VietNamNet Bridge would like to introduce an analysis by Jairo Acuna-Alfaro, Policy Advisor, Public Administration Reform and Anti-corruption, UNDP Vietnam, which reviews Vietnam's efforts to combat corruption in 2012 and suggests solutions for 2013. The article was published on the Vietnam Law & Legal Forum, January 2013.

Mr. Jairo Acuna-Alfaro, Policy Advisor, Public Administration Reform and Anti-corruption, UNDP Vietnam

During 2012 it seems the anti-corruption reforms gained impetus at the leadership of the Party, the Government and National Assembly. The top leadership of the communist Party had two plenums in which the corruption issue was prominently recognized.

Some actions followed as a result. The Government speedily drafted and proposed amendments to Law No. 55/2005/QH11 on Prevention and Combating of Corruption, and the National Assembly approved a few changes to it in November. Perhaps the most significant change is related to the removal of provisions regarding the Central Steering Committee on Anti-Corruption. But overall, it seems to be more of the same, with limited reduction/elimination of the incentives that feed into corrupt practices. So, what would be some of the main challenges for anti-corruption work in 2013? How can those challenges be addressed?

Over the past seven years, the Anti-Corruption Law has played a significant and important role in improving anti-corruption measures, but has not significantly reduced the occurrence Anti-Corruption during 2013: More of the same challenges of corruption. On the positive side, it has enhanced the discourse on the importance of transparency to reduce opportunities for corruption. And indeed, today corruption is recognized by the Party and the Government as a political and development issue.

Findings from different assessments reinforce that there are still many disadvantages and shortcomings in the implementation and enforcement of different anti-corruption provisions.

This is particularly relevant in terms of further reducing opportunities for corruption and implementing a less discretionary application of rules and procedures to deal with corrupt behaviors. Corruption is seen as a systemic, wide-spreading problem that is challenging the legitimacy of the political regime and jeopardizing human development gains and Vietnam’s middle-income status.

The victims of corruption have a human face. When someone falls sick and household members have to give bribes to receive medical services, it is the poorest who suffer most since their incomes are less disposable and limit their opportunities to access health.

 

When parents have to pay additional fees for school teachers in order for children to get passing grades, a life-time negative example is learnt from the classroom, and the quality of education diminishes considerably. When citizens have to pay money to get a job in the public sector, opportunities are limited for the best and brightest, but also for the less advantaged and the act will be repeated once in office. When businesses give a bribe to win a public procurement or to obtain a land title or a business license, competitiveness is distorted, the quality of goods and services is diminished and the costs are increased. In addition, when bribes become common practice and part of the daily interactions with authorities, the social fabric of trust and confidence in the public sector is eroded.

Corruption also occurs in large scale transactions. It occurs when powerful businesses interests influence public policies and decisions in their favor; when credits are given without proper guarantees and based on connections; when licenses and development projects are granted to highest bidders but lowest technically qualified; when infrastructure projects are awarded in closed door negotiations and in opacity and when interest groups influence policy makers without clarifying conflicts of interests. The results are hard to quantify, but overall they contribute in large part to increases in inequalities, limit opportunities, contribute to lower quality public investments and hamper overall growth prospects.

To address corruption, perhaps some salient challenges that have been identified need to be overcome both at the macro policy level and in practice. This paper discusses some of these challenges and provides policy recommendations. 2013 might be a good year for new approaches.

Enhanced effectiveness and stronger willingness in control of corruption

The first set of challenges is with the effectiveness and willingness in control of corruption in the public sector. The Vietnam Provincial Governance and Public Administration Performance Index (PAPI) survey identifies that citizens largely agree that bribes are required to receive medical care (31%), to get a job in the public sector (29%), to apply for a land use right certificate (21%), for children to receive better treatment in schools (17%), and to apply for construction permits (16%).

