Governance as an SDG Accelerator

Annex E. Case studies on fostering a culture of integrity and fighting corruption

Indonesia: Illegal wildlife trade threatens sustainable development outcomes

Indonesia’s large biodiversity makes it susceptible to illegal wildlife trade (IWT). The problem is complex and linked to a number of factors that are critical to the country’s long-term development. Enforcement capacity gaps, corruption, unclear legal frameworks, and issues with inter-agency coordination between government bodies complicate matters further.

As one of the world’s “mega-diverse” countries, Indonesia counts 500 national parks, spanning over 360 000 square kilometres. Across the country, 140 resident species of birds, 63 species of mammals and 21 species of reptiles are threatened by extinction (CBD, 2018[1]), with serious implications for the achievement of a number of SDG targets, e.g.:

• SDG Target 15.7: Take urgent action to end poaching and trafficking of protected species of flora and fauna and address both demand and supply of illegal wildlife products. Indonesia is both a source and consumer country for domestic IWT products and a consumer of internationally imported IWT products. Domestically, the illegal exotic bird trade is likely the largest form of IWT (Indonesia MEF, 2018[2]) (Indonesia Customs, 2018[3]). According to some estimates, over one million birds (CITES and non-CITES) are removed from their natural habitat annually in Indonesia (Nash, 1993[4]). Other poached and trafficked animals include Indonesia’s native pangolin, live reptiles and mammals such as the orang-utan.

  Illegal land clearing of rainforests, also known as “slash and burn” is done to make way for plantations is another environmental crime that encroaches upon and destroys habitats for endangered species.

• SDG Target 16.4: By 2030, significantly reduce illicit financial and arms flows, strengthen the recovery and return of stolen assets and combat all forms of organized crime. Illegal trafficking of animals takes place through networks of corrupt actors and organised criminal gangs. With over 17 000 islands, Indonesia’s geography represents an important enforcement challenge for tracking and stopping criminal networks of smugglers. The multi-million dollar trade in endangered species, which is also facilitated by corruption, means profits for criminals at the expense of sustainable development.

• SDG Target 8.5: By 2030, achieve full and productive employment for all women and men (…): Approximately 40% out of the country’s 264 million people rely on biodiversity for their subsistence needs. Illegal wildlife trade, alongside other wildlife crimes such as deforestation, threaten the well-being of Indonesian people. If left unchecked, deforestation and dwindling animal numbers from poaching and trafficking will inevitably lead to lower development outcomes.

Legal loopholes and steps towards reform

According to existing conservation laws (Act No.5/1990 on Conservation of Living Resources and their Ecosystem, as well as the Government Regulation No. 7/1999 on Preservation of Plants and Animal Species), most non-endemic animal poached illegally abroad can be legally traded once they are in Indonesia. For example, surveys of species of turtles and tortoises for sale in Jakarta’s markets found that non-native species made up 77% of all animals advertised (TRAFFIC, 2018[5]). The species of turtles and tortoises observed came from Africa, Asia, Europe, Madagascar, and North and South America. Nearly half of the species observed were categorized as near extinction, and several featured on CITES Appendix I, indicating that international trade is prohibited.

Recently, Indonesia has initiated high-level political anti-corruption drives targeting IWT and related offenses. Early in 2018, the government launched a revision of the Natural Resources Conservation Law of 1990. Some aspects of the draft law target IWT more effectively – such as banning the trade in species that are regulated by CITES, the main international treaty on endangered animals and plants. But it also purportedly weakens the existing law, such as the new “self-defence” clause that waives criminal charges for killing protected wildlife; a less clear definition of wildlife crime that could make it harder to crack down on traffickers; and the lifting of protection of conservation areas to allow “strategic development” projects such as geothermal exploration.

