Module 9 – Managing conflict of interest Toolkit on Transparency,

Module 9 – Managing conflict of interest Toolkit on Transparency, Accountability and Ethics in Public Institutions

Module 9 – Managing conflict of interest Training agenda Time Day 1: Fundamentals of ethics and public integrity Day 2: Ethics and public integrity at the institutional and policy level Day 3: Organizational change for enhanced ethics and integrity Day 4: Individual ethical behavior Day 5: Developing a strategy, roadmap and action plan for enhanced ethics and public integrity Morning Module 1 - How would a world without corruption look lik? Module 6 - Oversight institutions Module 11 - Staff management and developing capacities for integrity Module 14 - Ethical leadership Module 18 Preparation phase Module 2 Essentials of ethics and public integrity Module 7 - Social accountability mechanisms Module 12 - Creating an organizational culture of ethics and integrity Module 15 Assessing personal vis-à-vis organizational values Lunch break Afternoo n Module 3 Transparency and accountability Module 8 - Integrity codes Module 4 Understanding and assessing corruption Module 9 - Managing conflict of interest Module 5 International frameworks for integrity and anticorruption Module 10 Whistleblowing Module 13 - Transpa public procurement Toolkit on Transparency, Accountability and Ethics in Public Institutions Module 16 Behavioral insights and staff incentives Module 18 Presentation and feedback phase Module 17 - How to promote desired behavioral change? 2

Module 9 – Managing conflict of interest 01 Key terminology is managing 02 Why conflict of interest important? practices for: 03 Good 1. Legislation 2. Module agenda 3. 04 Practical examples Interest and asset declarations Resolutions Case studies – 05 Activity: Conflict of interest or not? UN Photo/Stuart Price Toolkit on Transparency, Accountability and Ethics in Public Institutions 3

Module 9 – Managing conflict of interest In this module you will learn: Learning objectives What conflicts of interests are, why are they risky and need to be managed; What the key components of an interest and asset declaration system are and where challenges may exist; How countries across the globe are managing conflicts of interest through information disclosure policies; Through case studies, how to determine whether a situation is a conflict of interest or not. Toolkit on Transparency, Accountability and Ethics in Public Institutions 4

Module 9 – Managing conflict of interest 01 Key terminology is managing 02 Why conflict of interest important? practices for: 03 Good 1. Legislation 2. Module agenda 3. 04 Practical examples Interest and asset declarations Resolutions Case studies – 05 Activity: Conflict of interest or not? UN Photo/Stuart Price Toolkit on Transparency, Accountability and Ethics in Public Institutions 5

Module 9 – Managing conflict of interest Key terminology Conflict of interest Interests A range of benefits which, at the time of declaration, may not bestow any particular advantage to the public servant, but could exert influence on an individual's decision-making (Jenkins 2015). Situation in which a public servant has a private or other interest such as to influence, or appear to influence, the impartial and objective performance of his or her official duties. E. g., assigning public contracts or positions based on family ties or personal relationships (OECD 2005: 97; Council of Europe 2000). Toolkit on Transparency, Accountability and Ethics in Public Institutions Risk for corruption Conflicts of constitute a corruption, which should be appropriately to facto wrongdoings. interest risk for can and managed avoid de 6

Module 9 – Managing conflict of interest Risk areas creating conflicts of interest FAMILY AND COMMUNITY EXPECTATIONS “INSIDE INFORMATION” CONTRACTING (OECD 2005: 106) ADDITIONAL EMPLOYMENT GIFTS AND OTHER FORMS OF BENEFIT ACTIVITY AFTER PUBLIC OFFICE OUTSIDE APPOINTMENTS Toolkit on Transparency, Accountability and Ethics in Public Institutions 7

Module 9 – Managing conflict of interest 01 Key terminology is managing 02 Why conflict of interest important? practices for: 03 Good 1. Legislation 2. Module agenda 3. 04 Practical examples Interest and asset declarations Resolutions Case studies – 05 Activity: Conflict of interest or not? UN Photo/Stuart Price Toolkit on Transparency, Accountability and Ethics in Public Institutions 8

Module 9 – Managing conflict of interest Importance of managing conflicts of interest Conflicts of interests constitute a risk for corruption and public trust, but they are per se not automatically corruption per; Opportunities to take advantage of position to pursue private advantage at the expense of the public interest materialize, if potential conflicts of interest are not prevented, identified promptly and managed adequately; Private advantage should be understood broadly to include not merely illicit financial gain but also attempts to curry favor with potential future benefactors UN Photo/Mark Garten or employers and the professional advancement of friends and family (OECD Toolkit on Transparency, Accountability and Ethics in Public Institutions 9 2005: 95-96).

