodies. be drawn and generalised. They are typical litical parties • Monitoring and evaluation of corrup- for most documents of this kind with some – Civil control tion level and effectiveness of corrup- exceptions. – Raising accountability level by setting tion preventive strategy Firstly, an anti-corruption strategy up specialised bodies of combating cor- should focus on causes and sources of cor- ruption as well as with the help of civil – Measuring corruption ruption rather than its evidence; on spe- society institutions. – Conducting surveys cific action rather than diagnosing; on • Enforcement: legal mechanisms to – Applying short-, middle- and long- systematic approach to all institutions identify, investigate and bring to court term methods of evaluation and indica- rather than scattered reforms. corruption cases tors. Secondly, an anti-corruption strategy – Effective criminal, civil, and adminis- It is noteworthy that different countries should be persuasively justified and meet trative law; independent law proceed- gained substantial experience – both posi- specific country’s needs; it should also be ings tive and negative – with each of the com- unified and global, transparent, objective, – Effective identification and investiga- ponents. One should keep in mind that target-oriented and accountable; it should tion of specific corruption cases none of national anti-corruption strategies reflect country’s opportunities and re- – Applying international and regional which have been adopted is anywhere near sources, should be developed in the anti-corruption tools completion. Also in course of implementa- country and for the country, i.e. rely maxi- – Control over illegal capital flow and tion individual parts of national anti-cor- mally on the internal expertise and politi- money laundry; participating in re- ruption strategies get modified and new cal will. turning misused funds from abroad. priorities appear. However the part dealing Thirdly, a national anti-corruption • Institutional building: strengthening all with corruption prevention always remains strategy normally incorporates 5 main the elements of national institutional essential. In some way it becomes a guar- components: system antee of progressive sustainable develop- • Prevention: administrative and regula- – Executive power ment of democratic society. It is highly tive mechanisms for preventing corrup- – Legislative power important not to step back on political de- tion – Courts termination even if some progress is – Control over public service – Regional and municipal authorities achieved and to ensure that an established – Removing administrative barriers – Specialised independent anti-corrup- anti-corruption system became an insepa- – Informing the public about the opera- tion bodies rable part of the daily life of the state and tion of the state system – Civil society society.
Russia’s experience in creating a national anti- corruption strategy
Combating corruption became a topical ical leaders initiated anti-corruption For obvious reasons bureaucracy is not issue in the early years of Russian Federa- campaigns, which at the end were used at all interested in establishing an inte- tion – a new democratic state with a for purposes far distanced from real gral anti-corruption system, which had market economy. Corruption was a major corruption combating. Moreover, the a potential to limit its power and illicit factor, which slowed down Russian re- anti-corruption reform leaders changed sources of income. forms, creeping into newly established in- often – both individuals and state insti- • Weak civil society. Organised civil stitutions and economic life of the tutions. Under these circumstances any society is as new to post-Soviet Russia transition period. In the course of the kind of co-ordinated activity was out of as market economy and independent modern Russian history attempts have the question. media. It took a lot of time to start been made (some are more active than • Weakness of institutions and power building it upwards. Still a good others) to address corruption issue. Unfor- of bureaucracy. Russian institutional number of public organisations are in tunately, these attempts were deprived of a system was built from zero level actively the process of positioning themselves more or less systematic approach for engaging old bureaucratic human re- and securing the functions, which are several reasons. Here are a few: sources. Fairly quickly institutional attributed naturally to a civil society in- • Fragmentary character and lack of functions of public bodies began to stitution in any democratic state. Up political will. At some stages top polit- serve concrete bureaucratic interests. until recently expert, intellectual and
Russia’s experience with national anti-corruption strategies: Elena Panfilova 14 Project “Russian Federation – Development of legislative and other measures for the prevention of corruption” (RUCOLA 2)
innovation capabilities of non-govern- duced to the State Duma the draft federal apply internationally recognised ap- mental organisations were not strong law “On Fundamentals of anti-corruption proaches to the Russian context and to enough to initiate and advance a na- Policy”. This document was probably the plant them in the Russian soil before pre- tional anti-corruption strategy in closest to lay the foundation for a compre- paring national anti-corruption legislation. Russia. hensive national anti-corruption strategy. As a result, the State Duma passed the However, in order to have a full picture Despite vague definitions, some confusion laws “On Ratifying the United Nations of the Russian attempts to combat corrup- and tilt towards “expert opinion”, it incor- Convention against Corruption” (February tion, it would make sense to characterise porated all the basic classical elements of 2006) and “On Ratifying the Council of them chronologically. such a strategy: prevention, law-enforce- Europe Criminal Law Convention on Cor- ment measures, international co-opera- ruption” (July 2006); they were later signed Legal initiatives on combating tion, etc. However, in November 2002 the by the President and came into force. It is State Duma did not vote for it, while voting planned to ratify another Council of corruption in the first reading for another draft law Europe Convention also signed by Russia – “On Fighting Corruption”, which was intro- “On Civil and Legal Liability for Corrup- The very first legal act on the subject of duced in November 2001 by deputies A. tion”. combating corruption, still remaining the Baskayev, A. Kulikov and A. Gurov and There are reasons to believe that the only one, was the President’s Decree “On which was not much different from similar chosen approach – bringing Russian legis- priority measures of preventing corruption draft laws of 1997 and 2001. However it did lation gradually in line with international and budget cuts for state procurement” not go further than the first reading and it anti-corruption standards, simultaneously (#305 dated 8 April, 1997). This Decree remains unclear what happened to it later. preparing a comprehensive document as was strictly specialised and dealt with state After 2002 there were no more attempts to foundation for a national anti-corruption procurement proceedings, however it con- present to the State Duma any drafts of a strategy – will prove to be more fruitful tained some statements, which were to re- comprehensive anti-corruption law. than the approaches ignoring international strain corruption in the country. practice. Implementation could hardly be effective One more thing is worth mentioning as according to expert and government’s here. At present there actually is a valid law evaluation bribes in the state contracting of Russian Federation “On Fighting Cor- Role of executive authority in remain up to 20%. ruption” (adopted by a Decree of the fighting corruption Furthermore, a series of draft anti-cor- Supreme Soviet of Bashkortostan Republic ruption laws is worth mentioning. None of #25/36 dated 13 October 1994 (Laws of Speaking about the role of executive power them actually became a valid law of the Bashkortostan Republic #23-3, dated 5 in fighting corruption, it would be right to Russian Federation. The first one “On Fight August, 1999)). It is very similar to the draft distinguish between the activity of the against Corruption” passed in the State law of 1997. Moreover “A Strategy of anti- President and the Government of the Duma, but was later vetoed by President corruption Policy” is valid on the territory Russian Federation. Here it only has con- Yeltzin. The next draft law on Combating of Russia (Decree by the President of Tatar- textual implications and has nothing to do Corruption was presented to the State stan Republic No. УП-127 dated 8 April with the institutions themselves. Duma in November 1997 by a group of 2005). This strategy and the draft federal The President of Russia (it would make deputies (V. Ilyukhin, P. Burdukov, V. Vol- law on Fundamentals of anti-corruption sense to speak about the existing President kovsky, A. Gurov, N. Kovalev, A. Kulikov, Policy (2001) are very much alike. It would Vladimir Putin) has addressed corruption A. Kulikov and V. Ostanin). It was not too not be proper to enlarge on the impact combating on a number of occasions. He much different from the previous one – these pieces of legislation produced on the mentioned this issue in practically each of they both partially addressed public corruption situation in these republics. his annual speeches to the Federal Assem- service regulations – namely, avoiding a Firstly, it is difficult to imagine having “pro- bly of the Russian Federation. 1 The Presi- conflict of interest and declaring income of bity islands” on the territory of the country dent’s statement that corruption remains a public officials, but to a much larger extent with vertical system of political and state serious obstacle to the country’s develop- they dealt with corruption law violations management. Secondly, no attempts were ment (May 2006) is of the utmost impor- and punishment. One can say that these ever taken in these republics to measure tance. Hopefully it becomes more than a drafts contained preconditions to form a level of corruption or the impact of the statement and the President will take con- national anti-corruption strategy, no local anti-corruption efforts. sistent action against corruption. This matter how general they were and weak Thus we can conclude that numerous action would be logical in light of the dec- from the instrumental point of view. At the attempts to create draft laws which could laration “On fighting high-level corrup- same time another draft law “On Adminis- lay the foundation for a national anti-cor- tion” signed by President Putin and other trative Procedures” was presented to the ruption strategy have led nowhere. participants of G8 Summit in St. Peters- State Duma by V. Pohmelkin. It was the However a recent corruption-combat- burg. The declaration motivates the first attempt to regulate all aspects of ad- ing strategy that was chosen by the Com- signing countries to take action against ministrative system and an integral mission of the State Duma seems by all corruption in the governing bodies. concept with instruments to prevent cor- means noteworthy. Their approach was The Council of the President of the ruption in public service. This draft law not to develop another anti-corruption Russian Federation to Fight Corruption however was not supported by the depu- paper, but to steadily move towards ratify- was established by Decree #1384 of 24 No- ties. ing international anti-corruption docu- vember 2003. The Decree provided for the In June of the same year (2001) a group ments, which Russia started signing in late establishment of two Commissions – an of deputies headed by A. Aslahanov intro- 90s. The idea behind it, as we see it, is to anti-corruption Commission and a Com-
Final report: Appendices, Volume 1 Project “Russian Federation – Development of legislative and other measures for the prevention of corruption” (RUCOLA 2) 15 mission on the Conflict of Interest. The tives are generated in the Ministry of eco- and officials’ material status; setting up a Decree described areas of competence and nomic development and trade of RF. These federal body on corruption prevention; in- objectives of the two Commissions, which initiatives primarily have to do with admin- volving civil society institutions into fight- fit very well with a classical scheme “pre- istration reform and reform of the public ing corruption; ensuring transparency, vention plus enforcement measures” and service. Among them are measures for reg- openness, integrity in state governance, could have been a foundation for an inde- ulating public service and removing ad- etc. pendent anti-corruption body within a na- ministrative barriers as well as significant Secondly, it seems highly important to tional anti-corruption strategy, if one was efforts to reform the system of service pro- consider the statements of the Strategic ever created. The problem is that the vision to the population, etc. The measures Development Centre while formulating ap- Council ceased to exist after the very first that the Ministry suggests are effective in proaches to national anti-corruption strat- meeting in February 2004. themselves and could produce a serious egy.2 It is envisaged that the most anti-corruption impact. But since they are successful corruption prevention strategies As for anti-corruption activity of the not in any way built into a unified system of are complex ones, which rely on the demo- Government, it is extensive and scattered. fighting corruption, their impact is not cratic and anti-corruption institutions Practically all the anti-corruption initia- seen and they are implemented slower than being developed in parallel to each other. the situation requires. 1. “One must admit – the state in many ways pro- They incorporate the following elements: moted the dictate of grey economy and grey schemes Thus one cannot say that the executive • promoting transparency as well as the outburst of corruption and outflow of power of the Russian Federation does • expanding the role of civil society capital abroad. Promoted by vague rules and unjus- nothing to combat corruption. However, tified limitations. A corrupted state with unclear di- • creating specialised mechanisms for vision of competence will not free the businessmen their activity – firstly – is not based on a anti-corruption investigations from the arbitrary rule and criminal world …When complex approach and is of selective and • economic de-regulating the officials act at their own discretion and are free technical character; and – secondly – it to interpret laws both centrally and locally, it is de- • minimising personal involvement of structive for entrepreneurs and creates favourable lacks a reference document, even if it is a public officials with citizens and organ- environment for corruption. We must have directly very general strategy on combating cor- isations e.g. with the help of one stop applicable laws and minimise internal instructions, ruption in the country. not allowing for duality in law interpretation … shop model and electronic form of We need professionals in public service who would communication have law as the only criterion. Otherwise the state gives way to corruption. At some point it may degen- Other anti-corruption • detailed regulation of interrelations erate and stop being democratic.” (2000) initiatives with service users (both state and mu- “It is obvious that using law like this opens potential nicipal services); limiting, if necessary, for misapplication in the area of civil right and creates favourable environment for corruption in Pre-requisites are in place and a lot of contact of an official with service users public service. The root of these problems is ineffec- initial material has been accumulated in • breaking down the administrative pro- tive instruments of law enforcement as well as our order to prepare such a strategy for the cedures into smaller stages, placing re- legislation structure itself.” (2001) “… Unfortunately, the current way of public service country. A substantial layer of expert liter- sponsibility on the people, who are not operation promotes corruption. Corruption is not ature deals with the principles and ap- caused by inadequate sanctions; I would like to em- proaches to developing an anti-corruption 1. See e.g.: Opportunities and limits of anti-cor- phasise it – it’s a direct consequence of limiting eco- ruption reforms in Russia by А. Bystrova, М., 2005; 1 nomic freedom. Any administrative barriers come programme for Russia. Besides one should anti-corruption policy in Russia: where to begin? by down with a bribe. The higher the barrier is, the mention two approaches formulated by the O. Vedernikova, Social sciences and modern life No. more bribes are needed and the more officials taking specialists of research and public institu- 3, 2005; Russia and corruption: who wins? by G. them. And we should not wait until achieved Satarov, M. Levine, M. Zirik, Rossiyiskaya gazeta No. freedom will turn into administrative stagnation. To tions. 32-33, 19 February 1998; Corruption: theory and a large extent – it may happen due to insufficient Firstly, the document “Main trends of reality by Y. Gilinsky, Materials of Russia-USA semi- transparency in public service operation. It remains anti-corruption policy in Russia” is of great nar, St. Petersburg, 23-24 September 1999; Defini- “a black box’ for many citizens. We should state tion of corruption and legislation to fight it by A. clearly what information must be open for the public interest. It was developed by the National Dolgova, Corruption and how to fight it/ Russian as- and affirm it by law. It is needed for developing civil anti-corruption Committee in 2000. This sociation of criminologists, 2000; Involving civil society as well as creating civilised business environ- document is out of date in many ways, but society institutions in the corruption prevention ment …” (2002) process. Final conference on the Programme. Push- “We must also set up an effective system of using the principle of systematic approach to kin, 19-21 May 2000 Conference materials, edited by natural resources. We need transparent and uncor- forming an anti-corruption strategy is M. Gorny: St Petersburg Centre “Strategia”, 2000; rupted ways of accessing them, e.g. by auction. We noteworthy. Besides some other aspects of Forming a monitoring department and limitation of must move from administrative decisions to legiti- corruption by S. Denisov, State and law. 2002. No. 3; mate contracts with clear definitions of rights and this programme could be singled out: lim- A man in corrupted environment by Y. Levada, responsibilities of both state and business. We must iting access for the criminal elements to ex- Monitoring of public opinion. 2000. No. 5. (Septem- ensure that these relations are predictable and stable. ecutive power and their ability to influence ber-October); The warmth of friendly relations: ” (2004) some words about corruption by G. Satarov, Social “Now that preconditions for serious and large-scale law-making procedures; making provi- sciences and modern life. 2002. No. 6; Corruption as work are created, the state may give in to temptation sions for the executive bodies to become a social and legal issue, legal notions and their char- and make some easy decisions. If so, the bureaucracy more structured, transparent and account- acteristics by B. Volzhenkin, Contribution of civil will prevail and we may find ourselves in stagnation society to corruption prevention. Final conference rather than a breakthrough. The civil society poten- able; limiting ability of the officials and ex- on the Programme. Pushkin, 19-21 May 2000 Con- tial will remain unclaimed, whereas corruption, irre- ecutive power bodies to act at their own ference materials, edited by M. Gorny: St Petersburg sponsibility and unprofessionalism will blossom, discretion; effective control over using the Centre “Strategia”, 2000; Shady Russia: economic and causing economic and intellectual deterioration, a sociological survey by I. Klyamkin, L. Timofeev: larger gap between state and society as well as un- budget funds; strengthening court system; Russian State University, 2000; Shady lifestyle. Soci- willingness of public servants to respond to people’s providing access to effective justice; adopt- ological portrait of post-Soviet society by I. Klyam- needs.” (2005) ing the law against legalising criminal reve- kin, L. Timofeev, Political surveys. 2000. No. 4. pages “… Despite the measures taken we have failed to 19-37; 2000. No. 5; Public service. A look from eliminate one of the most serious obstacles to our nue; clear legal regulations on how to within by V. Boikov, Sozis. 2003. No. 9; Basics of anti- development – corruption.” (2006) exercise control over dynamics of deputies’ corruption policy edited by G Satarov М., 2004, etc.
Russia’s experience with national anti-corruption strategies: Elena Panfilova 16 Project “Russian Federation – Development of legislative and other measures for the prevention of corruption” (RUCOLA 2)
dependant on each other to ensure • introducing mechanisms to check the • employing public officials as a result of mutual control legal documents for corruption risk as- open competition • making internal security subdivisions of sesssment • regulating lobbies a public organisation independent from • reviewing legal standards of corruption • increasing transparency and control its management risk assesssment over large state-owned companies • independent court and investigation • regular rotation of officials • setting up special regulation mecha- system. • administrative justice nisms for executive bodies as well as for To sum up all the above, the most essen- • extrajudicial mechanisms of appealing positions and functions with a high tial elements of the national anti-corrup- against officials’ decisions and actions level of corruption risk tion strategy have already been developed • using indirect proof of guilt (e.g. large • establishing a comprehensive system of and proposed. One needs to summarise amount of cash at the workplace) as corruption monitoring them, analysing their relevancy and formu- grounds to impose sanctions • regulating work ethics and conflict of lating some general approaches to building interest 2. See “Can corruption in Russia be restrained?” by up an effective anti-corruption concept in M. Dmitriev. Presentation on 26 February 2006. • competitive salary for public officials the country.
Some principles of formulating a national anti-corruption policy in Russia
An anti-corruption strategy in Russia corded and monitored later; secondly – to • The revenue part of the budget is con- should be based on the definition of cor- develop priorities for a specific action plan. siderably less than it could be. ruption, which is wider than just bribe- An anti-corruption strategy must be de- Social implications taking, also implying “abuse of one’s official veloped with a view of minimising the status with a view of reaching personal damage done by the corruption in the fol- • Social inequality deepens as the poor benefit”. The strategy should be aimed at lowing areas: people’s access to basic social services is opposing selfish use of existing laws, rules limited (free education, healthcare, and procedures as well as depriving certain Political implications social and pension provisions). people and groups of a legal way to use • State institutions lose support of the • The human resource potential de- public service for their own purposes. population due to distrust in corrupted creases; the process of elite regenera- An anti-corruption strategy in Russia officials. tion stops; the role of education and should be built into the general system of • The ideas, approaches and principles professional achievements is mini- strengthening democratic institutes in the proclaimed by the state are discredited mised. country: by the citizens due to the failure to carry • Legal nihilism spreads out, creating • Ensuring real political competition them through (e.g. openness and trans- good environment for corruption de- • Ensuring sovereignty of law parency). velopment. • Ensuring freedom of media • The state is ruled by the groups, who • Double ethics and double standards of • Ensuring free competition in business assumed the leading role solely for their behaviour become normal. • Ensuring freedom of development for personal benefit. In parallel with surveying the current civil society. • The investors’ interest and the country’s level of corruption and institutional An anti-corruption strategy should prestige in the world community de- damage it could bring, one should carry reflect fully all Russia’s international com- cline. out a detailed analysis of the major causes mitments in the area of fighting corruption of corruption and the factors promoting its Economic implications (Conventions and other documents). sustainability. The attempts to stand In order to implement a comprehensive • The competitive environment deterio- against the corruption as well as the exist- national anti-corruption strategy a special rates; consequently the market receives ing legislative and institutional basis independent body should be set up, which the wrong signal that a successful busi- should also be reviewed. will co-ordinate activity on each aspect of ness is not the one that meets a demand In order to put together a valid and suc- the strategy: prevention, investigation and better, but the one protected by high- cessful anti-corruption strategy, one must enforcement, public education and public level officials or able to pay itself off the make an assessment of institutional, involvement, control and monitoring and state claims. human and financial resources available in international co-operation. • Grey economy prospers as means of Russia for corruption combating. The strategy should be based on a pro- freeing from the bureaucratic press. At this stage the main objectives for a found analysis of the corruption level and • The state budget stops being a manage- national anti-corruption strategy must be structure in the country. Measurements of ment instrument and becomes a mech- the following: both social and business corruption should anism for channelling corrupted capital • Developing a unified, consistent, de- be made on the federal, regional and mu- flow. tailed and long-term programme for nicipal levels. citizens, entrepreneurs and • Goods and services become more ex- fighting corruption. public officials should be surveyed so that pensive as the sellers have to include • Defining priorities in fighting corrup- – firstly – the level of corruption is re- unofficial payments in the price. tion.
Final report: Appendices, Volume 1 Project “Russian Federation – Development of legislative and other measures for the prevention of corruption” (RUCOLA 2) 17
• Specifying activities, resources, time- the strategy simultaneously: prevention, • Bureaucratic obstruction to adopting frames, responsible individuals and investigation and enforcement, public edu- and implementing a national anti-cor- structures in order to meet the priori- cation and public involvement, monitoring ruption strategy ties. and control and international co-opera- • Deviation from the principles of pro- • Setting up a monitoring system to tion. gressive democratic development of the control anti-corruption activities (with The anti-corruption activities should be country. active involvement of civil society) planned so that they directly impact all the • Failure to ensure real independence of a • Establishing mechanisms to co-ordi- major forms of corruption in Russia: polit- special co-ordinating anti-corruption nate anti-corruption efforts of all public ical corruption, including improper use of body. bodies and institutions. administrative resource; administrative • Assessment of existing anti-corruption social corruption; administrative business • Tilt towards legislative and enforce- institutes and laws as well as effective- corruption; corruption in the area of man- ment measures, diminishing the role of ness of the previous anti-corruption ac- aging state assets, including state procure- preventive actions. tivity. ment and privatisation; corruption in court • Leaving some areas of the state activity • Setting up a sustainable system of inde- system; corruption in law-enforcement out of the coverage of a unified anti-cor- pendent corruption level evaluation. bodies and army; corruption in the social ruption programme. The priorities of anti-corruption pro- security system. • Inadequate human resource potential gramme should be defined following an While developing a national anti-cor- to carry out anti-corruption measures. open and wide discussion, involving all ruption strategy in Russia, one must con- • Failure to ensure legal protection for the public and social institutions. The facts sider and minimise all the possible risks of individuals participating in implemen- about the real situation with corruption in its implementation. Among them are: tation of anti-corruption activities. the country must also be taken into consid- • Lack of determination of the political eration, namely the zones of the highest leaders to commit to serious anti-cor- • Passiveness, withdrawal of media from corruption risks. ruption reforms in the country. strategy implementation. The anti-corruption activities should be • Declaratory approach to formulating a • Withdrawal of civil society from strat- carried out on all the main components of national anti-corruption strategy. egy implementation.
Russia’s experience with national anti-corruption strategies: Elena Panfilova Corruption in the legislative process: an overview of the issues
Quentin Reed Lead expert to the RUCOLA 2 project
Summary
Corruption of the legislative process and identifies the key principles of a well- which offers a detailed description and lowers the quality of laws and regulations designed legislative process whose applica- evaluation of the Russian legislative proc- and also results in laws that facilitate cor- tion – together with other standard anti- ess. ruption. Therefore, designing the legisla- corruption measures – will reduce the po- tive process in such a way as to minimise its tential for corruption. vulnerability to corruption is a vital com- This paper is recommended for reading ponent of a successful national anti-cor- together with a forthcoming publication 1. Законотворчество в Российской Федерации. Методическое пособие по подготовке и приня- 1 ruption strategy. This paper outlines the on lawmaking in the Russian Federation тию законов , Издательство «Кодекс», St Peters- different stages of the legislative process (hereafter “Council of Europe Guide”), burg, 2006.
Introduction: the problem of corruption of the legislative process
Corruption of the legislative process is an tion strategy must be scrutiny – and worski’s account of the problem of state au- issue that has received relatively little reform if necessary – of the legal frame- tonomy – the state is not able to choose focused attention from the anti-corruption work that governs that sector. This is the policies. In this situation it will tend to community. The existing anti-corruption one of the primary foci of the Rucola 2 become an instrument to serve interests literature tends to focus explicitly or im- project. others than those which it is established to plicitly on the bribery of state officials in serve, or a battleground in which various Taking this argument one step further, return for decisions that would favour the interests fight to control policy with no au- however, flaws in the legal framework that briber, in the context of a legal framework tonomous state to regulate them. 2 render a sector more vulnerable to corrup- that is already “given” – for example, bribes tion are often the result of corruption of Corruption is not the only reason a leg- in return for public contracts, licences or the legislative process itself – i.e. corrup- islative process may be undermined. For other benefits. Where the problem of cor- tion of lawmakers in order to secure a legal example, incompetence or intra-state con- ruption of law-making itself is identified, framework that itself facilitates corruption. flict is another key factor that may prevent the focus tends to be on the corruption Such corruption is in principle a more a legislative process from functioning as it itself (e.g. the bribing of a legislator or the damaging form of corruption than corrup- should. While this paper focuses on cor- provision of a corrupt donation to a politi- tion that distorts the implementation of a ruption, it is also based on the insight that cal party) rather than on the vulnerability law or regulation. For example, bribery of ‘fighting corruption’ directly is less effec- of the legislative process as a whole to cor- public officials in order that they evade or tive than pursuing policies designed to ruption. violate an otherwise sound law on public fulfil positive aims. Accordingly, the princi- procurement is less damaging than bribery ples advocated in Section III should be A particular sector is often made vul- of legislators in order that they approve a seen as mechanisms not to ‘fight corrup- nerable to corruption by flaws in the legal legal framework for public procurement tion’, but to create a legislative process that framework that governs or regulates that that systematically facilitates corruption. sector. To the extent that laws and rules de- 2. A very interesting discussion of this issue can be termine or constrain the behaviour of In the worst case, if the legislative found in Mark Philp, “Political Corruption, Democ- ratisation and Reform”, in Stephen Kotkin and public officials and politicians, an essential process is controlled by interests external Andras Sajo (eds.), Political Corruption in Transi- focus of any effective sectoral anti-corrup- to the state, then – following Adam Prze- tion , CEU Press, Budapest/New York, 2002.
18 Project “Russian Federation – Development of legislative and other measures for the prevention of corruption” (RUCOLA 2) 19 is less likely to be undermined by other to public officials.” 1 State capture, by con- The transition countries have been negative phenomena as well. In short, cor- trast, engaged in a concentrated process of de- ruption is made less probable as a second- refers to the actions of individuals, groups, fining the basic rules and institutions to ary effect, rather than its reduction being or firms in both the public and private govern their economies and societies, the primary aim of policy. sectors to influence the formation of laws, while at the same time redistributing the regulations, decrees and other government bulk of their assets. In many countries, The only explicit contribution by the policies (i.e. the basic rules of the game) to corruption has had a significant impact on anti-corruption community in recent years their own advantage by means of the illicit this process, encoding advantages in these to the area of corruption of legislative and non-transparent provisions of private new rules and institutions for narrow process has been from the World Bank. In benefits to public officials… For example, vested interests and distorting the path of the late 1990s the Bank introduced a dis- an influential “oligarch” could buy off legis- economic and political development. tinction between two different types of lators to erect barriers to entry in a partic- Media reports throughout the region tell corruption – administrative corruption ular sector. 2 of powerful firms and individual “oli- and state capture. Administrative corrup- The Bank identifies state capture as a garchs” buying off politicians and bureau- tion involves the “intentional imposition of key problem of transition countries in par- crats to shape the legal, policy, and distortions in the prescribed implementa- ticular: regulatory environments in their own in- tion of existing laws, rules and regulations terests. 3 to provide advantages to either state or 1. World Bank, Anti-corruption in Transition: A Contribution to the Policy Debate, World Bank, non-state actors as a result of the illicit and Washington D.C., 2000, p. xvii. 3. World Bank, Anti-corruption in Transition , non-transparent provision of private gains 2. World Bank, Anti-corruption in Transition, p. 1. p. xiii.
Existing approaches to tackle corruption in the legislative process
The World Bank’s concept of state capture tives for parties to pursue the policy and institutional framework within which is a useful starting point for thinking about agendas of powerful donors; laws are created and approved. corruption of the legislative process. How- • disclosure of parliamentary votes to ever, while the Bank’s approach clearly provide a disincentive for MPs to vote identifies corruption of the process of law- for legislative proposals; The difficulty of tackling making as a potentially more serious • encouraging collective business associ- corruption in the legislative problem than corruption of the implemen- ations as “legitimate instruments to tation of laws, it does not focus in detail on represent collective interests in the for- processes in transition the legislative process itself. The Bank mulation of law and policy”, rather than countries notes that allowing specific firms with narrower To date, anti-corruption programs have and less-encompassing interests to in- A key dilemma, especially for countries un- largely focused on measures to address ad- fluence laws and policies. dergoing the long transition from authori- ministrative corruption by reforming In addition, the Bank lists or mentions tarian rule to consolidated democracy, is to public administration and public finance other policies that may inter alia help to open the legislative process to the influ- management. But with the increasing rec- reduce state capture, such as duties of ence and input of various groups and inter- ognition that the roots of corruption public officials and politicians to declare ests – i.e. to establish pluralist democracy, extend far beyond weaknesses in the ca- their assets, conflict of interest rules and so while preventing the state from serving the pacity of government, the repertoire has on. Many of the policies the Bank mentions been gradually expanding to target broader have been developed in detail, for example interests of particular groups and interests structural relationships, including the in- guidelines on party financing legislation. at the expense of the public interest. In ternal organisation of the political system, The Bank’s introduction of the concept short, the challenge is to establish well-reg- the relationship between the state and of state capture is a useful starting point, ulated access of external interests to the firms, and the relationship between the clearly identifying corruption of the legis- legislative process. This is not just a state and civil society. [p. 39] lative process as a key problem of transi- problem of academic interest, especially in Accordingly, the Bank lists at least four tion countries in particular. However, the countries whose political systems are rela- areas of policy as important for restricting Bank and other international institutions tively young and whose economies are state capture: or anti-corruption organisations have paid characterised by phenomena such as mo- • transparency in party financing to much less attention to the legislative nopolisation of key sectors by powerful reduce the likelihood of corrupt incen- process itself – the rules by, procedures for, economic interests.
Corruption in the legislative process: an overview: Quentin Reed 20 Project “Russian Federation – Development of legislative and other measures for the prevention of corruption” (RUCOLA 2)
A systematic approach to tackle corruption in the legislative process
Laws are the most important product or Submission of draft law Draft of outline proposal output of a democracy, and in principle are The legal text of a draft law may be submit- the prerogative of elected representatives. ted formally by institutions or individuals However, elected representatives cannot defined by law. Typically, these will be the carry out this function well without a government, executive agencies, other process that is consciously designed to Issue of draft law state bodies (for example the Supreme both facilitate the work of legislators and Court), parliament, members of parlia- restrain them from (deliberately or non- ment (MPs), and in federal states (such as deliberately) legislating in ways that serve Russia) sub-national governments or legis- narrower interests at the expense of the latures. In Presidential systems this right wider public interest. Executive branch legislative will also be held by the President (as in Rus- This section defines the legislative sia). Except where the initiator of a law is process and divides it up into its main con- process the parliament or its members, a draft will stituent stages of components. It lays down normally be submitted for discussion five key principles that should be built into within the Executive Branch. Even where the legislative process at all stages, the ap- Parliamentary legislative the draft originates in Parliament, the Gov- plication of which will minimise the space ernment will usually have the right to for corruption. It goes through the differ- process submit an opinion on the draft law. ent stages of the legislative process to illus- trate the application of these principles in Executive branch legislative process practice, and notes other anti-corruption Draft laws generally go through an exten- mechanisms that are not integral compo- sive process of discussion within the exec- nents of the legislative process but are also cerning Presidential veto, and for simplic- utive branch (between ministries and other important for minimising corruption. ity assumes there is one parliamentary executive agencies), generally co-ordinated chamber. These stages are outlined briefly by a central government legislative depart- in the following subsections. ment or Ministry of Justice. The final Stages of the legislative output of this process is a government de- process Initiation/draft of outline proposal cision on the draft law – whether to approve the law or not, and if so in what Typically, the first step in the process by The legislative process may be regarded as exact wording. the process from the initial emergence of a which a law is created is the initiation and legislative initiative to the final approval of submission of an outline proposal or policy Parliamentary legislative process a law by the legislature. A law may be an en- document identifying the need for a new Once the government has approved a draft tirely new legal act or amendment to an ex- law. Such a document may vary in specifi- law, the all-important stage of parliamen- isting law. In a very general sense, the city. The term “green paper” is often used tary approval takes place. In most demo- stages of the legislative process may be (for example in the United Kingdom or at cratic countries laws go through three divided according to the scheme at the top European Union level) for a government parliamentary readings, each of which of the page. report of a proposal without any commit- deals with the law form a different aspect. ment to action, a first step towards chang- There are some situations where the For example, the first reading may consti- ing the law. A green paper often identifies a legislative process may not follow the tute a vote on whether to proceed the law need or perceived need for a law or legal above scheme. The most important of at all; the second reading a vote on pro- change, presents a range of options and these for the purposes of this paper is posed amendments submitted at first invites interested individuals or organisa- where the government (or even just the reading by MPs; and the third reading on tions to contribute views and information. Prime Minister or President) legislates by the final version with some restricted pos- A green paper may be followed by a “white decree – a practice that is used surprisingly sibilities to change the law. paper”, an official set of proposals that is often even in some democratic countries This stage is all-important, as Parlia- used as a vehicle for their development into (Romania and Albania are examples). In ment determines the final form of the law. law. A white paper signifies the clear inten- these circumstances the Executive Branch Since Parliament is by definition a body of tion of the government to pass a new law. and Parliament may be effectively by- elected members rather than professional passed. Another exception is where the in- In some cases or in the case of some legislators, the exact rules of procedure for itiator of the legislation is not the govern- laws, an outline proposal may not be issued passing laws and the institutional frame- ment or an institution from the Executive at all, and instead a detailed draft law work and capacity of parliament have a key branch. In particular, where an MP submits issued as the first step. Given that outline impact on the quality of law-making – and a draft law this may not be formally subject proposals provide a good first opportunity its resistance to potential corrupt influ- to Executive approval before going through for consultation (see below, page 22), by- ences. These key aspects include the pro- the process of Parliamentary approval. passing this step may be regarded a priori cedures for voting, the procedure for This paper does not deal with issues con- as a bad start to the legislative process. introducing proposed amendments to the
Final report: Appendices, Volume 1 Project “Russian Federation – Development of legislative and other measures for the prevention of corruption” (RUCOLA 2) 21 draft and the role of committees and legal Professionalism The collective decision-making princi- staff in processing changes to the draft pro- ple also means that proposed amendments In order for the Executive Branch and Par- posed by MPs. to any draft by individual officials or MPs liament to carry out its legislative role effi- should be subject to sufficient collective ciently and produce high-quality consideration – in practice meaning dis- Principles of a well-designed legislation, extensive assistance from cussion by a parliamentary committee – trained lawyers and other specialised staff legislative proposal before being voted on by the legislature. is needed. Expert lawyers and other staff This is a particularly vital aspect of the leg- In all cases, the key question for this paper assist legislators not only to formulate leg- islative process, and where it is not applied is how each of the stages of the legislative islation to pursue the goals they have. By the opportunities for corruption may mul- process is actually conducted, and specifi- providing more-or-less objective feedback tiply. cally to what extent they are designed in on proposed laws or amendments, they order to directly or indirectly minimise may also fulfil an important function of re- An example of how not to design the corruption of the process. For this purpose, straining the inclusion in laws of para- parliamentary legislative process is pro- this paper proposes six main principles of graphs that facilitate corruption – and vided by the Czech Republic. The Parlia- the legislative process whose application therefore by implication may help to mentary Rules of Procedure allow MPs to are of key significance in order to restrict prevent or restrict corruption during the submit proposed amendments to law both corruption. These components, roughly legislative process itself. during the second reading and up to twenty-four hours before the third and ordered, are institutionalisation, profes- In principle, the opinion of expert staff sionalism, collective decision-making, jus- final reading begins. There are essentially should be an automatic input into every no restrictions on the possible scope of tification, consultation and transparency. stage of the process of discussion among These principles are elaborated below. such proposals, and there is no procedure and decision-making by both executive of- to ensure that they are collectively dis- Institutionalisation ficials and parliamentary representatives. cussed by the relevant parliamentary com- In general, expert input is more likely to be A vital overarching component of any well- mittee with expert assistance from legal an automatic component of the legislative functioning legislative process is institu- staff. The result of this is that parliament is process in the Executive Branch, as the Ex- tionalisation – the embedding of the legis- often literally inundated proposed amend- ecutive is organised (although to varying lative process in a set of rules and ments at third reading, and very often ap- extents) on the principle of permanent organisational procedures which ensure proves amendments with which MPs did professional staff and sectoral (line) spe- that different entities that should or have not have the time, capacity or assistance to cialisation. The level of professionalism of the right to participate in the process are acquaint themselves. This creates exten- the civil service clearly varies massively aware of their rights and/or obligations and sive opportunities for corruption during across countries. are able to exercise/fulfil them. Institution- the parliamentary legislative process. It alisation is a principle that establishes a Professionalisation of the parliamen- also leads to lower-quality legislation, and basis for the consistent and predictable ap- tary legislative process is equally impor- also other curious phenomena such as the plication of the other principles described tant. There are vast differences between inclusion of a legislative proposal within an below. It includes, for example, clear and legislatures within the European Union in entirely unrelated draft law. mandatory rules on: terms of the size of their legal staff. For ex- By contrast, in Estonia all proposed • the form a draft law must take; ample, the legal department of the German amendments must be submitted at the • how draft laws must be made, and Bundestag employs some 1 000 lawyers, committee stage, which takes place prior to which information from the subsequent compared to around 15 in the Czech second reading, and are then submitted to legislative process should be made Chamber of Deputies. The less adequate is second reading with the opinion of the public; the legal staff a legislature employs, the committee attached to each proposal. This • who may and who must comment on more amateur its legislating activities will makes it impossible for an MP to submit an the proposal; be, the less information will be available to amendment near the end of the legislative • what are the deadlines for such feed- MPs to make informed decisions, and the process to avoid scrutiny by committees back and to whom it is submitted; more vulnerable to corruption the legisla- and professional staff. In short, the applica- • which body or persons co-ordinate the tive process. tion of the principle of collective decision- receipt of comments and feedback; making is an important mechanism to Collective decision-making • what mechanisms are established to fa- reduce the probability of additions being cilitate discussion of a draft law; Another very important principle of dem- made to draft laws to serve particular cor- • what are the deadlines within which ocratic law-making is that of collective de- rupting interests. state bodies must process a draft law. cision-making. This means that decisions These examples remain very general, at each stage of the legislative process Justification and each of them must itself be broken should be collective. For example, the If laws are supposed to embody the pursuit down into more detailed descriptions: for opinion of a line ministry on a draft law of the public interest, then by definition example, regarding who may comment on that falls within its competence should be any legislative proposal or proposed a proposal, institutionalisation implies a the result of a collective decision-making amendment to a draft law must be justifia- clear set of procedures for consultation, process within the ministry – not just the ble in the public domain. Proposed provi- such as the criteria for selecting which or- decision of the minister, who may either sions that are designed to benefit particular ganisations or interested parties should be decide arbitrarily or on the basis of inade- interests are less easy to justify in terms targeted for consultation, and so on. quate information. that can be acknowledged publicly. The re-
Corruption in the legislative process: an overview: Quentin Reed 22 Project “Russian Federation – Development of legislative and other measures for the prevention of corruption” (RUCOLA 2) quirement of justification usually exists for risk that not all relevant interests will be of promoting the transparency of public draft laws themselves, and is often speci- consulted. Therefore, if targeted consulta- administration and efficiency within ad- fied in some detail: the initiator should be tion is chosen then it is very important for ministrations or will encourage informed required to summarise the current legal the state to attempt to engage representa- participation by the public in matters of framework, identify and explain the need tives of as broad as possible a range of public interest. 2 for a legislative change, and justify in detail groups/interests affected by the proposal. The Recommendation defines “official why the proposed law or amendment is the Open consultation is likely to elicit a documents” (to which the recommenda- optimal solution. The initiator will also large number of poorly-structured re- tion as a whole applies) as usually be required to calculate the esti- sponses that are less well-informed. How- any information recorded in any form, mated financial impact of the proposal on ever, the ease with which open drawn up or received and held by public the state budget. It is also important, consultation can be organised has changed authorities and linked to any public or ad- however that any change proposed (for dramatically, especially due to the expan- ministrative function, with the exception example by a ministry or Member of Par- sion of the Internet; the BBC’s invitation to of documents under preparation. 3 liament) to a draft law that is going though visitors to its website to comment on the While it is not unambiguously clear the legislative process is also accompanied renewal of its Charter is a topical example. whether draft laws satisfy the definition of by a precise justification. This makes the In order to improve the quality of re- “official documents”, when taken together work of others involved in the legislative sponses from open consultation and with the public interest criteria of Article process easier and provides an ex ante re- reduce the costs of processing responses, it XI it would appear to be the most logical straint on the freedom of legislators to is a good idea to institutionalise a compul- common sense interpretation of the defini- propose anything they want – thereby sory format for responses to consultation. tion. That is, at a minimum draft laws after helping to prevent corruption. Consultation is an ideal mechanism for each stage of submission and approval addressing the danger of unrestricted lob- should be regarded as public documents. Consultation bying. By defining clear rules for consulta- Transparency in the legislative process Consultation is a vital core component of a tion and publicising the input of groups or therefore means – at a minimum – the democratic legislative process. Where the organisations that participate. An impor- publication of government legislative legislative process is well institutionalised tant issue is what types of organisation to plans, outline proposals for legislation, and professionalised, consultation that invite for consultation. The World Bank initial draft laws submitted by an initiator, gives individuals and groups in society an suggests that “countries in which firms can and drafts approved by the Government equal chance to comment on a draft law is find expression in legitimate collective as- for submissions to Parliament. However, likely to improve the quality, increase the sociations are less likely to suffer problems this is hardly sufficient for citizens or legitimacy and therefore lower the costs of of [state] capture and administrative cor- groups with an interest in participating in enforcement of the law. When conducted ruption.” 1 If this is true, then a clear guide- debate on draft legislation to be equipped properly – and if the input gained from line for consultation is that for a law that with sufficient information. In addition, it consultation is used well – it lessens the impacts a particular sector, only collective should be considered whether to make probability of corruption of the legislative industry organisations should be con- public comments on a draft law which are process by providing influence to a broader sulted, not individual firms. submitted by institutions within govern- range of interests. ment. All amendments submitted during Transparency Consultation may take place at all the parliamentary process should be avail- stages of the process prior to final approval Finally, transparency is an absolutely nec- able to the public, as should the decisions of a law and may take different forms at essary component of the legislative proc- and recommendations of committees on each stage; this is an issue dealt with in ess, and a minimum requirement if there is draft laws and the up-to-date versions of more detail in the forthcoming Council of to be any effective democratic scrutiny of draft laws prior to each reading. Last but Europe Guide. A key rule is that the earlier draft legislation. Transparency is also a not least, the voting record of all MPs consultation takes place the better. Ideally, necessary condition for any meaningful should be public. consultation should take place both on the form of consultation to take place. Moreo- ver, transparency is in practice an impor- outline proposal and the initial draft law, Other mechanisms to reduce prior to the government approving a draft tant means even for institutions within the for submission to parliament. state to be made aware of draft laws and corruption in the legislative their passage. Consultation may be targeted or open. process Targeted consultation invites selected in- Council of Europe Committee of Minis- Even where the legislative process is de- terests or groups to comment on a draft; ters Recommendation Rec (2002) 2 on signed to apply the above principles, public participants should be chosen who are access to official documents underlines the officials and legislators will still under expert in the subject of the legislation or crucial role of transparency in the demo- some circumstances face incentives to represent the interests of those affected by cratic process, stating that attempt to influence the content of draft it. Open consultation means opening con- A public authority should, at its own initi- legislation for the benefit of particular in- sultation to the public in general. ative and where appropriate, take the nec- essary measures to make public terests. In particular, officials or legislators Targeted consultation will normally information which it holds when the pro- seem to be the more attractive option for 2. Council of Europe Committee of Ministers vision of such information is in the interest legislators, as it will tend to elicit informed (COM) Recommendation Rec (2002) 2. on access to official documents, Article XI. Available at http:// responses and is less costly and burden- 1. World Bank, Anti-corruption in Transition , wcd.coe.int/ViewDoc.jsp?id=262135. some administratively. However, there is a p. 51. 3. COM Recommendation No. 2 (2002), Article I.
Final report: Appendices, Volume 1 Project “Russian Federation – Development of legislative and other measures for the prevention of corruption” (RUCOLA 2) 23 in key positions (for example heads of a key prevention of corruption will be necessary. ual interests, assets or incomes; and ministry departments or chairpersons of In addition to traditional criminal law anti- provisions on the immunity of MPs and/or parliamentary committees) may be espe- bribery provisions, important measures senior politicians. This paper will not cover cially attractive targets for corrupt pres- include the following: provisions on con- such mechanisms in detail. sures. Thus, other mechanisms for the flicts of interest; duties to declare individ-
Conclusion: the legislative process as a virtuous circle
Above ( Principles of a well-designed legis- • Consultation with legitimate represent- speak of reducing the need for further leg- lative proposal , page 21), we outlined prin- atives of affected and interested parties islative changes. Where the legislative ciples whose full incorporation into the leads to broad-based feedback on the process is professionalised and based on legislative process should maximise the ef- content of proposed laws, and lessens collective decision-making at every stage, fectiveness of the legislative process and that probability that laws will be influ- this virtuous circle is reinforced. help ensure that laws are drafted on the enced only be well organised interests By contrast, failure to implement the basis of the criteria of professional exper- with privileged access. principles will tend to create a vicious tise and well-regulated democratic debate. • Collective decision-making and the re- circle: The implementation of these principles quirement of justification at each stage • Where draft proposals or draft laws are will tend to minimise corruption. The of the process reduces the probability not publicly available, this will naturally same section noted in addition other anti- that individual officials or legislators result in a situation where knowledge of corruption measures that should also be in (MPs) will insert changes that are drafts laws will be limited to interests place. counter to the purpose of the law or who are well-organised and connected, The principles outlined in this paper otherwise contrary to the public inter- while the public will lack awareness of and their application may be seen as a est. upcoming legislation and its justifica- summary “road map” for the creation of a • The engagement of professional tion and will tend to respect the result- legislative process that fulfils a number of lawyers and staff at all stages of the leg- ing law less. objectives at once, in particular: islative staff provides a necessary com- • The absence of consultation will rein- • high-quality democratic input in the plement to the free rein of force this, creating the impression that form of well-regulated access to the leg- democratically elected legislators (pro- only privileged interests have influence. islative process; viding them with needed expertise to • high-quality output (quality legisla- perform their role effectively) and also a • A legislative process which does not tion); necessary counterweight to attempts by subject every input and proposal to col- • increased legitimacy of laws that are legislators to create or amend legisla- lective discussion and decision-making passed as a result of the creation of a tion in order to serve particular inter- and does not require every proposal to level playing field for feedback into the ests. be explicitly justified will raise the prob- legislative process; • In addition, the implementation of ability of draft laws lacking a public in- • lower costs of enforcement, as more le- standard anti-corruption measures will terest justification, and will directly gitimate laws engender increased vol- work to counter remaining corrupt increase the risk of changes being in- untary compliance. pressures on officials with the most in- serted during the legislative process The indirect result of the application of fluence on the legislative process. that do not reflect the public interest the principles outlined here will be The fulfilment of these objectives will and are not subject to the filter of col- reduced corruption: tend to be a mutually reinforcing virtuous lective approval. • The availability of information on all circle. Well-regulated access increases the • These factors will result in lower quality legislative proposals and key stages of legitimacy of the law-making process and legislation, undermine its legitimacy, their passage reduces the chance that results in higher-quality laws. This in turn raise the costs of enforcement and – last legislation will be passed in secret at the further increases the legitimacy of laws and but not least – increase the probability behest of vested interests. lowers the costs of enforcement – not to that the law will have to be amended.
Corruption in the legislative process: an overview: Quentin Reed Corruption risk analysis in the Russian Federation: theory and practice
Elvira Talapina Senior scientific expert, Institute of State and Law, Russian Academy of Sciences, Candidate of Law
If combating corruption is to be a success, of corruption are whole range of measures • Introduction of preventive anti-corrup- emphasis should be made not only on sup- including lawmaking. Three main objec- tion rules into sectoral legislation; pression of and criminal prosecution for tives could be identified in this area: • anti-corruption expertise of draft laws. corruption offences but also on their pre- • Development of specialised legislation The present report dwells on the above vention. Prevention warning, prophylactic to counter corruption; points, with special concern for the latter.
Terms and definitions
The need to have clear-cut definitions is of the Convention (if not otherwise stated) mation, requiring information from other obvious. One could talk about corruption the crimes, indicated by the Convention, bodies, violation of the rules of the consid- and mean its different forms. The trouble is do not necessarily have to result in a harm eration of citizens’ requests, delegating that no legislative act of Russia provides its or damage to state property. one’s authority, violation of the rules of definition: even such criminal offences as The given project is aimed at providing auctions and competitions, demanding bribery, abuse of power are seen as corrup- a definition of corruption either from the sponsor aid etc. may signal of possible cor- tion only in every day practice. point of view of international instruments ruption intentions. To make those actions Corruption is generally understood as – as a phenomenon existing in the public illegal is only feasible by establishing clear- “state” (public) corruption – in public ad- sector (public administration, state enter- cut competence in the interaction of public ministrations, i.e. receipt by civil servants prises, public functions by private subjects authorities and legal liability for distorting of rewards from third persons for carrying (agents)) or to extend it to Russia “social” “normal” management. Failing that, cor- out certain actions. Thus, the subject of (common) corruption (relationship with ruption activity is perceived as a legal field. state corruption is a public official. But the healthcare service staff, school and univer- Any management is subject to corrup- legislation on legal liability for offences sity teachers). tion risks, which makes a public official apt employs the term “official” that is not fully The line between corruption and po- to utilise his office to his own, not public, unified. Since local self-government au- tential for corruption risks is rather fine advantage. Corruption risks result from a thorities are separated from state authori- but clearly defined. Corruption is a deliber- number of factors – economic, political, ties and given the lack of a generalising ate use of the official position in order to social, e.g. from blurred competence, lack term “public authorities”, it is not easy to gain an advantage. Corruption risk is an of interaction procedures between agen- draw boundary lines of this phenomenon. objective possibility in legislation to utilise cies, lack of material support for official Meanwhile, the United Nations Con- one’s official position for mercenary inter- functions, inactivity or inefficiency of au- vention against corruption, ratified by est as a result of application of legal rules. thorities, procrastination in considering Russia, interprets this notion broadly, since Corruption-prone rules may be introduced people’s requests. Much depends on to “public official” can be understood as any into legislation accidentally – due to a what extent the idea of “correct adminis- person exercising a public function or pro- wrong legal tradition, negligence, etc. Ac- tration” has become reality. Many of the viding a public service. Hence, a person cordingly, a line is also drawn between cor- above factors could be removed through an providing healthcare, education or other ruption acts and actions conducive to evaluation of the administration efficiency, services in Russia is also a subject of cor- them. Therefore, such actions of an official in which case it is necessary to single out a ruption under the Convention. Of no less as interfering into the activity of other corrupt-prone component. Corruption importance is the fact that for the purpose agencies and organisations, denying infor- risks can be classified according to the
24 Project “Russian Federation – Development of legislative and other measures for the prevention of corruption” (RUCOLA 2) 25 scope of the legislation application: public erty, management of state finances, procurement, management of state prop- customs relations, tax relations etc.
Countering corruption: specialised Russian legislation
Recognition of corruption and the need to Standing apart in the framework of According to the normative definition, combat it back in the instruments of the rules on countering and prevention of cor- a conflict of interest takes place when the Soviet Union (Resolution of the Congress ruption among civil servants is legislation objective performance of official duties by of People’s Deputies of June 9, 1989 “On on the civil service. a public official is affected or may be af- the guidelines of the domestic and foreign It is obvious that successful anti-cor- fected by his self-interest, which results or policy of the USSR”) served as a basis for ruption strategies largely depend on the may result in a contradiction between the the RF President’ s Decree No. 361 of April well defined and detailed regulation of the official’s self-interest and legal interests of 4, 1992 “On Combating corruption in the status of civil servants. If a would-be offi- citizens, organisations, society, an RF system of the public administration”. There cial is well informed in advance of his func- entity or the Russian Federation, which was no law on the civil (public) service at tions and authority, he is responsible for, may damage the legal interests of citizens, the time, so the above Decree focused not legislation fulfils its preventive function organisations, an RF entity or the Russian so much on the fight against corruption and creates necessary conditions for re- Federation. but on the need of social protection for pressive measures to be taken when the Self-interest of an official that affects or civil servants and on prohibition for them need arises. may affect the objective performance of his to take certain actions. Later, in the Federal The current Russian legislation on the official duties is understood as a possibility Law of July 31, 1995 “On the basics of the civil service envisages a number of provi- for a public official in the exercise of his of- RF civil service” those prohibitions came to sions with anti-corruption thrust. Article ficial duties to receive income (illicit en- be named as restrictions determined by 17 of the Federal Law “On the RF civil serv- richment) in whatever form, money or in- civil service. Civil servants were proscribed ice” formulates proscriptions in the area of kind, income in the form of material gains to take up entrepreneurial activity, other civil service (entrepreneurship, divulgence for himself, family members, close relatives paid activities excepting teaching, science, of official information etc.) A civil servant or for citizens or organisations the official arts, etc., to use material, technical, finan- takes upon himself to submit, in the order is connected with by financial or other ob- cial, information means other than for the established under federal law, information ligations. In case a public official has a self- office needs. about himself and his family members, to interest that may result in a conflict of in- Among the current rules and regula- declare his income, property liable to taxa- terest, he is obliged to inform in writing a tions in this scope mention can be made of tion and property liabilities. The law stipu- representative of the employer. the Federal Law of 7 August 2001 “On lates moral and ethical rules of conduct But correct stipulation of the status of countering the legalisation (laundering) of (Article 18 “Requirements for official civil servants is not enough. Their activity proceeds obtained in a criminal way” and conduct of a civil servant”). Incidentally, should be properly organised and put legislation, establishing legal liability for international practices usually prescribe under control. The Conception of an ad- corruption offences – the RF Criminal moral ethical requirements to civil serv- ministrative reform in the RF for the period Code and the Code of Administrative Of- ants in special codes of conduct for offi- of 2006-2008 approved by the executive fences”. But a separate law on counteract- cials. The code sets forth standards of order of the RF Government of 25 October ing corruption is still not available (there is conduct such as integrity, honesty, loyalty, 2005 No. 1789-p notes, that application of a draft law, though, approved in the first transparency, responsibility and accounta- additional mechanisms to curb corruption reading on 20 November 2002). bility. But the Russian legislator incorpo- is appropriate. The most widely used of The federal structure of our state brings rated a list of ethical standards right into them are the following: about two tier legislation. But there is no the text of the law, leaving aside the draft of • the best possible depersonalisation of single approach to this issue. To illustrate, the Code of conduct for civil servants. interaction of public officials with citi- the law on combating corruption of the For the first time the law stipulates that zens and organisations, including by Volgograd region was considered contra- after resignation or retirement from the way of introducing “one window” dictory to the federal legislation because its office former officials for two years are not service and a system of electronic ex- subject matter lies solely within the com- entitled to be employed or do any work on change of information; petence of the Russian Federation (crimi- the basis of a civil law contract in organisa- nal and criminal procedural legislation). tions, if some functions of public adminis- • detailed rules for the procedure of in- Though, as stated above, the fight against tration of these organisations are directly teraction with entities (subjects, agents) corruption does not confine to criminal related to the officials’ duties during their of regulation (users of public services); prosecution. Meanwhile, a similar law was tenure (though no liability is provided for • division of administration and manage- adopted and is in force in the Republic of the breach of this proscription). A new ment procedures into stages, with Bashkortostan. As to other RF entities, the form of preventing breaching of official public officials, independent from each problem is being handled by adopting anti- duties has been established to resolve con- other, in charge of each stage to ensure corruption policies and some legislative flicts of interest in the civil service (Article mutual control. acts. 19). Does this institute work? • rotation of public officials.
Corruption risk analysis in the Russian Federation: Elvira Talapina 26 Project “Russian Federation – Development of legislative and other measures for the prevention of corruption” (RUCOLA 2)
In short, well-organised civil service tailed regulation of authority and official psychological testing in employment in should include anti-corruption measures, conduct, effective control of civil servants. order to find out if prospective employees prophylactic (prevention measures), de- It would be a good initiative to introduce are inclined to corrupt conduct.
Anti-corruption rules in sectoral legislation
Broad interpretation of anti-corruption that is why the laws on public procurement goods markets”: prohibited are combined legislation as a system of normative rules of 1994 and 1999 have been gradually but functions of federal executive authorities, obstructing corruption, makes it also pos- still inadequately improved. At present, executive authorities of RF entities, local sible to include into it preventive anti-cor- much is expected from the Federal Law of self- government authorities, other author- ruption rules in sectoral legislation. 21 July 2005 “On placing orders for deliver- ities or organisations entitled to the rights It is common knowledge that there are ing goods, doing work, rendering services and functions of the said authorities, and areas where the potential for the spread of for state and municipal needs” that has in- those of economic entities (market partici- corruption is much higher than in others, corporated positive experience of other pants). Also, economic entities (market in particular, those connected with man- countries in this area. Thus, the United participants) are not entitled to functions agement of public property or budget Nations Convention against Corruption of and rights of the above bodies, including funds, provision of benefits etc. Such sec- 31 October 2003 places particular empha- those of the organs of state supervision, ex- toral legislation is to fulfil an additional sis on anti-corruption requirements for cepting cases provided for by RF legislative anti-corruption function. This idea is re- public procurement (Article 9, para. 1) acts. flected in the RF President’s Decree of which have been developed in the given It is worth mentioning, that up to now 8 April 1997 No. 305 “On priority meas- law. RF legislation has given little consideration ures of the prevention of corruption and Article 1015 of the RF Civil Code can to such measures as transparency and ac- reduction of expenses on public procure- also be considered a preventive anti-cor- cessibility of public information, its free ment”. Its anti-corruption thrust was em- ruption rule (property is not subject to provision. It is only recently that in the phasised by a wide scope of prospective trust management by a public authority or framework of the administrative reform, suppliers allowed to gain access on a com- a local self-government authority). The transparency in the system of public ad- petition basis and by establishing express same is true of the rule of Article 7 of the ministration came to be regarded as a pre- procedure for the actions of the state cus- still effective RSFSR Law “On competition ventive anti-corruption mechanism. tomer. Understandably, it is not enough, and restriction of monopoly activities in
Anti-corruption expertise of draft laws
Apart from traditional ways to fight cor- pertise of legal rules in respect to their po- since after expertise the rule definitions ruption, anti-corruption thrust of legisla- tential for corruption risks, methods of would not leave any loopholes for arbitrary tion on the whole is assuming paramount primary and specialised (subject) expertise actions of civil servants. importance. What is meant is not special of current legal acts and draft laws would Typical potentially dangerous defini- rules but anti-corrupt rules that establish be developed, their expertise would be tions are perceived as corruption factors standards of conduct for officials. Assum- made and the resultant changes would be that, given unscrupulous attitudes of civil ing that not only specific measures to introduced into legal acts and submitted servants, would enable them to commit counter corruption help to reduce corrup- drafts. The foundation has already been legal actions in the interest external to the tion risks, the correct structuring of rules laid. The Centre for strategic develop- state interest. To reveal corruption factors, can also be effective in preventing corrup- ments is effecting the project “Analysis and it is necessary to evaluate: tion deals. monitoring of of the federal legislation for • the connection of the analysed rule with corruption risks”; in its course a Memoran- The United Nations Convention against other legal rules (if they increase risks dum for Experts on Primary Analysis of Corruption sets forth (Article 5, para. 3): for corruption reference and blanket Legislative Acts for corruption risks has Each State Party shall endeavour to period- rules, broaden departmental and local been written. 1 Behind this title are ically evaluate relevant legal instruments law-making, the presence of collision of methods enabling to evaluate rules of a law and administrative measures with a view legal rules that enable an official to “ma- (draft law) from the point of view of its cor- to determining their adequacy in respect noeuvre” between them); ruption-prone potential in the process of to preventing and fighting corruption. This its realisation. It is an important preventive • realisation of the authority of a state rule can be regarded as a basis for anti-cor- measure aimed at the legislation discour- body or public official (corruption ruption expertise. aging civil servants from corruption deals, factors – definition of the competence The Conception of administrative according to the formula “in the right”, reforms in the Russian Federation for the 1. Analysis of Corruption-prone nature of Legisla- broad discretionary powers, absence of period of 2006-2008 has set the task of in- tion: Memorandum for Experts on Primary Analysis administrative procedures, excessive troducing mechanisms of countering cor- of Legislative Acts for corruption risks. M.A. Kras- claims made on persons for the exercise nov, E.V. Talapina, Yu.A. Tikhomirov, K.A. Golov- ruption in the executive bodies. Within the shchinsky, V.N. Yuzhakov. Edited by V.N. Yuzhakov. of their rights, absence of competition framework of measures to introduce ex- V.,2004 (auction) procedures;
Final report: Appendices, Volume 1 Project “Russian Federation – Development of legislative and other measures for the prevention of corruption” (RUCOLA 2) 27
• exercising control of civil servants’ ac- prone activities, absence of liability of sion, registration, jurisdiction and other tivities (corruption factors – lack of spe- civil servants for offences, lack of powers of state (municipal) authorities. cialised detailed bans and restrictions control of government bodies and offi- The project is to give an answer to the for civil servants in some areas of their cials, false objectives and priorities of a question, if it is possible to extend the activity (management of state property, rule, rule collisions, excessive case of methods not only to public law but also tax, customs relations), absence of lia- ease of departmental and local lawmak- to private law relations. In our opinion, bility of a civil servant for offences, lack ing); if the methods can be applied to private of control (including public control) of • 3 corruption factors reflecting the spe- law relations at all, they should be con- state authorities and civil servants). cific nature of subordinate legislation fined to those, “burdened” by public law There may be other corruption factors, (adoption of a rule “beyond compe- elements (public procurement, provi- such as omissions (gaps) in legislative reg- tence”, filling up legislative gaps by sub- sion of a public service to private sub- ulation, lack of the link “the right of a ordinate acts, “imposed” corruption jects (agents) on the basis of citizen – the obligation of a state organ”, risks); delegating); corruption factors in the jurisdiction • forms of risks for corruption (formal • to resolve the issue of possible subject sphere (possibility of requalification of a technical corruption risks, non-adop- (specialised) expertise for corruption criminal offence into an administrative of- tion of a rule, upsetting the balance of risks – whether it is intensive anti-cor- fence, excessive and unjustified differentia- interest). ruption screening performed by the tion of administrative penalties, etc.). Anti-corruption expertise is made by same methodology by a subject expert, The above-mentioned memorandum two or more experts who offer their opin- or special subject examination methods has become a basis for the further develop- ion. Use has been made of the said for specific areas (public procurement, ment of the problem with the purpose to methods to analyse, in respect to their po- election legislation, customs relations extend anti-corruption analysis to the tential for corruption risks, a number of etc.) – the task may involve a combina- adoption of government regulations (a draft laws, considered by the RF State tion of deductive and inductive joint project of the Ministry of Economic Duma, as well as laws of some RF entities in methods – identifying specific corrup- Development and Trade and the World the course of the training of civil servants tion factors (if there are any) in a certain Bank, 2006). The Memorandum specifies of the Sverdlovsk, Kurgan, Tomsk, Vologda subject sector theoretically or through and complements the list of corruption regions and Stavropol and Perm regions. analysing the corruption market. factors. Now the Methods contain: In the framework of the present project, • to resolve the issue of specificity and • 13 general corruption factors, referring the following can be done to further classification of anti-corruption exper- to both laws and subordinate legislation develop the given Methods: tise: external anti-corruption scrutiny regulations (competence according to • to adjust the text of the Methods to the per se (the status of the expert, the force the formula “in the right”, broad discre- analysis of legal acts generally, but not of his opinion), internal analysis for cor- tionary powers, excessive claims made legislative acts and subordinate legisla- ruption risks made by the author of the on persons for the exercise of their tion; normative legal act himself (how the rights, juridicolinguistic corruption- • “to broaden” the scope of the Methods: fact of the analysis is reflected), internal prone potential, gaps in regulation, at the moment they are targeted at a anti-corruption expertise by the law de- absence of administrative procedures, civil servant as the subject (agent) of partment of the body that drafts the absence of competition (auction) pro- corruption offences (as well as at normative act. cedures, absence of specialised bans for persons fulfilling public functions) and civil servants in the area of corruption- legal acts on the regulation of permis-
Outline proposals on introducing the analysis of corruption risks in draft laws into legislative process
The effectiveness of an anti-corruption ex- to reflect the expert’s views and philos- • The present project is targeted at the pertise and the available experience in the ophy, therefore a) it is advisable to enlist modelling of legislation with regards to field make it advisable to impart to it an of- the services of two or more experts on corruption risks. How can one take ficial status. Due consideration is to be each draft law, b) the expert’s opinion account of corruption risks? To illus- given to the following: has to be formalised to be compared if trate, two methods are advisable in a • An official status of anti-corruption ex- the need arises. potentially corrupt situation, when the pertise is bound to enhance its anti-cor- • Corruption risks are potentially procedure is not observed (environ- ruption effect. Hence, its procedure, the corrupt-prone situations that facilitate ment assessment): 1) establishment and choice of draft laws for the examination or even encourage corruption. What is enforcement of liability for the breach and of experts are to be expressly regu- relevant is the scope of evaluation of of material and procedural rules; 2) en- lated, excluding ambiguous interpreta- corruption risks – whether modelling a couragement of lawful conduct. Cor- tion. possible corruption situation (not clari- ruption risks, as they are, have not been • The results of any expertise, even when fied or illustrated by figures) or evalua- taken account of in the Russian legisla- a single method is employed, are bound tion of the corruption market. tion. However, one could say, they are
Corruption risk analysis in the Russian Federation: Elvira Talapina 28 Project “Russian Federation – Development of legislative and other measures for the prevention of corruption” (RUCOLA 2)
removed by a positive procedure of • analysis by the Law Department (Arti- resolution) could result from the answers actions (encouraged lawful actions) and cle 112, para. 3). to the following questions: liability for breaches. But so far as cor- Those versions do not exclude each • the subject-matter of the expertise – ruption risks have not been indicated, other, i.e. combinations are possible. The what rules and regulations should an the solution of the task is far from sys- current methods of the evaluation for cor- anti-corruption expertise apply to; tematic and is dependable on the situa- ruption risks are based on the adjustment • Initiators of the examination – who is tion. The development of legislation in of the rules on legal techniques for law- entitled to initiate one. In this respect, a potentially corrupt-prone sphere proofing. Therefore elements of methodol- possible are internal analysis for cor- should be targeted at advance evalua- ogy of identifying corruption risks could be ruption risks (made by the author of the tion of corruption risks and incorpora- incorporated into the rules which drafting law and by the juridical service of a state tion of a number of preventive and of federal laws is guided by. organ) and external examination (from repressive measures. It is well to remember that most draft involvement of external experts to orig- At what level (in what normative act) is laws are developed by the Government and inal expertise performed by civil society it appropriate to define the rules and re- ministries. Hence, partial responsibility for institutes). Generally speaking, the quirements for an anti-corruption exper- the registration and prevention of corrup- issue of anti-corruption expertise is to tise? tion risks lies with them too. In this regard, be raised openly (on the initiative of a In theory, a few options are possible – changes should be introduced into the Ex- certain number of deputies, the Public from adoption of a legislative act (includ- ecutive Order of the RF Government of Chamber etc.). It means though, that far ing a separate chapter in the federal law on 2 August 2001 “On the adoption of major from all draft laws need to be examined, normative legal acts) to the introduction of requirements for the conception and draft- but only those, concerned with poten- relevant changes into the RF State Duma ing of federal laws”. In particular, the con- tially corrupt-prone sectors; Rules of Procedure. The current State ception of a draft law envisages the • status and expertise of the expert (who Duma Rules of Procedure make it possible consequences that the realisation of the chooses experts, by what procedure, to introduce an anti-corruption expertise draft law may entail, including potential who teaches authors (certification) in several ways: corruption risks. There are also several etc.); • expert analysis performed by the Public agencies in this field that can administer an • legal force of an expert’s opinion, the Chamber (Article 108, para. 1); anti-corruption expertise – sectoral federal procedure of ironing out differences, • expert analysis made on the initiative of organs of the executive, Ministry of Justice, repeated expertise; the State Duma (Article 108, para. 1); Institute of Legislation and Comparative • recognition of a single method of the • analysis by the responsible committee Law. analysis for corruption risks of rules (Article 111) or forwarding it by the The order of conducting an anti-cor- and regulations and approval of a list of committee for an external examination ruption expertise in the State Duma Rules corrupt-prone factors (as a supple- (Article 112); of Procedure (or in a separate State Duma ment).
Final report: Appendices, Volume 1 The issues of formulating the methods of assessing corruption risks in specific policy areas
Larissa Sannikova Senior scientific expert, Institute of State and Law, Russian Academy of Sciences, Candidate of Law
In Russia of today, corruption has perme- Yet in international legal instruments socio-legal phenomenon. In view of this it ated not only government bodies but there is an indication of possible manifes- seems reasonable to follow in the footsteps almost all areas of social life. People come tations of corruption in the private sector. of the Council of Europe. The Council of across corruption when applying to state For instance, in the United Nations Con- Europe Conventions “Criminal Law Con- (municipal) bodies as well as state (munic- vention against Corruption dated 31 vention on Corruption” and “Civil Law ipal) enterprises and organisations. Cor- October 2003, three articles mention cor- Convention on Corruption” use different ruption is especially rampant in education, ruption in the private sector: Article 12 definitions of corruption depending on the healthcare, housing maintenance and utili- “Private Sector”, Article 21 “Bribery in the purposes and fields in which these docu- ties, housing construction etc. With Rus- Private Sector”, Article 22 “Embezzlement ments are applied. sia’s transition to market economy most of Property in the Private Sector”. In the In order to organise monitoring of draft issues in these areas are predominantly Council of Europe Criminal Law Conven- laws and current laws within the frame- regulated by private law. Given that, it tion on Corruption corruption in the work of activities of the RF State Duma seems the time has come to monitor the private sector is treated as active (Article 7) anti-corruption Commission a broad un- potential for breeding corruption in legis- and passive bribery (Article 8). derstanding of corruption should be used lation in the field of private law regulation. Besides, according to the polls con- as a basis, including all the negative phe- However, such an approach needs addi- ducted by the “Public Opinion” Fund, Rus- nomena regarded by Russian society as tional theoretical justification as it does not sians associate the image of a corruptionist corrupt acts irrespective of their legal fully agree with the concept of corruption not only with a public official but also with nature. Such a broad definition of corrup- as abuse of state power. To illustrate, the representatives of the private sector. The tion was developed by the Council of “Memorandum for Experts on Primary sociological poll carried out by the Federal Europe Multidisciplinary Group on Cor- Analysis of Corruptogenic Character of Security Guard Service in August of 2005 ruption in 1995. It was stated that corrup- 1 Legislative Acts” recommended by the has shown that education ranks third (55%) tion means bribery or some other anti-corruption Commission of the RF among eighteen areas of activity where behaviour of persons authorised to fulfil State Duma for members of the Expert corruption is the most rampant – after law certain duties in public or private sector, Council under the authority of said Com- enforcement bodies (61.1%) and adminis- resulting in a breach of duties assigned in mission questions the existence of corrup- trative sphere (60.2%). accordance with the status of government tion provisions in legislative acts included So, narrow understanding of corrup- officials, private employees, independent in the domain of private law. As an argu- tion only as abuse of power by its repre- agents or some other relations and whose ment, the Memorandum asserts that pro- sentatives does not respond to the needs of goal is to obtain undue advantages for 2 visions in these acts “do not regulate the the present day Russian society in its fight himself and others. activities of public servants without whom against corruption. Proceeding from the above definition of corruption, with rare exceptions, is not fea- It is noteworthy that the problem of corruption it would be useful to include in sible”. elaborating a single concept of corruption the list of legislative acts scrutinised for the has become the cornerstone in the discus- presence of corruptogenic provisions the laws governing relations in the private 1. Analysis of Corruptogenic Character of Legisla- sion on adopting a single law on combating tion: Memorandum for Experts on Primary Analysis corruption. Many specialists in this area sector. of Corruptogenic Character of Legislative Acts. justly assert that it is impossible to develop M.A. Krasnov, E.V. Talapina, Yu.A. Tikhomirov, K.A. 2. See: Lunev V.V. Crime in the 20th Century. Golovshchinsky, V.N. Yuzhakov. Edited by V.N. such a definition of corruption which Global, Regional and Russian Trends. M., 1999, p. Yuzhakov. M., 2004, p. 52. would cover all the aspects of this complex 337.
29 30 Project “Russian Federation – Development of legislative and other measures for the prevention of corruption” (RUCOLA 2)
It should be borne in mind, however, methods for the analysis of the corrup- tionally regulated by private law. For that the legislative acts themselves do not togenic potential of legislation in the area example, relations in healthcare and edu- always contain loopholes for corruption. of private law regulation, i.e. methods of cation were governed by administrative As an example, being a practising lawyer I performing the so-called specialised expert rather than civil law. Russia’s transition to could cite such cases when one business examination? market economy necessitated changes in entity pays a kickback to another business We believe that at the present stage of ways and methods of legal regulation in entity in the process of supplies of goods. the organisation of monitoring of corrup- many sectors of social life. Also, develop- In my opinion it would be a mistake to togenic potential of legislation within the ment of legislation is way behind social believe that such behaviour is made possi- framework of work of the RF State Duma needs with resultant omissions in private ble by virtue of RF Civil Code provisions on anti-corruption Commission focusing law regulation. To illustrate, there are no supplies. This type of corrupt behaviour is efforts on elaborating such a methodology provisions on healthcare and medical serv- rather testimony to the fact that there is would be impractical. In order to create ices contracts in relevant laws. lack of legal culture in Russian society of such methods it is above all necessary to today. That is why selection of private law develop theoretical questions and secondly acts in need of scrutiny for their potential – to have enough empirical data. However, Scope of discretionary powers for breeding corruption should be based problems of corruption are not studied by on a priority principle. specialists in private law as there has been A similar corruption factor in a legislative Corruptogenic provisions are most firm conviction that this problem belongs act of private law may consist in lack of likely to be found in those laws that regu- to other branches of law (mostly criminal precise regulation of fulfilling obligations late relations in property transactions with and administrative law). Besides, there is by the debtor as refers to deadlines, the participation of the state and municipal not enough empirical data for generalisa- volume, possible ways of meeting obliga- entities. A vivid example is legislation on tions as the analysis of the corruptogenic tions etc. This factor engenders corruption purchasing goods, work and services for potential of legislative acts in the field of in legislative acts governing relations state and municipal needs. private law is actually still in embryo. between consumers – organisations and Corruptogenic provisions may also be Given that it seems advisable to con- individuals – i.e. the purchasing of goods, incorporated in laws devoted to the exer- sider possible use of “Methods of Analysis work, services for personal, everyday life cise of people’s rights, above all those pro- of Corruptogenic Potential of Legislative needs, as well as relations involving com- vided for by the constitution. In the RF Acts” (further on – the Methods) pre- pensation for harm caused to the individ- Constitution the following people’s rights sented by the project’s expert E.V. Talapina ual’s safety, health and (or) property (for have been proclaimed: right to housing for monitoring the corruptogenic potential example, in mandatory insurance). (Article 40); right to healthcare and of legislation in the domain of private law medical assistance (Article 41); right to ed- though it has been designed for use in ucation (Article 43) and others. Hence, public law regulation. Excessive demands made on laws and draft laws governing relations in We believe that the Methods could be persons for the exercise of healthcare, education, housing mainte- applied to the above-mentioned area pri- their rights nance and utilities, housing construction marily because legislation in private law etc should be subject to monitoring for regulation is often of a comprehensive Under private law, excessive demands can their corruptogenic potential. At the same nature, that is, it contains quite a substan- be made in relation to both individuals and time, it should be borne in mind that med- tial amount of public law provisions. legal persons. Individuals may face exces- ical, educational and housing maintenance Hence, from this point of view the use of sive demands when exercising their rights and utilities services are performed mostly the Methods is quite adequate and does to education (for instance, the establish- by state or municipal organisations. This not raise any doubts. ment of extra conditions for entry into an also creates extra opportunities for corrup- Some corruption factors contained in educational establishment), housing rights tion. the Methods can also be applied, by anal- (for example, when registering those in In order to organise monitoring for the ogy, to the analysis of corruptogenic factors need of housing), etc. Excessive demands corruptogenic potential of laws in private in legislative acts of private law. In this with respect to legal entities and individual law regulation it is necessary to elaborate case, the content of a corruption factor entrepreneurs may be established in the methods which would enable the achieve- must be determined taking into account area of licensing some kinds of activities, ment of pursued goals. As of today there is the specificity of private law regulation. standardisation and certification of goods, no single basic methodology of analysing From this point of view when monitor- work, services etc. the corruptogenic potential of legislation ing the corruptogenic potential of legisla- though it would be useful not only for the tion in private law regulation the following corruption factors could be used: RF State Duma anti-corruption Commis- Excessive ease of sion but for other federal authorities, in- departmental and local cluding the RF Audit Chamber. The Omissions in legal regulation existing methods, among them those rec- lawmaking ommended by the anti-corruption Com- This factor is the most relevant for legisla- mission, are designed for the analysis of tion in private law regulation. During the Legislative acts in the domain of private corruptogenic legislation in public law reg- Soviet period public law regulation was law often abound with blanket provisions. ulation. In view of this, a legitimate ques- prevalent often governing even those rela- It appears advisable to evaluate the corrup- tion arises: do we need separate, special tions which in market economies are tradi- togenic potential of such norms.
Final report: Appendices, Volume 1 Project “Russian Federation – Development of legislative and other measures for the prevention of corruption” (RUCOLA 2) 31
Upsetting the balance of performance of anti-corruption expert ex- their subsequent specialised scrutiny for interests amination. The Methods’ authors believe the corruptogenic potential. that corruption factors contained in it are Thus, in order to counter corruption When describing this corruption sub- formalised to such an extent that any the analysis of the corruptogenic potential factor the authors of the above-mentioned lawyer would be able to form an opinion on should be carried out exclusively by “Methods” directly refer to civil legislation the presence of corruptogenic provisions experts-specialists in the area of the scruti- (Article 1 of RF Civil Code), rightfully in this or that act. nised legislative act. That is why the RF stressing that civil law is based on the prin- We cannot quite agree with such an ap- State Duma anti-corruption Commission ciple of equality of the parties. This princi- proach. A number of corruption factors are when analysing the corruptogenic poten- ple is renounced only in the interests of an evaluative by nature, which is specified in tial of a legislative act should use specialists economically weaker person in need of the Methods themselves. Hence, an ex- in that branch of law to which the said act extra support, for instance, a consumer. pert’s opinion would depend to a consider- belongs. Upsetting the principle of equality of the able degree on the level of his/her special On the basis of the above it appears ad- parties in regulating relations between eco- knowledge in the application of the law, visable to recommend the RF State Duma nomic agents may not only be indicative of which too is stressed by the authors of the anti-corruption Commission to: unlawful lobbying of the interests of one Methods. To prove this point here are • use a broad definition of corruption group but also facilitate manifestations of some of the excerpts from the Methods: when organising the monitoring of corruption. • “Yet the identification of this factor ( ex- draft laws and current laws, which Hence, the analysis of the list of corrup- cessive demands made on persons for the would include all the negative phenom- tion factors specified in the presented exercise of their rights – L.S.) from the ena perceived as acts of corruption by Methods shows that some of its provisions formal point of view is one of the most Russian public, irrespective of their can be used in monitoring the potential for difficult tasks facing an expert. In this legal nature. breeding corruption in private law regula- case the successful solution of this task • perform the monitoring of the corrup- tion. However, what makes private law reg- directly depends on the expert’s qualifi- togenic potential of legislative acts and ulation special is the content of corruption cation”; draft laws regulating relations in the factors, suggesting that further develop- • “To identify collision it is necessary to private sector, with special attention to ment of the present Methods could be scrutinise not only the regulatory act in legal regulation: quite promising if the corruption factors question but rules and regulations at – in the area of property transactions which can be identified only in private law different levels in related relations and with the participation of the state and enactments were incorporated into it. At branches, which requires considerable municipal entities; the same time, it does not rule out but on skill and erudition of the expert”; the contrary strengthens the necessity of – in the area of relations evolving in the creating a specialised technique at a later In our opinion, only specialists in a par- exercise of people’s rights, above all, stage as we accumulate more empirical ticular branch of law are able both to iden- those proclaimed by the Constitution data. tify corruptogenic rules and regulations in (right to education, healthcare, housing When setting ourselves such a long- a legislative act on the basis of their formal etc.). term task as creating specialised methods characteristics and to uncover the mecha- • use as a basis for analysis of the corrup- it is necessary to determine the subject, i.e. nism of potential acts of corruption in the togenic potential of legislation in the scope of relations for which these process of the implementation of these leg- various branches of law the “Methods of methods should be designed. Apparently islative acts as well as to propose, if needed, Analysis of Corruptogenic Potential of we could use for this purpose the branch measures for their elimination. These are Legislative Acts” presented by E.V.Ta- division traditional for the Russian legal the tasks which should be set for the lapina, the project’s expert. Some parts system. experts when performing a specialised of the Methods can be used in the mon- The choice of experts for monitoring expert examination. itoring of the corruptogenic potential of the corruptogenic potential of legislation However, when an expert carries out legislation in the area of private law reg- should too be based on the division of primary analysis for the corruptogenic po- ulation. Russian law into branches. The Methods tential of a legislative act, no specialised • use the services of specialists in the per- recommended by the RF State Duma anti- knowledge (subject-matter competence) in tinent branch of law for the analysis of corruption Commission indicate that at the legislative act application is required. potential for breeding corruption of the least one expert in the area of normative Yet it is desirable to use primary analysis legislative act selected for expert exam- acts application should participate in the only when selecting legislative acts for ination.
