PROTECT YOUR MUNICIPALITY An anti-corruption handbook Content Transparency International is the global civil society organisation leading the fight Putting ethics and anti-corruption on the agenda 4 Anti-corruption programmes in the municipality 23 against corruption. Through approximately 100 chapters worldwide and an international Purpose and organisation 23 The need for anti-corruption efforts in Values, attitudes and culture 23 secretariat in Berlin, Transparency International raises awareness of the damaging effects local government 5 Code of conduct for employees and elected officials 25 of corruption and works with partners in governments, business and civil society to Trust is essential for a large municipal sector 5 Risk analyses 26 develop and implement effective measures to tackle it. Consequences of corruption 5 A sound control system – self-monitoring and internal For reflection 6 control 28 Strategy for procurements 30 Transparency International’s Norwegian chapter was established in 1999 and has What is corruption, and how can it arise Whistle-blowing 32 its office in Oslo. in municipalities? 8 Key acts and rules that require compliance 34 Areas of risk in the municipalities 9 Democracy and political processes 9 Actions to implement the programme 35 Transparency International Norway The handbook is available in Norwegian and English Exercising authority 9 Support from the municipality’s management 35 Office address: Tollbugata 32, Oslo language editions, which also can be downloaded Service provision 10 Training 35 Mail address: P.O. Box 582 Sentrum, 0106 Oslo from Transparency International Norway’s website: Local community development 11 Internal and external information 36 Phone: +47 41750872 www.transparency.no and from KS’ homepage Corporate governance 12 Managing cases that are revealed - responsibility www.transparency.no www.ks.no/etikkportalen. Procurements 12 and consequences 36 From bad habits to corruption 14 Reporting and evaluation 37 Copyright: 2014, Transparency International Norway Disclaimer: Can a municipality be corrupt? 14 ISBN: 978-82-93348-07-8 The information and advice in this handbook is provided Examples of corruption cases in the municipal sector 15 Examples of ethical dilemmas 38 Graphic design: Nano Design with reservations against any errors or omissions. Illustration: Cathrine Finnema Transparency International Norway, and those who From areas of risk to forms of corruption 17 Postscript 39 Print: PJ Trykk have contributed with content, are not responsible Bribes 17 for any losses or damages claimed to result from the Contributions to political parties or candidates 17 content, or the lack of content, in this publication. Charitable gifts 18 Sponsorship 18 Extortion 18 Gifts, hospitality and expenses 18 Conflicts of interest and impartiality 19 Lobbying 21 Business relationships and partners 21 TI NORWAY | An anti-corruption handbook 2014 | 2 Putting ethics and anti-corruption The need for anti-corruption efforts on the agenda in local government The endeavours to secure high ethical standards and prevent corruption require Trust is essential for a large Confidence in local democracy and municipal insti- continual attention at municipal and county level. The citizens should feel secure that municipal sector tutions will be undermined when fraud or corruption is uncovered. Confidence will be reinforced when the both municipality and county safeguard the community’s interests, based on democratic Trust is essential for local municipalities and county municipalities, through their deeds and actions, show processes and a just handling of local jurisdiction. municipalities as they manage considerable assets that service production, exercise of authority and political on behalf of the community. Trust is achieved through decision-making processes are transparent, legal and consistent good practice. By delivering high quality verifiable. It also inspires confidence when municipalities In 2013 Transparency International Norway (TI Norway) By recognising the risk of corruption, local and county services, procedural processes and the exercise of demonstrate ability to uncover and deal with and the Norwegian Association of Local and Regional municipalities can work to prevent corrupt behaviour authority, municipalities can build a good reputation undesirable incidents in a satisfactory manner. Authorities (KS), launched the first version of their and thus increase the chances of uncovering potential while securing basic democratic values. “Protect the Municipality! An anti-corruption Handbook”. corruption. Sound control and monitoring procedures are Based on practical experience and feedback from many also important in preventing and uncovering irregularities The Local Government Act’s preamble contains a Consequences of corruption municipalities and counties, the handbook is now or corruption. powerful statement on what values should characterise presented in a new and enhanced edition. the municipalities’ activities: “The act must also make Few issues are so damaging to trust and reputation Local authorities can demonstrate that they take the risk provision for a confidence-building administration based as cronyism, favouritism, abuse of power, fraud or The handbook targets elected officials, managers of corruption seriously and maintain a high ethical on high ethical standards.” corruption. Several of the corruption cases uncovered and employees in local municipalities, county standard. They can emphasise that misusing public in the Norwegian municipal sector1 have been very municipalities and municipal enterprises. It can also positions and trust in order to obtain personal benefits Local democracy allows citizens to exercise influence serious and have attracted much attention. The be of use to party groups, organisations and private for themselves or others will not pay in the end. over their own communities. Municipalities are reputation of and confidence in the affected individuals who interact with municipalities or who authorised to make binding decisions on behalf of their munici palities can well suffer. provide goods and services to them. The manual has been prepared by TI Norway in communities, within nationally stipulated frameworks cooperation with the Norwegian Association of Local and based on a democratic mandate from the local Corruption implies several societal costs. Resources The handbook can be used in introductory programmes and Regional Authorities (KS), under the project- electorate. The municipal system is a cornerstone of may be used in other ways than intended, with weak for new employees; as a point of departure for heading “Transparency, integrity and anti-corruption Norwegian democracy. democratic support. Local democracy and people´s seminars in municipal enterprises; in trainings for in the municipal sector.” The undertaking has received confidence in the ability of elected officials to represent elected officials, and as a basis for municipal anti- financial support from the Norwegian Ministry of Local The scope and significance of Local Government the interests of the community may be undermined. corruption programmes. Government and Modernisation. • Municipalities provide basic welfare services to individuals and families. • Corruption leads to economic losses as it affects in- Politicians, executives and employees in the municipal • Municipalities exercise public authority that regulates dividuals, businesses and municipalities. Money and sector might find themselves in situations that allow basic conditions of people’s lives and lays down a benefits may enrich individuals who are not entitled them to misuse positions, trust and power. External framework for the development of local communities. to them. Costs and expenditures increase, while actors may also promote special interests and exert • More than 11,500 elected officials at local and municipalities’ ability and capacity to solve important pressures that can be difficult to handle and which thus Guro Slettemark Gunn Marit Helgesen regional level are responsible for activities in tasks and ensure high-quality services is reduced. will test the integrity of both the municipality and its Secretary General, Chairwoman of KS 428 municipalities and 18 county municipalities. The result is poorer public services, waste of public servants. Transparency International • According to the 2015 national budget, the municipal municipal funds and inefficient operations, as well Norway sector will have a total of NOK 435 billion at their as distorted competition. disposal, corresponding to almost NOK 85,000 per • Municipalities must adhere to the rule of law and person, which amounts to nearly 20 percent of GNP. ensure equal access and treatment. When corruption • 515,000 employees work in the municipal sector. affects the exercise of authority, it can lead to discrim- Approximately every fifth employed person in Norway inatory treatment that unethically or unlawfully might works in this sector. favour someone. On the other hand, other individuals, • In 2011 Norway had 2,547 municipality-owned com- organisations and enterprises may be negatively panies with a combined turnover of NOK 137 billion. affected. If a municipality abandons the principle 1 Collection of legally binding judgements under the penal code’s corruption provisions (TI Norway) 4 TI Norway | An anti-corruption handbook | 5 of equal treatment due to undue external influence, or contracts not being awarded to suppliers providing the confidence