Module 9 – Managing conflict of interest Declarations covered in the UNCAC Toolkit on Transparency, Accountability and Ethics in Public Institutions 10

Module 9 – Managing conflict of interest 01 Key terminology is managing 02 Why conflict of interest important? practices for: 03 Good 1. Legislation 2. Module agenda 3. 04 Practical examples Interest and asset declarations Resolutions Case studies – 05 Activity: Conflict of interest or not? UN Photo/Stuart Price Toolkit on Transparency, Accountability and Ethics in Public Institutions 11

Module 9 – Managing conflict of interest 1. Legislation What is to be regulated? Who is to be regulated? In what form is it to be regulated? Secondary employment; Procurement; The revolving door; Sharing confidential information and insider trading; Nepotism and cronyism; Private financial interests. Seniority; Discretion in decision-making; Staff working on specific public policies; Access to confidential state or political party information . Laws; Integrity codes; Management guidelines; Single or multiple (and potentially overlapping) regimes . (Mooney et al. 2018: 853ff.). It is nearly impossible to legislate to prevent and detect all possible conflicts of interest! Toolkit on Transparency, Accountability and Ethics in Public Institutions 12

Module 9 – Managing conflict of interest 01 Key terminology is managing 02 Why conflict of interest important? practices for: 03 Good 1. Legislation 2. Module agenda 3. 04 Practical examples Interest and asset declarations Resolutions Case studies – 05 Activity: Conflict of interest or not? UN Photo/Stuart Price Toolkit on Transparency, Accountability and Ethics in Public Institutions 13

Module 9 – Managing conflict of interest 2. Interest and asset declaration Disclosing the value of assets and liabilities and sources of income; Deterrent against graft, collusion and patronage in the public sector; Key instrument to prevent conflicts of interest and uncover illicit enrichment; The effectiveness and credibility of a system of disclosures is only as good as its ability to detect violations and penalize wrongdoing (Jenkins 2015; Martini 2013). Toolkit on Transparency, Accountability and Ethics in Public Institutions 14

Module 9 – Managing conflict of interest Asset disclosure per year and region World Bank / International Finance Corporation 2014: 2 World Bank / International Finance Corporation 2014: 4 Toolkit on Transparency, Accountability and Ethics in Public Institutions 15

Module 9 – Managing conflict of interest Key components of a declaration system 8. ONLINE DISCLOSURE 7. CONFIDENTIAL VS. PUBLIC DISCLOSURE 6. SANCTIONS 5. REVIEW PROCESS Toolkit on Transparency, Accountability and Ethics in Public Institutions 1. SCOPE OF PERSONS WHO SHOULD DISCLOSE 2. SCOPE OF INFORMATION TO BE DISCLOSED 3. RESPONSIBLE BODIES 4. SUBMISSION PROCESS 16

Module 9 – Managing conflict of interest Scope 1. Who should disclose At least the leadership of the executive, legislative and judiciary as well as the senior career civil service; 2. Information to be disclosed Assets; Financial investments; Business assets; Bank accounts, interest-bearing instruments and Public servants in decision-making cash; Vehicles; Liabilities; Sources positions with large discretionary of income; (Unpaid) private sector powers; employment; (Unpaid) boards and A two-tired system for declarations directorships; Other public sector made by public servants and members employment; Lotteries, gambling, of government; ; Gifts; Participation in Information about the assets of associations, not-for-profit relevant public servants’ spouses, organizations and trade unions; children and other household members (Martini 2013). Post-tenure positions and Toolkit on Transparency, Accountability and Ethics in Public Institutions 17 employment (Martini 2013).

Module 9 – Managing conflict of interest Implementation (1) 3. Responsible bodies 4. Submission process An independent agency should Ensuring that declarations are receive, review and/or enforce asset submitted on time and in adequate declaration rules, and give impartial quality; advice on filing; Frequency: It should have the necessary skills Regularly, e.g. annually or every two and resources to review declarations years; to detect potential or actual conflicts “Event-driven”, i.e. after a significant of interest; change; Need for cooperation with other Twice, on entering office and on bodies such as tax authorities, antileaving. corruption agencies or election bodies; Frequency and coverage should be Agencies should enjoy investigative proportionate to the oversight powers and be able to request system’s capacity to process and information held by other agencies manage info (Martini 2013). (Martini Toolkit 2013). on Transparency, Accountability and Ethics in Public Institutions 18

Module 9 – Managing conflict of interest Implementation (2) 5. Review process 6. Sanctions Auditing by an independent third party (e g. an outside, nongovernmental auditor (whether a private auditing firm or other); Combination of risk-based prioritization and random sampling to select disclosures for audits. Types of checks: Sanctions for late submission, nonsubmission and submission of false / incomplete information: Summons; Fines; Temporary suspension of salary; Suspension from the performance of public functions for a certain period; Dismissal; Imprisonment; Reputational sanctions such as the publication of the names of non-filers on the agency’s website (Martini 2013: 4-5). o Checks against public or private sector records; o Checks against previous disclosures by the same public servant; o Checks against the public servant’s lifestyle; o Whether the interests declared by the public servant are compatible with the exercise of Toolkit on Transparency, Accountability and Ethics in Public Institutions his/her functions (Martini 2013). 19