Assessing corruption risks in specific policy areas: Larissa Sannikova Overview of the anti-corruption reform measures undertaken by the Duma
Vladimir Yuzhakov President, Institute for Modernisation of the Public (state and municipal) Administration
Demands to remove from Russian legisla- examination” “In case the responsible com- corruption. However, this work is by no tion the regulations (and defects thereof) mittee has taken a decision on performing means mandatory, as it is not prescribed by which can be used (and indeed are used) an expert examination of the draft law by rules and regulations. In practice until re- for corruption purposes became vocal the Public Chamber the responsible com- cently an expert examination (scientific ex- several years ago coming, among others, mittee shall submit a draft of the address of amination) of draft laws has not required from Russian parliamentarians, represent- the State Duma to the Public Chamber on purposeful identification of legislative atives of experts and journalists communi- carrying out an expert examination of the defects creating risks of corruption. ties. draft law and a draft of the decision of the The legal framework for purposeful Today as a rule no one objects to the as- State Duma on adopting the said address in work on lowering corruption risks has ap- sertion that corruption is largely a product accordance with the procedure set forth in peared due to Russia’s efforts – with active of flawed Russian laws and subordinate Articles 93 and 94 of the present Rules”. participation of the RF State Duma anti- legislation. Some of these flaws (probably A legal expert examination is also per- corruption Commission – to ratify the the majority) appear in laws through over- formed by the Legal Department of the RF United Nation Convention against Cor- sight. Others are built into it deliberately to State Duma. Under Para.2 of Article 112 of ruption. create opportunities for corruption. Chapter 12 of the State Duma Rules “The However, until recently this attention to Legal Department of the State Duma on The Federal law on the ratification of the problem of minimising corruption the instructions of and within the time the United Nations Convention against risks of Russian laws has had no legislative limit fixed by the Council of the State Corruption was approved by the RF State and methodological support. Duma or a responsible committee shall Duma on 17 February 2006, and was pub- This problem has been largely per- perform a legal expertise of the draft law lished and came into force on 20 March ceived through the prism of general with respect to its conformity to the Con- 2006. As a result of the ratification by the concern over the quality of draft laws and stitution of the Russian Federation, federal Duma of the United Nation Convention those already in force. constitutional laws, federal laws, major against Corruption casual attention to the By way of example, the Rules of the sectoral legislative acts; shall check the list problem of reducing corruption risks of State Duma of the Russian Federation stip- of federal legislative acts to be invalidated, legislation has acquired the status of offi- ulate only a general possibility of conduct- suspended, amended or adopted in con- cial requirement mandatory for all govern- ing an expert examination on the initiative nection with the adoption of a given draft ment bodies. Para. 3 of Article 5 of the of a sectoral or other responsible commit- and shall perform a juridical and technical Convention stipulates within the frame- tee of the RF State Duma or (by its deci- examination of the draft law. The responsi- work of preventive anti-corruption policies sion) at the request of the Public Chamber. ble committee may instruct the Legal De- and practices: “Each State Party shall en- Para.1 of Article 112 of Chapter 12 of the partment of the State Duma Apparatus to deavor to periodically evaluate relevant RF State Duma Rules states the following: conduct a linguistic expert examination of legal instruments and administrative mea- “By the decision of a responsible commit- the draft law”. sures with a view to determining their ade- tee a draft law with a cover letter signed by Clearly the above does not state ex- quacy to prevent and fight corruption”. the chairman of the committee of the State pressly the need for special attention to It goes without saying that this provi- Duma can be submitted to government corruption risks of legislation (draft laws). sion of the Convention, same as its other bodies and other organisations for prepar- We can assume that such an expert exami- provisions, needs specification in national ing comments, proposals and remarks as nation may include identification of the Russian legislation. Nevertheless, it creates well as for carrying out a scientific expert flaws in the legal framework that facilitate sufficient grounds to insist on mandatory
32 Project “Russian Federation – Development of legislative and other measures for the prevention of corruption” (RUCOLA 2) 33 specialised expert examination of legisla- ruption factors are singled out, i.e. those tise was carried out twice – before the first tion aimed at reducing its corruption risks. that occur most frequently and always and the second readings. A number of draft In this situation, the first priority is to create pre-conditions for corruption. laws were subjected to the anti-corruption develop the techniques of such expert ex- The Memorandum describes these expertise by the Commission based on the amination enabling reliable identification typical corruption factors, enabling their decision of the Council of the RF State and subsequent elimination of flaws in leg- reliable detection by any participant of the Duma. islation (draft laws) facilitating corruption. lawmaking process. It Memorandum also The anti-corruption expertise of draft Certain efforts were made to solve this gives a brief appraisal of possible corrup- laws was performed by external experts. problem by the Russian expert community tion consequences of retaining these cor- The expert examination was organised by with the support of the RF State Duma ruption factors in legislation. the Centre for Strategic Research, Institute anti-corruption Commission. In its turn any provision of a draft law for Modernisation of State and Municipal In 2002-2003 the representatives of the (and subsequently of an effective law) Governance and was supported by the expert and scientific community (INDEM where a corruption factor is detected Government of the United Kingdom Foundation; National anti-corruption (above all, a typical corruption factor) is through the Global Opportunities Fund. Committee, Higher School of Economics) considered to be corruption-prone . In most cases, the results of anti-cor- and the Audit Chamber of the Russian Fed- That means that this factor may be used ruption expertise were discussed at the eration formulated proposals on technol- for the purposes of corruption – to obtain meetings of the RF State Duma anti-cor- ogy of reducing corruption risks of undue advantage, administrative rent. ruption Commission forming a basis for legislation. However, it does not mean something decisions supporting experts’ opinions on In 2004 the Centre for Strategic Re- more categorical – that it is bound to be the presence of corruption-prone provi- search (CRS) prepared the “Memorandum used for these purposes. There is no need sions in the draft laws and recommending for Experts on Primary Analysis of Legisla- to prove that. Not every corruption factor the removal of these provisions from the tive Acts for corruption risks” (further on – becomes a basis for corruption practices, corresponding draft law. In some cases Memorandum) based on these proposals yet corruption practices are most often these decisions of the Committee were en- and with the active participation of its au- based on corruption factors of legislation. dorsed by the RF State Duma Council thors. The co-authors of the Memorandum Corruption factors must be removed from which recommended sectoral committees were representatives of the Ministry for legislation not because they have already of the RF State Duma to take into account Economic Development of the Russian been used for corruption purposes but the comments made on the results of the Federation, Centre for anti-corruption because they may be used to this end. anti-corruption expert examination. Studies and Initiatives “Transparency In- This also means that corruption-prone Between April 2005 and September ternational-R”, All-Russian Non-Govern- provisions must be removed or adjusted so 2006 on the instructions of the RF State ment Organisation of Small and Medium that they did not create “legal” prerequi- Duma anti-corruption Commission anti- Businesses (OPORa Rossii), International sites for corruption, that is, did not contain corruption expertise were carried out with Confederation of Consumers’ Societies corruption factors or at least typical cor- respect to: and other concerned organisations. At ruption factors. • Draft federal law “On Amendments and present further work continues under the Finally, it means that the law proper or a Additions to the Federal Law “On Med- CSR project “Analysis of Corruptogenic draft law (or subordinate legislation) con- icines”. Potential of Legislation and its Enforce- taining corruption-prone provisions is, • Draft federal law “the Harm Inflicted ment”. too, corruption-prone and must be While Operating Hazardous Facilities”. In July of 2004 the Memorandum was amended. In case of a draft law it must not • Draft federal law “On the Protection of presented to deputies – members of the RF be adopted in this form. Competition”. State Duma anti-corruption Commission The Memorandum was improved and • Draft federal law “On State Regulation and discussed at the Commission’s meet- published taking into account the discus- of the Activities and Conduct of Gam- ing. Judging from the discussion that took sions in the RF State Duma anti-corruption bling Organisations and on Introducing place the Commission’s members were im- Commission. 1 It was sent to concerned or- Amendments to Some Legislative Acts pressed with the opportunity for task-ori- ganisations including the RF State Duma, of the Russian Federation”. ented and systematic work on reducing legislative bodies of the RF entities, federal • Draft federal law “On Amendments to corruption risks of Russian legislation. executive bodies, heads of RF entities. the Federal Law “On Appraising in the The methods of analysis of the potential Due to the initiative of the RF State Russian Federation”. for breeding corruption (anti-corruption Duma anti-corruption Commission the • Draft federal law “On Amendments to expertise) attached to the Memorandum methods for screening legislative acts and Article 40 of the Federal Law “On Priva- helps identify the most typical corruption draft laws for corruption risks (the anti- tisation of State and Municipal Prop- factors in legislative acts and draft laws. corruption expertise) were evaluated in erty” and Article 28 of the Federal Law Thus the search for flaws (and formu- April 2005 – September 2006 during the “On Joint-Stock Companies”. las) of legislation containing corruption review by the RF State Duma of six draft The necessity of conducting an expert risks becomes more task-oriented. Among federal laws. With regard to the three of examination of the draft federal law “On numerous flawed provisions decreasing those draft laws the anti-corruption exper- Amendments and Additions to the the quality of laws (and subordinate legisla- Federal Law “On Medicines” resulted tion) are identified those that contain cor- 1. Analysis of Corruptogenic Legislation: Memo- from the decision of the Council of the RF randum for Experts on Primary Analysis of Corrup- ruption risks. Then – based on a broad togenic Character of Legislative Acts. M., Centre for State Duma dated 14 April 2005. In accord- expert examination – the most typical cor- Strategic Research/Statute, 2004. ance with this decision the anti-corruption
Anti-corruption reform measures undertaken by the Duma: Vladimir Yuzhakov 34 Project “Russian Federation – Development of legislative and other measures for the prevention of corruption” (RUCOLA 2)
Commission of the RF State Duma was in- By decision of the Council of the RF draft law before its deliberation by the structed to review this draft federal law and State Duma, the report of the anti-corrup- State Duma in the second reading. submit proposals to the Council of the RF tion Commission was submitted to the re- On 24 January 2006 the report of the State Duma. sponsible Committee of the State Duma on anti-corruption Commission of the RF The experts’ opinions reviewed at the Credit Institutions and Financial Markets State Duma was approved at the Commis- Commission’s meeting and the discussion so that it would be taken into consideration sion’s meeting and submitted to the re- that followed, the report of the Commis- while preparing the draft law for discussion sponsible State Duma Committee on sion prepared on their basis and submitted in the second reading. The conclusions Economic Policy, Business and Tourism. to the Council of the RF State Duma made by the Commission on the results of The Commission’s remarks were trans- proved that a number of provisions of the the anti-corruption expert examination of lated by the responsible Committee into draft law might facilitate the setting of ad- the draft law were on the agenda of the corresponding amendments to the draft ditional conditions for the development of working group set up in the Committee on law and discussed by the RF State Duma corruption relations in sales of medicines. Credit Institutions and Financial Markets during the second reading. On 5 July the Also, in the operative part of the conclu- of the State Duma and were included into a draft law went through the second reading sion on the results of the anti-corruption consolidated table of amendments to be and on 8 July the third. expertise the Commission recommended taken into account in the preparation of the On 9 February 2006 the Council of the the State Duma to reject the draft law. draft law for deliberations in the second State Duma took a decision instructing the reading. anti-corruption Commission of the RF Based on this report the RF State Duma State Duma to submit to the Council of the Committee on Healthcare responsible for At present the draft law has been pre- RF State Duma a report on the draft the review of this draft law a decision was pared by the responsible Committee for federal law “On State Regulation of the taken to set up a working group on the review by the RF State Duma. On the initi- Activities and Conduct of Gambling Or- draft federal law in order to improve it. The ative of the anti-corruption Commission ganisations and on Introducing Amend- working group included deputies of the RF experts are performing an anti-corruption ments to Some Legislative Acts of the State Duma – the chairman and members expertise of the draft law prepared for the Russian Federation” . The Commission’s of the Commission, independent experts second reading in order to see if all previ- report on the findings of the anti-corrup- who had performed the examination of the ously made comments were taken into tion expertise submitted the RF State draft law. All the reports on the corruption consideration in the course of the draft law Duma Council contained important com- risks of the draft law specified in the con- preparation. ments on the draft law in view of corrup- clusion were thoroughly discussed. The The expert examination of the draft togenic factors identified in it and a text of the draft law was corrected taking federal law “On the Protection of Com- recommendation to the State Duma not to into account the proposals specified in the petition” introduced to the State Duma by consider the said draft law in first reading report. the Government of the Russian Federation without changing its conceptual provi- Later the draft law was considerably im- and passed by the State Duma in the first sions. reading on 8 July 2005 was carried out on proved, with all the provisions (flawed pro- By the decision of the RF State Duma the initiative of the Commission in accord- visions and legislative formulas) facilitating Council of 16 February 2006 the report of ance with the Regulations on Commissions to corruption excluded from the text. As a the anti-corruption Commission was re- of the State Duma of the Federal Assembly result the draft federal law “On Amend- ferred to the responsible Committee on of the Russian Federation. In particular, the ments and Additions to the Federal Law Economic Policy, Business and Tourism of Commission’s decision to perform an ex- “On Medicines” was passed in the first the State Duma to be taken into account in pertise of the draft federal law resulted reading on 8 July 2006. At present the draft the preparation of the draft law for the first from the analysis of reports made by the RF law is in the responsible Committee. reading by the State Duma. The draft President’s Administration, responsible The expertise of the federal law “ On federal law “On State Regulation of the Ac- Committee on Economic Policy, Business Mandatory Insurance of Civil Liability tivities and Conduct of Gambling Organi- and Tourism of the State Duma and the for Causing Harm When Operating sations and on Introducing Amendments Legal Department of the State Duma Ap- Hazardous Facilities ” was carried out by to Some Legislative Acts of the Russian paratus. the anti-corruption Commission in ac- Federation” was approved by the State cordance with the decision of the Council The anti-corruption expertise showed Duma in the first reading on 24 March of the RF State Duma dated 13 December that many of its provisions are directed 2006. At present the responsible Commit- 2005. The Commission stressed in its against corruption and can promote pre- tee works at the procedure of preparing report on the draft law passed by the RF ventive measures of combating corruption. this draft federal law for the second reading State Duma on 16 December 2005 in the Quite a few progressive innovations of the in the State Duma. first reading that the study and analysis of draft law reflect the effort to regulate more The need to carry out an expertise of said draft project made it possible to iden- thoroughly the activities of government the draft federal law No. 279490-4 “On In- tify the provisions which create legal po- bodies. Nevertheless, the anti-corruption troducing Amendments to Article 40 of tential for corruption. The operative part expertise of the draft law identified in it the the Federal Law ‘On the Privatisation of of the conclusion contained the Commis- provisions in need of improvement as they State and Municipal Property’ and sion’s opinion that it would be impractical create favourable conditions for corrup- Article 28 of the Federal Law ‘On Joint- to review the draft law in the second tion. In the operative part of its report, the Stock Companies’” arose as a result of the reading without eliminating the corruption Commission pointed out the necessity of address of the Chairman of the RF State factors contained therein. removing the corruption factors from the Duma Property Committee and after the
Final report: Appendices, Volume 1 Project “Russian Federation – Development of legislative and other measures for the prevention of corruption” (RUCOLA 2) 35
RF State Duma Council took a decision to Quite “popular” is a corruption factor • The methods of analysis of the potential make the said Committee responsible for called provisions determining compe- for breeding corruption in legislation the above draft law. tence according to the formula of “being (the anti-corruption expert examina- The report of the Commission on the authorised” . Such a factor actually means tion) evaluated at the RF State Duma findings of the anti-corruption expertise that, for instance, employees of an author- anti-corruption Commission have submitted to the RF State Duma Property ised body may or may not take a decision proved their usefulness. They can be Committee was testimony to the fact that on the distribution of permissions and ex- used as an instrument of purposeful, the draft law contains a number of corrup- ercise of rights. This creates a market for systematic and productive work for tion factors. Also, in the operative part of purchasing legitimate rights. cleansing Russian legislation of corrup- the Commission’s report it was emphasised Provisions containing excessive dis- tion factors. that it would be inexpedient to consider the cretionary powers of officials and gov- Moreover, this work may be highly ef- draft law without striking off the corrup- ernment bodies are also among the most fective if efforts to reduce the corruption- tion factors from its provisions. Another frequently occurring corruption factors. prone potential of legislation focus not anti-corruption expert analysis of the draft The scope of such discretionary powers is only on federal legislative acts but also on law was performed after its preparation for extremely large – from extending the regional laws, rules and regulations of ex- the second reading. The Commission’s period of decision-making to establishing ecutive bodies. rules by the executor. opinion on the findings of the anti-corrup- Such efforts were also made in 2005- Juridicolinguistic misinterpretations tion expertise was submitted to the re- 2006 at the same time with the evaluation – the use of ambiguous terms or those that sponsible Committee and handed over to of the methods of analysis of the corrup- have not yet come into usage, evaluative the deputies in the chamber of the RF State togenic potential of legislative acts in the categories, words with a vague meaning is, Duma. On 7 July 2006 the law was ap- RF State Duma and largely due to the too, a frequent phenomenon. proved in the second reading, and on 8 July success of the approval. in the third. Among other factors of corruption can The need to incorporate screening of often be found the following: In the analysed draft law were identified laws for corruption risks has been recog- • Absence of competitive (auction) almost all typical corruption factors. Some nised and approved in the Concept of Ad- procedures when several individuals or of them crop up in all or in the majority of ministrative Reform in the Russian legal entities claim a specific right (pur- draft laws. Federation in 2006-2008. chasing or lease of government prop- As it turned out one of the first places erty, supplies of goods for government In 2006 on commission from the RF (by frequency of “use”) is occupied by ex- needs). The potential for breeding cor- Ministry of Economic Development to- cessive demands made on persons for ruption increases if there are no provi- gether with the CSR supported by the the exercise of their rights . This corrup- sions for an advance notification of the World Bank and the DFID Trust Fund of tion-prone factor almost inevitably gives tender, selection of the winner in ac- the United Kingdom on the basis of the rise to corrupt relations when using the rel- cordance with the previously estab- “Memorandum for Experts on Primary of evant provision of the draft law. This flaw is lished criterion, transparency and Legislative Acts for corruption risks” was most frequently manifested when a person publication of results, collective deci- prepared a paper called “Methodology for exercises his/her right to obtain a permis- sion-making by the tender committee. screening of Legislative Acts of Executive sion or registration. It is especially conspic- • False goals and priorities. The ap- Bodies got corruption risks”. At the same uous in the lists of grounds for refusal – for proval of the law may be impractical, time there were elaborated methods of instance, the list may not be exhaustive or the regulation of the issue may be exces- conducting training activities for the study may contain vague, subjective-evaluative sive, create additional administrative of this document by employees of legal de- wording (for example, information submit- barriers and make exorbitant demands. partments of executive bodies, lawmakers ted by the applicant is incomplete or is not Sometimes the direct result of the and independent experts. credible). adoption of an unsubstantiated law may Projects have been launched to dissem- Absence of administrative proce- be the reinforcement of corruptogenic inate the methods of analysis of corrup- dures is another corruption factor often schemes. togenic potential of legislative acts and occurring in the above-mentioned draft • Upsetting the balance of interests. rules and regulations of executive bodies laws. The potential for breeding corrup- Only one group of persons (e.g. insur- with the support of the World Bank and the tion increases if there is no well-defined ance companies, large business) bene- DFID Trust Fund of the United Kingdom. procedure of decision-making, obtaining fits because of the adoption of such a In 2006, training activities were started and use of information, review of applica- law. on mastering the methods of analysis of the tions from individuals and legal entities, Overall, the evaluation of the methods corruption-prone potential of legislative control, etc. of analysis of the corruptogenic potential acts (the anti-corruption expertise) by spe- Another corruption factor closely con- of legislative acts enables drawing three cialists of federal authorities, power bodies nected with the one characterised above is conclusions: of RF entities and independent experts. omissions in regulation. In rules and reg- • Judging from the scrutinised draft laws Such trainings were held by the Institute ulations are often absent provisions on the corruption risks are a real problem for for Modernisation of State and Municipal performance of the function vested in a Russian legislation; Governance with the support from the government body. This enables the offi- • A significant minimisation of corrup- Government of Great Britain through the cials to act at their own discretion in an un- tion risks of Russian legislation is quite “Global Opportunities” Fund for special- regulated sphere. feasible. ists and independent experts of the Vo-
Anti-corruption reform measures undertaken by the Duma: Vladimir Yuzhakov 36 Project “Russian Federation – Development of legislative and other measures for the prevention of corruption” (RUCOLA 2) logda, Kurgan, Sverdlovsk, Tomsk, Perm potential for breeding corruption in legis- has sent a letter to the Chairman of the RF and Stavropol Regions. lative acts. State Duma B.V. Grizlov with the proposal On the initiative of the RF State Duma Third, it is necessary to set up a rule ac- to start training specialists of the State anti-corruption Commission with the cording to which every participant of the Duma in the analysis of the potential for support of the Chairman of the RF State lawmaking process should bear responsi- breeding corruption in federal laws. As a Duma and the Duma Legal Department, bility for the absence of corruption factors first step, a proposal was made to hold a the training on mastering the methods of in a draft law at each stage of its elabora- training for the State Duma specialists on analysis of the corruptogenic potential of tion. An appropriate procedure of confirm- how to use the methods of analysis of the federal legislative acts (anti-corruption ing the results of anti-corruption work corruptogenic potential of legislative acts. expert examination) was also conducted performed by the participants should be “The practice of performing an anti- for specialists of the RF State Duma. elaborated. corruption expertise – states the letter – The decision to conduct such training Such a confirmation may be demanded, has confirmed the effectiveness and credi- was largely based on the conclusion that in under certain circumstances, from the bility of the application of methods of anal- order to accomplish a substantial reduc- holder of the right of legislative initiative. ysis of the corruptogenic potential of tion of the potential for breeding corrup- For example, a decision may be taken that legislative acts elaborated earlier by the tion in federal legislation it is not enough to the explanatory note to the draft law must Centre for Strategic Research. invite external experts and perform an ex- include a statement that when a particular At the same time, we have reached a ternal expert examination. Such a conclu- draft law was elaborated it was scrutinised conclusion that a considerable part of cor- sion was made in the course of the for the corruptogenic potential of pro- ruption-prone provisions (flawed provi- discussion of the results of evaluating the posed provisions by way of control, and sions) might well be eliminated by the methods of analysis of the corruptogenic that the draft law submitted to the State makers of draft laws or in the process of potential of draft laws by M.I.Grishankov, Duma does not contain any corruption fac- work with these documents of specialists Chairman of the RF State Duma anti-cor- tors. of sectoral committees and the State Duma ruption Commission, and the experts. Such a confirmation must become Legal Department. The emergence of corruption factors in mandatory for committees and commis- a draft law can and must be prevented and sions, the State Duma Legal Department, In view of this I ask you to support the (or) curbed at the stages of development their specialists in charge of the quality of proposals of the Institute for the Moderni- and review of the draft law in sectoral and the draft law in their area of responsibility. sation of State and Municipal Governance other responsible committees and com- Each of them passing on the draft law for to organise a training on mastering the missions of the RF State Duma and in the further consideration must put on it a kind methods of analysis of the corruptogenic RF State Duma Legal Department. of a stamp: “All checked. There are no potential of legislative acts for specialists of To achieve that, all the participants of factors of corruption”. the State Duma Legal Department and the lawmaking process must first recognise It is through such efforts that we can other units responsible for the quality of the necessity for special, purposeful and bring about the minimisation of the cor- draft laws submitted for consideration by systematic efforts to minimise corruption ruptogenic potential of the whole mass of the State Duma” risks of legislation. It has to be admitted federal laws. Analysis of the corruptogenic The proposal was approved. that this goal is not achieved as a result of potential of elaborated and discussed draft The first training on applying the traditional efforts to make a quality draft laws, proposed rules and regulations must methods of analysis of legislative acts for law – within the framework of legal or ju- become a form of day-to-day self-control corruption risks for the specialists of the ridico-technical expert examination. In the of lawmakers and other participants of this State Duma was conducted in July of 2006. future, the anti-corruption expertise might process. Barring that, the anti-corruption Some specialists of the State Duma became well become part of standard legal and ju- expert examination will remain an exotic familiar with the methods. ridico-technical expert examination. It is technology alien to the lawmaking process. essential that in time such an expert exam- Strictly speaking, external expert exam- In the near future, the Duma Commis- ination should become a standard practice. ination of draft laws, similar to that cur- sion plans to send a Memorandum with in- However, now, at the very beginning it rently organised and performed by the formation on the experience of its use to all needs special attention. Its cultivation re- State Duma anti-corruption Commission, the deputies of the RF State Duma. For in- quires that it should be perceived and mas- must be carried out strictly on a selective terested deputies an information seminar tered as a system of special efforts. basis as a means of control of the credibility will be held. Second, all the participants of the law- of those previously put stamps testifying to Thus, the first steps will be made to in- making process should master the tech- the absence of corruption factors. corporate the analysis of corruptogenic po- nique of reducing corruption risks of Taking into account these considera- tential (the anti-corruption expertise) of legislation. At present, such a technology is tions, M.I. Grishankov, Chairman of the RF legislative acts in the day-to day legislative supplied by the methods of analysis of the State Duma anti-corruption Commission, practice of the RF State Duma.
Final report: Appendices, Volume 1 Experience of European countries in the sphere of creation and functioning of a specialised body responsible for the co-ordination of national efforts in the sphere of combating and prevention of corruption
Drago Kos Chairman of the Commission for the Prevention of Corruption in Slovenia and Chairman of GRECO
Introduction
So much has been said about corruption damage caused by corruption internation- ble interests. It is because this is the case recently that there can be no doubt about ally is to fight it within individual coun- that it is vital to set effective standards that the enormous damage it causes, and the tries. The Council of Europe, as a leading are accepted by the majority of, if not all, threat it poses to the rule of law and to the institution in this field, has devoted a lot of the countries of the international commu- development of democracy. It does not attention to this issue, as have others such nity. attack the state, its institutions and the as the European Union, the organisation basic principles of democracy from the for Economic Co-operation and Develop- The international community is taking outside, but corrodes them from within. It ment (OECD), and recently the United Na- on a vital co-ordinating role, which is nec- is an integral part of every public adminis- tions. Many countries have accepted the essary for all countries due to increasing tration. The knowledge about how far- leading role of these international organi- globalisation and the (at least minimal) reaching corruption is and how much sations with relief because, despite a universality of solutions. However, adopt- damage it can cause the private sector, civil growing awareness of the necessity for ing fundamental positions also impor- society and every individual is growing action in this field, many recognise the del- tantly affect the formulation of the concept every day. icacy of these issues. The prevention, de- of corruption and its attributes, the strate- Although corruption does damage to tection and suppression of corruption are individual countries, we find ourselves in a made difficult by powerful individuals and/ gies for its reduction and the measurement paradoxical situation – because the driving or groups obstructing progress in individ- of its consequences. One of the measures, force in combating corruption is not indi- ual countries. No single country or institu- lately almost fixed as an international vidual countries, but the international tion is immune to corruption and any standard, is also the establishment and community. The reason for this is the real- individual could find himself or herself in a functioning of the national specialised isation that the best way to fight the situation of a conflict of totally irreconcila- anti-corruption institutions.
International standards in the area of anti- corruption institutions
Almost all international legal instruments “Each State Party shall, in accordance with – Implementing the policies referred to devote some attention to the position and the fundamental principles of its legal in Article 5 of this Convention and, powers of institutions fighting corruption: system, ensure the existence of a body or where appropriate, overseeing and co- • The United Nations Convention against bodies, as appropriate, that prevent cor- ordinating the implementation of those Corruption stipulates in Article 6: ruption by such means as: policies,
37 38 Project “Russian Federation – Development of legislative and other measures for the prevention of corruption” (RUCOLA 2)
– Increasing and disseminating knowl- should have the appropriate training and corruption and to provide them with edge about the prevention of corrup- resources to carry out their tasks.” appropriate means and training to tion. • The Council of Europe Criminal Law perform their tasks (Guiding Principle Each State Party shall grant the body or Convention on Corruption (ETS No. No. 7). bodies referred to in paragraph 1 of this 173) stipulates in Article 20 that It is very easy to summarise essential article the necessary independence, in ac- “each Party shall adopt such measures as mandatory international requirements for cordance with the fundamental principles may be necessary to ensure that persons or the bodies with respect to the effective of its legal system, to enable the body or entities are specialised in the fight against fight against corruption: bodies to carry out its or their functions ef- corruption. They shall have the necessary • necessary independence and autonomy, independence in accordance with the fun- fectively and free from undue influence. • absence of undue pressure or influence, damental principles of the legal system of The necessary material resources and spe- • appropriate training, cialised staff, as well as training that such the Part, in order for them to be able to • enough resources, staff may require to carry out their func- carry out their functions effectively and • specialisation. tions, should be provided. free from any undue pressure. The Party shall ensure that the staff of such entities The following features can also be ex- Each State Party shall inform the Secretary has adequate training and financial re- tracted from the above-mentioned legal General of the United Nations of the name sources for their tasks.” texts: and address of the authority or authorities • The Council of Europe’s Committee of • there can be one or more anti-corrup- that may assist other State Parties in devel- Ministers Resolution (97) 24 on the tion bodies in a country; oping and implementing specific measures twenty guiding principles for the fight for the prevention of corruption.” • establishment and functioning of the against corruption stipulates that coun- anti-corruption body(ies) have to follow • Furthermore, the United Nations Con- tries have the duty: the fundamental principles of the legal vention against Corruption stipulates in – to ensure that those in charge of the system of the country, Article 36: prevention, investigation, prosecution • anti-corruption body(ies) can have only “Each State Party shall, in accordance with and adjudication of corruption of- preventive, only repressive (investiga- the fundamental principles of its legal fences enjoy the independence and au- tive, law-enforcement 1) or combined system, ensure the existence of a body or tonomy appropriate to their functions, preventive/repressive powers; bodies specialised in combating corrup- are free from improper influence and • preventive functions should at least tion through law enforcement. Such body have effective means for gathering evi- include assurance of the implementa- or bodies or persons shall be granted the dence, protecting the persons who help tion of the national anti-corruption pol- necessary independence, in accordance the authorities in combating corrup- icy(ies) and dissemination of with the fundamental principles of the tion and preserving the confidentiality knowledge about the prevention of cor- legal system of the State Party, to be able to of investigations (Guiding Principle ruption. carry out their functions effectively and No.3); without any undue influence. Such – to promote the specialisation of 1. Including educational and awareness raising persons or staff of such body or bodies persons or bodies in charge of fighting functions.
Practical problems connected with the possible decision on the establishment of specialised anti-corruption body(ies)
Rarely do countries decide to establish a ment and functioning of this body. hand by hand, but what about the repres- new budgetary consumer in a form of a Without any doubt the best possible way to sion? Independent repressive anti-corrup- new public institution – they usually do it establish such a body and ensure its rela- tion bodies are usually created when because they are forced so, either by the tively unhindered operation is a form of a corruption is so pervasive and law enforce- population or by their international com- law, adopted in a (normal) legislative pro- ment agencies so corrupt or ineffective mitments. The area of corruption is a field, cedure, providing both for its independ- that corruption offences are either not in- where lately both push factors are very in- ence resources and methods by which it is vestigated or prosecuted. It is basically very tensive and therefore more and more coun- to be accountable to the public. simple: if the population still trust the “or- tries establish different anti-corruption The very first decision, which has to be dinary” law enforcement services risks of institutions. Since fighting corruption can made in such law, is the decision on the establishing an additional one would be too be a very unpleasant exercise for the main main character of the anti-corruption in- policy makers of the country they might be stitution and its position in the existing in- unforeseeable: division of work between tempted to establish such body with a legal stitutional set-up of the country. There are the existing and new institution, division of act, which can easily be changed or even different forms of anti-corruption institu- powers and cases among them, informa- abolished. Therefore, one of the most im- tions, dealing with the following ways of tion-flow, the level of co-operation, frag- portant pre-requisites for an effective anti- fighting corruption: prevention, repression mentisation of the fight against corruption, corruption body is a proper legal document and education. It is understandable that …, are simply too problematic to be tackled which serves the purposes of the establish- prevention and education go together without any serious need.
Final report: Appendices, Volume 1 Project “Russian Federation – Development of legislative and other measures for the prevention of corruption” (RUCOLA 2) 39
When the decision on the character of a accountability of an independent anti-cor- agency besides fulfilling the conditions body is made, the decision on its position ruption body. mentioned above ( International standards in the country’s institutional set-up has to When the body is established and its in the area of anti-corruption institutions , be made and its powers have to be defined powers are regulated the most difficult task page 37) needs: and regulated. Of course, powers of the starts: the anti-corruption institution has • to be an element within a wider national body with investigative authorities are to be given sufficient resources to hire and anti-corruption policy, completely different than powers of the educate employees, to purchase necessary • government commitment and political body, which deals exclusively with preven- premises and technical equipment and to will, pay at least decent salary to the employees. • co-ordinated action with other stake- tion (and education). Investigative powers Independence in drafting and expenditure holders, are very close to possible breaches of basic of its budget is again a basic pre-condition • adequate legislation with clearly human rights, much more than the powers for its effective work and a clear signal on defined powers, of pure preventive bodies. Therefore, legis- the real intentions of the country establish- • transparency and accountability mech- lators have to be very careful in defining ing such a body. The successes of countries’ anisms, those powers and they have to follow at anti-corruption institutions depend on • credibility and public trust, least the same standards as they are used such trivial matter as money but – money • co-operation with civil society, for the powers of traditional law enforce- is a proof of a real political will. The best • a high level of ethics. ment agencies. The powers, which an anti- legal arrangements on the establishment In any case, before the decision on the corruption body has and the range of its even ideally positioned anti-corruption in- establishment of a new (anti-corruption) duties in respect of targeted professions stitution will undoubtedly fail if there is not institution is made, three questions 2 have already give the first hint on its formal po- an appropriate part of the budget devoted to be answered: sition: if this is a body established to fight to this institution. • What is the problem to be addressed corruption in all three branches of power Once the body starts to operate, it and how should it be addressed? and it really wants to be independent, the strictly has to follow some principles, • Is the corruption high-volume 3 or high- 4 5 best possible position for it is completely which are unconditionally linked to its value or politically sensitive or sophis- (of course, bound by the basic constitu- work: objectivity, professionalism, imparti- ticated? tional principles of the country) independ- ality, integrity, honesty, effectiveness and • What are the strengths and weaknesses ent position, without interference with any efficiency. If these principles are not fol- of existing institutions and should or lowed, the enemies of the institution have a could they be resolved by a new institu- branch of power. That said, it has to be very easy job in discrediting its efforts and tion, a merger, interagency co-ordina- clear that such institution is also com- in demanding its re-structuring, or even its tion or co-operation, or segmented pletely accountable for its deeds and abolishment. responsibilities? actions and a proper reporting mechanism Based on the international legal and to a superior state body has also to be es- other 1 texts and practice, it is also apparent 2. As formulated by Professor Alan Doig, Univer- tablished. In the theory accountability to sity of Teesside, United Kingdom. that in order to succeed, an anti-corruption 3. Such as traffic police or licence clerks. the countries’ legislative body, the parlia- 4. Procurement contracts, for example. ment is considered to be the best form of 1. OSCE: Best practices in combating corruption. 5. Involving highest government officials.
European countries and specialised anti- corruption institutions
During its first evaluation round Group of more that are result of the lack of the Some practical cases of States against Corruption – GRECO has proper political will and of the lack of the specialised anti-corruption been dealing with the existence and func- national financial resources. institutions in Europe tioning of the specialised anti-corruption The second very important failure institutions in its Member States. It was noticed by GRECO was a shortage of suffi- In practice several types of anti-corruption surprising to find out that specialised anti- cient and fairly educated staff, which in- institutions were developed in Europe. For corruption institutions are not only cludes the lack of specialisation. this expert opinion they are split into three missing in countries known to have low As long as specialised anti-corruption different groups: repressive institutions, levels of corruption, but also in countries institutions are missing, there seems to be preventive institutions, combined institu- with a high incidence of corruption. At the neither the need nor the chance for a spe- tions. same time, these countries are also charac- cialised professional education in this area. Repressive institutions terised by a high degree of organisational Therefore, specialised anti-corruption deficits and lack of adequate equipment. training programmes are still exceptional. Major strengths of these institutions are This might cause to be able to conclude Having in mind that theoretical knowledge the following: that all the lacks mentioned are result of is not enough, it has to be complemented • high level of specialisation and multi- the minor importance attached to fighting with the practical experience of investiga- disciplinary approaches corruption by the entire society, further- tors trained in corruption cases. • concentration of skills and resources
Creation and functioning of specialised bodies: Drago Kos 40 Project “Russian Federation – Development of legislative and other measures for the prevention of corruption” (RUCOLA 2)
• fast and efficient action against corrup- It has a head, 20 officers, 40 principal in- Major difficulties encountered by these tion spectors and other personnel. Its investiga- institutions are next: • pro-active and intelligence-led activi- tions have led to number of convictions of • it is difficult to assess the real impact of ties high-profile perpetrators. It is dealing with these services, • great visibility and credibility of the high-profile corruption cases and assisting • the concept of prevention is not always anti-corruption efforts other police units in their efforts against clear to institutions which should co- • capabilities for long-term corruption corruption. operate, investigations. National Authority for Investigation • their control functions are limited due Major difficulties encountered by these and Prosecution of Economic and to absence of investigative powers, institutions are the following: Environmental Crime – Økokrim, • due to lack of investigate powers and • lack of understanding of other services Norway possibilities for sanctioning they are on the meaning of the term “corrup- sometimes not taken seriously by other tion” A specialised anti-corruption team was es- institutions, tablished within the National Authority for • not always clear legal basis for investi- • they have to send received complaints the Investigation and Prosecution of Eco- gation and prosecution and reports on concrete corruption nomic and Environmental Crime – • creation of barriers to investigations of cases to the criminal justice system (and Økokrim, which is the service combining complex cases involving not only cor- not handle them alone), police officers and prosecutors. This team ruption • they can serve as cover for the lack of focuses on the investigation and prosecu- • decrease of anti-corruption interest of investigation and prosecution, tion of serious cases; it is also involved in general law-enforcement bodies • their performance depends on the po- prevention and public education work. • isolation within the criminal justice litical commitment of the countries’ system National Anti-corruption Prosecutor’s leadership to implement such plans and • direct international police co-operation Office (NAPO), Romania on the commitment of other institu- is sometimes not possible NAPO was created in 2002 and deals with tions to co-operate, • no access to confidential and protected high- and medium-level corruption cases • if they are situated close to the head of information of complex nature and high impact. It has government or state (to ensure effective • investigations blocked by different im- around 500 staff, including judicial police co-ordination), their independence munities officers, prosecutors, specialists … It has a might be limited. • political interference in investigations. central office in Bucharest and 15 regional Typical cases of specialised preventive Typical cases of specialised repressive services. In a year NAPO handles up to anti-corruption institutions are those of anti-corruption institutions are those of 2 000 corruption cases. the Central Service for the Prevention of “Clean hands” in Italy, the “Central Office Corruption in France, the Commission for for the Repression of Corruption” in Bel- Preventive institutions the Prevention of Corruption in Slovenia, gium, “National Authority for the Investi- Major strengths of these institutions, the Anti-corruption Monitoring Group in gation and Prosecution of Economic and which also include services for managing Albania, and the Council to Fight Corrup- Environmental Crime – Økokrim” in implementation of anti-corruption strate- tion in Armenia. Norway and the “National anti-corruption gies, are the following: Central Service for the Prevention of Prosecutor’s Office” (NAPO) in Romania. • they focus on the core corruption prob- Corruption, France lems: lack of integrity, transparency and Clean Hands, Italy accountability, It is an interministerial body attached to the Ministry of Justice with a magistrate as It was not a specialised unit or service, but • they can undertake a wide variety of its director and advisers coming from dif- a group of prosecutors at the public prose- measures – from general preventive to ferent institutions (police, gendarmerie, cutors office in Milan who started to specific monitoring, uncover large scale and far reaching cor- customs, tax administration, audit cham- • they can mobilise and work with a large ruption cases in 1992. In three years the bers …). It is a central body with no re- range of institutions, group has investigated 2 800 people, in- gional offices. Its main tasks are • they can concentrate on institutions cluding 80 members of parliament. In the centralising and analysing all information and/or procedures which are exposed following 8 years 576 people were con- which may point out at risks of corruption, to particularly high risks, victed for corruption and the investigation to provide advice on the prevention of cor- • they are comparatively inexpensive, had also political implications. There were ruption, to co-operate with courts by for- three main elements crucial for the success • they can help integrate anti-corruption warding information on corruption or of the action: disappointment of the popu- measures in the overall process of ad- providing technical assistance, and to train lation with the state of play in the area of ministrative reform and strengthening public and private sector institutions. corruption, co-operation of key witnesses of good governance, Commission for the Prevention of and independence of the prosecutors. • they can ensure that anti-corruption strategies are actually implemented and Corruption, Slovenia Central Office for the Repression of that the progress made is monitored, It is an independent state body, which has Corruption, Belgium • they can ensure that the elements of law to report quarterly and annually to the Par- It carries out judicial investigations into enforcement, prevention and public ed- liament. Its main tasks are collection of great corruption. It is a service under the ucation are pursued in a balanced and reports on financial assets of 5 000 func- Directorate General of the Judicial Police. mutually reinforcing manner. tionaries, ensuring the implementation of
Final report: Appendices, Volume 1 Project “Russian Federation – Development of legislative and other measures for the prevention of corruption” (RUCOLA 2) 41 statutory provisions on incompatibility of • they do not depend so much on the co- the regions. The main office consists of the public functions with profit-making activ- operation of other institutions, department on Research and Documenta- ity, on conflicts of interest and on limita- • they can be highly visible symbols of in- tion, anti-corruption and Public Relations, tions on acceptance of gifts, ensuring the tegrity and determination to fight cor- Prosecution, Secretariat and Support Serv- implementation of the national anti-cor- ruption. ices. ruption strategy and enhancing the integ- Major difficulties encountered by these rity of the public sector. institutions are: Bureau for Preventing and Combating • the readiness of other institutions to co- Corruption, Latvia Anti-corruption Monitoring Group, operate may be reduced due to the all- It has been set up as a single agency in Albania purpose approach of these institutions, charge of enforcement, prevention, public It consists of a Board (representatives from • the success and failure of anti-corrup- education and development of the national a range of institutions) and a Permanent tion efforts depends on one service, strategy against corruption. It is also in Unit based at the Office of the Minister of • they are very clear targets for all forms charge of monitoring compliance with the State to the Prime Minister, which daily of pressure and undue influence, law on conflicts of interest and the declara- follows implementation of the anti-corrup- • expectations are very high, tion of assets by public officials, the rules tion plan. Its main tasks are implementa- • priorities among their different tasks on financing of political parties and follow tion of the national anti-corruption plan, have to be set, up to complaints related to public procure- assurance of inter-institutional co-opera- • their law-enforcement functions may ment. The Bureau is under supervision of tion and assessment of the progress made. make it less acceptable for civil society, the Cabinet of Ministers. business community and public admin- Once a year at the national conference, it is Special Investigation Service, istration to co-operate in prevention assessed whether any progress was made is Lithuania assessed as a result of which the plan is im- and education measures. proved and updated. Typical cases of combined anti-corrup- It is a specialised law-enforcement agency tion institutions are those of the Office for supervised by a prosecutor and accounta- The Council to Fight Corruption, the Prevention of Organised Crime and ble to the President of Republic and the Armenia Corruption (USKOK) in Croatia, the Parliament. Its main functions are detec- tion and preliminary investigation of cor- It was established by Presidential Decree in Bureau for Preventing and Combating ruption, collection and analysis of 2004 with the task to co-ordinate the im- Corruption in Latvia and the Special Inves- information on corruption, development plementation of the Armenian anti-cor- tigation Service in Lithuania. and implementation of preventive meas- ruption strategy. It is chaired by the Prime Office for the Prevention of Organised ures, public education. It is made up of the Minister and assisted by a Commission to Crime and Corruption (USKOK), following departments: Intelligence Activi- monitor the implementation of the anti- Croatia ties, Corruption Prevention (including di- corruption strategy. It has the status of a special public prosecu- visions for Corruption Prevention and Combined institutions tion office. Its tasks include the law en- Supervision, anti-corruption Education forcement functions of a prosecution office and International Education, Division of Major strengths of these institutions are: (data collection, intelligence work, direct- Legal Affairs, Personnel and Internal In- • they can ensure not only planning but ing the police work …), co-operation with vestigations, Complaints), Information also the implementation of anti-corrup- other bodies on the implementation of the Technology, Finance, Internal Audit and tion measures in all fields, national anti-corruption programme, field offices in five major towns in the • they can ensure that enforcement, pre- preparation of analytical reports on the country. The Special Investigation Service vention and public education are imple- forms and causes of corruption, anti-cor- has signed several co-operation agree- mented in a coherent manner, ruption training of public officials, raising ments with different law enforcement and • they allow for concentration of skills public awareness … USKOK has its head- intelligence bodies and control institutions and resources, quarters in Zagreb and three sections in in Lithuania.
Conclusion
Following the acceptance of the United stitutions several complex questions have • how to ensure enough resources for Nations Convention against Corruption, to be answered, too: proper functioning of the institution(s)? countries will have to establish or maintain • what is with the “old” institutions which Existence and functioning of special- some kind of preventive institution(s) for were also dealing with suppression of ised anti-corruption institution(s) in the the implementation of national anti- corruption? country is the most visible and easily acces- corruption strategies. This element can sible sign on their real readiness to fight • how to establish fair and useful rela- also be used by attaching to such institu- corruption and of the existence of a real tions with other institutions in the anti- tion(s) other tasks, such as general preven- political will to suppress this phenomenon. corruption and related areas? tion, public education, awareness-raising However, if anti-corruption institutions do and – respecting obstacles mentioned • how to find qualitative and determined not get the resources needed, it is obvious above – even law enforcement. With the leadership and staff for the institu- that their establishment is just another establishment of new anti-corruption in- tion(s)? failure in the anti-corruption develop-
Creation and functioning of specialised bodies: Drago Kos 42 Project “Russian Federation – Development of legislative and other measures for the prevention of corruption” (RUCOLA 2) ments throughout the world and a tool for Octopus Interface meeting, Strasbourg, • OSCE: Best Practices in Combating the politicians in the country for their November 2003 Corruption , Vienna, 2005 short-term survival in the expanding anti- • Eser, Albin, dr. and Kubiciel Michael, • United Nations ODCCP and Naif Arab corruption demands of modern societies. dr.: Institutions against Corruption, A Academy for Security Studies: Global Comparative Study of the National Programme against Corruption , Sources anti-corruption Strategies reflected by Vienna, 2002 • Council of Europe: Anti-corruption GRECO’s First Evaluation Round , Stras- services – good practices in Europe, bourg, November 2004
Final report: Appendices, Volume 1 The issue of creating in Russia a specialised body/bodies responsible for the co-ordination of national efforts in the sphere of combating and prevention of corruption
Elena Panfilova General Director of the Centre for Anti-corruption Research and Initiative Transparency International – Russia
Summary
Up to this moment (December 2006) there ical will of the top government officials. As ing body will be as follows: developing a is no unified body in Russia, co-ordinating the issue of fighting corruption in Russia national anti-corruption strategy, conduct- activity on preventing and combating cor- has intense political nature, proceeding ing surveys on assessment the level of cor- ruption. Moreover, up to this day there is with the option of immediate establishing a ruption in Russia, preparing legislative no national strategy on combating corrup- unified independent anti-corruption body initiatives on bringing internal legislation tion in Russia and therefore, the goals and seems highly unlikely. In this situation it is in line with the requirements of the United objectives for the specialised anti-corrup- more feasible to set up a co-ordinating Nations Convention against Corruption tion body are not formulated. There are body, which will incorporate strategic and Council of Europe’s Criminal Law two main areas of activity in combating planning of activity within existing trends Convention on Corruption and with other corruption: punitive (General Prosecutor’s as well as will make preparations for the legislative initiatives aimed at anti-corrup- Office) and preventive (State Duma Com- actual creation of a specialised anti-cor- tion regulation of the activity of public au- mittee on combating corruption and Min- ruption body and national anti-corruption thorities and institutions as well as istry of Economic Development of RF). strategy laying the foundation for the oper- carrying out current anti-corruption mon- Establishing a specialised anti-corruption ation of the specialised body. Thus the itoring. body in Russia totally depends on the polit- main tasks for this temporary co-ordinat-
Introduction
The need to set up a specialised anti-cor- figures could not be fulfilled if the situation All these initiatives raise in one way or ruption body in Russia is not only due, but remains as it is. the other an issue of instrumental fight long overdue. And it is not so much At this point practically all more or less against corruption, but are absolutely because setting up such a body is a require- significant entities of public administration unco-ordinated and chaotic. It is hard to ment imposed by international anti-cor- in Russia have publicly recognised their in- imagine how, for example, an initiative of ruption documents ratified by Russia – the tention to take an active part in combating the Supreme Arbitration Court on manda- United Nations Convention against Cor- corruption. State Duma of the RF, Govern- tory declaration of gifts to judges could be ruption and the Council of Europe’s Crim- ment of the RF, General Prosecutor’s Office implemented without formalising a similar inal Law Convention on Corruption – and of the RF, the Supreme Arbitration Court requirement in regard to other categories therefore, sooner or later it will be estab- of the RF, Ministry of Economic Develop- of public officials in Russia. The root of this lished. The main problem is that the task of ment of the RF, Ministry of Finance of the problem, however, is that a national anti- active and meaningful fight against corrup- RF, etc., put forward their anti-corruption corruption strategy is still not developed in tion proclaimed by top national political initiatives. Russia, the priorities are not set, the plan of legislative and practical anti-corruption
43 44 Project “Russian Federation – Development of legislative and other measures for the prevention of corruption” (RUCOLA 2) measures is not worked out, the people ac- and specialised staff, as well as the training have effective means for gathering evi- countable for specific areas of activity are that such staff may require to carry out dence, protecting the persons who help not appointed; so in this situation any sys- their functions, should be provided. the authorities in combating corrup- tematic, effective and long-term fight Each State Party shall inform the Secre- tion and preserving the confidentiality against corruption on the national level is tary-General of the United Nations of the of investigations (Guiding Principle out of the question. It is interesting that in name and address of the authority or au- #3); accordance with the requirements of Ad- thorities that may assist other States – to promote the specialisation of ministrative Reform Concept for 2006- Parties in developing and implementing persons or bodies in charge of fighting 2008 approved by a Decree of the RF Gov- specific measures for the prevention of corruption and to provide them with ernment dated 25 October 2005, the corruption.” appropriate means and training to Russian regions and federal authorities are • Article 36 of the United Nations Con- perform their tasks (Guiding Principle currently developing and adopting regional vention against Corruption: #7). and departmental strategies on combating “Each State Party shall, in accordance with Thus there are some international legal corruption. The nature of this process is no the fundamental principles of its legal framework requirements for what a spe- doubt creative, but far from being in any system, ensure the existence of a body or cialised anti-corruption body should look way systematic. By the beginning of 2007 bodies or persons specialised in combating like and what it should accomplish. At the the country may face a paradoxical situa- corruption through law enforcement. Such same time the principle of “independence” tion when a strategy and plan for combat- body or bodies or persons shall be granted is stressed in the documents over and over ing corruption would exist in some regions the necessary independence, in accord- again. Also importantly enough, the neces- and agencies, but not on the national level. ance with the fundamental principles of sity to combine prosecution for corruption For this reason it is highly important to es- the legal system of the State Party, to be offences with a preventive function is re- tablish a national specialised body for com- able to carry out their functions effectively peatedly pointed out. bating corruption as soon as possible. and without any undue influence. Such The challenge for Russia now is to If we go back to the requirements of in- persons or staff of such body or bodies choose, adjusting these framework re- ternational anti-corruption legislation, the should have the appropriate training and quirements to the actual institutional and following points are noteworthy: resources to carry out their tasks.” political situation in the country, the most • Article 6 of the United Nations Conven- • Article 20 of Council of Europe’s Crim- adequate and effective option for a special- tion against Corruption: inal Law Convention on Corruption: ised anti-corruption body, where on the “Each State Party shall, in accordance with “Each Party shall adopt such measures as one hand, its activity would harmoniously the fundamental principles of its legal may be necessary to ensure that persons or fit into the existing legal and institutional system, ensure the existence of a body or entities are specialised in the fight against system and on the other – would be maxi- bodies, as appropriate, that prevent cor- corruption. They shall have the necessary mally independent from political disposi- ruption by such means as: independence in accordance with the fun- tion and would not turn out to be a fake. – implementing the policies referred to damental principles of the legal system of In order to evaluate how realistic that is, in article 5 of this Convention and, the Party, in order for them to be able to it is necessary to answer the following where appropriate, overseeing and co- carry out their functions effectively and questions: ordinating the implementation of those free from any undue pressure. The Party policies; shall ensure that the staff of such entities • What is corruption in Russia? – increasing and disseminating knowl- has adequate training and financial re- • Which counteraction strategy comes edge about the prevention of corrup- sources for their tasks.” out of a specific corruption situation in tion. • Resolution (97) 24 of the Council of the country? Each State Party shall grant the body or Europe on the twenty guiding princi- • What should be the structure and prin- bodies referred to in paragraph 1 of this ples for the fight against corruption: ciples of setting up a prospective spe- article the necessary independence, in ac- – to ensure that those in charge of the cialised anti-corruption body in Russia cordance with the fundamental principles prevention, investigation, prosecution based on the key tasks of a national of its legal system, to enable the body or and adjudication of corruption of- anti-corruption strategy; how do these bodies to carry out its or their functions ef- fences enjoy the independence and au- principles correspond to the current fectively and free from any undue influ- tonomy appropriate to their functions, situation with co-ordinating anti-cor- ence. The necessary material resources are free from improper influence and ruption efforts in Russia?
Situation with corruption in Russia as of 2006
During the last year many surveys on the Public Opinion Foundation would not help. Almost every third of our subject of corruption were conducted in (November 2006) compatriots (28%) came across extortion Russia. Below are the findings of the main on the part of the public servants in the last surveys on how the Russian citizens per- Corruption will never be rooted out of our few years; practically the same amount of ceive corruption as well as on the peculiar- country – so are assured 67% of Russians respondents gave them bribes. ities of corruption in the Russian business taking part in the last survey of Public In answer to the question, where the environment. Opinion Foundation. 79% of them believe need “to give” arises most frequently, that even raising salaries to the officials police and the customs are absolute leaders
Final report: Appendices, Volume 1 Project “Russian Federation – Development of legislative and other measures for the prevention of corruption” (RUCOLA 2) 45
(52%). 45% of Russians mentioned road in their region “high” or “very high” is only ising the least damaging types of corrup- police, 33% medical institutions, 26% Pros- 57% and the number of people assured that tion, such as tips, gifts to doctors and ecutor’s Office and courts, 21% military either there is no “local” corruption or it is teachers (in May 2006 it was 8%). registration and enlistment office, 18% ed- insignificant amounts to 10%. ucation, the same number – local authori- Another conclusion that can be drawn ties; 12% are sure that the major bribe- from the survey results is – the bigger the TI Global Corruption takers are federal level officials. It is note- respondents’ locality is, the more corrup- Barometer (November 2006) worthy that 70% of Russians condemn tion they perceive both in the country as a bribe-takers, but at the same time most of whole and their region in particular. For See Tables 1 to 7 on this and the following them would willingly accept bribes, should example, 58% of the population of Moscow pages . the opportunity arise. Those condemning and St Petersburg consider the level of cor- “the giver” are in the minority – 38%. Here ruption generally in the society as “very Table 1: To what extent does corruption in also a remarkable phenomenon is found: high”, whereas only 40%-46% people from Russia affect your and your family’s life? based on their own experience the citizens other cities and 32% respondents from Not at all 43 say that most often they bribed the doctors rural areas hold the same view. To a small extent 29 To a medium extent 17 (8% out of 27% of those giving bribes), but Within the last 2 years the share of Very much 9 not policemen (6%). But in a more abstract I don’t know 1 those who admitted that they often gave 0 10 20 30 40 50 sense – when the question is asked about money or presents to people for solving the situation in general, not about the per- their problem reduced from 23% to 17% (a Table 2: Does corruption influence business sonal experience, police firmly holds both similar survey was held by VTSIOM in climate in Russia? the first and the second place – law en- October 2004); at the same time the share It does not 9 forcement bodies as a whole (52%) and of those who did it on rare occasions grew Small influence 20 Medium influence 36 road police in particular (45%), leaving the from 33 to 37%. The number of those who Very strong influence 32 third place to the medical profession (33%). I don’t know 4 never gave bribes increased by 2%, from 0 10 20 30 40 50 Obviously, in everyday life people deal with 41% to 43%. As the survey showed, the policemen less frequently than with doc- poorer people had to give bribes more Table 3: Does corruption influence political tors. Nevertheless, they strongly believe often – 17% compared to 15% of people in life in Russia? that, if necessary, they will be able to pay good economic circumstances. However, themselves off a situation with police at any It does not 7 the share of those who never gave bribes is Small influence 8 time. also higher among low-paid population: Medium influence 28 The perspectives of combating corrup- 52%, compared to 37% of those having no Very strong influence 54 tion are vague: only 4% think that corrup- financial difficulties. I don’t know 2 0 10 20 30 40 50 60 tion decreased in recent years (57% are 43% of respondents believe that the sure of the opposite); the majority of main cause of corruption is greed and im- Table 4: In your opinion, how effective are people (67%) think that corruption in morality of Russian officials and business- the anti-corruption efforts of the authorities Russia is impossible to overcome, they men; 35% inefficiency of the state and law in Russia? have no faith in the traditional cure – in- imperfection; 18% low level of legal culture Very effective 3 creasing salary for the officials (79%). Ap- Effective 17 and a small number of law-abiding citizens Not effective 42 proximately half of respondents believe Authorities do not fight corruption 22 among the population. Two years ago Authorities give incentives for corruption 13 I don’t know 2 that the country’s leaders are unable to during a similar survey the people put law 0 10 20 30 40 50 solve the problem of corruption; another imperfection as number one cause: 40%, third consider them able, but not willing to whereas they seemed less concerned about The proportion of Russian citizens and do so. the morality of public officials and busi- their family members who have given nessmen in 37% of cases. bribes in the last year is respectively 8% and Despite the fact that fewer respondents VTSIOM (November 2006) 9%. doubt effectiveness of the Russian legisla- As the survey results indicated, only 1% of ture, many of them still see the improve- The Russians view the corruption level citizens live in blissful ignorance regarding ment of legal base as a solution to the in personal and family life as very low (1.9 such a widespread phenomenon as corrup- corruption problem – 38% (six months ago out of 4 points, where 1 equals zero level of tion; the same amount believe that corrup- in a similar survey it was 30%). At the same corruption). However, if the Russians were tion in the country is non-existent. The time the number of those in favour of asked not about the personal bribes, but survey revealed that 78% of respondents radical ways of fighting bribes decreased: about corruption in the areas they have to defined the level of corruption is as “high” 16% of respondents demand the introduc- deal with, the situation became clearer. and “very high”. The paradox is that the cit- tion of the death penalty for corrupt offi- They come across bigger corruption, when izens view some “global” national corrup- cials (in May 2006 it was 28%); property they deal with police (4 points out of 5 with tion that way, whereas the corruption confiscation for bribe-takers and their the average at 3.5). The Russians are also situation in their own region or city seems family members, 36% (earlier 39%); reduc- very much aware of corruption in legisla- to them much more favourable. The share ing the public service staff, 26% (earlier tive authorities, legal system and business of those considering the level of corruption 38%). 11% of respondents supported legal- (all at 3.9).
Creating a specialised body/bodies in Russia: Elena Panfilova 46 Project “Russian Federation – Development of legislative and other measures for the prevention of corruption” (RUCOLA 2)
Table 5: To what extent, in your view, are the following areas of life in Russia affected by corruption?
Political parties 3.8 Parliament 3.9 Law-enforcement bodies 4 Court system 3.9 Tax service 3.5 Business 3.9 Healthcare system 3.7 Mass media 3.5 Education system 3.7 Housing & utilities infrastructure 2.9 Registr. & licensing bodies 3.6 Army 3.5 NGOs 3.1 Church 2.4 0 1 2 3 4 5
Table 6: Within the last 12 months did you World Bank Survey 1 ronment. Table 8 summarises the results of or your family member have to give a bribe the survey held in 2004 and 2005 by sub- to a representative of the entities listed Analysis of EOS survey results conducted index “public institutions”. below? annually by World Economic Forum to The results of EOS surveys show that
Education system 74 contribute to the report “Global competi- 18 among the areas of greater concern for Court system 80 tiveness” provides additional general indi- 11 business are independence of court system Healthcare system 80 13 cators on the tendencies of development and protection of ownership . Due to the Law-enforcement bodies 77 18 for the public administration system and poor legal provision for ownership protec- Registering and licensing bodies 78 2 16 combating corruption in Russia. Under tion and instability of court system opera- Housing & utilities service 87 3 EOS survey expert evaluations by over tion their ratings keep going down Tax authorities 74 12 10 000 business leaders and entrepreneurs 0 50 100 (independence of court system – down by from 117 leading countries and countries 18 points; protection of ownership – down Table 7: How much was the last bribe that with developing economy are put together. by 20 points). A high level of organised you or your family member gave to a In 2005 over 450 enterprises in Russia took crime and corruption put an additional representative of the entities listed below? part in EOS survey. It revealed extremely burden on the enterprises (101 and 106 low ratings in some key parameters of places among 117 countries). Education system 4704.7 public administration and business envi- Court system 0
Healthcare system 2305.9 1. Administrative reform and reform of public reg- Law-enforcement bodies 2256.6 ulation in Russia. Removing potential sources for Registering and licensing bodies corruption. Analytical note. 1 October 2006. De- 4844.8 Housing and utilities service 949.4 partment for economy management and poverty re- 4882.1 Tax authorities duction Europe and Central Asia. Report #: 36157- 0 2000 4000 6000 RU. 2. http://www.weforum.org/site/homepublic.nsf/ Content/Global+Competitiveness+Programme.
Table 8: Index of macroeconomic competitiveness, World Economic Forum (2004-2005)*
Rating in 2004 (among Rating in 2005 (among Sub-index: public institutions, contracts, legislation 104 countries) 117 countries) Independence of court system 84 102 Effectiveness of legal regulations 80 95 Protecting ownership 88 108 Protecting right for intellectual property 84 105 Favouritism of public officials 85 106 Effectiveness of rule-making activity 63 80 Level of bureaucracy 89 90 Reliability of enforcement system 90 99 Pressure on business by organised crime 88 101 Quality of auditing institutions and accounting standards 81 89 Source: World Economic Forum
Final report: Appendices, Volume 1 Project “Russian Federation – Development of legislative and other measures for the prevention of corruption” (RUCOLA 2) 47
Table 8: Index of macroeconomic competitiveness, World Economic Forum (2004-2005)*
Rating in 2004 (among Rating in 2005 (among Sub-index: public institutions, contracts, legislation 104 countries) 117 countries) Role of taxes as incentives to work and to invest 73 81 Freedom of media 84 96 Source: World Economic Forum
* http://www.weforum.org/site/homepublic.nsf/Content/Global+Competitiveness+Programme%5CGlobal+Competitiveness+Report
Corruption as a problem for Table 10: Corruption tax. Share of bribes terprises consider the information about business operation (BEEPS data) in the annual receipts bidding rules and requirements insuffi- 2002 2005 cient and untimely and named lack of See Table 9. 2.0 transparency in this area as a “serious” or 1.8 “very serious” problem. OECD report also Table 9: Share of businesses reporting that 1.6 revealed that “access to relevant informa- corruption creates problems for their 1.4 tion is even more difficult in the regions as operation 1.2 a larger number (60%) of respondents from 2002 2005 1.0 60% the regions expressed their discontent with 0.8 50% 0.6 the current situation in this area”. Finally, 40% 0.4 according to the report, “over half of the 30% 0.2 enterprises taking part in the survey (57%)
20% 0.0 complained about lack of transparency in Rus CIS ECA 10% bidding procedures, especially among
0% transport companies (almost 75% of them Table 11: Frequency of bribe-taking. Share Rus CIS ECA consider this problem serious or very seri- of businesses reporting about high frequency of informal payments ous)”. This data is confirmed by BEEPS survey results, which show an increase in According to the preliminary BEEPS re- 2002 2005 40% the number of informal payments for re- sults, during 2002-2005 corruption was be- ceiving public contracts. coming more of a barrier for doing 30% business. Informal payments for receiving It is noteworthy that despite the fact 20% public contracts that according to subjective assessment the See Table 14. influence of corruption upon business in- 10% creased and BEEPS results by this indicator were negative, the situation improved 0% Rus CIS ECA judging by another key indicator – “cor- Survey National transparency rating of procurement 2 ruption tax”. According to the information Problems for business operation in provided by the enterprises, the amount of Russia: time dynamics bribes as share in the total annual sales de- By the end of 2006 the total market loss creased. As for the frequency of bribe- See Table 12. from procurement at overstated prices will taking (the third key indicator), there have reach about 650 billion roubles. At the same not been any significant rating changes Informal payments in different time the public agents’ losses will reach within 2002 to 2005. areas in time dynamics about 300 billion. roubles – more than 45% from the total amount. The weight-average See Table 13. Bribing price deviation, characterising discrepancy Table 13 graphically describes a situa- between market and actual procurement See Table 10 and Table 11. tion with informal payments in different prices is on the average 16.1%. areas – in time dynamics and compared to The scale and the impact that corrup- other countries of the region. From these Conclusion tion produces can also be measured by the charts it is obvious that in 4 areas the amount of informal payments in specific amount of informal payments have signifi- Corruption in Russia has systematic areas or by comparing with other potential cantly increased – both in time dynamics character. All institutions of public admin- problems for business operation as shown and compared to other countries. istration are affected by it, including law- below. Although some aspects that were One of the key problems identified as a enforcement agencies and court system. considered “problems for business opera- result of BEEPS survey is an increase in tion in 2002” now seem to stir less concern 1. Change in the amount of informal payments for bribing for receiving public contracts. 1 (e.g. macroeconomic instability), a nega- receiving public contracts is statistically correct. 2. Transparency Rating, 2006. National rating of tive tendency in the area of corruption re- According to the results of an OECD transparency in procurement. Moscow, November mains. survey conducted in 2004, over 40% of en- 2006, p. 66
Creating a specialised body/bodies in Russia: Elena Panfilova 48 Project “Russian Federation – Development of legislative and other measures for the prevention of corruption” (RUCOLA 2)
Table 12: Share of enterprises agreeing that the following aspects are a problem for their business operation
Violating contract terms Russia 2005 Unfair competition Russia 2002 Organized crime/mafia Street crime Corruption Court system operation Macroeconomic instability Political uncertainty Training and education Labour legislation Licensing, securing permissions Customs and trade regulations Tax administration Tax rates Land ownership and rent Availability of land lots Transport services Energy supply Telecommunications Cost of attraction Access to financing
0% 25% 50% 75% 100%
Table 13: Share of businesses reporting about high frequency of bribing
Russia 2005 Receiving public contracts Russia 2002
Licensing, securing permissions
Influencing the content of new laws, regulations, decrees, etc.
Access and provision of public services (energy and telephone)
Solving tax issues and charging taxes
Interaction with sanitary inspectors
Interaction with fire and construction inspectors
Interaction with ecological inspectors
Interaction with the customs/importing goods
Applying to court
0% 5% 10% 15% 20% 25% 30% Source: BEEPS-2005
Final report: Appendices, Volume 1 Project “Russian Federation – Development of legislative and other measures for the prevention of corruption” (RUCOLA 2) 49
Table 14: Share of companies reporting about high frequency of bribes for receiving public contracts
25% 2002 2005 20%
15%
10%
5%
0% Rus CIS ECA Source: BEEPS-2005
A short list of statements upon which a national anti-corruption strategy in Russia should be based
Based on the analysis of the general cor- enforcement agencies and the court • It is necessary to strictly follow the re- ruption situation in Russia, one can formu- system. quirements of Federal law # 94-ФЗ late some general statements, which could • It is necessary to establish an effective dated 21 July “On placing orders for the lay a foundation for a national anti-corrup- supervising system over the depart- procurement of goods, carrying out tion strategy and for a systematic approach ments both in public service and in law- jobs and providing services for state and to combating corruption and therefore – enforcement agencies dealing with municipal needs”. significantly increase effectiveness of anti- prosecution for corruption offences. • It is necessary to identify potentially corruption activity in the country. All these • It is necessary to expand the opportuni- corruptive areas in the activity of exec- statements can be divided into 3 groups: ties for civil society’s involvement in utive authorities, to put in place a prosecution for corruption offences, pre- combating corruption by creating a system of control over the public serv- vention of corruption offences and anti- monitoring system of media informa- ants in these areas and to develop and corruption education. Such a division not tion on corruption as well as making a introduce the methodology for evaluat- only covers all areas and spheres of com- “hot line” available for citizens to report ing corruption risk of positions in bating corruption, but is also completely in about corruption instances. public service. line with international practice of building • It is necessary to introduce mechanisms national anti-corruption strategies. for the institutions operating in poten- Establishing an effective tially corruptive areas of activity in system of preventing order to let them conduct on-going in- Establishing an effective corruption ternal anti-corruption diagnostics of system of prosecution for their own. corruption offences • It is necessary to set up a body co-ordi- • It is necessary to strictly follow the re- nating the activities on preventing cor- quirements of the Federal law # 79-ФЗ • It is necessary to set up a body co-ordi- ruption. The main tasks of this body dated 27 July 2004 “On public civil nating the activities of different agen- will be provision and co-ordination in service of the Russian Federation”. cies in the area of investigating the area of implementing measures for • It is necessary to set up and introduce a corruption offences and prosecution corruption prevention, developing an system of control over submitting dec- for corruption. anti-corruption policy, conducting larations of income and property by • It is necessary to bring the Russian leg- monitoring and evaluation of corrup- public and municipal servants, judges islation in compliance with the require- tion level and effectiveness of anti-cor- and representatives of legislative au- ments of the United Nations ruption measures as well as control over thority as well as on their economic and Convention against Corruption and the carrying through the anti-corruption financial incentives and conflict of in- Council of Europe’s Criminal Law Con- activities. terests. vention on Corruption, especially in • It is necessary to ensure that civil • It is necessary to establish a system of regard to defining the elements of cor- society institutes are actively involved on-going evaluation of corruption level ruption offences and initiating sanc- in corruption prevention activities. in the country aimed at measuring and tions for each one. • It is necessary to conduct an analysis of study the following: • It is necessary to take measures in order all legal regulations for corruption risk – commonly recognised corruptive prac- to implement the proposals contained assesssment. tice; in G8 Statement “Fighting High Level • It is necessary for executive authorities – mechanisms of corruptive deals; Corruption” in the RF legal system. to ensure full access of citizens to the in- – level of corruption; • It is necessary to proceed with top pri- formation on the activity of executive – structure of corruption; ority anti-corruption activities in law- authorities in Russia. – factors promoting corruption;
Creating a specialised body/bodies in Russia: Elena Panfilova 50 Project “Russian Federation – Development of legislative and other measures for the prevention of corruption” (RUCOLA 2)
– effectiveness of anti-corruption activi- and about combating corruption in ex- Conclusion ties. ecutive authorities. • It is necessary to organise activities Russia is tasked with developing a system- aimed at forming intolerance of corrup- atic national anti-corruption strategy and Establishing a system of anti- tion instances and explaining to the cit- while implementing it, a maximum corruption education izens, public servants, judges, number of interested stakeholders should representatives of legislative authority be involved in the activity of a specialised and businessmen the main points of in- anti-corruption body. They should possess • It is necessary to make the civil society ternational and federal legislation on experience in prosecution for corruption institutes take a more active part in combating corruption. offences, preventing corruption and anti- anti-corruption education, enlighten- • It is necessary to set up a system of corruption education. ment and propaganda. ethical education for public and munic- • It is necessary to inform the society ipal servants, judges and representa- about level of corruption in the country tives of legislative authority.
Structure and principles of forming a specialised anti-corruption body in Russia
Principles specialised anti-corruption body tutional and Supreme Arbitration should not be combined with holding a Courts of the RF, General Prosecutor’s As seen from the main points of the na- management post in any other public Office of the RF, RF Ministry for the In- tional anti-corruption strategy, a special- institution (law-enforcement agency), terior, RF Ministry of Justice, RF Minis- ised anti-corruption body will be given a and secondly – the specialised anti-cor- try of Economic Development, RF set of tasks, which, according to the exist- ruption body should be headed by a sole Ministry of Finance, Central Bank of ing institutional and legal system in Russia, manager. His (her) appointment should the RF, the Federal Service for Financial are currently under authority of different be affirmed by the Federal Assembly of Monitoring, Accounts Chamber of the public institutions of the federal level. The the RF (one or both Chambers) follow- RF, other ministries and departments as situation is aggravated by the fact that at ing representation by the President of well as specialised civil society institu- this point there is no unified body respon- the RF. tions and expert institutes. sible for organisation and control over the • Collegiality. Strategic planning of the • co-ordination. The legal regulation on public service (the functions of organisa- specialised anti-corruption body’s ac- establishing a specialised anti-corrup- tion and control over the public service are tivity and organisation of its daily oper- tion body should make provisions for also given to different departments). ation should be co-ordinated by a mandatory co-ordination of activity of In order to succeed in implementing all collegial entity (council, board) consist- public authorities, RF courts and law- aspects of the anti-corruption reform in ing of highly qualified representatives of enforcement bodies with the special- Russia, the activity of the specialised anti- public authority, law-enforcement ised anti-corruption body. corruption body should be from its very agencies, court system and civil society • Transparency. The activity of the spe- outset based on the following key princi- organisations. The principles of cialised anti-corruption body should be ples: forming such a collegial entity should maximally transparent. The legal regu- • Legitimacy. Establishment of a national be clearly defined by a legal regulation lation on establishing such a body specialised anti-corruption body on establishing a specialised anti-cor- should make provisions for accounta- should be legalised by a special legal act, ruption body. bility of this body to the public. It could specifying its objectives, functions, • Representation. A specialised anti-cor- take a form of mandatory annual de- structure, accountability, principles of ruption body should employ (both for tailed reports as well as monthly or forming and financing. This legal act management purposes and everyday quarterly progress reports. can be a Federal law of RF of a Decree of activity) on a full time basis the most • Independent financing. In order to the President of the RF. highly qualified personnel from the avoid pressure on the specialised body • Independence. It is crucial that special- federal ministries, departments, re- from any of the authorities, it is neces- ised body should be independent from gional authorities, specialised civil sary to stipulate a form of its financing, the executive authorities of the RF. Con- society organisations and expert insti- which would be maximally independ- sidering the specific character of politi- tutions having experience in combating ent – e.g., a separate fixed budget line. cal and government system in Russia it corruption. The legal regulation on es- • Utilising international experience. should be accountable only to the tablishment of the specialised anti-cor- While forming the specialised anti-cor- Federal Assembly of the RF or the Pres- ruption body should define its staffing ruption body it is necessary to thor- ident of the RF. principle so that it would include repre- oughly study, analyse and, where • One-man management. Considering sentatives of the President’s Adminis- possible and relevant, apply interna- the peculiarities of political and man- tration, RF Government, the State tional experience in establishing and agement practice in Russia it is neces- Duma of the RF, The Federation running such specialised bodies, espe- sary that firstly – managing the Council of the RF, the Supreme, Consti- cially in regard to ensuring independ-
Final report: Appendices, Volume 1 Project “Russian Federation – Development of legislative and other measures for the prevention of corruption” (RUCOLA 2) 51
ence, determining the number of way sacrificed for the sake of momen- essary to rely on the following key princi- employees, operational functions, etc. tary political interests. ples while forming a co-ordinating body: All the above-mentioned principles are Thus provisions should be made for • Legitimacy. It is necessary to adopt a in some way universal. However, in Russia setting up the specialised anti-corruption relevant legal act, e.g. Decree of the one more radical principle may need to be body in two stages: President of the RF. considered while establishing the special- • Establishing a temporary co-ordination • Representation. Representatives of all ised anti-corruption body: phasing. body, consisting of all the interested the stakeholders should by all means stakeholders (representatives of the participate in the activity of the co-ordi- The following factors make this princi- President’s Administration, RF Govern- nating body. ple necessary: ment, the State Duma of the RF, The • Publicity. The activity of the co-ordinat- • Firstly, the main forces of institutional Federation Council of the RF, the Su- ing body should be maximally transpar- anti-corruption activity are currently preme, Constitutional and Supreme Ar- ent for the society. Provisions should be scattered and consequently, the key bitration Courts of the RF, General made for community consultations re- issue now is not so much establishing a Prosecutor’s Office of the RF, RF Minis- garding fulfillment of its two key tasks. specialised body, but rather bringing to- try for the Interior, RF Ministry of Jus- Conclusion gether all the different and often contra- tice, RF Ministry of Economic dictory views on what this body should Development, RF Ministry of Finance, Establishing the specialised anti-corrup- be like: whether it should be a separate Central Bank of the RF, the Federal tion body in Russia should begin from es- independent institution (as, e.g., Ac- Service for Financial Monitoring, Ac- tablishing a temporary co-ordinating body, counts Chamber of the RF); whether it counts Chamber of the RF, other minis- which will make preparation for establish- should be built into the system of repre- tries and departments as well as ing the actual specialised anti-corruption sentative agencies of State power (e.g., specialised civil society institutions and body, will develop a national anti-corrup- the State Duma or the Federation expert institutes); tion strategy and – in the short-term per- Council), or, on the opposite, into the • Establishing the actual permanent spe- spective – will solve some burning anti- existing system of law-enforcement cialised anti-corruption body. corruption issues. agencies (e.g., General Prosecutor’s The main tasks the co-ordinating anti- Office, Ministry for the Interior, etc.); or corruption body should perform: Structure whether it should operate within the • preparation for establishing the special- President’s Administration. ised anti-corruption body, and Despite the fact that the actual develop- • Secondly, there is still no common un- • development of a national anti-corrup- ment of structure for the specialised anti- derstanding in Russia what the special- tion strategy. corruption body should become a subject ised anti-corruption body should do. Besides, among the tasks of the co-ordi- for the joint discussion within the tempo- The views on this subject range from: nating anti-corruption body would be: rary co-ordinating body, even now we “only prosecution for corruption of- • collecting and systematising the exist- could, based on the range of tasks it would fences” to “only anti-corruption educa- ing data about the level of corruption in be expected to perform, consider the tion for the society”. Considering that all Russia; option for its structure, which would best three sets of tasks (prosecution, preven- • conducting an additional profound comply with the goals of the national anti- tion and education) must be compre- survey on corruption in public authori- corruption strategy. hensively addressed to combat ties of Russia (federal ministries and de- The structure of the specialised anti- corruption in Russia effectively, it is partments, regional and municipal corruption body should reflect both the necessary to work on coming to some authorities); key principles of its activity (one-man agreements, involving all the stakehold- • collecting proposals from the federal management, collegiality, transparency, ers. authorities on ways and methods of etc.) and the three main areas of the na- • Thirdly, one cannot neglect the peculi- combating corruption and positive ex- tional anti-corruption strategy (prosecu- arities of a specific political period in perience in implementing departmental tion, prevention and education). Besides Russia. In 2007-2008 the country will and regional anti-corruption pro- the structure of the specialised body face Parliament and Presidential elec- grammes; should be in line with the federal system of tions. Obviously, a hasty and unco-ordi- • preparing legislative initiatives to bring the Russian Federation and make neces- nated approach to setting up a new the internal legislation in compliance sary provisions for co-ordination with body is out of he question, as its activity with the requirements of the United various entities within the Russian public (combating corruption in such a Nations Convention against Corrup- administration. country as Russia is by all means a polit- tion and Council of Europe’s Criminal The structure of the specialised anti- ically sensitive issue) could significantly Law Convention on Corruption as well corruption body should include 4 Directo- influence the outcome of both election as with other legislative initiatives rates: campaigns. One should bear in mind aimed at anti-corruption regulation of • Prosecution Directorate that the tasks of election campaigns and the activity of public bodies and institu- • Prevention Directorate the tasks of a systematic long-term fight tions; • Education Directorate against corruption are totally different • conducting current anti-corruption • Administration Directorate. by definition. The strategic task of es- monitoring. Prosecution Directorate includes: tablishing an effective anti-corruption Undoubtedly, just as with the actual • investigation departments (there could system in Russia should not be in any specialised anti-corruption body, it is nec- be several of them considering the size
Creating a specialised body/bodies in Russia: Elena Panfilova 52 Project “Russian Federation – Development of legislative and other measures for the prevention of corruption” (RUCOLA 2)
of the country; the exact number can • public procurement department (en- society institutions, business society, depend on different factors, e.g., based sures that the transparency principles mass media, etc.) on seven federal districts in the Russian in public and municipal procurement Administration Directorate includes: Federation), are observed; offers relevant consulta- • HR department (responsible for select- • co-ordination department (its task is to tions to the public and municipal au- ing and training personnel for the spe- co-ordinate efforts with law-enforce- thorities, etc.), cialised body), ment agencies), • corruptive risk evaluation department • information department (informs the • international co-operation department (conducts monitoring in the areas of society about what the specialised body (its task is to co-ordinate efforts with public administration, which are the does through mass media, its own web- foreign countries on the issue and re- most vulnerable to corruption; analyses site; also acts as press service), covery of assets, as well as on other as- legal regulations for corruptive risks, • financial department, pects), and etc.), • planning department (carries out daily • “hot line” department (it is in some way • monitoring and research department planning of the specialised body’s activ- a department working with the citizens’ (conducts national, regional and de- ity based on the information provided appeals, but with a wider range of func- partmental corruption surveys; moni- tions – it analyses the collected data by all the other directorates and depart- tors public opinion on the permanent ments; prepares its regular progress re- and, if necessary, passes it to investiga- basis, etc.) tion or any other departments; among ports), Anti-corruption Education Directorate its functions are also monitoring of • security and audit department (respon- includes: media publications, the actual opening sible for internal security of the special- of “hot lines” in Russian regions, etc.) • public programmes department (devel- ised body and for internal audit of its Prevention Directorate includes: ops and introduces educational pro- activity), • legal department (responsible for pre- grammes targeted at different sectors of • IT department (responsible for all the paring legal initiatives on the whole the society; prepares training pro- information and communication range of anti-corruption issues; it also grammes for schools, organises special systems within the specialised body). provides legal expertise, if necessary), campaigns, prepares media pro- The proposed structure is only a draft • public service department (exercises grammes, etc.), and can vary depending on the specific control over observing the legislation in • sectoral programmes department (pre- tasks and functions the specialised anti- the area of public service; collects and pares special programmes on ethics of corruption body will be expected to per- analyses the information provided by the public service, court ethics, ethics of form. The elements of this draft structure the public officials about their income, law-enforcement service, business are based upon functions and tasks, which property owned, etc.), ethics; offers special training to the seem the most relevant for Russia at this • conflict of interest department (collects public authorities of the federal, re- stage. On the other hand, this draft struc- information about the instances of con- gional and local levels, etc.), ture has proved effective in the countries flict of interest; offers relevant consulta- • communications department (respon- where the specialised anti-corruption tions to the public officials, etc.), sible for communications with civil bodies already exist and function actively.
