Transparency International (TI) position statement prior to the VIII Summit of the Americas “Democratic Governance against Corruption”

Transparency International urges governments and civil society organizations meeting at the VIII Summit of the Americas to capitalize on the opportunity the summit provides in order to generate effective recommendations and consensuses on strategic matters related to the eradication of corruption.

Recent scandals in the region — mainly the case uncovered by the “Lava Jato” operation in Brazil which exposed the criminal activity of a cartel of Brazilian construction companies operating throughout the Americas, of which Odebrecht was one of the main perpetrators — confirm that the most strategic areas in which to fight corruption are as follows: the financing of parties and campaigns, public procurement procedures, and justice system accountability. To successfully fight corruption in each of these areas, it is necessary that there is access to information, accountability, and effective citizen participation.

The concrete proposals of the chapters of Transparency International in Latin America and the Caribbean for the VIII Summit of the Americas are:

1. Financing of parties and campaigns:

1.1. State Oversight: a) assign the oversight function of all public and private resources (in cash and in-kind) belonging to political parties and campaigns to a specific, autonomous and independent institution (without limiting the scope for inter-institutional coordination); b) create a specialized unit within that institution; c) assign review, verification and audit functions to that unit ; d) provide the unit with the necessary finance, human and technological resources; and e) strengthen the state’s capacity to prevent, sanction and eradicate political financing from illegal sources.

1.2. Accountability of political parties: a) establish an obligation to receive and manage all income of parties and campaigns via the banking system; b) establish complementary and mandatory mechanisms to guarantee the registration of all income and expenses (including in-kind resources) of parties and campaigns (certified receipts, declaration of the sources of funds, payment vouchers, purchase certificates); c) establish mandatory systems of administration and internal control of all resources (responsible specialized unit, manuals and accounting systems); d) make mandatory the complete transparency of integrated financial reports to the public (before and after the day of elections); and e) establish or strengthen electronic systems for reporting and political party accountability.

1.3. Access to information and participation: a) establish responsibilities and mechanisms to guarantee the disclosure of all information on political financing; b) establish regulation and mechanisms to guarantee citizen access to and monitoring of all information on financing; c) eliminate banking and tax secrecy regarding the finances of political parties and campaigns; d) establish the responsibility for legal entities that finance parties and campaigns to provide information to the authorities and the general public about the natural persons who control and receive benefits from them; and e) create open databases with the public information of all donors of parties and campaigns, including legal persons and the natural persons who control them, as well as individuals.

1.4. Limitation of campaign spending: a) establish campaign time limits, b) establish campaign-spending limits, and c) create limits and specific controls on spending triggers.

1.5. Prohibition of the misuse of public resources: a) prohibit the advertising of state activities during the campaign; b) ban the public procurement process during the campaign; c) forbid proselytizing from public office; d) prohibit the delivery of benefits, good or registration in social programs during the campaign; and e) Public officials who are pre-candidates and candidates should be step down from their positions during the campaign.

1.6. Penalties: a) establish effective, proportional and dissuasive administrative and criminal sanctions for all behaviours (actions and omissions) that violate the rules (prohibitions and obligations) of the financing system attributable to individuals (party leaders and public officials) and legal entities (parties and public institutions); b) establish competent authorities in administrative and criminal matters and the procedural rules necessary for the State to guarantee the effective application of penalties; and c) strengthen mechanisms protecting whistle-blowers, especially for those who report political financing from illegal sources.

2. Public procurement:

2.1. State Oversight: a) strengthen the independent governmental oversight bodies, guaranteeing their autonomy and providing them with the necessary financial, human and technological resources; b) strengthen the internal control units of all institutions involved in public procurement; c) assign to these internal units the responsibilities and the necessary financial, human and technological resources; d) create mechanisms to guarantee effective internal oversight (allocation of each phase to different teams and rotation of officials); e) create a prequalification system that establishes an integrity criteria that companies must comply with in order to participate in the public procurement process; and f) assign to oversight bodies the responsibility to compare and analyse the public information contained in the databases of party financiers and those of state contractors and publish the results periodically.

2.2. Accountability: a) institute the obligation to detect, prevent and resolve conflicts of interest for officials involved in all phases of public procurement processes; b) strengthen the systems of assets declaration and evaluation of public officials involved in all phases of public procurement processes; c) establish anti-corruption clauses in contracts and effective mechanisms for their enforcement; d) create or strengthen independent and effective appeal mechanisms for bidders at any stage of the process; and e) create or strengthen effective defence mechanisms for public institutions to resolve appeals in a timely and fair manner.