Module 9 – Managing conflict of interest Types of disclosure 7. Confidential vs. public disclosure 8. Online disclosure Public disclosure: Publication of Searchable database of declarations declarations filed through a public by criteria such as submitter, time and registry and in a timely and userdate filed, government agency etc.; friendly manner; Collection of metadata for statistical Disclosure can be made public in full analyses on e.g. compliance rates; or partially, i.e. by omitting certain Removal of proprietary software and of information; economic barriers such as access fees; Providing information on failed Managing electronic authentication, reporting obligations, disciplinary, identification, signature etc.; administrative or criminal penalties Automatic alerts on missing, and measures to avoid or terminate incomplete or erroneous entries (Open conflicts of interest; Government Partnership 2014: 15-18; Benefit: Scrutiny by media, Chêne et al. 2015: 2). parliaments, government organizations, people and civilandsociety Toolkit on Transparency, Accountability Ethics in Public Institutions 20 enhances the effectiveness of

Module 9 – Managing conflict of interest Challenges and lessons learned Challenges: - Data protection and privacy issues; - Lack of capacity to handle administrative burden; - Inappropriate verification systems (OECD 2011). Lessons learned: - Consult public servants to create ownership; - Keep the system manageable through sound samples and widen capacity only incrementally; - Make filing requirements clear and simple (Open Government Partnership 2014: 8-10). Toolkit on Transparency, Accountability and Ethics in Public Institutions 21

Module 9 – Managing conflict of interest 01 Key terminology is managing 02 Why conflict of interest important? practices for: 03 Good 1. Legislation 2. Module agenda 3. 04 Practical examples Interest and asset declarations Resolutions Case studies – 05 Activity: Conflict of interest or not? UN Photo/Stuart Price Toolkit on Transparency, Accountability and Ethics in Public Institutions 22

Module 9 – Managing conflict of interest 3. Resolutions Conflicts of interest, if properly identified, can be resolved or managed. Tools include: Recusal of the public servant from involvement in an affected decision-making process Resignation of the public servant from the conflicting privatecapacity function Divestment or liquidation of the interest by the public servant Assignment of the conflicting interest in a genuinely “blind trust” arrangement Re-arrangement of the public servant’s responsibilities Toolkit on Transparency, Accountability and Ethics in Public Institutions Restriction of information access by the affected public servant transfer of the public servant to a non-conflicting function (OECD 2005: 103) 23

Module 9 – Managing conflict of interest 01 Key terminology is managing 02 Why conflict of interest important? practices for: 03 Good 1. Legislation 2. Module agenda 3. 04 Practical examples Interest and asset declarations Resolutions Case studies – 05 Activity: Conflict of interest or not? UN Photo/Stuart Price Toolkit on Transparency, Accountability and Ethics in Public Institutions 24

Module 9 – Managing conflict of interest Practical examples Georgia: Online Asset Declaration Toolkit on Transparency, Accountability and Ethics in Public Institutions 25

Module 9 – Managing conflict of interest Guatemala: Asset Disclosure System Challenges Due to raising awareness of the requirement to file a delcaration, compliance rates could almost double over a relatively short period to ca. 75% in 2008; Achievemen ts Difficulties stemming from legal framework; Until 2008, high personnel turnover, budget and staffing constraints in view Focus on the detection of very large of illicit enrichment; population required Declarations are to file and lack of confidential; clear Integrity Administrative sanctions standards/criteria Department has for noncompliance with for submission and started to build submission deadlines; content capacity on enforcement at verification; personnel discretion of Declarations retention, implementing agencies protected by information confidentiality Content verification only technology excluding public upon departure from capabilities access as office; internal oversight; processes. Centralized submission Poor reporting on of hard copies from ca. disclosure statistics 16,000 eligible Toolkit on Transparency, Accountability and Ethics in Public Institutions (Mastruzzi et al. individuals. 2013). System System governed by 2002 Probity Law which created Integrity Department (staff of 15) in the Comptroller General’s Office; 26

Module 9 – Managing conflict of interest Argentina: Asset Declaration Unit (ADU) of the Anti-Corruption Office Verification of ca. 4,000 declarations in total per year, including systematic review of the most-highranking 5% of staff (1,600) and a targeted riskbased review of an additional ca. 2,500; Administrative burden: Work with hard copies, limited storage capacity for declarations, some timeconsuming manual kind of research for the verifications; Reliance on coordination with HR offices in line agencies, e.g. on communication of newly hired or appointed officials who are subject to the requirement to file (Habershorn et al. 2013: 7ff.). Cross-checks of movable and immovable assets against Toolkit on Transparency, Accountability and Ethics in Public Institutions state registries. Challenges Ca. 36,000 public servants required to declare per year; Achievemen ts System Anti-Corruption Office created in 1999 under the auspices of the Ministry of Justice; Mandate: Manage submission compliance; Verify declarations for indicators of illicit enrichment; Control and advise on conflicts of interest; Manage public access to information about declarations. Capacity: 12 staff (ADU) plus 37 (Investigation Department); ADU has oversight function with regard to HR offices in government agencies. ‘Cross-checking an asset declaration form can be completed in about 20 minutes.' 27