Table 15: Draft structure of the specialised anti-corruption body
Head of the specialised body
Collegial entity (council, board) including representatives of all the interested stakeholders (15-20 members)
Prosecution Directorate Prevention Directorate Education Directorate Administration Directorate
Investigation department 1 Legal department Department of public pro- HR department grammes
Investigation department 2 Public service department Communications department Information department
Investigation department 3 Conflict of interest depart- Sectoral programmes depart- Financial department ment ment
Investigation department 4 Public procurement depart- Planning department ment
International co-operation Corruptive risk evaluation Security and audit department department department
co-ordination department Monitoring and research IT department department
“Hot line”
Final report: Appendices, Volume 1 Project “Russian Federation – Development of legislative and other measures for the prevention of corruption” (RUCOLA 2) 53
General conclusions
Corruption in Russia has systematic char- • systematising the existing data about • preparing a legal act, regulating the ac- acter: daily life of citizens and business, the level of corruption in Russia; tivity of the specialised anti-corruption public administration, political and court • conducting an additional profound body in Russia; systems are all affected by it. survey on corruption in public authori- • preparing a legal act defining a national The level of corruption in Russia is ex- ties of Russia (federal ministries and de- anti-corruption strategy. tremely high; the losses from corruption partments, regional and municipal A temporary co-ordination body are as much as billions of roubles. authorities); should include representatives of the Pres- ident’s Administration, RF Government, All sectors of public administration are • collecting proposals from the federal the State Duma of the RF, The Federation affected by corruption. It is necessary to authorities on ways and methods of Council of the RF, the Supreme, Constitu- pay a special attention to a high level of combating corruption and positive ex- tional and Supreme Arbitration Courts of corruption in law-enforcement agencies perience in implementing departmental the RF, General Prosecutor’s Office of the and social welfare system. and regional anti-corruption pro- RF, RF Ministry for the Interior, RF Minis- Russian citizens evaluate the effective- grammes; try of Justice, RF Ministry of Economic De- ness of the state anti-corruption efforts as • preparing legislative initiatives to bring velopment, RF Ministry of Finance, very low, also being pessimistic about the the internal legislation in compliance Central Bank of the RF, the Federal Service prospects of such an activity. with the requirements of the United for Financial Monitoring, Accounts There is no unified anti-corruption Nations Convention against Corrup- Chamber of the RF, other ministries and strategy in Russia, but there as a great need tion and the Council of Europe’s Crimi- departments as well as specialised civil for one. nal Law Convention on Corruption as society institutions and expert institutes. In Russia there is no unified co-ordina- well as with other legislative initiatives While establishing a permanent spe- tion centre of anti-corruption activity. aimed at anti-corruption regulation of cialised anti-corruption body in Russia, the Establishing a specialised anti-corrup- the activity of public bodies and institu- following principles should be laid in its tion body is urgently needed in Russia. tions; foundation: legitimacy, independence, In the existing situation, when the anti- • conducting current anti-corruption one-man management, collegiality, repre- corruption activity in its present form is monitoring; sentation, transparency, co-ordination, in- widely scattered throughout different min- dependent financing and using • developing proposals on the format, istries, departments and other public international experience. functions and membership of the spe- bodies; when neither the society, nor the The structure of the independent anti- cialised anti-corruption body; public authorities have a clear picture of corruption body should strictly comply the format, principles of forming and ob- • developing proposals on the national with the main principles of its activity and jectives of the specialised anti-corruption anti-corruption strategy; the main tasks of the national anti-corrup- body, it is necessary at this stage to set up a • conducting departmental and public tion strategy in Russia: prosecution for cor- co-ordinating anti-corruption body, which expert discussions of the relevant pro- ruption offences, prevention of corruption could solve the following short-term tasks: posals; offences and anti-corruption education.
Creating a specialised body/bodies in Russia: Elena Panfilova Corruption in education systems: an overview of problems and solutions
Quentin Reed Lead expert to the RUCOLA 2 project
Executive summary
This paper provides an overview of corrup- system that may be affected: policy deci- formula-based funding system, objective tion in education systems, based on a sions and school accreditation, financing of standards for assessment at all levels and in review of existing literature and the au- educational institutions, procurement, the all areas of the education system, and an thor’s own insights. After underlining the personnel system, and the educational adequate control framework in the widest massive impact that it can have, corruption process. It summarises the policies and sense. Where relevant, the paper uses ex- in education is broken down according to measures that can be implemented to min- amples and raises issues that have been the main components of the educational imise it, and identifies as key issues a identified as important in Russia.
Introduction
Although corruption in education is a • Equal access to quality education is quality education, lower the quality of pro- subject that has been relatively neglected defined by the United Nations as a fun- fessional elites, and establish corruption as in the existing literature and research, damental human right. an essential and acceptable behavioural surveys indicate that in many countries ed- • Education is the main channel through norm for pupils and students – thereby ucation is one of the areas worst affected by which a country’s professional elites are building it into the fabric of society. corruption. This should make corruption constructed. Education systems are huge complex in education one of the key targets of the • Education is probably the most impor- organisational structures, in which corrup- anti-corruption community and interna- tant factor in the establishment and tion can take many different forms. Rather tional community, for several reasons: maintenance of norms of public ethics, than covering all of these forms in detail – • Education is the first or second largest as one of the key tasks of education is to an impossible task in a contribution of this component of the public sector in most instil values and ethics. size – this paper attempts to provide a clear countries, both in terms of financial and Corruption in the education sector overview, clarifying the main issues and human resources consumed. therefore may lead to major misallocation pointing at the main solutions. of public funds, undermine equal access to
Types of corruption in education
This section outlines the main types of cor- Policy decisions and school vestment and alters the composition of ruption that occur in education systems, accreditation public expenditure, “specifically by reduc- divided into five main areas: policy deci- ing the share of spending on education.” sions, financing, procurement, personnel, Corruption can distort a range of decisions Second, major investment decisions and the educational process itself. affecting the educational system. First, re- may be corrupted. This may happen for search indicates that corruption reduces example where a decision to build a school the share of public expenditure allocated to or on its size is taken on the basis of the po- education. Research carried out by Paulo litical or personal gains of an individual Mauro indicates that corruption lowers in- public official or legislator (for example in
54 Project “Russian Federation – Development of legislative and other measures for the prevention of corruption” (RUCOLA 2) 55 return for bribes from construction com- from 1991 to 1995 in Uganda only 13% of Regarding supply contracts, Heynemann panies) rather than on objective needs- the per-student central government grant notes that corruption may occur particu- based criteria. Conversely, decisions to sell to schools actually reached them. This larly in the design, manufacture and distri- off school assets may also be motivated by problem seems much more likely to afflict bution of textbooks and other educational corrupt exchanges; decisions by many less-developed countries than European materials. 2 schools in the United Kingdom in recent (including post-communist) countries, years to sell off sports facilities and playing however. Personnel fields to commercial developers have Third, schools may provide inaccurate raised questions about whether financial information to central authorities in order As Osche notes, up to 90% of educational considerations (even if not corruption) to secure a larger portion of funds than budgets are taken up by salaries, and a have been given priority over the educa- they are entitled. The employment of recent study shows that in the vast majority tional needs of children. ‘ghost’ (fictive) teachers or exaggeration of of countries salaries account for over 70% A third type of corruption of educa- data on numbers of classes or children are of the education budget. 3 The education tional policy decisions may be seen in cor- typical examples. In general, the more sector generally employs more staff than ruption in the accreditation of educational complicated are the criteria for determin- any other component of the public sector. institutions. In particular, educational ing budget allocations for schools, and the In this situation the way in which teachers systems in post-communist transition less effective is supervision and inspection, are recruited, placed and promoted is of countries have seen a rapid increase in the more vulnerable will be the budget al- fundamental importance to the function- private educational institutions. However, location process to corruption. This is a ing of the education system. systems of accreditation have remained key theme taken up in Section III on solu- According to Osche, outdated and based on extensive assess- tions to restrict corruption. The crucial factor in recruitment, appoint- ment criteria (such as assessment of school Fourth, management of funds that have ments, etc. is frequently not the qualifica- quality) that may increase the ability of of- been received by a school may also be tion and performance of candidates, but ficials responsible for accreditation to subject to corruption involving teachers bribes paid, family links or friendship, alle- extort bribes. Between 1991 and 2003, in and staff responsible for handling and/or giance to a certain political party, ethnic Russia 392 private higher educational insti- spending money. Teachers or administra- group or religious community, or gender. 4 tutions were created, but only one-third of tive staff may also siphon off money, espe- Corruption may occur not only to influ- them were accredited by the Ministry of cially if cash payments are often used and ence the recruitment or career decisions of Education. 1 poor records of financial transactions are school heads and administrators, but also kept. to influence the activities of inspection Financing bodies, one of whose functions is to ensure Procurement that teachers perform their duties ade- All states with educational systems must quately. Bribery of inspectors to overlook address the challenge of how to allocate As in any other sector where significant teacher absenteeism (a systemic phenome- money (generally from a central ministry amounts of money are spent on public con- non in many less-developed countries) or budget) to schools in order that it is used tracts, procurement is a component of the to ignore complaints are a natural counter- efficiently and effectively. There are several education system vulnerable to corruption. part of corruption that fills teaching posi- obvious risks of corruption: Although procurement is intimately tions with persons who are not the best First, many reports stress the impact of related to the financing of education, it is candidates. low teacher salaries in providing a context conceptually a separate issue as it involves in which corruption may flourish. The decisions on how to spend funds that have World Bank has noted a massive fall in the already been allocated. Much procurement The educational process proportion of GDP devoted to education in is likely to be handled at the level of a Last but not least, a fundamentally impor- Russia, by two-thirds in 1990 to 3 per cent central education ministry, although some tant area of corruption in education – and in 2000. Although the trend has reversed may be handled at lower levels, such as a the one that probably affects pupils/stu- since 2000, the Bank still appeared in 2004 regional education authority or even a dents most directly, is corruption within to regard salaries as a key problem within school itself. the educational process itself. Stated very the system for financing education (Can- There are two main types of procure- generally, such corruption occurs at school ning 2004). ment relating to education: public works level where admission, quality or quantity Second, as funds are allocated from the contracts (construction of schools or other educational facilities) and supply contracts of education, test results and exam results centre to regions, educational authorities are determined or influenced by criteria and schools, they may be siphoned off by for educational textbooks and other educa- tional materials. other than professional standards, merit officials or politicians. Reinikka and Svens- and ability. son describe how public expenditure Concerning works contracts, corrupt Such corruption may be divided into tacking surveys in a number of countries investment decisions may be accompanied the following types: have identified dramatic differences by corrupt processes for the selection of • Students are admitted to school in between funds allocated by central govern- construction companies to realise such in- return for cash or other benefits pro- ment to schools, and the amount of funds vestments. In southern Italy, for example, appalling construction quality that led to actually reaching schools. For example, 2. Heynemann (2002), pp. 8-10. collapsing roofs in a number of schools 3. Osche (2004), p. 9. 1. Canning (2004), p. 15. were attributed to systematic corruption. 4. Osche (2004), p. 12.
Corruption in education systems: an overview: Quentin Reed 56 Project “Russian Federation – Development of legislative and other measures for the prevention of corruption” (RUCOLA 2)
vided to teachers, instead of on the basis • Examination papers or questions are dents and pupils receiving after-school of clear objective criteria. Educational provided to pupils/students in advance tutoring in countries such as Brazil, institutions as entities may also provide in return for bribes. Such examination Malaysia and Morocco. places to applicants in return for finan- papers may also be for entrance to a The World Bank notes in a recent cial contributions to the institution as higher educational institution (as was report that in Russia, “Inequalities are an entity. the case in a scandal involving the compounded by a rise in privately-fi- • Students or parents provide cash or leakage of entrance examinations at nanced education, and worsened further other benefits to teachers in return for Prague’s prestigious Legal Faculty in the by an increasing incidence of informal pay- favourable marks for work, in school late 1990s). ments”. 1 The same report also implies that tests or examinations. In systems where • Teachers provide paid private tuition to there have been problems with corruption the design and marking of examinations students outside school hours (or even in school-leaving examinations and notes is decentralised, or where oral examina- within school hours) as a condition for that one of the aims of introducing a tions are common (the case of post- receiving good marks or standard quan- Unified National Examination for school communist countries) such corruption tity and quality of teaching within graduation is to reduce corruption. is greatly facilitated. school. Poisson and Hallack cite figures showing massive proportions of stu- 1. (Canning, 2004), p. 23.
Policies to restrict corruption in education
Policies to prevent corruption in education Another solution – for example found in system are open to public scrutiny, and that may be divided into two main categories: Czech law – is to make bribery laws apply the process of budget approval is designed general and sector-specific. General poli- to actions by any person in a position of re- to minimise the potential for undue influ- cies are policies and measures to reduce sponsibility who acts – in return for unau- ence. In Federal systems – such as in the corruption that apply not only to the edu- thorised benefits – in a way that is contrary Russian Federation – the task of making cation sector; sector-specific policies are to the public interest, whether s/he is a budget procedures transparent and effec- those that are specifically designed for and public official or not. tive is a more challenging one, and the applied in the education sector. World Bank among others has noted that Public procurement regulation Russia “has not yet developed a satisfactory General policies Procurement in education is in principle and equitable system of fiscal federalism, the same as procurement in any other area, which is particularly urgent for all social 2 There are three main types of general poli- and ensuring it functions with as little cor- services, including health and education.” cies that are important also in the educa- ruption as possible means pursuing the A very useful instrument for assessing tion sector: legislation to tackle bribery and same policies and measures as are needed the integrity of education budgets are abuse of official powers, public procure- for procurement in general. These will not Public Expenditure Tracking Surveys ment regulation and budget procedures. be covered in detail here as they are the (PETS). PETS gather information on the subject of a separate report being submit- funds allocated by central government to Legislation to tackle bribery and ted for this project. An important issue to education and compare this to information abuse of powers note is that procurement in education may from lower levels of the system – regional Officials in government institutions re- raise specific challenges, in particular the education authorities and schools them- sponsible for managing and financing the fact that price may often not be the most selves – to assess to what extent the funds education system must be subject to clear important criteria for allocating contracts. allocated actually reaches their destination. laws against bribery, with appropriate This is particularly the case for textbooks Reinikka and Svensson (2003) provide a sanctions for violations. Moreover, teach- and other teaching materials, where it is useful account of PETS and their use in ers and administrative staff in educational vital for clear quality standards or criteria specific countries. institutions are in principle public officials, to be defined for procurement purposes. while teachers in private educational insti- Budget procedures tutions perform functions that are of vital Specific policies importance to the public interest. Given the importance of education as a The issue of bribery of teachers is of proportion of public budgets, general Accreditation particular importance. It is not uncommon budget procedures will have a major Corruption in the process by which educa- for bribery legislation to apply only where a impact on the potential for corruption in tional institutions are accredited is likely to public official is involved, and for teachers budget decision-making. The issue of have a direct effect on the quality of educa- not to be included – or not be clearly in- general budget procedures is separate – al- tion institutions themselves, as objective cluded – in the definition of what is a though clearly interacts with – the specific criteria are pushed aside by bribes. Cor- public official; this was the situation at least system of financing education that is ruption in accreditation is a problem that until recently in Poland, for example. chosen by a country. The latter is covered applies primarily to private educational in- Where bribery only applies to exchanges under specific policies in the following stitutions that want to enter the system, at involving a public official, it is therefore subsection. both secondary and higher education level. important for teachers to be included In particular, it is important that major clearly in the definition of public official. decisions on investment in the education 2. Canning (2004), p. 24.
Final report: Appendices, Volume 1 Project “Russian Federation – Development of legislative and other measures for the prevention of corruption” (RUCOLA 2) 57
Canning (2004) suggests that one of the which can only spend the money line-by- research on formula funding that the fol- main reasons for corruption in accredita- line on the items for which it is allocated. lowing conditions are of special impor- tion in post-communist countries is that Russia (as of 2004) still operated essen- tance if formula funding is to the criteria for making decisions on tially with the model outlined above. Ac- unambiguously reduce corruption: 3 whether to accredit a school are too exten- cording to the World Bank, “the resulting • School principals and governing boards sive. In particular, she notes in a discussion budget allocation process, which involves are sufficiently trained in financial pro- of higher education institutions that “qual- bargaining and discretion, is nontranspar- cedures, and there must be a detailed ity” beyond the fulfilment of certain essen- ent, unpredictable, cumbersome, and … manual of financial procedures. tial criteria should not be controlled at the results in inflexible and inefficient use of • Governing boards and/or school coun- stage of accreditation of schools. This ar- scarce resources.” 2 Funding determined in cils must be sufficiently well-informed gument could be applied also for primary this way creates a large area for schools to about the funding process to be able to and secondary education, the logic being attempt to “inflate” various inputs – for detect fraud or corruption. that quality is logically best monitored by example by overstating the size of classes, • There must be standard national school inspection bodies when a school is buildings, etc. formats for financial reporting. already running. • There must be regular internal moni- Formula-based funding toring by a trained person independent Financing and audit Increasingly, governments finance educa- of the school head. tion through formula funding, defined by Two main areas of education financing • There must be thorough and regular ex- Levacic, Downes et al as “a rule for allocat- policy are of crucial importance in influ- ternal audit, either by public audit ing resources to schools that is universally encing the vulnerability of the system to bodies or private auditors independent applied to all schools of a given type within corruption. The first is simply the level of of the school. an educational jurisdiction.” This means financing. Where education is allocated in- • Statistics submitted by schools that are that a school receives funds based on a for- sufficient resources, one likely result is a used for the funding formula must be mula, that is itself mostly derived from the decrease in equal access to quality educa- subject to external checks. number of pupils and their age; hence, tion – and, often, an increase in corruption • The details of formulae for distribution formula funding is often synonymous with as bribery may become an important of funds must be explained in enough ‘per capita funding’. Once the school re- means for securing increasingly scarce detail and clearly enough to enable ceives the funds, it then controls some or places. In addition, the effect on teacher greater understanding both within and all spending decisions. Relating funding to salaries is likely to be disproportionate, as outside the school and among both pro- the number of pupils/students means that other items of spending are less easy to fessionals and non-professionals. governments determine funding on an ob- reduce, and a fall in salaries is likely to in- Russia has been experimenting in a jective basis that is available and under- crease the incentives for teachers to engage small number of regions with formula standable to the public. If information on in corrupt practices. Russia still lags behind funding. However, according to the World school performance is readily available, other central and eastern European coun- Bank the results have been unclear, there is this also makes schools much more ac- tries in the proportion of GDP spent on ed- huge work to be done on improving the fi- countable to parents. In particular, it also ucation. nancing system, and – crucially – there reduces the space for the provision of in- need to develop adequate regulatory The second and fundamental issue is correct information in order to secure frameworks and national systems of test- the method by which schools and educa- more funds. Last but not least, schools ing, monitoring and reporting – both of fi- tional institutions are financed. Two main have an incentive to use funds more effi- nancial data and school test and types of funding exist, 1 with countries oc- ciently, as they make spending decisions examination results. 4 cupying various positions on a continuum themselves and are rewarded for saving between them: money in one area – not the case under an Personnel systems 5 input-based financing system. In order to minimise corruption of the per- Input-based treasury funding Best combination: formula funding + sonnel system, it is first and foremost vital Traditionally, education systems in Europe sound financial procedures and audit to establish clear, objective and transparent have tended to allocate resources from a criteria and procedures for teacher recruit- Formula funding has become a standard central education ministry on the basis of ment, placement, promotion and remuner- model in Western Europe, and there are estimates of “inputs” submitted by schools ation. Second, educational institutions strong arguments for why it will lead to a – such as average class size, number of should have in place established standard more efficient allocation of funds. The classes per topic, number of buildings etc. procedures for recording and evaluating consensus among education experts is that If the estimates are in excess of the educa- the performance of teachers. Third, gov- formula funding with decentralised control tion budget allocated, a compromise would ernance institutions (see below, page 59) over spending is also likely to lead to less have to be reached based on negotiation should be sufficiently representative of all corruption, at least corruption involving with schools or simply cutting the funds al- stakeholders – especially parents – that central bureaucrats. Levacic, Downes et al. located to a percentage of the total esti- they can play a role in detecting teachers argue that it will reduce such corruption, mate. The funds would then be allocated who do not perform; such bodies should but also create more space for small-scale on a monthly basis directly to schools, have the authority to either address such corruption in the use of funds at school 1. This section is based on material from the fol- level. They conclude on the basis of their 3. Levacic R., Downes P. et al. (2004), p. 144-145. lowing: Levacic R., Downes P. et al. (2004); Canning 4. Canning (2004), p. 25, 39. (2004), Appendix 1. 2. Canning (2004), p. 24. 5. Osche (2003), pp. 12-13.
Corruption in education systems: an overview: Quentin Reed 58 Project “Russian Federation – Development of legislative and other measures for the prevention of corruption” (RUCOLA 2) problems directly (for example by initiating Russia has taken important steps Council of England, together with its State- sanctions) or notify them to the appropri- towards standardising examinations, in- ment of Professional Values and Practice ate inspection body. troducing a Unified National Examination for Teachers. 3 (EGE) in 2001 for pupils completing The Code of Conduct contains a strong Admission procedures general education. According to the World and clear statement of both core values and Similarly as for the recruitment of teachers, Bank the examination has spread rapidly practices – including corrupt ones – that corruption in the admission of pupils/stu- across Russia, and was taken by around 70 are incompatible with such values. dents will be minimised where criteria and per cent of all graduating students in 2004. 1 procedures for admission are clear, objec- However, the same report indicated that Restrictions on private tutoring tive and transparent. In primary and sec- most universities were continuing to Private tutoring is a phenomenon that is ondary education, the full implementation design their own entrance examinations. often linked with corruption, for example of a formula funding system (see above, Fi- being paid for by parents or students as a Gifts and contributions nancing and audit , page 57) is likely to condition for receiving good marks or help, as it will provide more resources to In addition to the establishment and imple- other treatment to which pupils or stu- schools which become more popular, mentation of clear objective criteria for ad- dents should be entitled anyway. Although thereby helping to satisfy demand for mission and examination, there should be there is little information available on places at good schools and reducing the clear guidelines for the acceptance of gifts whether this is a problem in Russian pressure for corruption to determine by teachers from pupils or parents (see primary and secondary schools, the World which pupils are admitted. Admission to below, Professional standards and codes of Bank expressed the opinion in 2004 that in higher education institutions should be conduct ), and also for the acceptance of fi- higher education institutions in Russia, “In based primarily on the criteria of standard nancial contributions by educational insti- addition to fees paid by students to private nationwide examinations (see above, tutions. Such guidelines should include the and some public institutions, students Testing and examinations , page 58). In obligation to of educational institutions to often find themselves liable for feed for general, the potential for corruption in ad- publish financial contributions they re- ‘unofficial’ tutoring…”. 4 Again, the very low missions processes will also be reduced if ceive. Failure to mandate publication of salaries received by teachers may encour- assessment and decision-making is con- contributions will facilitate the awarding of age such practices. In addition, it may be ducted by more than one person – for ex- places in return for parental financial con- worth considering specific restrictions on ample, a panel of teachers. tributions, and has done so even in some of private tutoring, for example the registra- the most highly respected educational in- tion of tutors or prohibitions on private tu- Testing and examinations stitutions. toring by teachers of students they already Testing and examinations are a key point of Professional standards and codes of teach in school. vulnerability to corruption within the edu- conduct cation system. In order to minimise the Complaint mechanisms and possibility of teachers allocating marks in A vital component of any education system feedback return for unauthorised benefits, the fol- is the existence of clear and widely dissem- As in other public organisations, it is im- lowing principles should be applied in the inated professional standards. Institutions portant for schools to have established design of tests and examinations. responsible for administering the educa- mechanisms for complaints to be submit- tion system in advanced countries invaria- • Key tests and examinations at primary ted by parents or pupils/students. Com- bly produce and endorse a set of or secondary school – in particular plaints may concern the conduct of professional standards and/or code of leaving examinations – should be teachers or school management and fi- conduct that explicitly defines both the standardised nationally. nancing. There are three especially impor- positive core values teachers should repre- • Important examinations should ideally tant aspects of complaints processes: sent and pursue, and practices from which be based on more than one type of as- • There must be a body that is independ- they should refrain. The value of such sessment – for example a combination ent of those that are the subject of com- standards and codes in creating a culture of written exam papers, multiple plaints, for example a representative and norms that are resistant to corruption choice, course work assessment and School Council or regional education should not be underestimated. As the Dec- oral examination where appropriate. authority. In the case of financial laration of Professional Ethics developed wrongdoing, it is also necessary to facil- • The use of oral examinations – a very by Education International (the World itate the filing of complaints to inde- widespread method in former commu- Union of Teacher Associations) states, pendent audit bodies. nist countries – should be restricted, …[the] raising of consciousness about the and ideally should be used only for sub- norms and ethics of the profession may 2. E.g. Declaration of Professional Ethics devel- jects where oral examination is neces- contribute to increasing job satisfaction oped by Education International, adopted in 2001. sary (languages are the obvious See http://www.ei-ie.org/worldcongress/docs/ among teachers and education personnel, WC03Res_DeclarationProfEthics_e.pdf#search=% example). to enhancing their status and self-esteem, 22Education%20International%20Declaration% • The criteria and procedure for marking and to increasing respect for the profession 20of%20Professional%20Ethics%22. 3. See General Teaching Council for England: examinations should be clearly laid out 2 in society. Code of Conduct and Practice for Registered Teach- and binding. Where possible, exam An excellent example of such docu- ers, http://www.gtce.org.uk/shared/contentlibs/ marking should be carried out by au- ments is provided by the Code of Conduct 92511/92601/conductcode.pdf; The Statement of tonomous examination agencies, as is Professional Values and Practice for Teachers, http:/ and Practice of the General Teaching /www.gtce.org.uk/shared/contentlibs/92511/92572/ the case for example in the United statement_of_values.pdf. Kingdom. 1. Canning (2004), p. 3. 4. Canning (2004), p. 17.
Final report: Appendices, Volume 1 Project “Russian Federation – Development of legislative and other measures for the prevention of corruption” (RUCOLA 2) 59
• The complaints process must be subject firmed, the body conducting proceedings • in some cases, participating in discipli- to clear rules and procedures, with needs to have the authority to impose ade- nary proceedings against teachers. complaints recorded in writing and quate sanctions. filed. School (or university) councils are also Governance • Where complaints concern misconduct seen by the expert literature as an impor- by teachers, it is important for com- For any of the policies and measures de- tant mechanisms to provide a buffer plainants to be protected from reprisals scribed in the subsections to be imple- between the state and the final provider of against the pupil/student filing the mented properly, it is vitally important that education, and this buffer may be of partic- complaint (or whose parents filed the schools and universities have adequate ular importance in countries where the complaint). governance structures. While authority for state administration is politicised and the Likewise, it is important for whistle- school management rests with the head, education sector is vulnerable to staffing blowing by educational stuff on miscon- governance structures exist mainly to carry on the basis of political loyalty rather than duct of school management to be afforded out the following tasks: merit. explicit protection. • provide representation to all local stakeholders, in particular teachers, Inspection bodies Disciplinary procedures and parents, other education professionals sanctions and other civil society organisations or In order to supervise whether schools fulfil Often, the first step in addressing suspi- groups (for example representing chil- the standards to which they are obliged, cions of misconduct (including corrupt be- dren with special needs or ethnic mi- European have established professional haviour) are internal disciplinary norities); school inspectorates, responsible for car- proceedings within the education institu- • make important or strategic decisions; rying out regular checks. In post-commu- tion. It is important that such proceedings • to provide oversight both of schools’ fi- nist countries school inspectorates tend to are codified, conducted by a sufficiently nancial management and the conduct be weak and focused on checking formali- broadly representative body (for example of teachers; ties rather than the substance of school ac- the School Council or Schools Inspector- • in some cases, receiving and processing tivities. It is vital to provide inspectorates ate). Likewise, where wrongdoing is con- complaints by parents; with sufficient resources.
Conclusion: the need for a comprehensive approach
Corruption in education is not a one-di- the implementation of other policies listed regard to Russia the following statement by mensional phenomenon, but takes many here; a clear example is formula funding, the World Bank: different forms affecting different compo- which will not yield the expected benefits Unfortunately, Russia has a long heritage of nents of the education system. A funda- without an adequate financial control announcing education reforms, doctrines, mentally important lesson from the framework. In addition, the sheer size of concepts, and new regulations, but leaving experience of advanced countries in build- education systems means that reforms are the entrenched practices within the system ing educational systems is that none of the a huge task and must be carried out over a virtually untouched. That can be avoided policies and measures outlined in this long period, with a systematic vision and this time only if the implementation of new paper will be effective alone; each of them political consensus. It is worth noting with ideas is properly planned and institutional- requires a certain context, and specifically ised.
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• Canning M. (2004), “The Modernisa- www.unesco.org/iiep/PDF/ • Levacic R., Downes P. et al. (2004), “For- tion of Education in Russia: Outstand- Forum15.pdf mula funding of schools, decentralisa- ing Issues”, World Bank Policy Note, tion and corruption: a comparative • Heynemann S. P. (2002), “Education Moscow. http://web.worldbank.org/ analysis”, International Institute for Ed- and Corruption”, Paper presented at the WBSITE/EXTERNAL/COUNTRIES/ ucational Planning, http:// Annual Meeting of the Association for ECAEXT/ www.unesco.org/iiep/PDF/pubs/ the Study of Higher Education, Sacra- RUSSIANFEDERATIONEXTN/ F167.pdf mento, California, July 2002, http:// 0,,contentMDK:20531498~pagePK:141 • Mauro P., “The Effects of Corruption on www.politika.lv/polit_real/files/lv/ 137~piPK:141127~theSitePK:305600,0 Growth, Investment and Government EducCorrupt.pdf 0.html Expenditure: A Cross-Country Analy- • Hallak J. and Poisson M. (2003), “Ethics • Karim S. et al. (2004), “Report Card in sis”, http://www.iie.com/publications/ and corruption in education”, Interna- Bangladesh, Quality Schools Pro- chapters_preview/12/ tional Institute for Educational Plan- gramme in Mexico, http:// 4iie2334.pdf#search=%22The% ning (IIEP), UNESCO, http:// unesdoc.unesco.org/images/0013/ 20Effects%20of%20Corruption%20on% 001390/139031e.pdf 20Growth%2C%20Investment%
Corruption in education systems: an overview: Quentin Reed 60 Project “Russian Federation – Development of legislative and other measures for the prevention of corruption” (RUCOLA 2)
20and%20Government% • Reinikka R. and Svensson J. (2003), • World Bank, “Higher education gov- 20Expenditure%20-%20Mauro%22 “Survey techniques to measure and ernance and management: A compara- • Meier B. (2004), “Corruption in the Ed- explain corruption”, World Bank Re- tive review and policy options for ucation Sector: An Introduction”, http:/ search Paper 3071, http://www- Russian Federation, Policy Note, /admin.corisweb.org/files/ wds.worldbank.org/external/default/ Moscow, 2004, http:// MeierB2004Corruption_Education_ main?pagePK=64193027&piPK= web.worldbank.org/WBSITE/ Intro1096553141.doc 64187937&theSitePK=523679& EXTERNAL/COUNTRIES/ECAEXT/ • Ochse K.L. (2004), “Preventing Corrup- menuPK=64187510&searchMenuPK= RUSSIANFEDERATIONEXTN/ tion in the Education System: A Practi- 64187511&theSitePK=523679& 0,,contentMDK:20531498~pagePK:141 cal Guide”, GTZ, Eschborn 2004, http:// entityID=000094946_ 137~piPK:141127~theSitePK:305600,0 www.gtz.de/de/dokumente/en- 03062104301451&searchMenuPK= 0.html corruption-and-education.pdf 64187511&theSitePK=523679
Final report: Appendices, Volume 1 Corruption risk assessment of the Russian legislation regulating education
Larissa Sannikova Senior scientific expert, Institute of State and Law, Russian Academy of Sciences, Candidate of Law
I.
Corruption in education has grown to (VTsIOM) and INDEM Foundation in system and improving its quality. Accord- such an extent within the last decade, that 2005, indicate that the population consid- ing to the Minister for Education and it greatly troubles the Russian society. The ers it to be a threat to Russian national in- Science Mr A. Fursenko, during the year results of surveys on corruption in the ed- terests. The overwhelming majority of around 2 billion US dollars was handed ucation system, conducted by the All respondents – 81.3% believe that corrup- over in the Russian higher education insti- Russian Public Opinion Research Centres tion blocks the development of education tutions.
II.
The following instances of corruption in • bribes or illegal demands of extra pay- • misuse of funds collected from parents the education system can be considered to ments for passing (resitting) exams; and students for the needs of educa- be the most typical: • misuse (namely, misappropriation) of tional institutions; • bribes for entering educational institu- budget funding allocated to educational • bribes for issuing state licences and ac- tions; institutions; creditation of educational institutions.
III.
Among the key reasons for corruption in dergartens), etc. Along with the economic ucation, corruption risk assessment in the education economic factor is most fre- reasons the legal regulation of relations is appropriate legislation must be carried out, quently mentioned, e.g.: insufficient fi- also of great importance. Inefficiency of that would have allowed to develop con- nancing of educational institutions, low legislation and potentially corruptive regu- crete recommendations on its improve- salaries of the teaching staff, lack of vacan- lations create the basis for corruption. As a ment. cies in educational institutions (e.g. in kin- result, in order to prevent corruption in ed-
IV.
Relations in education are regulated by a 100 legal documents). The following legal • RF Federal Law No.125-FZ of 22 August wide range of legal acts rather than a documents could be used for corruption 1996 “On Higher and Postgraduate Pro- unique codified document. Among them risk assessment: fessional Training”; are: federal laws, Decrees of the RF Gov- • regulations of educational services pro- • the RF Civil Code; ernment as well as the various legal docu- vided on a paid basis, approved by RF ments, issued by the RF Ministry of • RF Law No. 3266-1 dated 10 June 1992 Government Decree No. 505 of 5 June Education: orders, statements, etc. (over “On Education”; 2001.
61 62 Project “Russian Federation – Development of legislative and other measures for the prevention of corruption” (RUCOLA 2)
V.
The following corruption factors were according to RF legislature and the educational services were developed and identified while analysing legal documents Charter of the institution”. P. 2, Article 3 approved by the RF Ministry of Education in education: of the Federal Law “On Higher and in accordance with P. 16 of the Regulations Postgraduate Professional Training” for paid educational service rendering. It is Gaps in legislation states the following: “The higher educa- believed that once the RF Government tion institution is accountable for its ac- adopts the standard contracts for paid edu- The framework and declaratory charac- tivities to citizens, society and the state”. cational services, the consumers’ rights ter of the current laws, regulating educa- Thus, the legislation on education, does would be more protected. tion (the RF Law “On Education” and the not specify the forms and degree of re- In order to apply the regulation stated RF Federal Law “On Higher and Postgrad- sponsibility imposed on educational in- in Article 426 of the RF Civil Code to rela- uate Professional Training”) are their stitutions and their employees. tions between consumers and educational common drawback. Lack of the mechanisms to exercise institutions, the number of subjects in- The framework character of these laws the right for equal access to education volved has to be increased. In the current comes out of its goal, which defines the RF can also be regarded as a deficiency in legal version only the relations between a com- system of education and is, therefore, re- regulation of education activities. P. 3, mercial organisation and a consumer are flected in the structure of these laws. Thus, Article 5 of the RF Law “On Education” regulated. It is necessary to extend this reg- the RF Law “On Education” consists of six recalls and develops the statement of P. 2, ulation to the relations between consumers chapters, three of which deal with the Article 43 of the RF Constitution, which and non-profit organisations, including general issues of education system, its guarantees equal free pre-school, second- educational institutions. For this purpose management and economy. Three of the ary and professional education in the state the words “commercial organisations” in P. seven chapters of the RF Federal Law “On and municipal educational institutions. 1, Article 426 of the RF Civil Code should Higher and Postgraduate Professional Public recognition of contracts for edu- be changed to “profit and non-profit Training” also address the issues of higher cational services could become one of the making organisations”. and postgraduate education, its manage- elements of such a mechanism. It would The laws on education in question do ment and economy. make Article 426 of the RF Civil Code ap- not regulate providing paid educational A direct consequence of such legal plicable to such contracts in the following services by educational institutions. outcome is lack of legal provision for exer- way: The RF Law “On Education” allows cising rights by the subjects of educational • obliging an individual providing educa- state and municipal educational institu- system. The rights of participants of the tional services to sign a contract with tions to provide additional paid education educational relations as defined in the laws any applicant on equal conditions; services, which are not included in the cor- “On education” and “On Higher and Post- • providing an opportunity to take a case responding curricula and state educational graduate Professional Education” are of a to the court if an educational institution standards, implying only that paid services declaratory character: refuses to sign a contract for illegitimate cannot replace budget-funded educational • the rights and duties of the subjects of reasons. activities (Article 45). Private educational the educational system are defined in P. 13 of the Regulations for paid educa- institutions are also given the right to such a way that they do not correspond tional service obliges an educational insti- provide paid educational services (Article to the rights and duties of other sub- tution to provide the paid educational 46). jects. For example, Chapter V “Social services upon signing a contract, if it has a The RF Federal Law “On Higher and guaranties for RF citizens to exercise possibility to offer such a service and Postgraduate Education” directly states right for education” of the RF Law “On without giving any preferences. Neverthe- that a higher education institution decides Education” does not state or regulate the less, the above-mentioned Regulations do independently on signing contracts, de- duties of educational institutions as well not provide for an opportunity for a cus- fining responsibilities and other conditions as the teaching staff. Thus, the citizens’ tomer to go to court and force the institu- that should not contradict to the RF legis- right for education, declared in this tion to sign a contract in case it failed to do lation and the Charter of a higher educa- chapter has no legal back up. so. tion institution (P. 2, Article 29). • no one bears responsibility for breach- It is believed that the prospects of being Thus, the laws on education do not reg- ing the rights of students or pupils. In called to court as a result of illegitimate ulate a number of important parameters P. 3, Article 32 of the RF Law “On Edu- refusal to enter an educational institution and conditions for providing paid educa- cation” the reasons to hold an educa- could make miscreant managers think tional services, such as: the procedure for tional institution responsible are listed, about the consequences and a number of providing paid educational services, the however, it also says that it can be held invalid refusals and money extortion cases type of paid educational services, contrac- responsible in the order stipulated in will be reduced. tual arrangements, etc. the legislation of the Russian Federa- Besides P. 4, Article 426 of the RF Civil These gaps are often filled in by sub-leg- tion . P. 7, Article 51 of the RF Law “On Code states that the Government of the islative legal acts, which is insufficient for Education” states that “ employees of Russian Federation has the right to issue an effective legal regulation of contractual educational institutions are responsi- rules, obligatory for the parties when relations between the educational institu- ble for creating adequate conditions for signing and executing public contracts. tions and the consumers of paid services studies, labour and leisure of students, The existing samples of contracts for paid on a contractual basis.
Final report: Appendices, Volume 1 Project “Russian Federation – Development of legislative and other measures for the prevention of corruption” (RUCOLA 2) 63
It is necessary to make contracting for • Regulations for paid educational service expiration of the contract between the paid educational services a part of the rendering, affirmed by Decree No. 505 owner (or the authorised legal entity) and federal law (RF Civil Code or RF Law “On of the RF Government of 5 July 2001; the educational institution or between the Education”), including definition, proce- • Instruction on paid extra services pro- owner (or the authorised legal entity) and dures, important conditions, execution, vided by state and municipal educa- the founder, if not stipulated otherwise in reasons for termination, liability. tional institutions, affirmed by Order the contract. Filling in this gap will allow to protect No. 1578 of the Ministry of Education According to P. 2, Article 43 of the RF the rights of educational service users of 16 June 1998; Law “On Education”, financial and material much more effectively. • Letter of the RF Ministry of Education assets of an educational institution as- At present, contracts for paid educa- No. 31-52-122 of 25 December 2002 signed to it by the founder can be used by tional services are regulated by Chapter 39 “On licensing paid educational services the educational institution in accordance of the RF Civil Code: “Paid Service Render- provided by public education institu- with its Charter and cannot be withdrawn ing”. Article 782 of the RF Civil Code allows tions”; from it, if not stipulated otherwise in the for unilateral termination of the contract • Order No. 2994 of the RF Ministry of legislation of the Russian Federation. for a service provider. Thus, an educational Education of 10 July 2003 “On creating Thus, the RF Law “On Education” con- institution, being a service provider, can a contract format for educational serv- tains two mutually exclusive regulations choose to terminate a contract, which ob- ices provided in the area of public edu- regarding withdrawal of property from ed- viously infringes upon the rights of the stu- cation”; ucational institutions (one is imperative dents and pupils. • Order No. 3177 of the RF Ministry of and the other is non-mandatory). Conse- Filling in the gap in legal regulation of Education of 28 July 2003 “On creating quently, the decision on withdrawal of paid educational service provision will a contract format for educational property from an education institution result in elimination of such instances of service provided in the area of profes- remains at an officials discretion acting on corruption as illegal financial charges of sional education”. behalf of an owner (a state or municipal in- pupils and their parents. Here are some stitution). There is certainly a potential for other examples of corruption : corruption in this situation. • setting a special fee for taking or resit- Excessive freedom of sectoral According to P. 7, Article 12 of the RF ting tests and examinations; and local rule-making Law “On Education”, branches, sections • fees for private tuition, when a regular and structural divisions of an educational According to the RF Law “On Education” teacher takes the function of a private institution can by power of attorney fully and the Federal Law “On Higher and Post- tutor; or partially exercise the power of a legal graduate Education” a wide range of issues entity. The similar regulation is found in P. • inclusion of paid extra services into the are at the founders’ discretion. The RF 3, Article 18 of the Federal Law “On Higher obligatory school curriculum, so the Ministry of Education and Science carries and Postgraduate Education”: “structural pupils cannot refuse to take paid out the role of establishing educational in- divisions of a higher educational institu- classes, etc. stitutions at the federal level. This function tion can exercise by power of attorney is established by the RF Government. For complete or partial authority of a legal Filling in the legislative gaps this reason a large number of legal docu- entity in accordance with an institution’s with the help of legal acts ments, affirmed by this Ministry, regulate Charter”. issued by executive important issues of educational services. The above-mentioned regulations con- authorities For example, P. 1, Article 16 of the RF tradict to P. 3, Article 55 of the RF Civil Law “On Education” states that procedures Code. A letter of attorney cannot be issued The numerous gaps in legal regulation of for enrollment to educational institutions to a branch, section or a structural division relations in education called for adoption are determined by a founder and regulated since they don’t have a legal entity status. of sublegislative legal documents both on by the Charter of the educational institu- Granting authority to structural divi- the level of RF Government and the Minis- tion, if they are not regulated by this Law. sions of educational institutions leads to try of Education. At the same time, the RF Furthermore, Order No. 50 of the RF Min- unnecessary independence and creates the Law “On Education” and the Federal Law istry of Education of 14 January 2003 corruption risk potential for the adminis- “On Higher and Postgraduate Education” affirms the enrollment procedures to state tration of these divisions. contain very few direct references to these institutions of higher professional educa- legal documents adopted by the RF Gov- tion (higher education institutions) estab- Competence definition lished by federal executive authorities. ernment. However, since there is no direct according to “may” formula indication of the need for adoption of the It is believed that this issue should be regulated by a law since it deals with right legal acts by the government, the gap is P. 5, Article 47 of the RF Law “On Educa- of citizens to education. filled at a lower level – by the acts of the RF tion” states that the founder or local au- Ministry for Education and Science. thorities may suspend until court decision As an example will serve Article 45 of Collisions in legal regulation the entrepreneurial activity of an educa- the RF Law “On Education” that allows the tional institution, if it has a negative effect state and municipal institutions to provide According to P. 6, Article 39 of the RF on educational activity stipulated by the paid additional educational services. Law “On Education” withdrawal and (or) Charter. The following sublegislative acts were alienation of property assigned to an edu- The “may” formula in this regulation adopted to further develop this statement: cational institution is possible only upon leaves potential for improper use of au-
Corruption risk assessment of the Russian legislation regulating education: Larissa Sannikova 64 Project “Russian Federation – Development of legislative and other measures for the prevention of corruption” (RUCOLA 2) thority, including corruption, in regards to mission to state and municipal educational Providing opportunity for an educational institution. It seems that it institutions at the pre-school, primary legal gain at the expense of should be a court decision to suspend en- general, basic general, secondary (com- third parties while executing trepreneurial activities, or otherwise a plete) general and primary professional ed- complete list of reasons for suspending ucation levels.” official duties or functions should be put together. Financial extortions from students or their Lack of public control over parents in the form of presents to child- Lack of competitive (auction) educational institution’s minders, teachers and tutors are widely procedures spread in Russia. P. 2, Article 575 of the RF activities Civil Code allows to give presents to teach- Introduction of competitive (auction) pro- ers and child-minders if their value does cedures is mostly needed in the system of According to P. 8, Article 41 of the RF Law not exceed five minimal wages. This regu- higher and postgraduate education. P. 4, “On Education”, educational institutions lation contains the potential for corrup- Article 1 of the Federal Law “On Higher can generate extra financing, including vol- tion. A similar regulation in regards to and Postgraduate Education” declares that untary contributions and fees by individu- public officials has already been recognised “competitive and transparent character of als and (or) legal entities. In reality as corruptive and is to be excluded from setting priorities in scientific, technical and voluntary contributions is often a synonym the Civil Code. Nevertheless, a mere exclu- technological development, as well as in for charging parents. sion of the above practices from the RF training of specialists, further training and We should admit though that demands Civil Code is not sufficient; there should be improving professional qualifications of of extra payments in the educational insti- a ban on any kind of gifts to the above- the employees.” P. 5 of this article stipulates tutions result from insufficient state mentioned categories, regardless of their “state support of specialists’ training, as funding and cannot always be regarded as value, so that the people will start to asso- well as prioritised scientific research in corruption. There are no traces of corrup- ciate this activity as an offence. higher and postgraduate professional edu- tion when funds are used for the needs of In this regard the following amend- cation”. an educational institution only. However, ments and additions of Article 575 of the It is envisaged that the state support since no effective control mechanisms are RF Civil Code should be introduced: should be distributed only on a competitive in place, it often leads to misuse of funds on • To remove P. 2 and 3 from Article 575 of basis. As the Minister of Education and the part of institution administration. the RF Civil Code; Science Mr A. Fursenko rightly pointed It seems reasonable to make educa- • To add Part Two to the Article 575 of out, “The RF Government Decree ‘On state tional institutions accountable to students the RF Civil Code stating: contracting for training of specialists with and (or) their parents on the use of extra “No gifts are allowed, regardless of their secondary and higher education’ can cause funding. An annual financial report can be value: a breakthrough. Budget financing should published and distributed in order to – To public officials in connection with also be made within the framework of this prevent misuse of resources. performing their job or their duties and 1 contract”. functions; In order to carry it out the RF Law “On – To the employee of healthcare, educa- Education” should be edited in the follow- tional, social security and other similar Excessive demands to a ing way: person in implementation of institutions by citizens that are subjects • To add P. 11 to Article 41 of the RF Law to medical treatment, are kept, trained his/her rights “On Education”, stating: or educated in the above-mentioned “An educational institution shall present an institutions, as well as by parents (au- Excessive admission barriers to the educa- annual report on spending extra funding, thorised representatives), spouses and tional institutions of all levels is an impor- listed in P. 8 of this article, by means of its relatives of these citizens”. tant factor for corruption. At present, publication in the media or distribution to practically all education institutions intro- the students and (or) their parents (author- duce the admission tests (or other forms of The scope of discretion ised representatives)”. selection), which becomes an extra barrier no matter how good the intentions are. An • To add P. 23 to Article 50 of the RF Law According to P. 10, Article 33 of the RF Law act of corruption thus becomes a means of “On Education”, stating: “On Education” the expertise requirements for licensing educational activities cannot overcoming this barrier. For this reason it “Students of secondary professional or exceed average statistic parameters for is necessary to legally forbid admission higher professional educational institu- the territory where the educational institu- testing on the pre-school, general and sec- tions may ask for documents, indicated in tion is registered. ondary professional education levels. P. 2, Article 16 and P. 11, Article 41 of this For this purpose Part Two of P. 1, law”. There is no definition of “average statis- Article 16 of the RF Law “On Education” tic parameters” given in the Law itself or in • To add Part Two to P. 1, Article 52 of the should be adopted in the following way: other legal documents. It is also not clear RF Law “On Education”, stating: “No testing or other competitive forms of what body is entitled to determine this selection violating rights of citizens to ed- “Parents (authorised representatives) of average parameter or set up a methodology ucation are allowed in the process of ad- students may ask for documents indicated for its establishment. Under these circum- in P. 2, Article 16 and P. 11, Article 41 of stances the expertise requirements for 1. Gazeta, 23.11.2005. this law”. licensing can be either excessive or under-
Final report: Appendices, Volume 1 Project “Russian Federation – Development of legislative and other measures for the prevention of corruption” (RUCOLA 2) 65 stated, which stipulates a large scope dis- cretion on the part of the expert committee.
VI.
The corruption risk assessment of the leg- the period of transition to the market • To add P. 23 to Article 50 of the RF Law islation on education enabled us to find a economy and is outdated, both politically “On Education”, stating: wide range of corruptive factors in the RF and economically, though it has been “Students of secondary professional or Law “On Education” and in the RF Federal amended 28 times. For this reason it seems higher professional educational institu- Law “On Higher and Postgraduate Educa- reasonable to initiate the development of a tions may ask for documents, indicated in tion”. Therefore, we can conclude that the new law on education. P. 2, Article 16 and P. 11, Article 41 of this current legislation on education is in need The proposed legislative measures for law”. of reforms. eliminating corruption risks in legislation • To add Part Two to P. 1, Article 52 of the There are several ways to bring the regulating education are as follows: RF Law “On Education”, stating: current legislature in line with the • The words “commercial organisations” demands of the modern Russian society, “Parents (authorised representatives) of in Paragraph 1, Article 426 of the RF students may ask for documents indicated including corruption implications. Civil Code should be changed into The first option is to adopt RF Educa- in P. 2, Article 16 and P. 11, Article 41 of “profit- and non-profit making organi- this law”. tion Code. It would allow for a comprehen- sations”. sive way to address legal regulation • To remove P. 2 and 3 from Article 575 of • Part Two of P. 1, Article 16 of the RF problems in education and would substan- the RF Civil Code; Law “On Education” should be adopted tially reduce the risk of legislative gaps and • To add Part Two to Article 575 of the RF in the following way: law collisions. However, putting this code Civil Code stating: “No testing or other competitive forms of together will take a long time. “No gifts are allowed, regardless of their selection violating rights of citizens to ed- The second option is to amend the ex- value: isting laws. This is the way that the Minis- ucation are allowed in the process of ad- – To public officials in connection with ter of Education and Science Mr. A. mission to state and municipal educational performing their job or their duties and Fursenko intends to take, pointing out the institutions at the pre-school, primary functions; necessity for a “more rapid development of general, basic general, secondary (com- the socially-oriented federal legal acts”, plete) general and primary professional ed- – To the employee of healthcare, educa- meaning the amendments and additions to ucation levels.” tional, social security and other similar the RF Law “On Education” and Decrees of • To add P. 11 to Article 41 of the RF Law institutions by citizens that are subjects the RF Government. “On Education”, stating: to medical treatment, are kept, trained In spite of the fact that some amend- “An educational institution shall present an or educated in the above-mentioned ments to existing legislation aimed at re- annual report on spending extra funding, institutions, as well as by parents (au- ducing corruption risks in education were listed in P. 8 of this article, by means of its thorised representatives), spouses and proposed in this paper and, this version is publication in the media or distribution to relatives of these citizens.” far from being optimal. The current RF the students and (or) their parents (author- • Remove P. 10, Article 33 of the RF Law Law “On Education” was passed in 1992 in ised representatives).” “On Education”.
Corruption risk assessment of the Russian legislation regulating education: Larissa Sannikova The prevention of corruption in public procurement: good practice in Europe
Peter Trepte Barrister specialising in public procurement law, United Kingdom
To seek to identify what could be described curement and the limits of those Motivation is also a critical element, i.e. as “good practice in Europe” in the context possibilities. It is about striking a balance determining why those opportunities are of preventing corruption in public pro- between the need to curb the inappropriate taken. It may be out of necessity or of curement is probably both too optimistic use or misuse of discretion in the hands of greed, for example, but the common and too facile. It assumes that there is a procurement officers and allowing those feature is that the official will expect to defined set of common tools which are and same officers to exercise the professional benefit in some way from exploiting the can be applied successfully in the fight judgement for which they were recruited opportunity, either by receiving money or against corruption. It is true that there are and trained. money’s worth. It is a question of self-inter- a number of identified measures that can est and corruption will continue to take Corruption flourishes in the public be taken to reduce corruption but it would place so long as the official can get away sector where opportunities exist to exploit be a mistake to believe that the same tools with it. In economic terms, the officer will the possession of authority and discretion. can be used indiscriminately in every con- remain corrupt so long as he can continue Thus, bribes are often extracted by officials text. It would also be a mistake to assume to expect to profit from the transaction, i.e. which have the power to grant licences that using such measures will, of them- to the extent that the benefit exceeds the (such as business or operating licences) or selves, eradicate corruption in the round. costs (in this case, the risk and effect of dis- to impose or withhold penalties (such as in Procurement regulation can be an effective covery). Successful anti-corruption meas- the event of breaches of health and safety weapon in the fight against corruption but ures will thus lower the expected gains and laws). This paper identifies how, in the it is only one part of the armoury. Corrup- increase the expected penalties. context of the procurement function, such tion needs to be addressed much more The effects of discovery are usually, opportunities can arise. In economic broadly. though not always, outside the scope the terms, such opportunities arise essentially It has become commonplace to assume procurement regulation. Penalties, for ex- as a result of the agency relationship which that public procurement and corruption go ample, generally fall within the remit of the characterises the purchasing activities of hand in hand as if corrupt practices were criminal authorities (the public prosecu- government: procurement is conducted by an inevitable consequence of the procure- tors or specialised anti-corruption agen- civil servants acting as agents on behalf of ment function within government. Whilst cies) but will also crucially depend on the government. there is little doubt that corruption can and broader issues such as a country’s histori- does flourish in the context of public pro- By identifying the opportunities for cal treatment of corrupt practices, the curement, there is nothing inevitable about corruption inherent in the procurement quality of the judicial authorities, the scope the phenomenon and it is important not to function, we will be able to consider the and strength of the enforcement institu- treat as an inevitable consequence of the ways in which the administrative proce- tions. The probity of the officials will also procurement function what is essentially dures of procurement regulation are used depend on the quality of the civil service an avoidable by-product of such an activity. (and how they cannot be used) to close off rules and authorities and the measures A ‘theological’ or ‘crusading’ approach to those opportunities and to apply disincen- taken to deal with miscreant officials. the eradication of corruption may, in the tives. The ability of procurement regula- On the other hand, the probability of case of procurement, do as much harm as tion to combat corruption depends on the having penalties imposed is a consequence good. This paper is, therefore, about bal- ability of the regulator to identify the op- of detection of the corrupt practice and of ance. There is a balance to be struck portunities created by the procurement the degree of the risk of discovery. Corrup- between the possibilities for fighting cor- function and to close off that opportunity tion is a gamble for the corrupt official and ruption inherent in the regulation of pro- by applying a disincentive. the greater the risk of discovery (and pen-
66 Project “Russian Federation – Development of legislative and other measures for the prevention of corruption” (RUCOLA 2) 67 alties) the less likely he is to engage in bility and accountability through the appli- costs of procurement to the public purse corrupt practices. It is here that procure- cation of enforcement mechanisms. (maybe significantly) whilst producing ment regulation comes into its own since This paper will consider the various very little added benefit to the fight against the regulation can both reduce the oppor- ways in which procurement regulation, corruption. In the end, the balance to be tunities for corruption and increase the notably in Europe, has sought to achieve struck is between the actual benefits, tangi- risk of detection. These efforts are based these goals. It will also, however, address ble and intangible, to be achieved through largely on the imposition of transparency the issue of excessive or inappropriate reg- procurement regulation and the costs of requirements which enable the actions of ulation which will often have the effect of doing so. the procurement agents and others to be creating inefficiencies in the procurement verified in a way which ensures responsi- process. The result will be to increase the
Procurement as an opportunity for corruption
In broad terms, governments consist of income or departmental budget, better perience and training of modern procure- both politically elected and non-elected working conditions, job prospects etc. The ment techniques. “Bad” procurement is members. The non-elected members make agent’s goals are thus not necessarily co-ex- not always the result of bad intentions: it up the bureaucracy or apparatus of govern- tensive with those sought by the govern- could just be the result of incompetence. ment and it is they who are, in most cases, ment. The issue for procurement The ability of the agent to act in his own responsible for the efficient functioning of regulation becomes one of control over the interest is based on the fact that he holds government. Whilst the elected members agent in an attempt to realign the goals or information which is not available to the make the policy decisions of government at least to provide incentives to ensure that principal. There is, in economic terms, an on the basis (it is hoped) of which they the agent performs in accordance with the “informational asymmetry”. He holds in- were elected, it is the bureaucracy which goals of government. formation related to the process, the carries out those policies in concrete form The possibility for the agent to extract bidders and the products. He is, therefore, and ensures that the whole apparatus is in personal gain from the procurement at an informational advantage in respect of a position to fulfil the routine and policy process arises from the position he is given the principal and will be able to use this ad- tasks assigned to it. Procurement decisions within the bureaucracy to exercise discre- vantage for, inter alia , personal gain. The are, absent any political interference, tionary authority. The relative independ- agent holds this information because he is largely made and carried out by the bu- ence of the procurement officers both from in the “front line”. It is the agent that speci- reaucracy, specifically by procurement central government and from each other fies his requirement through the technical agents within the bureaucratic hierarchy. vests them with an often large degree of specifications or standards. He is the one From an economic point of view, govern- discretionary authority to award procure- who selects the process or procedure to be ment can conveniently be divided into two: ment contracts. The supplier who seeks to used. He is the one that invites the tender- the government (represented by the politi- influence the procurement process by way ers and receives their tenders. He is the one cians) and the bureaucracy (represented by of a bribe will seek to exploit this relative that evaluates those tenders and makes the the government’s procuring agencies). independence and to induce the agent to decision to award the contract. The ability These stand in an agency relationship, the place his own interests before those of the of the agent to benefit from the procure- government as principal, the bureaucrat as government whom he represents. Care ment process arises essentially because he agent. needs to be taken, however, in assessing the has more information over all of these As two distinct actors, the interests of incidence of corruption in procurement. aspects of the procurement than his princi- principal and agent may not be identical Anti-corruption crusaders tend to see pal. The agent can manipulate this infor- and are likely, over time, to diverge. The every questionable procurement as the mation and dissimulate it or conceal it danger is that the goal of the agent may not result of corruption even if, in reality, this is from the principal in such a way that the be to maximise social or economic welfare just a question of incompetence. In devel- agent is able to affect the outcome of the (the government’s presumed goal) but to oping and transition economies especially, procurement process whilst, at the same maximise his own personal benefit or that procurement reforms are a relatively time, keeping the principal in the dark. of his department’s, i.e. increased personal recent phenomenon and there is little ex-
Using procurement regulation in the fight against corruption
In the traditional vertically integrated bu- audit systems (mostly ex post ) and, at a sanctions on the non-compliant bureau- reaucracy, control over the bureaucracy is more direct level, tender or procurement crats. The threat of such sanctions also op- often seen in terms of direct supervision or committees. In other cases, supervision erates, however, as an incentive for future monitoring. Direct supervision will often may be carried out by independent govern- compliance and may be seen as pro-active involve oversight by hierarchically superior ment agencies. Where the bureaucracy has deterrence. Apart from the question of the officials and, in the case of procurement, departed from the governments regulatory effectiveness of sanctions and the likeli- frequently implies the existence of internal requirements, the remedy is to impose hood of detection, the main difficulties
The prevention of corruption in public procurement: Peter Trepte 68 Project “Russian Federation – Development of legislative and other measures for the prevention of corruption” (RUCOLA 2) with implementing effective compliance by from the political to the technical sphere mitted parameters and framework within way of direct supervision or monitoring are (above) and, from the point of view of the which the agent is permitted to operate time and cost. In all but the smallest of pro- fight against corruption, merely introduces and needs to be able, if the need should curing entities, governments purchase (rather than removing) a further incentive arise, to verify that the agent has indeed huge amounts of goods, works and services for corruption. acted within those parameters. In order to for public consumption; huge in terms of The most frequent preferred procedure verify the agent’s actions, the principal both breadth of purchases and number of relied upon is the open or competitive needs to know what the agent has done and contracts. To monitor each and every con- bidding system, generally based on sealed needs to be able to access both the deci- tract in anything but the most superficial of bids. Competition acts as a discovery pro- sions of the agent and the information ways would require an enormous team of cedure allowing different suppliers to com- upon which those decisions were based. In competent experts in many different tech- municate the prices at which products are other words, the principal will use the tool nical fields. Even if such a team could be available. Requiring competition is, there- of transparency to provide for the verifia- found, the exercise would be very costly in fore, a mechanism used by the regulator to bility of the agent’s actions against the terms of the number of employees needed ensure that the procurement officer is led framework of the regulation. and the amount of time expended. It would to opt for the lowest price commensurate also be hugely inefficient since, in order to with the stated requirements. In the case of Transparency detect instances of deviation, such a team a readily available and homogenous would need to review 100% of cases, even product for which there is a private market The imposition of transparency require- where problems may be identified in a (approximating a state of perfect competi- ments is a critical component of the princi- much smaller percentage of cases. tion), the opportunities for corruption are pal’s administrative control for it is only Regulation as a form of imposing ad- reduced because prices are known (or when the actions of the agent are transpar- ministrative procedures on the bureauc- easily identified) and comparable. In com- ent can they be verified. Unless it is possi- racy may assist in overcoming these petitive price sensitive markets, it is diffi- ble to verify the agent’s actions, there will difficulties whilst preserving political cult for the agent to ‘pull the wool’ over the be no means of holding the agent account- control over the process. By setting out in principal’s eyes. Bribes may be eliminated able. There may be many reasons why the advance the parameters of the procure- by using a sealed bid system whereby the government principal will want to verify ment process, the political principals bids are made public after the lowest the actions of the agent. Generally, its in- define the institutional and procedural en- bidder has been identified. Such a system terest will be to ensure that it knows what vironment within which the procurement would introduce contestability, which may its agent does in terms of procurement in agents make decisions and thereby limit otherwise be missing, at least between the order to satisfy itself that the agent is acting their range of feasible policy options. By participants in the tender procedure. in the interests of his employer, is achieving controlling the process rather than by de- However, price is rarely the only factor the goals set by his employer, does not fining the outcome, political leaders are other than in cases of mundane, off-the- make a personal benefit from any procure- able to assure compliance without specify- shelf purchases or routine works. There is ment transaction and otherwise conducts ing, or even necessarily knowing, what a need to consider other factors such as the procedure in an efficient manner. For substantive outcome is most in their inter- quality, durability, long-term economic international regulators, transparency is est. benefits, contractual terms etc. Indeed, also a mechanism used to ensure that the Procurement regulation operates by most purchases will be of differentiated benefits of competition are made available setting out the process and requirements products. Here, it is the agent that is likely to all of those tenderers who are entitled to that the officers need to follow. In so doing, to possess greater information and knowl- benefit under the international system at it reduces the scope for unlawful action, edge than his principal and it is the agent issue. In the context of the fight against ensures discretion is exercised objectively who has the upper hand. These elements of corruption, transparency is a vital tool pre- and improves detection of unlawful behav- the evaluation process are simply not as cisely because it makes visible what can be iour. It does so in a number of ways. visible or verifiable as the prices offered in only too easily concealed. Transparency re- competitive markets. Assuming there is an quirements make it more difficult to be Procedural requirements incentive for bidders to resort to bribery, corrupt and provide a disincentive by re- the agent will, in the absence of specific ducing the opportunity for extracting or All modern systems of procurement regu- regulation, be able to deal with the bidders receiving bribes. lation operate by imposing the use of pre- in a way that allows him to identify suitable The transparency tool can be used ex- ferred procurement procedures on the quality/price packages whilst ensuring that tensively in procurement regulation to procurement officers and allowing alterna- the most suitable one is also the one which provide disincentives against corrupt prac- tive procurement procedures only in well provides him with the most advantageous tices. It may be used throughout the whole defined circumstances. Sometimes, such personal incentive (bribe). process from the initiation of a given pro- alternative procedures are permitted only It is partly for this reason that procure- curement procedure right through to the on the basis of a prior authorisation which ment regulation not only imposes the use contract administration phase where, for implies an element of prior superior con- of specific procedures but also controls the example, variations (to delivery times and trol. Apart from the additional time and choices made by the agent in respect of the price) may be permitted only when made cost involved in such a procedure and the bidders to be entertained and the criteria in writing and on the basis of explicit frequent bottlenecks occasioned by it, such to be applied in the evaluation of bids. To provisions and formulae contained in the a procedure will often fail to transfer re- ensure that the agent’s discretion is used contract. These are verifiable. The mecha- sponsibility and therefore accountability properly, the principal will set out the per- nisms adopted are initially based on the
Final report: Appendices, Volume 1 Project “Russian Federation – Development of legislative and other measures for the prevention of corruption” (RUCOLA 2) 69 publicity provisions of the procurement particular tenderers. There is a general been convicted of any such offences in the regulation which normally requires techni- preference for the use of performance, past in order to be eligible for participation cal specifications as well as selection and output or functional specifications as could overcome the problems associated award criteria to be made known in ad- opposed to design or descriptive specifica- with debarment. vance. These operate in various ways. tions. This enables a description of the The transparency of these various qual- items to be procured to be defined in terms ification criteria are vouchsafed not only by Publicity of their intended use rather than by refer- the requirement to make them public at The requirement to advertise procurement ence to specific products, makes or sources the very outset but also by the require- procedures or at least solicit bids from a or to particular manufacturing processes ments to expand on them to all tenderer’s minimum number of tenderers will ensure which could have the effect of favouring or in writing (where questions have been that procurement agents are not able eliminating specific tenderers. There will raised) and to provide to tenderers rejected simply to contact those tenderers with be circumstances where this is not always on any of the stated grounds with the whom they would prefer to deal. From the possible and it may be necessary to define reasons for their rejection. anti-corruption perspective, this prevents products in such a way that a specific man- the agent from dealing only with those ten- ufacturer or service provider is readily Award criteria derers who are prepared to pay a bribe and identified. Where this is inevitable, all widens the pool of tenderers, thereby systems of procurement regulations In so far as award criteria are concerned, making it less likely that only tenderers in- require the agent to state explicitly that transparency is applied in a similar way to terested in offering a bribe will be selected. equivalent products will also be accepted. ensure that the criteria to be applied by the The transparency of the procedure itself is The use of objective and recognised stand- agent are known. Thus, the procuring enhanced by additional requirements that ards may also be employed. entity will be required to state in the notice requests for information be made only in Qualification and/or tender documents all the criteria it writing and that all responses and clarifica- intends to apply to the award of the con- In respect of selection or qualification cri- tions be sent in writing to all the tenderers tract. In general terms, the award criteria teria, procurement regulations tend to simultaneously. Most systems of procure- applied in most procurement systems can follow a common path although with dif- ment regulation will also prohibit negotia- be divided into two: (1) the lowest price ferent degrees of formality. The task is es- tions or discussions between purchaser and (2) price which is evaluated together sentially to ensure that the potential and tenderer during the course of the pro- with a number of other criteria which will bidders are properly qualified and, to that cedure in anything other than permitted be set out in the bidding documents. sole source or ‘negotiated’ procedures and end, all systems of procurement regulation only where they do not concern price or set out objective qualification criteria The difficulty and opportunity for other fundamental terms and conditions of against which bidders may be judged. abuse comes in with the interpretation and the tender or contract documents. The re- These will usually relate to three aspects of application of the second criterion. In quirement either to notify the tenderers of qualification: the suitability of the bidder as some systems, the emphasis is placed on the successful tenderer or to publish a con- a trustworthy company; the bidder’s eco- the need to assign monetary values to the tract award notice will also serve to alert nomic and financial standing denoting its criteria employed in order to avoid subjec- tenderers to the possibility of corruption ability to complete the proposed contract; tivity and manipulation. Thus minor devia- where the outcome is not consistent with and the bidder’s technical capacity and re- tions or differences in the bids are to be expectations. This is particularly helpful in sources. assessed in terms of their economic impact those systems which employ the practice of More and more frequently, provisions will be translated into quantifiable mone- holding public bid openings at which bid relating to probity are being introduced to tary terms according to specified formulae. prices are read out. Unexpected deviations the extent that the issue of a tenderer’s pro- In this way, the procurement entity can between bid prices and the prices accepted fessional conduct will cover previous acts bring such factors as operating cost, main- in the award decision will assist in the dis- of corruption. Indeed, in a number of sys- tenance cost, performance and endurance closure of intervening shenanigans. tems, previous such convictions could lead under consideration in an objective to the penalties of debarment or blacklist- manner. Other systems rely on point or Technical specifications ing and thus become conditions of eligibil- weighting systems which are more suscep- In the case of technical specifications, pro- ity. The use of debarment, and the tible to manipulation. Here, additional curement regulations will often set out in difficulties associated with it, is discussed evaluation criteria are generally included relatively strict terms what may be accept- under the heading of penalties below. in a non-exhaustive list and will be subject able. Such an approach is necessary However, there is also a strong argument to to a further clause requiring any additional because it is all too easy for an agent to suggest that the system of “white-listing” criteria not contained on such a list to be define the requirements and/or technical under which potential tenderers would be applied in an objective and non-discrimi- specifications in such a way as to favour obliged to prove that that they have not natory manner.
Accountability
The decentralisation of procurement re- hallmark of modern procurement systems, countability. This has implications at sponsibility to procurement agents, the brings with it a commensurate need for ac- several levels.
The prevention of corruption in public procurement: Peter Trepte 70 Project “Russian Federation – Development of legislative and other measures for the prevention of corruption” (RUCOLA 2)
Responsibility and Monitoring compliance ment regulations also often require the accountability grounds for choosing certain procurement Transparency is used to ensure accounta- procedures to be recorded. Access to such The twin pillars of responsibility and ac- bility which will be vouchsafed through a information will assist in identifying those countability provide a guarantee of probity supervisory process. This is done by way of cases in which the reasons are not properly but can be undermined in the context of ensuring that the considerations taken into substantiated and where agents have procurement. Taking away the decision- account (relating to qualification of bidders sought to manipulate their discretion to making responsibility of the agent by, for and the setting of specifications, for exam- favour certain tenderers, for example example, subjecting critical decisions like ple) and which have been made transpar- where they have opted for sole source con- the choice of procurement procedure to ent (above) are also objectively verifiable. tracting. prior authorisation, takes the responsibility Thus, the bases upon which bids are evalu- for that decision away from the agent and ated must be clear and precise and must be places it with a third party who may not be capable of ex post assessment. There will Impartiality accountable for that decision. More often still be discretion in the hands of the agent than not, the authorising body is a regula- (the engineer must be able to decide what Procurement regulation will also seek to tory authority which is not answerable to is necessary for a particular works) but it reduce instances of potential conflicts of the procurement review bodies. In coun- will be capable of verification, though that interest in the context of procurement and tries where corruption is systemic and ability to verify will depend on the capaci- will generally impose provisions with having created a further opportunity for ties of the monitoring and enforcement au- regard to impartiality and confidentiality. corruption, it should come as no surprise thorities. In some cases, procurement rules will that such systems are often abused by those The specific tools used to guarantee ac- require participants in the procurement very authorising bodies set up to control countability in procurement are the provi- process (notably those connected to the the actions of the agent. sions relating to recording, reporting and evaluation process) to sign declarations The same may be said for the existence the mechanisms for review and control. guaranteeing their impartiality. Some- of hierarchically superior tender commit- Before the objectivity of the process may be times, these declarations will also refer to tees or central procurement units which verified through review procedures, how- the absence of bribes or participation in operate in a similar way to absolve the ever, it is necessary to be in a position to collusive practices. Whilst such declara- agent of responsibility and accountability. assess the performance of the agent. The tions have a valuable and immediate dis- Whilst the imposition of collective deci- procedures used, the specifications chosen suasive and preventative effect, their legal sion-making through tender committees is and selection and award criteria applied utility is that they may be used, in the often imposed on grounds of ensuring can all be monitored through the appli- context of legal proceedings where it is greater compliance and combating corrup- cation of the transparency requirements found that the declarations are inaccurate, tion, it may well lead to less responsibility discussed above. However, further trans- to demonstrate dishonest intent and/or and accountability, especially where, as parency measures are required to discover misrepresentation. Provisions used to often happens, the procurement agent re- how they were applied by the agent. These ensure that no conflicts of interest arise sponsible for the procurement is not even a are provided through recording and re- include the prohibition on procurement member of the tender committee. Apart porting. officers from participating in contract from increasing the potential for higher Apart from requiring that all files and award procedures where they have any level corruption, this mechanism can lead documents related to the procurement connection (family, social or financial) to bottlenecks and uninformed procure- procedure be kept for a stated period fol- with any of the tenderer’s; the requirement ment decisions wholly removed from the lowing the execution of the ultimate con- for such officers to declare themselves inel- reality of the product market in question. tract, the regulation will also usually igible; the requirement for such officers to impose specific requirements as to the sign declarations to that effect; or the pro- taking of minutes. In most cases, these will hibition on the engagement of any govern- apply to bid opening procedures, evalua- ment employee as part of any tender (as tion reports and award decisions. Procure- expert, for example).