2.3. Access to information: a) guarantee the disclosure and access to the totality of information regarding the phases of the public procurement processes (from planning to evaluation) in intelligible formats; b) prohibit confidentiality clauses in contracts, with any exceptions established in the legal framework, justified, limited and public; c) establish or strengthen electronic public procurement systems and guarantee their use at all levels of the state; (national, federal, departmental or provincial and local or municipal); d) guarantee the disclosure of the declarations of interests and assets of the officials involved in all phases of the public procurement processes; and e) establish a responsibility for legal entities that compete in public procurement to provide information to the authorities and the public about the natural persons who control and receive benefits from them.

2.4. Citizen participation: a) institute efficient, formal and mandatory citizen consultation and monitoring mechanisms before, during and after the conclusion of contracts; and b) establish the responsibilities of public authorities to respond to the conclusions and recommendations derived from citizen consultation and monitoring.

2.5. Penalties: a) establish effective, proportional and dissuasive administrative and criminal penalties for all behaviours (actions and omissions) that violate the regulations (prohibitions and obligations) and bad practices (collusion, artificially dividing public purchases or public works to avoid public contracting thresholds, influence peddling, access to privileged information, among others) in the public procurement processes attributable to individual persons (businessman and officials) and legal entities (companies and institutions); b) guarantee the effective application of sanctions through institutional strengthening and improvement of the procedural legal framework in administrative and criminal matters.

3. Justice systems

3.1. Strengthen the independence of justice system institutions: a) create transparent, competitive and objective selection processes for all officials of the justice system; b) establish penalties against interference in the selection processes of system officials; c) strengthen transparent, competitive and objective judicial, prosecutor and public defender career systems; and d) provide the necessary financial, human and technological resources to these systems.

3.2. International cooperation: a) promote the ratification of an international convention on anti-corruption cooperation, as well as facilitate its implementation, promoting the necessary institutional mechanisms for effective action; b) improve legal systems by innovating and updating existing national and international legal instruments, as well as harmonizing the substantive legislation; c) strengthen the bodies in charge of investigating corruption and provide them with sufficient financial, human and technological resources; d) move towards direct cooperation, without intermediaries, among those responsible for investigating corruption cases by holding regular meetings and strengthening the specialized networks of competent authorities, as well as the creation of regional coordination hubs or international investigative teams that are granted permission to attend transnational cases and serve as repositories of information; e) create formal tools for international cooperation, referencing other successful models used in other regions of the world, and also explore the use of informal tools of communication and interaction between the authorities responsible for criminal prosecution; and f) promote the creation and operation of centralized databases of financial records of beneficial owners of legal, providing to financial intelligence teams further information for investigations.

3.3. Access to information, accountability and citizen participation: a) establish mechanisms to guarantee that information on the performance and integrity of the justice system is accessible to the public; b) establish an obligation to detect, prevent and resolve conflicts of interest of the officials of the justice system; c) strengthen the systems of asset evaluation and declaration of officials working in the justice system; d) strengthen the incompatibility methods for judges and guarantee transparency for the public; e) establish the responsibility to disclose declarations of interests and assets; and f) guarantee effective citizen monitoring on the performance of the justice system in general.

3.4. Protection of whistle-blowers and witnesses: a) increase scope of protection; b) create norms and mechanisms for the protection of whistle-blowers and witnesses; b) widely disseminate the scope, rules and mechanisms; c) establish specific assistance and protection measures for whistle-blowers and witnesses; and d) create independent agencies with the necessary competencies (receive, investigate, evaluate and assign measures) and provide them with sufficient economic, human and technological resources.

3.5. Asset recovery: a) harmonize and strengthen existing legislation to facilitate efficient cooperation and asset recovery; b) create the necessary mechanisms so that the countries where illegal assets are located respond immediately to the requests; c) develop measures and regulations that facilitate the freezing of assets; and d) establish sanctions for financial institutions that refuse to comply with asset recovery processes and standards.

4. Inter-American system:

Corruption has a clear impact on security, quality of life and social development in general. That is why we ask the Organization of American States (OAS) to include in the inception, analysis and work of the inter-American system to tackle the pervasive causal relation between corruption and human rights violations.

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