Concrete measures to improve governance for corruption and environmental crime

Indonesia’s anti-corruption commission, the KPK, estimates the losses from logging to total some USD 9 billion in state revenues from timber sales between 2003 and 2014 (TI, 2017). Many of the losses incurred from illicit trade in timber attributed to corruption. Indonesia has taken a number of concrete measures to tackle governance gaps that enable environmental crime, with a focus on illegal logging and deforestation. A presidential decree was issued for the creation of a National Task Force on Logging, which has led to the creation of the “multi-door approach” for environmental crimes. The multi-door approach is a multi-agency coordinated effort to tackle environmental crimes. The coordinated approach includes the Ministry of Environment and Forestry; Customs; National Police; Quarantine; the Anticorruption Commission (KPK); the Indonesia Financial Transaction Reports Analysis Center (PPATK); and the Office of the Attorney General (OAG).

The results from the multi-door approach vis-à-vis logging crimes has been a series of successful, high-level prosecutions related to corruption and money laundering. In 2014, the former governor of Riau Province was sentenced to 14 years in jail and USD 90,000 in fines for embezzlement, which stemmed from illegally issued logging permits (Mongabay, 2014[6]). However, many obstacles to the successful and wide-spread implementation of the multi-door approach remain, especially when it comes to applying this to all forms of environmental crime. For example, on IWT, the OECD learned that, despite widespread allegations, there have been no corruption cases pursued by the KPK on this front, due to the relatively low perceived revenue and income losses. Most importantly, one of the major gaps that remains is that there are too few resources and capacity for anti-corruption authorities to investigate all cases and reports. Indonesia remains a country that faces important challenges from corruption, yet its anti-corruption administrations lack the adequate staffing levels to conduct investigations. As a result, there is a tendency for the administrations to focus on less complex cases or to target only the “known knowns”.

Lithuania: Developing and sustaining an anti-corruption environment for the public sector

Lithuania’s Special Investigation Service (STT) is a statutory law enforcement agency created in 1997 to develop and implement corruption prevention measures. It is also mandated as the investigation agency to detect and probe corruption related-crimes, including domestic and foreign bribery cases. Its functions, resources and legal mandate are defined in the Law on the Special Investigation Service, and form an important part of Lithuania’s efforts to improve governance for the achievement of SDG target 16.5 to “substantially reduce corruption and bribery in all its forms”.

The STT is taking a whole-of-government and whole-of-society approach to integrity and anti-corruption, and has taken considerable steps to raise awareness on the prevention of corruption, both within other government agencies and across society and the private sector as a whole. This is consistent with the overall implementation of the 2030 Agenda, which requires integrated, coordinated and coherent approaches across all policy areas and actors.

As part of the Anti-Corruption Programme of the Republic of Lithuania for 2015-2025, the STT developed awareness-raising activities on corruption prevention and risk management, but also on public sector understanding of anti-corruption initiatives.

For example, in 2017, the STT developed and published a Guide on the Development and Implementation of an Anti-Corruption Environment in the Public Sector, in co-operation with the Lithuanian Chief Official Ethics Commission, the Ministry of Justice, the State Tax Inspectorate, the Ministry of the Interior and the Ministry of Education, Science and Sports (Special Investigation Service, 2018[7]). The Guide, of which a second edition was published in 2018, is the first structured document with the objective to develop a sustainable anti-corruption environment in the public sector. The Guide has several objectives that are relevant for but not limited to the implementation of SDG 16:

• Identify and properly manage the risk of corruption in the public sector

• Strengthen citizenship and intolerance for corruption, encourage public sector employees not to commit corruption-related offences

• Introduce transparent and fair standards of behaviour

• Disseminate good practices in developing an anti-corruption environment.

• Develop an environment resistant to corruption in state and municipal institutions.

It also has the objective to assess public sector employees’ vulnerability to corruption and identify risk factors, in particular through:

• Identifying employees’ (in)tolerance for corruption, and gradually achieve “zero” tolerance

• Raising awareness on anti-corruption topics.

• Organising activities within anti-corruption commissions and for persons responsible for the prevention of corruption.

• Organising, coordinating and implementing anti-corruption programmes and plans.

• Identifying probabilities of corruption manifestation.

• Conducting qualitative anti-corruption assessments of legal acts.

• Organising information and training activities for persons seeking to hold or holding a position in a state or municipal institution or enterprise.

• Preparing a code of conduct for civil servants and employees.