Control mechanisms
From the anti-corruption perspective, the and ineffective system of control. To pillars of responsibility and accountability purpose of procurement regulation may be monitor each and every contract in any- and on external and independent enforce- seen as an attempt to monitor and control thing but the most superficial of ways ment mechanisms to impose accountabil- the activities of the agent in such a way as would require an enormous team of com- ity based on complaints brought by the to minimise the way in which the agent petent experts in many different technical tenderers themselves. Tenderers are aware may be persuaded to misuse his discretion fields. Even if such a team could be found, of the procedures employed, are able to and the information he possesses for his the exercise would be very costly in terms identify potential breaches more easily and personal gain. Traditionally, this was done of the number of employees needed and have greater interest in correcting breaches by way of direct supervision. As indicated the amount of time expended. which may be to their disadvantage. previously, the costs and time involved in It is for this reason that modern systems direct supervision make this an inefficient of procurement regulation rely on the twin
Final report: Appendices, Volume 1 Project “Russian Federation – Development of legislative and other measures for the prevention of corruption” (RUCOLA 2) 71
Review Financial penalties criminal activities. Where such activities are discovered, it is clear that they should Most countries have in place mechanisms Some countries also go so far as to impose be pursued either by way of disciplinary and procedures for review of the acts (and financial penalties for breaches of the pro- action or by the appropriate authorities omissions) of administrative bodies and curement law. As a general mechanism, (public prosecutor or anti-corruption au- other public entities in the exercise of their such penalties often attach to any breach of thorities). These are entirely appropriate procurement functions. These may have the procurement regulation regardless of not only as a means of punishing the perpe- been established specifically for disputes whether that breach is also corrupt. There trators but also as a deterrent. arising in the context of procurement or are a number of possible objections. As criminal penalties, however, they are they may be part of the general mecha- The penalties may be applied either to subject to the procedures of the criminal nisms and procedures for review of admin- the procuring entity as a whole (as the courts and need to be prosecuted in those istrative acts. budget holder) or to the procurement courts. The issues of discovery and the Broadly, the review mechanisms will agent. These have strong intuitive appeal as mechanism of prosecution are just as rele- include a complaint to the procuring entity deterrents but their effects are far from vant in this context. Corrupt practices are itself, followed by an action (or appeal) clear. In the case of a penalty imposed on easily concealed and discovering them re- before an administrative body (either hier- the procuring entity, for example, the fine quires the application of sophisticated in- archical or independent) and judicial itself is paid to another government entity vestigative and forensic tools. The review. In most reforming countries, it is (or government funded entity such as a difficulties of proving corruption mean the second tier (administrative) review court). It is not, as in the case of damages, that it would be extremely difficult and which is the most interesting and which paid to the person (i.e. tenderer) harmed by probably inappropriate for contracting au- gives rise to the most debate. It is an impor- the infringement. The result of such a fine thorities to make these findings them- tant debate, however, because the time and on the procuring entity could, however, be selves. To take action based on a suspicion inefficiency involved in pursuing judicial disastrous. Given that procurement would be unwise and, where there are any review in some reforming countries and budgets are generally granted based on es- other weaknesses in the armoury, largely the frequent distrust of the judiciary timates which are then reduced by appro- ineffectual in combating systemic corrup- (sometimes also corrupt) means that ad- priations committees or parliament (and tion. ministrative review is likely to be the only probably by the Treasury also), it may be Procurement regulations are generally a speedy and reliable method of recourse. that after paying the fine there is no longer rather weak mechanism, however, for Here, the debate centres on the question of sufficient budget to proceed with the pro- setting out avenues for criminal com- the independence of the administrative curement as planned or at all. No doubt the plaints. They have little to say about body since, even if an appeal would ulti- procuring entity would wish to avoid this, whistle-blowers and their protection. mately lie to the courts, it is recognised that if only to maintain its budget for the follow- These fall within the jurisdiction of other such an appeal will not be heard in time to ing year but the only people who are really legislation. What procurement regulations address the issues in a realistic fashion. Po- harmed by this are the public who were ex- can do, on the other hand, are to set out the litical interference is also of primary pecting, for example, the construction of a consequences of convictions for corrup- concern when the review mechanism is op- new hospital. tion for the implicated procurement offic- erated by hierarchically superior review Where fines are imposed against the ers and tenderers. In the case of the agent, bodies or even by regulatory bodies which procurement officer then there may also be this is more likely to result form the conse- are appointed by the government. In these more generalised negative consequences. quent disciplinary procedures but, in the cases, their independence is put into ques- The possibility will certainly act as a disin- event that the agent is not dismissed, the tion. centive to take on the position (especially regulations can prevent his participation in The review mechanism needs to be ef- where other civil servants are not subject executive decisions (from selection and fective and rapid and most systems give to the same dangers) and could impede the evaluation to award). In the case of the ten- tenderers broadly three avenues of attack: creation of a professional procurement derers, regulations permit the exclusion of an injunction (interim measures and/or cadre: it is curious that, notably in reform tenderers convicted of such crimes from suspension) to prevent an infringement, countries, where new rules are introduced, tender procedures under the qualification the possibility of setting aside (annulling) a where capacity is low, where training is criteria and some systems also permit the particular procedure or award, including generally insufficient, where no advice is use of debarment or blacklisting. the right to remove unlawful specifica- given, where procurement officers are not tions, and, finally, damages. These reme- offered increased salaries or conditions of dies are provided within tight time limits Debarment employment, they should then be fined for which will ensure speedy action and reso- making mistakes, fines which may often be Debarment or “blacklisting” (the practice lution. It is of little assistance if disputes re- greater than their monthly or even annual of excluding certain bidders from procure- garding public expenditure for goods, salaries. ment procedures either temporarily or works and services intended for public The case is different if they have been permanently) is also a mechanism some- consumption and, therefore, their execu- found guilty of corruption, of course, but times used to punish those engaging in tion are held up indefinitely. that is a different issue altogether. Fines corrupt practices. Thus, where bidders imposed in the context of a procurement have been found guilty of paying bribes to regulation are (or should be) imposed for public officers in return for favouritism in a breaches of the (administrative) procure- procurement process, they may be ex- ment regulation and not as the result of cluded either from a given procedure or
The prevention of corruption in public procurement: Peter Trepte 72 Project “Russian Federation – Development of legislative and other measures for the prevention of corruption” (RUCOLA 2) from all government procurement proce- tightly controlled (this explains why it is a ‘best’ bidder will still win the bid since dures for a given time (usually depending mechanism favoured by the international whoever wins will be forced to pay the on the gravity or frequency of the practice) development banks, for example). The op- bribe. Catching and blacklisting individual or, less frequently, permanently. There is portunity for paying bribes is removed. bidders (the most incompetent ones in little doubt that such blacklisting provides However, in countries where corruption is concealing their activities) will merely intuitive appeal and satisfaction since the entrenched in the public sector and where remove one or more bidders from the punishment for paying bribes is clearly it is systemic, a certain degree of circum- equation and possibly deprive the pur- seen and the perpetrators clearly identi- spection may be called for. chaser of the most efficient or ‘best’ bidder. fied. Success of the blacklisting system is Apart from the obvious dangers of At the same time, it is unlikely that this generally equated with the number of abuse of any blacklisting system which would have any effect at all on the system those caught. This, however, really only need to be addressed, it cannot always be which creates the incentive to bribe, viz . demonstrates the success of the mecha- assumed that public officials are the inno- the requirement that bribes will always be nisms employed to identify, investigate and cent victims of temptations offered by paid. In such a situation, the satisfaction of prosecute individual instances of corrup- corrupt bidders. There will always be at knowing that a payer of bribes has been tion. It does not necessarily indicate least two parties to the transaction and a caught out does nothing to eradicate the success in the eradication of corruption as corrupting benefactor will require a willing systemic corruption and may even divert a practice, especially in the case of systemic beneficiary. Indeed, where corruption is attention from its continuing existence. corruption. systemic, it may be that no public contract It is unclear that debarment or black- In countries where corruption is not en- will ever be awarded without the payment listing offers a panacea and, whilst it may demic, it may well be that blacklisting will of a bribe. Here, the bidders are the victims, be a critical tool in the fight against oppor- have a positive impact since those few not the public officials who systematically tunistic corruption in a number of circum- bidders which seek to corrupt otherwise extract the bribes. In such circumstances, stances, its more general success has not innocent procurement officers will be the bribe merely becomes another of the yet been demonstrated and there are suffi- identified and removed from a position many transaction costs and will be paid by ciently cogent arguments to suggest that it from which they may cause damage. It may any bidder wishing to win a contract, may offer, in some circumstances, no more be similarly beneficial where there is a whether or not it would have won the con- than cosmetic comfort. limited number of high value contracts tract without the bribe. It is perfectly pos- awarded in circumstances which may be sible that, even where a bribe is paid, the
Audit
Audit is one of the main forms of direct increasing the role of the audit function cases, the auditors may simply seek to supervision over the procurement process. produces further problems: increasing the “second guess” the qualified agents by re- This includes both internal and external scale of the audit increases costs in terms of placing the agent’s decision with their own. audit. The main disadvantage (other than time and money; conducting ex ante audits This is extremely dangerous since the suc- those otherwise associated with all forms generally leads to bottlenecks. cessful implementation of the procure- of direct supervision discussed above such A further potential problem with audit- ment function presupposes an in-depth as the impossibility of reviewing all con- ing procurement is that the auditors not di- knowledge of procurement procedures and tracts and the need to use sampling) is that rectly associated with the procurement market assessment ( e.g. works, supplies this is generally conducted ex post . From function will lack the experience of pro- and services contracts over an infinite the anti-corruption perspective, it is possi- curement agents and are not necessarily number of goods and services requiring as- ble that clandestine activities will be dis- qualified to make the assessments they sessment of a variety of different suppliers covered but the trail will be cold and the seek to make. Whilst audit is also con- and service providers). Performance audits sanctions limited: auditors generally cerned with the correct deployment of ex- may be useful where auditors are specifi- provide reports and make recommenda- penditure and compliance with, for cally trained to measure performance tions. From a procurement perspective, the example, the prevailing procurement regu- against a set of prescribed benchmarks findings of auditors are usually too late to lation ( compliance audit), it cannot effec- such as the best value benchmarks of the make any difference to specific procure- tively control the quality of that United Kingdom’s Audit Office but ment procedures, although they may, expenditure ( performance audit) in the without such benchmarks and the ability where reports are sufficiently synthesised same exercise. Even in conducting simple and experience to apply them, perform- and comprehensive, provide an indication compliance audits, inexperienced auditors ance audits are a dangerous tool in the of particular weaknesses in the system. At- will merely apply a given rule without any wrong hands. tempts to overcome these disadvantages by understanding of why it is applied. In many
A note of caution
Since the procurement function only pro- for corruption, procurement regulation opportunities by removing the incentives vides an opportunity (however attractive) can only seek to reduce or eliminate those for corruption. It cannot address all forms
Final report: Appendices, Volume 1 Project “Russian Federation – Development of legislative and other measures for the prevention of corruption” (RUCOLA 2) 73 of corruption and cannot address opportu- procurement regulations will in any event This approach is often exacerbated by nities which do not arise in the procure- be ignored by the political superiors who the approach generally taken towards pro- ment context. Whilst, for example, foreign hold the key to the career opportunities curement training. The training is not so goods which are to be sold to the govern- open to the lowly procurement agent. In much limited by the time or money availa- ment purchaser will need to cross the na- such cases, the procurement regulations ble but by the nature of the training itself. It tional border, thus linking the import to will simply cease to operate optimally. is more often than not restricted to the the procurement process, procurement Agents will, realistically, be unable to resist teaching of the new rules and little else. regulation can do little to prevent the facil- the political pressure. Whilst these will generally be consistent itation payments which may be extracted In looking at procurement regulation with the tools described above and assist in by corrupt customs officials. The opportu- through the lens of the fight against cor- the fight against corruption in the same nity for corruption arises because of the ruption, the tendency to seek to impose way, it is also true to say that mere compli- authority given to the customs officer to very strict procurement regulation based ance with the rules does not necessarily grant or withhold importation. It does not on the argument that corruption is a lead to good procurement or clean pro- arise because the goods in question form serious problem has already been raised. curement. It is not enough to teach the the subject matter of a winning tender. Reformers rarely limit themselves to re- rules only. To build or develop real pro- The existence of entrenched or sys- ducing the opportunities for corruption curement capacity, training in the art of the temic corruption means that it is exercised but go further by imposing regulations practical aspects of procurement is re- at all levels of the bureaucracy from the which eliminate any possibility for the pro- quired: in procurement planning, supply technical to the political. It may in fact be curement agent to exercise his discretion. chain management, processing, contract reinforced by the procurement regulation The attempt to reduce the procurement management as well as the skills of tactical itself where that system allows for political function to a mechanical application of and strategic procurement. To fight cor- interference in the procurement decision- rules negates such an attempt and often ruption, much more generalised (i.e. across making process through political approvals results in a complete lack of discretion on the whole civil service) ethical training is of award decisions or through centralised the part of the agent. It is critical to remem- required. To further enhance the procure- procurement subject to political control. ber that it is not the existence of discretion ment function, probity and public expend- This is a much deeper cultural problem that is the problem but the misuse of that iture management procurement officers and goes beyond opportunistic corruption, discretion. The result is likely to be a series need also to understand how to take re- i.e. corruption based on seizing the oppor- of “bad” procurement decisions devoid of sponsibility for the decisions and be pre- tunities for personal gain presented by, in any judgement or skill on the part of the of- pared to be accountable for those this case, the procurement function. ficer. decisions. Where corruption is so entrenched, the
Concluding remarks
There is no doubt that procurement regu- curement agent can then be tested since it are well versed in the conduct of efficient lation can play an important part in the will be possible to hold the agent fully ac- and ethical procurement in all its aspects. fight against corruption and the tools used countable for his actions. This is imperative because procurement in Europe and described here demonstrate This does depend, however, on the agents need to have knowledge, skill and that it can be effective. Procurement is an strength and impartiality of the enforce- experience in order to exercise their pro- activity which provides a number of oppor- ment mechanisms in place. Procurement fessional judgement in awarding contracts. tunities which may be exploited by the cor- regulation provides a means of detection, They must be able to exercise their neces- rupt. The agency relationship with its but enforcement mechanisms need to be in sary discretion wisely. Inadequate training authority to decide and powers of discre- place to ensure that the corrupt officer may well lead to the incorrect use of discre- tion provide the opportunity; the informa- loses his gamble, i.e. that the costs associ- tion and could well contribute to the tional asymmetries created by the agency ated with corruption (the risk of being corrupt use of that discretion. The pro- relationship provide the means. By impos- caught and the penalty to be paid) exceed curement function needs to be better pro- ing administrative control over the proc- the likely benefits. Review procedures fessionalised in the public sector as well as ess, the government principal can reduce brought by bidders will highlight the in- controlled. the opportunities for corruption. Procure- stances of corruption but it is the civil serv- The answer is not to impose ever ment regulation succeeds in this respect by ices rule which must provide for the stricter regulations on the agent in the applying procedural requirements and disciplinary measures and the appropriate name of anti-corruption. In extreme cases, transparency requirements. The effect of authorities which must prosecute criminal over-regulation erodes the ability of the these requirements is to reduce the oppor- activity. agent to exercise his discretion to such an tunity for corruption by making the infor- It is not enough to address only the extent that he is incapable of making a mation relied upon in the procurement rules to be applied. Blind adherence to a set proper procurement decision. Such forms process (the tender documents, draft con- of rules can result in incompetent (rather of regulation have a serious negative effect tract, technical requirements, selection than corrupt) procurement but can also on public expenditure because they will and award criteria) available for all to see provide a shield for corrupt practices. The often condemn the government to ineffi- and, most importantly, by making it verifi- approach has to take on board the need to cient and expensive purchasing and result able. The responsibility given to the pro- create a cadre of procurement agents who in the purchase of outdated or low quality
The prevention of corruption in public procurement: Peter Trepte 74 Project “Russian Federation – Development of legislative and other measures for the prevention of corruption” (RUCOLA 2) products not fit for the purpose intended. important tool in the fight against corrup- from effective procurement regulation, a The achievement of inappropriate regula- tion. Where that is not the case, it will balance needs to be struck between com- tion may be questionable successes in the provide a cosmetic and possibly politically bating corruption and promoting profes- fight against corruption at the expense of astute statement of intention which will sionalism in procurement. Equally the promotion of inefficient procurement achieve little in real terms to reduce or important are the commitment of the gov- and increased waste of public funds. eradicate corruption but which will in- ernment and the efforts made to develop By ensuring that procurement regula- crease the costs of procurement to the capacity to provide proactive and ethical tion is framed in a way which addresses public purse and thereby defeat one of the procurement officers capable of achieving those opportunities for corruption that are main objectives of procurement regula- the financial and economic benefits to be capable of being successfully addressed tion, cost savings to the government. To gained from transparent, efficient and through such regulation, it will serve as an avoid losing the benefits to be expected competitive procurement.
Final report: Appendices, Volume 1 Corruption risk assessment of the Russian legislation regulating state and municipal procurement
Nina Solovyanenko Senior scientific expert, Institute of State and Law, Russian Academy of Sciences, Candidate of Law
1.
RF Law No. 94-FZ of 21 July 2005 “On quirements. It proceeds from a broad un- contracts, allowing potential tenders placing orders for procurement of goods, derstanding of anti-corruption legislation sufficient time to prepare and submit rendering jobs and services for state and as a system of regulations, serving as a their tenders; municipal needs” (hereafter – the Federal barrier to corruption and relying upon pre- • The establishment, in advance, of con- Law “On Placing Orders”) came into force ventive anti-corruption legal acts. ditions for participation, including se- on 1 January 2006, setting up a unified pro- One of the goals of this Law is to bring lection and award criteria and cedure for placing state and municipal the RF legislation on state and municipal tendering rules, and their publication; orders. The law allowed to bring various procurement in line with international reg- • The use of objective and predetermined systems of procurement on the federal, re- ulations, also from the point of view of pre- criteria for public procurement deci- gional and municipal levels in line with the venting corruption. sions, in order to facilitate the subse- new unified rules. Thus the United Nations Convention quent verification of the correct The Federal Law “On Placing Orders” against Corruption of 31 October 2003 application of the rules or procedures; covers the areas of economic and adminis- specifies the anti-corruption requirements • An effective system of domestic review, trative relations that are potentially more to regulating public procurement (Part 1, including an effective system of appeal, prone to corruption than others, since they Article 9): establishment of a appropriate to ensure legal recourse and remedies in deal with managing the budgetary funds. systems of procurement based on trans- the event that the rules or procedures Such a sectoral legislative document parency, competition and objective criteria established pursuant to this paragraph should possess an additional anti-corrup- for decision-making. are not allowed; tive function. Thus, the Federal Law “On These systems shall address, inter alia : • Where appropriate, measures to regu- Placing Orders” should include regulations • The public distribution of information late matters regarding personnel re- aimed at prevention of corruption. relating to procurement procedures sponsible for procurement, such as The Federal Law “On Placing Orders” and contracts, including information declaration of interest in particular belongs to a “new generation” of Russian on invitations to tender and relevant or public procurements, screening proce- laws in the sense of anti-corruption re- pertinent information on the award of dures and training requirements.
2.
Analysis of the Federal Law “On Placing • a system of legal regulations, ensuring tion electronically, holding electronic Orders” showed that a great number of its transparency and publicity of procure- auctions, public access to data con- regulations have anti-corruption nature ment procedures, including a legalisa- tained in the register of contracts and and are able to provide preventive anti-cor- tion of IT application was set up; the register of unreliable suppliers on ruption measures. • provisions were made for: publicising in the official web sites on the Internet, The regulations of this law can be con- the official media, on the official web etc. (the official web site should contain sidered preventive anti-corruption due to sites on the Internet with strict dead- all data regarding the bidding progress the following statements: lines, placing an electronic version of – from the bidding announcement to tendering rules, submitting an applica-
75 76 Project “Russian Federation – Development of legislative and other measures for the prevention of corruption” (RUCOLA 2)
information on the supplier to whom • participation of the authorised repre- volume of state procurement (878 billion the contract was awarded); sentatives of producers or trading or- rubles compared to 575 billion rubles). The • a clear legal regulation of the procure- ganisations alongside with producers share of contracts signed as a result of ment mechanism is in place; themselves is legalised; tenders has grown by almost 8%. At the • a complete list of requirements for all same time there is a 9% decrease of con- • introducing a bidding procedure in the tenders is put together; the Principal tract share concluded with a sole supplier. form of a competition (open or closed) has no authority to obligate tenders to The statistic data for the second quarter of or an auction (open, including electron- affirm compliance with these require- 2006 indicates a 3 times increase in savings ically or closed); exceptions are listed in ments; compared to the first quarter. Another pos- the federal law itself (requests for quo- • a list of criteria for evaluating partici- itive trend is that 86 subjects of the Russian tations from the sole source on com- pants’ applications is completed; Federation created official web-sites for modity exchanges); • defining possibility of cash cover of par- placing information on state orders, 59 • new forms of placing orders are legal- ticipants’ applications and provision for subjects (out of 71 that provided informa- ised – auctions, requests for quotations state and municipal contract execution; tion) appointed official press for publishing with preliminary selection, procure- • stipulating a possibility of pre-trial information on placing orders, half of the ment on commodity exchanges – in appeal against actions of state and mu- subjects have successfully established order to increase effectiveness of nicipal Principals. special bodies authorised for placing budget spending; According to the data of the RF Minis- orders and authorised monitoring institu- • the scope of participants is broadened: try for Economic Development and Trade, tions. 1 any legal entity regardless of its business the situation with placing orders is charac- legal structure, form of ownership, lo- terised by positive dynamics: “Analysis of 1. Draft report by Mr A.V. Sharonov, Deputy Min- cation or origin of capital and any indi- comparable parameters of placing orders ister for Economic Development and Trade at the vidual, including entrepreneurs can for the first half of 2005 and 2006 (accord- Government session on 28 September 2006, entitled “On placing orders for procurement of goods, ren- take part in state or municipal contract ing to the Federal State Statistics Service) dering jobs and services for state and municipal bidding; indicates the 1.5 times growth of the needs”. http://www.economy.gov.ru/wps/portal/.
3.
Nevertheless, we have to admit that at this Collisions of legal documents This contradiction is dangerous from stage the Russian legislation on state pro- the point of view of corruption. It raises curement still remains contradictory and First of all, we would like to point out con- legally irresolvable issues of the limits on fragmentary with serious deficiencies. It tradictions in the two key legal documents, spending the funds allocated to a state or creates prerequisites to corruption in the regulating state procurement – Federal municipal institution for procurement of law-enforcement process. A number of Law “On Placing Orders” and the RF goods (works, services) in order to keep norms bear potentially corruptive factors Budget Code. this institution running. and risks. These norms create the addi- The Federal Law “On Placing Orders” This collision has not been legally re- tional conditions for corruptive relations in (Part 2, Article 1) sets up procedures for solved yet. For this reason the plenary the area of state procurement. placing orders that must be applied for session of the RF Supreme Arbitration state and municipal procurement in all Court adopted Decree No. 24 of 22 June We have to point out that a special 2006, which puts an obligation on a methodology of assessing corruption risks cases except when such goods, works and services are procured or rendered for an budget-funded organisation to carry out in legislation, presented by a project expert procurement procedures according to the Ms. E.V. Talapina (in the first place, the def- amount not exceeding the limit of the Central Bank for a cash deal between legal Federal Law “On Placing Orders”. The pro- inition of corruption risks and the typology cedure depends, however, on whether pro- of corruptive factors) was used in this entities in the Russian Federation. Cur- rently this limit is 60 thousand roubles. 2 curement is made for the needs of the state report. The feasibility of using this Meth- or the institution itself. If goods, works and Articles 70-71 of the RF Budget Code, odology can be explained with a complex services are bought for the institution’s regulating expenses of budget-funded or- character of legislation on state and munic- own needs for the amount not exceeding ganisations contain imperative norms to ipal procurement, including both public 2000 minimal wages, it does not have to procure goods, works and services on the and private norms. apply the procedures for order placement basis of the state and municipal contracts stipulated by the Law. According to this Methodology, cor- for the amount exceeding 2000 minimal In fact, this resolution of the collision by ruption risks are defined as an opportunity wages 3 (as opposed to 60 thousand rubles, the plenary session of the RF Supreme Ar- incorporated in a legal instrument to con- mentioned in Federal Law “On Placing Or- bitration Court increases the risk of cor- tribute to corruptive actions and (or) cor- ders”). 4 ruptive decisions in the process of ruption, since it “sanctions” deviations implementing the above regulation. 2. According to Instruction No. 1050-U of the RF from the competitive law-stipulated proce- Central Bank of 14 November 2001. dures for the placement of orders. This sit- The following corruptive factors can be 3. At 1 May 2006 the minimal monthly wage is uation makes it possible to return to the 1 100 roubles. traced in the legislation on state and mu- 4. http://iv2.garant.ru/SESSION/S__fRQk2Q5n/ corruptive situation that existed before the nicipal procurement: PILOT/990,0. Federal Law came into force, when orders
Final report: Appendices, Volume 1 Project “Russian Federation – Development of legislative and other measures for the prevention of corruption” (RUCOLA 2) 77 were artificially split in order to avoid com- the court in the original form or as a notary in legislative gaps with the help of legal petitive procedures. sealed copy (Part 8 Article 75 of the RF documents issued by the executive author- The above collision has to be legally re- Code of Arbitral Procedure). ities. solved. It seems reasonable to make In this case several corruptive factors Article 16 of the Federal Law “On amendments to the RF Budget Code to are “engaged” complementing each other: Placing Orders” states legal provisions for avoid contradictions with the statements of collision of legislative norms, imposing ex- implementation of principles of transpar- the Federal Law “On placing orders for cessive demands on a person that prevent ency, publicity and accessibility of informa- procurement of goods, rendering jobs and him/her from exercising his/her rights and tion on state procurement. Among the services for state and municipal needs”. gaps in regulation. most important conditions is an obligation The minimal contract amount that calls for To eliminate these corruption factors it of the supreme government bodies of the applying Federal Law procedures to is recommended to design the amend- Russian Federation, subjects of the Russian placing orders has to be defined. ments and additions to the Fundamentals Federation and local administrations to We also have to point out contradic- of the RF Notary legislation and to adopt identify the official web sites of the Russian tions of the Federal Law “On Placing them. The more so, as notary sealed elec- Federation, subjects of the Russian Federa- Orders” to the Fundamentals of the RF tronic documents are required not only in tion and local administrations to publish Notary legislation. the sphere of state procurement. It seems information on state procurement compe- The Federal Law “On Placing Orders” reasonable to develop a unified format of titions. This obligation is imposed to provides an opportunity for any tender to an electronic document, its original, provide equal and free access of stakehold- submit a tender application for a competi- copies, as well as the legal status of a hard ers to information on state procurement tion (Part 2 of Article 25) or an auction copy of an electronic document and, vice tenders. The official web sites must also (Part 4 Article 35) in an electronic form). versa, an electronic copy of a paper docu- contain the list stipulated by the Law, At the same time the Law obliges a bidder ment, etc. which could also serve as a source of infor- to present the originals or notarised copies There is an alternative (and a quicker) mation on procurement. These are regis- of documents, e.g., an extract from the way of solving this problem. The require- ters of state and municipal contracts and unified state register of legal entities or a ment for notary certification of the elec- the register of unreliable suppliers. notary sealed copy of such an extract; tronic documents could be taken out of the However, law-enforcement practice copies of ID (for other individuals); a certi- Federal Law “On Placing Orders” if these faces a number of unresolved issues and fied Russian translation of the state regis- documents bear an electronic digital signa- problems of the procedural and the tech- tration documents for legal entities and ture according to the procedures, specified nological character. For example, the fol- private entrepreneurs in accordance with in the RF Law “On Electronic Digital Signa- lowing issues need to be clarified: what is the legislation of a corresponding state (for ture”. the procedure of placing information on foreign citizens). We should also point out the collisions the official web site; in what format this in- These requirements of the Federal Law of provisions within the Federal Law “On formation should be presented; is it possi- “On Placing Orders” cannot be met elec- Placing Orders” itself. For example, Article ble to refuse to place this information and tronically since they do not correspond to 36 of the Law states that the auction com- if so, on what grounds; is it possible to the provisions of the Fundamentals of the mittee considers applications for their remove information from the open access RF Notary legislation, that foresee the compliance with the requirements stated area and what should be the grounds of this exclusive use of hard copies and have no in the auction documents, as well as the removal; and, finally, what is the liability of procedures for certifying electronic docu- participants’ compliance with the require- the authorised web site provider. ments. Besides, the Russian legislation has ments stipulated by Article 11 of the Law. In spite of the fact, that many official no clear definition of what originals and The period of consideration cannot exceed web sites are functioning already, no re- copies of electronic documents are. The 5 days from the final submission date. It is quirements have been developed so far for Federal Law does not clarify the situation difficult to keep this deadline as the data technological and software means of their in regard to the procedures on state and necessary to determine the participants’ operation. “The analysis of the dynamics of municipal procurement. This problem compliance with the requirements must be notification placed on the official web site cannot be resolved either by using the submitted to a Principal by the corre- of the Russian Federation indicates that the general legislative norms, since the Russian sponding organisations or institutions number of notifications has grown from legislation has no unified legal definition of within a 10-day-period. This regulation 2 000 per month in February to 20 000 in an electronic document, its original and creates opportunities to avoid a thorough September. The average daily number of copy. evaluation of participants for corruptive visits has grown from 5 000 in January to Thus, in practice the bidders cannot ex- reasons. 300 000 in September. Currently there are ercise their legal right to submit their appli- about 12 thousand state customers, dis- cations electronically. This collision tributors of state budget funds and special- artificially limits the number of partici- Gaps in regulation, filling in ised organisations registered on the web pants from different Russian cities and legislative gaps with the help site”. 1 considerably reduces competition. Besides, of the legal documents by the The mechanism guaranteeing transpar- the opportunities for legal protection of executive authorities ency, publicity and accessibility of informa- rights and interests of tenders are mini- tion in the area of placing orders cannot mised as well. According to the require- It seems feasible to analyse the state pro- fully operate if the above issues are not re- ments of the arbitrary legislation, all curement legislation looking for such cor- solved. It is common knowledge that the written evidence should be submitted to ruptive factors as gaps in regulation, filling lack of transparency of procurement pro-
Corruption risk assessment of the Russian legislation regulating state and municipal procurement: Nina Solovyanenko 78 Project “Russian Federation – Development of legislative and other measures for the prevention of corruption” (RUCOLA 2) cedures is a strong corruptive factor in the Excessive freedom of sectoral event when a Principal purchases such a sphere of state procurement. (sub-legislative) law-making right; 2) no record of bidders in the register It is necessary to add here that the Law of unreliable suppliers (Part 2 Article 11). “On Placing Orders” leaves no opportunity This factor makes it possible to regulate a A Principal, an authorised organisation, for appealing against actions (failures to number of important issues by sub-legisla- a competition or an auction committee act) of the organisation authorised by an tive legal documents. have the right to dismiss a bidder at any executive authority to maintain the official Despite the fact, that the Law “On stage of a competition or an auction if fol- web site, although it does contain an anti- Placing Orders” regulates the procedures lowing facts were revealed: not authentic corruption provision on appealing against for placing orders in great detail, it still information contained in documents sub- actions (failures to act) of a Principal, an calls for adoption of a large number (over mitted by a participant, liquidation or ap- authorised body, a specialised organisa- 20) of sub-legislative legal documents by plying bankruptcy procedures to a tion, competition, auction or quotation the RF Government. It is justified in some participating legal entity, suspending activ- committees. cases, but it is important that the Law itself ity of a participant according to RF Code The Law “On Placing Orders” does not regulates the most essential issues. for Administrative Violations (Part 4 provide any means of control over observ- Thus, it is completely justified that such Article 12). ing RF legislation in terms of placing orders specific issues as standards for technologi- The indicated competence of a princi- by an authorised body for the official web cal, software, linguistic, legal and organisa- pal, an organisation, a competition or an site administration, which increases the tional provision of official web sites access auction committee based on the “may” risk of corruption. Though this type of can be regulated by the legal documents formula creates the favourable conditions control is exercised over a Principal, an au- adopted by the RF Government. for corruptive deals and applying subjec- thorised body, specialised organisation, tive criteria for the selection of bidders. In Nevertheless, it should be a prerogative competition, auction and quotation com- order to eliminate this corruptive factor it of the Federal Law rather than a Govern- mittees. seems reasonable to determine the compe- ment regulation to determine such anti- The Law fills in the above gaps by refer- tence of a Principal, an organisation, a corruption practices as possibility to ring to sub-legislative legal documents. competition or an auction committee ac- appeal against actions (failures to act) of Thus, the RF Government must set up: cording to the “shall” formula. organisations authorised to maintain the • procedures for using the official web official web site and to ensure that these or- These potentially corruptive provisions sites and standards for technological, ganisations observe the RF legislation on are also typical of regulations determining software, linguistic, legal and organisa- placing orders. area of competence for federal, regional tional provisions of access to the sites and local bodies authorised to exercise It seems reasonable though to intro- (Part 7, Article 16); control over order placement (Article 17). duce the following additions to the Federal • procedure for contract registers and According to the Law, a federal execu- Law “On placing orders for procurement of standards for technological, software, tive body can carry out unscheduled mon- goods, rendering of jobs and services for linguistic, legal and organisational pro- itoring in cases stipulated by the Law. state and municipal needs” in order to visions of access the official sites, con- Among them are the instances when the eliminate the risks of corruption: Article 17 taining these registers (Part 6, Article Principal commits actions (or fails to act) “Control over the observation of the RF 18); qualified as administrative violation. legislation and other regulations of the • procedure for the register of unreliable Russian Federation on placing orders” and If the audit reveals violations of legisla- suppliers and standards for technologi- Article 8 “Ensuring protection of rights and tion on order placement on the part of the cal, software, linguistic, legal and or- legal interests of the bidders”. Principal, an authorised body for such an ganisational provisions for web sites, audit has the right to: containing the register of unreliable • propose to the Principal (a regional suppliers (Part 11, Article 19); Definition of competence public body or local authority) to elimi- • procedure of using the Internet web according to “may” formula nate the violation as well as to replace a sites that carry out open electronic auc- member of a competition, auction or tions and standards for technological, The Federal Law “On Placing Orders” quotation committee who allowed this software, linguistic, legal and organisa- contains some potentially corruptive regu- violation; tional provision of access to the sites lations, determining competence of execu- • obligate the Principal who is not a re- (Part 4, Article 41). tive authority in terms of what they “may” gional public body or local authority to We should point out that the above do, leaving to interpret their right as an rectify a breach as well as to replace a legal documents have not been adopted by option rather than an obligation to abide by member of a competition, auction or the RF Government so far. This fact creates Law, thus possibly exercising this right de- quotation committee who allowed this such a corruptive factor as Failure to pending on the corruptive conditions. law violation, adopt a legal document (failure to act). Such corruptive statements are typical • appeal to a court or an arbitrary court to of regulations, determining requirements recognise the order as invalid. 1. Draft report of the RF Deputy Minister of Eco- nomic Development and Trade Mr. A.V. Sharonov at to bidders. In the event that the Principal ignores the RF Government session on 28 September 2006, A Principal or an authorised organisa- the proposals, an authorised federal au- entitled “On placing orders for procurement of tion can impose the following require- thority can appeal to court in order to force goods, rendering of jobs and services for state and municipal needs” http://www.economy.gov.ru/wps/ ments in the process of placing orders: the Principal to act in accordance with the portal/. 1) bidders have exclusive rights to the RF legislation and to protect the rights and objects of the intellectual property in the legal interests of bidders. It can also
Final report: Appendices, Volume 1 Project “Russian Federation – Development of legislative and other measures for the prevention of corruption” (RUCOLA 2) 79 demand to replace a member of the com- Excessive demands on RF Government order No. 725-r of 3 June, petition, auction or quotation committee. participants in the process of 1998 on free publication of tender an- If the Principal ignores the instructions, exercising their rights or nouncements became inoperative. The of- an authorised executive federal body can ficial press edition of the Russian hold him responsible according to the RF duties Federation – press bulletin “Biddings” pub- legislation. lishes announcements only on a paid basis. We can point out another corruptive factor The listed legislative provisions demon- in the Federal Law “On Placing Orders” – Failure to fulfil this condition can be strate the considerable legal power (as that is excessive demands on participants treated as a corruptive factor by an author- opposed to duties) of the federal, regional in the process of exercising their rights or ised control body executing of placement and local executive authorities exercising duties. of orders. control over order placement. This wide The publication of all the information For this reason when the stock-list competence according to the “may” on the open competition required by the exceeds 300 positions it is recommended formula creates favourable conditions for Law in the official press (including a com- in announcements about open competi- corruption during audit and in case when plete list of goods, works or services), takes tions to list the groups of goods consider- violations are discovered. 20 to 300 pages, depending on a competi- ing the specifics of institutions involved in In order to eliminate the above-men- tion. According to Part 4 Article 41 of the cases; whereas the full list of goods (works, tioned corruptive factor Article 17 of the Law the announcement of the open com- services) procured and their technical Federal Law “On Placing Orders” should be petition must include “the subject of state specifications should be listed only in the changed to determine the competence of or municipal contract, indicating quantity tender documentation. federal, regional and local executive au- of goods, volume of works or services ren- It also seems reasonable to abolish the thorities in controlling order placement ac- dered and brief specifications of these burdensome requirement of publishing cording to the “shall” formula. goods (works, services). The requirement protocols on order placement procedures to put this publication in the official press in the official press as they are available on is problematic, considering that P. 3 of the official web sites.
Conclusions and preliminary suggestions
Since the RF legislation on state and mu- corruptive regulations are used or can • To make amendments and additions to nicipal procurement be used; the Fundamentals of RF Notary legisla- • firstly affects the administrative and • developing proposals on introducing tion, legalising notarial procedures for economic relations characterised by additions and amendments to legisla- electronic documents. In this respect it high potential for corruption, tion on state and municipal procure- seems reasonable to develop a unified • secondly is at the development stage, ment in order to bring it in compliance legal structure of an electronic docu- • and thirdly, is able to reproduce corrup- with the anti-corruption requirements. ment, its original and copies, as well as tion risks the legal status of a hard copy of an elec- At present the following corruptive it is necessary to carry out a constant tronic document and of an electronic factors must be eliminated from the legis- targeted anti-corruption monitoring of copy of a paper document, etc. lation on state and municipal procure- legislation and law-enforcement prac- • As an alternative to making amend- ment: collisions of legal documents, gaps tices. It seems relevant to establish a full- ments to the Fundamentals of RF in legal regulation and filling in these gaps time expert group to carry out this moni- Notary legislation it is recommended to with the help of the relevant legal docu- toring. exclude from the Federal Law “On ments adopted by the executive bodies, ex- Monitoring goals: Placing Orders” the requirement of cessive freedom of sectoral law-making, • identification of legislative provisions notary certification of electronic docu- definition of competence according to the on state and municipal procurement ments, if these documents bear an elec- “may” formula, excessive demands on par- that should be strengthened by the anti- tronic digital signature according to the ticipants in the process of exercising their corruption practices and preventive procedures, specified in the RF Law rights or duties. measures; “On Electronic Digital Signature”. • identification of legislative acts with the The following recommendations can be • Making provisions for an appeal against potential corruption risk factors and suggested to eliminate these corruptive actions (failures to act) of organisations create conditions for corruption in the factors: authorised to maintain the official web sphere of state and municipal procure- • To make amendments to the RF Budget site; ensuring that these organisations ment; Code to avoid contradictions with the act in accordance with the RF legisla- • identification of other legislative regu- statements of the Federal Law “On tion on placing orders. Introducing the lations with corruption risk in the placing orders for procurement of following additions to the Federal Law sphere of state and municipal procure- goods, rendering jobs and services for “On placing orders”: Article 17 “Control ment; state and municipal needs”. To clearly over observance of the RF legislation • identification of typical law-enforce- identify the minimal contract amount and other legal documents of the ment situations of implementation of that calls for applying Federal Law pro- Russian Federation on order place- state and public procurement where cedures to placing orders. ment”; and Article 8 “Ensuring protec-
Corruption risk assessment of the Russian legislation regulating state and municipal procurement: Nina Solovyanenko 80 Project “Russian Federation – Development of legislative and other measures for the prevention of corruption” (RUCOLA 2)
tion of rights and legal interests of an authorised body, a competition or an federal, regional and local executive au- bidders”. auction committee according to the thorities, according to the “shall” for- • Introducing changes to Part 2, Article “shall” formula. mula. 11 and Part 4, Article 12 of the Federal • Introducing amendments to Article 17 Law “On Placing Orders”, formulating of the Federal Law “On Placing Orders”, the areas of competence for a Principal, formulating the areas of competence for
Final report: Appendices, Volume 1 Perspectives for the development of the corruption risk assessment methodology with regard to the analysis of legislation on public procurement of the Russian Federation
Vladimir Yuzhakov President, Institute for Modernisation of the Public (state and municipal) Administration
The periodic evaluation of relevant legal of this methodology is revealing groups of the Russian legislation at the federal level, instruments and administrative measures corruptive factors, recognised as the most and also to continue the search for the with a view to determining their adequacy typical “legal” sources of corruption. This most effective technologies for this work. to prevent and fight corruption, 1 provided methodology has been successfully tested. One of the goals of this project is to further for by the United Nations Convention, is However, from the very start the ques- develop methodologies for assessment and carried out in different ways. tion of its implementation limits has been elimination of corruption risks in the legis- A recent report entitled “Administrative raised. Specifically, are there any signifi- lation. and Regulatory Reform in Russia: Address- cant peculiarities of corruption risk assess- Consequently, the project experts who ing Potential Sources of Corruption”, pre- ment in different spheres of legislation? Is were to analyse corruption risks in the pared by the World Bank, analyses the it applicable to different areas of legal reg- Russian legislation in specific areas – experience of combating corruption by re- ulation? Does it work in regard to the exist- public procurement and education – were viewing rules and regulations in three ing legal regulations and their drafts? Does not limited to choosing or designing a countries. 2 Each of these countries has de- it work in regard to laws and sub-legislative certain methodology to carry out this anal- veloped certain strategies in this work. In acts? Should therefore special methodolo- ysis. Mexico it is institutionalised regulatory gies for revealing corruption risks be devel- They were not directed to use an exist- review. In Finland it is development of oped? ing methodology. On the contrary, their better regulations. In Latvia it is a partici- Actually, the current version of this task was to assess the situation and to patory approach to designing regulations. methodology is a result of addressing two choose, develop or complete the method- Perhaps the variety of approaches of these issues. Originally it was meant to ologies, reflecting the peculiarities of a shows the novelty of the task itself. The reveal corruption factors in legal acts. given area of regulation. Indirectly, this history of purposeful search for solution Later, when tested on sub-legislative acts, practice helped to evaluate the coverage and solving it is fairly short. Obviously, it certain peculiarities were discovered. They and application of methodology dealing will take some more time to find, test and were taken into consideration in the with anti-corruption expertise of laws and recognise the most viable ways of its solu- current version of methodology, which re- regulations, used by the experts of RF State tion. flects both general requirements for legal Duma anti-corruption Commission. This search is carried out in Russia as regulations and specific requirements in In fact, the experts had to define the well. The methodology on corruption risk regard to corruption risk assessment of perspectives for developing the methodol- assessment (anti-corruption expertise) of sub-legislative acts. ogy on anti-corruption expertise of laws legal acts and regulations has become one The search for answers to these ques- and regulations based on the current re- of these solutions. The distinctive feature tions continues. sults, or expand it with new methodolo- The joint project of the Council of gies. 1. See the United Nations Convention against Cor- Europe, the Russian State Duma anti-cor- In the case of the law on procurement ruption, Chapter II, Article 5. 2. World Bank Report No. 36157-RU: “Administra- ruption Commission and the European for state and municipal needs it was tive and Regulatory Reform in Russia: Addressing Commission entitled “Development of leg- decided to involve two experts (the main Potential Sources of Corruption”. Policy note. islative and other measures for the preven- and the additional ones) to carry out this 1 October 2006. Poverty reduction and economic development Unit. Department of economy and tion of corruption” aims at taking practical analysis independently from each other to poverty alleviation. Europe and Central Asia. measures to decrease corruption factors in ensure greater reliability of the results.
81 82 Project “Russian Federation – Development of legislative and other measures for the prevention of corruption” (RUCOLA 2)
Such an approach (an expert assess- As a result, the main expert carried out In this case the table gives us an oppor- ment of a legal instrument by two inde- the analysis of corruption risks in the RF tunity to compare the results of two ex- pendent experts) is foreseen by the legislation on state and municipal procure- perts, who used the same methodology, methodology on corruption risk assess- ment based on the methodology of anti- but have a different experience in carrying ment of laws and regulations. corruption expertise of laws and regula- out the general legal expertise and the The main expert was free in searching, tions traditionally used by the RF State methodology of anti-corruption expertise choosing and completing the most ade- Duma anti-corruption Commission. in particular. The main expert has a consid- quate and effective methodology for ana- This fact proves the universal nature of erable experience in legal expertise and lysing the federal law on state and the methodology of anti-corruption exper- knowledge in the area of state and munici- municipal procurement. tise of laws and regulations at the current pal procurement, but had no prior experi- The additional expert had to carry out stage of anti-corruption technology devel- ence of using the methodology of the anti- the analysis strictly in accordance with the opment. corruption expertise of legal acts. traditional methodology on corruption This is true, at least, in two areas – state The conclusions based on the results of risk assessment of laws and regulations and municipal procurement and existing comparison are presented below. (anti-corruption expertise). Federal laws. The latter is particularly im- Both experts discovered a certain If the main expert had suggested a new portant, since this methodology has been number of factors of corruption in the law (different) or a modified methodology for used so far for anti-corruption expertise of in question and concluded that there is a analysing corruption risks in legislation, draft laws only. need to improve the law in order to elimi- this duplication would have allowed to Thus, both experts used the same nate these corruptive factors. According to compare the results and effectiveness of methodology, despite of the fact that one of the main expert, “The following corruptive the two methodologies in order to pick up them had a choice and a task to find some- factors are to be eliminated from the legis- one of two or to make a synthesis of both. thing new and, possibly, more effective. lation regulating state and municipal pro- If the main expert had used a traditional The comparison of expert reports (See curement: collisions of legal acts; gaps in methodology of anti-corruption expertise, Appendix 1, page 83) allows us to draw regulating and filling in legal gaps with the his previous experience and a fresh look on some conclusions on the perspectives help of the regulations by the executive the methodology would have helped him/ (tasks) for development of the methodol- branch; excessive freedom of sectoral law her to reveal its weaknesses as well as the ogy of the anti-corruption expertise of design; definition of competence according ways for its further development and im- legal acts. to the “can” formula; excessive discretion of provement. For comparison the table “Evaluation of the person exercising his rights or duties”. According to the second expert, “the In any case, the expert assessment made corruption factors and manifestations of general conclusion of the anti-corruption by two experts independently should help corruption in a legal act”, was traditionally expertise: implementing the current to increase the reliability of assessing cor- used. version of the law gives an opportunity to ruption risks in Russian legislation on state When the methodology is applied, the miscreant public officials to conclude cor- and municipal procurement. table is usually used for the following rea- ruptive deals and to join corruptive agree- The results are presented below. sons: ments.” According to the assignment, the main • To ensure full coverage and systematic Out of 12 corruptive factors in the law expert evaluated the need for developing approach by an expert, that carries out pointed out by the main expert, 5 were also additional technologies of analysis. She the anti-corruption expertise. In the discovered by the second expert. Out of had a vast experience in general legal ex- process of analysis, each statement of 100 corruptive factors revealed by the pertise of legislation. She had no previous the regulation (or its draft) should be second expert, 5 were also found by the experience in practical implementation of first of all checked for each corruption main one. the methodology of the anti-corruption ex- factor or other manifestation of corrup- pertise of laws and regulations, which tion risks. Secondly, in the end the The further work on summarising both could have predetermined her choice in entire legal act can be checked for each reports and making recommendations on favour of the methodology. corruption factor or other manifesta- the amendments to the law in order to tion of corruption risks. eliminate factors of corruption – will allow Nevertheless, judging by the report pre- to study the feasibility of revealing each pared by the main expert on the corruption • To compare the results of the anti-cor- corruptive factor discovered by the experts risk assessment in the RF legislation on ruption expertise, carried out by differ- and to come to the conclusion on accepting state and municipal procurement, she did ent experts; for external examination of or rejecting these factors. not find any reasons for searching or de- reliability of the results of the anti-cor- signing a different technology (methodol- ruption expertise or corruption risk as- However, regardless of the future con- ogy) for such an analysis. The choice was sessment of a legal act done by the clusions, this comparison allows us to de- made in favour of the methodology of anti- developers. termine several points for development corruption expertise. According to the • To make up a summary report on the (ways of improvement) of the current main expert, “the possibility and expedi- results of anti-corruption expertise if it methodology of the anti-corruption exper- ency of using the Methodology is explained was carried out by several experts. tise of legal acts. by the fact, that the legislation, regulating • The table is also used for training spe- An obligation to examine each state- state and municipal procurement is cialists and new experts in applying the ment of a legal act to determine the pres- complex in character and contains both methodology of anti-corruption exper- ence of each corruptive factor should be public and specific acts.” tise. established.
Final report: Appendices, Volume 1 Project “Russian Federation – Development of legislative and other measures for the prevention of corruption” (RUCOLA 2) 83
The same refers to an obligatory control of the former legal practice on the expert ruption today, could still become a part of procedure – the examination of presence assessment, especially if it lies in the area of this practice tomorrow. of each corruptive factor in the entire legal the legal regulation under analysis. The The methodology for the anti-corrup- instrument. larger this practice and the higher qualifi- tion expertise is primarily meant to iden- These requirements (mostly, the first cation of an expert in that area, the greater tify all corruptive factors, regardless of one) are generally implemented ex post . To their influence on the analysis of corrup- whether they are currently used for cor- some extent they are a part of experts’ tion risks in a legal act. The expert natu- ruption. The second expert was evidently training in practical use of the methodol- rally sees and highlights the corruptive guided by this statement. ogy of the anti-corruption expertise of factors that proved to be significant in his The methodology of the anti-corrup- legal acts. experience. And on the contrary – he tion expertise has been created as an in- Obviously, these requirements should leaves out those, which he did not come strument for discovering and eliminating be imposed by the methodology itself. across or which seemed to be less impor- all typical corruptive factors in all legal in- The previous experience and the com- tant. Obviously, these circumstances influ- struments to be analysed. This methodol- parative analysis of the results of anti-cor- enced the work of the main expert. ogy becomes even a more effective ruption expertise of the federal law on state However, the corruptive factors that were instrument for reducing corruption risks and municipal procurement made by two not a part of the expert’s prior experience of the Russian legislation as its anti-cor- experts demonstrate the strong influence or that are not used for the purposes of cor- ruption requirements are reinforced.
Appendix 1. Comparative table of corruption risks assessment (anti-corruption expertise) of the Federal law “On placing orders for procurement of goods, jobs and services for state and municipal needs”
Table 1: Evaluation of corruptive factors and manifestations of corruption present in the legal act
Corruptive factor, Article in the legal act, in which a corruptive factor is discovered manifestations of corruption Main expert Additional expert A 1 Scope of discretionary pow- Article 9 part 3; Article 11 part 2; Article 12 part 3; Article ers 12 part 4; Article 21 part 4 Par.10; Article 22 part 4 Para- graphs.14 and 15; Article 24 part 3; Article 26 part 7; Article 27 part 1; Article 28 part 2; Article 28 part 4; Article 28 part 6; Article 29 part 2; Article 31 part 1; Article 34 part 2; Arti- cle 35 part 8; Article 38 part 2; Article 40 part 1; Article 41 part 13; Article 45 part 3; Article 47 part 7; Article 50 part 1; Article 52 part 1; Article 55.1 part 1; Article 60 part 4 2 Definition of competence Article 11 part 2; Article 12 Article 7 part 9; Article 15 part 1; Article 17 part 4; Article according to “can” formula part 4; Article 17 17 part 8; Article 17 part 12; Article 17 part 13; Article 28 part 5; Article 32 part 2. 3 Excessive demands on the Article 21 part 4 Article 11 part 1 п.1; Article 12 part 1 Par.1; Article 25 part 3; person to exercise his rights Article 25 part 6; Article 35 part 2; Article 51 part 2; Article 52 part 3; Article 57 part 6; Article 58 part 2; Article 58 part 3 4 Abuse of applicant’s rights Article 25 part 9; Article 61 part 1 5 Freedom of sub-legislative Article 16; Article 18 part 6; Article 2 part 2; Article 2 part 3; Article 4 part 2; Article 10 regulation Article 19 part 11; Article 41 part 4; Article 11 part 3; Article 13 part 3; Article 13 part 4; part 4 Article 15 part 1; Article 16 part 7; Article 18 part 6; Arti- cle 19 part 11; Article 28 part 7; Article 30 part 1; Article 31 part 1; Article 39 part 1; Article 41 part 4; Article 45 part 4; Article 48 part 3; Article 56 part 2 6 Juridical and linguistic cor- Article 7 part 4; Article 34 part 3; Article 47 part 7 ruption risks 7 Adoption of legal regulation “extra vires” 8 Filling in legislative gaps
Corruption risk assessment methodology with regard to the analysis of legislation on public procurement: Vladimir Yuzhakov 84 Project “Russian Federation – Development of legislative and other measures for the prevention of corruption” (RUCOLA 2)
Table 1: Evaluation of corruptive factors and manifestations of corruption present in the legal act
Corruptive factor, Article in the legal act, in which a corruptive factor is discovered manifestations of corruption Main expert Additional expert Б 9 Presence of a gap Article 16; Article 18 part 6; Article 6 part 2; Article 15 part 2; Article 29; Article 37 part Article 19 part 11; Article 41 2; Article 37 part 3; Article 41 part 4 10 Lack of administrative proce- Article 7 part 4; Article 7 part 10; Article 9 part 6; Article 11 dures part 6; Article 21 part 4 Par.12; Article 28 part 3; Article 28 part 15; Article 37 part 15; Article 38 part 3; Article 45 part 5; Article 52 part 9; Article 53 part 3; Article 54 part 6 11 Lack of competitive (bid- Article 42 part 5; Article 48 part 3; Article 55 part 2 ding) procedures 12 Lack of prohibitions and lim- itations for public officials 13 Lack of responsibility of pub- lic officials 14 Lack of control over public officials B 15 False goals and priorities 16 Normative collisions Article 1 part 2; Article 25 Article 8 part 2 from part 4 Article 11; Article 9 part 7; Arti- part 2; Article 35 part 4; Arti- cle 9 part 7.1; Article 10 part 6; Article 11 part 2 Par. 2 from cle 36 from Article 11 Article 19 ; Article 21 part 5; Article 26 part 2 from Article 22 part 4 P. 9, also Article 21 part 4 P. 9, 6 , Article 22 part 4 P. 13, Part 2 Article 2 17 “Imposed” corruption Г 18 Formal and technical corrup- tion 19 Failure to adopt a legal act (Article 16; Article 18 part 6; Article 19 part 11; Article 41 part 4) – remarks on the RF Government 20 Disrupting the balance of Article 9 Parts 9 and 10 interests Other corruptive factors Violation of transparency condition Article 30 part 5
Final report: Appendices, Volume 1 The basis for the national anti-corruption strategy in the Russian Federation
Elena Panfilova General Director of the Centre for anti-corruption research and Initiative Transparency International – Russia
This document is prepared as a discussion documents developed in Russia over the and, namely, workshop materials of the paper of problems of developing a national last ten years. For example, some provi- joint projects of the State Duma anti-cor- anti-corruption strategy in Russia. It does sions and principles that had originally ruption Commission and the Council of not claim to be exhaustive and complete, been integrated into draft Federal laws “On Europe were used for the purpose of this nevertheless, it outlines the basic princi- combating corruption” (2002) and “The document. It is assumed that these basics ples of developing a national anti-corrup- basics of anti-corruption policy” (2001) of the anti-corruption strategy will lay the tion policy, as reflected in the statements of were also used in preparation of this docu- foundation for further public discussion so the United Nations Convention against ment. Besides, numerous expert studies on that to by summer 2007 they underlie a de- Corruption and in the anti-corruption the ways of combating corruption in Russia tailed final document.
Preliminary statement
The fundamentals of an anti-corruption 1.7. The mechanisms of anti-corruption 3. High priority measures for imple- strategy in Russia consist of the following strategy implementation menting the anti-corruption strategy sections: in Russia 2. Main areas of combating corruption 1. General statements in Russia 3.1. Creating a specialised anti-corruption 1.1. Stating the problem body in Russia 1.2. Definition of corruption 2.1. A specialised anti-corruption body 1.3. The objective of the strategy 2.2. Prosecution for corruption offences 4. Risks at the stage of strategy imple- 1.4. The aims of the strategy 2.3. Prevention of corruption mentation 1.5. The principles of strategy implementa- tion 2.4. Anti-corruption education 5. Annex: Model plan for implementing 1.6. The legal and regulatory framework of 2.5. Evaluation and monitoring of corrup- high priority measures of the anti- the strategy implementation tion in Russia corruption strategy in Russia
General statements
Stating the problem public authority, rule of law, democracy, provided by law-enforcement agencies, human rights and social justice; it slows bodies of judicial statistics and mass media Reaching the goals of sustainable and pro- down social and economic development of statements testify to the fact that corrup- gressive development of Russia is impossi- Russia. tion phenomenon affected the political and ble without a substantial reduction of The official statistics, as well as the data, institutional, economic, judicial and law- corruption level on both the federal and provided by NGOs, specialising in the rel- enforcement, educational and instruc- the regional levels. At present corruption is evant field, the results of scientific, socio- tional fields, as well as social welfare a serious threat to proper functioning of logical and criminological surveys, the data system, medical and investment spheres,
85 86 Project “Russian Federation – Development of legislative and other measures for the prevention of corruption” (RUCOLA 2) international trade, and seriously damages The anti-corruption strategy is prima- tion according to the form of its perpetra- the state system of Russia itself. rily focused on reasons and sources of cor- tion – active and passive bribery. The economic consequences of corrup- ruption rather than on its manifestations, Active bribery is “the promising, offer- tion are manifested in various ways. Bu- on concrete actions rather than on diagno- ing or giving by any person, directly or in- reaucratic delays of document preparation, sis, on systematic approach to all institu- directly, of any undue advantage to any of inability of the state to ensure manufactur- tions rather than on selective measures. its public officials, for himself or herself or ers’ security, lobbying, protectionism, The implementation of the strategy is for anyone else, for him or her to act or abuse of power, unfair competition, exces- carried out systematically and progres- refrain from acting in the exercise of his or sive regulation and state control affecting sively on the entire territory of the Russian her functions”. market economy and free competition Federation, involving all public and munic- mechanisms take the potential investors’ ipal authorities. Passive bribery is “the request or receipt confidence and reduce business initiatives, by any of its public officials, directly or in- The strategy takes into account as much causing a raise of state project costs, reduc- directly, of any undue advantage, for as possible a specific corruption situation tion of economic effectiveness, increased himself or herself or for anyone else, or the in Russia and relies upon continually evasion of taxes, lower rate of filling the acceptance of an offer or a promise of such renewed data in this area. state budget and development of shadow an advantage, to act or refrain from acting economy. The strategy is a unified document with in the exercise of his or her functions”. Ac- Social and political consequences of an open access for everyone and assuming cording to the Criminal law Convention, corruption are manifested in the func- public involvement in its completion and these facts are referred to as corruption if tional, political and moral deterioration of implementation, control and evaluation of committed by domestic and foreign public federal and local authorities as a result of its impact with due regard to capacities and officials, members of domestic and foreign spreading the political corruption, and in resources of Russia. public assemblies, members of interna- the decrease of open and responsible polit- tional parliamentary assemblies, interna- ical competence, impoverishment of popu- tional officials and also by officials of lation and escalation of social tension. Definition of corruption international organisations. Corruption is Corruption affects the activity of execu- relevant for both public and private sec- Corruption is mainly a social phenome- tive authorities causing lower quality of tors. non, which is often revealed as a specific public administration; establishment of offence, but generally cannot be fully de- The United Nations Convention against unofficial decision-making system; pro- scribed by definitions of the criminal law. Corruption defines corruption of national moting closer ties between organised For this reason the anti-corruption strat- public subjects as the “promise, offering or crime, public officials, corrupt politicians, egy considers corruption in the most giving, to a public official, directly or indi- etc. general sense as any use of power or func- rectly, of an undue advantage, for the offi- Over the past few years corruption in tions for the personal benefit. cial himself or herself or another person or Russia has become more systematic, which entity, in order that the official act or This wording coincides with the manifests in the following: refrain from acting in the exercise of his or working definition, given by the Council of • the state policy and the decision- her official duties”. The United Nations Europe interdisciplinary group on corrup- making process in public administra- Convention defines the following instances tion: “corruption is a bribery or any other tion are influenced by private interests of corruption: bribery of national public of- type of behaviour of persons, entrusted of people in power or close to power; ficials, bribery of foreign public officials with certain responsibility in public or • income from “administrative rent”, i.e. and officials of public international organi- private sectors, leading to poor perform- revenues received as additional infor- sations, embezzlement, misappropriation ance of their job responsibilities and aimed mal payments for carrying out public or other diversion of property by a public at gaining any undue benefits for them- authority functions constitute the official, trading in influence, abuse of func- selves or other individuals”. major share of the public officials’ tions, illicit enrichment, bribery in the income; In the work on combating corruption it private sector, embezzlement of property is advisable to use and implement to the • corrupt behaviour is not publicly disap- in the private sector, laundering of pro- fullest the provisions of the Russian legisla- proved of, is considered acceptable and ceeds of crime and obstruction of justice. tion and the international anti-corruption permissible; documents, ratified by Russia. • the executive authorities actively inter- fere with the activity of business entities According to the Council of Europe The objective of the strategy and derive considerable non-budgetary Civil Law Convention on Corruption, “cor- income from this interference. ruption means requesting, offering, giving Reducing the corruption level in Russia by The anti-corruption strategy takes into or accepting, directly or indirectly, a bribe eliminating its causes, promoting intoler- consideration the whole range of corrup- or any other undue advantage or prospect ant attitude to corruption by co-ordinating tion instances and is geared towards com- thereof, which distorts the proper per- efforts and resources of different public au- plete elimination of corruption and its formance of any duty or behaviour re- thorities and society and developing a prerequisites from the public administra- quired of the recipient of the bribe, the common long-term anti-corruption policy tion, rather than correction of certain undue advantage or the prospect thereof”. in Russia in order to remove a threat to the defects in the functioning of regional au- The Council of Europe Criminal Law legal and democratic state and the barriers thorities. Convention on Corruption defines corrup- to its economic and social development.
Final report: Appendices, Volume 1 Project “Russian Federation – Development of legislative and other measures for the prevention of corruption” (RUCOLA 2) 87
The aims of the strategy The principles of strategy plementing the medium-term Programme implementation of social and economic development of the General objectives Russian Federation (years 2006-2008); The General principles concept of administrative reform in the • Strengthening the trust of citizens to • Rule of law, inevitability of criminal lia- Russian Federation for the years 2006-2008 public and municipal authorities. bility for committed crimes (Order of the RF Government No. 1789-r of 25 October 2005); as well as the United • Ensuring the rule of law as the main in- • Presumption of innocence Nations Convention against Corruption strument of regulating the life of society • Equality of all citizens before the law and the Council of Europe Criminal Law and the state. and ensuring free access to justice • Ensuring the basic rights and freedoms Convention on Corruption. • Ensuring the transparency of function- of citizens ing of public and municipal authorities, • Transparency and accountability of free access of citizens to information on The mechanisms of anti- public and municipal authorities for the activities of public and municipal corruption strategy their activities. authorities. implementation • Strengthening the real political compe- Special principles tition and decreasing the threat of • Consolidation of legal and administra- A special legal and regulatory framework is weakening democratic institutions. tive anti-corruption mechanisms being developed in order to implement the • Partnership of public and municipal au- high priority measures within the main • Observing the principle of division of thorities with civil society institutions areas of anti-corruption efforts in Russia. powers and their interaction strictly in and private sector All measures are carried out on the accordance with the Russian Constitu- • Priority of preventive anti-corruption basis of common methodologies, obliga- tion and the legislation of the Russian measures tory for application on the federal, regional Federation. • Inadmissibility of limiting access to in- and local levels. At the same time Federal • Increasing tax revenue and strengthen- formation about corruption instances, and regional authorities, municipal au- ing the budget sphere. corruption risks and anti-corruption thorities, civil society organisations and in- • Strengthening market economy institu- measures. stitutions and private sector can be the tions through applying efficient com- subjects of methodology development. petitive mechanisms. The legal and regulatory The methodologies for implementing the national anti-corruption strategy are • Improving the quality and availability of framework of the strategy subject to public discussion followed by the state and municipal services for citi- implementation approval in accordance with the estab- zens. lished procedure. This strategy is based on the provisions • Reducing the operational business and requirements of the Constitution of An individual action plan is developed costs, resulting in the increase of com- the Russian Federation, Federal laws and for each strategy implementation measure, petitive capacities and decrease of costs codes of the Russian Federation, namely: with an indication of specific activities, for goods and services. the RF Criminal Code; the RF Code on Ad- methodology, organisation or person in charge, timeframe for implementation and • Developing and strengthening civil ministrative Offences; Federal law No 79- resources, necessary for specific actions. society institutions. FZ “On public civil service of the Russian Federation” of 27 July 2004; Federal law No. Strategy implementation measures can Special objectives 94-FZ “On placing orders for procurement be tested through pilot activities followed of goods, carrying out works, provision of by the review of their results and, depend- • Identifying the principal areas of com- services for state and municipal needs” of ing on the results, finalising the methodol- bating corruption in Russia by defining 21 July 2005; The medium-term Pro- ogy for its mass implementation. the priority measures for combating gramme of social and economic develop- The list of activities on anti-corruption corruption, prosecution for corruption ment of the Russian Federation (years strategy implementation in Russia is not offences and anti-corruption education. 2006-2008) (Order of the RF Government exhaustive. This list can be changed, • Identifying specific high priority meas- No. 38-r of 19 January 2006); the Action revised and amended in accordance with ures of strategy implementation. plan of the RF Government for 2006 on im- the established procedure.
Main areas of combating corruption in Russia
A specialised anti-corruption dinating anti-corruption efforts in combat- corruption policy measures, carrying out body ing corruption. monitoring and evaluating the corruption The main tasks of this body are as fol- level and effectiveness of implementing A specialised anti-corruption body is to be lows: provision and co-ordination of anti-corruption measures, as well as over- created in Russia for the purpose of co-or- efforts in combating corruption, co-ordi- sight of the execution of anti-corruption nation of efforts in prosecuting for corrup- activities. tion offences, developing the anti-
The basis for the national anti-corruption strategy in the Russian Federation: Elena Panfilova 88 Project “Russian Federation – Development of legislative and other measures for the prevention of corruption” (RUCOLA 2)
Prosecution for corruption Anti-corruption education corruption level in Russia. Performance in- offences dicators to monitor the results of the activ- Considerable attention will be paid to ities will be put in place and will become an forming a negative attitude to corruption integral part of the strategy. Prevention of corruption in the society. Corruption must be re- A specialised anti-corruption body in garded by society as a dangerous anti- Russia will perform monitoring and evalu- Prevention of corruption in Russia will be social behaviour. In many cases corruption ation functions. carried out by means of identifying and can be prevented, if citizens are more re- NGOs and independent institutions at eliminating conditions and reasons causing sponsible in exercising their legal rights. the Federal and regional levels are enlisted and provoking corruption. Corruption is in The public must, first of all, be aware of the to conduct surveys and to ensure an objec- many ways a consequence of defects in de- corruption risks and of their rights. tive and impartial approach to developing cision-making processes and working pro- The goal of the anti-corruption educa- monitoring and evaluation methodologies. cedures of executive and municipal tion is to create such a pattern of public be- Monitoring and evaluation of corrup- authorities, as well low ethics of some haviour when people would choose a tion are based on the surveys to be carried public and municipal officials. It is neces- longer, but legal way, to solving their out to discover and measure the following: sary to eliminate conflicts of functions, problem by bribing officials. For this • perception by citizens of the level of when public and municipal authorities ex- purpose special training programmes for corruption in public and municipal au- ercise supervision, oversight and provide adults, students and pupils will be devel- thorities; services at the same time. It is also neces- oped and implemented on the corruption • perception by public and municipal of- sary to strictly define the procedures of risks, ways of fighting corruption and anti- ficials of the level of corruption in public regulation, to deprive officials of op- corruption behaviour. public and municipal authorities; portunities to make decisions at their own Involvement of the society will become • perception by the subjects of the entre- discretion and to depersonalise interaction an obligatory component of all strategy ac- preneurial activities of the level of cor- of public servants with citizens and organ- tivities. For this purpose the following ruption in public and municipal isations (reducing the number of personal actions are planned: regular coverage on authorities; contacts while solving problems). The fight anti-corruption activities in mass media; • Federal and regional markets of corrup- against corruption in regard to the activi- informing the public on corruption risks in tion; ties of public and municipal authorities different areas; public hearings; regular • corruption practices at the federal and must be carried out with consideration of and obligatory consultations with civil regional levels; the key areas of administrative reform, society organisations before taking impor- • mechanisms of corruption actions; namely by: regulating the functions of tant decisions, especially in public regula- public and municipal authorities; improv- • structure of corruption in Russia as a tion and taxation areas. whole and in the regions; ing decision-making procedures; reform- The strategy includes measures on ing the system of selection, training and • factors promoting corruption; active media involvement, since it is a “nat- • effectiveness of implementing meas- assigning staff; controlling the conflict of ural” enemy of corruption. The main interests; improving the law-making pro- ures of the national anti-corruption methods of promoting measures on com- strategy. cedure; introducing an obligatory anti-cor- bating corruption will include: continuous Corruption evaluation shall be carried ruption screening of current legislation as coverage of preventive measures in mass out annually in order to follow the dynam- well as draft laws by a specialised anti-cor- media and conducting public campaigns. ruption body; reducing administrative bar- ics of development of corruption proc- riers; strictly controlling the transparency esses. of real estate deals, privatisation, renting Evaluation and monitoring of A detailed comprehensive survey of the out State and municipal property. corruption in Russia level of corruption in Russia is necessary at the initial stage of the strategy implemen- In order to implement the strategy success- tation in order to make provisions for fully it is vital to develop and introduce a future monitoring of its effectiveness and system of evaluation and monitoring of the for making necessary adjustments.
High priority measures for implementing the anti-corruption strategy in Russia
Creating a specialised anti- duces a common legal concept of “corrup- rest of criminal legislation, legislation on corruption body in Russia tion” into the Russian legal field, defines administrative offences, civil legislation, criminal offences regarded as corruption legislation on operational and search activ- A specialised anti-corruption body is set by offences and gives a list of “public officials” ities, judicial legislation, as well as legisla- adopting a special legal regulation, defin- legally liable for corruption deads. tion on public and municipal service. ing principles of its operation, tasks, func- Introduction of the comprehensive The following criminal offences prohib- tions, structure and principles of creating legal concept of “corruption” into the ited by the relevant Articles of the RF such a body. The same regulation intro- Russian legal field by adopting a relevant Criminal Code should be referred to in the legal regulation, followed by amending the special legal regulation as corruptive as a
Final report: Appendices, Volume 1 Project “Russian Federation – Development of legislative and other measures for the prevention of corruption” (RUCOLA 2) 89 result of introducing the common legal • abuse of authority by private notaries Parts One and Two of the present Arti- concept of “corruption” into the Russian and auditors (Article 202) committed cle; legal field and as part of bringing the with a view of gaining benefits and ad- • monopolistic activities and limitation Russian legislation in line with the require- vantages for themselves or for the third of competition (Article 178) with lucra- ments of United Nations Convention parties; tive or other personal interests; against Corruption and the Council of • foundation of a criminal association (a • abuse of authority in issuing securities Europe Criminal Law Convention on Cor- criminal organisation) by a person (Article 185) with lucrative or other ruption: • abusing his/her authority (Part Three, personal interests; • obstruction of exercising the electoral Article 210) for committing other cor- • exceeding the authority by employees rights or the work of an election com- ruptive grave and felony crimes listed in of private security and detective serv- mission if done by means of bribery Part Two of the present Article and stip- ices (Article 203) with lucrative or other (Paragraph “a” of Part Two, Article 141), ulated by Paragraph “c” of Part Two, personal interests; including the abuse of functions (Para- Article 159; Paragraph “c” of Part Two, • obstructing authorities from exercising graph “b” of Part Two, Article 141); Article 160; by Article 164; Paragraph justice and preliminary investigation • illegal acquisition and disclosure of in- “b” of Part Three, Article 188; by Part (Article 294) with lucrative or other formation related to commercial or Two, Article 203; Paragraph “c” of Part personal interests; banking secrets if done by means of Two, Article 221; Paragraph “c” of Part • instituting criminal proceedings against bribery (Article 183); Two, Article 226; by Parts Two and an unquestionably innocent person • bribery of participants and organisers Three, Article 285; Parts Two and (Article 299) of professional sports competitions and Three, Article 286 of the RF Criminal • with lucrative or other personal inter- entertaining commercial contests (Arti- Code; ests; cle 184); • embezzlement or extortion of nuclear • illegal exemption from criminal liability • commercial tampering (Article 204); substances committed by a person (Article 300) with lucrative or other • foundation of a criminal association (a • abusing his/her authority (Paragraph personal interests; criminal organisation) (Article 210) for “c” of Part Two, Article 221); committing grave and felony crimes • illegal detention, taking a person into • embezzlement or extortion of weapons, custody and keeping under custody listed in Part One of the present Article ammunition, explosive substances and and stipulated by Parts Two, Three and (Article 301) with lucrative or other explosive devices committed by a personal interests; Four of Article 290, Part Two of Article person 291, Part Four of Article 309 of the RF • forcing to bear witness (Article 302) • abusing his/her authority (Paragraph Criminal Code; with lucrative or other personal inter- “c” of Part Two, Article 226); • acceptance of a bribe (Article 290); ests; • embezzlement or extortion of drugs or • giving a bribe (Article 291); • falsification of evidence (Article 303) psychotropic substances, committed by • provoking bribery or commercial tam- with lucrative or other personal inter- a person pering (Article 304); ests; • abusing his/her authority (Paragraph • bribery, compulsion to bear witness, to • pronouncement of deliberately unjust “c” of Part Two, Article 229); avoid bearing witness or to misinterpret sentence, decision or any other judicial • abuse of functions (Article 285); if done by means of bribery (Article act (Article 305) with lucrative or other 309). • exceeding one’s authority (Article 286) personal interests; • nonpayment of wages, pensions, schol- with lucrative or other personal inter- • giving deliberately false evidence, arships, benefits and other financial ests; expert conclusion or translation (Arti- provisions (Article 145 1); • appropriation of powers of an official cle 307) with lucrative or other personal • fraud committed by a person (Article 288) with lucrative or other interests; • abusing his/her functions (Paragraph personal interests; • illegal activities in regard to property “c” of Part Two, Article 159); • illegal involvement in the entrepreneur- subjected to inventory, arrest or confis- • misappropriation or squandering com- ial activity (Article 289); cation (Article 312) with lucrative or mitted by a person • forgery by an official (Article 292); other personal interests; • abusing his/her functions (Paragraph • obstruction of legal entrepreneurial ac- • concealment of crime (Article 316) “c” of Part Two, Article 160); tivity (Article 169) with lucrative or without advance commitments to con- • embezzlement of high value items (Ar- other personal interests; cealment: foundation of a criminal as- ticle 164), if done by means of fraud, • legalisation (laundering) of money or sociation (a criminal organisation) misappropriation or squandering, also other property from crime proceeds (Article 210) for committing grave and involving (Article 174), if this money or property felony corruptive offences, as well as • abuse of authority; was obtained as a result of committing crimes stipulated by Part Four, Article • registration of illegal deals with land any crime listed in Parts One and Two 290 of the RF Criminal Code. (Article 170); of the present Article; As part of bringing the Russian legisla- • contraband committed by an official • purchasing and sales of property delib- tion in line with the provisions of the • abusing his/her functions (Paragraph erately obtained by criminal means (Ar- United Nations Convention against Cor- “b” of Part Three, Article 188) with lu- ticle 175), if purchasing and sales of ruption and the Council of Europe Crimi- crative or other personal interests; property was deliberately obtained as a nal Law Convention on Corruption the • abuse of authority (Article 201); result of committing any crime listed in amendments to the RF Criminal Code
The basis for the national anti-corruption strategy in the Russian Federation: Elena Panfilova 90 Project “Russian Federation – Development of legislative and other measures for the prevention of corruption” (RUCOLA 2) should be introduced in order to set up special right of state participation in national Business Transactions should be stricter sanctions for corruption offences. management (“golden share”) as well as signed and ratified. As a result of introducing a common in the governing bodies of joint-stock A programme of evaluation and moni- legal concept of “corruption” into the companies having their shares in State toring of corruption in Russia should be Russian legal field and as part of bringing property; developed and adopted, including the tools Russian legislation in line with the provi- • heads of commercial and non-profit or- for assessment both corruption itself and sions of the United Nations Convention ganisations with managerial functions; effectiveness of anti-corruption measures. against Corruption and the Council of • arbitrary managers; Developing the methodology for evalua- Europe Criminal Law Convention on Cor- • persons registered by the set out proce- tion and monitoring of corruption should ruption it is necessary to specify positions dures as candidates to the legislative be carried out by a specialised anti-corrup- of “public officials” liable for corruption of- and executive authorities of the Russian tion body, involving civil society institu- fences: Federation, the subjects of the Russian tions as well as independent organisations • all persons holding public positions in Federation or to the local authorities; selected on the competitive basis. the Russian Federation as indicated in • persons entrusted with internal control It is necessary to make legal provisions the index of public positions of the over the activities of credit institutions for obligatory screening of all legal regula- Russian Federation; employees, professional participants of tions and draft laws of the Russian Federa- • persons holding top, chief, leading or securities market and other persons, tion for corruption risks (anti-corruption senior positions in public organisations acting on the market of the financial expertise of legal acts). in accordance with the current Index of services. public positions of the Federal public The anti-corruption expertise of legal According to the requirements of the service; acts is based on the methodology that was United Nations Convention against Cor- developed and tested at the federal level • persons holding positions stipulated by ruption it is necessary to introduce a legal and is applied to all newly adopted legal the Charter on municipal level; concept of “illicit enrichment of public of- regulations as well as, stage by stage, to the • officials of the RF Central Bank, its in- ficials” into the Russian legal field and whole legislative regulatory framework. stitutions and branches, as well as of make the relevant amendments to the RF The schedule of anti-corruption expertise State non-budgetary and pension legal regulations. Strict criminal liability of the current legal acts of the executive funds; measures should be initiated for illicit en- public bodies should be developed and ap- • representatives of all levels of legislative richment. proved by a specialised anti-corruption authority; It is necessary to make legal liability body based on the proposals of the execu- • officials of public bodies of control and provisions for corruption offences, accord- tive public bodies issuing the respective oversight; ing to which any damage caused by a cor- legal acts. The schedule must be published • officials and other servants of inter- ruption offence to a legal person, an in the regional mass media. Screening for state entities, if they have a status of individual entrepreneur and other citizens corruption risks (expertise) of draft legal public servants of the Russian Federa- should be fully reimbursed in accordance laws of the executive bodies should be tion according to international treaties; with the civil legislation. carried out at the stage of preparation and • officials and other employees of inter- consideration of each legal regulation. national organisations, foreign officials, A complete analysis should be carried having this status according to national out in regard to conformity of the national It is necessary to make legal provisions legislation of their respective countries; legislation with international anti-corrup- for full access of citizens to information on tion standards and relevant changes should • other persons not mentioned in the the activities of the executive and munici- be entered into the Russian legislation. Index of public positions of the Federal pal bodies in Russia. A law should be devel- public service, having special military A law should be developed and adopted oped and adopted, regulating the ranks and carrying out their functions on State protection of victims and other procedure for providing information to the in entities and institutions governed by persons, assisting to criminal process in citizens on activities of the public bodies. military service legislation (entities, or- order to ensure proper protection of citi- A law should be developed and ganisations and institutions of the RF zens and legal persons, involved into the adopted, regulating lobbying activities in Armed Forces, the RF Federal Border process of prosecution for corruption of- the Russian Federation in order to create a Control Service, the RF Ministry for the fences. legal field eliminating opportunities for Interior, Federal government commu- A set of measures should be developed corrupt mechanisms for lobbying of draft nication and information services, in order to improve the level of social laws, contradictory to the interests of citi- Federal Security Services, RF foreign welfare and social security for employees zens and the State. intelligence service, the RF customs, the of public, municipal, law-enforcement and It is necessary to ensure strict observ- RF tax police, bodies of other bodies involved in fighting corrup- ance of the provisions of the Federal law • criminal executive system, Prosecutor’s tion, as well as a set of measures to ensure No. 94-FZ “On placing orders for procure- office); the necessary financial and technical pro- ment of goods, carrying out works, provi- • magistracy (justices of the peace); vision of the relevant bodies. sion of services for state and municipal • arbitral and peoples’ assessors; The Council of Europe Civil Law Con- needs” of 21 July 2005. The monitoring of • representatives of the Russian Federa- vention on Corruption should be signed observance of the law requirements should tion in the governing bodies of open (re-signed) and ratified. be carried out by the relevant public au- joint-stock companies, in relation to The OECD Convention on Combating thorities of the Russian Federation, involv- which a decision was made to use the Bribery of Foreign Public Officials in Inter- ing a specialised anti-corruption body. The
Final report: Appendices, Volume 1 Project “Russian Federation – Development of legislative and other measures for the prevention of corruption” (RUCOLA 2) 91 information on results of the monitoring • adopting special requirements for per- It is necessary to develop and imple- should be published in mass media. sons, seeking to fill positions in the ment a comprehensive programme aimed It is necessary to develop and imple- public bodies or other significant public at informing the public on the level of cor- ment a comprehensive programme on positions in accordance with the set out ruption in Russia and anti-corruption ac- identifying potentially corrupt areas in the procedure; tivities in the executive bodies. Within this activities of executive public bodies, to set • adopting special requirements for per- programme a requirement will be imposed up a system of control over public servants sons, holding positions in the public to publicise the results of all surveys per- in these areas as well as to develop and in- bodies or other significant public posi- taining to evaluation of corruption in troduce the methodology evaluating cor- tions in accordance with the set out Russia, as well as of all anti-corruption ruption risks of public service positions. procedure; legal acts and the current information on It is necessary to develop and imple- • imposing legislative bans on persons, activities of a specialised anti-corruption ment a system of administrative regula- holding positions in public bodies and body. tions, clearly defining procedural positions of public service to directly or It is necessary to develop and imple- parameters for the functioning of public indirectly interfere with activities of dif- ment a comprehensive programme aimed and municipal authorities. ferent commercial or non-profit organ- at forming intolerance to corruption in- It is necessary to develop and imple- isations, or to take part in management stances and explaining to the citizens, ment a programme of continuous internal of these organisations, including a ban public servants and entrepreneurs the anti-corruption diagnostics in the institu- for a certain period of time to take posi- main points of international and the tions operating in potentially corrupt tions in commercial or non-profit or- federal anti-corruption legislation. areas. ganisations that were directly or This programme will include publish- It is necessary to develop and imple- indirectly connected with their duties; ing information materials on what corrup- ment a set of measures, ensuring strict ob- • making regulatory lists of public posi- tion is; its influence on social and servance of public civil servants of tions access to which is closed or economic development of the country; responsibilities, restrictions and prohibi- limited for persons previously con- specific damage it causes to the society as a tions for civil service, requirements to the victed for corruption offences. whole and each citizen in particular; anti- rules of conduct of a civil servant, includ- It is necessary to legally impose an obli- corruption measures stipulated by interna- ing those in the area of resolving conflicts gation on the public officials to provide tional, federal and regional legislation and of private and public interests, as stipulated declarations of income, property, eco- the way these measures can influence the by the Federal law No 79-FZ “On public nomic and business interests and conflicts corruption situation; as well as conducting civil service of the Russian Federation” of of interests. A more thorough legal regula- public informational events for different 27 July 2004. The monitoring of observ- tion should be ensured in relation to work target groups: public and municipal serv- ance of the law requirements should be performed by public and municipal serv- ants, employees of budget-financed organ- carried out by the relevant public authori- ants for another employer and restrictions isations, students and young people, ties of the Russian Federation, involving a imposed in those instances. It is necessary entrepreneurs, other groups of citizens. specialised anti-corruption body. The in- to develop and adopt a legal act, regulating It is necessary to develop and imple- formation on results of the monitoring the procedure of declaring income, prop- ment a systematic programme of ethical should be published in mass media. erty, economic and business interests and education for “public officials”. This pro- Legal provisions should be made to the conflicts of interests by public officials, as gramme provides for training of all “public basic principles of personnel policy in well as a methodology for monitoring and officials” on public service ethics, including Russia. They will provide for: checking the information provided. elements of legal education.
Risks at the stage of strategy implementation
The current strategy cannot be fully imple- tion body; inclusion of excessively of anti-corruption measures; absence of mented under the following circum- ambitious activities into the anti-corrup- protection mechanism for persons ensur- stances: lack of political will at the highest tion programme, which cannot be fulfilled; ing implementation of anti-corruption level of executive and legislative authority prevailing of legislative and law-enforce- measures; lack of civil society’s involve- to implement the Strategy; absence or inef- ment measures over preventive actions; ment or non-participation in implement- fectiveness of the specialised anti-corrup- leaving some areas, which are out of reach ing and monitoring the Strategy.
Annex: Model plan for implementing high priority measures of the anti-corruption strategy in Russia
No. Activities Persons in charge Timeframe 1. Creation and functioning of a specialised anti-corruption body 1.1. Development of a legal act, regulating the structure and functions of a specialised anti-corruption body
The basis for the national anti-corruption strategy in the Russian Federation: Elena Panfilova 92 Project “Russian Federation – Development of legislative and other measures for the prevention of corruption” (RUCOLA 2)
No. Activities Persons in charge Timeframe 1.2. Adopting a legal act, regulating the composition and func- tions of a specialised anti-corruption body 1.3. Establishing a specialised anti-corruption body 1.4. Developing and adopting an action plan for a specialised anti-corruption body for the years 2007-2010 1.5. Forming divisions for the specialised anti-corruption body in order to implement high priority measures of the regional anti-corruption strategy in accordance with this plan 1.6. Conducting public discussions of the action plan of a special- ised anti-corruption body based on the results of the first year of its operation 1.7. Publishing a progress report of a specialised anti-corruption body on the results of the first year of its operation 2 Carrying out analysis and monitoring of corruption in Russia 2.1. Developing a programme of analysis and monitoring of cor- ruption in Russia 2.2 Developing a methodology for comprehensive evaluation of corruption in Russia according to the following indicators: - level of perception of corruption in public and municipal administration by citizens; - level of perception of corruption in public and municipal administration by public and municipal servants; - level of perception of corruption in public and municipal administration by the subjects of entrepreneurial activities; - structure of corruption markets; - structure of corruptive practices; - structure and mechanisms of corruption deals; - structure of corruption; - factors promoting corruption 2.3 Organising a tender for conducting a comprehensive survey of corruption and for some other relevant surveys on the subject 2.4 Conducting a comprehensive survey of corruption based on the approved methodology 2.5 Carrying out a presentation and a public discussion of the comprehensive corruption survey results 2.6 Developing a methodology of focus corruption surveys in public bodies and making a plan for these surveys 2.7. Carrying out focus surveys of corruption in public bodies 2.8. Publicising the results of focus corruption surveys in public bodies and conducting departmental and public discussion of the results 2.9. Developing a methodology of monitoring the effectiveness of anti-corruption measures 2.10. Developing a plan of surveys within the framework of moni- toring the effectiveness of anti-corruption measures 2.11 Conducting annual comprehensive surveys of corruption; presentations and public discussions of their results 2.12 Conducting annual focus corruption surveys in public bod- ies; their presentations, public and departmental discussions 2.13. Conducting annual monitoring of effectiveness of anti-cor- ruption measures, its presentation and public discussion 2.14. Publicising annually the results of the comprehensive cor- ruption survey, focus corruption surveys in public authori- ties and monitoring of effectiveness of anti-corruption measures 3 Expert evaluation of legislative acts and draft legal acts for corruption risks.