Module 9 – Managing conflict of interest Georgia: Online Asset Declaration Government has become more responsive, cleaner and less corrupt; System has inspired other government agencies to launch similar egovernance projects. Information was initially disclosed by the government in a format that made it difficult to search and use the data; Over time, the government also improved the data format of the declarations and added further functionalities to the online system; System design was outsourced at about USD 20,000 plus an annual maintenance cost of about USD 10,000 (Chêne et al. 2015: 9-10). CBS facilitates process by sending reminders via text messages or email, and providing a Toolkit on chat Transparency, Accountability and Ethics in Public Institutions hotline and online service to help with Challenges Submitted declarations are published instantaneously into a searchable, publicly accessible database that allows downloading for free; Watchdogs are in a better position to monitor the honesty and legality of incomes and expenditures of staff; Achievemen ts Ca. 2,800 senior public servants are obliged annually to declare assets owned by them and family; System Initiated by the Civil Service Bureau (CBS) to replace the previous paper-based declaration in force from 1998-2010 causing risks; 2013 winne r Public Servic of the UN e excellence in Awards for preventing corruption 28

Module 9 – Managing conflict of interest Rwanda: Asset Declaration System Submission compliance rate raised to 91% in 2008; Declarations are not publicly available; Conflicts between agencies on the gap between recommendations and enforcement; ‘We maximize performance of limited staff through verfications based on randomization and focus on high-risk areas.‘ While Office of the Ombudsman recommends imposition of administrative sanctions for wrongdoings, however these remain at the discretion of the agencies in which the individual works; Deterrence with only limited staff due to random Detailed audit audits of declarations procedures; submitted (ca. Declarations are 6% per year) confidential; privacy of targeting high Limited staff filers is protected Toolkit on Transparency, Accountability and Ethics in Public Institutions risk areas. specifically by law. (Barnes 2013a: Declarations can be submitted electronically; Challenges Design intended to detect and prosecute illicit enrichment; Office of the Ombudsman, police and Office of the Prosecutor General regularly use declarations for investigations into corruption and criminal behavior; Achievemen ts As of 2011, there were ca. 5,000 individuals who must declare annually directly to the Office; System Administered by the Office of the Ombudsman of Rwanda which maintains a staff of nine to oversee submission and analysis; 29

Module 9 – Managing conflict of interest Mongolia: Asset Declaration System Enforcement of sanctions of administrative nature; High submission compliance rate for some 250 top government staff declaring to IACC and 50,000 public servants declaring to designated ethics officers in agencies; No criminal penalties for false statements on forms and vague criminal code vague on illicit enrichment; System focuses on establishing a baseline of all income and assets of staff, i.e. transparency, rather than law enforcement which can be seen critical in view of weak media; Resource constraints for verifications and reliance on 120 line agencies to receive declarations in a decentralized way (Barnes 2013b: 153ff.). Demonstration Public access to that a modified income and decentralized asset declarations system can work enabling public to do with centralized Toolkit checks. on Transparency, Accountability and Ethics in Public Institutions limited lifestyle monitoring. Challenges Verification procedures and trained staff who investigate; Enforcement of admin. sanctions on 50 public servants failing to submit asset declarations in 2008; Achievemen ts Decentralized submission system with centralized monitoring; System The Anti-Corruption Law of 2006 created the system and Independent Agency against Corruption (IAAC) is responsible for its management (staff of nine). , our ce constraints ‘Given resour n o s AC focuse dedicated IA s n of on declaratio following up , ent staff only top governm e th t u o etting ab whilst not forg .' bigger picture 30

Module 9 – Managing conflict of interest Indonesia: Asset Declaration System Challenges Increased compliance rate from 56% in 2006 to 85% in 2009 by exerting pressure within agencies and creating a culture of compliance through internal administrative processes. Achievemen ts Fierce opposition to the KPK has caused it to suffer setbacks that, although serious, have to date hindered but not derailed the institution; By law, sanctions apply for failure to Wealth-reporting submit a function and ensuring declaration, but the compliance of officials nature of sanctions required to submit a is not specified. declaration; Wealth-reporting Sample of 1-5 % of requirement might declarations is verified, be seen as a sole primarily targeting staff bureaucratic in high-risk agencies; formality; Strengthening of Wealth disclosure verification reports published in the capacity state gazette and online (Habershorn 013: for publicToolkit access. on Transparency, Accountability and Ethics in Public Institutions 97ff.). System Established in 2001 and managed by Corruption Eradication Commission (KPK) - a specialized agency with a broad mandate to prevent, investigate and prosecute corruption and ca. 80 staff; 31