• Effectively organising declarations of private interests and declarations of assets and income.

• Ensuring the protection of employees when they report cases of corruption or any other offences committed or being committed in an institution or agency.

In addition, in 2017 the STT published an Anti-Corruption Handbook for Business (Lithuanian Special Investigation Service, 2017[8]). The Handbook was developed in co‑operation with other government bodies, Lithuanian business associations, civil society organisations and companies. It provides tools, practical guidance and examples of best practices for private sector entities seeking to implement transparent and responsible conduct, prevent corruption in business deals, raise anti-corruption awareness and promote ethical behaviour. It also includes the legal consequences of corruption-related offences, including liability for bribing foreign public officials.

In 2017, Lithuania also became a party to the Convention on Combating Bribery of Foreign Public Officials in International Business Transactions of the OECD, and since then has actively participated in the OECD Working Group on Bribery in International Business Transactions.

Thailand: Building transparent and accountable institutions to support SDG implementation

In recent years, the Government of Thailand has strengthened efforts to mitigate corruption risks in the public sector, declared anti-corruption efforts an urgent issue and part of the national agenda. Prime Minister General Prayut Chan-o-cha has on several occasions emphasised the need to include anti-corruption efforts in the reform process of every sector, whether in politics, the economy, energy, public health and the environment, mass media and social affairs (The Nation, 2016[9]).

In terms of policy instruments, the National Anti-Corruption Strategy (Phase 3, 2017-2021) is the main government-guiding document in the area of anti-corruption and integrity. The vision of the strategy is “Zero Tolerance and Clean Thailand”, which aims to achieve a “society founded on discipline, integrity and ethics, with all sectors participating in the prevention and suppression of corruption”. In developing Phase 3 of the Strategy, the National Anti-Corruption Commission (NACC) employed a consultative approach and collected the views and suggestions of experts, academics and representatives of government agencies, state enterprises, the private sector, independent and non-governmental organisations.

In addition to the National Anti-Corruption Strategy (2017-2021), good governance and anti-corruption are widely recognised as priorities in a large number of plans and strategies developed by the Thai government, such as the 20 Years Country Strategy (2017-2036), the 12th National Economic and Social Development Plan (2017-2020), as well as in Thailand’s budget plans.

The Thai Government also urges all agencies and institutions to undertake action against corruption, underscoring the whole-of-government approach to promote integrity and fight corruption. All government agencies and institutions are expected to adopt guidelines and measures in accordance with this strategy and to translate them into practice. In particular, each government department at the national and provincial level must undergo an annual Integrity and Transparency Assessment (ITA). The annual assessment is led by the Public Sector Anti-Corruption Commission (PACC) and the National Anti-Corruption Commission (NACC). The assessment methodology has been adapted from the Anti-Corruption and Civil Rights Commission of South Korea and consists of three components: an internal survey, an external survey for customers/stakeholders, and an evidence-based self-assessment survey, which covers five topics (transparency, accountability, anti-corruption, integrity culture and work integrity). The scores of the ITA surveys are combined in an index, which is published online and is intended to encourage higher standards of integrity throughout the government. Further challenges will include strengthening the impact of the ITA and improve the overall coordination of the country’s anti-corruption and integrity policies in order to strengthen government accountability, promote trust and ensure that the country can continue down a path of sustained economic growth.

United Kingdom: The long-term objectives of the UK Anti-Corruption Strategy

The United Kingdom Anti-Corruption Strategy for 2017-2022 is grounded in the benefits of tackling corruption on the achievement of desired impacts. Recognising that corruption is a threat to Britain’s safety and security, and that integrity “underpins the UK’s ability to boost trade and attract investment”, the strategy identifies three national long-term expected outcomes:

• Reduce threats to Britain’s national security.

• Increase economic prosperity.

• Enhance public confidence in Britain’s domestic and international institutions.

This vision is supported by six priorities, each has several goals – 24 in total – and specific reform measures, which build on the previous actions taken within the framework of the UK 2014 implementation plan and the 2016 London-anti-corruption summit:

• Reduce the insider threat in high risk domestic sectors.