Final report: Appendices, Volume 1 Corruption and anti-corruption strategies in health systems: an overview of the issues and policy solutions
Quentin Reed Lead expert to the RUCOLA 2 project
Executive summary
Corruption in healthcare is widely ac- ronment that is especially vulnerable to such corruption. The paper stresses the knowledged as one of the most serious and corruption. This paper identifies the key point that without the basic parameters of damaging forms of corruption. The scale of types of corruption in healthcare, with par- the healthcare system being well designed, public resources devoted to healthcare, the ticular reference to transition countries such measures are unlikely to be success- specific characteristics of healthcare provi- such as the Russian Federation, and points ful. sion and the need to entrust such provision towards some specific policy solutions that to essentially private actors creates an envi- have been identified or pursued to tackle
Corruption and healthcare – the issues
Healthcare systems provide a public good Key actors payment of doctors for services they though actors (doctors and other medical provide. In most countries, there will be personnel, pharmaceutical companies) The subject of corruption in healthcare is a two types of payers – public and private. that are, more often than not, essentially broad and complicated one. Corruption in • The provider designates the entities private. Healthcare is provided to persons healthcare systems may appear in a wide that provide medical care – i.e. hospi- (patients) who are subject to systematic range of forms, from informal payments by tals, doctors, nurses and other medical uncertainty concerning when they will patients in return for routine hospital staff. need to consume healthcare, and by defini- treatment, to the use of medical personnel • Patients receive medical care from pro- tion possess less information than provid- and facilities for election campaign pur- viders poses. The diagram in Annex 1 (page 98), ers (doctors) concerning their healthcare • Drug and equipment suppliers (phar- presented by Savedoff and Hussmann needs. These conditions of systemic uncer- maceutical companies) provide drugs, (2006), provides an overview of the main tainty, asymmetric information and large other medicines and medical equip- 1 actors within a healthcare system and sug- numbers of widely dispersed actors make ment to providers. necessary extensive government regulation gests types of corruption that may occur • Other suppliers provide goods and of the healthcare sector – from the need to between those actors. services of a nature that is not specific As the diagram usefully depicts, there ensure some level of free access to health- to healthcare; these may be of any are six main actors: care, to the registration of drugs, approval nature ranging from buildings to com- • The government regulator primarily of their prices and the management or su- puter equipment. pervision of the system by which health- approves the registration of drugs and care is financed. Last but not least, medical devices (equipment), decides healthcare consumes vast amounts of which medicines are paid for by the Main forms of corruption public money – generally between 5% and state (or to what extent each medicine is 15% of government revenues. These financed by the state and to what extent The diagram identifies a considerable factors taken together create a context that paid for by patients), and approves the number of types of corruption that can is potentially highly prone to corruption. prices of medicines and equipment. occur between various actors in the health- • The payer finances the provision of care system. The following is a list (cer- 1. Savedoff and Hussman (2006). healthcare – from purchase of drugs to tainly not exhaustive) of types of
93 94 Project “Russian Federation – Development of legislative and other measures for the prevention of corruption” (RUCOLA 2) corruption, classified according to the procurement. 1 It also does not deal with ID These areas not only account for large actors between which it occurs. fraud or understatement of income by pa- losses in resources, but also have the most tients, as these are not corruption in the direct effects on health in terms of reduc- Government regulator – Payer sense of an exchange between patients and tions in quality of care and access to serv- • bribery of regulators to overlook mis- providers – as opposed for example to ices, especially for poor segments of the management of public health insurance bribes provided in order to ensure that population. 3 funds; such practices are overlooked. Neither • collusion in embezzlement of health- does it address other possible forms of cor- care funds between regulators and offi- ruption, such as bribery in hiring person- Healthcare corruption in cials responsible for management of nel by medical establishments (sale of transition countries healthcare funding (health ministry of- positions). ficials or health insurance company of- Instead, this contribution focuses par- ficials). ticularly on a subset of the list above, There is widespread evidence that corrup- Government regulator – Drug/ namely three main areas of corruption that tion in the healthcare systems of transition equipment supplier have been most discussed in the literature countries is a major problem, and systemic in countries of the former Soviet Union. • bribery of regulators to secure registra- and particularly in the context of transition According to the results of surveys cited in tion of drugs/medical equipment; countries. These are the following: 2006 Transparency International Global • bribery of regulators to secure place- • informal payments to doctors by pa- Corruption Report, informal payments to ment of drugs/medical equipment on tients in return for medical care to doctors by patients are equal to 84 per cent list of drugs and equipment financed which they are formally entitled; of total health expenditure in Azerbaijan, from public funds. • corruption of the health regulator by 35%-40% in Georgia and 56% in the pharmaceutical companies in return for Government regulator – Provider Russian Federation. 4 According to other registration of drugs and medical survey evidence, in CIS countries more • bribery of government inspectors by equipment and placement of drugs on than 60% of citizens reported making in- medical establishments/doctors to the list of essential drugs that are wholly overlook non-compliance with health- formal payments, with the figure rising to or partly financed by the state; 5 care standards and norms. over 90% in Armenia. The New Europe • corruption of doctors and medical es- Barometer surveys of the Centre for the Payer – Provider tablishments by pharmaceutical com- Study of Public Policy conducted in 2004 panies in return for prescribing or over- • bribery of health ministry or health in- found that 93 per cent of Russians rated prescribing their drugs or in drug pro- surance company to overlook or collude their health system as very bad or not so curement. in reimbursing medical facility with good, and findings of the survey across more funds than it is entitled to. These areas of corruption are selected countries showed a correlation between for four main reasons. First, according to ratings of healthcare quality and general Provider – Drug/equipment the available sources of information these perceptions of corruption in the country. 6 supplier are widespread or serious forms of corrup- • provision of advantages to doctors by tion in healthcare in transition countries There is also ample evidence that cor- pharmaceutical company in return for (see Healthcare corruption in transition ruption in other areas of the healthcare doctors prescribing or over-prescribing countries below). Second, informal pay- system than payments by patients to particular drugs or medical equipment. ments to doctors by patients have been doctors is a major problem in Russia. identified in surveys are a types of corrup- Against a background of major leakages Provider – Patients tion that is systemic in many transition from the health budget (see Lessons for the • informal payments to doctors by pa- countries. Third, the selection, categorisa- Russian Federation , page 97), corruption in tients in return for provision of medical tion and service delivery of drugs and the system of healthcare financing has re- care to which patients have a right; medical equipment are almost certainly cently yielded a major scandal after top of- • informal payments to doctors by pa- the largest single clear category of health- ficials in the Federal Mandatory Health tients in return for access to above- care spending; according to evidence cited Insurance Fund were arrested on suspicion standard medical care. by Viann, governments typically allocate of accepting bribes from regional branches This list (and this paper) does not tackle 20%-50% of the health budget to drugs of the insurance fund and from pharma- the issue of corruption involving “other alone. 2 Fourth, as Viann also argues, ceutical companies. suppliers”, but assumes that this is an area that should be sufficiently dealt with by 1. A World Bank study on an electronic procure- 2. Evidence cited in Viann (2002), p. 78. standard public procurement regulation, ment bidding system implemented in Chile stated 3. Viann (2002), pp. 29-30. that the system led to “tremendous savings and 4. Allan, Davaki and Massalios (2006), p. 64. including the use of the most advanced helped increase access of the poor to essential med- 5. Viann (2002), p. 20. procurement techniques such as electronic icines …”. Clare Cohen and Montoya (2001), p. 1. 6. Rose (2006), p. 40-41.
Final report: Appendices, Volume 1 Project “Russian Federation – Development of legislative and other measures for the prevention of corruption” (RUCOLA 2) 95
Overall healthcare system design: financing and incentives
Before discussing how the three areas of is a large gap between i) the healthcare to consequences of these systemic factors was corruption listed above should be tackled, which citizens are formally entitled, and ii) the de facto institutionalisation of informal it is essential to realise that measures to the actual capacity of the system to provide payments by patients to doctors or medical tackle corruption in healthcare cannot be healthcare up to the formally acknowl- facilities as a means for obtaining care to isolated or “tacked on to” overall health- edged standard are much more vulnerable which patients were formally entitled. care policy. For corruption to be effectively to corruption. One of the clearest examples tackled, it is necessary for a healthcare is healthcare in the former Soviet Union. A full discussion of issues of healthcare system to The USSR was the first country in the design is far beyond the scope of this con- • establish clear and publicly reiterated world to guarantee constitutionally the tribution. The point that needs to be un- goals and commitments right of all citizens to the provision of all derlined is the importance of putting in • establish clear mechanisms and rules healthcare for free. However, the system place a system whose principles of alloca- for achieving those goals and commit- never provided sufficient resources for this tion of care and reimbursement of costs are ments standard of provision to be implemented in clear, transparent and internally consistent. • include a system of financing which practice, and from the 1970s the propor- Whatever the type of system that is chosen, enables these goals to be achieved in tion of GDP devoted to healthcare fell. for example whether it tends towards uni- practice within the financial con- Moreover, the system was designed in a versal public provision or more towards straints. way that biased healthcare provision in the participation of citizens in direct In other words, the system must be de- ways that wasted resources on certain payment for frontline services, if it does signed in such a way that it is actually feasi- types of care (particularly in-hospital treat- not satisfy these standards it will yield in- ble for healthcare to be allocated according ment) at the expense of other types (espe- centives that create direct or indirect pres- to the official rules. Systems in which there cially primary care). One of the main sure for corruption.
Key areas of corruption
This section discusses the three areas of to arise as a mechanism by which patients are paid no more than the average wage. 2 corruption selected by this paper for par- obtain care to which they are formally enti- The tendency of less rich countries to re- ticular focus, and outlines the most impor- tled – and which doctors are thereby moti- munerate doctors disproportionately to tant measures that have been identified to vated to provide in return for additional the professional commitment and stand- tackle them. payments. ards expected of them, combined with the One solution to the problem of informal ease with which they may extract payments Informal payments payments that is often advocated is the in- from patients, yields obvious lessons for troduction of official charges as a means of anti-corruption policy. In addition to the “formalising” informal payments. While Informal payments for medical treatment basic need to ensure that the healthcare introducing charges may be a way of in- are defined by Lewis as “payments to insti- system does not promise to provided more creasing revenue to redress the balance tutions or individuals in cash or in kind than its funding will sustain, doctors and made outside official payment channels for between formal and real entitlements to other key medical personnel should be re- services that are meant to be covered by care, the introduction of official charges munerated such that their official income the public health system.” 1 They are a wide- should not be taken as a panacea for does not lag radically behind their “target spread phenomenon in all post-communist dealing with informal payments. While wage” – in lay terms, the income to which transition countries, and – as underlined such payments may make patients less they feel entitled. above ( Healthcare corruption in transition willing to pay doctors “under the table”, they may not make doctors less willing to countries , page 94) – appear to be systemic The paradox of countries where infor- in countries of the former Soviet Union. demand such payments, in the absence of mal payments are widespread, however, is While a legitimate debate continues about improvements in their own situation. that both “adequate remuneration” of whether small post-hoc gratuities consti- Moreover, such reforms must be very doctors and the introduction of official tute corruption, it is simply assumed here careful to monitor their effects on lower charges may both be politically infeasible. that all informal gratuities or payments income segments of the population. constitute corruption or encourage a This leads to an additional common un- Where such solutions are partially imple- context in which healthcare is conditional derlying cause of informal payments, mented, other specific measures to prevent on the provision of such payments. which is inadequate remuneration of corruption are also essential. The most im- As Section 3 underlined, in healthcare doctors and other medical personnel. Ac- portant of these can probably be divided systems that aspire to the provision of cording to Ensor and Duran-Moreno into two types: measures to maximise more services than the healthcare budget doctors in OECD countries generally transparency and the establishment of can finance, informal payments are likely receive incomes between 2.5 and 4 times functioning complaint mechanisms. the national average wage, whereas doctors 1. Lewis (2000), p. v. in eastern European countries generally 2. Ensor and Duran-Moreno (2002), p. 115.
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Two types of transparency Measures to prevent corruption involv- ultimate prize for a pharmaceutical com- ing the regulator and pharmaceutical com- pany, essentially guaranteeing the pre- Mechanisms to increase transparency are a panies may be split into two main types: scription of the drug for the relevant fundamentally important anti-corruption medical conditions, and reimbursement at mechanism in all areas of healthcare provi- Criteria and procedures for drug taxpayers’ expense. sion. In the context of informal payments, registration and selection there are two main types of transparency For these reasons, a key anti-corruption The activities of drug selection committees measure. First, a clear statement of pa- mechanism is the promotion of essential are a target par excellence for corruption, tients’ rights and active provision of infor- drug lists based on objective criteria. The as their decisions carry huge commercial mation on these rights can act as an WHO criteria for selection of drugs for in- implications for pharmaceutical compa- important bulwark against informal pay- clusion on EDL’s should be seen as a nies. In order to reduce the discretion of ments for treatment to which patients have minimal standard. These are: relevance to selection committees – or, viewed differ- a right. the pattern of prevalent diseases; proven ently, to allow them to decide on the basis efficacy and safety; evidence of perform- Second, more specific measures to of sound analysis and objective criteria – a ance in a variety of settings; adequate qual- provide information on the provision of number of mechanisms have been pro- ity, including bio-availability and stability; care in practice can be very useful. A good posed and implemented. example of this is a pilot scheme imple- favourable cost-benefit ratio in terms of mented in Croatia in 2004-2005 to tackle Drug registration criteria and total treatment cost; and preferences for corruption by publishing waiting lists for procedures drugs that are well known to have good 1 pharmaco-kinetic properties. 3 According treatment such as operations. Hospitals The World Health Organisation has to Clare Cohen, Australia and Canada have were obliged to disclose to patients lists defined a set of minimum criteria for a successfully improved the objectivity of showing them their position in the waiting transparent drug registration process: 2 list and make such lists available at medical drug selection processes through the appli- • a list of all registered pharmaceutical facility reception desks. Patients who did cation of “pharmaco-economics” or out- products and an information system for not wish their identity to be disclosed were comes research, which uses cost-benefit, the registration process of pharmaceu- listed by number instead. According to cost-effectiveness and cost-utility analyses tical products which include a defined preliminary evaluations of the scheme it to compare the economics of different minimum level of information, such as had a significant impact. pharmaceutical products, or to compare the product description (including the drug therapies with other medical treat- generic name and a summary of Complaints mechanisms ments. 4 product characteristics), the name of While measures to increase the transpar- the manufacturing company, the date of A minimal condition for the approaches ency of healthcare provision are vital, they the registration, and the name and outlined above are rules and procedures to may be ineffective if patients are not able to contact information of the company ensure the professionalism and independ- seek redress for misconduct or bribe- registering the medicines; ence of selection committees: seeking by medical personnel. In the open • written procedures on how to submit waiting lists policy implemented in Drug selection committees must be com- and assess applications for registration Croatia, TI Croatia established a hotline to posed of impartial persons with the appro- of medicines products, describing the monitor the project, and received more priate technical skills. Their members process to follow and the fees required; than 90 calls relating to waiting lists in one must be obliged to declare any conflicts of • a standard application form for submis- hospital in the first few months. interest, and meetings should be regular sion of applications, which is publicly and well publicised so that the public can accessible and readily available at a gov- observe proceedings. Minutes of meetings Corruption of the health ernment office or on a web site; should be posted on the Internet and deci- regulator • a formally established and operational sions clearly justified. In the event of a po- committee responsible for registration tential breach, an appeal process must be The nexus between pharmaceutical com- of pharmaceutical products composed in place that ensures due process. 5 panies and the state regulator is one of the of professionals with technical skills, In addition to such measures, it may be clearest points of vulnerability to corrup- which meets on a regular basis; useful for regulators to apply strict rules tion in a healthcare system. The state regu- • the existence of a mechanism whereby governing contacts and meetings between lator (for example the Food and Drug once decisions are made, the responsi- employees of the regulator and representa- Administration in the USA or the Czech ble committees provide official written tives of pharmaceutical companies – for State Institute for Drug Control) registers documents for all decisions regarding example a ban on such meetings on the the drugs produced by pharmaceutical applications, explaining the reasons for premises of the regulator or company companies and decides which of those rejection if necessary. unless accompanied by a designated offi- drugs will be provided to patients at public cial from the regulator, duties of both regu- expense (“essential drugs”). The regulator Selection of “essential drugs” latory employees and pharmaceutical also carries out other tasks which may also The inclusion of a drug on the list of drugs companies to declare other meetings, and be affected by corruption, such as supervi- that are provided for free – that is, are paid so on. sion of clinical studies, although these are for or at least partially subsidised from the not discussed here. public health budget – may be seen as the 3. Clare Cohen (2006), p. 81. 4. Ibid , p. 80-81. 1. Vian (2006) p. 55. 2. WHO (2006), p. 8. 5. Ibid , p. 81.
Final report: Appendices, Volume 1 Project “Russian Federation – Development of legislative and other measures for the prevention of corruption” (RUCOLA 2) 97
Corruption of doctors and ment patterns and prescription practices in will be much lower. Moreover, as Williams medical facilities by particular. Measures to restrict undue in- notes, “[U]nless all interested parties co- pharmaceutical companies fluence by pharmaceutical companies operate to address conflicts of interest in include the following: healthcare, it is unlikely that progress will 2 Influence by the pharmaceutical industry • self-regulation and codes of ethics ap- ever be achieved.” on the healthcare practices of doctors and proved and enforced by pharmaceutical medical facilities is an area in which there companies themselves and their trade Corruption in procurement associations – on the principle that re- is increasing evidence of corruption. This This paper does not tackle the issue of pro- striction of all companies is more ad- subsection covers corruption involving the curement in healthcare comprehensively. vantageous for all than no restriction; provision of benefits to doctors in return This subsection only raises briefly the issue • formal restrictions on marketing and for prescribing or over-prescribing partic- of procurement of drugs and medicines, promotion activities by pharmaceutical ular drugs, and of procurement staff in and specifically quantities of drugs pur- companies within medical facilities; return for manipulation of drug prices or chased and their prices. Again, in addition • bans or restrictions on promotion of procurement of excessive quantities of to the standard application of rules and particular medicines and drugs by drugs. Clare Cohen cites research that oversight systems for procurement, meas- doctors within medical facilities; identifies a correlation between the fre- ures to increase transparency may have a quency of doctors’ contacts with pharma- • conflict of interest provisions for big impact. In Argentina, the government ceutical companies and their prescription doctors which rule as inadmissible implemented a policy of monitoring the of drugs produced by the same companies. business relationships or positions by prices hospitals paid for medical supplies Regulatory authorities in the United States which they benefit from the activities of and then distributing this information and United Kingdom have both moved re- pharmaceutical companies (for among all hospitals. Prices of the moni- cently to tackle undue influence of compa- example share ownership or consul- tored supplies fell immediately by an 1 nies on the medical profession. tancy contracts); average of 12% and stayed below the initial • in particular, banning of trips by Corruption of doctors purchase prices for the whole time the doctors paid for by pharmaceutical policy was implemented. 3 There are no Doctors need some contact with pharma- companies, for example to conferences convincing arguments why such prices ceutical companies in order to obtain nec- in exotic locations; should not be made public entirely, as they essary information about the drugs or • monitoring of prescription practices of are in the Chilean procurement system devices those companies supply. However, individual doctors by medical facility mentioned above (page 94, footnote 1). such contacts can very easily grow into un- oversight committees or citizen boards. healthy relationships which distort treat- Needless to say, unless doctors have 2. Williams (2006), p. 96. been educated at medical school about the 3. Viann (2006), p. 52. Viann also refers to a drug 1. See for example United Kingdom House of price monitoring tool developed by the WHO and Commons Health Select Committee (2005); Kassirer standards to which they should adhere and Health Action International that can be used by (2006). why, the chances of preventing corruption other organisations to monitor prices.
Lessons for the Russian Federation
This section outlines very briefly some cording to the WHO, in 2003 Russia spent bination of old and new financing ele- lessons that might be drawn for reform of $167 per capita on healthcare – compared ments, with enormous regional variations healthcare in Russia. The Russian health- to around $3 000 in Germany and France 4 in the pace of transition and relative care system currently lies at a major cross- – and funding of primary care in particular success of implementation… In some roads. In the early 1990s reforms were has been especially inadequate. regions the new financing system has not initiated to replace or supplement direct It is worth citing at some length Tra- been implemented at all; in other regions state financing of healthcare with financing gakes and Lessof’s summary of the situa- the system has been implemented only in by health insurance companies – in partic- tion as of 2003: some rayons…. Full insurance and cover- ular the Federal Mandatory Health Insur- Roughly a decade after the introduction of age of the population has nominally been accomplished, even though payment for ance Fund (FMHIF) and its territorial the initial health insurance legislation, the this coverage, whether by insurance com- branches, with regulations also allowing healthcare financing system in the Russian panies, territorial fund branches, or local private insurers to form. A payroll tax to Federation is still in a state of flux and health authorities in the case of the non- finance the insurer was set at 3.6% of earn- beset with difficulties. The financing and working population, is far from complete. 5 ings. However, to cut a long story short, the purchasing mechanism envisaged by the law has not yet been fully implemented in Not surprisingly, such a system has not reform was never fully implemented, and any of the regions… The only component come close to fulfilling the need for while citizens continued to be guaranteed of the planned system which at present rational health system design outlined formally extensive free healthcare, the functions mostly as expected is the role of above ( Overall healthcare system design: fi- system continued to be massively under- the territorial funds in payroll tax (pre- nancing and incentives , page 95). Not sur- funded; Tragakes and Lessof (2003) cite ar- mium contribution) collection… As for the prisingly, the system has helped to guments that the payroll tax would have to remaining components, they show a com- perpetuate the phenomenon of widespread be doubled to 7% for the system to provide the services it guarantees on paper. Ac- 4. Moscow Times, 4 December 2006. 5. Tragakes and Lessof (2003), p. 77.
Corruption and anti-corruption strategies in health systems: an overview: Quentin Reed 98 Project “Russian Federation – Development of legislative and other measures for the prevention of corruption” (RUCOLA 2) informal payments – the persistence of bribes were provided to secure a place for tion, the number of specialists is planned which is documented above ( Informal pay- pharmaceutical companies in the DLO to be as much as halved and priority ments , page 95). Moreover, reports cited by scheme. 2 If confirmed, this scandal would focused on primary care and prevention. Ensor and Duran-Moreno in 2002 sug- confirm that corruption involving the most gested that up to 30% of the federal health senior healthcare officials and pharmaceu- The ambitious nature of the National budget was not accounted for, i.e. does not tical companies has been rife. 3 Health Project is striking, and if imple- reach its intended destination. 1 mented as planned it might be expected – The FMHIF has been responsible for The National Health Project by addressing the current shortages in the managing the state DLO program, system – to have a significant effect on the launched in 2005, which finances and ad- An ambitious healthcare reform launched incidence of informal payments, although ministers the provision of medicines to by President Vladimir Putin in September there have been complaints about unfair pensioners and other citizens on a low 2005 created the new National Health criteria for selecting personnel eligible for income. During 2006 the Fund has been in- Project, which is to channel major in- salary increases. However, it is not clear creasingly under attack as delayed pay- creases in funding (recent media reports whether the Project embodies a clear ments to distributors led to widespread appear to suggest something like a dou- vision of the system for financing health- shortages of essential drugs. Against this bling of funds) into higher salaries for care. The FMHIHF has not been abolished background, in December 2006 a major general practitioners and nurses, new or altered by the reform, although the scandal broke in which the Director of the equipment for clinics and four new high- Project is taking over financing of many of FMHIF, his deputies and heads of several tech health centres in major cities. In addi- the drugs in the DLO system that were fi- departments were arrested and charged nanced by the Fund. Perhaps most ur- with organised corruption and abuse of 2. Global Insight, “Corruption Scandal Unfolds with Arrest of Russian Mandatory Health-Insurance gently, it is not clear whether the spending power. The officials were accused of ac- Fund Chief”, http://www.globalinsight.com/SDA/ envisaged by the Project is being imple- cepting bribes from the FMIHF’s territorial SDADetail7563.htm. mented as planned; a recent media report branches, pharmaceutical companies and 3. The scandal has been compounded by news that the Interior Ministry is investigating possible em- cited clinics close to Moscow who claimed suppliers, with analysts assuming that the bezzlement of tens of millions of dollars intended to pay for children’s holidays at health resorts. ( Moscow not to have received any of the promised 1. Ensor and Duran-Moreno (2002), p. 113. Times , 11 December 2006). new equipment.
Conclusion: the need for comprehensive analysis-based reform
This paper has outlined the main ap- velopments summarised up to now suggest intended. Given the evidence on corrup- proaches and measures for tackling cor- is that if massive increases in funding of tion and leakages from the healthcare ruption in healthcare, and has emphasised healthcare are not accompanied by root- budget proper research should be carried the primary importance of rational and and-branch reform of the entire healthcare out on the flows of funds within the health- consistent healthcare system design and fi- financing system along with the process of care system – for example through Public nancing along with a number of specific registration and selection of medicines, Expenditure Tracking Surveys – in order to anti-corruption policies. As far as the much of the money might end up in differ- identify risks and design (or at least adjust) Russian Federation is concerned, the de- ent locations than those for which it was reforms accordingly.
Annex 1: Actors in the healthcare system and corrupt linkages between them
See chart on following page.
Bibliography
• Jillian Clare Cohen and Jorge Carikeo fective regulation in the health sector”, • Maureen Lewis, Who is paying for Montoya (2001), Using Technology to Chapter 5 in Richard B. Saltman et al. healthcare in eastern Europe and Fight Corruption in Pharmaceutical (eds.), Regulating entrepreneurial be- central Asia? , The World Bank, Human Purchasing: Lessons Learned from the haviour in European healthcare sys- Development Sector Unit, Europe and Chilean Experience , http://info. tems , European Observatory on Central Asia Region, Washington DC, worldbank.org/etools/docs/library/ Healthcare Systems Series, World 2000, http://lnweb18.worldbank.org/ 48617/oj_chile.pdf. Health Organisation, Open University eca/eca.nsf/Attachments/ • Tim Ensor and Antonio Duran-Moreno Press, pp. 106-124. http://www.euro. Who+is+Paying+for+Health+Care+in (2002), “Corruption as a challenge to ef- who.int/document/e74487.pdf.
Final report: Appendices, Volume 1 Project “Russian Federation – Development of legislative and other measures for the prevention of corruption” (RUCOLA 2) 99
Table 1: Five key actors in the health system State capture State capture Definition Government regulator Drug approval and control and approval of norms Equipment norms
Influence on Influence on decision-makers Payer (social security, decision-makers private or public Bribes to overlook health insurance compliance Other supplier Extortion Drug and (e.g. construction) by inspectors Negative Overprovision equipment supplier incentives Absenteeism to save costs Overbilling Phantom patients
Procurement Provider (public or Prescription practices (facilities, ambulances) private hospitals, Drug and equipment procurement physicians)
Fraud in beneficiary ID use Informal payments Understatement of income Unnecessary treatment and prescriptions
Patients Source: Savedoff and Hussmann (2006), p.7.
+Europe+and+Central+Asia/$File/ (Chapter 3); Sara Allin, Konstantina dustry, April 2005, http://www. Who+Is+Paying+text.pdf. Davaki and Elias Mossialos (Chapter 4); publications.parliament.uk/pa/ • Ellie Tragakes and Suszy Lessof (2003), Péter Gaál (Chapter 4); Jillian Clare cm200405/cmselect/cmhealth/42/42. Healthcare Systems in Transition: Cohen (Chapter 5); Jerome P. Kassirer pdf Russian Federation , European Observa- (Chapter 5); Harvey Bale (Chapter 5); • World Health Organisation (1999), Op- tory on Health Systems and Policies, John R. Williams (Chapter 5), http:// erational Principles for Good Pharma- Copenhagen, 2003: 5 (3). http://www. www.transparency.org/publications/ ceutical Procurement , http://www.who. euro.who.int/document/e81966.pdf. gcr/download_gcr#download int/medicinedocs/collect/edmweb/ • Transparency International (2006), • Taryn Vian (2002), Corruption and the pdf/whozip49e/whozip49e.pdf. Global Corruption Report 2006: Cor- Health Sector , USAID/MSI, http:// • World Health Organisation (2006), ruption in Health , especially contribu- www.usaid.gov/our_work/democracy_ Measuring transparency in medicines tions by: William D. Savedoff and Karen and_governance/publications/ac/ registration, selection and procurement: Hussman (Chapter 1); Magnus Lin- sector/health.doc. Four country assessment studies , http:// delow, Inna Kushnarova and Kai Kaiser • United Kingdom House of Commons www.who.int/medicines/areas/policy/ (Chapter 2); Richard Rose (Chapter 2); Health Select Committee Report on goodgovernance/WHO_PSM_PAR_ Jim Gee (Chapter 2); Taryn Viann The Influence of the Pharmaceutical In- 2006.7.pdf.
Corruption and anti-corruption strategies in health systems: an overview: Quentin Reed Joint report on corruption risk assessment of the legislation in the sphere of healthcare
Elvira Talapina and Larissa Sannikova Senior scientific experts, Institute of State and Law, Russian Academy of Sciences, Candidates of Law
Summary conclusion
In the Russian healthcare system the cor- (Centre for Strategic Development, World tion evaluation of the above-mentioned ruption is most evident in two areas: Bank, 2006) and based on the enforcement legislative acts prepared by the two project • public procurement of medical drugs practice, the Basics of the RF legislation on experts – Candidates of juridical science L. and medical equipment; the citizens’ healthcare dated 2 July 1993 Sannikova and E. Talapina – independently • providing medical services in health- were reviewed with reference to the RF of each other. The document contains the care institutions. Civil Code and the Programme of state conclusions agreed by the experts, at the At the same time the relations in the guarantees in providing free medical care same time preserving their individual healthcare system are not regulated by a to the RF citizens for 2007 approved by the value. Their peculiarities should be taken single codified act, but rather – by a wide Order of RF Government #885 dated in consideration while preparing legislative range of regulatory legislative acts: federal 30 December 2006. proposals on removal of the corruption laws, orders of the RF Government, as well The goal of the review is to identify the risk factors identified in the healthcare leg- as legislative acts issued by the Ministry of statements in the legal regulation, creating islation. healthcare and social development of the directly or indirectly incentives for corrup- RF – orders, letters, etc. tion. According to the methodology of as- The summary conclusion was put to- sessing legislative acts for corruption risks gether based on the results of anti-corrup-
Scope of discretionary powers Article13: Providing medical care in committing socially dangerous acts, in the institutions of the municipal the order stipulated by the Russian Article 5. Authority of the federal healthcare system can also be financed legislation. by the mandatory medical insurance government bodies Such category as persons committing so- and by other sources in accordance cially dangerous acts can be interpreted with the RF legislation. Article 6. Authority of the regional quite broadly (committing an administra- government bodies In the absence of a legislative act this un- tive offence is also socially dangerous) and specific provision (the part about “other subjected to arbitrary isolation based on Article 8. Competence of the local sources”) can be interpreted quite broadly, this article. Thus, according to Article 13 of authorities especially as financing issues are resolved. the FL “On psychiatric help and guarantee- As the areas of competence of legislative Article 34: Providing medical ing the citizens’ rights on its provision” and executive bodies are not distinguished assistance (medical examination, “measures of compulsion of the medical in the above-mentioned articles, there is a hospitalisation, observation and character are applied following a court de- big chance for arbitrary interpretation and isolation) without the consent of a cision in respect of the persons, suffering transferring regulation of the general rela- citizen or his/her authorised serious psychiatric disorders and commit- tions to the sub-legislative level, which can representative is allowed in regard to ting socially dangerous acts, on the basis also lead to duplicating the competence. persons with illnesses, which are of and in the order stipulated by the RF Crim- This is qualified as unreasonably wide dis- danger to the others, suffering serious inal Code and the RF Criminal and Proce- cretional powers. psychiatric disorders, or persons dure Code.”
100 Project “Russian Federation – Development of legislative and other measures for the prevention of corruption” (RUCOLA 2) 101
So the measures of compulsion in Physical evaluation board (aircrew medical Excessive freedom of sub- medical care are allowed only in regard to review board) to the Physical evaluation legislative rule-making the persons who have committed criminal board (aircrew medical review board) of a offences. higher standing or to court. No independ- The Basics of the legislation contain a large ent examination is envisaged (a conflict number of blanket provisions. The rule- Article 41: The citizens suffering from with the Basics). making authority of the RF Government is socially significant diseases, the list of established – Article 18, Article 21 p.1, which is defined by the Government of Article 31. The right of citizens to Article 36, Article 40, Article 41, Article 42, the Russian Federation, receive information about health condition Article 51, Article 52, Article 54, Article 64; medical and social help and are authority of federal executive bodies – guaranteed clinical observation in the The procedure for receiving the informa- Article 21 p.3, Article 24 p.1, Article 25, relevant institutions for the prevention tion by the citizens is a gap. The Basics of Article 29, Article 36, Article 37, Article 39, and treatment for free or on the legislation make no provisions for a Article 40, Article 41, Article 46, Article 48, preferential terms. mechanism, guaranteeing the citizens’ Article 49, Article 54, Article 59, Article 63; access to this information (whether a On the issue of payment for medical care authority of the government bodies of the citizen should sign upon receiving the in- an alternative, which is not linked to any- RF subjects – Article 24 p.1, Article 24 p.4, formation, whether it should be docu- thing, is given – whether to provide it for Article 24 p.3, Article 41, Article 42, Article mented, etc.) free or on preferential terms (the amount 59, Article 63; authority of the local gov- of privileges is not specified, either). ernment bodies – Article 63, Article 64. Article 44: Control over the quality of In all these cases the discretional The validity of transferring the regula- medical drugs, immunobiological powers provoke opportunities to use them tion to a sub-legislative level should be drugs, disinfectants and medical for corruptive purposes. checked in every case. supplies is exercised by a federal executive body, responsible for Presence of a legal gap exercising public control and Excessive requirements supervision over circulation of medical imposed on a person Article 15: Licensing of the medical and drugs; and by a federal executive body exercising his/her right pharmaceutical activity is carried out responsible for control and supervision in accordance with the RF legislation. in the area of human sanitary and Article 18: The procedure for providing With this reference the law moves away epidemic well-being. medical care to the persons without from laying the foundation for licensing – citizenship and to the refugees is The functions of control are given to the licensing conditions, grounds for refusal in defined in accordance with the public bodies, which exercise them at their issuing a license, etc. This gap is filled by legislation of the Russian Federation. discretion (the control procedure is regu- by-laws – the Order of the RF Government Reference to the legislation (which is non- #499 “On approving the Statement on li- lated by the acts of the Federal Service for the Supervision of Public Health and Social existent in this area) is considered as an ex- censing of the medical activity” dated 4 July cessive requirement imposed on the 2002. Development, i.e. by the supervising body itself with the help of by-laws). The State- persons without citizenship and on the ref- Article 25: In case of disagreement with ment on the Federal Service for the Super- ugees, blocking them from exercising their the conclusion of the Physical vision of Public Health and Social right. evaluation board, military men, the Development has no mention of any super- Article 29: Persons in detention … have citizens, who are subject to the draft vising authority in this area. a right to medical care as necessary in and enlisted as contractors, have a the institutions of state or municipal right for an independent medical Article 56: Control over the quality of healthcare at the expense of the examination in accordance with medical care provision is exercised by a relevant budgets. article 53 of these Basics and (or) for an federal executive body; its competence The provision gives no clear guarantees for appeal against Physical evaluation includes exercising state control and free medical care, as it is left to the discre- board’s conclusions in legal form. supervision in the healthcare system, if tion of relevant people in authority (it is not stipulated otherwise by a federal Carrying out an independent medical ex- not even specified what these people are) – law. amination and the procedure for register- as necessary. ing its conclusion is a gap filled by using See the previous comment. discretional powers. Besides, several cor- Article 39: First aid is provided immediately to citizens where urgent ruption risk factors are combined here. Ac- Article 57: The right for practicing folk medical intervention is required cording to Article 53 of the Basics, the medicine is given to the RF citizens, (accidents, injuries, poisoning, other Statement on the independent medical ex- who have received the certificate of a conditions and illnesses). amination should be approved by the RF folk practitioner issued by the Government, but it is not (rejection of a healthcare executive authorities of the The way this provision is stated can lead to regulatory legislative act). According to p.9 subjects of the Russian Federation. the breach of citizens’ right for medical of the Statement on the Physical evaluation care. As it is applied in practice, the refus- board approved by a Government Order The status of a folk practitioner’s certificate als to provide first medical aid can occur. dated 25 February 2003, a citizen can and the possibility of receiving it are both One of the options to solve this problem is appeal against a conclusion made by the the gaps. to define a list of diseases and situations,
Joint report on corruption risk assessment of the legislation in the sphere of healthcare: Elvira Talapina and Larissa Sannikova 102 Project “Russian Federation – Development of legislative and other measures for the prevention of corruption” (RUCOLA 2) when the assistance is provided urgently (if state or municipal medical institutions representative, if there are grounds to such a list can be made). Another option is can in some cases be entrusted to a believe that the harm to the citizen’s to specify the subjects having a right for person having secondary medical health was done as a result of unlawful first medical aid (but only as any subject education degree in accordance with a acts. applying, regardless of whether he/she has decision of the regional executive The provision allows for a subjective ap- a medical policy). Still another is to estab- bodies in charge of healthcare. proach – practically any harm to health can lish liability for a refusal to provide first What is meant by “some cases” and how be assumed to result from unlawful acts. medical aid. are the activities of public bodies and a medical institution co-ordinated? Absence of responsibility for Absence of administrative Article 52: A citizen or his/her violations procedures authorised representative has a right apply to a body, appointing forensic This factor refers to responsibility of any Article 19: This information is medical or forensic psychiatric medical official, professional or a legal entity. At the provided by public and local examination concerning inclusion of same time the responsibility of a medical government bodies in accordance with an additional specialist of the relevant institution for its employee’s actions is not their authority through the mass media profile into the expert commission with directly stated in the Basics of RF legisla- or directly to citizens. his/her consent. tion on the citizens’ healthcare and can The procedure for providing information The procedure for considering an applica- only be defined based on the general rule in to the citizens is missing. tion, its gratification or refusal? Article 1068 of the RF Civil Code: “Respon- sibility of a legal entity or a citizen for the Article 20: Children, teenagers, Article 58: The consulting physician damage caused by its employee”. students, disabled and retired people, has a right to refuse observing and doing the physical training have a right In some cases the Basics give references treating a patient, subject to agreement to the criminal legislation: to free medical checks. with a relevant official … The procedure for exercising the right to What is the procedure for agreement? Article 35: Illegal performance of which the medical control provision corre- artificial insemination and embryo sponds is missing. Article 62: Professional medical and implantation entails criminal liability pharmaceutical associations stipulated by the RF legislation. Article 24 p.1: For healthcare purposes participate in … the persons under age have a right for a Article 37: Illegal performance of The procedure for such participation is a regular medical check-up and medical sterilisation entails criminal key issue in this provision, which is not de- treatment in health centres for children liability stipulated by the RF scribed exhaustively. and teenagers in the order stipulated legislation. by a federal executive body, regulating Article 63: The procedure for re- The Criminal Code does not contain legal relations in the healthcare system training, improving professional special provisions for such liability (it is and under conditions defined by the knowledge of medical and possible to qualify it as doing harm to authorities of the subjects of the pharmaceutical workers and assigning health, but it would not exactly reflect the Russian Federation. qualification categories to them is essence of these provisions, aiming to The absence of procedures for exercising defined in accordance with these Basics single out a special subject of violation). the right for clinical examination adds up by the federal and regional executive In others – the responsibility of medical to unclear division of administrative bodies in the area of healthcare jointly workers is declared, but its forms, scope, actions between federal executive and re- with professional medical and basis and conditions are not specified: pharmaceutical associations. gional authorities – a joint regulation has • p. 6 Article 58: The consulting physician to be adopted, regulatory or individual? What is the mechanism for co-ordinating bears responsibility for inadequate per- the actions of public bodies with profes- Article 29: The procedure for providing formance of his professional duties in sional organisations? medical care to persons detained, accordance with the RF legislation ; serving a sentence in the form of • p. 1 Article 68: If the violation of citi- restraining liberty, arrest, Juridical and linguistic zens’ rights in the area of healthcare imprisonment, being in places of corruption risks occurs as a result of inadequate per- confinement or under administrative formance of professional duties by arrest is defined by a federal executive Article 24 p.5: obtaining necessary medical and pharmaceutical workers, body, regulating legal relations in the information on health condition in the doing harm to the citizens’ health or healthcare system jointly with form accessible for them. their death, the restitution is made in accordance with Part One, Article 66 interested federal executive bodies. The interpretation of accessibility is quite of these Basics ; The procedure for administrative co-ordi- subjective according to a professional view. nation of federal executive authorities’ See also comments to Article 31. • p. 1 Article 66: If harm to the citizens’ actions is missing. health is done, the guilty persons must Article 61: Disclosing patient make a restitution to the victims in the Article 49: The medical evaluation of confidentiality without the consent of a amount and order stipulated by the citizens’ temporary disablement in citizen or his/her authorised RF legislation .
Final report: Appendices, Volume 1 Project “Russian Federation – Development of legislative and other measures for the prevention of corruption” (RUCOLA 2) 103
Definition of competence by the Order of Ministry of healthcare and of the types and scope of the first medical according to “may” formula social development # 220 dated 29 March and sanitary aid that they could receive for 2006 (this order falls under the corruption free at a medical institution in their local- Article 34: Compulsion measures of the risk factor “adopting a regulatory legisla- ity. medical character may be applied to tive act by an executive body “beyond com- The list of the specialised (hi-tech) persons committing socially dangerous petence”). In practice it led to the fact that medical services provided in accordance acts on the basis and in the order in the specialised federal medical institu- with the Programme of state guarantees in stipulated by the Russian legislation. tions financed from the federal budget but providing free medical care to the RF citi- See the comments to the same article not falling under Order #220 patients were zens for 2006 was approved by the Order of under “scope of discretionary powers” charged for those types of specialised the Ministry of healthcare and social devel- factor. The order of applying compulsion medical care, which according to the Pro- opment # 220 “On providing hi-tech types measures depends on the discretion. The gramme of state guarantees in providing of medical care at the expense of the Criminal and Procedure legislation is to free medical care to the RF citizens, should federal budget in federal specialised blame here also, as it needs revision from be provided for free in the specialised medical institutions within jurisdiction of the point of view of human rights. federal medical institutions. the Federal agency on healthcare and social The presence of this list is important as development, the Federal medic-biological the programmes of state guarantees of free agency and the Russian Academy of Presence of conflicts between medical care to the RF citizens for 2006 Medical Science in II-IV quarters of 2006” legal norms and 2007 point out plainly that the special- dated 29 March 2006. ised medical care including hi-tech care is This Order is of high importance to the The title and contents of Article 44 contra- provided in federal specialised medical or- RF citizens, as in 2006 for the first time the dict to each other (internal conflict). ganisations at the expense of the federal hi-tech medical care (e.g., aortocoronary Article 56: Prohibiting to carry out budget. Consequently, the Russian citizens bypass) was included in the list of medical private medical activity is executed by have a right to claim free provision of services provided to the citizens for free at a decision of a body having issued a certain types of specialised medical care. the expense of the federal budget. How- permit for such an activity or by a court However, in order for them to exercise this ever, it was not registered at the RF Minis- decision. right, a list of federal specialised medical try of Justice, as the officials of this organisations is necessary. Ministry did not think it needed state reg- Prohibition on carrying out an activity is an istration (Letter of the RF Ministry of administrative punishment, which can Article 43: The procedure for applying Justice N 01/3397-ЕЗ dated 27 April 2006). only be imposed by a court decision (Arti- methods of diagnostics and treatment The Order of the Ministry of healthcare cle 3.12 of the RF Code of Administrative specified in Parts 2, 3 of this article as and social development # 220 was pub- Offences). well as using medical drugs, lished only in a specialised journal “Health- immunobiological drugs, disinfectants care”. Therefore, the conclusion is that the including those used abroad is defined Absence of bidding (auction) citizens needing hi-tech medical care for by a federal executive body, regulating saving their life are not provided access to procedures legal relations in the healthcare system. the information, which is vitally important In the Basics of RF legislation on citizens’ Only the procedure for using medical to them. healthcare the provisions for bidding (auc- drugs is adopted. All the others fall under In order to ensure the right of citizens tion) procedures in the healthcare system rejection of regulatory and legislative acts for information about the free medical are missing – e.g., placing state order for and resolving issues individually. The same care, it is feasible to specify the obligations providing some types of medical services. refers to p. 17 Article 5 (establishing a pro- of the federal and regional executive au- cedure for conducting medical evaluation), thorities in the area of healthcare as well as p. 5 Article 6 (establishing a procedure and municipal healthcare authorities concern- Rejection of a regulatory scope of social support to certain groups of legislative act ing provision of such information to citi- people in the area of medical and social zens both through media and individually care as well as provision of medical drugs). P. 5 Article 40 states that financial covering – during a consultation in a medical insti- of activities related to providing specialised tution. medical care by specialised federal medical Violating the principle of legal Apart from the corruption risk factors institutions, the list of which is approved by information transparency listed above, it is noteworthy that as the RF Government in accordance with medical institutions provide paid medical these Basics is an expenditure obligation of P. 4 Article 20 states that the guaranteed services, incentives for corruption are the Russian Federation. Up until this time scope of free medical care is provided to created by applying chapter 39 of the RF the list of specialised federal medical insti- the citizens in accordance with the Pro- Civil Code “Provision of paid services”. P. 2 tutions is not approved by the RF Govern- gramme of state guarantees of free medical Article 782 of the RF Civil Code stipulates ment. At the same time a list of specialised care to the RF citizens. The Programme of the possibility of the provider’s unilateral federal medical institutions within juris- state guarantees of free medical care to the refusal to fulfil the contract terms. In prac- diction of the Federal agency on healthcare RF citizens, which is adopted annually does tice this provision leads to the citizens’ and social development, the Federal not specify the types and the scope of the constitutional rights being violated. medic-biological agency and the Russian medical services provided for free. Conse- By the Definition of the RF Constitu- Academy of Medical Science is approved quently, the Russian citizens are not aware tional Court No. 115-О dated 6 June 2002
Joint report on corruption risk assessment of the legislation in the sphere of healthcare: Elvira Talapina and Larissa Sannikova 104 Project “Russian Federation – Development of legislative and other measures for the prevention of corruption” (RUCOLA 2) the contract on providing paid medical Thus, as a result of anti-corruption sponsibility for violations, defining compe- services (medical care) was recognised as a expert evaluation of the Basics of the RF tence according to “may” formula, public agreement in accordance with p. 1 legislation on citizens’ healthcare dated presence of conflicts between legal norms, Article 426 of the RF CC. The Constitu- 2 July 1993, the following corruption risk absence of bidding (auction) procedure, re- tional Court also determined that an obli- factors were found: scope of discretionary jection of a regulatory legislative act, gation to make a public agreement also powers, presence of legal gaps, excessive adopting a regulatory legislative act by an means inadmissibility of the provider’s uni- freedom of sub-legislative rule-making, ex- executive body “beyond competence” and lateral refusal to fulfil it. The Court’s legal cessive requirements for a person, absence violating the principle of legal information view is not reflected anywhere in the exist- of administrative procedures, juridical and transparency . ing legislation. linguistic corruption risks, absence of re-
Final report: Appendices, Volume 1 Joint report on corruption risk assessment of the legislation in the sphere of education
Elvira Talapina and Larissa Sannikova Senior scientific experts, Institute of State and Law, Russian Academy of Sciences, Candidates of Law
Summary conclusion
The Federal law “On Education” of 10 July Strategic Development, World Bank, 2006) perts, at the same time preserving their in- 1992 and the Federal law “On Higher and was used during the anti-corruption evalu- dividual value. Their peculiarities should Postgraduate Professional Training” of ation. The goal of the analysis is to identify be taken in consideration while preparing 22 August 1996 were selected as the main the provisions in a legal regulation, creat- legislative proposals on removal of the cor- subjects of anti-corruption expert evalua- ing directly or indirectly incentives for cor- ruption risk factors identified in the legisla- tion (corruption risk assessment). In the ruption or having a potential to do so. tion on education. course of the anti-corruption evaluation, The summary conclusion was put to- As a result of corruption risk assess- the related provisions of the RF Civil Code gether based on the results of the anti-cor- ment the following corruption risk factors and the Rules of providing paid educational ruption evaluation of the above-mentioned were identified in the Federal law “On Ed- services approved by the Order of RF Gov- legislative acts prepared by the two project ucation” dated 10 July 1992 and the ernment No. 505 dated 5 July 2001 were experts – Candidates of juridical science L. Federal law “On Higher and Postgradu- also reviewed. V. Sannikova and E.V. Talapina – inde- ate Professional Training” dated The methodology of assessing legisla- pendently from each other. The document 22 August 1996. tive acts for corruption risks (Centre for contains the conclusions agreed by the ex-
Absence of responsibility for the RF Government to adopt by-laws: p. 7 tional activity, which should be governed violations Article 5, p. 3 Article 7, p. 3 Article 10, p. 5 by a law. Article 12, p. 2 Article 13, p. 4,5 Article 16, For example, in accordance with p. 1 The RF Law “On Education” makes no pro- p. 1 Article 20, Article 28, p. 1 Article 33, p. Article 16 of the RF Law “On Education” the visions for specific measures of liability of 1 Article 34, p. 3 Article 35, p. 3 Article 41, procedure for admission to public educa- educational institutions and officials for p. 2 Article 42, p. 10 Article 50, p. 3 Article tional institutions of higher professional ed- breaching the rights of students and pupils 52.1, Article 53 p. 2 . ucational (higher education institutions) of or other illegal actions; no effective mech- Other provisions give rule-making the RF established by federal executive anism inflicting inevitability of punish- power to public bodies (federal, regional bodies is defined by the Order of the Minis- ment for law violations is in place (p. 3 and local) – p. 1 Article 7, p. 2 Article 13, p. try of education #50 dated 14 January Article 4; p. 7 Article 51; p. 3 Article 32) . 8 Article 15, Article 28, Article 29, Article 2003, although this issue should be regu- This drawback is also found in the FL “On 31, Article 33 p. 1, Article 33 p. 9, Article 34 lated by a law as it has to do with citizens Higher and Postgraduate Professional p. 1, p. 4 Article 41, Article 52.2 p. 2. exercising their constitutional right for ed- Training” (p. 2 Article 3). Resolving a wide range of issues is ucation. placed within the competence of the The FL “On Higher and Postgraduate founders. The functions of the founder of Professional Training” also contains many Excessive freedom of sub- the federal educational institutions estab- blanket provisions regarding the authority legislative rule-making lished by the RF Government are carried of the RF Government (p. 3, 6 Article 5, p. 8 out by the RF Ministry of education and Article 6, p. 4,6,7 Article 10, p. 6 Article 11, The RF Law “On Education” has a big science. Consequently, the Ministry’s acts p. 3 Article 16, p. 4 Article 19, p. 3 Article number of provisions giving authority to regulate some important issues of educa- 21, p. 2 Article 24, p. 2 Article 33).
105 106 Project “Russian Federation – Development of legislative and other measures for the prevention of corruption” (RUCOLA 2)
There are also provisions with the au- review – makes it possible to apply them to Presence of conflicts between thority of the federal executive body (p. 9 selected (or on the contrary – unfavoura- legal provisions Article 6, p. 2 Article 7, p. 3 Article 8, p. 2 ble) institutions and creates incentives for Article 11, p. 4 Article 15, p. 3 Article 16, p. corruption ( p. 6. Article 10 of the FL “On In the RF Law “On Education” there are 4 Article 17, p. 2 Article 20, p. 5 Article 23, Higher and Postgraduate Professional two contradictory provisions dealing with p. 3 Article 24). At the same time the Training” ). confiscating property of an educational in- federal executive bodies and the federal stitution: an imperative – p. 2 Article 43 bodies governing the education are distin- and a discretionary one – p. 6 Article 39. guished and so are their powers. Definition of competence Consequently, while considering property Such a large number of reference and according to “may” formula confiscation of an educational institution a blanket provisions allow to characterise public official, acting on behalf of the prop- the laws on education as being of frame- The competence of public bodies and erty owner (public or municipal institu- work and declaratory nature. The mecha- public officials is defined by such terms as tion), can use his/her discretion, which can nism of exercising citizens’ rights in “may”, “has the right to” in several provi- lead to a corruption offence. education is not clarified by these pieces of sions of the RF Law “On Education” (p. 6 P. 7 Article 12 of the RF Law “On Educa- legislation. Article 30, p. 23 Article 33, p. 6 Article 37, p. tion” and p. 3 Article 18 of the FL “On 1 Article 38), as well as the FL “On Higher Higher and Postgraduate Professional and Postgraduate Professional Training” Scope of discretionary powers Training” contradict to p. 3 Article 55 of (p. 4 Article 7, p. 9 Article 16). the RF CC. A warranty cannot be issued to The powers of public bodies are defined Several corruption risk factors are com- an affiliate, a branch or a structural subdi- quite vaguely – “ensure” , which in practice bined in the provision of p. 4 Article 47 of vision, as they have no legal status, which is allows for a wide range of interpretations – the RF Law “On Education”: the founder or clearly stated in p. 3 Article 55 of the RF from passive co-ordinating or approving the local authorities may suspend until CC. Giving authority to structural subdivi- role to active interference with the activity court decision the entrepreneurial activity sions of the educational institutions ambig- of educational institutions (p. 1 Article 14, of an educational unit, if it is to the detri- uously expands their property autonomy, p. 1,5 Article 15 of the RF Law “On Educa- ment of its educational activity stipulated which creates potential for abuse by their tion”) . by the charter. managers. The powers of local authorities are de- The presence of “may” formula justifies P. 5 Article 47. of the RF Law “On Edu- clarative and can be exercised discretion- a possibility for the arbitrary rule, also of cation” contradicts to Article 3.12 of the ally: the local authorities organise and co- corruptive nature, in relation to an educa- Code for Administrative Offences. P. 5 ordinate (p. 5 Article 18 of the RF Law “On tional institution. It appears that a decision Article 47 gives a founder or a local author- Education”) . on suspending the entrepreneurial activity ity a right to suspend until court decision Licensing powers can be used as discre- should be within the competence of court the entrepreneurial activity of an educa- tionary ones, as p. 13 Article 33 of the RF or otherwise an exhaustive list of reasons tional unit, if it is to the detriment of its ed- Law “On Education” suggests only one for suspending the entrepreneurial activity ucational activity stipulated by the charter. result of the licensing activity in case there of an educational institution should be put However, according to Article 3.12 of the are no grounds for a negative conclusion: a together. Code for Administrative Offences suspen- founder may appeal to the court regarding sion of activity is an administrative punish- Besides it describes alternative powers a negative conclusion on the result of expert ment, which can only be imposed by a of the public authorities and individuals (if evaluation and a following refusal to issue a judge. the founder is an individual); the procedure license to an educational institution. for suspension is unclear (time limits, deci- Insufficient separation of competence sion-making procedure); the activity may between the legislative and executive Juridical and linguistic not be suspended. bodies in Article 28, 29 of the RF Law “On corruption risks Education” , defining competence of the RF In accordance with p. 2 Article 19 of the and its subjects. On the more important RF Law “On Education” on request of the In p. 10 Article 33 of the RF Law “On Edu- issues the legislative level of regulation parents (authorised representatives) a cation” the term “average statistic indica- should be imposed by the law itself. founder of the educational institution may tors” is used, which is not explained further Implementation of national and re- allow admission to educational institutions in the law. As it is a baseline concept for gional components of public educational for studying at an earlier age. conducting assessment in licensing educa- standards in higher and postgraduate pro- The provision makes it possible to give tional activity, it can be interpreted differ- fessional training by a higher education in- a permission (or to refuse) without any le- ently by law enforcers and thus be used for stitution on the contract basis with a gitimate reasons. Thus a factor, which is corruptive purposes. relevant regional executive authority more typical for public authorities than in- It also remains unclear, which body is creates incentives for corruptive deals on dividuals, can be applied to this situation. responsible for calculating the average sta- the contract terms ( p. 4. Article 5 of the FL In light of further elaboration of the Meth- tistic indicator or introducing methodol- “On Higher and Postgraduate Professional odology and its application to the civil rela- ogy for its calculation. Under these Training” ). tions, this factor can be called “giving a circumstances the requirements of the as- Giving discretionary powers, namely, right infringing upon the equality of the sessment can be both overstated and un- the initiative to conduct a performance sides”. derstated, which also causes the wide scope
Final report: Appendices, Volume 1 Project “Russian Federation – Development of legislative and other measures for the prevention of corruption” (RUCOLA 2) 107 of the expert committee’s discretionary FL “On Higher and Postgraduate Profes- However, at present the development of powers. sional Training”) . educational standards is regulated by the The mechanism for providing paid edu- RF Government, which delegates many Presence of a legal gap cational services is regulated by a by-law – functions to a federal executive body. So in Rules of providing paid educational serv- defiance of the law provision, the regula- The RF Law “On Education” is generally of ices approved by the Order of RF Govern- tion takes place on a lower level and a reg- framework nature. The consequence of the ment #505 “On approval” dated 5 July 2001. ulatory legislative act of an adequate level legislative decision is absence in these laws At the same time the Rules regulate provid- is not adopted. It blocks implementation of of the legal mechanisms for exercising edu- ing paid educational services in a very p. 5 Article 43 of the RF Constitution, ac- cational entities’ rights. The rights of the general sense, leaving the same gaps (e.g., cording to which the Russian Federation subjects participating in the educational p. 26 of the Rules is a gap in the procedure establishes federal public educational activity are declaratory as the rights of of exercising control). The main corrup- standards, supports different forms of edu- some do not correspond to the duties of tion risk factor in these Rules, however is cation and self-education. others. filling the legal gap with an executive au- There are no legislative acts, regulating For example , in chapter V “Social guar- thority’s regulatory legislative act. the procedure for giving state educational antees of exercising citizens’ rights for edu- The presence of these gaps causes some credit to the citizens and its repayment as cation” the duties of educational corruptive instances related to illegal stipulated by p. 16 Article 28 of the RF Law institutions and educational workers are charges of students and their parents: “On Education”. It predetermines “individ- not established or regulated. Consequently, • setting a separate fee for passing or re- ual” approach to giving state educational the citizens’ rights for education estab- peating tests and examinations; credits and, consequently, corruption. lished in this chapter are left without the • imposing charges by way of tutoring, P. 5 Article 5 of the RF Law “On Educa- proper legal provision. when the tutor is actually the teacher tion” makes provision for adopting federal Among the gaps in legislative regulation him/herself; laws, which define for the federal public ed- of educational activity is also the absence in • providing additional paid educational ucational institutions the categories of citi- these laws of the mechanisms for exercis- services in the timeframe when the zens entitled to social support, as well as the ing the citizens’ right for equal access to classes of the standard educational cur- order and scope of its provision, however education. riculum should take place, thus depriv- the provision is not implemented to a full One of the elements of such mechanism ing a pupil of an opportunity to turn extent. The specific measures of social can be set up by recognising the contracts them down. support are only stipulated by the FL “On for providing educational services as a The procedure for exercising control Higher and Postgraduate Professional public agreement. It would allow to make over observing the license terms by an ed- Training” (p. 3, 3.1 Article 16) . In regard to provisions of Article 426 of the RF Civil ucational institution (p. 14 Article 33 of the the students of other educational institu- Code applicable to them. They stipulate RF Law “On Education”) is a gap in the law, tions no social support measures are envis- the following: which can be filled by both the regulatory aged on the level of federal laws. It appears • an obligation of a service provider to acts of the supervising body and by its that it could block implementing p. 2 make a contract with each one who practical activity based on discretion. Article 43 of the RF Constitution, which applies on equal terms; Issuing a license for carrying out educa- guarantees free access to the pre-school, tional activity is not regulated by a law (p. 7 • a possibility to apply to court, forcing basic general and secondary professional Article 33 of the RF Law “On Education”). the other side to make a contract as the education at the public and municipal edu- This gap is filled by a by-law – Order of RF counterpart unreasonably refuses to cational institutions and enterprises. Government #796 “On approving the sign it. P. 6 Article 28, 34 of the RF Law “On Ed- Statement on licensing educational activ- According to p. 13 of the Rules of pro- ucation” stipulates adopting federal laws, ity” dated 18 October 2000. However, ac- viding paid educational services an educa- defining a procedure for establishment, re- cording to p. 11 Article 28 of the RF Law tional institution is obliged to make a organisation and liquidation of the federal “On Education” establishing a licensing contract for providing paid educational public educational institutions. procedure is within the competence of the services, if it has a capacity to provide a rel- These provisions are not implemented Russian Federation (not the executive evant service, without preferring one cus- on the federal level. branch). Generally, it seems that the basics tomer to the other. However, the Rules do of licensing in education should be estab- not make provisions for applying to court lished by a law. with a demand to force an educational in- Absence of public control over stitution to make a contract with a cus- the activity of an educational tomer as a consequence of the educational Rejection of a regulatory institution institution’s refusal to sign it. legislative act The laws on education do not stipulate According to p. 8 Article 41 educational in- some essential parameters and conditions P. 4 Article 7 of the RF Law “On Education” stitutions have a right to receive additional for providing paid educational services: the stipulates adopting a federal law, establish- finances, also as voluntary donations and procedure for carrying out paid educa- ing the main principles of public educa- special-purpose contributions from indi- tional activity, nature of paid educational tional standards for the primary general, viduals and legal entities. In practice services, contract terms laying the basis for basic general, secondary (complete) however “voluntary donations of individu- such an activity, etc. (Article 45 of the RF general education levels, as well as the pro- als” often mean voluntary-compulsory Law “On Education” and Article 29 of the cedure for their development and approval. charges imposed upon the parents.
Joint report on corruption risk assessment of the legislation in the sphere of education: Elvira Talapina and Larissa Sannikova 108 Project “Russian Federation – Development of legislative and other measures for the prevention of corruption” (RUCOLA 2)
One has to admit that monetary For this reason it is necessary to legally The procedure for approving the State- charges in educational institutions are forbid conducting all admission tests and ment on performance review committees mainly caused by insufficient financing using their results as a condition for enter- and their membership is not defined (p. 4 and cannot always be regarded as corrup- ing public and municipal educational insti- Article 12 of the FL “On Higher and Post- tion offences. There is no corruption, if the tutions on the pre-school, general and graduate Professional Training”). money is spent exclusively for the needs of primary professional education levels. The following procedure is not clear: the educational institution. However, as a how executive bodies, executive-adminis- legal mechanism of control over the money Absence of auction (bidding) trative entities of city districts and scien- use is missing, the incidents of abuse on the tific councils of higher education part of the heads of educational institu- procedures institutions consider and utilise recom- tions are not rare. mendations given by civil society organisa- The FL “On Higher and Postgraduate Pro- tions and public associations in the system In order to prevent the possible abuse, it fessional Training” makes provisions for of higher and postgraduate professional seems practical to obligate an educational state support in training specialists for training (p. 5 Article 15 of the FL “On institution to inform the students and (or) priority areas of scientific research as part Higher and Postgraduate Professional their parents about the way the addition- of higher and postgraduate professional Training”) . ally attracted resources are spent by publi- education (p. 5 Article 1). Thus, as a result of anti-corruption cising or providing them with a copy of the The way the state support is distributed expert evaluation of the Federal law “On annual financial report. is not defined. Presumably, it should only Education” the following corruption risk be based on bidding procedures and the factors were identified: absence of respon- law needs to openly state that. Excessive requirements sibility for violations, excessive freedom of imposed on a person sub-legislative rule-making, scope of dis- exercising his/her right Absence of administrative cretionary powers, defining competence procedures according to “may” formula, juridical and Putting excessive barriers to entering edu- linguistic corruption risks, presence of cational institutions of all levels is a major The FL “On Higher and Postgraduate Pro- legal gaps and conflicts between legal corruption risk factor. Nowadays testing fessional Training” does not specify the norms, rejection of a regulatory legislative (or other forms of selection) is introduced procedures for agreeing establishment of act, absence of public control, excessive re- for admission to educational institutions affiliates of the federal public educational quirements for a person exercising his/her practically everywhere. It is an additional institutions (p. 3 Article 8) ; and for the sci- right, absence of bidding (auction) and ad- barrier, no matter how good the intentions entific council’s decision on introducing ministrative procedures. are. Consequently, an act of corruption the position of the President of a higher ed- becomes a way to overcome it. ucation institution (p. 3.1 Article 20).
Final report: Appendices, Volume 1 An expert opinion on “Guidelines to experts on the initial assessment of a legislative act for corruption risks” and recommendations for approaches to prevent corruption in the legislative process
Quentin Reed Lead expert to the RUCOLA 2 Project
Introduction
This paper briefly summarises the opinion corporation into the legislative process, • the typology of “corruption risks” to be of the expert on the Guidelines adopted by some problems remain. In particular: identified in legislative acts should be the Russian State Duma anti-corruption • the objectives of the methodology de- reorganised so that risks are separated Commission for the screening of legislative scribed in the Guidelines should be into logical sub-groups. acts for provisions that increase the risk of clarified; In addition, some criticisms of and/or corruption (‘corruption risk assessment’). • the non-determinant nature of “corrup- recommended changes to specific parts of According to this opinion, while the meth- tion risk factors” should be stressed; the typology are offered. odology is an extremely useful tool for in- • the structure of the Guidelines should be made more logical;
Objectives and the nature of “corruption risk factors”
Paragraph 1.1 of the Guidelines defines the specific context increase the risk of corrup- during the legislative process, a law might objectives of the methodology as tion. It is therefore recommended that the legalise a monopoly of production in a par- to identify the most typical and formalised methodology states that corruption risk ticular sector of the economy. In its current instances of manifestation of corruption in factors are constituted by provisions that form, the methodology does not contain a the text of a legislative act. By corruption may increase the risk of corruption (see “corruption risk factor” that covers such a risks we mean a potential integrated in below). case. Due to the importance of such “cor- legal provisions to contribute to instances Second, the methodology currently rupt” legal acts, it is therefore recom- of corruption while implementing those appears to be oriented towards identifying mended to state the objectives of the provisions. provisions in a legal act that will facilitate methodology as to: It is firstly recommended to state that corruption in the implementation of the • identify provisions in a legal act or draft the Guidelines are for application both to act – for example, provisions that provide legal act that will or may legalise the draft legal acts and legal acts already in excessive discretion to officials, that in turn provision of benefits to particular indi- force. encourages them to use such discretion to viduals or groups without any clear Second, the methodology as it stands extort bribes. However, and as recognised public interest justification; implies that wherever one of the listed “risk by the World Bank in particular, one of the • identify provisions in a legal act or draft factors” is found in a draft law, it should be major forms of corruption in post-commu- legal act that will or may encourage or assumed that the risk of corruption will be nist countries is “state capture” – the de- facilitate corrupt behaviour (such as higher. However, there may often be excep- signing of laws to legalise corruption itself. bribery) during the implementation of tions, where a listed “factor” does not in the For example, as a result of corruption the legal act;
109 110 Project “Russian Federation – Development of legislative and other measures for the prevention of corruption” (RUCOLA 2)
• provide recommendations to modify illegal corruption links the methodology to cation of the methodology to draft legal the draft legal act or other legal acts and a different problem identified during this acts, the separate recommendations of the provisions in order to remedy these project – corruption within the legislative expert concerning corruption within the findings. process itself. Corruption may occur (or be legislative process are considered and im- The typology of corruption risk factors facilitated) not only as a result of poor laws, plemented as appropriate to the Russian should be altered accordingly. The ac- but may also be a key factor in the very context. knowledgement that a law may be designed process of drafting laws. It is therefore rec- to legalise corruption as well as facilitate ommended that in parallel with the appli-
Structure of the Guidelines
The present overall structure of the Guide- modified according to the other recom- 2. Definitions of terms: current 1.2, 1.4 lines is not very clear, and it is recom- mendations in this opinion. (bullet points), 1.5, mended to clarify it by adopting the 1. Objectives and Principles: include 3. Typology of corruption risk factors: following structure, containing the con- current 1.1, 1.3 and first paragraph of current sections A-D. tents as from the current Guidelines as 1.4 4. Structure of corruption risk assess- ment report.
Detailed comments on the contents of the typology
The Guidelines provide an extensive and to clarified to underline that primary legal location of authority to an officials or au- a large extent adequate description of cor- acts should contain all procedural rules for thorities to take or not take specific ruption risk factors to be identified. How- the exercise of powers (for example a licen- actions, without the statement of clear cri- ever, the expert has the following specific sing process), while it is acceptable and teria by which such a decision should be comments and recommendations on the indeed necessary for detailed criteria (such made.” content of the typology. as licensing conditions for a particular sector) to be laid down by relevant author- “One window” principle: Mixing together different ities, although in line with broad principles of fairness, etc. subsection 2.4.3 (should be 2. corruption risk factors 5.3) The typology does not adequately distin- Conflicts between legal The expert is not sure whether the one guish different types of risk factor or indi- norms: section 2.3 window (or one-stop-shop) principle is ac- vidual risk factors themselves. For curately described in this subsection, and example, Subsection 2.1 mixes together It is recommended that the material in recommends that this is checked. It is also problems of reference provisions, excessive section 2.3 is clarified to identify this cor- not clear whether the material on the ‘one discretion and the imposition of excessive ruption risk factor as “the presence of a window’ principle should be here, and it is requirements for persons to fulfil their conflict between provisions of the act and suggested that it would be better to de- rights. Likewise, section 2.2 mixes together other legal norms that is not clearly re- scribe why the existence of parallel duties/ the problem of excessive discretion being solved neither by existing legal provisions powers creates a risk of corruption. allowed to regulatory authorities to deter- for the resolution of such conflicts nor ju- mine the rules governing their own activity dicial precedent”. on the one hand, and the problem of where Unjustified regulation: primary legal norms are contained in dele- Allocation of rights rather Section 2.7 gated legislation/by-laws. It is strongly rec- ommended to reorganise the typology than duties: section 2.4 Section 2.7 identifies as a corruption risk according to the recommendation in Or- Section 2.4 states that public officials factor the establishment of excessive re- ganisation of the typology of corruption risk should only be granted discretion to take quirements on persons exercising their factors below, page 111. or not take certain actions in cases “of an rights. It is suggested that an additional exceptional character … strictly linked to prior corruption risk factor is added here, The need for discretion: certain, legally defined conditions …”. In which is excessive regulation, or regulation section 2.1 the expert’s opinion this statement is too without a clear public interest justification. strong, as there are many situations even in An example of this is the requirement of a While the typology rightly underlines ex- processes such as the revocation of a license for persons to carry out economic cessive discretion as a key corruption risk license where discretion will be necessary. activities that have no justification for factor, the expert believes that the material It is recommended to term the corruption being subject to licensing; this is a different in the second half of section 2.1 should be risk factor defined in this subsection as “al- corruption risk factor, as the establishment
Final report: Appendices, Volume 1 Project “Russian Federation – Development of legislative and other measures for the prevention of corruption” (RUCOLA 2) 111 of excessive requirements for persons to not clear whether it simply refers to con- Control mechanisms: Section exercise their rights refers to the licensing flict of interest provisions, or goes further. 2.11 process itself. In addition, it is recommended that the last Responsibility for violations: It is strongly recommended that the mate- sentence of first paragraph plus second rial in this section is divided into two sepa- paragraph are included in the section of the Section 2.10 rate areas of corruption risk factors: access Guidelines on Objectives and Principles, as Responsibility for violation of provisions of to information on the one hand, and the point expressed may apply to all cor- a law may apply to a public authority, not control mechanisms on the other, as sug- ruption risk factors. just individual officials. Indeed, this should gested in the suggested revised structure of be the case if persons exercising their the typology below. Absence of specialised rights are to be afforded effective redress. It detailed bans: Section 2.9 is strongly recommended that this corrup- tion risk factor is reworded to refer to “re- In its current wording Section 2.9 is very sponsibility of public officials or public unclear and needs clearer explanation. It is authorities”.
Organisation of the typology of corruption risk factors
The typology is currently structured in a • The use of different terms within the teria governing procedures which that way that does not adequately distinguish same draft legal act to refer to the same same body is responsible for imple- between different types of corruption risk phenomenon menting factor and different individual factors • Allocation of authority to apply a provi- themselves. It is important to keep differ- Conflicts of legal provisions sion (take decisions) without imposing ent corruption risk factors distinct, both to clear criteria for such a decision ensure the clarity of the corruption risk as- • Conflicts of provisions of the draft legal • Failure to state clear deadlines for deci- sessment report and to enable. In particu- act with other legal acts in force which sions lar, it is suggested to adopt a structure such are not resolved by existing legal provi- • Establishment of excessively long dead- as the following. The main headings are sions for the resolution of such con- lines supplemented by suggested individual cor- flicts. • Allocation of authority to institution to ruption risk factors, most of which are • The presence of primary legal norms extend deadlines without restriction or drawn from the existing Guidelines, but within a draft regulatory act (by-law) duty to provide a clear justification for some of which are suggested additions. such extensions • Establishment of non-exhaustive, am- Allocations of powers, biguous or subjective grounds for an Justification of legal act competencies and duties authority to refuse to conduct certain actions (for example process an applica- • Lack of a comprehensive justification Faulty reference provisions tion or request) for a legal act • Reference – in order to set a rule or de- • Failure to require competitive proce- • Promotion by the legal act of the inter- termine criteria – to legislation or regu- dures for the allocation of contracts, li- ests of particular groups or individuals, lation that is not specified cences, concessions etc or damage to the interests of particular • Reference – in order to set a rule or de- groups or individuals, without a public termine criteria – to legislation or regu- Establishment of excessive interest justification lation that does not exist requirements for persons to fulfil • Inclusion of substantive provisions that their rights Other are unrelated to the subject of the legal • Establishment of conditions which are act • Establishment of parallel duties generally very difficult to fulfil (for • Failure to provide a clear estimate of the example requirement of costly verified cost and financial impact of the draft Rules and criteria for documents that are not relevant to the legal act implementation matter). • Conditions that are not listed exhaus- Unjustified regulation tively – i.e. allow for extra arbitrary re- Ambiguous linguistic quirements to be imposed upon • Provisions that impose regulation persons by the public authority. formulation without a public interest justification for such regulation • Provisions in the draft legal act which Access to information have unclear or ambiguous meaning Excessive discretion • The use of terms or expressions which • Allocation of authority to a regulator or • Absence or inadequacy of provisions have not been used before executive body to determine rules/cri- and procedures to ensure that persons
An expert opinion on “Guidelines to experts on the initial assessment of a legislative act for corruption risks”: Quentin Reed 112 Project “Russian Federation – Development of legislative and other measures for the prevention of corruption” (RUCOLA 2)
are informed of all their rights and Control mechanisms Responsibility and sanctions duties relating to a draft legal act for violations • Absence or inadequacy of provisions to Supervision and control ensure access of persons to information • Failure of draft legal act or other legal • Failure to establish clear responsibility they need to fulfil their legal rights or acts to establish clear procedures for of specific persons or authorities for vi- duties the supervision of the implementation olations of provisions of the draft legal • Absence or inadequacy of provisions of the draft legal act act and procedures to ensure that the • Failure to establish clear and propor- general public has access to information Appeal and judicial review tionate sanctions for violations of provi- on the implementation of the draft legal • Absence or inadequacy of internal pro- sions of the draft legal act act cedures or judicial procedures for appeal against decisions taken under the authority of the legal act
Structure of the corruption risk assessment report
The corruption risk assessment report of corruption risk factors. It is recom- plate should also be supplemented by a should be structured according to a de- mended to make the template more de- section for recommendations on specific tailed template. The current Annex 1 may tailed than the current template in changes recommended. serve as a basis for the template, which Annex 1, having separate items/rows for should be based upon the revised typology every subsection of the typology. The tem-
Final report: Appendices, Volume 1 Recommendations for further action to assess and address vulnerabilities to corruption in the legislative processes of the Russian Federation
Quentin Reed Lead expert to the RUCOLA 2 Project
A paper by the expert on corruption in the visions in laws that facilitate corruption, be based on the six principles of institu- legislative process, presented at the since the former is one of the main reasons tionalisation, professionalism, collective RUCOLA 2 project meting on 18 October why the latter emerge. The paper argued decision-making, justification, consulta- 2006, argues that corruption of the legisla- that in order to minimise the risk of cor- tion and transparency. tive process itself is potentially a more ruption – and maximise the quality of draft serious problem than the presence of pro- legal acts – the legislative process needs to
Screening the legislative process
Since the presentation of the expert of that Guide, the Duma anti-corruption • Conduct or commission an analysis opinion in October, a working group of a Commission does the following: (screening) of the entire Russian legisla- joint Council of Europe/European Union tive process to assess the extent to programme has issued a detailed Guide on 1. “Lawmaking in the Russian Federation: Guide to which it conforms to the six principles, lawmaking in the Russian Federation. 1 The the Preparation and Adoption of Legislation”, in particular the aspects elaborated in Council of Europe Working Group in the framework recommendations of that draft are in line of the Joint Programme between the Council of Section 2 of this contribution. with the recommendations of this contri- Europe and the European Commission in the • Propose or initiate legislative or other bution. It is recommended that, taking into Russian Federation, on the basis of reports by ex- changes to tackle deficiencies in the leg- perts: Mr Suren Avakyan (Russian Federation), Mr account the lessons and recommendations St John Bates (United Kingdom) and Mr Günter islative process identified during the Schmidt (Germany). analysis.
Key points for analysis
In the opinion of the expert, the analysis of • Is there a duty – at least for important sions of a draft law within the Executive the Russian legislative process should focus laws drafted by the Presidential Admin- Branch? especially on the following questions, istration or relevant Government (Fed- – Publication on the Internet of all opin- which are derived or elaborated from the eral or sub-national) – for a draft ions on a drat law submitted by interest six principles: outline proposal to be drafted and sub- groups? • Is the legislative process described in mitted for public discussion prior to the sufficient detail in legally binding pro- issue of a detailed draft? – Public access to the voting records of cedures describing what are the stages • Is transparency built into every stage of members of the relevant Duma? of law drafting and approval, who has the legislative process, involving • Is there a binding duty to provide a what rights and duties at each stage, and – Publication of the draft law at every sig- formal and substantial justification of a other aspects of the process as de- nificant stage, inter alia on the Inter- draft law, including an estimate of the scribed in the expert’s paper submitted net? financial and material impact of the to the October 18 Meeting of the – Publication on the Internet of impor- proposed law (who benefits, who loses, RUCOLA 2 Working Group? tant dissenting opinions during discus- how much will it cost) and a prohibition
113 114 Project “Russian Federation – Development of legislative and other measures for the prevention of corruption” (RUCOLA 2)
on the inclusion of provisions that are • Is the legislative procedure within the • Are officials of all kinds – both in the not related to the law and its objectives? relevant Duma designed to minimise executive branch and elected represent- • Is the procedure for discussing and ap- the ability of individual elected repre- atives – who are involved in the process proving a draft law at each stage a col- sentatives from pushing through laws of drafting and approving laws subject lective one? or changes to draft laws without discus- to effective provisions on conflict of in- • Is there a binding and institutionalised sion and scrutiny? terest, duties to declare their assets and process of consultation – both open • Are all institutions involved in the income, and codes of conduct/ethics? (open to the public) and targeted at le- process of drafting and approving laws gitimate representatives of groups/ sufficiently equipped with professional parties affected by the draft law? staff?
Concluding comments
The results of the analysis should be used tions, for example to encourage the exist- to yield concrete recommendations for ence of organisations that mediate contacts changes in laws, rules and procedures gov- between elected representatives and busi- 1. A good example of such an organisation is the International Association of Business and Parlia- erning the legislative process. The analysis ness organisations and work to improve ment, which inter alia operates in several former may also yield other types of recommenda- the transparency of the legislative process. 1 Soviet countries (http://www.iabp.org/).
