Contributions from
the Column
Tribune

Martin Menski: GM crops in India: Caution on precautionary principle

Corinna Kreidler: Risk of corruption in humanitarian aid

Romeo Bertolini, Olaf Nielinger and Monika Muylkens: Prospects for African telecom markets


12/2006
  

[ Relief agencies ]

Risking embezzlement

Corruption in humanitarian aid is an under-researched issue. Traditionally, it was seen as an auditors’ problem, discussed behind closed doors as not to attract attention. Slowly but steadily, corruption is considered a management problem that can, and should, be addressed.


[ By Corinna Kreidler ]

In various forms, corruption affects relief agencies. Nepotism, bribery or plain diversion of funds should not occur, of course; but they do happen. Particularly in emergencies, several factors enhance the likeliness of such malpractices. Time pressure is always high, decisions on recruitment or simply on who to help must be made fast. The immediate need to save lives takes priority over detailed procedures; and media attention means that results must be presented fast.

Many emergency operations take place in conflict-ridden countries. Where insecurity restricts access to their beneficiaries, agencies sometimes hire private contractors to deliver goods for distribution by local authorities. Both contractors and authorities can embezzle the goods, however. They may sell them or distribute them according to their own priorities. Often, agencies must weigh the risks of fund abuse against those of becoming unable to help at all.

Obviously, there are many reasons why humanitarian aid is not immune to corruption. For several reasons, relief agencies nonetheless tend to shy from tackling this important issue. Controlling malpractices, for example, costs money and increases the share of funds spent on administration, whereas donors want every cent to benefit the victims of war or natural disasters.

Moreover, senior staff often find it hard to deal with the fact that colleagues may be involved in illicit practices. It is usually painful to recognise the signals of corruption; and investigating them is even tougher. Sometimes, those who raise such concerns are considered trouble-makers, and even the mere fear of being seen as such can inhibit a person’s readiness to diligently monitor procedures and practices. People on short-term assignments, on the other hand, may decide to simply not be bothered with these problems at all. As frequent turnover of staff reduces institutional memory, it may also be forgotten that a certain staff member or contractor has been found failing in the past. On top of all this, humanitarian agencies have reason to worry that detection of corrupt practices could lead to the withdrawal of donor support or, at least, demands that funds be repaid.

All summed up, there are many obstacles for checking corruption, even though the drawbacks are obvious. If those inclined to malpractice realise that little effort is made to stop them and that the risk of punishment is very low, corruption will continue or even spread. If, on the other hand, such practices become publicly known, the reputation of an aid agency can be shattered for good.

There are a number of fundamental principles in addressing corruption:
– transparency in decision making,
– publicity and openness in handling information,
– a “4-eye principle” throughout all procedures, and
– enforcement mechanisms for rules and regulations.


Setting examples

Transparent recruitment procedures help to avoid or, at least, reduce nepotism. It therefore makes sense to announce vacancies on the radio, in newspapers or in public places. Applications should be managed carefully, with all documents made available to the appointed decision-makers. Agencies would be well-advised to even resort to written tests and careful background checks. In poor countries, the public tends to be well informed about recruitment practices. After all, many people would like to have a well-paid job with an international agency. Inadequate recruitment procedures can spoil an agency’s public image. On the other hand, transparent and merit-based procedures will enhance any organisation’s reputation.

Bribery is illegal in most countries. Senior staff should not only forbid all such payments, they also need to set an example themselves. Even if tempted to take bribe-supported short-cuts when dealing with a foreign country’s cumbersome bureaucracy, for instance, senior staff should refrain from doing so. They should never instruct subordinates to effect such payments. If that happens once, there is no point in forbidding it the next time. “Receipts” for paid bribes must definitely not be accepted in the book-keeping.

Various procurement procedures are designed to reduce the risk of kickbacks. A standard option is to provide several quotations and public tenders for valuable contracts. Nonetheless, suppliers and vendors may still find ways to cheat. Therefore, agencies must make sure sensitive information is controlled. Tenders should be opened in public or at least by a tender committee. Exchanging information with other agencies on suppliers that should be avoided helps to eliminate some of the worst cases. If possible, legal action should be taken against culprits – and those found guilty, publicly exposed.

Payment by cheque, with two signatories, reduces the likelihood of direct cash cuts. Quality controls can reduce the risks of deceitful provision with low-quality goods. Pre-numbered forms for procurement orders limit the abuse of an organisation’s letterhead, making it harder for staff to buy private goods at agency prices. Finally, rotating staff in sensitive posts can reduce the growth and spread of entire corruption systems within an agency.
Involving local communities is the best way to tackle the risk of resources being diverted during distribution. Particularly the voices of the intended beneficiaries need to be heard early on. Aid diversion can be enormously reduced by transparently defining eligibility criteria, consistently applying them and comprehensively publishing all distribution-related data. Victims of malpractices may shy from accusing culprits in public, but an efficient complaint mechanism can encourage them to expose wrong-doers. In the same sense, post-distribution monitoring can help uncover corrupt practices.

Unfortunately, there have been cases in which whistle-blowers, whether from within an organisation or among its beneficiaries, were personally attacked. Relief agencies must therefore ensure that investigations are carried out in a way that shows they are concerned as a whole and do not view such matters as personal affairs between individuals, be they staff members or other stake holders. Investigating staff must be allowed to retreat from any place if they no longer feel safe. These people need and deserve the backing of the head office. They should also enjoy increased protection, wherever that is feasible and necessary.

If corruption charges lead to legal action against a relief agency, that agency should fully cooperate with the judicial system. Making the case transparent in public, will similarly help to minimise the loss of trust. It is important to show a readiness to investigate the case, to take appropriate measures to punish culprits, and to put mechanisms in place to make sure such things will not happen again. The relief agency concerned needs to make it very clear that it is not the entire organisation that is corrupt – it is individual people who are. That is the message that aid agencies must convey to the media. They will only succeed in doing so, however, if they act credibly and convincingly.


Conclusion

Of course, agencies have reason to fear damage to their reputation with host governments as well as donors, be they private or institutional. However, a growing number of governments and donors are encouraging partners to actively take measures against corruption. Agencies reporting problematic cases are therefore more likely than in the past to find support and understanding.
There are, moreover, undeniable risks to fighting corruption pro-actively. For instance, there may be over-enthusiastic reporting based on rumours. Jealousy and other motives can lead people to report malpractices which actually never happened. Perversely, corrupt staff members may use false allegations of wrong-doing in order to discredit a colleague they fear to be a potential whistleblower.

Obviously, the matter needs to be handled with very great care. In spite of all difficulties, however, the risks of tackling it are smaller than those of continued negligence. Aid agencies, after all, not only depend on their credibility; they have to earn it, too.


Corinna Kreidler
works for ECHO, the European Commission Humanitarian Aid department, in Liberia. This article expresses her personal opinion and does in no way engage the European Commission. corinna_kreidler@yahoo.de



Link:
In this year’s July edition of the Journal of Humanitarian Assistance, Corinna Kreidler argued her case in a longer essay:
http://www.jha.ac/articles/a190.pdf