Module 9 – Managing conflict of interest 01 Key terminology is managing 02 Why conflict of interest important? practices for: 03 Good 1. Legislation, 2. Module agenda 3. 4. 04 Practical examples Interest and asset declarations, Resolutions and Preventive measures Case studies – 05 Activity: Conflict of interest or not? UN Photo/Stuart Price Toolkit on Transparency, Accountability and Ethics in Public Institutions 32

Module 9 – Managing conflict of interest Activity UN Photo/Mark Garten Toolkit on Transparency, Accountability and Ethics in Public Institutions 33

Module 9 – Managing conflict of interest Case studies – Conflict of interest or not? Why? The purpose of this activity is to assist participants to develop practical skills in recognizing conflict-ofinterest problems and in applying a sound decisionmaking procedure in a process of ethical reasoning. What? - On the following pages, you find a number of case studies that may (or not) constitute conflict-ofinterest situations; - Identify whether situations presented constitute a real conflict of interest or not, give reasons for your decision and, if applicable, propose how the conflict of interest could be resolved. Time - Reserve ca. 30 minutes for this exercise and adapt the number of cases to be examined to this time limit; - You may for example select five cases and discuss each for 5 minutes; - Discussion can happen with the full group of participants or participants can discuss with each other in small groups and present their resolution of the cases to the others. Resources - Versions of the case studies can be made available to participants on paper or digitally. OECD 2005: 75ff. Toolkit on Transparency, Accountability and Ethics in Public Institutions 34

Module 9 – Managing conflict of interest Case study 1: Soccer World Cup The case: You are the chief Anti-Corruption Officer for the Ministry of Justice. Your Deputy Minister has overall responsibility for the ministry’s current major review of the national Criminal Code. A consultant from the company which is Question a review conflict of interest issue involved in this offer? advising 1: onIs the project asks you whether it would “cause difficulties” if A: the Yes.company The gift from the consultant risks being seen as an attempt to compromise the were to invite your Deputy Minister to attend the forthcoming deputy minister’s independent decision on the review. gift maysays also that be seen Soccer World Cup finals in a neighboring country. TheThe consultant the as intended to influence the minister’s decision-making on further in which the company would provide the airfares and accommodation, andprojects the Deputy company be also interested. Ministermay would be a guest in the company’s corporate hospitality tent at the National Stadium. This would give the Deputy Minister a good opportunity Question How would from you advise the Minister asked to? be there. The to meet 2: other ministers neighboring countriesifwho will also A: Deputy To refuse the offer. The keen eventon is soccer unrelated minister’s official Minister is very andtoisthe a former President ofresponsibilities. your country’s national Soccer Federation. Question 1: Is a conflict of interest issue involved in this offer? Question 2: How would you advise the Minister if asked to? Toolkit on Transparency, Accountability and Ethics in Public Institutions OECD 2005: 75ff. 35

Module 9 – Managing conflict of interest Case study 2: The lunch The case: On occasions, and often in their own time, the most senior public Question: are the integrity issues here? servants What of a government agency (the Ministry of Infrastructure Development) A: attend While some social contact between public servants and representatives of the lunches or dinners with a wide range of business people, including private sector is inevitable, and may often desirable, the provision timing of the representatives of schools, churches, thebe local newspapers and TV, and property (reportedly) “lavish” lunch is likely to raise and suspicions about companies. the integrityThis of the developers, consultants, manufacturers construction haspublic servants involved inpart the decision, theservants’ integrityactivities of the contract the been understood of senior and public in this process ministry,ofand ministry. The creates, at minimum, apparent conflict interest for the as there is lunch no feealso or other money involved. an These activities haveofnever been public In this example, it is irrelevant that the lunch occurred during their free seenservants. as a problem for the Ministry. time cannotoccasion, claim to be present in apublic “private capacity”). On(they one recent three of these servants attended what was The ministry must be able to demonstrate that the contracting process reported in a newspaper the next day as a “lavish” lunch hosted by awas appropriately free of improper or corrupt influences. If itacannot, this situation may be prominent local construction company. This occurred week before the anministry exampledecided of a form of “state capture”a–number obtaining a favorable official decision by finally on awarding of major construction contracts. covert influence public corrupt methods and won should It was reportedofthat theservants companythrough which had hosted the lunch thebe majority investigated. of the contracts. Question: What are the integrity issues here? Toolkit on Transparency, Accountability and Ethics in Public Institutions OECD 2005: 75ff. 36