In addition, PAPI attempts to quantify the costs of these informal payments. It estimates the average amount informally paid per semester in primary schools is VND 2.6 million, VND 1.3 million per health treatment at district hospital and VND 0.8 million per land use right certificate. In a low middle-income country like Vietnam, where the official minimum salary is barely above VND 1 million per month these seem to be considerable amounts and a clear burden for poor citizens. Other countries have dealt with this challenge by finding ways to making official and legalizing these informal payments.

The government’s efforts to disseminate the Anti-Corruption Law seem to have paid dividends as citizens’ knowledge of the law remains high. During 2010 and 2011, on average, at least one in every two citizens was aware of the law. Knowledge shows not only how much dissemination has been done to enhance awareness of the Anti-Corruption Law, but also citizens form stronger opinions on corruption when they are aware of the law. For citizens who have heard about the Anti-Corruption Law 43% believe provincial governments are “serious” and 30% believe they are “not serious”. For citizens who have not heard about the Anti-Corruption Law, opinions decrease to 27% and 18%, respectively.

Figure 2 also highlights the decrease of “don’t know” from citizens who have heard about the Anti-Corruption Law. This suggests that knowledge of the Anti-Corruption Law is
a strong driver of public opinion towards governmental willingness and efforts to address corruption.

A deeper analysis into PAPI also highlights different groups of citizens have different experiences and expectations in terms of the willingness to fight corruption. Overall, respondents identified as members of the Communist Party and respondents with at least secondary education seem to experience less corrupt practices. Also, older people believe there is greater willingness to fight corruption, while younger generations are less optimistic. In addition, women are less optimistic about finding a job based on merit and on willingness to fight corruption.

Improved transparency and accountability

 

The second set of challenges lies in the still limited transparency and accountability in the operation and performance of the public sector, leading to concerns about effective control of corruption. As identified in PAPI3 there is a great deal of variation on how authorities at central and local levels apply the existing normative framework.

PAPI findings suggest that there is unevenness of performance in terms of transparency, vertical accountability and control of corruption. For instance, on overall transparency, the province of Ba Ria Vung Tau has a score that is 24% higher than the median score (Khanh Hoa) and 54% higher than the lowest scoring province Tra Vinh. On vertical accountability, the best scoring province of Quang Tri is 26% higher than the median scoring province of Dak Lak, and 47% higher than An Giang’s lowest score. And thirdly, the province of Long An has a score on control of corruption that is 18% higher than the median score and 47% higher than the lowest scoring province of Cao Bang in this dimension.

Since these scores are based on a set of survey questions about different issues, a few examples will help to illustrate these differences. In terms of transparency, 56.8% of citizens in Ba Ria Vung Tau have not heard about land use plans in their locality, as opposed to 96.5% of citizens in Tra Vinh province. On accountability, 55.7% of citizens in Quang Tri province have made proposal to local authorities when faced a particular problem, as opposed to only 14.1% in An Giang province.

And in terms of corruption, while 68.2% of citizens in Long An disagree that officials use public budget for personal benefits, only 47.1% disagree to this statement in Cao Bang province.  

This unevenness of performance is a clear call for action and further deepening the system of enforcement to ensure implementation and compliance with the rules and regulations. What make it possible for certain provinces to achieve such higher scores than others? This is relevant considering that they operate under the same legal framework.

A recently updated anti-corruption diagnostic report commissioned by the Government Inspectorate with the support of the World Bank, UNDP and DfID4 suggests the need to scale up what is working and to reduce or fix what is not working. For instance, deepen policies and actions geared towards greater transparency of policies, administrative reforms at local levels, greater independence for anti-corruption bodies and investigations. On the other hand, the report suggests de-emphasizing and fixing assets declaration system. All these are important in a context where corruption is systemic and as such the challenge is to look at ways to enhance the enforcement and implementation of these reforms. Bottom line is that while the same actions that have not produced results should not be repeated, in order to have different results on the fight against corruption new approaches are also needed.

The Anti-Corruption Law has introduced the concept of accountability under the framework of “responsibility of the heads of agencies, organization, and/or units for the occurrence of corrupt acts”. However, after more than seven years of implementation these clauses seldom had the intended effect.