Final report: Appendices, Volume 1 Proposals on improving legislation on public and municipal procurement
Nina Solovyanenko Senior scientific expert, Institute of State and Law, Russian Academy of Sciences, Candidate of Law
In order to eliminate corruption risk For the purpose of providing For the purpose of attracting factors in the legislation on public and mu- openness and transparency of the largest possible number of nicipal procurement, introduction of the information on placing orders suppliers and widening the following amendments and additions to circle of bidding participants the legal acts regulating the sphere of To introduce an additional provision to public procurement can be recommended: Article 16 of the Federal law “On placing from different regions orders for procurement of goods, carrying To give an opportunity to a bidding partic- For the purpose of applying out works and provision of services for ipant to fulfil his/her right to submit an ap- the alternative procurement state and municipal needs”, regulating the plication to a competition (p. 2 of Article procedure for placing advertising informa- 25) or auction (p. 4 of Article 35) electron- procedures only in strictly tion on the official web site. Among other regulated cases ically, excluding the notary certification re- things the provision should cover: the quirement with regard to electronic format of information placed on the web To introduce the changes to Article 71 of documents, if they are signed with an elec- site; whether it is possible to refuse placing the RF Budget Code eliminating the con- tronic digital signature according to the re- information and on what grounds; whether flict with the provision of Article 1 of the quirements of the Federal law “On it is possible to withdraw information from Federal law “On placing orders for pro- electronic digital signature”. To introduc- open access and on what grounds; the re- curement of goods, carrying out works and ing the relevant changes into Article 25 and sponsibility of an authorised body admin- provision of services for state and munici- Article 35 of the Federal law “On placing istering the official website. pal needs”. To define the minimal contract orders for procurement of goods, carrying To add an article to chapter 8 on the amount, starting from which it is necessary out works and provision of services for protection of rights and legal interests of to place orders to conclude such contracts, state and municipal needs”. bidding participants, of the Federal law in accordance with the procedures stipu- “On placing orders for procurement of lated in the Federal law “On placing orders goods, carrying out works and provision of For the purpose of providing for procurement of goods, carrying out services for state and municipal needs”. equal opportunities to the works and provision of services for state The article should make provisions for an and municipal needs”. Namely, if expendi- bidding participants, appeal against actions (failure to act) of an ture for procurement of goods, works and regardless of the discretion of authorised executive body in charge of the services is most likely to exceed the limit of a customer, an authorised official web site. cash payments among legal persons for one To add to Article 17 on “Control over body, a tender or auction transaction in the Russian Federation observing the legislation of the Russian committee allowed by the RF Central Bank, then such Federation and other regulatory legal acts procurement is done on the state or mu- To make a legal provision in part 2 of of the Russian Federation on placing nicipal contract basis only which is con- Article 11 of the Federal law “On placing orders” the provisions on the control over cluded based on the results of placing an orders for procurement of goods, carrying observing the RF legislation on placing order. out works and provision of services for orders by an authorised executive body re- state and municipal needs” that a customer sponsible for the official web site. or an authorised body shall set the follow- ing requirements when placing an order by means of holding an auction: 1) possession
115 116 Project “Russian Federation – Development of legislative and other measures for the prevention of corruption” (RUCOLA 2) by bidding participants the exclusive right or at other party’s fault. To remove part 10 IT, promoting competition for the objects of intellectual property, if a from this article. when placing orders customer obtains the rights for the objects of intellectual property while carrying out For the purpose of improving A separate chapter 3.1 of the Federal law state or municipal contracts; 2) absence of “On placing orders for procurement of bidding participants in the register of unre- control over observing the goods, carrying out works and provision of liable suppliers. legislative requirements on services for state and municipal needs” To make a legal provision in part 4 of state and municipal should be devoted to the legal construction Article 12 of the Federal law “On placing procurement of an electronic auction: “Placing orders by orders for procurement of goods, carrying means of holding an open auction in elec- out works and provision of services for To introduce changes to the provisions of tronic form”. state and municipal needs” that a cus- Article 17 of the Federal law “On placing This chapter should include a number tomer, an authorised body, a tender or orders” and to define the competence of of articles with the following provisions: auction committee shall dismiss a bidding the Federal executive body, an executive An open auction in electronic form on participant from participation in a compe- body of the subject of the RF and the local an Internet website should be carried out tition or an auction at any stage, in cases authority, authorised to exercise control in according to the procedure stipulated by when the data provided proved to be inau- the sphere of public procurement accord- the relevant chapter of the law. thentic; a participant (a legal person) is ing to a “shall” formula. under liquidation procedure or bankruptcy To carry out an open auction electroni- “If violations of the legislation on placing proceedings were initiated against the par- cally there should be foreseen the same leg- orders by a customer are revealed as a ticipant; if the participant’s activities were islative opportunities and rules as for result of inspections, an authorised body in suspended according to the regulations holding an open auction without using in- charge of control in the area of placing stipulated in the RF Administrative formation and communication systems. orders shall: Offence Code. In this regard it seems reasonable to To set an obligatory procedure in part 6 – send a proposal to the customer which eliminate such a limitation as prohibiting of Article 11 of the Federal law “On placing is a public authority of the subject of an electronic auction, if the starting price orders for procurement of goods, carrying the RF or a local authority to eliminate of a state or municipal contract exceeds out works and provision of services for such violations and to replace the five hundred thousand roubles; to make a state and municipal needs” for verification member of the tender, auction or quo- regulation regarding both the starting date of compliance of the winner that placed an tation committee, who allowed for vio- and time and the deadline of registration of order with the requirements outlined in lating the legislation; bidding participants of an open auction par. 2-4 of p. 2 and par. 2 p. 2 of the article. – give an instruction to the customer, that is held electronically. It seems reason- To set the deadlines in working days: p. which is not a public authority of the able to set the end of registration before the 3, Article 12; parts 3 and 4, Article 18; parts subject of the RF or a local authority to beginning of an electronic auction, by 4, 6 and 8, Article 19; parts 1 and 5, Article eliminate such violations as well as to changing the current regulation providing 21. replace the member of the tender, an opportunity for a bidding participant to get registered before the end of an open To make the legal provisions for the auction or quotation committee, who auction. The announcement on holding an equal responsibility of a supplier (provider, allowed for violating the legislation. open auction in electronic form shall be contractor) and a customer for failure to If cases when a customer did not take into placed on the official web site no later than fulfil or inappropriate fulfilment of the consideration the proposals made, an au- twenty working days before the registra- contract. To set forth part 9 of Article 10 of thorised executive body shall take the case tion deadline. It is also possible to apply to the Federal law “On placing orders for pro- to court, claiming the compulsion to take an electronic auction a regulation on the curement of goods, carrying out works and action according to the RF legislation, en- establishment by a customer or an author- provision of services for state and munici- suring protection of rights and legal inter- ised body the requirements of providing an pal needs” in the following way: “In case of ests of bidding participants and application form for the participation in exceeding the time limit by one of the demanding the replacement of the auction. parties for fulfilment of an obligation, pro- member of the tender, auction or quota- vided by the state or municipal contract, tion committee. A separate article of the law should make provisions for the eligibility of a the other party may claim the payment of If a customer did not follow the given in- bidding participant in an open electronic forfeit (fine, penalty). The forfeit (fine, pen- structions, an authorised federal executive auction, including the main requirements alty) is calculated for each day of exceeding body shall apply liability measures in ac- to the registration procedure on the web the time limit, provided by the state or mu- cordance with the RF legislation”. nicipal contract, starting from the day, fol- site. lowing the deadline of fulfilling the The access procedure should include obligation provided in the state or munici- For the purpose of simplifying submitting an application in electronic pal contract. The amount of this forfeit is the order placement form by a bidding participant within the established as 1/300 of refinance rate of the procedures, ensuring timeframe defined in the auction an- RF Central Bank valid for the day of pay- nouncement, as well as registration of each ment. The party is released from paying the transparency and openness of application submitted before the deadline. forfeit (fine, penalty), if it proves that the the procurement procedure, The application is submitted by filling in a delay took place as a result of force majeure including legalisation of using registration form on the web site. It should
Final report: Appendices, Volume 1 Project “Russian Federation – Development of legislative and other measures for the prevention of corruption” (RUCOLA 2) 117 contain all the obligatory data stipulated by cording to the procedure described in the whether this regulation implies that a cus- the law. announcement of the open electronic auc- tomer should own the system for conduct- The access procedure should also tion. ing open electronic auctions and perform include provisions for creating (automati- Article 41 (p. 5) of the law makes a state technical support by his own means. cally or in any other way) an access key or or municipal customer accountable for en- In this respect, it seems reasonable not other means of identification to grant suring reliability on the software used for to consider the issue of ownership, but access for a bidding participant to work in conducting open electronic auctions. In rather establish a civil responsibility on a the system for holding electronic auctions. this regard the legal construction of an state or municipal customer if unreliable Upon receipt of a filled in registration open electronic auction should be cor- software is used for conducting open elec- form, the system sends a notification on its rected in the way that would give an answer tronic auctions. registration or refusal in registration ac- to the following practical question,
Proposals on improving legislation on public and municipal procurement: Nina Solovyanenko Proposals on improving legislation on public and municipal procurement
Elvira Talapina Senior scientific expert, Institute of State and Law, Russian Academy of Sciences, Candidate of Law
As the conclusion of the anti-corruption order to that type (classified according cessity to receive quotations from at expertise indicates, the Federal law “On to different criteria) to bypass the least three such persons). Besides, an ob- placing orders for procurement of goods, bidding procedure. As a result, the ulti- ligation of simultaneous sending out of carrying out works and providing services mate goal of the law – to make an requests for quotations should be set for state and municipal needs” contains auction the key form of placing public (the same refers to Article 53 p. 3). both preventive anti-corruption measures orders – is diminished. • To set a procedure for altering the con- and a number of corruptive factors. In gen- The proposals on improving legislation tracts for placing orders – e.g., Article eral, the following should be mentioned: based on the results of the completed anti- 54 p. 6. A possible legal regime for such • Some procedures are described in the corruption expertise of the above-men- an “addition” to a public order is placing law with insufficient detail, which, in tioned law can be divided into general and orders with the sole supplier. In this some cases, gives too much scope for specific (concrete changes in the articles of case the following wording of the regu- the customer’s actions. the law). Thus, speaking about the general lation can be suggested: if a winner of • Insufficient separation of powers of a proposals it is necessary to clarify whether requested quotations cannot fill the customer, an authorised body, a special- calendar or working days were meant order in full, a customer also places the ised organisation and a committee. throughout the text of the law; as well as to order with a participant, who appears Practically everywhere throughout the elaborate the procedure of electronic the next on the list in the ascending text of the document these terms are bidding – Article 37 p. 2, Article 41. order, according to the rules stipulated used as synonyms, which does not cor- It is also necessary to make corrections for placing orders with the sole supplier. respond to the reality. In some cases to the use of authority, defined in the text these entities enter into administrative as “may” or “shall” (Article 52 p. 9, Article • To “change” par. 2, part 2, Article 11 to relations that require a stricter regula- 17 p. 4, Article 17 p. 8, Article 17 p. 12 and p. 5, p. 1, Article 11 – the absence of tion; in other cases they enter into civil 13), setting an obligation to act in a certain data on bidding participants in the reg- law relations that allow for variety. manner. ister of unreliable suppliers should be These peculiarities are not reflected in The following corrections of the an obligatory requirement to the partic- the law which leaves space for ambigu- content are suggested: ipants. ous interpretation in practice. For ex- • To establish an administrative liability ample, according to Article 4, a budget for failure to preserve tender (auction) • To set up a deadline for applications – e. receiver (a spending unit) acting as a documents. g., a day prior to the date of bidding customer falls under the law only in • To introduce a special pre-selection (taking into account the need to check case of placing an order from the budg- procedure (or to define the exact source the information provided in the appli- etary funds; if non-budgetary resources of information – e.g. a register of cation – 3-5 days). At the same time the are used, tender procedures can be already signed contracts) of persons provisions of Article 26, p. 2, Article 21 avoided, although in practice it has who will receive a request for quota- p. 4 p. 9 and Article 22 p. 4 p. 13 should double meaning. tions – Article 45 p. 5 ( A customer be co-ordinated, eliminating any • The full list of types of orders placed should send a request for quotations to chance of submitting an application with the sole supplier without placing a the persons who can realise the procure- right before the auction. tender according to Article 55 of the law ment of goods, carrying out works and • To introduce a procedure for verifying is vaguely and unclearly defined, which provision of services, stipulated by the the data on the bidding participants allows when needed to “classify” any request of quotations, based on the ne- (Article 12 p.1 p.1)
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• To establish the legal basis for interac- • To transfer the powers of the federal ex- • Eliminating the statement on complaint tion between an authorised body and a ecutive body to the RF Government ac- recall (Article 61 p. 1). customer. For this purpose Article 4 cording to Article 13 p. 3. part 2 should contain more details (The • To clarify the form of submitting docu- • Eliminating an opportunity to make procedure of interaction between an au- ments (originals or copies, the proce- changes in bidding documents (Article thorised body and public and municipal dure of their attesting), or it is possible 24 p. 3). customers should be established by the to define such requirements in an infor- • Eliminating an opportunity to request decision on the creation of such an au- mation note – Article 25 p. 3. clarifications from the participants thorised body). It seems that this proce- • To establish customer’s obligation to after opening the envelopes (Article 26 dure for interaction has different take the case to court for recover losses p. 7). modes, if we are talking about to cus- as a result of refusal to conclude a con- tomers that are not governing authori- tract – Article 29 p. 2. • Eliminating p. 6 of Article 57 and while ties. There is an open issue whether A number of corruption risks can be introducing an “administrative” proce- profit-making relations are possible in eliminated only by eliminating of the ap- dure for requesting documents when this context (a customer that is not a propriate provisions of the law, in particu- filing a complaint. public authority transfers the right of lar: having a auction to an authorised body • Eliminating an opportunity for a partic- Some instances of corruption can be on a contract basis?) ipant to alter an application stipulated eliminated by changing the respective arti- in p. 9 of Article 25. cles of the law.
Corruptive risk Current version Suggested version Article 15 p. 1: Public customers shall place orders with Public and municipal customers, excluding the subjects of small business entities at the the cases of placing orders for procure- rate of 15% of the total amount of procured ment of goods, carrying out works and goods, carried out works and provided providing services for the needs of state services, with the exception of cases when defence and security, shall place orders placing orders for procurement of goods, with the subjects of small business entities carrying out works and providing services at the rate of 15% of the total amount of is done for the needs of the state defence procured goods, carried out works and and security, according to the list estab- provided services, according to the list lished by the Government of the Russian established by the Government of the Rus- Federation by means of holding auctions sian Federation by means of holding auc- where these entities participate, public cus- tions where these entities participate. In tomers in cases of placing orders for pro- cases of placing orders for procurement of curement of goods, carrying out works and goods, carrying out works and providing providing services for the needs of the state services for the needs of state defence and defence and security, and the municipal security public customers have the right to customers have the right to place such an place such an order. order. Article 37 p. 2: The requirements to the system for the The requirements to technological, soft- Expanding the subordinate rule-making electronic bidding, are established by the ware, linguistic and organisational means Government of the Russian Federation. for electronic bidding are established by the Government of the Russian Federation . Article 8 p. 2: The participation in placing orders may be The participation in placing orders may be Increasing the possibilities of limiting par- limited only in cases stipulated by this Fed- limited only in cases stipulated by this Fed- ticipation in placing orders eral law and other Federal laws. eral law, and in case of placing a state defence order or an order for procurement of material values to the government reserve – also by other Federal laws. Article 11 p. 1 par. 1: Conformity of bidding participants with Availability of a special permission Excessive requirements to a participant the requirements of the RF legislation, (license) that a bidding participant must established for persons, that fulfil the pro- have in regards to the subject of auctions. curement of goods, carrying out works and providing services, described as the subject of auctions.
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Corruptive risk Current version Suggested version Article 58 p. 2: A bidding participant who files a complaint A bidding participant who files a complaint Imposing a burdensome duty on a bidding against actions (negligence) of a customer, against actions (negligence) of a customer, participant that can hinder an appeal an authorised body, a specialised organisa- an authorised body, a specialised organisa- tion, the tender, auction or quotation com- tion, a tender, auction or quotation com- mittee, should also attach the documents, mittee, should also attach the documents, proving the validity of arguments. proving the validity of arguments. In cases where he does not have the relevant docu- ments, the Federal executive authority, an executive body of a subject of the RF, a local authority shall obtain them on demand from the customer, an authorised body, an specialised organisation, the ten- der, auction or quotation committee. Article 12 p. 4: In cases where the data provided in accord- In cases where the data provided in accord- ance with p. 3 of Article 25 or p. 2 of Article ance with p. 3 of Article 25 or p. 2 of Article 35 of the present Federal law by a bidding 35 of the present Federal law by a bidding participant proved to be inauthentic; estab- participant proved to be inauthentic; estab- lishing the fact of liquidation of the partici- lishing the fact of liquidation of the partici- pant (a legal person) that had placed an pant (a legal person) that had placed an order or bankruptcy proceedings were ini- order or bankruptcy proceedings were ini- tiated against the participant (a legal per- tiated against the participant (a legal per- son, a private entrepreneur); if suspension son, a private entrepreneur); if suspension of the participant’s activities according to of the participant’s activities according to the regulations stipulated in the RF the regulations stipulated in the RF Administrative Offence Code took place Administrative Offence Code took place the customer, an authorised body, the ten- the customer, an authorised body, the ten- der or auction committee may dismiss such der or auction committee shall dismiss a participant form the bidding/auction at such a participant form the bidding/auc- any stage. tion at any stage.
The law contains a number of blanket ber 2006, which duplicated the law provi- lated privileges to the institutions of the regulations that allow the Government or sions (an additional requirement is criminal-executive system, associations an authorised body to adopt the regulatory available capacities), and transferred the of disabled persons as well as the sub- acts. In cases when it is impossible to regu- authority of defining the lists of goods nec- jects of the small business entities in the late such issues at a legislative level, the im- essary for the country’s defence to the de- process of placing orders by means of plementation of these blanket regulations partmental level. Thus, the regulation of holding an auction. While the state- shall be under special control. In particular, the law is misunderstood and is not imple- ments of the law should be amended. the attention should be paid to: 1) the need mented towards solving the concrete For example, p. 3 of Article 37 (In cases for timely adoption of such acts, 2) the issues at the Government level, but instead when the notification on an open need for conducting an anti-corruption ex- the decision making process goes lower auction provides for privileges for insti- pertise of such acts, 3) anti-corruption ex- down. tutions of criminal executive system pertise if changes are made in such Besides, to eliminate the ambiguous in- and (or) associations of the disabled subordinate acts (e.g., when the Govern- terpretation of the articles’ provisions: persons, the customer, the authorised ment makes changes to the list of goods, • To design a procedure for giving body announces the presence of such works and services, provided on the basis grounds for the unilateral change of the participants just before the auction of an auction – p. 4 of Article 10). In partic- scope of work (Article 9 p. 6). starts), since it is not only the presence ular, in the performance of p. 3 of Article 11 • To make additions to the law or to adopt of such participants that matters, but of the Federal Law, the Government the governmental acts on the procedure also a procedure of recording their priv- adopted the Decree No. 813 of 28 Decem- of registering and provision of stipu- ileges.
Final report: Appendices, Volume 1 Expert opinion on the legislative proposals in the sphere of public procurement made by the Russian experts to the project
Peter Trepte Barrister specialising in public procurement law, United Kingdom
I have been asked to review and comment procurement of 21 July 2005. I am at a terms of the legislative proposals put for- upon proposals made by two Russian ex- slight disadvantage since I do not have a ward. Where there is doubt as a result of perts, namely N.I. Solovianenko and E.V. copy of the Law, although the experts’ translation, I will make that clear. I will Talapina, for improving, from an anti-cor- papers are mostly sufficiently comprehen- consider the proposals in turn. ruption perspective, the Federal Law on sive to make their proposals self-evident in
Proposals by Ms Solovianenko
The expert makes a number of comments Proposals made for the purpose of should not be made mandatory but used as and proposals under a series of headings. I providing openness and transparency an alternative. Electronic submission can will deal with each heading in turn. of information on placing orders also reduce document tampering provided there are sufficient guarantees in place Proposals made for the purpose of Providing clarity for the publication of ad- with regard to the opening of the bid docu- applying the alternative procurement vertisements on-line is important, particu- ments before the deadline for the opening procedures only in strictly regulated larly in respect of the format which needs of bids (this can be vouchsafed through the cases to be consistent. I am not entirely sure of the purpose of providing appeals against use of password protection or electronic It is critical that any alternative procure- the body responsible for the online publi- signatures, for example). ment procedure (i.e. other than open cation for its failure to act but I agree that On the related point concerning notary bidding with or without pre-qualification) there must be some remedy where adver- certification, there are also other docu- be permitted on conditions which are set tisements are not placed on-line in a timely ments which cannot always be submitted out clearly and consistently in the Law. fashion. Where there is online advertise- electronically such as certificates and qual- These conditions should be strictly inter- ment, the body responsible should be re- ifications. Of course, they can be converted preted. They apply not only to the use of al- quired to publish within a given time into image files but it is the authenticity ternative procedures at different threshold period and this should be reflected in the that becomes important in the verification levels but also for alternative procedures minimum time limits given to bidders to process and this is less secure in the event which become necessary as a result of submit their tenders. of image files. One solution may be to specified circumstances such as in cases of require the electronic submission of such extreme urgency or where bidders posses Proposals made for the purpose of certificates and notarised documents and exclusive rights, for example. It would also attracting the largest possible number to impose a further requirement that the be a good idea to ensure that contracting of suppliers and widening the circle of originals must either (1) be sent by post to authorities should indicate in the record of bidding participants from different arrive by a certain date or (2) be provided the procedure the reasons for using such regions only by the successful bidder. This second an alternative procedure. Electronic bid submission is an efficiency possibility also has the effect of reducing tool and can broaden the pool of bidders as the burden on bidders (something which suggested. Unless there is equal access to sometimes dissuades them from bidding). technology throughout the country, it
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Proposals made for the purpose of the bids is so long that there is a danger that body is in a position to react very quickly so providing equal opportunities to the the situation of the bidders may have that the proposed actions can be taken bidding participants, regardless of the changed in the interim. This is also the po- within the time-frame of the procurement discretion of a customer, an authorised sition if bidders have been selected from procedure. body, a tender or auction committee among pre-qualified or pre-registered bid- Proposals made for the purpose of ders. The purpose is to ensure that the I am not entirely sure that I understand the simplifying the order placement qualification and selection criteria con- intention of the proposal with regard to in- procedures, ensuring transparency and tinue to be met. tellectual property rights but I assume that openness of the procurement Clarity on whether the number of days it means that where the contracting entity procedure, including legalisation of is set in calendar or working days is impor- comes into possession of intellectual prop- using IT, promoting competition when tant and raised by both experts. erty rights during the course of a procure- placing orders ment (e.g. the copyright in a design), it The equality of the contracting parties In some cases in these papers, the term must licence all bidders to use that right. is also important but a very difficult condi- “auction” appears to be used as a synonym This is an issue which has arisen in many tion to apply in practice. Whilst govern- for tender/bidding (this may be a transla- countries where, for example, a contract ments are usually over-eager to challenge tion issue). Here, however, it does seem to for services to provide a design has led to a bidders who delay, they are less eager to refer to a reverse auction as such, i.e. a claim by the successful designer that it then bear the responsibility for late payments. process of reducing prices incrementally holds the copyright in the design so that This clearly has a negative effect on the either in an auction room or on-line. Per- the execution of that design (e.g. construc- procurement and can give rise to an oppor- sonally, I do not see that auctions offer sig- tion) could only be carried out by the de- tunity for corrupt practices. I fully support nificant improvements as an anti- signer, thereby preventing competition the imposition in the Law of a requirement corruption tool although many do make from other contractors. That results in for both parties to take responsibility for that claim. I would emphasise that auctions unequal treatment. their contractual obligations. are useful only for some procurements, Where there is a register of unreliable notably off-the-shelf products and spare suppliers, then it is normal that absence Proposals made for the purpose of parts. It is less useful for construction from the register should be a condition of improving control over observing the projects or for the procurement of consult- participation. However, it is equally impor- legislative requirements on state and ant services where quality is paramount. I tant that the procedures linked to the reg- municipal procurement think it would beneficial, therefore, for this ister are not abused. The reference to “inspections” is unclear. If to be made clear in any legislative amend- I agree that the production of inauthen- it refers to an audit type function with an ments. As the expert rightly points out, the tic documents should be grounds for rejec- officer monitoring individual procedures, essential process is that bidders should be tion. This should be even more the case, then it is unrealistic because an army of in- properly qualified and assessed in advance where they are deliberately falsified. This spectors would be necessary to carry out of the auction and any technical issues re- becomes a case of fraud which could be such an exercise effectively and in a timely solved before it begins. The actual auction linked to corruption. fashion. On the other hand, if by “inspec- is realistically limited to price and not (at I do not fully understand the point re- tion” is meant the actions of an authorised least not without difficulty) to other quali- garding “verification of compliance of the body following a complaint from a bidder tative issues. The proposed clauses are ap- winner” but I imagine that this related to in respect of a potential violation, then it propriate. post-qualification. This is useful in the case makes perfect sense. The critical issue is of the award of very large or complex con- one of timing. It is crucial that a bidder can tracts where the time involved in assessing make a complaint and that an authorised
Proposals by Ms Talapina
This expert’s proposals are made in se- concerns the scope of application of the defined service to the public. It is their quential points without numbering. I will Law. I am afraid I do not know what the activity which is covered and it is irrele- deal with each in turn. Both papers will, “double meaning” may be but it is vant where the funds come from. Public therefore, need to be read together. unusual to see public authorities being authorities are covered whatever the • It is imperative that the procedures are able to avoid tendering procedures source of their funds. set out clearly and that exceptions are when using non-budget funds. This is • This reflects the points made by the clearly defined. If this is not the case, more frequent in the case of State other expert and discussed in para- them amendments should be made. owned enterprises (SOEs). This is a graph 3 above. Exemptions from the • What is important is that the lines of re- very complicated area and the issue is preferred procedure must be clear and sponsibility and accountability are clear really to ensure that the Law defined conditional. so that the bidder knows where the de- clearly who is and who is not covered cision-making power lies and who and, if the situation changes depending • This is considered above (“Clarity on should be held accountable for any vio- on the source of funds, where this hap- whether the number of days is set in cal- lations during the various stages of the pens. In the EU, for example, SOEs are endar or working days …”). procedure. The second issue raised covered only where they provide a • This is crucial.
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• Records must be kept though it is often tion, that should take place well before • I have not read the original provision difficult to ensure this. It may also be an the date for submission of bids since and so cannot comment since I do not idea to require reporting of these only pre-qualified bidders will be per- know the purpose of the provision. records either to an authorised body or mitted to submit bids and, following • There are situations where changes are to the head of the procuring entity. That pre-qualification, they will need to start necessary. To eliminate the possibility usually acts as an incentive to record ac- preparing their bids. In an auction, the would often condemn the procuring curately and to encourage greater care qualification process also needs to take entity to buying the wrong thing. Pro- in the conduct of the procedure. place well before the auction begins tection is afforded by ensuring that any • It is certainly useful to provide that similar to the case of pre-qualification. changes are notified to all bidders si- where there is a register of contractors See also above, “In some cases in these multaneously in writing. If that is not or suppliers, then those invited to papers, the term ‘auction’ appears to be done, the change is unlawful. submit quotations should be selected used as a synonym for tender/ • This is designed to clarify mistakes or from among those appearing on the bidding …. errors of calculations. To eliminate this register. I fully agree that the requests • I am surprised that this is not already would jeopardise the proper evaluation should be sent simultaneously. the case. Clearly the data needs to be of bids. • I do not understand the reference to verified … where it is essential. Con- • I have not read the original provision “sole supplier” in this context unless it is tracting entities should only ask for es- and so cannot comment. to imply that the winner might become sential data and not for all the possible • I’m afraid I cannot see what changes the sole supplier as a result of winning data listed in the Law. the contract. The proposal seems to have been made other than re-arrang- • I’m afraid I do not understand this issue ing the order of the sentence. raise many issues: (a) if the purchaser but if the authorised body is in any way • I do not see what substantive difference wants to add to the purchase order involved in oversight or monitoring of a this makes but I would have no objec- made to the successful bidder, then this contracting entity then it should not tion. would ordinarily be permitted up to a become involved in any procurement certain maximum percentage of the itself since the lines of accountability • I am assuming that the definition of original order (say 20%) – this would will become blurred. “state defence order” does not allow ex- need to be foxed in the Law; (b) if the emption for any procurement by the • I have no comment on this. It appears successful bidder cannot satisfy the defence authorities but only procure- an administrative/political issue. order, the contract is cancelled or, if that ment of defence related equipment. • I agree. See also above, page 121, “On becomes clear at the time of award, the • I do not understand the proposed the related point concerning notary cer- contract could be placed with the amendment. The power to provide per- tification …”. second best bidder on the terms it has mission is always an incentive for cor- offered; (c) splitting purchase orders • This is usually the function of a tender ruption. Compliance with legislative between bidders should only be done security. If the bidder refuses to con- requirement is usually preferable. clude a contract, then he forfeits the where the bidding documents have • This seems a sensible precaution. made clear that the contract can be tender security. In any event, the cus- • I can see no difference between the awarded in lots. Otherwise, there is a tomer would then be entitled to award texts. danger that the parties could get to- the contract to the next best bidder so gether (in a corrupt manner) to arrange there will be no loss in having con- • This is a very valid issue. The power to the division of contracts between them- ducted the procedure. If all bidders adopt implementing regulations should selves. refuse to sign the contract, then there is not be misused to deal with specific • This is considered above (“Where there more likely to be something wrong with procurements nor to pursue the per- is a register of unreliable suppliers …”). the procedure in respect of the require- sonal goals of the draftsman. All critical • The use of the terms bidding and ments or the proposed contract. Those provisions should be set out in the Law auction in the same comment are con- are the issues which need to be ad- and any explanations or guidance set fusing since the situation is different in dressed. out in the regulations should be entirely each case. In the case of tenders/bid- • There is usually no problem in allowing consistent with the Law. In addition, ding, bids should be submitted at the amendments before the deadline for regulations should be kept to a deadline for receipt of bids and bid submission of applications or bids. Only minimum and must be transparent, i.e. opening should take place immediately. amendments after that date should be must be made public so that everyone is There should be no delay between sub- prohibited if they are unilateral. aware of them. mission and opening since that time Changes made as a result of changes in • Any such changes should be made delay provides an opportunity for ma- the bidding documents should be per- under strict conditions and recorded. nipulation. In the case of pre-qualifica- mitted. • I think that is a valuable precaution.
Expert opinion on the legislative proposals in the sphere of public procurement made: Peter Trepte Proposals on improving the legislation in the sphere of education
Larissa Sannikova Senior scientific expert, Institute of State and Law, Russian Academy of Sciences, Candidate of Law
It seems feasible to renew substantially the into the Russian Federation Civil Code To design a legal base in order to move regulatory base in the sphere of education where to regulate an agreement on render- to financing of educational institutions on by adopting a new Federal law “On Educa- ing educational services – not only the paid “per head” basis. tion”. ones, but also those covered by the respec- To make changes in the current legisla- To design and to include a separate tive budgets. tion regulating the sphere of education. chapter “Providing educational services”
Explanatory note
Expanding the area of application of the students and (or) their parents on the • To amend Part Two of P. 1, Article 16 of Article 426 of the Civil Code of the Russian spending of additional funding by means of the Law “On Education” of the Russian Federation to non-profit organisations in- publication in media or providing them Federation as follows: cluding educational institutions is neces- with an annual financial report. “No testing or other competitive forms of sary to ensure better protection of rights of selection violating the rights of individuals the consumers of educational services, as it Additional charges of parents or the to education are allowed in the process of will allow to make a contract for providing students themselves in the form of presents admission to state and municipal educa- educational services a public document. to daycare workers, teachers and tutors are tional institutions at pre-school, primary, The Russian Federation legislation widely spread in Russian educational insti- comprehensive, secondary (complete) and makes no provisions for competitive ad- tutions. P. 2, Article 575 of the Civil Code of primary professional training levels.” mission to the public and municipal educa- the Russian Federation allows the giving of • To add P. 11 to the Article 41 of the tional institutions on the pre-school, presents to the employees of educational Russian Federation Law “On Educa- comprehensive and secondary professional and similar institutions if their value does tion”: education levels. Nevertheless, in real life not exceed five minimal wages. This regu- “An educational institution shall present an there are cases of refusal of admission to lation is of a corruptive character. For this annual financial report on spending extra educational institutions based on the reason an imperative ban should be funding, listed in P. 8 of this article, by results of testing (or other forms of com- imposed on any kind of gifts to the above means of publication in media or distribu- petitive selection), or unlawful charges for mentioned categories of employees, re- tion to the students and (or) their parents admission to educational institutions if gardless of their value, so that in people’s (authorised representatives)”. minds it is associates with a corruption of- those tests were passed non-satisfactorily. • To add P. 23 to Article 50 of the Russian fence. For this reason it is advisable to legally Federation Law “On Education”: forbid using the results of admission tests The proposed changes and additions to “Students of secondary professional or (or other forms of competitive selection) the legislation regulating education: higher professional educational institu- for entering public and municipal educa- tions may ask for documents, indicated in tional institutions on the pre-school, com- • To replace the words “commercial or- P. 2, Article 16 and P. 11, Article 41 of this prehensive and secondary professional ganisations” in Paragraph 1, Article 426 law”. education levels. of the Civil Code of the Russian Federa- • To add Part Two to P. 1 of Article 52 of In order to prevent any abuse of author- tion with the “commercial and non- the Russian Federation Law “On Educa- ity, an educational institution shall inform profit organisations”. tion”:
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“Parents (authorised representatives) of • To add Part Two to Article 575 of the – to the employees of healthcare, educa- students may ask for documents, indicated Civil Code of the Russian Federation: tional, training, social security and in P. 2, Article 16 and P. 11, Article 41 of other similar institutions by individuals “No gifts are allowed, regardless of their this law.” that are subject to medical treatment, value: • To remove P. 2 and 3 from Article 575 of that are kept, trained or educated in the the Civil Code of the Russian Federa- – to public servants and the officials of above-mentioned institutions, as well tion. the municipal educational bodies in as by parents (authorised representa- connection with their position or when tives), spouses and relatives of those in- performing their duties; dividuals”.
Proposals on improving the legislation in the sphere of education: Larissa Sannikova Proposals on improving the legislation in the sphere of education
Elvira Talapina Senior scientific expert, Institute of State and Law, Russian Academy of Sciences, Candidate of Law
The legislation on education is excessively Article 33 part 23. An educational institu- To eliminate a regulatory collision with framed and declarative, therefore it needs tion may be deprived of its state accredita- Article 3.12 of the Code on Administrative serious revision. Taking into account the tion as a result of performance audit. Offences, according to which the suspen- results of the anti-corruption expertise The proposed change is “will be de- sion of an activity is an administrative would be the most productive in the frame- prived”. offence measure, prescribed by a judge work of exactly that kind of work. It is note- Article 37 part 6: In case of breaking by an only. worthy that the anti-corruption correction educational institution the law of the Article 47 part 5 of the Federal Law “On of individual regulations would hardly Russian Federation on education and/or its Education”: The founder or the local au- make any significant difference to the cor- own Charter, the public bodies of Educa- thorities may suspend till the court deci- ruption situation in the area under study. tion Administration may instruct them to sion on this matter the entrepreneurial Within the anti-corruption expertise eliminate the violation. activity of an educational institution, if it carried out it is advisable to control the un- The proposed change – “instruct”. harms the educational activity stipulated certainty in the following issues – proce- Article 38 part 1. The state performance by the Charter. dure for licensing and state accreditation of audit committee may send to an educa- The following version of this article is educational institutions, procedure for tional institution with the state accredita- proposed: providing paid educational services by tion, a reclamation regarding the quality of them, possibility for state financing for ful- The founder may suspend the entrepre- education and/or non-compliance of the filling the educational standards. neurial activity of an educational institu- level of education with the requirements of tion, if it harms the educational activity It is necessary to make amendments to a relevant state education standard. stipulated by the Charter till the court de- the regulations defining the competence of cision on this matter. the public (municipal) bodies, namely, to The proposed change – “sends reclama- eliminate the possibility for the unregu- tion”. In order to fill the gaps in the legislative regulation of such issues as providing paid lated implementation of authority referred In the Federal Law “On Higher and educational services (Article 45 of the to as the body’s discretional right. Postgraduate Professional Federal Law “On Education”, Article 29 of Training”: In the Federal law “On education” the Federal Law “On Higher and Postgrad- Article 30 part 6. The federal executive Article 7 part 4. A decision of the state per- uate Professional training”), it is necessary body exercising control and supervising formance audit committee on awarding a to define in the text of the law a list of paid functions in the sphere of education and graduate with the qualification (degree) educational services, the main rights and science may, within its competence, in- and providing him/her with a standard obligations of parties in accordance with spect, as the way of supervision, educa- state document on higher professional the terms of the agreement. Also the tional institutions on the territory of the training may be cancelled by a federal ex- federal licensing requirements and condi- Russian Federation, regardless of their ecutive body, that had appointed the chair- tions, the procedure for conducting exper- legal status, type and form, as well as man of the state performance audit tise should be fixed by the law (if bodies of Education Administration and committee, only in case when an estab- technically impossible – provisions should the authorised executive bodies of the sub- lished procedure of issuing standard docu- be made for adopting a subordinate regula- jects of the Russian Federation exercising ments on higher professional training was tion on this issue) (Article 33 of the Federal control and supervision in the sphere of violated by a student. Law “On Education”, Article 10 of the education. The proposed change – “will be can- Federal Law “On Higher and Postgraduate The proposed change is “inspects”. celled”. Professional Training”).
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To specify the competence of the public entrusted to a higher educational institu- performance audit and accreditation; the bodies and legal uncertainties: tion itself, then their implementation can more so, as according to the law, the state be co-financed by the state (or even by accreditation of a higher educational insti- In the Federal Law “On Education” private entities, e.g., business structures in- tution is fulfilled on the basis of the per- Article 14 part 5: Public bodies of Educa- terested in certain types of personnel). The formance audit. Thus, performance audit tion Administration ensure the develop- procedure for co-financing is stipulated, is the initial stage of accreditation. This ment of model educational programmes but is not evident in the regulation. For this simplification will clarify the actual admin- on the basis of the state educational stand- reason the following version of this article istrative procedure for performance audit. ards. is proposed: To adopt the regulatory legal acts men- The proposed change is “develop”. The national and regional components tioned in the Federal Law “On Education”: Article 15 part 1: Public bodies of Educa- of the state educational standards in the tion Administration ensure the develop- sphere of higher and postgraduate profes- Article 5 part 5 – the provisions of the ment of primary curricula and model sional training are defined by a higher edu- federal law on the categories of individuals programmes of courses and subjects. cational institution. The obligation to that are entitled to the social benefits; on The proposed change is “develop”. develop, approve and introduce them is the procedure and amounts of their provi- Articles 28 and 29, defining the compe- part of the licensing agreement. In case sion. tence of the Russian Federation and its sub- their implementation is fully or partially fi- jects, despite the presence of Article 30, nanced from the budget of a subject of the Article 7 part 4 – the provisions of the insufficiently distinguish the competence Russian Federation, the relevant higher ed- federal law on the key issues of the state ed- of the executive and legislative bodies. As ucational institution acquires a status of ucational standards in the area of primary, to the key issues, the legislative level of reg- the budget recipient with the respective comprehensive and secondary (complete) ulation should be reflected in the law. rights and responsibilities (or – The rela- education; the procedure for their design Article 33 part 10: The requirements of the tions of a higher educational institution on and approval. the implementation of the national and re- expertise cannot exceed the average statis- Part 16 article 28 – the procedure for gional components of the state educational tical figures for the territory where an edu- providing the individuals for the state edu- standards where the financing is made cational institution is registered. cational credit and its repayment. It is advisable to remove this regulation from the budget of a subject of the Russian in light of the previously mentioned pro- Federation are regulated by the Russian To abolish the regulation of Article 34 posal to legally define the expertise proce- Federation budget legislation.) of the Federal Law “On Education”, accord- dure. Article 10 part 6. Performance audit of ing to which the procedure for reorganis- the higher education institution is carried ing the federal public educational In the Federal Law “On Higher and out by the state performance audit agency institutions is set by the Government of the Postgraduate Professional training” at the request of a higher educational insti- Russian Federation: by the executive au- Article 5 part 4. National and regional tution or at the initiative of a federal body thority of a subject of the Russian Federa- components of the state educational stand- of Education Administration, bodies of ex- tion in the case of the educational ards in the sphere of higher and postgradu- ecutive power or executive-administrative institutions of the subjects of the Russian ate professional training are defined by a bodies of the municipal districts where an Federation; and by the local authority for higher education institution on the initia- institution is located. the municipal educational institutions. tive of an executive body of the subject of A Performance audit agency of higher The reason is that the procedure for reor- the Russian Federation and are imple- educational institutions, along with their ganising is regulated by the civil law. The mented by a higher educational institution state accreditation and licensing, is quite same applies to part 6 of Article 28 (the on the basis of the contract with the rele- vaguely defined (it can be held at the initia- procedure for establishing, re-organising vant executive body of the subject of the tive of both an institution itself and the au- and abolishing federal public educational Russian Federation. thorities) with unclear frequency and institutions), so that “individual” requests If the development of the components function. It is envisaged that the two per- are avoided when setting up an educational of the national and regional standards is missive procedures could be combined – institution.
Proposals on improving the legislation in the sphere of education: Elvira Talapina Opinion on proposed measures to tackle corruption in the education system in the Russian Federation
Quentin Reed Lead expert to the RUCOLA 2 project
Introduction
This opinion briefly comments on the pro- appear sound, the expert believes that a Working Meeting, this opinion underlines posals of Larissa Sannikova and Elvira Ta- few of the recommendations may be prob- the need for a broader approach to educa- lapina to amend legislation regulating the lematic. More importantly, following the tion reform, including proper research to provision of education in the Russian Fed- expert’s contribution on corruption in edu- identify key problems. eration. While most of the proposals cation to the 19 December RUCOLA 2
Specific comments on the expert recommendations
The following specific comments are allow for such methods to be used to The following specific comment is offered on the comments of Ms Sannikova, select pupils for certain types of schools offered on the comments of Ms Talapina: and refer to the Explanatory Note unless (for example gymnasia ). The expert be- The third sentence of the introductory otherwise stated. lieves it is of more importance to clearly paragraph suggests that amendments to in- • The thrust of point 1 is not clear, and in regulate which schools may use admis- dividual regulations will have little effect particular it is not clear what is meant sion tests as an admission criterion, and on corruption in education. While the by “contract for providing educational impose clear duties on such schools to expert broadly shares this opinion, it is services”. make such tests and other admission somewhat confusing as the rest of the • One of the main recommendations of criteria clear to the public. opinion does not elaborate on what addi- Mrs Sannikova’s contribution is to • While restricting the provision of gifts tional measures or approaches are neces- “legally forbid using the results of ad- may be an important anti-corruption sary in order to actually have a real impact mission tests (or other forms of com- measure, it is not clear whether a ban on on corruption in education. Reflecting this, petitive selection) for entering public all gifts irrespective of value is wise. for example part 1 of the recommendations and municipal educational institutions Forbidding expressions of gratitude address problems in the wording of various on the pre-school, comprehensive and such as flowers etc may undercut a le- laws that allocate rights rather than duties secondary professional education gitimate cultural practice while doing to make certain decisions. However, levels.” The expert has doubts whether a little to prevent real corruption. The amending these laws will not tackle the blanket prohibition on competitive expert suggests that it would be wiser issue of the adequacy of the criteria and methods of selection is applicable, as simply to ban gifts over a certain value, processes by which such decisions are almost all education systems allow for with the threshold value set such that it made – for example, the inspection of edu- such methods to be used to select pupils will not exclude gifts of insignificant cational institutions or the conduct of per- for certain types of schools (for example value. formance audits.
128 Project “Russian Federation – Development of legislative and other measures for the prevention of corruption” (RUCOLA 2) 129
The need for a broader approach to reform
In the opinion of the expert, not all of the – A thorough analysis of the funding sions to teachers, and recommenda- factors underlying corruption in education needed by the education system in tions for reforms to ensure that teachers can be identified by examining the laws order to ensure that the educational can be prosecuted for receiving or solic- governing the education system using the services envisaged by Russian legisla- iting bribes. methodology for identifying corruption tion can be provided in practice • Research on the incidence of corrup- risks in legal acts. Indeed, the expert be- – the use of Public Expenditure Tracking tion/informal payments within the edu- lieves that the application of the methodol- Surveys to identify financial leakages cational process and particularly ogy for identifying corruption risks in legal – an assessment of the application in – the vulnerability to corruption of pro- acts cannot identify the key problems practice of formula funding systems in cedures for admission to educational unless it is carried out together with a locations of the Russian Federation that institutions at all levels, including an wider assessment of the functioning of key have initiated such systems assessment of the impact of the Unified aspects of the education system. A more – an assessment of control mechanisms National Examination on the transpar- comprehensive approach based on proper at all levels within the system for fi- ency and uniformity of admissions research into the functioning of the educa- nancing education, including financial processes at higher educational institu- tion system in practice is a necessary con- procedures, reporting systems and au- tions dition for well targeted reform. diting – the vulnerability of school examina- • Commissioning an analysis of the vul- tions to influence by bribes Following the earlier contribution on nerability to corruption of accreditation – the incidence and effects of the provi- corruption in education by the expert, the procedures for private schools and edu- sion of private tuition by teachers in following steps are recommended in par- cational institutions and the develop- publicly funded educational institu- ticular: ment of proposals to reform such tions • The commissioning of an analysis of the procedures. • The development of proposals to financing of the education system, in- • An assessment of the applicability of address problems identified in the pre- cluding: standard anti-corruption legal provi- vious point.
Opinion on proposed measures to tackle corruption in the education system in the Russian Federation: Quentin Reed Proposals on improving legislation in the healthcare system
Larissa Sannikova Senior scientific expert, Institute of State and Law, Russian Academy of Sciences, Candidate of Law
It seems feasible to renew substantially the the RF Civil Code where to regulate the use bility of the subjects that carry out medical regulatory base in the sphere of healthcare of an agreement on rendering medical activity (medical institutions and doctors by adopting a new Federal law on health- services – not only the paid ones, but also with private practice). care in the RF. those covered by the respective budgets. To make amendments to the current To design and include a separate To design a Federal law on the obliga- legislation regulating the sphere of health- chapter “Providing medical services” into tory risk insurance of the professional lia- care.
Explanatory note
Expanding the area of application of obligation to conclude a contract stipu- of the RF Civil Code to “commercial and Article 426 of the RF Civil Code to non- lated by the law would make no sense and non-profit organisations”. profit organisations including medical in- no legal importance. • To add Part 2, Article 782 of the RF Civil stitutions is necessary to ensure better pro- Code with the words: In order to expand the citizen’s oppor- tection of the rights of the consumers of “excluding cases, when an agreement for tunities to exercise his/her right to receive medical services, as it will allow to make a providing paid services is a public docu- primary medical-social care, it is recom- contract for providing medical services a ment”. mended to set the right of an individual to public document. • To add a part to Article 38 of the Funda- receive his/her right to primary medical- The establishment of prohibition on the mentals of RF legislation on healthcare social care covered by the obligatory unilateral refusal by a service provider stating: medical insurance upon presentation of in- from fulfilling the terms of a public agree- “A citizen has the right to claim primary surance policy in any medical institution of ment on providing paid services is neces- medical and social care provided within his/her area, and not only in the medical sary to strengthen the legal position of the the basic programme of obligatory medical institution of his residence. RF Constitutional Court for the purpose of insurance in any outpatient medical insti- ensuring that the citizens’ constitutional In order to ensure the citizens’ right to tution or polyclinic of the area of his/her rights are not violated when providing information on the provision of free permanent residence, upon presentation medical service. The obligation to con- medical assistance, it is advisable to set this of an insurance policy.” clude a public agreement, where there is a right by the list of patient’s rights contained • To add a part to Part 1 of Article 30 of possibility to provide with the relevant in Article 30 of the Fundamentals of the the Fundamentals of RF legislation on services, equally means the inadmissibility legislation on healthcare. healthcare stating: of a provider’s unilateral refusal from ful- “information on the types of medical as- The proposed changes and additions to filling the terms of an agreement, if there is sistance provided within the state pro- the legislation regulating healthcare: a possibility to fulfil them (to provide rele- gramme, guaranteeing free medical vant services to a person). Otherwise, the • To replace the words “commercial or- assistance to the citizens of the Russian ganisations” in Paragraph 1, Article 426 Federation.”
130 Proposals on improving legislation in the healthcare system
Elvira Talapina Senior scientific expert, Institute of State and Law, Russian Academy of Sciences, Candidate of Law
As a result of the anti-corruption expertise – licensing requirements and condi- • clarify the provision of Article 41: The of the legislation in the sphere of health- tions for carrying out medical activity citizens suffering from socially signifi- care, it seems feasible to make some pro- stipulated by the Regulations on licens- cant diseases, the list of which is defined posals on its improvement. ing a medical activity of 22 January 2007 by the Government of the Russian Feder- First of all, it is noteworthy that the sit- (availability of a document certifying ation, receive medical and social help uation with corruption in healthcare re- medical education; observing medical and are guaranteed in-hospital observa- quires different action – from correcting technology, etc.), as well as licensing re- tion in the relevant institutions for pre- individual legal regulations to filling in the quirements and conditions for carrying vention and treatment for free or at gaps and eliminating the conceptual con- out pharmaceutical activity (observing concessionary conditions . The proce- tradictions between The Fundamentals of the rules for producing medicines, etc.). dure of defining the scope of privileges the legislation on healthcare of individuals, • To design at the legislative level the pro- and the categories of citizens (or other the federal law “On medical insurance of cedure for conducting an independent criteria) who are not charged for the citizens of the Russian Federation” as expertise and using its results medical assistance should also be spec- well as the federal law “On medicines”. The (Article 25, 53 of the Fundamentals). ified by the Government and not left at main contradiction is a citizen’s right to the discretion of a medical institution. • To define the relations of Articles 13, 38 free healthcare and its financing as well as • increase the level of information trans- of the Fundamentals (financing from unclear procedure of public procurement parency on free medical services; to in- the budget of the mandatory medical of medicines for their provision to the citi- troduce the procedure for providing insurance and other sources) and the zens with at concessionary rates. information on health condition in ac- federal law “On medical insurance”. Speaking about the anti-corruption re- cordance with a special form against One of the ways is to determine the vision of the existing Fundamentals of leg- citizen’s signature. types of diseases when the medical care islation, the following corruptive factors • adopt the legal acts specified in p. 17 (outpatient care and in-hospital) is pro- should be eliminated: Article 5, p. 5 Article 6, Article 43 of the vided for free within the basic pro- • To distinguish the competence of legis- Fundamentals – The procedure for ap- gramme of the mandatory medical lative and executive bodies in the arti- plying methods of diagnostics, treat- insurance. cles 5, 6, 8 by specifying the authority of ment, immunobiological medication The listed areas require further con- the legislative and – separately – execu- and disinfectants; The procedure for tents assessment and bringing in relevant tive bodies. For example, adopting and conducting medical expertise; The pro- specialists – medical, financial experts and amending the federal laws in healthcare cedure and scope of social support economists. The lawyer’s task is to shape a is the area of competence of a legislative measures offered to some groups of cit- selected anti-corruption concept. body, whereas managing federal public izens when providing them with property used in the healthcare system At the same time it is necessary to make medical-social assistance and medi- is the area of competence of an execu- some amendments to the existing regula- cines. tive body. tions in order to eliminate the corruptive • To set at the legislative level the main factors. (See table on following pages.) requirements to licensing, in particular Besides, it is necessary to:
131 132 Project “Russian Federation – Development of legislative and other measures for the prevention of corruption” (RUCOLA 2)
A corruptive risk Current version Proposed version Article 56: Prohibition to carry out private medical Prohibition to carry out private medical Legal collision with Article 3.12 of the practice is made at the decision of a body practice is made at the decision of a court. Code for Administrative Offences of the that had issued a permit for carrying out RF private medical practice or at a court’s decision. Article 34: Providing medical assistance (medical Providing medical assistance (medical Broad interpretation of “persons commit- examination, hospitalisation, observing examination, hospitalisation, observing ted a publicly dangerous acts”. and isolating) without consent of a citizen and isolating) without consent of a citizen or his/her authorised representatives is or his/her authorised representatives is allowed in regard to the persons with ill- allowed in regard to the persons with ill- nesses, which are of danger to the others, nesses, which are of danger to the others, suffering from serious psychiatric disor- suffering from serious psychiatric disor- ders, or persons that committed socially ders, or persons that committed socially dangerous acts, in the order and according dangerous acts, in the order and according to the procedure stipulated by the legisla- to the procedure stipulated by the Crimi- tion of the Russian Federation. nal Code of the RF and the Criminal Pro- cedural Code of the RF . Article 39: First medical aid is provided to the citizens First medical aid is provided to anyone in Narrowing down the circle of people enti- with conditions requiring urgent medical need of it with conditions requiring urgent tled to receiving the first medical aid to the interference (accidents, injuries, poisoning, medical interference (accidents, injuries, citizens of the RF (people without citizen- other conditions and illnesses), is provided poisoning, other conditions and illnesses), ship, refugees, foreigners are excluded) immediately by medical institutions is provided immediately by medical institu- regardless of their territorial and depart- tions regardless of their territorial and mental subordination and ownership form, departmental subordination and owner- by medical specialists as well as by other ship form, by medical specialists as well as persons obligated to provide the first aid by by other persons obligated to provide the law or by a special regulation. first aid by law or by a special regulation. Article 61: Disclosing information that is part of med- It is proposed to leave out p.5 and p. 6 Possibility for disclosing information that ical secrecy without consent of a citizen or is part of medical secrecy his/her authorised representative is allowed in the following instances: 1) for the purpose of an examination and treatment of a citizen who is unable to express his/her will due to his/her condi- tion; 2) under threat of spreading infectious dis- eases, mass poisoning and damage; 3) upon request of investigating bodies, the Prosecutor’s office and court in connection with conducting an investigation or a court hearing; 4) in case of providing medical aid to a per- son under age (the age is stipulated by part 2, article 24 of the Fundamentals) to inform his/her parents or authorised representa- tives; 5) if there are grounds to believe that the damage to a citizen’s health is done as a result of unlawful actions; 6) for the purpose of a military-medical expertise in the order stipulated by the Regulations on military-medical expertise approved by the RF Government.
Final report: Appendices, Volume 1 Project “Russian Federation – Development of legislative and other measures for the prevention of corruption” (RUCOLA 2) 133
A corruptive risk Current version Proposed version Article 34: The compulsory measures of medical The compulsory measures of medical Possibility for discretional use of compul- nature can be applied to the persons that nature are applied to the persons that had sory measures had committed socially dangerous acts, in committed socially dangerous acts, in the the order stipulated by the legislation of the order stipulated by the Criminal Code Russian Federation. and the Criminal Procedural legislation of the Russian Federation. Article 44. Provision of the population with Control over quality of medicines, immu- The categories of citizens entitled to medicines and healthcare products, immu- nobiological medication, disinfectants and receive medicines and healthcare products nobiological medication and disinfectants: healthcare products is carried out by a fed- at concessionary rates are stipulated by the Absence of legal regulations for provision eral executive body, responsible for exer- legislation on the public social care. of medicines and rules for their procure- cising the public control and supervision in The production and procurement of medi- ment. the sphere of application of medicines; and cines and healthcare products for provi- by a federal executive body responsible for sion to the citizens at concessionary control and supervision in the sphere of a conditions is carried out in accordance person’s sanitary and epidemic well-being. with the Federal law “On placing orders for procurement of goods, carrying out works, rendering services for public and munici- pal needs”.
Proposals on improving legislation in the healthcare system: Elvira Talapina Opinion on proposed measures to tackle corruption in the healthcare system in the Russian Federation
Quentin Reed Lead expert to the RUCOLA 2 Project
Introduction
This opinion briefly comments on the pro- cember 19 RUCOLA 2 Working Meeting ble to corruption, in particular the registra- posals of Larissa Sannikova and Elvira Ta- this opinion underlines the need for a tion and pricing of medicines. As in the lapina to amend legislation regulating the broader approach to healthcare reform, in- case of the expert’s opinion on proposals to healthcare system in the Russian Federa- cluding proper research to identify key amend legislation governing the education tion. While the proposals appear sound, problems and notes that the recommenda- system, this contribution recommends a following the expert’s contribution on cor- tions do not sufficiently address key areas broader approach to tackling corruption in ruption in the healthcare system to the De- of the healthcare system that are vulnera- healthcare, based on targeted research.
Specific comments on the expert recommendations
The following specific comment is offered Paragraph 2 Box listing articles containing on the comments of Ms Sannikova and corruptive risks refers to point 1 of the Explanatory Note. It This paragraph points to contradictions is not clear what is meant by “contract for between three main pieces of health legis- The box lists a number of articles without providing medical services”. If this means a lation; however, the rest of the expert specifying to which law or laws they contract between citizens and healthcare opinion does not seem to identify such belong. In addition, a number of the arti- institutions, the expert is not aware that contradictions. In addition, the last sen- cles – while they may be problematic for public/state healthcare is provided on such tence states that “The main contradiction the reasons stated – do not appear to be a basis in other countries, except in the is a citizen’s right to free healthcare and its clear corruption risks; examples are case of private healthcare provision. A con- financing as well as unclear procedure of Article 34 (page 2), 61. tract implies a transaction – and therefore public procurement of medicines for their The comment on page 133 concerning the exchange of something for something provision to the citizens at concessionary Article 44 touches on the issue of procure- (e.g. payment for healthcare provision), rates”. This sentence does not however de- ment, supply and provision of medicines whereas under free public healthcare the scribe any contradiction, and is therefore and healthcare products, recommending issue is about what entitlements citizens unclear. that i) categories of citizens entitled to (consumers of healthcare) have. The expert cheap or free medicines/healthcare prod- suggests that therefore the important ob- 3rd bullet point ucts are stated in legislation; ii) production jective for reform is to ensure that such en- and provision of medicines/healthcare titlements are stated very clearly, It is not clear to the expert what is meant by products are carried out in accordance irrespective of whether they are governed “independent expertise” with the Federal procurement law. The by a “contract” or not. expert strongly believes that these pro- The following specific comments are posed measures are not adequate to tackle offered on the comments of Ms Talapina: the problems in this area. In particular, the system of establishing categories of citi- zens entitled to certain medicines and
134 Project “Russian Federation – Development of legislative and other measures for the prevention of corruption” (RUCOLA 2) 135 healthcare products for free or cheaply re- in advanced healthcare systems. Second, the operation of the health regulator, quires a thorough assessment of the ration- merely applying the procurement law to Federal Mandatory Health Insurance ality of the system itself, as it appears to be the production and provision of such med- Fund, budgetary procedures for making very different to the systems of determin- icines and products is unlikely to have any payments for medicines/healthcare prod- ing essential medicines – rather than de- effect without a broader assessment of the ucts. termining categories of entitled citizens – entire system, including the whole issue of
The need for a broader approach to reform
As in the case of corruption in education, does not reach its intended destination, – pharmaceutical companies and the expert wishes to stress that not all of to carry out Public Expenditure Track- medical establishments the factors underlying corruption in ing Surveys to assess the extent of such • On the basis of the research conducted, healthcare can be identified by examining leakages and help identify where they formulate and implement – or encour- laws through the optic of the methodology take place. In particular, conduct as a age: for identifying corruption risks in legal priority selected audits – designed on – a clear statement of the principles on acts. It is debatable whether the removal of the basis of audit risk analysis and con- which the Russian healthcare system is “corruption risk factors” as defined by the ducted by independent auditors – of the based, in particular the extent of citizen methodology is likely to have much effect effect in practice of the National Health rights to free or subsidised provision; on its own on key types of corruption, in- Project. – reforms of budget procedures and fi- cluding: informal payments to doctors by • Likewise, conduct an assessment in se- nancing mechanisms; patients; corruption of the state regulator, lected regions of the implementation of – reform of the status, composition, and medical establishments and doctors by the financing and purchasing mecha- other aspects of the FMHIF as revealed pharmaceutical companies; or leakages of nisms envisaged by existing healthcare is necessary; budget funds. Given the apparent scale of legislation. corruption in the healthcare sector in the • Conduct a forensic audit of the func- – reform of the state regulator to ensure Russian Federation, in order to identify the tioning of the Federal Mandatory its professional composition, sufficient key problems of corruption in the health- Health Insurance Fund. political independence and the trans- care sector it is vital to conduct research • Conduct and independent assessment parency and objectivity of all proce- and assessment of the functioning of key of the process of registration of drugs dures it conducts; aspects of the system, and develop targeted and medical equipment by the state reg- – duties to publish or otherwise make reforms on this basis. ulator. transparent as much information con- Following the earlier contribution on • Conduct an independent assessment of cerning procurement contracts corruption in healthcare by the expert, the the prices for drugs and medical equip- between medical establishments and following steps – although not exhaustive ment approved by the state regulator, drug/equipment providers, particularly – are recommended in particular: especially drugs and medical equip- on final prices paid; • Carry out a comprehensive assessment ment partially or wholly financed from – duties of medical establishments to of the imbalance between the rights to the health budget. make public and actively distribute in- healthcare provision guaranteed by • Conduct research on informal pay- formation on the exact rights and Russian law on the one hand, and the ments in healthcare, designed to assess duties of patients; actual financial resources allocated to the extent to which such payments are – make public or appropriately accessible such provision on the other. the result of inadequate resources. information on waiting lists for opera- • In light of estimates (cited in the ex- • Conduct research on the contacts and tions and other information that will pert’s earlier contribution) that up to 30 commercial relationships between create incentives not to engage in infor- per cent of the federal health budget – pharmaceutical companies and doctors mal payments for priority treatment.
Opinion on proposed measures to tackle corruption in the healthcare system: Quentin Reed Principles and format of establishing a specialised anti-corruption body in Russia
Elena Panfilova General Director of the Centre for anti-corruption Research and Initiative Transparency International – Russia
Summary
An intersectoral working group was estab- sible to predict the final conclusions and decision on such a body will be taken in the lished by the President’s Decree of 2 Febru- resolutions of the intersectoral group, one same way other important decisions re- ary 2007 for the preparation of the can assume that, firstly, its decisions will be garding the structure of public administra- legislative proposals on the implementa- based on Russia’s commitments within the tion bodies in the country are taken, that is tion of the provisions of the United Nations international conventions ratified by it and, at the level of the President of the Russian Convention against Corruption of 31 secondly, the group will have to choose the Federation. There are grounds to believe October 2003 and the Council of Europe format of a specialised body out of the that this decision will be taken in the Criminal Law Convention on corruption of three known types of anti-corruption nearest future. The present report gives a 17 January 1999. The working group aims bodies: an independent specialised anti- brief review of the international require- at preparing proposals including the pro- corruption body; a body within an existing ments to a specialised body and the possi- posals on designing a national anti-corrup- law-enforcement agency; or a consultative ble options for creating a specialised anti- tion strategy, as well as principles and and co-ordinating body under one of the corruption body in Russia. objectives for the operation of a specialised high level public authority bodies. One anti-corruption body. Though it is impos- should keep in mind the basic factor: the
International requirements to a specialised body
Article 6 of the United Nations Convention its or their functions effectively and free “Each party should, in accordance with the against Corruption states that from any undue influence. The necessary fundamental principles of its legal system, material resources and specialised staff, as ensure the existence of a body or bodies or “Each State Party shall, in accordance with well as the training that such staff may persons specialised in combating corrup- the fundamental principles of its legal require to carry out their functions, should tion through law enforcement. Such body system, ensure the existence of a body or be provided. Each State Party shall inform or bodies or persons should be granted the bodies, as appropriate, that prevent cor- the Secretary-General of the United necessary independence, in accordance ruption by such means as: implementing Nations of the name and address of the au- with the fundamental principles of the the policies and, where appropriate, over- thority or authorities that may assist other legal system of the state party, to be able to seeing and co-ordinating the implementa- States Parties in developing and imple- carry out their functions effectively and tion of those policies; increasing and menting specific measures for the preven- without any undue influence. Such disseminating knowledge about the pre- tion of corruption.” persons or staff of such body or bodies vention of corruption. Each State Party Furthermore, Article 36 of the United should have the appropriate training and shall grant the body or bodies the neces- Nations Convention against Corruption resources to carry out their tasks.” sary independence, in accordance with the states that fundamental principles of its legal system, Thus, the United Nations Convention to enable the body or bodies to carry out definitely states that the anti-corruption
136 Project “Russian Federation – Development of legislative and other measures for the prevention of corruption” (RUCOLA 2) 137 body in each country that ratified the Con- has adequate training and financial re- to provide them with appropriate means vention, including Russia, must perform a sources for their tasks.” and training to perform their tasks”. twofold function: prevention of corruption Resolution (97) 24 of the Council of Eu- Thus, there are some international legal and prosecution for corruption offences. rope’s Committee of Ministers on the framework requirements to a specialised When choosing a format for a specialised twenty guiding principles for the fight anti-corruption body and what and how it anti-corruption body in Russia, this fact against corruption defines the format and should carry out its tasks. In this connec- must be considered first. functions of a specialised anti-corruption tion the most important principle men- tioned in all the documents is the principle The requirements to an anti-corruption body even in greater detail. It states that of “independence”. What is also utterly im- body are also clearly stated and specified in member states should portant is the necessity to combine prose- Article 20 of Council of Europe Criminal “ensure that those in charge of the preven- cution for corruption offences with a Law Convention on Corruption, which de- tion, investigation, prosecution and adju- preventive function. clares that dication of corruption offences enjoy the The challenge for Russia today is to independence and autonomy appropriate “Each Party shall adopt such measures as choose, applying these framework require- to their functions, are free from improper may be necessary to ensure that persons or ments to the actual institutional and polit- influence and have effective means for entities are specialised in the fight against ical situation in the country, the most gathering evidence, protecting the persons corruption. They shall have the necessary adequate and effective option for a special- who help the authorities in combating cor- independence in accordance with the fun- ised anti-corruption body, where on the ruption and preserving the confidentiality damental principles of the legal system of one hand, its activities harmoniously fit of investigations”. the Party, in order for them to be able to into the existing legal and institutional carry out their functions effectively and The member states shall also system and on the other hand – would be at free from any undue pressure. The Party “promote the specialisation of persons or the most independent from political dispo- shall ensure that the staff of such entities bodies in charge of fighting corruption and sition and would not turn out to be a fake.
Options for the format of a specialised anti- corruption body in Russia
Most countries do not have a body inde- “з” of Article 102 of the RF Constitution) the United Nations Convention and the pendent from other public authorities, ensures independency of the Prosecutor’s Council of Europe Criminal Law Conven- which would concentrate solely on the Office in investigation process. tion on Corruption. For example, p. 1 of fight against corruption. However, coun- At the same time there are some doubts Article 8 of the Law states that “the General tries in which such anti-corruption agen- that the Russian Prosecutor’s Office can Prosecutor and his subordinate prosecu- cies are in place, the efficiency of their perform the tasks set by the United tors co-ordinate the activities on fighting work is impressive. Nations Convention for anti-corruption crime in the bodies of the interior, federal It is commonly believed that the Prose- bodies. The above-mentioned extract from security bodies … and other law-enforce- cutor’s Office is a public body, or a system, the Convention points out that such bodies ment agencies.” According to p. 2 of Article which must root out the problem of cor- must be responsible for: a) implementing 4 of the Law, the Prosecutor’s Offices ruption in Russia. Indeed, there are several anti-corruption policies and, where appro- “inform … citizens on the state of the rule indisputable facts that point to that. Firstly, priate, overseeing and co-ordinating the of law”. according to Article 151 of the RF Criminal implementation of those policies; and b) In other words, if the task of fighting and Procedure Code on investigative juris- increasing and disseminating knowledge corruption is entrusted to the Russian diction, the preliminary investigation of about the prevention of corruption. Until Prosecutor’s Office, it must raise awareness crimes against public authority, interests of now the experts have not seen any traces of of the scope of the problem of corruption public and municipal service (Chapter 30 developing a coherent anti-corruption to the level outlined in the UN Convention of the RF Criminal and Procedure Code, policy, which would go further than tradi- against Corruption and the Council of par. 285-293) including corruption of- tional punitive surges. The same refers to Europe Criminal Law Convention on Cor- fences, must be carried out by investigators the task of educating citizens on the pre- ruption. It means, inter alia , that the Pros- of the Prosecutor’s Office. Secondly, Prose- vention of corruption, which tends to be ecutor’s Office shall take serious measures cutor’s Office has a special status in the considered by the Prosecutor’s office as in- to prevent corruption, rather than only system of public administration in the significant and something other agencies prosecute for corruption offences, as well Russian Federation and constitutes a “uni- should be responsible for. as it shall develop a coherent long-term fied centralised system where lower However, Federal Law #2202-1 of programme of combating corruption in ranking prosecutors are subordinate to the 17 January 1992 “On the Prosecutor’s Russia. higher ranking ones” (Article 129 of the RF Office of the Russian Federation” (with Setting up a specialised anti-corruption 1 Constitution). Thirdly, a special procedure subsequent amendments) has some body to is believed to be effective in a situ- for appointing the General Prosecutor of shoots of anti-corruption tasks outlined in ation, when the law-enforcement agencies the Russian Federation – by the Federal are subject to corruption themselves, and 1. Rossiyskaya Gazeta . Issue 39, 18 February 1992 Council as advised by the President of the Consultant Plus legal information system was used therefore citizens do not trust them in this RF (according to p. “е” of Article 83 and p. as a reference to prepare this material. respect. In most economically developed
Principles and format of establishing a specialised anti-corruption body in Russia: Elena Panfilova 138 Project “Russian Federation – Development of legislative and other measures for the prevention of corruption” (RUCOLA 2) countries there are no special anti-corrup- of current importance. However, before Discussing the necessity to establish an tion agencies, but the problem of corrup- the UN Convention was adopted, most of independent anti-corruption body, differ- tion there is not systematic. In other these countries relied without any success ent experts often give similar arguments, countries, where corruption is so wide- on law-enforcement bodies, or created which are summarised in the table below: spread that it literally becomes a threat to weird administrative structures to solve normal, effective operation of public au- the problem of corruption, entrusting re- thorities and affects practically all aspects sponsibility for anti-corruption measures 1. Basics of fighting corruption (of the state ethics of of society life, the issue of establishing a to, for example, Ombudsman, as in Uganda conduct system), Edited by S.V. Maksimov and special anti-corruption structure remains or Papua New Guinea. 1 others – М.: Spark, 2000. P. 186.
Table 1: Establishment of a specialised anti-corruption body
Advantages Disadvantages • High quality investigation and other results are ensured due to • Higher costs to support an independent body. professional skills. • Investigation of corruption offences often requires interde- • High degree of autonomy and public character of a body partmental co-operation, which will be hindered from a “spe- makes it unlikely for corruption to spread among its employ- cial” status of a new agency. ees. • Possible decrease of influence of traditional law-enforcement • Concentration on one issue results in a more responsible agencies, especially if success of a new body becomes obvious. approach towards work. • Political issues of exercising control over activities of a new • Responsibility for solving the problem of corruption is not body can in some cases put obstacles to its work.† divided among a wide variety of agencies; consequently it is always clear what body is responsible for failure. • A new body will enjoy a larger level of trust of citizens. • Starting to work from scratch means the absence of the burden of old departmental bureaucratic problems; the new agency is more flexible and mobile.*
* The global program against corruption. UN anti-corruption tool-kit . 3rd edition, Vienna, September 2004. Р. 90. † See for example: P.A. Skoblikov “Does Russia need an independent federal service of fighting organised crime and corruption?”, Problems of fighting corruption. Collected articles . М., 1999. P. 55.
Specialised anti-corruption bodies Chairman of the RF Government E.T. ident’s Decree #103 of 20 January 1993. were established in a number of countries, Gaidar was established “to review issues The decision on establishing this commit- including Hong Kong, Singapore, India, and to develop proposals for fighting cor- tee was part of the President’s Decree Philippines, etc. The Hong Kong anti-cor- ruption in the public administration #1189 of 8 October 1992 “On measures for ruption service is generally considered to system and to organise financial and legal protecting citizens’ rights, law enforce- be the most successful one. An independ- control over business activities in the ment and strengthening anti-criminal ef- ent anti-corruption commission was estab- major sectors of economy.” forts”. lished in Hong Kong as early as 1973. The According to Resolution of the RF In carrying out its tasks the intersecto- Commission is an independent body sub- Supreme Council #4891-1 of 28 April 1993, ral committee, inter alia : ordinate to the Governor of Hong Kong, a specialised commission for investigating • co-ordinates the provision of informa- who appoints members of the Commission corruption offences committed by public tion and analytical materials to the for six years without re-election possibility. authority officials was established within President of the RF and the Security The Commission is structured according the framework of the RF General Prosecu- Council of the RF; to its key tasks: increasing the risks of in- tor’s Office “to ensure objective and overall volvement into corruption offences, re- • summarises the anti-corruption efforts examination and investigation of the facts structuring bureaucracy in order to reduce in the ministries, agencies and execu- of corruption, misuse of authority and eco- opportunities for corruption, changing at- tive bodies of the Russian Federation, as nomic crime.” 3 V.G. Stepankov, General titude of citizens to corruption. Successful well as puts forward proposals on the Prosecutor was advised to introduce a po- anti-corruption bodies were established in prevention of corruption; sition of the First Deputy General Prosecu- Croatia, Latvia, Lithuania and Slovenia tor – head of the special commission – for • by order of the RF President, co-ordi- based on the same principles. organisational and operational control. 4 nates auditing the activities of law en- It would be incorrect to say that Russia forcement bodies in the area of The provision “On the intersectoral has always been aside from the idea of es- preventing crime and corruption and, committee by the Security Council of the tablishing a specialised anti-corruption according to the set-up legal procedure, Russian Federation for combating crime body. There have been several attempts, reports on any illegal actions commit- and corruption” 5 was approved by the Pres- but in all of these cases Russian anti-cor- ted by the officials at any level; ruption commissions were consultative or 2. Collected legislative acts of the RF President and • studies international experience in the working bodies within the existing public Government. September 28, 1992 # 13. P. 1071 area of combating crime and corruption authorities. 3. News of the RF Council of People’s Deputies and as well as develops proposals on apply- Thus, following the RF Government Supreme Council. May 13, 1993 # 19. P. 691. 4. It is known that the similar suggestion was made 2 Order #1761-р of 17 September, 1992 a in 2006 by the State Duma Speaker and “United 5. Collected legislative acts of the RF President and Governmental commission headed by the Russia” party leader B. Gryzlov. Government. 28 June 1993. #26. p. 2419.
Final report: Appendices, Volume 1 Project “Russian Federation – Development of legislative and other measures for the prevention of corruption” (RUCOLA 2) 139
ing it to the activities of the law enforce- prevention and combating corruption thorities, government authorities of the ment bodies in the Russian Federation. in the federal, regional and local author- subjects of the RF and local authorities Apparently a special role was to be ities; as well as representatives of those or- played by a new anti-corruption body es- • reports annually to the President of the ganisations; tablished under the President’s auspices. It RF on the results of its activities. • set up the permanent and/or ad hoc is not coincidental that in light of signing Thus, having reviewed the tasks and working (expert) groups on the subjects the UN Convention against Corruption Mr working procedures of the Council on under its jurisdiction and to approve its Meshkov, head of the Russian delegation at combating corruption, one can conclude composition; the conference in Merida (Mexico), in- that this body cannot be regarded as an in- formed the participants about setting up dependent anti-corruption agency in the • attract in accordance with the set up an anti-corruption Council by the RF Pres- sense as it refers to the international expe- procedures scientists and experts to ident’s auspices. The provisions for estab- rience of establishing specialised anti-cor- carry out work including on a contract lishing the Council were approved by the ruption bodies. What is important here is basis. President’s Decree #1384 of 24 November the fact that this body was specially pre- 2003. 1 According to the Decree, the sented by the Russian representative at the By 1 August 2007 the inter-institutional Council is a consultative body by the Pres- conference in Merida in connection with working group in accordance with the set- ident of the RF, which was to assist him in signing the UN Convention against Cor- up procedure shall present the legislative executing his constitutional authority. The ruption. proposals necessary for the implementa- anti-corruption Commission and the The recent legal initiatives in searching tion of the provisions of the international Commission on the conflict of interest for the best organisational structure in the anti-corruption legal acts, including the were established by the Council. context of anti-corruption activities show proposals on the creation of the specialised Among the members of the Council are willingness to reconsider previously used body responsible for the co-ordination of the Chairman of the Government, the approaches. For example, an intersectoral national effort in fighting corruption. In Chairman of the Federation Council, the working group was set up by the Presi- order words, the issue of creating a special- Chairman of the State Duma, Chairmen of dent’s Decree #129 of 3 February 2007. 2 It is ised anti-corruption body will be solved in the Constitutional Court and Supreme Ar- responsible for developing proposals for the near future in line with the provisions bitration Court. The Council does not deal the improvement of the Russian legislation of the anti-corruption conventions. with the reports on crimes and offences in line with signing the anti-corruption If the option of setting up a separate and does not follow up on the incidents of conventions. specialised anti-corruption body is to be violating working discipline. However, it According to the Decree, for the realisa- chosen, such a body could incorporate the carries out the following key functions: tion of the tasks put forward the intersec- best practice of similar bodies around the • puts forward proposals to the President toral working group has the right to : world which already proved effective. The of the RF on the composition of the • request and get in accordance with the structure of such body should reflect the anti-corruption Commission and the set up procedure the necessary materi- key principles of its operation (one-man Commission on the conflict of interest; als from the federal government au- management, collectiveness, transparency, • hears annually the report of the General thorities, government authorities of the etc.), as well as three main areas of the na- Prosecutor of the RF on the state of subjects of the RF and local authorities tional anti-corruption strategy (prosecu- affairs in combating corruption; as well as organisations; tion, prevention, education). Moreover it • considers proposals prepared by the • invite to its meetings the government should take into account the federal struc- anti-corruption Commission on the officials of the federal government au- ture of the Russian Federation as well as to 1. Collection of the RF legislation. 1 December 2. Collection of the RF legislation, 5 February 2007. make provisions for co-ordination with 2003.# 48. p. 4657. # 6. p. 731. various public authorities.
Draft structure of an independent specialised anti-corruption body
The structure of a specialised anti-corrup- federal districts in the Russian Federa- passes it to investigation or other rele- tion body should include 4 directorates: tion), vant departments; among its functions • Directorate for Prosecution • department for co-ordination (its task are also monitoring media publications, is to co-ordinate efforts with law-en- setting up “hot lines” in the regions, etc. • Directorate for Prevention forcement bodies), ) • Directorate for Education • department for international co-opera- • Directorate for Administration. tion (its task is to co-ordinate efforts Directorate for Prevention consists of: with other countries on issuing and re- • legal department (prepares legislative Directorate for Prosecution consists of: covering assets, etc.) and initiatives related to all aspects of com- • investigation departments (there can be • “hot line” department (it is in a way a bating corruption as well as provides several of them considering the size of unit working with citizens’ appeals, but legal expertise as necessary), the country; the exact number can be with a wider range of functions – it • public service department (exercises determined by different factors – e.g. 7 analyses the accumulated data and control over observing legislation in the
Principles and format of establishing a specialised anti-corruption body in Russia: Elena Panfilova 140 Project “Russian Federation – Development of legislative and other measures for the prevention of corruption” (RUCOLA 2)
area of public service; collects and anal- tutions, business society, mass media, the RF, the Federation Council of the RF, yses the data provided by the public of- etc.) the Supreme, Constitutional and Supreme ficials on their income, property, etc.), Arbitration Courts of the RF, General Pros- Directorate for Administration consists • department on conflict of interest (col- ecutor’s Office, RF Ministry of Justice, RF of: lects information on the conflict of in- Ministry of Economic Development and terest facts; offers relevant • HR department (selects and trains per- Trade, RF Ministry of Finance, Central consultations to the public servants, sonnel for the specialised body), Bank of the RF, the Federal Service for Fi- etc.), • information department (informs the nancial Monitoring of the RF, Accounts public about the activities of the spe- • public procurement department (exer- Chamber of the RF, other ministries and cialised body both through mass media cises control over observing transpar- agencies, as well as representatives of the and its own web-site; carries out press- ency principles in public and municipal specialised civil society organisations and service functions), procurement; offers relevant consulta- expert institutions. Such body would ap- • financial department, tions to the public and municipal au- parently function on the periodic basis and • department for planning (plans the ac- thorities, etc.), distribute authority given to the specialised tivities of the specialised body based on anti-corruption body between its member • department of corruption risk assess- the information from other directorates agencies. This option also has its advan- ment (monitors the areas of public ad- and departments as well as prepares tages and disadvantages. If a specialised ministration, which are most vulnerable regular narrative reports), anti-corruption body operates in this to corruption; screens legal acts for cor- • security and audit department (it is re- format, the main problem would be decid- ruption risks, etc.), sponsible for proper security within the ing how and between which agencies the • monitoring and research department specialised body and internal audit of three key functions would be divided: pre- (conducts surveys in the area of corrup- its activities), vention, education and prosecution for tion at the national, regional and de- • IT department (it is responsible for in- corruption. There is a danger of minimal partmental levels; monitors public formation and communication systems impact from such anti-corruption meas- opinion on the permanent basis, etc.) within the specialised body). ures if they are in competence of three dif- Directorate for Education consists of: The proposed structure is, of course, ferent agencies and there is no proper co- only exemplary and can vary depending on ordination between them. • department of public programmes (de- the specific tasks the specialised body will In any case, while analysing approaches velops and offers educational pro- be expected to perform and the functions to selecting a format of a specialised anti- grammes targeted at different society that will be assigned to it. The elements of corruption body in Russia, One should groups; prepares educational pro- this exemplary structure are based on the keep in mind the basic factor: the decision grammes for schools, conducts special functions and tasks which seem to be the on such a body will be taken in the same campaigns, prepares media pro- most relevant for Russia today. On the way other important decisions regarding grammes, etc.), other hand, this structure proved its effec- the structure of public administration • department of sectoral programmes tiveness in the countries where specialised bodies in the country are taken, that is at (prepares special programmes on anti-corruption bodies already exist and the level of the President of the Russian public service ethics, court ethics, work actively. Federation. There are grounds to believe ethics of law enforcement service, busi- Another option for an anti-corruption that this decision will be taken in the ness ethics; offers special educational body in Russia could be setting up a con- nearest future. programmes to federal, regional and sultative body by the President of the RF or local authorities, etc.), by the RF Government. It could include • co-ordination department (aims to co- representatives of the President’s Adminis- ordinate efforts with civil society insti- tration, RF Government, the State Duma of
Annex
V.V. Putin, President of the Russian Feder- • To establish an inter-institutional proval the composition of the inter-in- ation signed the Decree “On establishing working group for the preparation of stitutional working group by the inter-institutional Working Group for the legislative proposals on the imple- 15 February 2007. the preparation of the legislative proposals mentation of the provisions of the UN • By 1 August 2007 the inter-institutional on the implementation of the provisions of Convention against Corruption of 31 working group, in accordance with the the UN Convention against Corruption of October 2003 and the Council of set-up procedure shall present the legis- 31 October 2003 and the Council of Europe Criminal Law Convention on lative proposals necessary for the im- Europe Criminal Law Convention on cor- corruption of 17 January 1999 (hereaf- plementation of the provisions of the ruption of 17 January 1999”. Below is the ter inter-institutional working group ). international legal acts, mentioned in p. full text of the Decree: • To nominate V.P. Ivanov, an Adviser to 1 of this decree, including the proposals In order to harmonise the Russian legis- the President, as Head of the inter-insti- on the creation of the specialised body lation in line with international obligations tutional working group. responsible for the co-ordination of na- of the Russian Federation in the sphere of • The Head of the inter-institutional tional effort in fighting corruption. fight against corruption I declare: working group shall present for ap-
Final report: Appendices, Volume 1 Project “Russian Federation – Development of legislative and other measures for the prevention of corruption” (RUCOLA 2) 141
• For the realisation of the tasks put – set up the permanent and/or ad hoc group to the federal budget aimed at forward the inter-institutional working working (expert) groups on the sub- supporting the President’s Administra- group has the right to: jects under its jurisdiction and to tion of the RF; – request and get in accordance with the approve its composition; • Cancel the President’s Decree N 1384 procedure the necessary materials – attract in accordance with the set up on the Council under President’s aus- from the federal government authori- procedures scientists and experts to pices on the fight against corruption of ties, government authorities of the sub- carry out work including on a contract 24 November 2003 (The collection of jects of the RF and local authorities as basis. the legislation of the RF, 2003, N48, p. well as organisations; • Make responsible the President’s Ad- 4657). – invite to its meetings the government ministration for the material-technical, • The present Decree will come into force officials of the federal government au- transport and other support of the ac- on the day of its signature. thorities, government authorities of the tivities of the inter-institutional subjects of the RF and local authorities working group. as well as representatives of those or- • Refer the expenses connected with the ganisations; work of the inter-institutional working
Principles and format of establishing a specialised anti-corruption body in Russia: Elena Panfilova Expert opinion on the papers prepared by Elena Panfilova concerning anti-corruption strategy and anti-corruption body in the Russian Federation
Drago Kos Chairman of the Commission for the Prevention of Corruption in the Republic of Slovenia and Chairman of the Group of States against Corruption – GRECO
Introduction
Both documents – “Principles and format of the project, especially having in mind anti-corruption policy and the national of establishing a specialised anti-corrup- that she was the only representative of civil anti-corruption body. tion body in Russia” (page 136 of this society who took part in the project. Both documents will be analysed first as volume) and “The basis for the national Therefore, it was also essential, that her they are written – chapter by chapter. At anti-corruption strategy in the Russian taking part in almost all RUCOLA-2 activ- the end of the detailed analysis a general Federation” (page 85) – were prepared in ities, as a person, who knows a lot about opinion on the strengths and weaknesses the framework of RUCOLA-2 project and the state of play of anti-corruption efforts of the relevant document will be given. followed by list of seminars, foreign and in the Russian Federation, and as someone Where no comments are made by the Russian experts’ opinions and some very who enjoys uncontested high level of cred- expert, it is a sign that he or she does not interesting and exhaustive discussions ibility by country’ s governmental and non- have any special remarks, neither in the taking part in the Russian Duma. The input governmental institutions was appointed negative nor in the positive way. In order to of Ms Panfilova, as leading person in the to produce a concluding document on two avoid longer repetitions, Ms Elena Pan- Russian’s Transparency International Na- most important issues dealt with in the filova in this expert opinion will be referred tional Chapter was significant in all stages framework of the project – the national as “the author”.