Module 9 – Managing conflict of interest Case study 3: The recruitment The case: A middle-level manager employed by ahere, publicor authority repeatedly Question: Is there a serious conflict of interest is it just a matter of refusespreference? to recruit, or to select for training opportunities, staff from a particular personal religious ethnicofbackground, even when individuals well qualified and of selfA: This is an and example a serious conflict, and actual abuseare of office, in the form skilled, because, asuses he says, “those people are nothing but trouble”. dealing. The manager indulges his/her personal prejudice against the ethnic group concerned, at the expense of the employer’s interests [in obtaining trained staff, and in Question: Is there conflict of interest here, or isequally it just aand matter of having a reputation as aa serious good employer, for treating all staff fairly]. personalthe preference? Of course, legitimate interests of those staff who are excluded from training are also being denied. The community at large may also be seen as disadvantaged, in that equal access to public employment opportunities for all qualified people is being prevented by this manager’s conduct. The manager’s conduct may also cause the organization to breach applicable anti-discrimination/equal opportunity law(s), potentially exposing the organization (and the government) to penalties, including the payment of compensation. OECD 2005: 75ff. Toolkit on Transparency, Accountability and Ethics in Public Institutions 37

Module 9 – Managing conflict of interest Case study 4: The driver The case: part of his official duties, an to official driver required use the in Question: Is As it acceptable for the driver carry out is his privatetobusiness ministry’s vehicle to deliver andof tocorruption? carry out official errands. His job, the ministry’s vehicle? Or ismessages this a case not well paid, requires him be “on call” if and away frombusiness the ministry for A: which This arrangement may be seen asto“reasonable” other official is not lengthyand periods most days, and he is trusted duties with delayed, thereon is no significant additional cost to or carry risk toout thehis organization. supervision. driver has been withofthe ministry many years and Butminimal it may also be seen The as an apparent conflict interest, andfor favoritism of the has never been anyThe trouble. Becauseofofa the flexibility the driver’s work vehicle individual concerned: appearance public servantofusing a government he may findsalso it very to carry out personal business, such as forarrangements, private purposes be useful problematic. shopping, or taking his children to school, during workingprovided day. Using the ministry vehicle for private purposes is notthe “corrupt” that the ministry knows of, and approves of, the practice. But “personal” arrangements (e.g. Question: for the driverformal to carry out his private can business in the tacit approval Is byitaacceptable local manager, without documentation) be ministry’s vehicle? Or isbe this a case of corruption? misunderstood, and may unlawful. OECD 2005: 75ff. Toolkit on Transparency, Accountability and Ethics in Public Institutions 38

Module 9 – Managing conflict of interest Case study 5: The market The case: Your Office issues licenses to traders who have restaurants and food Question: What are the ethical issues here? stalls in the town. Your job is to process the license applications. One day a A: The offer of a valuable gift in these circumstances creates a conflict of interest. popular food stall operator, Mr A, comes to your office to seek urgent renewal of Unwarranted delay in processing the applications of those traders who had applied in his business license, which expires tomorrow. He says he has been away on time is also an issue. urgent business and did not notice the renewal date. It normally takes a week in The claim that the trader will be offended if you refuse his “gift” is irrelevant. The gift total for your Office to process a license application through the various steps. offered is actually a bribe to influence you to not apply the office’s administration Your Office has a strict policy of prosecuting unlicensed traders: if Mr A is caught procedures in this case, that is, to treat him more favorably than other traders. trading without a license he could be disqualified from holding a license and lose his place in the Market. To show his appreciation for helping him, Mr A offers to provide you and your family with free meals for a month if you will agree to process his license renewal application today. This is a valuable offer, amounting to a week’s salary for you. He will be very offended if you refuse his gift. The Office has a strict anti-bribery rule, but you know that the rule does not prohibit gifts of food. If you agree to do as he asks, it is inevitable that approval of several other applications will be delayed by three days, as today is Friday and Monday is a religious holiday. OECD 2005: 75ff. Toolkit on Transparency, Accountability and Ethics in Public Institutions Question: What are the ethical issues here? 39

Module 9 – Managing conflict of interest Case study 6: The survey Question 1: Is the public servant acting wrongly inthe this example? The case: A public servant is directed to summarize public’s responses to A: his Yes.ministry’s This is anrecent actual survey conflicton of the interest. Government’s proposed changes to the laws regulating environmental protection in the forestry industry. The public servant Question What those is wrong with puttingwhich forward your ownwith views, long secretly 2: discards survey responses are in conflict her as / his well-as you have a clear conscience that the youneed are for right? considered personal beliefs about stronger government protection A: of The public servant is “putting forward her / his views” inservant this example: S/he is the environment, and forests in particular. The public is a wellsecretly distorting the surveyforestry by destroying government information to advance a qualified and experienced scientist. personal objective. This is in a strict sense, corrupt conduct – i.e. acting dishonestly, or in breach of trust, as apublic publicservant servantacting and gaining aninadvantage for a private interest in Question 1: Is the wrongly this example? so Question doing. 2: What is wrong with putting forward your own views, as long as you The fact that protecting forests might be argued to be “in the public interest” have a clear conscience that generally you are right? does not remove the conflict of interest in this case. OECD 2005: 75ff. Toolkit on Transparency, Accountability and Ethics in Public Institutions 40