This could be for two reasons. First, it could be that respective articles on the issue on the anti-corruption law are not enforceable because they are vague or unclear and thus require major revision. For instance, the recently reported cases of loss-making and signs of corruption at key state owned enterprises that the Government Inspectorate uncovered are precedent cases for the Law to adopt stronger measures. These could include from temporary termination of job for the suspected wrongdoers rather than allowing a job rotation, to suspension of benefits like pensions and allowances.

But a second reason is that a strong assumption is implied that “heads of organizations and agencies” are also not part of the problem of corruption and operate under a system of “conflict of interest.” That is, the concept of “accountability” embedded in the anti-corruption law assumes there are strong fair, competitive and transparent recruitment and promotion processes in the public sector, and that “heads of agencies” have arrived to their positions in clean and accountable manners.

This raises a further question on “who guards the guardians” and what type of measures can be applied to enhance the oversight and supervision from external agencies to strengthen their independence and autonomy and reduce conflicts of interest.

Increased autonomy for anti-corruption agencies

Another challenge for 2013 lies in enhanced ‘independence’ or ‘autonomy’ for anti-corruption agencies (ACAs). The upcoming revision during 2013 of the Constitution provides an opportunity to consider options to strengthen the basis on which institutions engaged in anti-corruption enforcement are able to act even more effectively.

As a starting point the recent placement of the Central Steering Committee on Anti-Corruption under the Politburo and the return of its Office to the Central Committee of Internal Affairs (CCIA), also under the Party presents an opportunity to realize this autonomy. At least, part of the motivation for this institutional rearrangement was the recognition that on anti-corruption it is not possible to be “referee and player” at the same time. For this, stronger autonomy and clear investigation mandates could be given.

Otherwise, the opportunity will be missed and the institutional restructuring will mean nothing less than a change in the address for citizens to send complaints. On this front, the recently promulgated “Jakarta Principles of Anti-Corruption Agencies” by a group of worldwide heads and former head of anti-corruption agencies, provides a strong basis on aspects to look at in order to increase the independence and effectiveness of the CCIA.

Vietnam is an active member of the Conference of State Parties to the UN Convention against Corruption (UNCAC). As such, UNCAC articles 6 and 36 on preventive anti-corruption bodies and specialized authorities (mandatory obligations) could provide clues on how to enhance this “autonomy” element. The UN Convention respects different legal systems, but requests anti-corruption agencies and specialized bodies are “granted necessary independence … to be able to carry out their functions effectively and without any undue influence”.

One way to deal with it, and something that could be extended to the Government Inspectorate as well, is to rethink not only the institutional set up, but also the appointment (length, format and authority) of the heads of these agencies. For instance, instead of linking the appointment to changes in Government every five years, the heads of the anti-corruption agencies could be appointed (i) for longer periods, say ten to fifteen years or even off-cycle tenures, for instance appointed two years into an administration for a five year term, (ii) follow a rigorous merit-based recruitment process, (iii) appointment and dismissal decisions made by the National Assembly, via a dedicated appointments committee. In the end, when improving the anti-corruption legal framework it might be worth also to discuss and apply new approaches, as
opposed to continue with the “more of the same” modality.

An increased autonomy is relevant in order to enhance enforcement mechanisms. For instance, an autonomous anti-corruption agency will be able to rigorously apply stronger and bolder sanctions and enforcement mechanisms as regulated. The ineffectiveness of existing criminal sanctions against corruption derives not from the fact that they are lenient, but that they are not enforced, that anti-corruption agencies face bottleneck and walls in their investigations and because of the hierarchical structure in which they operate. Investigative bodies lack some of the necessary powers and capacities to conduct effective anti-corruption investigations. In a popular expression, a significant problem is the “lack of teeth” and force within the Anti-Corruption Law to be enforceable in practice.