Principles and format of establishing a specialised anti-corruption body in Russia
Summary the list given it can not be understood what will be one of the most important ques- can be derived easily from the following tions to be solved.Following the establish- In this part the author gives a short factual parts on the international requirements: ment of a multidisciplinary working group description on developments in the that it is important for countries to have a in February 2007 and a logical conclusion Russian Federation following the establish- preventive and a repressive body, or a com- of the author that decision on the future ment of a multidisciplinary working group bination of both. The position of such a anti-corruption body will by taken by the in February 2007. The author is referring to body is generally not so important under President of the Russian Federation, it is to three “known types of anti-corruption bodies”: an independent specialised anti- the presumption that other basic require- be believed that the President before corruption body, a body within an existing ments (independence, autonomy, no disal- making his final decision will take into law-enforcement agency, and consultative lowed influence, objectivity …) are account international legal requirements and co-ordinating body under one of the fulfilled, but it is obvious that this (the po- for the establishment/existence of such a high level public authority bodies. From sition of a body in a state administration) body, Russian conditions/circumstances
142 Project “Russian Federation – Development of legislative and other measures for the prevention of corruption” (RUCOLA 2) 143 and the level of readiness of Russian ad- it can serve as a good starting point when There is a proposal given by the author ministration to honestly and sincerely fight making decision on a future body. to divide the future body into four directo- corruption. Basically, this part deals with two possi- rates and a detailed description of their ble options for the future anti-corruption tasks is given. Without going into details of body: the first one is a body within the suggested structure – the author herself is International requirements to Russian Prosecutor’s Office and the second aware of the exemplary nature of the given a specialised body one is a body within the President’s admin- structure – it can be said that in the Direc- istration (having in mind the fact that there torate for Prevention the Public service de- Requirements of international legal docu- were already several attempts made in this partment and the Department for ments (United Nations Convention against direction). The author does not mention corruption risk assessment could be Corruption, Council of Europe Criminal third possibility, which was often men- merged and if there are no special reasons Law Convention on Corruption, Resolu- tioned during discussions in the Russian for it there is no need to have a “Public pro- tion (97) 24 of the Council of Europe’s Duma: the FSB, the federal law enforce- curement department”, since its tasks in Committee of Ministers on the twenty ment agency, which – under some condi- other countries are usually performed by guiding principles for the fight against cor- tions – could also serve as a basis for the other bodies, controlling the use of public ruption) are given in this part in a fairly new anti-corruption institution. money. direct and understandable manner point- For obvious reasons the author does not There is no structure given for the ing out that the crucial question of the explicitly take the stand on the position of second option – the consultative body. future anti-corruption body in the Russian the future anti-corruption institution, There is only a list of its possible members Federation will be the question of its func- moreover, from her text it can easily be un- and the author herself has noticed its main tional independence, having in mind broad derstood that she is in favour of creation of deficiency: the lack of co-ordination while existing legal and institutional system in a “separate specialised anti-corruption this body would not be in session. Clearly, Russia and existing relations in the political body”, pointing at the creation of an inde- this is not a solution, which would make a set-up of the country with clearly dominat- pendent anti-corruption institution similar difference in the anti-corruption efforts of ing powers of its President. to those in Hong Kong, Lithuania, the Russian Federation. Latvia …. This indeed seems to be the best possible solution for the Russian Federa- Options for the format of a Conclusion specialised anti-corruption tion. body in Russia The author has prepared a document Draft structure of an which gives answers to the main questions This part contains some paragraphs independent specialised anti- on the format and desired position of the dealing with the past Russian efforts in the corruption body future anti-corruption institution in the area of establishing an anti-corruption Russian Federation. Although her opinion body. As much as they are useful, in order Despite the title of this chapter the author and ideas are of a very high quality, the to understand the situation in the Russian is not dealing with one but with two possi- author herself has warned several times Federation it would be better to place them ble forms of the anti-corruption agency: that the final decision on the position and in the first part (“Summary”), which is the first one is an independent body and structure of the Russian anti-corruption dealing with the “history” of those efforts. the second one the consultative body body will be taken at the highest possible Furthermore, in this part the author within the President’s administration. level – the President of the Russian Feder- gives a very precise and structured analysis The author proposes to entrust the ation. This is a fact inevitably involving in- of the advantages and disadvantages of a future body with law enforcement powers, clusion of political considerations and “specialised” anti-corruption body. Per- too. Without going into details this seems despite the work conducted in the frame- haps, it is a problem of translation; how- to be a natural and the only choice for the work of RUCOLA-2 and the work of ever, the real problem that is discussed future anti-corruption body in Russian working group established by the Presi- here is the problem of “institutional inde- Federation in order to be taken seriously by dent’s Decree of 2 February 2007 this fact pendence” and not a problem of “speciali- the Russian citizens and by other public ad- can result in a major surprise when the de- sation”. The analysis is a very good one and ministration bodies in the country. cision will be made.
The basis for the national anti-corruption strategy in the Russian Federation
Preliminary statement in Russia”. The author is not giving any ex- would be merged into one single chapter planation on the relation between the men- proving in such a way that all their ele- In this part the author describes the funda- tioned two parts, which might give the ments are parts of a single national anti- mentals of the future anti-corruption strat- impression that they are dealing with two corruption policy. This could be done egy of the Russian Federation, dividing different and separated subjects. However, easily since all elements are elaborated sub- them into two parts: “general statements” this is not a case and both parts are closely stantially in a very reasonable and useful and “main areas in combating corruption related but it would be even better if they manner.
Expert opinion on the papers prepared by Elena Panfilova concerning anti-corruption strategy and anti-corruption body: Drago Kos 144 Project “Russian Federation – Development of legislative and other measures for the prevention of corruption” (RUCOLA 2)
General statements Main areas of combating adopt a “special legal regulation” as sug- corruption in Russia gested by the author since regular amend- Stating the problem ments to the Criminal Code are also A specialised anti-corruption body possible – this possibility is even envisaged This part is a very good one and with minor in the following sub-chapter on strength- drafting improvements it can serve as an Although tasks of the future anti-corrup- ening sanctions. excellent introduction to Russian anti-cor- tion body are given in a very general ruption strategy. manner, they are not covering full area of Term of “public officials” responsibility of the body: there is nothing Definition and concept of “public official” Definition of corruption explicit on prevention and education, both is one of the crucial points in incriminating tasks being important ones for the pur- Due to several definitions copied from in- different forms of corrupt behaviour and poses of the implementation of the na- ternational legal instruments or working represents vital criteria for assessment of tional anti-corruption strategy. bodies, it is difficult to find the definition of the implementation of different interna- corruption which will be used for the pur- Prosecution for corruption offences tional anti-corruption conventions, poses of the strategy. It is defined in a best There is nothing written here, probably adopted by different international organi- possible way (“corruption is any use of due to the fact that this part relates to activ- sations (UN, Council of Europe, OECD …). power or functions for the personal bene- ities of “traditional” law enforcement Therefore, it is of utter importance that fit”), although it is somehow hidden in the bodies. this concept includes requirements of all mass of other definitions. relevant conventions and special attention Prevention of corruption has to be paid to it. The aims of the strategy This part deals only with prevention of cor- Illicit enrichment The aims of the strategy are given in a form ruption in the public sector. Business and of “general” and “special” objectives. While civil society are not mentioned at all. It is The UN Convention does not ask for man- the list of general objectives is quite an ex- unambiguous that corruption has to be datory incrimination of illicit enrichment. haustive one and it is only asking for some fought in the public sector first, yet without Therefore, a detailed and careful pro/ adjustments concerning the priorities of anti-corruption measures in the private contra analysis should be conducted before general objectives 1, the list of special objec- sector no significant results can be making a decision on the incrimination. tives consists only of two objectives, which achieved or sustained. The OECD Convention is simply not enough. Accomplishing The OECD Convention cannot be ratified special objectives the general ones will be anti-corruption education by a country which is not a member of the reached as well. Therefore, it would be nec- OECD or its Working Group on Bribery. essary to elaborate a slightly more on the In this part it has to be added that not too special objectives. intrusive anti-corruption education has to “anti-corruption diagnostics” become a component of standard educa- The usual term used internationally in this The principles of strategy tional programmes in all kinds and levels of area is “risk assessment” and not “anti-cor- implementation schools. ruption diagnostics”. The principles of strategy implementation anti-corruption programmes are given in a form of “general” and “spe- High priority measures for cial” principles. Despite the fact that the It would be very natural if two programmes principles chosen for the implementation implementing the anti- mentioned here would merge into one of the national anti-corruption policies corruption strategy in Russia single programme targeting the goals men- solely depend on their drafters, there is a tioned in both previous ones. very important principle missing in the This part represents a list of first practical steps to be fulfilled in order to ensure im- Risks at the stage of strategy given list: political will! It will prove to be implementation the most important principle for the imple- plementation of the national anti-corrup- mentation of the strategy (as it always tion strategy. It would be too much to The relation between preventive and re- does), and it simply has to be mentioned. expect that measures will be implemented pressive anti-corruption measures is a very Thorough analysis of the given lists would following the priority given by the author, complex one. Therefore, “prevailing of leg- enable inclusion of other useful principles, but the set of measures given here – with islative and law-enforcement measures too (gradual approach, flexibility …). minor exceptions – is indeed the most over preventive actions” does not neces- urgent one to be implemented. Neverthe- sary mean that there will be a big obstacle The mechanisms of anti-corruption less, some remarks have to be made: for full implementation of the strategy. Strategy implementation Without going into details, this part of the Criminalisation sub-chapter would have to be deleted in On the basis of the text given here, it is not There are two different ways how to amend order not to cause any unnecessary prob- possible to assess in practical terms how existing articles of the RF Criminal Code: lems. the strategy will be implemented. More by changing each of them or by adding an precise redrafting of this part seems to be additional article referring to all relevant Annex – Model Plan unavoidable. articles in the Criminal Code. The second The term “persons in charge” would have option seems to be a better one since there to be replaced by “institutions in charge”. If 1. I.e. it is not clear why “strengthening the trust of citizens to public and municipal authorities” is given is no danger for leaving out important indi- this is to be considered as a detailed action at the beginning of the list. vidual articles. It is also not necessary to plan, then planned measures (“activities”)
Final report: Appendices, Volume 1 Project “Russian Federation – Development of legislative and other measures for the prevention of corruption” (RUCOLA 2) 145 will have to be further elaborated in a form Conclusion conclusion. If the Russian Federation of very concrete and detailed actions for wants to start with implementation of the their implementation. Again, the author has produced a very anti-corruption policy in an efficient and qualitative document, which can assist effective manner, then this document will substantially in the initiating stages of the have to be used as one of important tools drafting and implementing procedures for for achieving that goal. the national anti-corruption strategy. Minor flaws identified do not spoil this
Expert opinion on the papers prepared by Elena Panfilova concerning anti-corruption strategy and anti-corruption body: Drago Kos Legislative measures to prevent corruption in healthcare
It is generally acknowledged that corrup- extent of corruption in healthcare was sig- tions of this regulation. Also, there is still a tion in the healthcare systems of transition nificant in both poor and wealthy coun- lack of information about the application countries is a major problem, and systemic tries. of the new Federal Law No. 94-FZ of 21 July in countries of the former Soviet Union. Bribes paid to medical personnel are 2005 “On the placement of orders for the According to the results of surveys cited in classed as routine corruption, but that does delivery of goods, execution of work and the Transparency International Global not take away from the social hazard they provision of services for state and munici- Corruption Report, informal payments by represent. Reports from the IA Teleinform pal needs”, which came into effect on patients to doctors constitute 84% of total suggest that some 30 million Russians have 1 January 2006. healthcare expenditure in Azerbaijan, 35- been unable to obtain medical care In these circumstances, the task is to 40% in Georgia and 56% in the Russian because they could not afford to pay bribes reform the healthcare system while at the Federation. According to other survey evi- to medical personnel. same time eliminating corruption risks. dence, in CIS countries more than 60% of One of the priority tasks when fighting One of the ways this has been tackled in the citizens reported making informal pay- corruption in the healthcare sphere, there- RUCOLA-2 project is through drafting ments, while in Armenia the figure is close fore, is to see to it that Russian citizens are legislative proposals to deal with corrup- to 90%. The Centre for the Study of Public able to exercise their right to health protec- tion in healthcare. This work was carried Policy’s New Europe Barometer surveys tion and free medical care. out in several stages. To begin with, conducted in 2004 found that 93% of Rus- Violations in the procurement of Russian experts (Elvira Talapina and sians rate their healthcare system as very medical equipment under the National Larissa Sannikova) analysed Russian legis- bad or not so good. The results of the Health Project have been uncovered by the lation on healthcare for its corruption po- survey across countries show a correlation RF Chamber of Accounts. In the Cham- tential. Their findings were then evaluated between healthcare quality ratings and ber’s report “On the results of the audit of by a European expert (Quentin Reed). Each general perceptions of corruption in the targeted and effective use of funds from the expert also put forward proposals on how country. Russian Federation budget allocated for to improve healthcare legislation with a Article 41 of the Constitution of the centralised procurement of equipment and view to preventing corruption. This was Russian Federation states that every person medicines for healthcare needs”, it was then taken as a basis for some summary has the right to health protection and concluded that centralised procurement of proposals from all the experts involved in medical care. It is established that medical a number of medicines and items of the project. care in state and municipal health institu- medical equipment had been carried out in tions is to be provided to citizens free of violation of the law as it stood at that time, Analysis of the corruption potential charge and be covered by the relevant specifically Federal Law No. 97-FZ of 6 (anti-corruption expertise) of Russian budget, insurance contributions and other May 1999 “On tenders for the placement of healthcare legislation was performed on income. orders for the delivery of goods, execution the basis of a document on methodology This constitutional right is not, how- of work and provision of services for public entitled “Instructions to experts on ever, being properly put into effect. The needs”. Organisations, for example, were primary analysis of a legislative enactment weakness of the state healthcare system, announced as having won tenders even for corruption risks” (TsSR, 2004). Consid- the problems with its funding, the unfin- though they had failed to meet the require- eration was given to analysis of such fea- ished nature of the medical insurance ments laid down in current law and in the tures of the legislation in question as its reform and inadequate legal regulation of tender documents issued by the organiser comprehensiveness, the existence of a large private medical services combine to create for those participating in the procedure; number of sub-legislative instruments, and fertile ground for corruption in this area. the time limits for tender procedures had also corrupt practices that had developed Data provided by VTsIOM [Russian Public been violated, and purchases of medical in practice. The main focus of the analysis Opinion Research Centre] show that Rus- products made without a tender procedure were the Principles of Russian Federation sians most often give bribes to medical per- being held at all. Legislation on Public Healthcare of 22.07. sonnel – 51%. This problem is a general It appears, therefore, that abuses in the 1993 (hereinafter referred to as the Legisla- one. In its Global Corruption Report 2006, centralised procurement of equipment and tion Principles), a number of provisions of the non-governmental organisation Trans- medicines are due not so much to inade- the Civil Code (regarding contracts for the parency International observed that the quate legal regulation as to flagrant viola- provision of services) and the Programme
146 Project “Russian Federation – Development of legislative and other measures for the prevention of corruption” (RUCOLA 2) 147 of State Guarantees for the Provision of Fifth, a lack of administrative proce- Eleventh, many regulatory legal instru- Free Medical Care to RF citizens. dures. Specifically, there is no defined pro- ments which should have been adopted at As a result of the anti-corruption exper- cedure whereby children, adolescents, the direct instigation of the Legislation tise, the Legislation Principles were found students, disabled people and pensioners Principles for healthcare have not been to contain the following corruption risk engaging in physical training can exercise adopted. For example, under Article 40, the factors . their right to free medical check-ups (Arti- Government is to ratify a list of specialist First, the wide scope of discretionary cle 20). Nor is any procedure laid down in federal medical institutions which provide powers, as reflected in the fact that there is Article 52, where mention is made of citi- specialist medical care. In practice, this list no division of competence between legisla- zens’ right to request that the agency has not been adopted by the government, tive and executive agencies. This means calling for a forensic medical or forensic and has been replaced by a Ministry of there is a high risk of arbitrary interpreta- psychiatric appraisal include on the panel Health enactment. tion, and of relations of a general nature of experts an additional specialist with a Twelfth, a failure to ensure transpar- being regulated at sub-legislative level, relevant background. ency of information has been identified. which may also lead to a duplication of Sixth, there is the juridical/linguistic Under Article 20, para. 4, of the Legislation competence. The breadth of discretionary corruption risk factor, namely terms Principles, citizens are to be afforded a powers can also be seen in Article 34 of the which, when used, give rise to a certain am- certain guaranteed scope of free medical Legislation Principles, under which com- biguity of interpretation and may in prac- care in accordance with the Programme of pulsory medical care, including even iso- tice lead to corruption. In Articles 24 and State Guarantees for the Provision of Free lating citizens without their consent, is 31, for example, mention is made of citi- Medical Care to RF citizens. The Pro- permissible on the grounds and in accord- zens’ right to obtain information about the gramme, however, gives no details of the ance with the procedure prescribed by law state of their own health in a form that is types and scope of such care. As a result, in respect of persons suffering from dis- accessible to them. As a rule, “accessible RF citizens do not have information about eases that constitute a hazard to those form” means that the information should the types and scope of primary medical around them, those suffering from severe be delivered to the patient in his/her native and sanitary assistance which they may mental disorders or persons who have tongue. This is clearly inadequate. receive free-of-charge at a medical institu- committed socially hazardous acts. It is a Seventh, there are no provisions estab- tion near where they live. well- known fact, however, that adminis- lishing specific penalties for violations. The Besides the corruption factors listed trative offences also constitute socially liability of health professionals is stated, above, the experts pointed out that where hazardous acts, thus opening the way for but there is no indication of the forms, healthcare institutions provide paid an unacceptably free application of this ar- scope, grounds or conditions under which medical services, opportunities for corrup- ticle. liability arises (Article 58, para. 6, Article tion are created by Chapter 39 of the RF Second, the existence of legal loopholes. 66, para. 1, Article 68, para. 1, of the Prin- Civil Code “Compensable services” which Generally legislation on healthcare con- ciples). applies in such cases. Under Article 782, tains numerous gaps, which are filled by Eighth, competence is defined using the para. 2, of the RF Civil Code, a contractor regulation at sub-legislative level. For ex- word “may”. Specifically, under Article 34, may unilaterally refuse to perform a con- ample, the law provides no rules for licens- enforcement measures of a medical nature tract. In practice, this provision of the law ing medical and pharmaceutical activities, may be applied on the grounds and in ac- leads to a violation of citizens’ constitu- or for carrying out independent medical cordance with the procedure prescribed by tional rights. In its decision No. 115-O of 6 evaluations. RF legislation to individuals who have June 2002, for example, the RF Constitu- Third, the Legislation Principles committed socially hazardous acts. This tional Court found that a contract to provide merely a declarative framework, wording allows for variation in the actions provide paid medical services constitutes a with the result that there is a large number of the relevant officials who, even if public contract under Article 426, para. 1, of referential and blanket provisions. Pur- grounds exist, are formally entitled to of the RF Civil Code. The Constitutional suant to these Principles, the RF Govern- refrain from applying enforcement meas- Court likewise ruled that the obligatory ment and authorised agencies have ures of a medical nature. aspect of concluding a public contract also obtained extensive rule-making powers, Ninth, a number of inconsistencies have means there can be no unilateral refusal by and this is not always justified. been found. Article 56 states that a ban on the contractor (service provider) to Fourth, the Legislation Principles set engaging in private medical practice shall perform it. The legal position of the Court excessively high requirements for individu- be imposed by decision of the agency that is not reflected in current legislation, als seeking medical care. Article 39, for ex- issued the licence to engage in private however. ample, formulates the right to render medical practice, or by a court. Under the The summary conclusions of the anti- medical first aid in conditions requiring RF Code of Administrative Offences, how- corruption expertise of healthcare legisla- urgent medical intervention (in cases of ac- ever, prohibition of engagement in certain tion were presented at a seminar/meeting cident, injury, poisoning and other condi- activities is an administrative punishment of Russian and european experts on 22 tions and diseases). Such an open-ended which may be imposed only by a court. February 2007. The Russian experts em- list may be interpreted in favour of the ap- Tenth, in the RF Legislation Principles, phasised that the findings of the expertise plicant, but it also confers the right to there are no provisions that envisage the could be incorporated in a more broad- refuse to provide medical care if the health holding of tender (bidding) procedures in based work on reforms to the healthcare professional considers that a given disease healthcare, for example when placing state system. (in his/her opinion) does not require orders for the provision of certain types of At the next meeting, on 20 March 2007, urgent medical intervention. medical care. the Russian experts’ conclusions were eval-
Legislative measures to prevent corruption in health care 148 Project “Russian Federation – Development of legislative and other measures for the prevention of corruption” (RUCOLA 2) uated by the European experts. This evalu- audit was required, internal or external. If One solution to the problem of informal ation was delivered by Quentin Reed. He the state audit functioned as it should, payments that is often advocated is the in- recommended that, over and above the there was no need for other types of con- troduction of official charges as a means of amendments suggested by the experts, trol. In central and eastern Europe, how- “formalising” informal payments. While which were very important from the point ever, the state audit did not function introducing charges may be a way of in- of view of combating the emergence of cor- properly anywhere. creasing revenue to redress the balance ruption, a detailed analysis be made in spe- In support of his argument for a broad between formal and real entitlements to cific areas, using research methodologies. approach, Mr Reed provided an overview care, the introduction of official charges His main conclusion was that a broader ap- of corruption issues and anti-corruption should not be taken as a panacea for proach to healthcare reform was required. strategies in the healthcare system, saying dealing with informal payments. While Mr Reed reported that there were eight that the following were required for suc- such payments may make patients less separate areas in healthcare where a corre- cessful action in this area: willing to pay doctors “under the table”, sponding evaluation should be made of the • establish clear and publicly reiterated they may not make doctors less willing to discrepancies between the provisions of goals and commitments; demand such payments, in the absence of the legislation on citizens’ rights to medical improvements in their own situation. • establish clear mechanisms and rules services and the actual funds made availa- Moreover, such reforms must be very for achieving those goals and commit- ble. He also recommended monitoring the careful to monitor their effects on lower ments; public funds that were disbursed for income segments of the population. • include a system of financing that healthcare purposes. According to some This brings us to another reason for in- enables these goals to be achieved in estimates, as much as 30% of the federal formal payments, which is inadequate re- practice within the financial con- budget set aside for healthcare did not muneration of doctors and other medical straints. reach the end user. It might be necessary to personnel. In addition to the basic need to Far more vulnerable to corruption are carry out a judicial enquiry into the func- ensure that the healthcare system does not systems in which there is a large gulf tioning of the Mandatory Health Insurance promise to provide more than its funding between the healthcare services to which Fund and the activities of the state regula- will sustain, doctors and other key medical the public is officially entitled and the tory body, the registration of medicines, personnel should be remunerated such actual capacity of the system to deliver medical training, and the pricing of medi- that their official income does not lag radi- healthcare services in line with officially cines, especially for products that were cally behind their “target wage” – in lay approved standards. One vivid example of partially or wholly funded by the state. It terms, the income to which they feel enti- this is the healthcare system in the former was also very important to examine the tled. Soviet Union. The USSR was the first state practice of making unofficial payments for The paradox of countries where infor- in the world to give all citizens a constitu- the services of healthcare agencies, doc- mal payments are widespread, however, is tionally-based guarantee of free health- tors, etc. This was a very widespread phe- that both “adequate remuneration” of care. But the system never made enough nomenon in Russia. The question of doctors and the introduction of official resources available to provide such a high whether it was due to inadequate re- charges may both be politically unfeasible. standard of healthcare in practice. More- sources, creating scope for corruption, or Where such solutions are partially imple- over, healthcare provision was biased in whether there were other reasons still re- mented, other specific measures to prevent ways that wasted resources on certain mained to be answered. corruption are also essential. The most im- types of care (particularly in-hospital treat- Future research would provide an op- portant of these can be divided into two ment) at the expense of other types (espe- portunity to develop some clear principles types: measures to maximise transparency cially primary care). One of the main for the functioning of the healthcare and the establishment of functioning com- consequences of these systemic factors was system, especially with regard to citizens’ plaint mechanisms. the de facto institutionalisation of informal rights, budget procedures, allocation of payments by patients to doctors or medical Measures to increase transparency (1) funds, reforms, the status of the Federal facilities as a means of obtaining care to are a fundamentally important anti-cor- Mandatory Health Insurance Fund and which patients were formally entitled. ruption mechanism in all areas of health- procedural transparency. A duty to publish care provision. In the context of informal Mr Reed identified three areas of cor- or otherwise make transparent informa- payments, there are two main types of ruption and the most important measures tion concerning contracts between transparency measure. First, a clear state- for tackling them. medical institutions and drug/equipment ment of patients’ rights and active provi- providers should be established, together sion of information on these rights can act with a duty on the part of medical institu- Informal payments as an important bulwark against informal tions to make patients fully aware of their payments for treatment to which patients rights and duties, Mr Reed concluded. Payments to doctors in cash or in kind for have a right. Second, more specific meas- There were questions for Mr Reed from services that are meant to be covered by ures to provide information on the provi- the seminar participants. A member of the the public health system are very wide- sion of care in practice can be very useful. European delegation, Stephanie Harter, spread in the countries of the former A good example of this is a pilot scheme asked him to give an assessment of the ef- USSR. It is assumed here that all informal implemented in Croatia in 2004-2005 to fectiveness of public expenditure monitor- gratuities or payments constitute corrup- tackle corruption by publishing waiting ing. Mr Reed confirmed that the value of tion or encourage a context in which lists for treatment such as operations. Hos- public expenditure surveys was considera- healthcare is conditional on the provision pitals were obliged to disclose to patients ble. The state should decide what kind of of such payments. lists showing them their position in the
Final report: Appendices, Volume 1 Project “Russian Federation – Development of legislative and other measures for the prevention of corruption” (RUCOLA 2) 149 waiting list and make such lists available at of professionals with technical skills, procurement of excessive quantities of medical facility reception desks. Patients which meets on a regular basis; drugs. who did not wish their identity to be dis- • the existence of a mechanism whereby Corruption of doctors closed were listed by number instead. Ac- once decisions are made, the responsi- cording to preliminary evaluations of the ble committees provide official written Doctors need some contact with pharma- scheme, it had a significant impact. documents for all decisions regarding ceutical companies in order to obtain nec- While measures to increase the trans- applications, explaining the reasons for essary information about the drugs or parency of healthcare provision are vital, rejection if necessary. devices those companies supply. However, such contacts can very easily grow into un- they may be ineffective if patients are not The inclusion of a drug on the list of healthy relationships which distort treat- able to seek redress (2) for misconduct or drugs that are provided for free – that is, ment patterns and prescription practices in bribe-seeking by medical personnel. In the paid for or at least partially subsidised from particular. Measures to restrict undue in- open waiting lists policy implemented in the public health budget – may be seen as fluence by pharmaceutical companies Croatia, TI Croatia established a hotline to the ultimate prise for a pharmaceutical include the following: monitor the project, and received more company, essentially guaranteeing the pre- than 90 calls relating to waiting lists in one scription of the drug for the relevant • self-regulation and codes of ethics ap- hospital in the first few months. medical conditions, and reimbursement at proved and enforced by pharmaceutical taxpayers’ expense. For these reasons, a key companies themselves and their trade anti-corruption mechanism is the promo- associations – on the principle that re- Corruption of the health striction of all companies is more ad- regulator tion of essential drug lists based on objec- tive criteria. The WHO criteria for vantageous for all than no restriction; selection of drugs for inclusion on EDLs • formal restrictions on marketing and The link between pharmaceutical compa- should be seen as a minimal standard. promotion activities by pharmaceutical nies and the state regulator is one of the These are: relevance to the pattern of prev- companies within medical facilities; clearest points of vulnerability to corrup- alent diseases; proven efficacy and safety; • bans or restrictions on promotion of tion in a healthcare system. The state regu- evidence of performance in a variety of set- particular medicines and drugs by lator (e.g. the Food and Drug tings; adequate quality, including bio-avail- doctors within medical facilities; Administration in the United States or the ability and stability; favourable cost-benefit • conflict of interest provisions for Czech State Institute for Drug Control) ratio in terms of total treatment cost; and doctors which rule as inadmissible registers the drugs produced by pharma- preferences for drugs that are well known business relationships or positions by ceutical companies and decides which of to have good pharmaco-kinetic properties. which they benefit from the activities of those drugs will be provided to patients at pharmaceutical companies (for public expense (“essential drugs”). A minimal condition for the approaches example share ownership or consul- Measures to prevent corruption involv- outlined above are rules and procedures to tancy contracts); ing the regulator and pharmaceutical com- ensure the professionalism and independ- • in particular, banning of trips by panies include criteria and procedures for ence of selection committees, which doctors paid for by pharmaceutical drug registration and selection. should be composed of impartial persons with the appropriate technical skills. Regu- companies, for example to conferences The World Health Organisation has lators should apply strict rules governing in exotic locations; defined a set of minimum criteria for a contacts and meetings between employees • monitoring of prescription practices of transparent drug registration process: of the regulator and representatives of individual doctors by medical facility • a list of all registered pharmaceutical pharmaceutical companies – for example a oversight committees or citizen boards. products and an information system for ban on such meetings on the premises of the registration process of pharmaceu- Corruption in procurement the regulator or company unless accompa- tical products which include a defined nied by a designated official from the regu- In addition to the standard application of minimum level of information, such as lator, duties of both regulatory employees rules and oversight systems for procure- the product description (including the and pharmaceutical companies to declare ment, measures to increase transparency generic name and a summary of other meetings, and so on. may have a big impact. In Argentina, the product characteristics), the name of government implemented a policy of mon- the manufacturing company, the date of itoring the prices hospitals paid for medical the registration, and the name and Corruption of doctors and supplies and then distributing this infor- contact information of the company medical facilities by mation among all hospitals. Prices of the registering the medicines; pharmaceutical companies monitored supplies fell immediately by an • written procedures on how to submit average of 12% and stayed below the initial and assess applications for registration Influence by the pharmaceutical industry purchase price for the whole time the of medicinal products, describing the on the healthcare practices of doctors and policy was implemented. process to follow and the fees required; medical facilities is an area in which there On the basis of the reports and conclu- • a standard application form, which is is increasing evidence of corruption. This sions of the Russian and European experts, publicly accessible and readily available subsection covers corruption involving the some summary proposals were then put at a government office or on a web site; provision of benefits to doctors in return together and approved for amending the • a formally established and operational for prescribing or over-prescribing partic- legislation on healthcare. These proposals committee responsible for registration ular drugs, and of procurement staff in were prepared in the light of the findings of of pharmaceutical products, composed return for manipulation of drug prices or the anti-corruption expertise and the legis-
Legislative measures to prevent corruption in health care 150 Project “Russian Federation – Development of legislative and other measures for the prevention of corruption” (RUCOLA 2) lative proposals made by the Russian nikova), with due regard for the assessment expert (Quentin Reed) as part of the experts (Elvira Talapina and Larissa San- and opinion provided by the European Council of Europe’s RUCOLA 2 project.
Final report: Appendices, Volume 1 Legislative measures to prevent corruption in public procurement
As part of the project to develop legislative tion is exercised objectively and improve formation be made only in writing and that and other measures to prevent corruption detection of unlawful behaviour. all responses and clarifications be sent in in public procurement, the Russian and In the fight against corruption, the main writing to all the tenderers simultaneously. European experts met to hear and discuss components of regulation in Europe are as Most systems of procurement regulation reports by Peter Trepte, Council of follows: will also prohibit negotiations or discus- Europe expert, Nina Solovianenko, senior • the imposition of procedural require- sions between purchaser and tenderer scientific expert, Institute of State and Law, ments. All modern systems of procure- during the course of the procedure in any- Candidate of Law, and Elvira Talapina, ment regulation operate by imposing thing other than permitted sole source or senior scientific expert, Institute of State the use of preferred procurement pro- “negotiated” procedures and only where and Law, Candidate of Law. cedures – typically tender and bidding they do not concern price or other funda- In the report by the Council of Europe procedures – in the case of large con- mental terms and conditions of the tender expert, Peter Trepte 1 “The prevention of tracts. Alternative procurement proce- or contract documents. The requirement corruption in public procurement: good dures are allowed only in well defined either to notify the tenderers of the suc- practice in Europe”, the author considers circumstances; cessful tenderer or to publish a contract award notice can also serve to alert tender- the various methods employed in Europe • the imposition of transparency require- ers to the possibility of corruption where to prevent corruption in procurement ments (including the requirement to the outcome is not consistent with expec- through regulation and addresses the issue advertise any procurement procedures, tations. of excessive or inappropriate regulation, to disclose information, to make the which often has the effect of creating inef- technical specifications as well as selec- In the case of technical specifications, ficiencies in the procurement process. tion and award criteria known in ad- the procurement regulations will often set Procurement regulation in Europe in- vance). out in relatively strict terms what may be volves the use of specific administrative In the context of the fight against cor- acceptable. There is a general preference procedures and criteria for evaluating bids, ruption, transparency is a vitally important for the use of performance, output or func- and also controls the choices made in tool because it makes visible what can be tion specifications as opposed to design or respect of the bidders to be entertained. only too easily concealed. Transparency re- descriptive specifications. This enables a Procurement decisions are largely made quirements make it more difficult to be description of the items to be procured to and carried out by the bureaucracy, specif- corrupt and reduce the opportunity for ex- be defined in terms of their intended use ically by procurement agents within the tracting or receiving bribes. rather than by reference to specific prod- bureaucratic hierarchy. In this relationship, Transparency can be used throughout ucts, makes or sources or to particular the government acts as principal and the the whole procurement process from the manufacturing processes which could have bureaucrat as agent. initiation of a given procurement proce- the effect of favouring or eliminating spe- cific tenderers. In order to exercise control over the dure right through to the contract adminis- tration phase. The mechanisms adopted agent, the principal will set out the permit- In respect of qualification criteria, pro- are initially based on the publicity provi- ted parameters and framework within curement regulations tend to follow the sions of the procurement regulation which which the agent is permitted to operate same principles and the criteria usually normally requires technical specifications and needs to be able, if the need should relate to three aspects of qualification: the as well as selection and award criteria to be arise, to verify that the agent has indeed suitability of the bidder as a trustworthy made known in advance. The requirement acted within those parameters. The company, the bidder’s economic and finan- to advertise procurement procedures or at purpose of such regulation is to reduce the cial standing denoting its ability to com- least solicit bids from a minimum number scope for unlawful action, ensure discre- plete the proposed contract and the of tenderers will ensure that procurement bidder’s technical capacity and resources. 1. Peter Trepte is a barrister based in London spe- agents are not able simply to contact those cialising in public procurement law and has partici- tenderers with whom they would prefer to More and more frequently, provisions pated in the reform of public procurement systems in a number of different transition and developing deal. Transparency is also enhanced by ad- relating to probity are being introduced to countries in many parts of the world. ditional requirements that requests for in- the extent that the issue of a tenderer’s pro-
151 152 Project “Russian Federation – Development of legislative and other measures for the prevention of corruption” (RUCOLA 2) fessional conduct will cover previous acts Procurement regulation will also seek Audit is one of the main forms of direct of corruption. to reduce instances of potential conflicts of supervision over the procurement process In so far as award criteria are con- interest in the context of procurement and and includes both internal and external cerned, transparency is applied in a similar will generally impose provisions with audit. The main disadvantage is that this is way to ensure that the criteria to be applied regard to impartiality and confidentiality. generally conducted ex post. The findings by the agent are known. Thus, the procur- From the anti-corruption perspective, the of auditors are usually too late to make any ing entity will be required to state in the purpose of procurement regulation is to difference to specific procurement proce- notice and/or tender documents all the cri- minimise the way in which the agent may dures, although they may, where reports teria it intends to apply to the award of the be persuaded to misuse the information he are sufficiently synthesised and compre- contract. The award criteria applied in possesses for his personal gain. Tradition- hensive, provide an indication of particular most procurement systems can be divided ally, this was done by way of direct supervi- weaknesses in the system. A further poten- into two: (1) the lowest price and (2) price sion. The costs and time involved in direct tial problem with auditing procurement is which is evaluated together with a number supervision make this an effective and inef- that the auditors lack the experience of of other criteria which will be set out in the fective system of control, however. procurement agents and so are not suffi- tender documents. It is for this reason that modern systems ciently qualified to make the necessary as- sessments. • Responsibility and accountability, of procurement regulation rely on the twin which provide a guarantee of probity pillars of responsibility and accountability, There is no doubt that procurement but can be undermined in the context of and on external and independent enforce- regulation can play an important part in procurement. ment mechanisms to impose accountabil- the fight against corruption and the tools ity based on complaints brought by the used in Europe demonstrate that it can be In his report, the author emphasises the tenderers themselves. effective. Procurement is an activity which need to allow the agent a measure of free- provides a number of opportunities which Most countries have in place mecha- dom. Taking away the decision-making re- may be exploited by the corrupt. The nisms and procedures for review of the acts sponsibility of the agent by, for example, agency relationship with its authority to (and omissions) of administrative bodies subjecting critical decisions like the choice decide provides the opportunity; the infor- and other public entities in the exercise of of procurement procedure to prior author- mational asymmetries created by the their procurement functions. Broadly isation, takes the responsibility for that de- agency relationship provide the means. By speaking, the review mechanism will cision away from the agent and places it imposing administrative control over the include a complaint to the procuring entity with a third party who may not be account- process, the government principal can itself, followed by an appeal before an ad- able for that decision. The same may be reduce the opportunities for corruption. ministrative body (either hierarchical or said for the existence of hierarchically su- Procurement regulation succeeds in this independent) and judicial review. In most perior tender committees or central pro- respect by applying procedural require- reforming countries, it is the second tier curement units which operate in a similar ments and transparency requirements. (administrative) review which is the most way to absolve the agent of responsibility The effect of these requirements is to interesting. and accountability. As well as increasing reduce the opportunity for corruption by the potential for higher level corruption, The review mechanism needs to be ef- making the information relied upon in the this mechanism can be a barrier to good fective and rapid and most systems give procurement process (the tender docu- procurement decision-making in a given tenderers broadly three avenues of attack: ments, draft contract, technical require- segment of the market. an injunction (interim measures and/or ments, selection and award criteria) The specific tools used to guarantee ac- suspension) to prevent an infringement, available for all to see and, most impor- countability in procurement are the provi- the possibility of setting aside (annulling) a tantly, by making it verifiable. The respon- sions relating to recording and reporting particular procedure or award, including sibility given to the procurement agent can and the mechanisms for review and con- the right to remove unlawful specifica- then be tested since it will be possible to trol. tions, and, finally, damages. Some coun- hold the agent fully accountable for his Apart from requiring that all files and tries also impose financial penalties for actions. documents related to the procurement breaches of the procurement law. As a Much depends, however, on the procedure be kept for a stated period fol- general mechanism, such penalties often strength and impartiality of the enforce- lowing the execution of the contract, the attach to any breach of the procurement ment mechanisms in place. Procurement regulation will also usually impose specific regulation regardless of whether that regulation provides a means of detection, requirements as to the taking of minutes. breach is also corrupt. but enforcement mechanisms need to be in In most cases, these will apply to bid Debarment or “blacklisting” (the prac- place to ensure that the corrupt officer opening procedures, evaluation reports tice of excluding certain bidders from pro- loses his gamble, i.e. that the costs associ- and award decisions. Procurement regula- curement procedures either temporarily or ated with corruption (the risk of being tions also often require grounds for choos- permanently) is also a mechanism some- caught and the penalty to be paid) exceed ing certain procurement procedures to be times used to punish those engaging in the likely benefits. Review procedures recorded. Access to such information will corrupt practices. Success of the blacklist- brought by bidders will highlight the in- assist in identifying those cases in which ing system is generally equated with the stances of corruption but it is the civil the reasons are not properly substantiated number of those caught. This, however, service rules which must provide for the and where agents have sought to manipu- does not necessarily indicate success in the disciplinary measures and the appropriate late their discretion to favour certain ten- eradication of corruption as a practice, es- authorities which must prosecute criminal derers. pecially in the case of systemic corruption. activity.
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It is not enough to address only the countries turn their backs on regulation with a list of criteria to be applied in the rules to be applied. Blind adherence to a set completely, but that he did not think there evaluation of competitive bids; of rules can result in incompetent (rather was any evidence to support a direct link • the law provides for the possibility of than corrupt) procurement but can also between stricter regulation in this area and pre-trial appeal against the actions of provide a shield for corrupt practices. The a reduction in corruption. To his knowl- state and municipal customers, etc. approach has to take on board the need to edge, no such data existed. As it stands today, however, Russian create a cadre of procurement agents who Attention was also given to another im- legislation on public procurement remains are well versed in the conduct of efficient portant issue, namely that breaches of contradictory and piecemeal and has some and ethical procurement in all its aspects. public procurement law are not always ev- serious deficiencies, creating opportunities This is imperative because procurement idence of corruption. Corruption does for corruption when it comes to enforce- agents need to have knowledge, skill and exist, of course, but problems in public ment. It is possible to identify a number of experience in order to exercise their pro- procurement and price variations can also provisions which constitute corruption fessional judgement in awarding contracts. be due to lack of comprehension or incom- risk factors and create a conducive envi- They must be able to exercise their neces- petence. Such problems need to be ad- ronment for corruption in state and mu- sary discretion wisely. Inadequate training dressed, but in a different way, i.e. not nicipal procurement. may well lead to the incorrect use of discre- through anti-corruption measures but Among the main risk factors is the tion and could well contribute to the simply by developing capacity and clarify- Federal Law’s failure to establish a number corrupt use of that discretion. The pro- ing the law. There may well be corruption of essential administrative procedures. curement function needs to be better pro- as well but it is important in that case to This is an unacceptable omission in a law, fessionalised in the public sector as well as focus on the causes, and not to see every the fundamental purpose of which is to set tightly controlled. problem that arises in the area of procure- out such procedures in detail. A whole The answer is not to impose ever ment as a corruption issue. series of acts, moreover, appear in brack- stricter regulations on the agent in the The report by the Russian expert 1 ets, giving the customer too much room for name of anti-corruption. In extreme cases, looked at corruption risks in RF legislation manoeuvre. Examples of areas not covered over-regulation erodes the ability of the on state and municipal procurement. by the law include: the procedure govern- agent to exercise his discretion to such an RF Law No. 94-FZ of 21 July 2005 “On ing dealings between the authorised body extent that he is incapable of making a the placement of orders for delivery of and the customer; the procedure for com- proper procurement decision. Such forms goods, execution of works and provision of pulsory verification of information con- of regulation have a serious negative effect services for state and municipal needs” cerning bidders; the procedure for on public expenditure because they will covers those areas of economic and admin- amending an order placement contract, the often condemn the government to ineffi- istrative relations in Russia that are partic- procedure for making unilateral changes to cient and expensive purchasing and result ularly prone to corruption as they involve the volume of work to be done, the proce- in the purchase of outdated or low quality managing budgetary funds. In this respect, dure for placing orders via open bidding in products not fit for the purpose intended. the above-mentioned law has an addi- electronic form, the procedure for keeping Provided it successfully addresses the tional, anti-corruption function. In terms tender (bidding) documents, and the ad- issue of minimising opportunities for cor- of anti-corruption requirements, the law ministrative procedure for requesting doc- ruption, procurement regulation will serve “On the placement of orders” belongs to a uments when filing a complaint. as an important tool in the fight against “new generation” of Russian legislation. In The law likewise fails to address the fol- corruption. Where that is not the case, it keeping with international standards, it lowing procedural issues: what is the pro- will provide a cosmetic and possibly politi- contains a set of rules designed to prevent cedure for posting information on the cally astute statement of intention which corruption: official website; in what format should the will achieve little in real terms to reduce or • it calls for the introduction of criteria information be presented; is it possible to eradicate corruption but which will in- such as openness and transparency in refuse to post this information and if so, on crease the costs of procurement to the procurement procedures, and requires what grounds; is it possible to remove in- public purse and thereby defeat one of the that the necessary information be pub- formation from the open access area and main objectives of procurement regula- lished within fixed deadlines in the offi- what should be the grounds for such re- tion, cost savings to the government. To cial media and on official websites; moval; and, finally, what is the liability of avoid losing the benefits to be expected • it legalises new procedures for placing the authorised website provider? Unless from effective procurement regulation, a orders with a view to ensuring more ef- these issues are resolved, the mechanism balance needs to be struck between com- ficient use of budgetary resources, such for implementing the provisions ensuring bating corruption and promoting profes- as bidding, requests for quotations with openness, transparency and accessibility of sionalism in procurement. Equally pre-selection and procurement on information in order placement cannot be important are the commitment of the gov- commodity exchanges; fully effective. It should further be noted ernment and the efforts made to develop • the pool of potential bidders has been that the law “On the placement of orders” capacity to provide proactive and ethical considerably widened; affords no opportunity for appealing procurement officers capable of achieving • a list of requirements to be met by all against the actions (or omissions) of the or- the financial and economic benefits to be bidders has been drawn up, together ganisation authorised by the executive au- gained from transparent, efficient and thorities to maintain the official website. competitive procurement. 1. Nina Solovianenko, senior scientific expert, In- There is no separation of powers stitute of State and Law, Russian Academy of Sci- In the course of the discussion, ence, Candidate of Law, member of the State Duma between the customer, the authorised Mr Trepte said he was not suggesting that anti-corruption Commission. body, the specialised organisation and the
Legislative measures to prevent corruption in public procurement 154 Project “Russian Federation – Development of legislative and other measures for the prevention of corruption” (RUCOLA 2) committee. In some cases, these entities oped in practice. Any decision to include • achieve an optimal balance between enter into administrative relations which referring provisions in a law always needs legislative and sub-legislative public require stricter regulation, in others they to be justified, therefore, and to address the procurement regulation, reduce de- enter into civil-law relations that allow question: why cannot the relations in ques- partmental rule-making; some variation. None of this is reflected in tion be governed by legislation? The law • require an anti-corruption evaluation the law, however, leaving the way open for provides for the adoption of a large number to be carried out in respect of regula- ambiguous interpretations in practice. (over 20) of sub-legislative acts of the RF tory legal instruments in the field of Not enough has been done to develop Government, without which the law public procurement; objective admission, selection and award cannot operate. • eliminate corrupt practices through criteria. Bidders do not always have the op- Also problematic are the provisions in legislation. portunity to participate on equal terms and the Federal Law “On the placement of The Russian experts have made a large are to some degree dependent on the dis- orders” which define the competence of ex- number of proposals along these lines cretion of the customer, authorised body, ecutive authorities in terms of what they which, if acted upon, would be enough to tender or bid committee. Evidence of this “may” do, making it possible to interpret eradicate some typical corruption risk discretion can be seen in two areas: posses- the right thus conferred purely as an factors such as lack of administrative pro- sion by bidders of exclusive rights to intel- option, and not a duty, to perform the cedures, excessively wide discretionary lectual property, and liability of the actions envisaged in the law, and to subject powers, definition of competence using the supplier (contractor, sub-contractor) and the exercise of that right to corrupt condi- word “may”, absence of liability for viola- customer for non-performance or im- tions. tions of the legislation on state and munic- proper performance of the contract. The This risk typically arises in the provi- ipal procurement, excessive requirements various types of orders that can be placed sions which impose requirements on bid- for bidders, excessive freedom in terms of without bidding with a single supplier are ders, and in the provisions defining the sub-legislative rule-making, non-compli- framed in vague, ill-defined terms, with the competence of federal executive authori- ance with transparency rules and the exist- result that almost any order can be classi- ties, executive authorities of RF subjects ence of gaps in the law. fied in this way at will, so as to bypass the and local self-government bodies author- The proposals were examined and com- bidding process. The primary goal of the ised to carry out supervision in respect of mented on by the Council of Europe law, namely to make bidding the main order placement. expert, Peter Trepte, and then revised in method of placing orders, is thus sub- Attention should also be drawn to a the light of Mr Trepte’s comments and sug- verted. number of instances in state and municipal gestions. The system of penalties and monitoring procurement where corruption-prone pro- In order to eliminate corruption factors to ensure compliance with the legislation visions are or may be used (the practice of and risks in the legislation on state and mu- on public procurement is flawed. The law “splitting” orders in order to bypass the nicipal procurement, the experts have rec- does not deal adequately with the question tender process, the existence of legislation ommended making amendments and of monitoring to ensure that the legislation that artificially restricts the pool of bidders additions to RF Law No. 94-FZ of 21 July on public procurement is observed. There from different parts of Russia, and restricts 2005 “On the placement of orders for deliv- are doubts about the effectiveness of the competition when placing orders). ery of goods, execution of works and provi- scheduled and unscheduled checks, as pre- In the light of the analysis of corruption sion of services for state and municipal sented in the law, and also about the stipu- risk factors in RF legislation on state and needs”. lation that no customer, authorised body or municipal procurement, the Russian The Russian experts’ proposals contain- tender/bid committee operating on a per- experts 1 have produced a number of pro- ing measures to prevent corruption in state manent basis may be subjected to more posals setting out legislative measures to and municipal procurement can be divided than one scheduled check every six prevent corruption in this area: into the following broad categories: 1) months. While such restrictions are per- • ensure openness and transparency of general proposals for eliminating corrup- missible in the case of private operators, information concerning order place- tion factors and risks, 2) elimination of cor- which stand, as it were, in “opposition” to ment; ruption risks by developing the necessary the state, they are completely unjustified in • establish the necessary procedures for procedures, 3) elimination of corruption the case of internal, public-sector controls. improving the rules on conducting bid- risks by abolishing or amending the rele- Another potential source of corruption ding; vant sections of the law. Among the general proposals for elimi- in the legislation on public procurement is • apply objective, predetermined admis- nating corruption factors are the following: the existence of gaps and the filling of these sion, selection and award criteria; gaps with regulatory legal instruments • introduce administrative liability for • introduce penalties and monitoring to issued by executive authorities. The law failure to ensure the safe-keeping of ensure that the legislation on public contains a large number of referring provi- tender (bidding) documents, impose a procurement is observed; sions, which give the RF Government requirement to provide information • introduce an effective complaints standard-setting powers to deal with par- about the existence and content of these system; ticular issues in greater detail. Such provi- documents; sions carry a risk of corruption because the 1. Nina Solovianenko, senior scientific expert, In- • establish a legal framework for interac- rules are then made at a lower level, and de- stitute of State and Law, Russian Academy of Sci- tion between the authorised body and partmental acts are drafted in greater ence, Candidate of Law, member of the State Duma the customer; anti-corruption Commission, and Elvira Talapina, secrecy than laws and are more likely to en- senior scientific expert, Institute of State and Law, • in order to guard against ambiguous in- shrine corrupt practices that have devel- Russian Academy of Science, Candidate of Law. terpretation of articles, make additions
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to the law or adopt government acts on • provide for the possibility of appeal do not apply the notarisation requirement the procedure for registering and grant- against the actions (omissions) of the to electronic documents if they have been ing privileges to penal institutions and body authorised by the executive au- signed with an electronic digital signature disability organisations, and also to thorities to maintain the official website in accordance with the procedures laid small businesses when placing orders and for the possibility of monitoring to down in the RF Law “On electronic digital through bidding; ensure that the said body complies with signature”. • in order to ensure openness and trans- RF legislation on order placement. During the discussion on the proposed parency of information on order place- Among the measures to eliminate cor- legislative measures to prevent corruption ment, introduce an additional provision ruption risks by developing the necessary in state and municipal procurement, a governing the procedure for posting in- procedures, mention should be made of number of points came up: formation on the official website. the following: Among other things, the provision • introduce a procedure for pre-selecting The place and role of blanket should cover: the format of information those persons to whom it is mandatory provisions in procurement regulation. posted on the website, whether it is pos- that a request for quotations be sent. The participants expressed doubts sible to refuse to post information and if There should also be a duty to simulta- about the effectiveness of a large so, on what grounds; whether it is pos- neously send out and publish the number of sub-legislative acts in the sible to remove information from the request for quotations; field of procurement, describing such open access area and if so, on what • introduce a procedure for mandatory regulation as “leading nowhere”. grounds; and finally, what is the liability verification of the information concern- of the authorised website provider; ing bidders; The expert agrees that a notable feature of • for the purpose of applying alternative • establish a procedure for amending this law is the fact that it refers to over 20 procurement procedures only in strictly order placement contracts: such sub-legislative instruments, without which regulated cases, introduce amendments amendments could be governed by the the law will be unable to operate to the full to the RF Budget Code, specify the con- rules on placing orders with a single extent. There are also some areas where, tract value beyond which, in order for supplier; without the appropriate sub-legislative in- such contracts to be awarded, orders • develop a procedure for giving reasons strument, the law cannot be fully effective. must be placed in accordance with the for any unilateral change in the volume These regulatory legal instruments are procedures laid down in the Federal of work to be done; now being adopted. Accordingly, the law Law “On the placement of orders for de- • in order to simplify order placement contains a large number of references to livery of goods, execution of works and procedures and ensure transparency these sub-legislative acts. The experts have provision of services for public and mu- and openness in the way procurement sought, where possible, to reduce these nicipal needs”; is carried out, including by legalising provisions, by incorporating the relevant • in order to afford bidders the opportu- the use of information technologies and norms directly in statute. There are, how- nity to participate on equal terms, irre- encouraging competition when placing ever, some issues that cannot be regulated spective of the discretion enjoyed by the orders, devote a separate chapter of the by law, such as the introduction of techni- customer, authorised body, tender or law to electronic bidding: “Placement of cal, linguistic and legal requirements in bid committee, introduce a provision orders via open bidding in electronic respect of official websites. It is a well- whereby when placing an order through form”; known fact that if only because of their bidding, the customer or authorised • introduce an administrative procedure fast-changing nature, no technical require- body must impose the following re- for requesting documents when filing a ments can be incorporated directly in law. quirements: complaint. One sensible option would be to have man- – bidders to possess exclusive rights to The proposals for eliminating corrup- datory anti-corruption evaluations when the objects of intellectual property if, in tion risks by abolishing or amending the adopting regulatory legal acts of this kind. the course of the performance of the relevant sections of the law include the fol- state or municipal contract, the cus- lowing: remove the provision on with- Could the proposed arrangement be tomer acquires the rights to those ob- drawal of complaints; transfer to the RF adopted by private entities/effective jects; Government the powers vested under owners, given that procurement occurs – bidders must not appear in the register Article 13, para. 3, of the Law in the federal in the private sector as well? of unreliable suppliers; executive authority carrying out regulation • stipulate that the supplier (contractor, in respect of order placement; clarify the In the expert’s opinion, the proposed anti- subcontractor) and the customer bear format in which documents must be pre- corruption rules should be perfectly appli- equal responsibility for non-perform- sented (originals or copies, the procedure cable, with all our amendments, to the leg- ance or improper performance of the for certification), or include a duty to stip- islation on procurement carried out by contract; ulate such requirements in the notice, etc.; natural monopolies.
Legislative measures to prevent corruption in public procurement National anti-corruption strategy in the Russian Federation
A seminar of Russian and international Declaratory strategies were above all • application of the law: legal (legislative) experts was held on 17 October 2006 with geared to formulating general objectives structure for detecting, investigating the aim of studying the experience of Euro- for combating corruption (such as “lower- and prosecuting cases of corruption; pean countries in devising and running na- ing the level of corruption and creating a • institutional structuring: strengthening tional anti-corruption strategies, with climate of intolerance towards corruption of all elements of the national institu- Mikhail Grishankov , chairman of the in society”), with an indication of the tional system; Russian Federation State Duma Commis- general thrusts of activity but no laying sion on combating corruption, in the chair. down of concrete tasks or assigning of spe- • anti-corruption education, public par- ticipation; Drago Kos , chairman of the Slovenian cific institutions or officials responsible for Commission for the Prevention of Corrup- carrying out the strategy or clear definition • monitoring and assessment of the level tion and chairman of the GRECO group, of a system of supervision and accountabil- of corruption and the effectiveness of presented a report on “Experience of Euro- ity for strategy implementation. Practical the national anti-corruption strategy. strategies on the other hand differed from pean countries in the sphere of develop- It was also pointed out that substantial the familiar technocratic approach by re- ment and functioning of national anti- experience had been gained in different ducing the declaratory part to a minimum corruption strategies” (see report in this countries in implementing each of these and devoting most of the document to a collection of documents, page 7). main thrusts – both positive and negative detailed description of the planned meas- – and that not one of the national anti-cor- This was followed by a report on “Rus- ures, with reference to what purposes ruption strategies in any of the countries sia’s experience in developing and imple- those measures served, who was to imple- having adopted one had reached anything menting national anti-corruption ment them and by when. like a concluding phase. strategies” presented by Elena Panfilova , Existing practical anti-corruption strat- director of the Centre for anti-corruption egies from countries around the world Where Russia’s direct experience of sys- research and the Transparency Interna- were analysed to pick out a number of gen- tematically combating corruption was con- tional Russia initiative. Her report focused eral, fundamental factors characteristic of cerned, the rapporteur mentioned that on both purely Russian and international those documents, with a few exceptions. there had been attempts to tackle the experience in devising national anti-cor- Firstly, an anti-corruption strategy had to problem of corruption (some more active, ruption strategies. focus not on the manifestations but on the some completely lackadaisical) throughout She pointed out that the countries causes and sources of corruption, not on the whole of Russia’s contemporary history. where anti-corruption strategies already diagnosis but on specific acts, and not on Unfortunately, all these attempts had never existed had taken differing approaches to selective reforms but on a systematic ap- resulted in any kind of systematic ap- drawing them up: in some cases work to proach towards all institutions. Secondly, proach, apparently for a variety of reasons, devise such strategies had been initiated by an anti-corruption strategy had to be per- some of them as follows: international institutions providing assist- suasively argued and take account of the ance to the countries in question (for country’s specific requirements, it had to example Ghana, Uganda, Zimbabwe) and be a unified, all-embracing strategy, trans- Fragmentation and in other cases by the countries themselves parent, objective and targeted. It had to be unsustained political will (with the involvement of international or- subject to supervision and assessment, ganisations and institutions) in their efforts take account of the country’s possibilities At various stages the country’s top political to comply with international anti-corrup- and resources and be devised within the leadership had initiated anti-corruption tion standards (for example Estonia, country for the country, i.e. it had to be campaigns which, more often than not, Latvia, Romania, Bulgaria). There were backed as far as possible by national exper- had been used for purposes totally uncon- also substantial differences in the content tise and political will. Thirdly, a national nected with a real fight against corruption. of programmes: all approaches towards anti-corruption strategy generally incorpo- Above all, those leading anti-corruption setting up national anti-corruption strate- rated five main thrusts: reforms had continually been replaced, in gies to date could be divided into two basic • prevention: administrative and regula- terms of both staff and state institutions. In categories: declaratory strategies and prac- tory mechanisms for preventing cor- such conditions, there was no possibility tical strategies. ruption; whatsoever of co-ordinated action.
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Weak institutions and an all- trated its efforts not on drawing up any The report reached the general conclu- powerful bureaucracy kind of unified anti-corruption document sion that the efforts of the Russian Federa- but on systematic activity to ratify interna- tion’s executive authorities to combat Russia’s institutional system had been tional anti-corruption texts to which corruption were not underpinned by a created virtually from scratch but made Russia had begun to sign up by the end of comprehensive approach and were of an heavy use of the bureaucratic officialdom the 1990s. As a result the State Duma had isolated, technical nature and, secondly, previously in place. The system had fairly adopted laws (subsequently signed by the that nothing within that activity suggested rapidly become a complex one, with insti- President, which had brought them into that the authorities had any kind of basic, tutional functions of state authorities be- force) “On ratification of the United generalised strategy for the comprehensive coming subordinate to the specific Nations Convention against Corruption” combating of corruption in the country. interests of the bureaucracy. For obvious (February 2006) and “On ratification of the The report also looked at anti-corrup- reasons, the bureaucracy had no interest Council of Europe Criminal Law Conven- tion initiatives of civil society and specialist whatsoever in creating a streamlined anti- tion on Corruption” (July 2006). There institutions: the Strategic Development corruption system, which might seriously were plans to prepare ratification of Centre, the National anti-corruption Com- restrict the extent of its influence and op- another Council of Europe convention also mittee and many others. All the necessary portunities for unlawful enrichment. signed by Russia, the Civil Law Convention components of a national anti-corruption on Corruption. strategy for Russia had already been devel- Weak civil society In the analysis of the activities of Rus- oped and proposed in expert documents. sia’s executive authorities in combating The task now was simply to summarise An organised civil society was also a corruption, the report drew a necessary them, analyse the relevance of each one novelty in post-soviet Russia, like the distinction between the anti-corruption and formulate some general approaches to market economy and independent media. activity of the President and that of the building up an effective blueprint for com- It had been quite some time before public Government of the Russian Federation. bating corruption in the country. organisations had begun to grow at grass- President Putin had repeatedly turned to The following basic principles for roots level. Up to that time a large number the theme of combating corruption. He framing national anti-corruption policy in of public sector organisations had been set had done so in virtually all of his annual Russia were set out in the report: messages to the Federal Assembly of the up and had been securing functions that • An anti-corruption strategy in Russia Russian Federation. The most important of would normally have been the preserve of should be based on a definition of cor- these had been in May 2006, with the state- civil society institutions in any democratic ruption which is wider than just bribe- ment that old-style corruption was the State. Until very recently, the possibilities taking, also implying “abuse of one’s of- most serious obstacle to Russia’s develop- available to non-governmental organisa- ficial status with a view to procuring ment. In addition, at the G8 summit in St tions in terms of expert, intellectual and in- personal benefit”. The strategy should Petersburg in July 2006, President Putin, novative input had been starkly inadequate be aimed at opposing officials’ self- together with the other participants, had for initiating and encouraging the setting serving use of existing laws, rules and signed a declaration on fighting high-level up of a national anti-corruption strategy in procedures as well as depriving certain corruption, calling on the signatory coun- Russia. people and groups of the possibility of tries to pursue an active fight against cor- The report went on to analyse in detail creating legal scope for exploiting ruption among senior officials. the specific steps and efforts undertaken by public authority in their own interests. executive and legislative authorities in the Of the Russian President’s other anti- • An anti-corruption strategy in Russia Russian Federation on combating corrup- corruption initiatives, the report singled should be built into the general effort to tion. Where the legislative authorities were out the setting up in November 2003 strengthen democratic institutions in concerned, the report mentioned the (Decree no. 1384 of 24 November 2003) of the country, by ensuring real political Decree of the Russian Federation President the Presidential Council for combating competition, primacy of law, media “On priority measures for the prevention corruption. Under the terms of the decree, freedom, free competition in business of corruption and reduction of budget ex- the Council was to pursue its work through and freedom of development for civil penditure in the organisation of state pro- two commissions: a Commission for com- society. curement” (no. 305 of 8 April 1997), which bating corruption and a Commission for was of a highly specialised nature relating resolving conflicts of interest. However, • An anti-corruption strategy should to state procurement but nevertheless con- with its first and last sitting in February fully reflect all Russia’s international tained a number of provisions for curbing 2004, the Council had de facto ceased to commitments in the area of fighting corruption in the country; it also men- exist. corruption (conventions and other doc- tioned a whole raft of anti-corruption bills, Regarding the anti-corruption activity uments). none of which had become actual law in of the Russian Government, it was as broad • In order to implement a comprehensive the Russian Federation, pointing to the as it was scattered. The report pointed out national anti-corruption strategy a spe- conclusion that attempts, numerous as in this connection that virtually all anti- cialised independent body should be set they were, to create special legislative acts corruption initiatives were generated up to co-ordinate activity on each that could underpin a national anti-cor- within the Russian Federation Ministry of aspect of the strategy: prevention, in- ruption strategy had all come to nothing. Economic Development and Trade. They vestigation and enforcement, public ed- Another section of the report analysed were linked primarily to the implementa- ucation and public involvement, the activity of the State Duma Commission tion of administrative and civil service supervision and monitoring, and inter- on combating corruption, which concen- reform in Russia. national co-operation.
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• The strategy should be based on a far- be taken into consideration, with a taken by the Russian President and that the reaching analysis of the level and struc- focus on the zones where corruption State Duma Commission on combating ture of corruption in the country. Cor- risks are highest. corruption would obviously provide the ruption in both day-to-day life and • anti-corruption activities should be President with all the necessary informa- business should be measured at federal, carried out for all the main components tion, documentation and data on this ques- regional and municipal levels. citizens, of the strategy simultaneously: preven- tion. entrepreneurs and public officials tion, investigation and enforcement, In response to numerous requests from should be surveyed so that – firstly – public education and public involve- the participants, Drago Kos described in the extent of corruption is recorded and ment, supervision and monitoring, and detail the terms of reference and practical subsequently monitored and – secondly international co-operation. work of the Slovenian Commission for the – priorities can be determined for a • anti-corruption activities should be Prevention of Corruption he chaired. In specific action plan. planned so that they directly impact on particular, he pointed out that a special law • Development of an anti-corruption all the major forms of corruption in passed in 2004 guaranteed the Commis- strategy must be geared to the funda- Russia: political corruption, including sion’s independence and made it subordi- mental objective of minimising the improper use of administrative re- nate to the Slovenian Parliament. The damage caused to the country by cor- sources; administrative corruption in Commission’s main task was to implement ruption in the following areas: political day-to-day dealings; administrative national anti-corruption strategy. It influence; economic influence; influ- corruption in the business sphere; cor- checked records of Slovenian state officials’ ence in the social sphere. ruption in the area of managing state incomes, oversaw implementation of the • In parallel with investigating the assets, including state procurement and law on conflicts of interest and monitored current level of corruption and the in- privatisation; corruption in the judicial legislative restrictions on contacts between stitutional damage it could cause in key system; corruption in law-enforcement state officials and commercial companies. areas, detailed analysis should be bodies and the army; corruption in the In addition, the Commission monitored carried out of the major causes of cor- social security system. compliance with the restriction imposed ruption and the factors promoting its The concluding section of the report on gifts to officials in Slovenia (not more sustainability. Attempts to combat cor- analysed the following risks that were than €65 per annum). The Commission ruption should also be reviewed, as well potential obstacles to implementing a presented an annual report to Parliament as the existing legislative and institu- comprehensive national anti-corruption on the work carried out. In turn, all Slove- tional base. strategy: lack of political will on the part of nia’s state authorities were under obliga- • The framing of a truly effective and suc- the country’s top leadership to carry out tion to submit annual reports on their cessful anti-corruption strategy calls for serious anti-corruption reforms; a declara- implementation of the anti-corruption an assessment of institutional, human tory approach to formulating a national strategy. If it was found that state authori- and financial resources available in anti-corruption strategy; bureaucratic ob- ties had failed to comply with the require- Russia for combating corruption. struction to adopting and implementing a ments of the national anti-corruption • The main objectives for a national anti- national anti-corruption strategy; devia- strategy, the Commission could issue them corruption strategy in Russia must be: tion from the principles of progressive with a formal warning and notify the Slov- to develop a unified, consistent, de- democratic development of the country; enian Government of the fact. Another im- tailed and long-term programme for failure to ensure real independence of a portant aspect of the work of Slovenia’s fighting corruption; to define priorities specialised co-ordinating anti-corruption Commission for the Prevention of Corrup- in fighting corruption; to specify activi- body; a slant towards legislative and en- tion was to reinforce ethical standards for ties, resources, timeframes, responsible forcement measures, diminishing the role public administration and analyse risks of individuals and structures in order to of preventive action; leaving some areas of corruption in the civil service. The Com- meet the priorities; to set up a system state activity outside the scope of a unified mission consisted of five members ap- for monitoring and supervising imple- anti-corruption programme; inadequate pointed by the Slovenian Parliament at the mentation of anti-corruption measures human resource potential to carry out anti- proposal of the Government, the Supreme (with active involvement of civil soci- corruption measures; failure to ensure Court and the Parliament itself. Its term of ety); to establish mechanisms to co-or- legal protection for the individuals partici- office was six years. dinate anti-corruption efforts of all pating in implementation of anti-corrup- Drago Kos pointed out that the work of authorities and institutions; to assess tion activities; passiveness and excluding Slovenia’s Commission for the Prevention existing anti-corruption institutions the media from strategy implementation; of Corruption was not without its difficul- and laws as well as the effectiveness of excluding civil society from strategy imple- ties and problems, many of which arose previous anti-corruption activity; to set mentation. immediately after it had been set up. These up an ongoing system for independent The seminar participants then engaged problems were primarily linked to at- measurement and assessment of the in detailed discussion on approaches to tempts by the Slovenian Government to re- level of corruption in the country. setting up a national anti-corruption strat- strict the Commission’s powers. • The priorities of an anti-corruption egy and a specialised anti-corruption body He reviewed in detail legislative ap- programme should be defined on the in the Russian Federation. proaches to setting up specialised anti-cor- basis of broad and open discussion, in- In reply to their questions Mikhail ruption bodies in different countries volving all public and social institu- Grishankov said that the setting up of a around the world and reiterated that there tions. The facts about the real situation specialised anti-corruption body would were various means of guaranteeing that of corruption in the country must also hinge directly on the political decision they functioned effectively. In France the
Final report: Appendices, Volume 1 Project “Russian Federation – Development of legislative and other measures for the prevention of corruption” (RUCOLA 2) 159 role was fulfilled by the Ministry of Justice, thorities and business and the drawing up Elena Panfilova , director of the Centre while there were distinct bodies in coun- of specialised departmental anti-corrup- for anti-corruption research and the tries like Lithuania and Latvia. He also tion texts were concerned. Transparency International Russia initia- stressed that the issues of creating a spe- The overall conclusion from the semi- tive, then presented her report on the bases cialised anti-corruption body, what type it nar’s findings was that, as of October 2006, for national anti-corruption strategy in the should be and how it was to fit into the Russia did not have a unified comprehen- Russian Federation. Her proposed ap- country’s political system were directly sive national anti-corruption strategy, this proach to framing a national anti-corrup- linked to the issue of drawing up and being defined as a clear action programme tion strategy for Russia reflected the basic adopting a national anti-corruption strat- set out in a document officially adopted principles of the approach set out in the egy and the two aspects could not be con- and approved by society, aimed at reducing United Nations Convention against Cor- sidered separately. the level of corruption in the Russian Fed- ruption and also in the documents related The seminar participants went on to eration through the effective elimination of to anti-corruption efforts drawn up in the discuss different approaches to researching its causes and integrated use of adequate last ten years in Russia. Accordingly, for and measuring corruption in a country and enforcement measures as well as through her report on the bases for drawing up a also the parameters for determining the active anti-corruption education. Attempts strategy she had drawn on several provi- state of corruption with a view to framing a to create such a strategy for Russia to date sions and principles set out in draft federal national anti-corruption strategy. It was had been fragmented and unco-ordinated. laws “On combating corruption” (2002) proposed that Russia’s national anti-cor- The main reasons for the lack of a clearly and “On the bases of anti-corruption ruption strategy should cover all types of formulated anti-corruption strategy in policy” (2001). Further material had come corruption: political corruption, corrup- Russia (reasons that could hamper the from numerous expert studies on ways of tion in day-to-day dealings; administrative adoption and implementation of such a combating corruption in Russia, and par- corruption in the business sphere; corrup- strategy in the future too) were: lack of sus- ticularly from seminars run under joint tion in the area of state procurement and tained political will to carry out systematic projects of the Russian Federation State privatisation; corruption in the civil serv- anti-corruption reforms in the country, the Duma Commission on combating corrup- ice; corruption in social services, etc. It was systemic and institutional nature of cor- tion and the Council of Europe. also suggested that one of the forthcoming ruption, bureaucratic obstruction and The report on the bases for national seminars be devoted to a more in-depth ex- weak democratic institutions (political anti-corruption strategy was in two sec- amination of the problem of assessing the competition, media, civil society). Further- tions: a general section, considering the ne- level of corruption in Russia and discussion more, no comprehensive assessment of the cessity of combating corruption, defined of the findings of previous studies. level of corruption and the contributing corruption, formulated the objectives, The participants also engaged in de- factors had been carried out in Russia. aims and principles of the strategy and gave tailed discussion of the declaration of There was a pressing need for Russia’s leg- references for the legal and regulatory basis income by civil servants, which was one of islative and executive authorities and civil and strategy implementation machinery, the most important problems and called, society institutions to devise a national and a section focusing on the main areas of among other things, for the adoption of a anti-corruption strategy on the basis of the combating corruption in Russia, reflecting national anti-corruption strategy. It was international commitments entered into specific actions and measures. pointed out that although Russia had rati- by Russia and the general principles In the first section it was noted that at- fied the United Nations Convention already devised for an approach towards taining the goals of sustainable and pro- against Corruption with a reservation in framing an anti-corruption strategy in the gressive development of Russia was respect of Article 20 (“Illicit enrichment”) country. impossible without a substantial reduction every possible effort had to be made to es- The topic of a national anti-corruption in the level of corruption on both the tablish a clear mandatory procedure in the strategy, and more specifically the drawing federal and regional scales. At present cor- country for the declaration of income by up of recommendations for creating one, ruption was a serious threat to the proper officials and members of their families, to- was pursued at a seminar of experts on functioning of public authority, rule of law, gether with a corresponding system of 22 February 2007. democracy, human rights and social jus- strict checks on their declarations. Active Introducing the seminar, the chairman tice, slowing down the social and economic media involvement was also necessary to of the Russian Federation State Duma development of Russia. highlight the income declaration issue and Commission on combating corruption, The official statistics, and also data pro- encourage public condemnation of state Mikhail Grishankov , said that devising vided by NGOs specialising in the relevant officials who refused to publish their and adopting a national anti-corruption field, the findings of scientific, sociological incomes. strategy in Russia was one of the most and criminological surveys and data pro- The representatives of the Chamber of topical issues, not only because it was nec- vided by law-enforcement agencies, judi- commerce and industry, the Russian essary to bring Russian legislation into line cial statistics bodies and media statements Federal anti-monopolies department and with the requirements of the United testified to the fact that the corruption the “Opora Rossiy” association informed Nations Convention against Corruption phenomenon affected the political and in- the seminar participants of the work and the Council of Europe Criminal Law stitutional, economic, judicial and law-en- carried out by their organisations to Convention on Corruption, but also forcement, educational and instructional combat corruption and put forward a because the planning of specific anti-cor- fields, as well as the social welfare system, number of proposals for the practical im- ruption activities hinged on the adoption medical and investment spheres and inter- plementation of a national anti-corruption of such a strategy, and these ranked highly national trade, and seriously damaged the strategy where interaction between au- on the country’s agenda at present. state system of Russia itself. An anti-cor-
National anti-corruption strategy in the Russian Federation 160 Project “Russian Federation – Development of legislative and other measures for the prevention of corruption” (RUCOLA 2) ruption strategy should take into consider- now had the task of enshrining that broad codes of the Russian Federation, notably: ation the full range of instances of concept in domestic legislation. the RF Criminal Code; the RF Code on Ad- corruption and be geared not to correcting The objective of the strategy should be ministrative Offences and other legal and individual shortcomings in the functioning to reduce the level of corruption in Russia regulatory acts. A special legal and regula- of regional authorities but to eliminating by eliminating its causes, promoting intol- tory framework was being developed in corruption and its causes as far as possible erance of corruption by co-ordinating order to implement the priority measures from public administration practices. efforts and resources of different public au- within the main areas of anti-corruption anti-corruption strategy was primarily thorities and society, and developing a efforts in Russia. All measures were carried focused on reasons for and sources of cor- unified long-term anti-corruption policy out on the basis of unified methodologies, ruption rather than on its manifestations, in Russia in order to remove a threat to the whose application was mandatory at fed- on concrete actions rather than on diagno- rule of law and democracy and barriers to eral, regional and local levels. Federal and sis, on a systematic approach to all institu- the economic and social development of regional authorities, municipal authorities, tions rather than on selective measures. It the State. The aims of the strategy should civil society organisations and institutions was to be implemented systematically and be to: strengthen citizens’ trust in public and the private sector could all take a role progressively throughout the territory of and municipal authorities; ?ensure that the in developing methodology. Methodolo- the Russian Federation, involving all public main instrument for regulating the life of gies for implementing the national anti- and municipal authorities. It should be society and the State is the rule of law; corruption strategy were subject to public geared as far as possible to the specific cor- ensure transparency of functioning of discussion and subsequent approval in ac- ruption situation in Russia and draw on a public and municipal authorities and free cordance with the established procedure. set of continually renewed data in this area. access of citizens to information on the ac- An individual action plan was developed The strategy should be a unified document tivities of public and municipal authorities; for each strategy implementation measure, accessible to all and assuming public in- ?strengthen real political competition and with an indication of specific activities, volvement in its fine-tuning and imple- reduce the threat of weakening democratic methodology, organisation or person in mentation and in the supervision and institutions; observe the principle of divi- charge, timeframe for implementation and assessment of its implementation, with due sion of powers and their interaction strictly resources, necessary for specific actions. regard to Russia’s available capacities and in accordance with the Russian Constitu- Strategy implementation measures could resources. tion and the legislation of the Russian Fed- be tested through pilot activities followed by a review of their results and, depending For the framing of a national anti-cor- eration; ?increase tax revenue and on the results, finalisation of the methodol- ruption strategy the rapporteur proposed strengthen the budget sphere; ?strengthen ogy for its large-scale implementation. The that corruption be defined in the broadest market economy institutions by imple- list of measures to implement anti-corrup- sense, as any exploitation of power or func- menting efficient competition mecha- tion strategy in Russia was not exhaustive tions for personal benefit. The Council of nisms; ?improve the quality and and could be amended and supplemented Europe Criminal Law Convention on Cor- accessibility of state and municipal services in accordance with the established proce- ruption defined corruption according to for citizens; reduce operational business dure. the form of its perpetration – active and costs and so achieve increased competi- passive bribery. Active bribery was “the tiveness and lower costs of goods and serv- The following main areas of combating promising, offering or giving by any ices; develop and strengthen civil society corruption in Russia were singled out: person, directly or indirectly, of any undue institutions. advantage to any [of its] public officials, for The principles proposed for strategy Creation of a specialised anti- himself or herself or for anyone else, for implementation entailed general principles corruption body him or her to act or refrain from acting in such as: the rule of law, inevitability of criminal liability for crimes committed; the exercise of his or her functions”. Passive The main tasks of this body were to: ensure presumption of innocence; equality of all bribery was “the request or receipt by any and co-ordinate implementation of anti- citizens before the law and ensuring free [of its] public officials, directly or indi- corruption efforts, co-ordinate efforts to access to justice ; respect for the funda- rectly, of any undue advantage, for himself bring prosecution for corruption offences, mental rights and freedoms of citizens; or herself or for anyone else, or the accept- develop anti-corruption policy measures, transparency and accountability of state ance of an offer or a promise of such an ad- carry out monitoring and assessment of and municipal authorities for their activi- vantage, to act or refrain from acting in the the level of corruption and effectiveness of ties, and also special principles: consolida- exercise of his or her functions”. The implementing anti-corruption measures, tion of legal and administrative anti- United Nations Convention defined the as well as overseeing the implementation of corruption mechanisms; partnership of following instances of corruption: bribery anti-corruption activities. of national public officials, bribery of state and municipal authorities with civil foreign public officials and officials of society institutions and the private sector; public international organisations, embez- priority of preventive anti-corruption Setting up of a comprehensive zlement, misappropriation or other diver- measures; inadmissibility of restricting system of prosecution for sion of property by a public official, trading access to information on instances of cor- corruption offences in influence, abuse of functions, illicit en- ruption, corruption risks and anti-corrup- richment, bribery in the private sector, em- tion measures. This set of measures included bringing bezzlement of property in the private The legal basis for strategy implementa- Russian legislation into line with the stand- sector, laundering of proceeds of crime and tion was formed by the Constitution of the ards of the United Nations Convention obstruction of justice. Russian legislators Russian Federation and federal laws and against Corruption and the Council of
Final report: Appendices, Volume 1 Project “Russian Federation – Development of legislative and other measures for the prevention of corruption” (RUCOLA 2) 161
Europe Criminal Law Convention on Cor- adults, students and pupils, focusing on On the second point she pointed out that ruption with respect to extending and corruption risks, ways of fighting corrup- experts had expressed the view at previous more closely defining the list of corruption tion and conduct geared to preventing cor- seminars that at this stage of developing offences and establishing corresponding ruption, would be developed and anti-corruption activity in the country it punitive sanctions, as well as introducing a implemented for that purpose. was necessary to set up a specialised anti- common definition of corruption in corruption body covering the transitional Russian legislation. Assessment and monitoring phase. More specifically, this would be a prototype unified co-ordinating body in- of corruption in Russia volving as many interested authorities and Prevention of corruption civil society representatives as possible, Monitoring and assessment of corruption which would prepare a co-ordinated pro- would be based on surveys run to ascertain Prevention of corruption in Russia would posal on the format and objectives of the and measure: public perception of the level be implemented by identifying and elimi- agency that would be responsible for com- of corruption in state and municipal au- nating conditions and reasons causing and bating corruption in the country. encouraging corruption. This entailed thorities; state and municipal officials’ per- eliminating conflicts of functions, when ception of the level of corruption in state Presenting a report on principles for state and municipal authorities ran checks, and municipal authorities; business enti- framing a national anti-corruption strat- exercised supervision and provided serv- ties’ perception of the level of corruption in egy, Drago Kos , chairman of the Slovenian ices simultaneously. It was also necessary state and municipal authorities; federal Commission for the Prevention of Corrup- to strictly define the procedures of public and regional markets of corruption; tion, pointed out that fundamental pre- regulation, deprive officials of opportuni- corrupt practices at federal and regional cepts had been identified at previous ties to make decisions at their own discre- levels; mechanisms of corrupt dealing; seminars which had to underpin the for- tion, and depersonalise interaction structure of corruption in Russia as a whole mulation of the objectives, tasks and prac- between public servants and citizens and and in the regions; factors facilitating cor- tical content of an anti-corruption strategy organisations (reducing the number of per- ruption; effectiveness of implementing in Russia. The opinion of a broad circle of sonal contacts while resolving problems). measures of the national anti-corruption experts taking part in the discussions had The fight against corruption in the activi- strategy. Corruption had to be assessed on been instrumental in this. Also of great im- ties of state and municipal authorities had an annual basis in order to track trends in portance was the information on the start to be carried out with consideration of the the development of corruption processes. of work by the Inter-departmental working key areas of administrative reform, namely Specific high-priority measures for im- group set up by Decree of the Russian Pres- by: regulating the functions of state and plementing the anti-corruption strategy in ident to prepare proposals for implement- municipal authorities; improving decision- Russia were also covered in the report, ing the provisions of the United Nations making procedures; reforming the system which gave a detailed description of 26 Convention against Corruption and the of selecting, training and assigning staff; technological and instrument-based meas- Council of Europe Criminal Law Conven- supervising conflicts of interests; improv- ures geared to the planned reduction of tion on Corruption in Russian Federation ing the law-making procedure; introducing corruption in the country, underpinned by legislation. This raised hopes that the pro- mandatory anti-corruption screening of an implementation programme with an in- posals made in the previous phase of the current legislation as well as draft laws by a dication of those responsible for carrying project would take concrete form fairly specialised anti-corruption body; cutting out each of the measures and the time- soon, as most of them concerned the align- down administrative barriers; strict frames for completing the tasks set. ment of both Russian anti-corruption leg- control and transparency of real estate Elena Panfilova concluded by consider- islation and practices with international deals, privatisation and the renting out of ing two further issues: the potential risks to standards. strategy implementation and the practical state and municipal property. Drago Kos spoke at length about the problem of deciding on the format for a setting up of a specialised anti-corruption specialised anti-corruption body. On the body in Russia, reiterating the importance Anti-corruption education first point, she said that a strategy could of the issues he had raised at previous sem- not be fully implemented under the follow- inars, and first and foremost the impor- There had to be a special effort to promote ing circumstances: lack of political will to tance of the legal arrangement for creating negative views of corruption in society. implement the strategy at the highest level such a body. Were it to be created not by a Corruption had to be regarded by society of executive and legislative authority; law but a presidential decree or govern- as a type of dangerous anti-social behav- absence or ineffectiveness of the special- ment instruction, the agency could be sus- iour. In many cases corruption could be ised anti-corruption body; inclusion of ceptible to outside pressure and influence. prevented if citizens took a more responsi- over-ambitious activities in the anti-cor- ble attitude in exercising their legal rights. ruption programme, which could not be Moreover, it had to be very clearly de- First and foremost the public had to be fulfilled; too much emphasis on legislative termined exactly which entity would made aware of corruption risks and of their and law-enforcement measures over pre- provide the foundation for the national rights. The goal of anti-corruption educa- ventive actions; creation of no-go areas for strategy. Given that it was a national strat- tion was to create such a pattern of public anti-corruption measures; absence of egy to be applied throughout the Russian behaviour when people would choose a mechanisms to protect those implement- Federation, there were two possibilities: lengthier but legal solution to their ing anti-corruption measures; lack of civil the State Duma or the President, because problem rather than simply bribing offi- society involvement or participation in im- this would give the strategy sufficient au- cials. Special training programmes for plementing and monitoring the strategy. thority and power for it to be carried out.