Module 9 – Managing conflict of interest Case study 7: The road The case: An elected Councillor in the municipal council in a small community has voted in favor of a new, and controversial, road, which is to be built through an old forest which was a popular place for wilderness tourism. The road will Question: What are the integrity benefit the Councillor’s brother, byissues giving here? better access to his farm. It is alleged A: The Councilor has a clear conflict of interest in this by case, as a relative is involvedofin by opponents that the road will drive away hikers, reducing the remoteness thethe decision. In some countries this form of conflict may prohibited by lawhave as an area, and increasing pollution of local streams andbe rivers. Opponents “incompatible” (“incompatibility”). claimed thatrelationship the Councillor had a conflict of interest, which should have been It isdeclared, not acceptable for the Councilor decide not tocode observe the code of ethics as it was a breach of thetoCouncil’s new of ethics to vote on a simply because hematter assumes knows” all the relevant facts about whothe has an Council in athat way“everyone which secretly benefited a relative. In response, interest in matters before council. Codes ethics for public servants set important Councillor used his influence with localofnewspapers to conduct a campaign to public standards or benchmarks and can establish a kind of contract with a relevant damage the reputations of those people who have complained about him. When community as to how positions of trust besmall exercised. questioned, the Councillor said: “Thiswill is a community and conflicts of While it may be a small community, transparency as a process has an important value interest don’t mean anything here, as everyone knows everyone else and many in keeping public servants accountable. Ensuring everyone is informed aboutisimportant people are related by family or marriage. Anyway, everyone knows what being governance matters can be very important, even at the level of very small decided by the Council, and ‘academic’ codes of ethics and so on are communities. unnecessary: that’s just the way we do things here”. OECD 2005: 75ff. Toolkit on Transparency, Accountability and Ethics in Public Institutions Question: What are the integrity issues here? 41

Module 9 – Managing conflict of interest Case study 8: The business dispute Question: What are the integrity issues here? Theiscase: The husband a Parliamentary is involved a business about A: This a difficult case: Onof the one hand, the Deputy deputy has a role ininadvocating dispute over aconcerns, contract with a private sector company to provide security “public interest” and the specific concerns of a constituent. The deputy servicesappears including armed There has been considerable public debate concerned not to beguards. a minister or to have a specific responsibility for thein the policy national newspapers public issues involved.and TV recently, concerning the need for reform of the involving allegations of connections with and organized On security the otherservice hand, industry, the deputy’s husband’s interests are commercial, apparently crime, using illegal immigrants as employees, failure to perform the services not closely related to the matters about which there is public concern. Nothing is contracted for,facts tax evasion, and trafficking drugs and illegal weapons. The known about the of the dispute: It shouldinnot be assumed that the deputy’s Parliamentary Deputy writes parliamentary letterhead to the head of the husband has a justified cause of on complaint. which licenses provideto security services: She deputy complains Theministry deputy’s husband maycompanies or may notwho be entitled have this particular about the conduct ofThis the company and asks for business be advocate on his behalf: must be established astheir a question of license fact. In to these reviewed. writing as a parliamentary deputy, on official parliamentary letterhead, circumstances, and requesting review of the company’s license to operate, could appear to be an Question: What areoffice the integrity issues for here? improper use of public and resources private advantage. The deputy has, at minimum, an apparent conflict of interest. OECD 2005: 75ff. Toolkit on Transparency, Accountability and Ethics in Public Institutions 42

Module 9 – Managing conflict of interest Learning outcomes In this module you have learned that: Public servants are required to take as much care to avoid apparent conflicts of interest as to avoid actual or potential ones; If not managed properly, conflicts of interest can be a serious risk for corruption; Managing conflicts of interests requires a holistic approach: Prevention and detection through legislation, declaration regimes, resolution and measures such as awareness-raising and training work best as a system. Toolkit on Transparency, Accountability and Ethics in Public Institutions 43