• Strengthen the integrity of the UK as an international financial centre.

• Promote integrity across the public and private sectors.

• Reduce corruption in public procurement and grants.

• Improve the business environment globally.

• Work with other countries to combat corruption.

The fifth objective – improving the business environment globally – aims to “allow companies, including UK businesses, to compete on even terms” and generate sustainable economic growth: “trading with integrity is crucial, not only because it underpins growth at home and abroad, but also because it helps to reduce the negative effects of globalisation, including inequality. Integrity is essential in underpinning our reputation as a fair, rules-based society that attracts investment and allows people to trade freely”. Actions within this priority are divided into four long-term goals:

• Goal 1. Reduced impact of corruption on trade and investment internationally. Building on the measures taken since the 2014 Anti-Corruption strategy, including guidance and training about the UK Bribery Act of 2010 and on how to report allegations of corruption, the UK Government aims to continue supporting developing countries to strengthen their business environment through government programmes involving capacity building and technical assistance.

• Goal 2. Enhanced international development and expert finance practices. The UK’s Development Finance Institution (DFI) and export credit agency will encourage similar international institutions to adopt high standards of integrity, such as the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions (OECD, 2011[10]).

• Goal 3. Increased investment by UK companies in challenging overseas markets. Through enhanced support and advice, the UK Government works with businesses and civil society to ensure that UK companies are able to operate and succeed with integrity, and comply with new measures to tackle modern slavery.

• Goal 4. Strengthened business-led collective action to reduce corruption. The UK government seeks to support private sector-led initiatives and actions aimed at strengthening anti-corruption good practices.

References

[1] CBD (2018), Indonesia Country Profile, The Convention on Biological Diversity, https://www.cbd.int/countries/profile/default.shtml?country=id (accessed on 19 November 2018).

[3] Indonesia Customs (2018), Interview with the Directorate General of Customs, Ministry of Finance, October 18, 2018.

[2] Indonesia MEF (2018), Interview with Indonesia Directorate General for Law Enforcement, Ministry of Environment and Forestry, October 17, 2018.

[8] Lithuanian Special Investigation Service (2017), Anti-Corruption Handbook for Business, https://protect2.fireeye.com/url?k=827a964c-de61dfc4-827abd8f-002590f45c88-8c128f3b063839db&u=https://www.stt.lt/documents/avv_viesajam_sektoriui/8_3607_STT_antikorupcinis_vadovas_EN_210x295_WEB_2v.pdf.

[6] Mongabay (2014), Indonesia politician gets 14 years in jail for illegal permits, forest corruption, Mongabay News, https://news.mongabay.com/2014/03/indonesia-politician-gets-14-years-in-jail-for-illegal-permits-forest-corruption/ (accessed on 11 December 2018).

[4] Nash, S. (1993), Sold for a Song: The Trade in Southeast Asian non-CITES birds, TRAFFIC International, Cambridge, UK, http://www.trafficj.org/publication/94_Sold_for_a_song_NonCITESBirds.pdf.

[10] OECD (2011), Convention on Combating Bribery of Foreign Public Officials in International Business Transactions, http://www.oecd.org/daf/anti-bribery/ConvCombatBribery_ENG.pdf.

[7] Special Investigation Service (2018), Guide on the Development and Implementation of an Anti-Corruption Environment in the Public Sector, https://www.stt.lt/documents/avv_viesajam_sektoriui/AAV_viesajam_2018_09_05_viesinimui_PDF_EN_2.pdf.

[9] The Nation (2016), “Prayut carrying burden of anti-corruption fight”, http://www.nationmultimedia.com/news/opinion/today_editorial/30302113.

[5] TRAFFIC (2018), Slow and Steady: The Global Footprint of Jakarta’s Tortoise and Freshwater Turtle Trade, http://static1.1.sqspcdn.com/static/f/157301/27865373/1521988425807/Jakartas-Tortoise-and-Freshwater-turtle-trade-web.pdf?token=pcanRKCjUQWp67U%2FakdZK5EB%2BzA%3D (accessed on 29 November 2018).