Simpler and fairer incentives and remuneration in the public sector

Another set of challenges come from how to curb practices of nepotism, relationships, disperse remuneration and to remove the opacity environment in which “incentives” are provided. Data and evidence from citizens experiences captured by PAPI and other surveys points to a recurrent problem of negative incentives in the public sector.

PAPI survey findings suggest that less than a quarter of Vietnamese citizens (23%) think connections are not important in order to work in the public sector, as opposed to 50% who think connections are important.

The PAPI policy research also suggests that bribes for jobs in the public sector seems to be prevalent, together with personal relationships playing important roles for those wishing to pursue careers in the public sector.

These practices distort provision of public services and limits capabilities of human resources (i.e. public administrators). These practices, together with disperse “incentives” and non-transparent remuneration are typical in low-income countries, while Vietnam has recently departed from this category. For Vietnam to catch up with upper middle-income countries it needs to deal with these practices sooner rather than later, otherwise it risks staying at the low brackets of middle-income, at best.

Vietnamese citizens have higher expectations from the public administration system, the performance of the economy and the effects at their personal level. In that regards, the public sector needs to become more professional, transparent and accountable to respond to that demand. This could be done with reform efforts to strengthen the emuneration and incentives system in the public sector. This is not only about reforming salary and payments, but also the transition from undesirable behavior (such as nepotism and patronage) to elements of performance management based on the abilities of civil servants, a performance culture, competent and meritocratic human resources and transparency in human resource matters needs focused attention.

A simpler and fairer incentive and remuneration system basically means, on the one hand, stronger and bolder efforts to clarify income making opportunities for public sector jobs, beyond what is covered by the official salaries and regulated allowances. On the other hand, it means to strengthen recruitment and promotion practices to ensure the most capable and talented get rewarded accordingly and those lagging behind with poor performance handled properly, regarding training and capacity building opportunities or even dismissal.

Part of this relates to the need to close the gap between Vietnamese regulations and international standards as per the UN Convention against Corruption (UNCAC). In particular, the Government could move towards compliance with article 20 under UNCAC regarding illicit enrichment. That is to consider measures to establish that a significant increase in the assets of a public official that cannot be reasonably explained in relation to lawful income is a criminal offence if committed intentionally.

Concluding

RemarksIt is recognized that the “breakthrough” on reducing corruption will come not through “piece meal” changes in legislation, but rather through enforcement mechanisms that will challenge corrupt practices and rent-seeking behaviors among public officials and civil servants that use public office as a vehicle for personal enrichment. Therefore, bolder, stronger and more courageous approaches to anti-corruption are needed to strengthen sanctions, enforcement and autonomy for anti-corruption agencies.

The following elements might be considered for further policy discussions during 2013: (i) what rent-seeking practices are prevalent in the public sector?; (ii) how can sanctions and penalties be incorporated into the existing Anti-Corruption Law to provide it with more ‘teeth’?; (iii) what is the concept and legal framework for “accountability” of heads of agencies?; (iv) how can the institutional set-up of anti-corruption agencies ensure greater degrees of independence and autonomy for anti-corruption agencies? and (v) how can civil service reforms help curb corruption?

The underpinning elements of the reform agenda in 2013 are regarding rule of law and to bring “teeth” to the anti-corruption reform. This means the need to realize the legal principle that everybody is equal before the law. Enhancing enforcement of anti-corruption regulations is much needed. Currently, there are gaps in the legal framework that give room to impunity. This is a compulsory middle-income challenge, because in a system where there is no enforcement, no sanctions, the message given to society is that illicit and corrupt acts can continue because they bring no consequences.

The year 2013 will provide the right moment to discuss these questions given the opportunities coming from the revised Anti-Corruption Law that needs to be implemented, the identified gaps between the UNCAC and the anti-corruption framework Vietnam is adopting and the revision of the Criminal Code and the Constitutional revision. A critical question that anti-corruption policy makers and practitioners need to get answered is whether as a middle-income country Vietnam can afford to do more of the same, or different approaches and strategies are necessary.

Jairo Acuna-Alfaro

Source: Vietnam Law & Legal Forum