Module 9 – Managing conflict of interest Barnes, D. W. (2013a). Rwanda, Ch. 9. In World Bank (Ed.). Income and Asset Disclosure Case Study Illustrations - A companion volume to Public Office, Private Interests: Accountability through Income and Asset Disclosure (pp. 173-186). Washington: International Bank for Reconstruction and Development / The World Bank. Retrieved from http://documents.worldbank.org/curated/en/664561468340842190/pdf/Income-and-asset-disclosure-case-study-illustrations.pdf (last accessed on April 7, 2020). References (1) Barnes, D. W. (2013b). Mongolia, Ch. 8. In World Bank (Ed.). Income and Asset Disclosure Case Study Illustrations - A companion volume to Public Office, Private Interests: Accountability through Income and Asset Disclosure (pp. 153-172). Washington: International Bank for Reconstruction and Development / The World Bank. Retrieved from http://documents.worldbank.org/curated/en/664561468340842190/pdf/Income-and-asset-disclosure-case-study-illustrations.pdf (last accessed on April 7, 2020). Bertók, J. (August 2007). Conflict of Interest: Tools for implementation and enforcement. OECD Public Governance and Territorial Development Directorate. Retrieved from https://www.oecd.org/site/adboecdanti-corruptioninitiative/39368002.pdf (last accessed on April 7, 2020). Chêne, M., Messick, R., Mulukutla, H. & Hoppe, T. (September 2015). The use of technology for managing income and asset declarations. U4 Expert Answer. U4 Anti-corruption Resource Centre. Retrieved from https://www.u4.no/publications/the-use-of-technology-for-managing-income-and-asset-declarations.pdf (last accessed on April 7, 2020). Council of Europe (2000). Recommendation No. R 10 of the Council of Europe committee of ministers to member states on codes of conduct for public officials. Retrieved from https://search.coe.int/cm/Pages/result details.aspx?ObjectID 09000016805e2e52 (last accessed on April 7, 2020). Habershon, A. & Berger, T. (2013). Argentinia, Ch. 1. In World Bank (Ed.). Income and Asset Disclosure Case Study Illustrations - A companion volume to Public Office, Private Interests: Accountability through Income and Asset Disclosure (pp. 7-26). Washington: International Bank for Reconstruction and Development / The World Bank. Retrieved from http://documents.worldbank.org/curated/en/664561468340842190/pdf/Income-and-asset-disclosure-case-study-illustrations.pdf (last accessed on April 7, 2020). Habershon, A. & Mulukutla, H. (2013). Indonesia, Ch. 5. In World Bank (Ed.). Income and Asset Disclosure Case Study Illustrations - A companion volume to Public Office, Private Interests: Accountability through Income and Asset Disclosure (pp. 97-114). Washington: International Bank for Reconstruction and Development / The World Bank. Retrieved from http://documents.worldbank.org/curated/en/664561468340842190/pdf/Income-and-asset-disclosure-case-study-illustrations.pdf (last accessed on April 7, 2020). Jenkins, M. (June 2015). Topic Guide: Conflicts of Interest. Transparency International. Retrieved from https://knowledgehub.transparency.org/guide/topic-guide-on-conflicts-of-interest/5483 (last accessed on April 7, 2020). Martini, M. (July 2013). Declaration of Interests, Assets and Liabilities: Oversight mechnaisms, Disclosure policy and sanctions. Anti-corruption Helpdesk. Transparency International. Retrieved from https://www.transparency.org/files/content/corruptionqas/Declaration of interests assets and liabilities.pdf (last accessed on April 7, 2020). Mastruzzi, M. (2013). Guatemala, Ch. 3. In World Bank (Ed.). Income and Asset Disclosure Case Study Illustrations - A companion volume to Public Office, Private Interests: Accountability through Income and Asset Disclosure (pp. 59-80). Washington: International Bank for Reconstruction and Development / The World Bank. Retrieved from http://documents.worldbank.org/curated/en/664561468340842190/pdf/Income-and-asset-disclosure-case-study-illustrations.pdf (last accessed on April 7, 2020). Mooney, J., Ferguson, G. & Bildfell, C. (2018). Public Officials and Conflicts of Interest, Ch. 9. In Ferguson, G. (Ed.). Global corruption: Law, theory & practice (pp. 853-887). University of Victoria (Canada). Retrieved from https://dspace.library.uvic.ca/bitstream/handle/1828/9253/Ch.%2009 April2018 web.pdf?sequence 10&isAllowed y (last accessed on April 7, 2020). Toolkit on Transparency, Accountability and Ethics in Public Institutions OECD (2005). Managing Conflict of Interest in the Public Sector: A Toolkit. Retrieved from https://www.oecd.org/gov/ethics/49107986.pdf (last accessed on April 7, 2020). 44

Module 9 – Managing conflict of interest OECD (2011). Asset Declarations for Public Officials: A Tool to Prevent Corruption, Paris: OECD Publishing. Retrieved from http://www.oecd.org/daf/anti-bribery/47489446.pdf (last accessed on April 7, 2020). Open Government Partnership (November 2014). Open Government Guide. Cross Cutting Topics. Customised Report. Assets disclosure and conflicts of interests (authored by Global Integrity in lead). Retrieved from https://www.opengovpartnership.org/wp-content/uploads/2019/06/open-gov-guide summary cross-cutting-topics.pdf (last accessed on April 7, 2020). United Nations Convention against Corruption. Adopted by the UN General Assembly on 31 October 2003, by resolution 58/4. Retrieved from https://www.unodc.org/documents/treaties/UNCAC/Publications/Convention/08-50026 E.pdf (last accessed on April 7, 2020). References (2) World Bank / International Finance Corporation (April 2014). Asset Declaration Systems. Panel 1: Introduction to Asset Disclosure. Presentation held at MENA Regional Conference. Retrieved from http://siteresources.worldbank.org/PUBLICSECTORANDGOVERNANCE/Resources/285741-1233946247437/5810405-1399294268994/ADInternational-and-Regional-Trends.pdf (last accessed on April 7, 2020). Toolkit on Transparency, Accountability and Ethics in Public Institutions 45

Thank you.