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As its name suggested, a strategy was a for corruption offences. While it was true it had to be done. The Commission for strategic document but it also had to be a that much was already covered by different combating corruption had prepared a draft flexible one. If the body responsible for car- laws within the Criminal Code, which law “On combating corruption” laying rying it out decided that it needed to be ad- could not be altered, something could down a set of general provisions. Obvi- justed, improved, supplemented or simply be added to make everything clear ously, all the ideas contained in this draft otherwise cut down, the necessary changes and specific. When the Inter-departmental law required meticulous examination, in- would have to be made. For that reason it working group finished its work in August cluding within the community of experts. had to be considered from the outset what 2007, the text of such a law would be drawn The seminar participants also gave de- system to adopt for the further develop- up. It was possible that some of the compo- tailed consideration to the correlation ment and fine-tuning of the strategy. It was nents of the national anti-corruption strat- between a national anti-corruption strat- also necessary to preserve the full abun- egy would be directly inserted into it. egy and local, regional and departmental dance of ideas generated by existing work Indeed, the law might directly down the strategies. In line with the blueprint for ad- on the project. The way had to be cleared bases of the strategy. ministrative reform in the Russian Federa- for sectoral strategies. It was most improb- Implementation of a national anti-cor- tion for the period 2005-2008, all of the able that all corruption problems could be ruption strategy in Russia might be in Federation’s administrative departments resolved with one anti-corruption strategy, several phases, beginning with the presi- and regions were preparing departmental and provision had to be made for incorpo- dential decree on the specialised body, and regional strategies and were ideally to rating sectoral and local strategies, focus- then a law laying down the bases for com- have completed them by 1 January 2007. ing on corruption problems in different bating corruption and then practical, spe- Some had already done so. It was impor- areas, with these sectoral and local cialised strategies to be prepared by the tant to note that the Ministry of Economic schemes corresponding to the base param- specialised body. This would launch a Development and Trade was also planning eters of the overall strategy. The strategy process that would go on for a fairly to prepare model departmental and re- therefore had to contain provisions for its lengthy period. gional anti-corruption strategies in the future development, guaranteeing poten- By complying with this handful of prin- near future in order to assist those which tial for evolution and refinement as it was ciples, Russia would meet all the require- had not managed to complete the task on being implemented, and also opening the ments of international conventions and their own and to bring all the strategies door to the incorporation of other regional have all the basic instruments for success- into line. It was stressed that it was neces- and departmental proposals. ful implementation of the strategy. sary to achieve a balance and an optimum One of the most complex tasks was to In the ensuing discussion the seminar combination between the national strategy incorporate a definition of corruption in participants stated their views concerning and the strategies worked on at regional national legislation. Even the international the content and principles for the framing and local level. Within the strategy a spe- legal instruments were not united on this of a national anti-corruption strategy for cialised body had to be assigned the task of issue. The Council of Europe Civil Law Russia. In particular, Mikhail Grishankov ascertaining which regional and local Convention on Corruption was possibly reiterated that decisions on the strategy’s bodies already had a strategy, analysing better than the others in this respect, with content would largely hinge on the findings them and passing them on for information its very detailed description of bribery. of the Inter-departmental working group. at regional and national level. But corruption was actually a far The creation of this group was itself a Another specific discussion topic was broader concept, also involving cronyism major step forward in systematic anti-cor- the complex issue of fusing the require- and nepotism, favouritism, conflicts of in- ruption efforts in Russia. The necessity of ments laid down for national anti-corrup- terest, clashes of interest and so on, which devising an anti-corruption strategy was tion bodies in international instruments made corruption very difficult to define. quite clear. At present there was a whole with the specific characteristics of Russia’s There were a number of models that could host of isolated ideas which had emanated domestic legislation. Here it would obvi- be used and various possibilities for defin- from different structures and departments ously be necessary to consider which ing corruption. The first of these was based in the country. These efforts had to be matters fell within the competence of indi- on the principle of loyalty or trust, and the given unity and work had to be more sys- vidual Russian authorities in accordance best example of this was the corruption bill tematic. with the Constitution of the Russian Feder- which had failed to pass into law in Great Mikhail Grishankov saw the question of ation and along what lines. Under the Con- Britain. Formulating a definition of corrup- adopting an anti-corruption law as a sepa- stitution, the setting up of federal executive tion along these lines for the needs of rate issue. Any such law would have to very authorities lay within the competence of Russian legislation could be a first concrete clearly be a framework law, laying down a the President, who set up ministries, step towards framing a national anti-cor- number of common definitions. In recent federal services and agencies. Depending ruption strategy. times numerous heads of departments had on the essence of the issues involved, the As far as monitoring and supervision of asked to be given a definition of corrup- Russian Government could also decide on such a strategy were concerned, there had tion, which they believed would open up a such matters, but this mainly applied to au- to be provision for some ramifications and great many possibilities for taking action. thorities dealing with strictly social and sanctions for failure to implement it. And, And while their position was not fully economic questions. The prerogative re- of course, there had to be action plans for borne out by evidence, if society was mained with the President. If the anti-cor- implementing the strategy, with as much calling for a definition of corruption and ruption body was an advisory body, detail as possible. practitioners and theoreticians were eager without any state powers, it could be Russia also had to pass law incorporat- to draw one up that would serve as the created by the State Duma. Following dis- ing both preventive and punitive measures yardstick for assessing numerous activities, cussion, the seminar participants con-
Final report: Appendices, Volume 1 Project “Russian Federation – Development of legislative and other measures for the prevention of corruption” (RUCOLA 2) 163 cluded that it was necessary to carry out the Constitution, were transcribed into could handle those tasks, there was no detailed analysis of the whole of Russia’s federal law, giving it a special place within point in creating a separate body. At the legislation to ensure that new anti-corrup- the system of authorities. The Federal Law same time, if it was clear from detailed tion mechanisms and instruments fitted “On the Prokuratura ” made the Prosecutor analysis that none of the existing bodies harmoniously into the existing collection General’s office responsible for co-ordinat- would be able to fully cope with the tasks of of legal and regulatory acts. ing the anti-corruption activity of federal both preventing and directly combating The most hotly debated point was the executive authorities. It was possible, with corruption, the need to create a new, sepa- format of the specialised anti-corruption the passing of anti-corruption legislation, rate body would be undeniable. body. The question was raised as to that it would also be assigned anti-corrup- In conclusion, the seminar participants whether it had to be a separate, new au- tion activities and, accordingly, the Prose- agreed that the main purpose of a national thority or whether the tasks and functions cutor General’s office would play more of a anti-corruption strategy in Russia had to be of a specialised anti-corruption body could leading role in decision-making where not so much to define punishments for acts be dealt with by one of the existing law-en- combating corruption was concerned. of corruption but rather to bring about forcement agencies in Russia. Whichever Under the United Nations Convention substantive and far-reaching changes in at- the case, the key issue was how that body against Corruption it was not compulsory titudes to the problem of corruption on the would fit into the existing system of state to create a new body, since the convention part of state authorities and officials and authorities. At present, presidential spoke in general terms of the necessary ex- also in public perceptions. For that reason, decrees stated that combating corruption istence of an anti-corruption body. It might when considering the three components of was the task of the Ministry of Internal Af- already exist. But Articles 6 and 36 men- the strategy: prevention, repression and fairs, the FSB to a certain extent and the tioned two different functions of special- education, the right balance had to be Russian Financial monitoring agency. ised anti-corruption bodies: prevention struck between them, with each being as- Where the Prosecutor General’s office was and enforcement. A specialised body could signed clear content easily grasped by concerned, there was a law, since the combine those powers. But if one or other society. powers of the Prokuratura , on the basis of of Russia’s existing federal authorities
National anti-corruption strategy in the Russian Federation Corruption in education in the Russian Federation
As part of the project to develop legislative fourth, management of funds already re- curement regulation and budget proce- measures to prevent corruption in educa- ceived by a school may also be subject to dures. tion, Russian and European experts gath- corruption involving teachers and staff re- Officials in government institutions re- ered to hear and discuss reports by sponsible for handling and/or spending sponsible for managing and financing the Quentin Reed, the lead consultant from the money. education system must be subject to clear Council of Europe, Larissa Sannikova, As in any other sector where significant laws against bribery, with appropriate senior scientific expert, Institute of State amounts of money are spent on public con- sanctions for violations. Moreover, teach- and Law, Candidate of Law, and Elvira Ta- tracts, procurement in the education ers and administrative staff in educational lapina, senior scientific expert, Institute of sector is an area that is vulnerable to cor- institutions are in principle public officials, State and Law, Candidate of Law. ruption. Although procurement is inti- while teachers in private educational insti- In the report by the Council of Europe mately related to the financing of tutions perform functions that are of vital expert, Quentin Reed , “Corruption in ed- education, it is conceptually a separate importance to the public interest. ucation systems: an overview of problems issue as it involves decisions on how to Procurement in education is in princi- and solutions”, the author looked at the spend funds that have already been allo- ple the same as procurement in any other problem of corruption in education cated. area, and ensuring it functions with as little systems based on a review of existing liter- Corruption may occur not only to influ- corruption as possible means pursuing the ature and his own insights. ence the recruitment or career decisions of same policies and measures as are needed Identifying the main types of corrup- school heads and administrators, but also for procurement in general. It is important tion encountered in education systems, to influence the activities of inspection to note that procurement in education may Mr Reed divided them into five main areas: bodies, one of whose functions is to ensure raise specific challenges, in particular the policy decisions, financing, procurement, that teachers perform their duties ade- fact that price may often not be the most personnel and the educational process quately. important criterion for allocating con- itself. One fundamentally important area of tracts. This is particularly the case for text- As the report points out, corruption corruption in education, and the one that books and other teaching materials, where can distort a range of decisions affecting probably affects pupils/students most di- it is vital for clear quality standards or cri- the educational system: first, corruption rectly, is corruption within the educational teria to be defined for procurement pur- reduces the share of public expenditure al- process itself. Stated very generally, such poses. located to education; second, major invest- corruption occurs at school level where ad- Given the importance of education as a ment decisions may be corrupted and mission, quality or quantity of education, proportion of public budgets, general third, corruption can also occur in the ac- test results and exam results are deter- budget procedures will have a major creditation of educational institutions. mined or influenced by criteria other than impact on the potential for corruption in All states with educational systems professional standards, merit and ability. budget decision-making. In particular, it is must address the challenge of how to allo- One of the aims of introducing a Unified important that major decisions on invest- cate money (generally from a central min- National Examination for school gradua- ment in the education system are open to istry budget) to schools so that it is used in tion is to reduce corruption. public scrutiny, and that the process of the optimum and most rational manner. In Mr Reed’s view, policies to prevent budget approval is designed to minimise There are several obvious risks of corrup- corruption in education can be divided the potential for undue influence. tion: first, many reports stress the impact into two main categories: general policies A very useful instrument for assessing of lower teacher salaries in providing a are policies and measures to reduce cor- the integrity of education budgets are context in which corruption may flourish; ruption that apply not only to the educa- Public Expenditure Tracking Surveys second, as funds are allocated from the tion sector; sector-specific policies are (PETS). PETS gather information on the centre to regions, educational authorities those that are specifically designed for use funds allocated by central government to and schools, they may be siphoned off by in the education sector. education and compare this to information officials or politicians; third, schools may There are three main types of general from lower levels of the system – regional provide inaccurate information to central policies that are important also in the edu- education authorities and schools them- authorities in order to secure a larger cation sector: legislation to tackle bribery selves – to assess to what extent the funds portion of funds than they are entitled to; and abuse of official powers, public pro- allocated actually reach their destination.
164 Project “Russian Federation – Development of legislative and other measures for the prevention of corruption” (RUCOLA 2) 165
Specific policies can be applied in the that is universally applied to all schools of a the possibility of teachers awarding marks following areas: accreditation of educa- given type within an educational jurisdic- in return for unauthorised benefits, the fol- tional institutions; financing and audit; tion”. This means that a school receives lowing principles should be applied in the personnel systems; admission procedures; funds based on a formula, that is itself design of tests and examinations: key tests testing and examinations; gifts and contri- mostly derived from the number of pupils and examinations at primary or secondary butions; professional standards and codes and their age; hence, formula funding is school (in particular leaving examinations) of conduct; restrictions on private tutor- often synonymous with “per capita fund- should be standardised nationally; impor- ing; complaint mechanisms and feedback; ing”. Once the school receives the funds, it tant examinations should ideally be based disciplinary procedures and sanctions; then controls some or all spending deci- on more than one type of assessment; the governance; inspection bodies. sions. Relating funding to the number of use of oral examinations should be re- Corruption in the process by which ed- pupils/students means that governments stricted; the criteria and procedure for ucational institutions are accredited is determine funding on an objective basis marking examinations should be clearly likely to have a direct effect on the quality that is available and understandable to the laid out and binding. of educational institutions themselves, as public. If information on school perform- In addition to the establishment and objective criteria are pushed aside by ance is readily available, this also makes implementation of clear objective criteria bribes. Corruption in accreditation is a schools much more accountable to par- for admission and examination, there problem that applies primarily to private ents. In particular, it also reduces the scope should be clear guidelines for the accept- educational institutions that want to enter for the provision of incorrect information ance of gifts by teachers from pupils or par- the system, at both secondary and higher in order to secure more funds. Last but not ents, and also for the acceptance of education level. least, schools have an incentive to use financial contributions by educational in- Two main areas of education financing funds more efficiently, as they make spend- stitutions. Such guidelines should include a are of crucial importance in influencing the ing decisions themselves and are rewarded requirement for educational institutions to vulnerability of the system to corruption. for saving money in one area – which is not publish any financial contributions they re- The first is simply the level of financing. the case under an input-based financing ceive. Where education is allocated insufficient system. A vital component of any education resources, one likely result is a decrease in Formula funding with decentralised system is the existence of clear and widely equal access to quality education – and, control over spending is also likely to lead disseminated professional standards. The often, an increase in corruption as bribery to less corruption, at least corruption in- value of such standards and codes in creat- may become an important means for se- volving central bureaucrats. ing a culture and norms that are resistant curing increasingly scarce places. In addi- In order to minimise corruption of the to corruption should not be underesti- tion, the effect on teacher salaries in likely personnel system, it is first and foremost mated. to be disproportionate, as other items of vital to establish clear, objective and trans- Private tutoring is a phenomenon that spending are less easy to reduce, and a fall parent criteria and procedures for teacher is often linked with corruption, for in salaries is likely to increase the incen- recruitment, placement, promotion and example being paid for by parents or stu- tives for teachers to engage in corrupt remuneration. Second, educational institu- dents as a condition for receiving good practices. Russia still lags behind other tions should have in place established marks or other treatment to which pupils central and eastern European countries in standard procedures for recording and or students should be entitled anyway. It the proportion of GDP spent on education. evaluating the performance of teachers. may be worth considering specific restric- The second and fundamental issue is Third, governance institutions should be tions on private tutoring, for example, the the method by which schools and educa- sufficiently representative of all stakehold- registration of tutors or prohibitions on tional institutions are financed. Two main ers – especially parents – that they can play private tutoring by teachers of students types of funding exist, with countries occu- a role in detecting teachers who do not per- they already teach in school. pying various positions on a continuum form; such bodies should have the author- As in other public organisations, it is between them: input-based treasury ity to either address such problems directly important for schools to have established funding and formula-based funding. (for example by initiating sanctions) or mechanisms for complaints to be submit- Traditionally, education systems in notify them to the appropriate inspection ted by parents or pupils/students. Europe have tended to allocate resources body. Often, the first step in addressing suspi- from a central education ministry on the In primary and secondary education, cions of misconduct (including corrupt be- basis of estimates of “inputs” submitted by the full implementation of a formula haviour) are internal disciplinary schools – such as average class size, funding system is likely to help, as it will proceedings within the education institu- number of classes per subject, number of provide more resources to schools which tion. It is important that such proceedings buildings, etc. Russia (as of 2004) still oper- become more popular, thereby helping to are codified and conducted by a sufficiently ated essentially with the model outlined satisfy demand for places at good schools broadly representative body. Likewise, above. Funding determined in this way and reducing the pressure for corruption where wrongdoing is confirmed, the body creates a large area for schools to attempt to determine which pupils are admitted. conducting proceedings needs to have the to “inflate” various inputs – for example by Admission to higher education institutions authority to impose adequate sanctions. overstating the size of classes, buildings, should be based primarily on the criteria of For any of the policies and measures de- etc. standard nationwide examinations. scribed in this report to be implemented Increasingly, governments finance edu- Testing and examinations are a key properly, it is vitally important that schools cation through formula funding, defined as point of vulnerability to corruption within and universities have adequate governance “a rule for allocating resources to schools the education system. In order to minimise structures.
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In order to supervise whether schools exercise their rights; lack of competitive 2, Article 33, para. 2). There are also provi- fulfil the standards by which they are (bidding) procedures; lack of adminis- sions that grant powers to the federal exec- bound, European countries have estab- trative procedures. utive agencies (Article 6, para. 9, Article 7, lished professional school inspectorates, para. 2, Article 8, para. 3, Article 11, para. responsible for carrying out regular 2, Article 15, para. 4, Article 16, para. 3, checks. In post-communist countries Absence of liability for Article 17, para. 4, Article 20, para. 2, school inspectorates tend to be weak and violations Article 23, para. 5, Article 24, para. 3), with focused on checking formalities rather a distinction being made between federal The RF Law “On education” contains no than the substance of school activities. It is executive agencies, federal educational au- specific measures that would enable edu- vital to provide inspectorates with suffi- thorities and their respective powers. cational institutions and officials to be held cient resources. With so many references and blanket liable for violating the rights of students In his conclusion, Quentin Reed provisions, Russian legislation in the edu- and pupils and other unlawful actions; stresses that corruption in education is not cation sector may be said to provide merely there is no effective mechanism in place to a one-dimensional phenomenon, but takes a declaratory framework, that leaves it ensure that wrongdoing does not go un- many different forms affecting different unclear how citizens are to exercise their punished ( Article 4, para. 3; Article 51, components of the education system. A rights in this area. para. 7; Article 32, para. 3 ). The same is fundamentally important lesson from the true of the Federal Law “On higher and experience of advanced countries in build- postgraduate professional education” ( Ar- Wide scope of discretionary ing educational systems is that none of the ticle 3, para. 2 ). policies and measures outlined in the powers report will be effective alone; each of them The powers of public bodies are defined requires a certain context. Excessive freedom in sub- extremely loosely. Use is made of the term An anti-corruption evaluation of legislative rule-making “ensure” which in practice admits of Russian legislation in the field of education various interpretations, from a passive co- has been prepared by two Russian experts The RF Law “On education” contains a rel- ordinating or approving role to active in- – Larissa Sannikova and Elvira Talapina – atively large number of provisions author- tervention in the activities of educational independently from one another. The ising the RF Government to adopt sub- institutions (Article 14, para. 1, Article 15, object of the exercise was to identify any legislative acts: Article 5, para. 7, Article 7, paras 1 and 5, of the RF Law “On educa- provisions in the law which directly or indi- para. 3, Article 10, para. 3, Article 12, para. tion”). rectly created incentives for corruption or 5, Article 13, para. 2, Article 16, paras. 4 The powers of local self-government had the potential to do so. The main focus and 5, Article 20, para. 1, Article 28, para. bodies are of a declaratory nature only and of the evaluation were the Federal Law “On 1, Article 33, para. 1, Article 34, para. 1, can be exercised discretionally: local self- education” of 10 July 1992 and the Federal Article 35, para. 3, Article 41, para. 3, government authorities shall organise and Law “On higher and postgraduate profes- Article 42, para. 2, Article 50, para. 10, co-ordinate (Article 18, para. 5, of the RF sional education” of 22 August 1996. When Article 52.1, para. 3, Article 53, para. 2. Law “On education”). evaluating these laws, attention was also Other provisions grant rule-making Licensing powers can be exercised as given to the relevant provisions of the RF powers to state authorities (federal state discretionary ones, as Article 33, para. 13, Civil Code and the Rules on the Provision authorities and state authorities of subjects of the RF Law “On education” suggests of Paid Educational Services, as approved of the Russian Federation, as well as local only one outcome of the licensing activity by RF Government Order No. 505 of 5 July self-government bodies) – Article 7, para. in cases where are no grounds for denying 2001. When carrying out their study, the 1, Article 13, para. 2, Article 15, para. 8, an application: the founder may appeal to a experts used the methodology for assess- Article 28, Article 29, Article 31, Article 33, court of law against a negative conclusion ing legislative acts for corruption risks paras. 1 and 9, Article 34, para. 1, Article based on an expert evaluation and any re- (Centre for Strategic Research, World 41, para. 4, Article 52.2, para. 2. sultant refusal to issue a licence. Bank, 2006). Founders of institutions have responsi- The implementation of national and re- As a result of the assessment, the legis- bility for a fairly wide range of issues. In the gional components of state educational lation on education was found to contain a case of federal educational institutions es- standards in higher and postgraduate pro- number of corruption risk factors: tablished by the RF Government, the RF fessional education by higher educational • absence of liability for violations; Ministry of Education and Science acts as establishments on a contractual basis with • excessive freedom in sub-legislative founder. As a result, some important areas the relevant executive agencies of RF sub- rule-making; of educational activity are governed by the jects creates incentives for doing corrupt • wide scope of discretionary powers; decisions of this Ministry when in fact they deals under these contracts ( Article 5, • definition of competence using the ought to be governed by statute. para. 4, of the RF Law “On higher and post- word “may”; The Federal Law “On higher and post- graduate professional education”). • existence of conflicting legal provisions; graduate professional education” contains Granting discretionary powers, namely juridical and linguistic corruption risks; a relatively large number of blanket provi- the right to conduct performance reviews, • existence of gaps in the law; failure to sions conferring powers on the RF Govern- means that these can be applied to selected adopt regulatory legal instruments; lack ment (Article 5, paras. 3 and 6, Article 6, institutions, creating incentives for corrup- of public scrutiny of the activities of ed- para. 8, Article 10, paras. 4, 6 and 7, Article tion ( Article 10, para. 6, of the RF Law “On ucational institutions; excessive re- 11, para. 6, Article 16, para. 3, Article 19, higher and postgraduate professional edu- quirements for persons wishing to para. 4, Article 21, para. 3, Article 24, para. cation”).
Final report: Appendices, Volume 1 Project “Russian Federation – Development of legislative and other measures for the prevention of corruption” (RUCOLA 2) 167
Definition of competence this concept forms the basis of the expert tion to enter into a contract with a cus- using the word “may” evaluation when issuing licences to tomer if the institution refuses to do so. educational institutions, it can be The laws on education are silent on The competence of executive agencies and interpreted by enforcement agencies in a some essential parameters and conditions officials is defined in terms of what they variety of ways and may thus be used for for providing paid educational services: the “may” or “have the right to” do in a number corrupt purposes. procedure for engaging in paid educational of places in the RF Law “On education” It is also unclear which body is respon- activity, the nature of paid educational (Article 30, para. 6, Article 33, para. 23, sible for calculating the average statistical services, the terms of the contract on the Article 37, para. 6, Article 38, para. 1), and indicator and introducing methodology for basis of which the activity is to be per- in the RF Law “On higher and postgraduate its calculation. In this context, the require- formed, etc. ( Article 45 of the RF Law “On professional education” (Article 7, para. 4, ments of the expert evaluation can be both Education”, Article 29 of the Federal Law Article 16, para. 9). overstated and understated, giving the “On higher and postgraduate professional Article 47, para. 4, of the RF Law “On expert evaluation committee a very wide education”). education” contains several corruption risk margin of discretion. The mechanism for providing paid edu- factors: The founder or local self-govern- cational services is dealt with at sub-legis- lative level, in the Rules on the Provision of ment bodies may suspend the entrepreneur- Existence of gaps in the law ial activity of an educational institution if it Paid Educational Services, as approved by is detrimental to the educational activity RF Government Order No. 505 of 5 July The RF Law “On education” is, generally stipulated in its Charter, pending a court 2001. These Rules, moreover, deal with the speaking, a framework law. One conse- decision on the matter. provision of paid educational services only quence of this is that the legislation exam- in a very general sense, leaving the same The use of the term “may” here opens ined here contains no legal mechanisms by gaps as before (para. 26 of the Rules, for ex- the way for arbitrary and possibly corrupt which participants in educational activity ample, fails to stipulate the procedure decisions in relation to educational institu- can exercise their rights. The rights of whereby supervision is to be exercised). tions. Either the decision to suspend entre- those participants are merely declaratory, The main corruption risk factor in these preneurial activity should be assigned to as the rights of some do not correspond to Rules is the practice of filling gaps in the the courts or an exhaustive list of grounds the duties of others. for suspending the entrepreneurial activi- law by means of regulatory legal instru- For example, chapter V “Social guaran- ties of educational institutions should be ments issued by executive agencies. tees for the exercise of citizens’ rights to ed- drawn up. The existence of these gaps gives rise to ucation” does not stipulate or regulate the The provision also confers alternative a number of corrupt practices which duties of educational institutions and powers on public authorities and individu- involve students and parents being billed teachers , so the civic rights to education re- als (if the founder is an individual); the pro- for illicit charges: ferred to in this same chapter have no legal cedure governing suspension is unclear • charging a separate fee for taking or re- back-up. (time-limits, decision-making procedure) sitting tests and examinations; Something else that is missing from the and the activity may also not be suspended. • charging for tutoring, when the tutor is legislation on educational activity is a actually the teacher himself/herself; mechanism that would enable citizens to • providing additional paid educational exercise their right to equal access to edu- Existence of conflicting legal services within school hours, making it cation. provisions. • almost impossible for students (in par- One of the components of this mecha- ticular schoolchildren) to refuse them. Article 47, para. 5, of the RF Law “On edu- nism can be created by recognising con- The procedure for ensuring that educa- cation ” conflicts with Article 3.12 of the tracts for the provision of educational tional institutions fulfil the terms of their Code of Administrative Offences. Article services as public agreements. They would licence ( Article 33, para. 14, of the RF Law 47, para. 5, grants founders and local au- then fall within the scope of Article 426 of “On education”) leaves a gap in the law, thorities the right to suspend the entrepre- the RF Civil Code which: which can be filled either by regulatory in- neurial activities of educational • requires the service provider to con- struments issued by the supervisory au- institutions if they are detrimental to the tract with all requesting parties on thority, or by that authority’s discretionary educational activities provided for in their equal terms; practice. charters, pending a court decision on the • provides for the possibility to going to The issuing of licences for engaging in matter. Under Article 3.12 of the Code of court, to force the other party to con- educational activity is not addressed in law Administrative Offences, however, suspen- clude a contract if it unreasonably (Article 33, para. 7, of the RF Law “On ed- sion of activity is an administrative penalty, refuses to do so. ucation”). The gap is filled by a sub-legisla- which may be imposed only by a court. Under para. 13 of the Rules on the Pro- tive instrument: RF Government Order vision of Paid Educational Services, an ed- No. 796 of 18 October 2000 “Approving the Juridical and linguistic ucational institution is required to Regulations on the Licensing of Educa- corruption risks conclude a contract for providing paid ed- tional Activity”. Under Article 28, para. 11, ucational services if it is able to provide the of the Law on Education, however, estab- In Article 33, para. 10, of the RF Law “On requested service, without favouring one lishing a licensing procedure is a matter for education”, reference is made to “average customer over another. The Rules, how- the Russian Federation (not the executive statistical indicators”, without any further ever, make no mention of the possibility of agencies). Generally speaking, it is advisa- indication as to what the term implies. As legal action to force an educational institu- ble that the basic principles of licensing in
Corruption in education in the Russian Federation 168 Project “Russian Federation – Development of legislative and other measures for the prevention of corruption” (RUCOLA 2) the education sector be enshrined directly and liquidation of federal state educational Lack of competitive (bidding) in law. institutions. procedures These provisions have not been imple- The Federal Law “On higher and postgrad- Failure to adopt a regulatory mented at federal level. uate professional education” provides for legal instrument state support in training specialists for pri- ority areas of scientific research in higher Article 7, para. 4, of the RF Law “On ed- Lack of public scrutiny of the and postgraduate professional education ucation” provides for the adoption of a activities of educational (Article 1, para. 5). It is not specified, how- federal law establishing the basic provi- institutions ever, how matters relating to state support sions for national educational standards in are to be dealt with. It seems sensible that primary general, basic general and second- such support should be allocated solely on ary (complete) general education and the Under Article 41, para. 8, educational insti- the basis of competitive bidding proce- procedure for their development and ap- tutions may receive additional funds, in- dures and that this should be clearly stated proval. cluding through voluntary donations and in law. At present, however, the development targeted contributions from individuals of educational standards is governed by the and/or legal entities. In practice, however, RF Government, which delegates many voluntary donations from individuals often Lack of administrative areas to the federal executive agencies. mean voluntary-compulsory charges procedures Regulation thus occurs at a lower level and imposed on parents of students. the appropriate regulatory legal instru- It is important to recognise that the The Federal Law “On higher and postgrad- ment is not adopted. This in turn hampers charges levied in educational institutions uate professional education” does not the implementation of Article 43, para. 5, are due primarily to underfunding and specify the procedures for agreeing/co-or- of the RF Constitution which requires the cannot always be classed as corruption. dinating the setting-up of branches of Russian Federation to establish federal There is no corruption if the money is federal state higher educational institu- state educational standards, and maintain spent exclusively on meeting the needs of tions ( Article 8, para. 3) or for the academic different forms of education and self-edu- the institution. Because there is no legal council’s decision to create the post of cation. mechanism for monitoring the way funds president of a higher educational institu- There are no legal instruments govern- are used, however, instances of abuse on tion (Article 20, para. 3.1). ing the procedure for the granting to, and the part of heads of educational institu- Nor does it deal with the procedure for repayment by, citizens of state educational tions are not uncommon. approving the Regulations on performance loans, as referred to in Article 28, para. 16, review committees and their membership of the RF Law “On education”. This omis- In order to prevent possible abuses, it (Article 12, para. 4, of the Federal Law “On sion makes for a highly “individual” ap- seems sensible to require educational insti- higher and postgraduate professional edu- proach to granting educational loans and, tutions to inform students and/or their cation” ). parents about how the extra funds raised hence, corruption. It is unclear how executive agencies, ex- are spent, either by publishing the informa- The provisions of Article 5, para. 5, of ecutive-administrative bodies of city dis- tion or by presenting students and/or their the Law on Education providing for the tricts and academic councils of higher parents with an annual financial report. adoption of federal laws establishing for educational institutions are to consider federal state educational institutions the and act on recommendations made by categories of citizens to whom social assist- NGOs and state-public associations within ance shall be granted, the procedure for Excessive requirements for the system of higher and postgraduate pro- granting such assistance and its scope, have persons wishing to exercise fessional education (Article 15, para. 5, of not been fully implemented. Specific social their rights the Federal Law “On higher and postgradu- support measures appear only in the ate professional education”). Federal Law “On higher and postgraduate Erecting excessive barriers to entry to edu- Larissa Sannikova has observed that in professional education” ( Article 16, paras. cational establishments at all levels is a Russian educational institutions, the prac- 3 and 3.1). As regards students of other ed- major corruption risk factor. Nowadays tice of extorting money from students or ucational institutions, no provision for testing (or other forms of selection) is used their parents in the form of gifts for teach- social support exists in federal law. It is felt for admission to educational institutions ers and tutors is relatively widespread. In that this could hamper the implementation practically everywhere. However well-in- Article 575, para. 2, of the RF Civil Code, it of Article 43, para. 2, of the RF Constitu- tended, such testing poses another barrier, is permitted to give gifts to staff of educa- tion which guarantees universal, free and corruption becomes a way of overcom- tional and other similar institutions pro- access to pre-school, general secondary ing it. vided their value does not exceed five times and vocational secondary education in the minimum wage. In Ms Sannikova’s state and municipal educational institu- What is needed, therefore, is a legisla- view, this rule carries a risk of corruption as tions and enterprises. tive ban on all admission tests and the a similar rule with regard to state employ- Article 28, para. 6, and Article 34 of the practice of using their results to determine ees has already been widely recognised as RF Law “On education” provides for the admission to state and municipal educa- corruptive and is to be removed from the adoption of federal laws establishing the tional institutions in pre-school, general RF Civil Code. Simply removing such pro- procedure for the creation, reorganisation and primary vocational education. visions from the Civil Code is clearly not
Final report: Appendices, Volume 1 Project “Russian Federation – Development of legislative and other measures for the prevention of corruption” (RUCOLA 2) 169 enough, however. Ms Sannikova suggests that at present, the maximum permissible Overall, Quentin Reed considered that introducing a strict ban on all gifts, irre- value of gifts was equivalent to the average the application of the methodology for spective of their value, to the above-men- wage of workers in the budget-financed identifying corruption risks could not tioned categories of persons, so that the sector. Instead of raising the pay of budget- identify the key problems unless it was public will start to see such practices as a sector workers, the state was thus effec- carried out together with a wider assess- corruption offence. tively legalising the system whereby ment of the functioning of Russia’s educa- In the course of the discussion, certain workers lived off gifts. In order, therefore, tion system as a whole. First and foremost, of the experts’ proposals drew criticism. to eradicate such practices and develop there was a need to carry out an analysis of Doubts were expressed about the wisdom public intolerance to them, it was proposed the financing of the education system, in- of banning the use of admission test results that a strict ban be introduced, with no cluding an assessment of the funding for entry to state and municipal educa- mention, however, of possible criminal needed, in order to ensure that the educa- tional institutions, on the ground that stu- consequences. Quentin Reed felt that the tional services envisaged by Russian legis- dents needed to have particular natural maximum permissible value of gifts in lation could be provided in practice. There qualities and abilities to study in specialist Russia was too high, but also that to ban all was also a need to use public expenditure educational institutions (e.g. music or gifts would be too extreme. In his view, tracking surveys to identify any financial sports academies). Quentin Reed argued in there ought to be sensible limits on the leakages. On the subject of funding analy- favour of allowing gymnasia and other spe- value of gifts and the maximum threshold sis, it was very important to carry out re- cialist educational institutions to keep the should be reduced through legislation so as search on the incidence of corruption in right to employ competitive methods of se- to avoid the danger that even very small the education sector and on the various lection. gifts might become grounds for prosecu- types of informal, unofficial payments for Another subject of heated debate was tion. services in teaching and education in gen- Ms Sannikova’s proposal that the giving of The proposal that educational institu- eral. gifts to teachers and other staff of educa- tions should shift to a system of financing In the light of the anti-corruption eval- tional institutions should be banned, irre- based on the number of students was criti- uation and after discussing its findings at spective of their value. Vladimir Yuzhakov cised as many rural schools would in that meetings with the European expert, expressed the fear that scrapping the exist- case be threatened with closure. The Quentin Reed, the Russian experts, Larissa ing right of workers in education, health- experts agreed that these fears were justi- Sannikova and Elvira Talapina, developed a care and other budget-financed fied, with Quentin Reed pointing out that set of proposals for improving the legisla- institutions to receive gifts would do “per capita funding” was only one of the tion so as to prevent corruption in educa- nothing to reduce corruption, and merely ways in which transparency could be tion. swell the list of practices that were deemed ensured in the financing of educational in- to constitute an offence. Ms Sannikova said stitutions.
Corruption in education in the Russian Federation The creation of the anti-corruption body in the Russian Federation
A conference of Russian and international tion against Corruption and the Council of ficient police bodies and a good state pros- experts was held on 19 December 2006 Europe Criminal Law Convention on Cor- ecution system to combat corruption. But with the aim of studying best practices of ruption, as well as the Russian Federation’s recent experience showed that that was not European countries in the creation and forthcoming accession, in the next two enough. It was precisely for that reason functioning of a specialised body responsi- months, to the Group of States against cor- that the United Nations Convention ble for co-ordinating national efforts in the ruption (GRECO). against Corruption had been adopted. As a sphere to prevent and combat corruption. The Chairman of the Slovenian Com- result, many countries had begun to When opening the seminar, the chair- mission for the Prevention of Corruption rethink their attitudes towards creating man of the Russian Federation State Duma and Chairman of the GRECO group, specialised anti-corruption bodies. Commission on combating corruption, Drago Kos , then presented the base report To create an effective and genuinely Mikhail Grishankov , informed the partic- on “Experience of European countries in useful anti-corruption body it was firstly ipants of his involvement in the Octopus the sphere of creation and functioning of a necessary to determine and identify the project conference held in Strasbourg in specialised body responsible for the co-or- concrete problems faced by the country in November where discussion had focused, dination of national efforts in the sphere of question. It also had to be clarified what among other aspects, on steps taken to combating and prevention of corruption”, type of corruption was involved, what kind comply with the requirements of interna- analysing the fundamental requirements of of corruption was being encountered by tional anti-corruption conventions in dif- international law regarding specialised citizens and businessmen. Was it across ferent European countries. Mikhail anti-corruption bodies and the ways in the board, taking in different sectors of Grishankov also pointed out that a meet- which those requirements had been met in state administration, was it large-scale in ing, chaired by the Russian President, different countries (see report in this col- terms of the amounts involved? It was also Vladimir Putin, had been held on 21 No- lection of documents). necessary to analyse the experience of ex- vember, with discussion also covering In particular, he pointed out that, to isting institutions and determine whether questions of anti-corruption efforts of law- combat corruption successfully, it was nec- these problems could be resolved by creat- enforcement agencies and problems of essary, among other things, to implement ing new bodies or by improving efforts complying with the standards laid down in the twenty guiding principles for the fight through better co-ordination between ex- the United Nations Convention against against corruption ratified in the relevant isting bodies and closer inter-departmental Corruption and the Council of Europe Council of Europe resolution. Those prin- co-operation. Criminal Law Convention on Corruption, ciples established the key requirements for When considering these issues States particularly in relation to the framing of anti-corruption bodies and included: inde- could reach the conclusion that it might Russia’s anti-corruption strategy. Clearly, pendence and autonomy, freedom from require specialised anti-corruption bodies, the issue of creating a specialised body or improper influence, adequate resources in which case they had to make such bodies bodies responsible for co-ordinating state and close specialisation. truly effective. measures to combat and prevent corrup- Furthermore, these principles allowed Firstly, they had to decide on which tion is highly topical. more than one anti-corruption body to be legal basis anti-corruption bodies were to Alexander Seger, head of the Council of set up in a country. This had to be deter- be set up. In one country, to take the Europe’s Economic crime division, pointed mined by the real political situation and example of Serbia, anti-corruption bodies out in turn that the most important prereq- legislation of each individual country. had been created for the sole purpose of uisite for successfully combating corrup- Anti-corruption bodies might take solely meeting the requirements of international tion was political commitment and punitive or preventive measures or organisations and the international com- support, and stated his belief that the nec- combine these with other measures. But, munity. A so-called anti-corruption com- essary political backing and will for serious whatever the case, they had to implement mittee had been created simply by measures now existed in the Russian Fed- the measures laid down by the anti-corrup- governmental decree. As soon as the com- eration. He also welcomed the steps taken tion policy of the country in question. mittee had started its work, the govern- in the Russian Federation, particularly the In some countries, the legislators had ment itself had immediately begun to exert ratification of the United Nations Conven- concluded that it was sufficient to have ef- pressure on it and it had only been public
170 Project “Russian Federation – Development of legislative and other measures for the prevention of corruption” (RUCOLA 2) 171 vigilance that protected it. But the se- the allocation of the necessary funding that were concerned, examples included the quence of events itself showed that a spe- demonstrated political will, because commissions in France, Slovenia and a cialised anti-corruption body had to be without funding such bodies would be of number of other countries. created on the basis not of sub-legal acts no use. But the most effective bodies were but on a foundation of law, a legal act There were a number of other condi- those fulfilling both repressive and preven- adopted by parliament, in order to reduce tions linked to the activities of anti-corrup- tive functions, such as those set up in the risk of that body being destroyed by po- tion bodies: objectivity, professionalism, Croatia, Latvia and Lithuania. litical forces not happy with its work. Un- impartiality, honesty, integrity, effective- On the whole, it could be concluded fortunately, that was exactly what was ness . If those conditions were not met, that the creation of specialised anti-cor- happening in a number of countries at these bodies’ activities could very easily be ruption bodies was a good indicator of a present, notably in Slovenia. discredited and restructuring or even abo- country’s willingness to combat corrup- Secondly, the nature of the future body lition might result. This had already hap- tion, but if those bodies did not receive the had to be determined. Would its function pened in countries like Albania, necessary resources for their work, their be repressive, clamping down on and pun- Macedonia, Serbia and Slovenia. For the creation would mark just another failure in ishing existing abuses, or would it be to time being specialised anti-corruption the fight against corruption. prevent corruption? If there was no partic- bodies in Latvia, Lithuania and Estonia Next to speak, on the report on the ular need for a body with a repressive func- were still free from this kind of pressure. issue of establishing in Russia a specialised tion, then there was no point in creating The GRECO Group of States against body or bodies responsible for co-ordinat- one. If the public previously trusted the ex- Corruption analysed the functioning of ing national efforts on combating and pre- isting law enforcement agencies and the ju- such bodies and assessed their activities. In venting corruption was Elena Panfilova , dicial system, then it was very risky to the GRECO group’s work it had emerged director of the Centre for anti-corruption create another, new repressive anti-cor- that the so-called transition countries were research and the Transparency Interna- ruption body with investigative functions. very keen to create and develop anti-cor- tional Russia initiative. At the request of The division of labour between existing law ruption bodies. On the other hand, long- participants at the previous seminar, she enforcement agencies and the new body standing members of the European Union had focused her report not only on prob- would generate problems which might be which also had high levels of corruption lems directly related to the setting up of an very difficult to resolve. gave no consideration to the necessity of anti-corruption body in Russia but also on Thirdly, it was necessary to be clear as creating specialised anti-corruption bodies analysis of data assessing the level of cor- to the status of a future anti-corruption (Italy, Spain, Greece). It was obvious that ruption in the Russian Federation. body within the system of state authorities . double standards existed between the older The rapporteur began by pointing out This body was required to be independent, members of the EU and its new members. that the need to set up a specialised anti- but of course that did not mean absolute It was equally clear that in most countries corruption body in Russia was not only independence. Independent though it there was a shortage of well-trained staff due, but long overdue, as the task of ac- might be, an anti-corruption body had to specialised in combating corruption. tively and comprehensively combating cor- be accountable to someone. Usually such Analysis of the overall experience of ruption set in 2006 by the country’s highest bodies were subordinate to a legislative creating and operating specialised anti- political leadership could not be fulfilled if body and its activity had to be meticulously corruption bodies in Europe suggested that the current situation was maintained. By regulated, especially if it was assigned re- all countries had attempted to one degree December 2006 virtually all more or less pressive functions, particularly if these or another to create some semblance of significant authorities in Russia had pub- were linked to any degree with restrictions one: in some cases solely with repressive licly stated their determination to actively of human rights. A system had to be functions, in other cases solely with pre- participate in combating corruption. Anti- devised to supervise its activity to ensure ventive functions and then others with corruption initiatives had been launched that rights were not violated. mixed functions. by the State Duma, the Russian Federation Fourthly, prior provision had to be One well-known example was the re- Government, the Prosecutor General of made for effectively settling the problem of pressive activities of anti-corruption the Russian Federation, the Higher Court guaranteeing adequate resources for such a bodies in Italy, in the “Clean hands” opera- of Arbitration of Russia, the Russian Minis- body . In some countries remarkable anti- tion, where the role of anti-corruption try of Economic Development and Trade, corruption bodies had been created with body had been fulfilled by a group of pros- the Russian Ministry of Finance and so on. the most wide-ranging functions. They had ecutors based in Milan. They had investi- All those initiatives had in one way or been granted independence within the gated the activities of nearly three another set the objective of an instrumen- social structure but they had not been thousand suspects, including members of tal fight against corruption but were totally given the necessary resources. And if such parliament, and 500 or so of these had been unco-ordinated and chaotic. a body existed only on paper, it was not convicted for corruption. When the politi- It was interesting that, in line with the going to solve the problem. Specialised cal powers had turned against this activity, requirements of the Blueprint for adminis- anti-corruption bodies had to have their it had to be wound down. A similar sce- trative reform for 2006-2008 approved by a own independent budget. They had to be nario had been played out in Romania, Russian Federation Government order of able to take independent action to involve where the activities of an independent anti- 25 October 2005, the constituent entities of the top specialists in a given field in their corruption body had been substantially re- the Federation and Russian state authori- work. Adopting legislative acts and creat- stricted after it had ruffled the feathers of ties were devising and adopting province- ing anti-corruption bodies on paper alone the highest echelons of the country’s polit- wide and departmental anti-corruption proved little in terms of political will. It was ical leadership. As far as preventive bodies strategies respectively. While this was un-
The creation of the anti-corruption body in the Russian Federation 172 Project “Russian Federation – Development of legislative and other measures for the prevention of corruption” (RUCOLA 2) deniably a constructive process, it was very According to VTSIOM data from Nov- market and actual procurement prices av- far removed from any systematic effort, ember 2006, only 1% of citizens lived in eraged 16.1%. and a paradoxical situation was now being blissful ignorance of such a widespread In the light of all these data the rappor- created in which an anti-corruption strat- phenomenon as corruption; the same teur concluded that corruption in Russia egy and plan would exist in individual amount believed that corruption in the was systematic in nature and all institu- provinces and state departments but not at country was non-existent. The survey re- tions of public administration were af- national level. vealed that 78% of respondents defined the fected by it, including law enforcement level of corruption as “high” and “very agencies and the judicial system. Elena Panfilova then considered the re- high”. 43% of respondents believed that the Her conclusion pointed to the need to quirements of international anti-corrup- main cause of corruption was greed and create a specialised anti-corruption body tion legislation regarding the creation of immorality of Russian officials and busi- capable of implementing an integrated specialised anti-corruption bodies and em- nessmen; 35% inefficiency of the State and anti-corruption programme incorporating phasised the importance in the Russian the imperfections of law; 18% the low level three fundamental components: prosecu- context of implementing the principle of of legal culture and the low number of law- tion for corruption offences, prevention of independence. She also made a detailed abiding citizens among the population. corruption offences and anti-corruption analysis of the arguments in favour of com- The majority (38%) saw the improvement education. bining efforts to prosecute acts of corrup- of the legal base as a solution to the corrup- tion with preventive efforts and set out the For such a three-pronged approach, the tion problem. 16% of respondents called basic task facing Russia, which, after trans- activity of an anti-corruption body had to for the introduction of the death penalty posing these framework requirements to be based on the following principles: for corrupt officials, while 36% called for the real institutional and political situation the confiscation of property for bribe- Legitimacy in the country, would have to select the takers and members of their family and The establishment of a national specialised most suitable and effective type of special- 26% wished cuts in public service staff. On anti-corruption body had to be enshrined ised anti-corruption body, which on the the other hand, 11% of respondents fa- by a legal act specifying its objectives, one hand would pursue activity fitting har- voured legalising the least socially damag- functions, structure, accountability and moniously into the existing legal and insti- ing types of corruption, such as tips or gifts principles of formation and financing. tutional system and on the other hand to doctors and teachers. would be as independent as possible from Independence According to the Transparency Interna- political circumstances and not become a A specialised body had to be independent tional Global Corruption Barometer for travesty. from the executive authorities of the corruption worldwide (November 2006), Russian Federation. Given the specific The first step had to be a detailed anal- the share of Russians and members of their character of Russia’s political and govern- ysis of the state of corruption in Russia. family giving bribes in the previous year mental system, it should be accountable The rapporteur presented a vast array of had amounted to 8% and 9% respectively. only to the Federal Assembly of Russia or data from different sources, characterising Russians viewed the corruption level in the Russian President. the level of corruption in the country. Ac- personal and family life as very low (1.9 out cording to research by the Public Opinion of 4 points, with 1 equalling zero level of One-man management Foundation as of November 2006, 67% of corruption). However, if Russians were Considering the particularities of polit- Russians believed that corruption would asked not about personal bribes, but about ical and management practice in Russia it never be eradicated from the country, and corruption in the areas they had to deal was necessary that, firstly, management of 79% believed that even raising salaries paid with, the situation became clearer. They the specialised anti-corruption body to officials would not help. 28% of Russians encountered most corruption when they should not be combined with a manage- had encountered extortion on the part of dealt with police (4 points out of 5 with the ment post in any other public institution public servants in recent years, and practi- average at 3.5). Russians were also very (law-enforcement agency), and, secondly, cally the same number of respondents had much aware of corruption in legislative au- the specialised anti-corruption body given bribes to officials. thorities, the legal system and business (all should be headed by a single manager at 3.9). In reply to the question as to where the whose appointment had to be ratified by need to “grease palms” arose most fre- Elena Panfilova also presented data on the Federal Assembly of the Russian Feder- quently, police and the customs were indis- corruption in the business world (from re- ation (one or both Chambers) at the pro- putably in the lead (52%). 45% of Russians search by the World Bank, World Eco- posal of the Russian Federation President. mentioned traffic police, 33% medical in- nomic Forum and European Bank of stitutions, 26% the prosecutor’s office and Reconstruction and Development), with Collegiality courts, 21% military registration and en- special emphasis on the findings of the Na- Strategic planning of the specialised anti- listment office, 18% education, the same tional transparency rating of procurement, corruption body’s activity and organisation number local authorities; 12% believed which showed that by the end of 2006 the of its day-to-day operation should be co- that the biggest bribe-takers were federal total market loss from procurement at ordinated by a collegial entity (council, level officials. It was noteworthy that 70% overstated prices would reach about 650 board) consisting of highly qualified repre- of Russians condemned bribe-takers, but billion roubles. At the same time public sentatives of state authority, law-enforce- at the same time most of them would will- agents’ losses would reach about 300 ment agencies, judicial system and civil ingly accept bribes if given. Those con- billion roubles – more than 45% of the total society organisations. The principles of demning people who gave bribes were in amount. The weight-average price devia- forming such a collegial entity should be the minority: 38%. tion, characterising discrepancy between clearly defined by a legal prescriptive act
Final report: Appendices, Volume 1 Project “Russian Federation – Development of legislative and other measures for the prevention of corruption” (RUCOLA 2) 173 establishing a specialised anti-corruption Utilising international experience political leadership, the seminar partici- body. When setting up the specialised anti-cor- pants had to examine or devise all possible ruption body it was necessary to thor- variants to be derived from international Representation oughly study, analyse and, where possible experience. It was particularly important in this respect to look at examples of coun- A specialised anti-corruption body should and relevant, apply international experi- tries where the implementation of anti- employ (both for management purposes ence in establishing and running such spe- corruption programmes and the work of and day-to-day activity) on a full-time cialised bodies, especially with regard to anti-corruption bodies had encountered basis the most highly qualified personnel ensuring independence, determining the specific problems. from the federal ministries, departments, number of employees, operational func- The representatives of the Prosecutor regional authorities, specialised civil tions etc. General’s office of Russia explained to the society organisations and expert institu- Phasing seminar participants how they viewed the tions having experience in combating cor- Given that the main forces of institutional problem of organising anti-corruption ruption. The legal prescriptive act anti-corruption activity were currently efforts in Russia. They held the opinion establishing the specialised anti-corrup- scattered and there was still no common that, since the United Nations Convention tion body should define its staffing princi- understanding in Russia on what a special- against Corruption provided for the possi- ple so that it would include representatives ised anti-corruption body should do, the bility of creating a specialised anti-corrup- of the Presidential Administration, the creation of such a body should be planned tion body within the framework of existing Russian Federation (RF) Government, the in several phases. law-enforcement agencies, the Prosecutor State Duma of the RF, the Federation General’s office of Russia could perfectly Council of the RF, the Supreme, Constitu- In the first phase it would be expedient well take on this function, as it already tional and Supreme Arbitration Courts of to set up a temporary co-ordination body, dealt with many of the tasks to be handled the RF, the Prosecutor General’s Office of consisting of all the interested stakeholders by a specialised anti-corruption body in the RF, the RF Ministry of Internal Affairs, (representatives of the Presidential Admin- the framework of its existing powers. To il- the RF Ministry of Justice, the RF Ministry istration, RF Government, the State Duma lustrate their point, they gave a detailed de- of Economic Development and Trade, the of the RF, Federation Council of the RF, the scription of the work of the Russian RF Ministry of Finance, the Central Bank Supreme, Constitutional and Supreme Ar- Federation Prosecutor General’s office of the RF, the Federal Financial Monitoring bitration Courts of the RF, Prosecutor where the prevention of corruption was Service, the Chamber of Audit of the RF, General’s Office of the RF, RF Ministry of concerned. This function had been made a other ministries and departments as well as Internal Affairs, RF Ministry of Justice, RF stronger focus of attention within the Pros- specialised civil society institutions and Ministry of Economic Development and ecutor General’s office in recent times and expert institutes. Trade, RF Ministry of Finance, Central Bank of the RF, Federal Financial Monitor- over a six-month period in 2006 a great many checks had been made to ensure that Co-ordination ing Service, Chamber of Audit of the RF, other ministries and departments as well as officials at different levels complied with The legal prescriptive act establishing a specialised civil society institutions and the restrictions and prohibitions laid down specialised anti-corruption body should expert institutes). Following the same basic in Russian legislation regulating civil serv- stipulate mandatory co-ordination of ac- principles in its work, the co-ordination ice. They also expressed the view that in tivity of state authorities, Russian Federa- body would prepare the way for the crea- the Prosecutor General’s office itself this tion courts and law-enforcement bodies tion of the specialised anti-corruption was not such a pressing issue as in the other with the specialised anti-corruption body body and devise a national anti-corruption law-enforcement agencies. in order to implement a national anti-cor- strategy as well as resolving some of the The seminar participants then dis- ruption strategy. most acute anti-corruption issues in the cussed in detail the question of compara- short term. bility of data on the level of corruption in Transparency Elena Panfilova went on to consider dif- Russia. It was said that it was difficult to ferent structures for a specialised anti-cor- assess the real state of affairs in the country The activity of the specialised anti-corrup- ruption body, which would have to closely solely on the basis of public opinion sur- tion body should be as transparent as pos- comply with the key principles underpin- veys. Factual information from the state sible. The legal prescriptive act establishing ning its activity and the main objectives of authorities themselves was lacking or in- such a body should make binding provi- national anti-corruption strategy in Russia: complete in a great many cases. It was sions for accountability of this body to the prosecution for corruption offences, pre- pointed out that a state authority and public. This could take the form of manda- vention of corruption offences and anti- public and specialist organisations should tory detailed annual reports as well as corruption education. sit down together and explore the possibil- monthly or quarterly progress reports. In the course of discussion, the seminar ity of carrying out joint research into the state of corruption in the country using an Independent financing participants focused on the problem of correlating the tasks of devising national agreed methodology. In order to avoid pressure on the spe- anti-corruption strategy and creating a Further discussion centred on the cialised body from any state or representa- specialised anti-corruption body. Mikhail issues of guaranteeing the independence, tive authorities, it was necessary to Grishankov pointed out that, since there including in financial matters, of a special- stipulate a form of financing which would was a real demand for proposals for the de- ised anti-corruption body, the necessary be independent as far as possible – e.g. a vising of a national anti-corruption strat- involvement, including through wide- separate fixed budget line. egy from the country’s highest level of spread information, of society and business
The creation of the anti-corruption body in the Russian Federation 174 Project “Russian Federation – Development of legislative and other measures for the prevention of corruption” (RUCOLA 2) in the debate on the systematic combating porary co-ordination body had to include tion body. And while it was impossible to of corruption and also departmental ap- representatives of the Presidential Admin- guess what conclusions and findings the proaches by different state authorities istration, RF Government, the State Duma inter-departmental group would ultimately towards combating corruption. There was of the RF, Federation Council of the RF, the arrive at, it could be assumed that, firstly, it specific discussion on the question of pri- Supreme, Constitutional and Supreme Ar- would draw inspiration in its decisions orities, with emphasis on the great impor- bitration Courts of the RF, Prosecutor from the obligations entered into by Russia tance of devising a system of priorities General’s Office of the RF, RF Ministry of under the international conventions it had since, with corruption in Russia on such a Internal Affairs, RF Ministry of Justice, RF ratified, and, secondly, it would have to broad and all-embracing scale, any attempt Ministry of Economic Development and choose a format for the body from three to tackle every aspect straight away would Trade, RF Ministry of Finance, Central known options for organising anti-corrup- result in total chaos. Bank of the RF, the Federal Financial Mon- tion efforts: a separate specialised anti-cor- itoring Service, Chamber of Audit of the ruption body; a body incorporated into one In conclusion, the seminar participants RF, other ministries and departments as of the existing law-enforcement agencies; agreed that, in a context where corruption well as specialised civil society institutions or an advisory/co-ordination body within in the country was of a systematic nature and expert institutes. The creation of a one of the highest state authorities. and penetrated all spheres of state admin- continuously functioning specialised anti- istration and the economy, Russia needed The rapporteur began her report with a corruption body in Russia had to be to create some form of specialised anti- brief overview of the international require- founded on operating principles of legiti- corruption body. In the context of the situ- ments for a specialised body and the possi- macy, independence, one-man manage- ation that had come about, where anti-cor- ble variants for implementing a blueprint ment, collegiality, representation, ruption efforts in their present form were for a specialised anti-corruption body in transparency, co-ordination, independent dispersed throughout numerous authori- Russia. financing and utilising international expe- ties, ministries and departments, and there Elena Panfilova pointed out that rience. was no clear understanding or agreement, Article 6 of the United Nations Convention in society as a whole or within the state au- A seminar of Russian and international against Corruption stipulated that thorities, as to the form, founding princi- experts was held on 25 April 2007 with the “each State Party shall, in accordance with ples and objectives of a specialised anti- aim of presenting recommendations on the the fundamental principles of its legal corruption body, it was now necessary to creation of a national anti-corruption system, ensure the existence of a body or set up a co-ordination body for combating strategy as well as a specialised body re- bodies, as appropriate, that prevent cor- corruption which could handle the follow- sponsible for co-ordinating overall state ac- ruption by such means as: ing tasks in the short term: systematisation tivity in the area of preventing and – implementing anti-corruption policy of available data on the level of corruption combating corruption in the Russian Fed- and, where appropriate, overseeing and in Russia; in-depth investigation into the eration. co-ordinating the implementation of extent to which authorities in Russia were Introducing the seminar, the Council of that policy; contaminated by corruption (federal min- Europe expert Quentin Reed stressed that – increasing and disseminating knowl- istries and departments, regional and mu- it was extremely important to consider the edge about the prevention of corrup- nicipal authorities); gathering of question of concrete recommendations on tion. information from federal authorities re- the creation of a specialised anti-corrup- Each State Party shall grant such a body or garding proposals for ways and means of tion body in the context of the fundamental bodies the necessary independence, in ac- combating corruption and best practices of thrusts of framing a unified national anti- cordance with the fundamental principles departmental and regional anti-corruption corruption strategy in Russia. The nature of its legal system, to enable it/them to programmes; preparation of legislative ini- of the strategy would very much hinge on carry out its/their functions effectively and tiatives aimed at introducing domestic leg- the type of body assigned to implement it. free from any undue influence. The neces- islation in line with the standards of the Elena Panfilova , director of the Centre sary material resources and specialised United Nations Convention against Cor- for anti-corruption research and the staff, as well as the training that such staff ruption and the Council of Europe Crimi- Transparency International Russia initia- may require to carry out their functions, nal Law Convention on Corruption as well tive, presented the base report on the prin- should be provided. The State Parties shall as other legislative initiatives geared to ciples and format for creating a specialised inform the Secretary-General of the fighting corruption within the activities of anti-corruption body in Russia. She said United Nations of the name and address of authorities and institutions; ongoing mon- that, by Presidential decree of 2 February the authority or authorities that may assist itoring of anti-corruption efforts; devising 2007, an Inter-departmental working other States Parties in developing and im- of proposals for the format, functions and group had been set up to prepare proposals plementing specific measures for the pre- composition of a specialised anti-corrup- for implementing the provisions of the vention of corruption.” tion body; devising of proposals for the United Nations Convention against Cor- Moreover, Article 36 of the United framing of a national anti-corruption strat- ruption and the Council of Europe Crimi- Nations Convention against Corruption egy; holding of departmental and public nal Law Convention on Corruption in stipulated that expert debate on the corresponding pro- Russian Federation legislation. The aim of each State Party shall, in accordance with posals; drawing up of a legal prescriptive the working group was to devise proposals, the fundamental principles of its legal act governing the activity of a specialised some of them concerning the framing of system, ensure the existence of a body or anti-corruption body in Russia; drawing up national anti-corruption strategy and the bodies or persons specialised in combating of a legal prescriptive act laying down a na- principles and objectives underlying the corruption through law enforcement. Such tional anti-corruption strategy. The tem- functioning of a specialised anti-corrup- body or bodies or persons shall be granted
Final report: Appendices, Volume 1 Project “Russian Federation – Development of legislative and other measures for the prevention of corruption” (RUCOLA 2) 175
the necessary independence, in accord- yet to be created. However, in those coun- traditional punitive actions. The same ance with the fundamental principles of tries where such anti-corruption agencies point could be made about public educa- the legal system of the State Party, to be had been set up, they had impressed by the tion linked to preventing corruption, con- able to carry out their functions effectively effectiveness of their work. sidered by many within the Prokuratura as and without any undue influence. Such When considering the possible variants an ineffectual activity falling within the persons or staff of such body or bodies for implementing a blueprint for a special- remit of other departments. should have the appropriate training and ised anti-corruption body in Russia, the And yet in Federal law no. 2202-1 “On resources to carry out their tasks. first consideration was whether existing the Prokuratura of the Russian Federation” Accordingly, the United Nations con- law-enforcement agencies could be used of 17 January 1992 (subsequently amended vention unequivocally stated that in each for this purpose. It was generally thought and supplemented) there were distinct in- country having ratified the convention, in- that the most appropriate authority or dications of anti-corruption tasks desig- cluding in Russia, an anti-corruption body rather system for tackling the problem of nated in the United Nations and Council of had to perform a dual function: preventing corruption in Russia is the Prosecutor’s Europe conventions. Article 8 paragraph 1 corruption and prosecuting acts of corrup- Office or Prokuratura . of the Law stipulated that the Prosecutor tion. This was obviously a primary consid- Indeed, there were a multitude of unde- General and the prosecutors subordinate eration in choosing the format of a niable factors to bear this out. Firstly, under to him shall co-ordinate the crime-fighting specialised anti-corruption body for Article 151 of the Russian Federation Code activity of internal affairs bodies, Federal Russia. of Criminal Procedure on investigative ju- security service bodies and other law-en- The requirements of an anti-corruption risdiction, a preliminary investigation into forcement agencies. Under Article 4 para- body were also clearly specified in Article crimes against a state authority or the in- graph 2 of the Law, organs of the 20 of the Council of Europe Criminal Law terests of a state service or services of local Prokuratura “shall inform the public of the Convention on Corruption, which stipu- authorities (chapter 30 of the Russian Fed- state of lawfulness”. lated that countries signing up to the con- eration Criminal Code, pp. 285-293), obvi- vention ously including corruption offences, was In other words, if anti-corruption tasks “shall adopt such measures as may be nec- undertaken by investigators from the were indeed assigned to Russia’s Prokurat- essary to ensure that persons or entities are Prokuratura . Secondly, the organs of the ura , it would have to raise awareness of the specialised in the fight against corruption. Prokuratura enjoyed special status within scale of the corruption problem to the level They shall have the necessary independ- the system of state authorities and were de- indicated in the United Nations Conven- ence in accordance with the fundamental scribed as a “single centralised structure in tion against Corruption and the Council of principles of the legal system of the respec- which lower-ranking prosecutors are sub- Europe Criminal Law Convention on Cor- tive State, enabling them to carry out their ordinate to higher-ranking prosecutors” ruption. This supposed, among other functions effectively and free from any (Article 129 of the Constitution of the things, that the Prokuratura would take undue pressure. The States Parties shall Russian Federation). Thirdly, the special serious steps to prevent corruption, and ensure that the staff of such entities have procedure for appointing the Prosecutor not only to prosecute acts of corruption, as adequate training and financial resources General of the Russian Federation, namely well as actively participating in the devising for their tasks”. by the Federation Council at the proposal of a national anti-corruption strategy. The format and functioning of a spe- of the Russian Federation President (in ac- Creating a separate special anti-corrup- cialised anti-corruption body were set out cordance with indent “f” [“ е” in the original tion department was considered to be a in even greater detail in Council of Europe Russian] of Article 83 and indent “i” [“ з” in good means of combating corruption in a Resolution (97) 24 on the twenty guiding the original Russian] of the Russian Feder- situation where the law enforcement agen- principles for the fight against corruption. ation Constitution) guaranteed the inde- cies themselves were substantially contam- It was stated that countries had to ensure pendence of the Prokuratura in carrying inated by corruption and, as a result, there that those in charge of the prevention, in- out investigations. was no public confidence in them to carry vestigation, prosecution and adjudication At the same time there were doubts as out such a task. In the majority of States of corruption offences enjoyed the inde- to whether Russia’s Prokuratura alone with developed economies specialised pendence and autonomy appropriate to would be capable of fulfilling the objectives anti-corruption agencies were not set up, their functions, were free from improper set for an anti-corruption body by the but the problem of corruption was not of a influence and had effective means for gath- United Nations Convention against Cor- systematic nature in those countries. For ering evidence, protecting the persons who ruption and the Council of Europe Crimi- the other countries, where the spread of helped the authorities in combating cor- nal Law Convention on Corruption. It was corruption had hit a critical level that af- ruption and preserving the confidentiality stated in the previously quoted part of the fected the normal, effective functioning of of investigations. Furthermore, countries convention that such bodies must be re- authorities and reached virtually all had to promote the specialisation of sponsible for: a) implementing anti-cor- spheres of public life, the idea of creating a persons or bodies in charge of fighting cor- ruption policy and, where appropriate, special anti-corruption structure remained ruption and to provide them with appro- overseeing and co-ordinating the imple- highly topical. However, in practice, in priate means and training to perform their mentation of that policy; b) increasing and most States the continuing trend was to tasks. disseminating knowledge about the pre- unsuccessfully rely on the traditional law- In most countries a branch of state au- vention of corruption. To date there had enforcement agencies or create fanciful ad- thority specialising exclusively in the inte- been no sign of Prokuratura bodies devis- ministrative institutions to deal with cor- grated resolution of corruption problems ing a fully-fledged anti-corruption policy ruption problems, assigning responsibility and independent of other authorities had that would go beyond the framework of for anti-corruption measures to a human
The creation of the anti-corruption body in the Russian Federation 176 Project “Russian Federation – Development of legislative and other measures for the prevention of corruption” (RUCOLA 2) rights ombudsman, for example, as was the It could not be said that Russia had it within the work of the law-enforcement case in Uganda or Papua-New Guinea. always been in favour of creating a special- agencies of the Russian Federation. ised anti-corruption agency. There had When discussing the need to set up an In 2003 President Putin had created the been a few precedents but in each case autonomous anti-corruption body, various Council for combating corruption. Under Russian anti-corruption commissions had specialists often voiced similar arguments. Decree no. 1384 of the Russian Federation been advisory or working groups within Some of the arguments in favour of creat- President of 24 November 2003 the the structure of existing authorities. In ing a specialised body were as follows: Council was an advisory body to the Presi- 1992, under Russian Federation Govern- high-quality investigations and other good dent, set up for the purpose of assisting the ment Instruction no. 1761-r of 17 Septem- results were ensured by professional spe- President in exercising his constitutional ber 1992, a Government commission had cialisation; a high level of autonomy and powers. Under the Council a Commission been set up under the leadership of the profile of a body countered the likelihood for combating corruption and a Commis- Chairman of the Russian Federation Gov- of corruption among its officials; speciali- sion for resolving conflicts of interest had ernment, Yegor Gaydar “to consider issues sation in a given problem area engendered been set up. and devise proposals aimed at combating a more thorough approach to work; re- Recent regulatory initiatives aimed at corruption within the state civil service sponsibility for resolving the problem of an optimum organisational solution for system and the organisation of financial combating corruption should not be dis- anti-corruption measures reflected a will- and legal supervision of economic activity persed between a multitude of bodies, so ingness to rethink earlier approaches. On in key sectors of the economy”. that it was always clear who to call to the basis of Decree no. 129 of the Russian Federation President of 3 February 2007 an account for any failings; a new body was In line with Order no. 4891-1 of the Inter-departmental working group had guaranteed stronger public trust; clearing Supreme Soviet of the Russian Federation been set up, with responsibility for devising the decks and starting from scratch got rid of 28 April 1993, a Special commission for proposals for improving Russian legisla- of longstanding departmental bureaucratic investigating material linked to corruption tion in connection with the signature of problems; a new service was more flexible among officials had been set up within the anti-corruption conventions. The decree and mobile. structure of the Prosecutor General’s office established that, for the carrying out of the of the Russian Federation “for the purpose Other arguments were advanced tasks assigned to it, the working group was of objective and multilateral checking and against creating a separate anti-corruption entitled to: request and receive under the investigation of incidents of corruption, body: higher running expenses of an inde- established procedure the necessary mate- abuses of power and economic infringe- pendent department; investigation of cor- rial from federal authorities, authorities of ments”. In this connection it had been pro- ruption offences often required constituent entities of the Russian Federa- posed that the Prosecutor General departmental co-operation, which would tion and local authorities, as well as organ- introduce the post of first deputy prosecu- be hampered by the “individuality” of the isations; invite to its sittings officials of tor general as head of the special commis- new service; potential decline in the au- federal authorities, authorities of constitu- sion, responsible for its organisational and thority of traditional law-enforcement ent entities of the Russian Federation and operational management. agencies, particularly if the work of the local authorities, as well as representatives new body was successful; political imposi- Decree no. 103 of the Russian Federa- of organisations; set up permanent and/or tions stemming from a desire to control the tion President of 20 January 1993 had laid ad hoc working/expert groups on ques- activity of the new body and in certain down regulations “on the inter-departmen- tions falling within its competence and de- cases hamper its work. tal commission of the Russian Federation termine their composition; involve Special anti-corruption bodies had Security Council for combating crime and academics and specialists, including under been created in a whole host of States, in- corruption; the decision to create that body agreements, in individual projects under cluding: Hong Kong, Singapore, India, the had been set out in Decree no. 1189 of the the established procedure. In particular, Philippines etc. The most successful one Russian Federation President of 8 October the Decree had ordered the Inter-depart- was generally acknowledged to be the anti- 1992 “on measures to protect citizen’s mental working group to present proposals corruption service in Hong Kong. An inde- rights, maintain law and order and step up under the established procedure by 1 pendent anti-corruption commission had the fight against corruption”. The functions August 2007 for making the necessary been set up as long ago as 1973. The com- of the inter-departmental commission en- amendments to Russian Federation legisla- mission was an independent body subordi- tailed: providing the Russian Federation tion to implement international anti-cor- nate only to the Governor of Hong Kong, President and the Russian Federation Se- ruption texts, “including with respect to and its members were appointed by the curity Council with information and ana- determining/creating a specialised body Governor for six years, with no possibility lytical material; generalising the practice of empowered to co-ordinate anti-corruption of re-election. The commission was struc- combating corruption in ministries, de- efforts”. tured in accordance with its founding ob- partments and executive authorities of the So it was clear from this that Russia’s jectives: making involvement in corruption Russian Federation and preparing propos- leadership had been seeking appropriate offences carry a greater risk, restructuring als to prevent and combat such phenom- ways of implementing the functions of a bureaucracy with the aim of reducing the ena; organising checks of law-enforcement specialised anti-corruption body for quite causes of corruption, changing public atti- agencies for preventing crimes and corrup- some time. The Inter-departmental tudes towards corruption. It was along the tion on the instructions of the Russian Fed- working group set up several months pre- same lines that the current anti-corruption eration President; studying international viously had taken on the role of the transi- bodies in Croatia, Latvia, Lithuania and experience in combating crime and cor- tional co-ordination body mentioned at Slovenia had been created. ruption and drawing up proposals to utilise previous seminars, which had to prepare
Final report: Appendices, Volume 1 Project “Russian Federation – Development of legislative and other measures for the prevention of corruption” (RUCOLA 2) 177 definitive proposals for the format and count: the decision on such a body would militia or prosecution bodies ran the risk of function of a specialised anti-corruption be taken like any other highly important causing damage to those very bodies, in- body. decision affecting the structure of state ad- cluding a bloating of their staff and budget. If it was decided to create a separate ministration in the country; in other It was necessary in any case to give de- specialised anti-corruption body in Russia, words, it would be taken at the level of the tailed thought to the question of using ex- it could embody the best achievements of Russian Federation President, and there isting bodies to carry out the functions of a other countries’ specialised anti-corrup- were grounds for assuming that it would be specialised anti-corruption body. This re- tion bodies which had already demon- taken in the very near future. quired assessment both of the scale of ad- strated their effectiveness. The structure of The Chairman of the Slovenian Com- ditional resources, assignments and staff such a body had to reflect the founding mission for the Prevention of Corruption and of whether it was realistic and reason- principles of its work (one-man manage- and Chairman of the GRECO group, able to allocate functions to the body con- ment, collegiality, transparency etc), as well Drago Kos , then presented his analysis of cerned that were not related to its as the three basic thrusts of the national approaches to setting up a specialised anti- fundamental mission. anti-corruption strategy (prosecution, pre- corruption body. He began by expressing The question of organising anti-corrup- vention and education). In addition, the the hope that efforts made at previous tion efforts was a very difficult one. From a structure of the specialised anti-corruption seminars to prepare the bases of a national political viewpoint it was a very sensitive body had to take account of the federal anti-corruption strategy and set up a spe- and delicate issue. It was a matter to be structure of the Russian Federation and cialised anti-corruption body would be handled solely by professionals and could also cater for the necessity of co-ordinating taken into account and exploited by the not be given over to politicians alone. efforts with different bodies of state au- Inter-departmental working group prepar- Where the practical aspects of combating thority. ing proposals for implementing the provi- corruption were concerned, professionals Another option for setting up an anti- sions of the United Nations Convention had to be involved, and these had to be corruption body in Russia could be to against Corruption of 31 October 2003 and both prosecutors and law-enforcement of- create a consultative/advisory body for the the Council of Europe Criminal Law Con- ficers with the broadest possible profile. Russian President or the Russian Federa- vention on Corruption in Russian Federa- For that reason, the worst possible tion government, which would comprise tion legislation. move would be to create some consultative representatives of the Presidential Admin- Dwelling on the practical problems of body of a temporary, ad hoc nature to deal istration, the Russian Federation (RF) Gov- setting up a specialised anti-corruption with general questions of combating cor- ernment, the State Duma of the RF, the body in Russia, Drago Kos stressed that any ruption in the country. A consultative body Federation Council of the RF, the Supreme, decisions had to be in line with the United of this kind would change very little, with a Constitutional and Supreme Arbitration Nations Convention against Corruption great deal of discussion resulting in little Courts of the RF, the Prosecutor General’s and more specifically the choice from three action. Without serious commitment and Office of the RF, the RF Ministry of Internal possible formats for such a body. Firstly, resolution and without the input that pro- Affairs, the RF Ministry of Justice, the RF Article 6 stated that it had to be an inde- fessionals could provide in activities and at Ministry of Economic Development and pendent, autonomous body within the the stages of both drawing up and imple- Trade, the RF Ministry of Finance, the framework of the constitutional standards menting laws, it would achieve nothing. Central Bank of the RF, the Federal Finan- of the country in question and it had to deal It had to be ensured that the decision to cial Monitoring Service, Chamber of Audit with questions of anti-corruption strategy. be made took this into account. Obviously, of the RF, other ministries and depart- Article 36 of the United Nations Con- it would be very difficult to arrive at the ments as well as specialised civil society in- vention spoke of a specialised body or right solution because Russia was a big stitutions and expert institutes. Obviously, bodies implementing and putting into country and there were already many dif- such a body would operate on a periodical practice anti-corruption strategy. Accord- ferent structures, ministries and depart- basis and settle questions of the distribu- ingly there was reference to a body or ments, which dealt with these matters to tion of powers over the running of a spe- bodies dealing with completely different some extent. but it was important to cialised anti-corruption body between the tasks, namely prosecuting and punishing ensure that society and the authorities participating structures. This also had its people for corruption. It was easy enough came to the realisation that any decision pros and cons. The major difficulty in the to assign these functions to existing law- would be better than one to set up just functioning of a specialised anti-corrup- enforcement agencies, such as the militia another consultative body engaging only in tion body following this format was settling or prosecution bodies, but the question theoretical discussion on the question of the issue of how and between which de- arose as to how they were to be linked up combating corruption. partments the three basic functions of pre- with the tasks of preventing corruption When discussing the reports presented vention, education and prosecution were and educating the public. Moreover, the to them the seminar participants analysed to be allocated. There was a danger that, if anti-corruption strategy being adopted in in detail a whole host of key issues. Firstly, those functions were completely split up the country and the tasks of implementing they considered the functions to be as- between different departments with no co- it required those bodies to handle a signed to a specialised anti-corruption ordination between them, the impact of broader range of tasks going beyond their body. It was pointed out somewhat une- anti-corruption efforts would be minimal. initial brief. This in turn required the in- quivocally and firmly that a body tasked Whatever the case, when considering volvement and training of additional staff with effectively combating corruption had approaches to the choice of a specialised and the input of additional funding and to be assigned operational/search func- anti-corruption body for Russia, one fun- material resources. Implementing a func- tions (like the one in Latvia for example). damental factor had to be taken into ac- tion within the framework of existing This variant, as long as it deployed a clearly
The creation of the anti-corruption body in the Russian Federation 178 Project “Russian Federation – Development of legislative and other measures for the prevention of corruption” (RUCOLA 2) independent specialised body that was tional anti-corruption strategy and decid- legislation setting up the anti-corruption fully accountable to Parliament and ing on the format to be adopted for a body had to make it as institutionally far granted sufficient unambiguous and broad specialised anti-corruption body. It was removed as possible from such circles of powers, yielded clear results and enjoyed said that terrorism, corruption and organ- influence. public trust. ised crime had to be fought within the The seminar concluded with the rap- Secondly, they agreed that adopting a framework of a unified effort in terms of porteurs and participants discussing the consultative or advisory format for a spe- strategies and responsible bodies. It was importance of openness and transparency cialised anti-corruption body would be proposed that the experience gathered in in the activities of a specialised anti-cor- more counter-productive than anything the United Nations and other international ruption body. While all those present else. A theoretical anti-corruption body institutions be studied in greater detail. agreed that the specific nature of anti-cor- would not resolve the tasks of combating The issue was also raised as regards en- ruption efforts required a degree of confi- corruption in Russia. This body had to be suring real and not fictitious independence dentiality and professional secrecy, they independent and wield a sufficiently broad for a specialised anti-corruption body. It also concurred that without maximum range of powers to be able to really take was pointed out that there was of course no publicity for the achievements of such a things forward. such thing as complete independence. But body’s work and widely available informa- There was also discussion on the inter- in order to protect a specialised anti-cor- tion on its structure, tasks, funding and ac- relations between combating corruption ruption body as far as possible from pres- countability, it would be very difficult to and combating organised crime, and how sure from both corrupt politicians and win over the public support and trust re- those inter-relations could and had to be officials and organised crime groups in quired to combat corruption effectively in taken into account when framing a na- league with those politicians and officials, any country.
Final report: Appendices, Volume 1