Tue 26 Dec 17 // Conflict & Insecurity
The Independent Defence Anti-Corruption Committee (NAKO) announced that it would withdraw from engagement with UkrOboronProm, due to the failure of the Government and Presidential Administration to make progress in establishing an independent Supervisory board.
The committee had hoped to support efforts to reform the state-owned enterprise, both by providing advisory services and by advising the Government and Presidential Administration on the steps needed to establish an independent and effective Supervisory board for the Company. Recommendations were provided to Deputy Head of the Presidential Administration Valeriy Kondratiuk, who committed to supporting their implementation.
Oleh Rybachuk, co-chair of NAKO, said:
We hoped we could contribute to reducing the high corruption risk that exists in UkrOboronProm today, and ensure that UkrOboronProm is overseen by an independent, effective board, so that the firm could do what it should: provide our troops with the equipment they need and use taxpayer funds wisely. Unfortunately, we do not see that this presidential administration has the political will for real change.
At the invitation of UkrOboronProm, NAKO has monitored UkrOboronProm’s procurement of a consulting firm to advise and support the implementation of governance reform. Without an independent Supervisory board in place, however, the NAKO committee determined that the procurement of a consultant would be out of line with Ukrainian legislation (Article 6 of the Law of Ukraine “On features of management of objects of state-owned property in the defence industry complex” requires Supervisory board sign-off on strategy, audit, and reorganisation of the Company). More importantly, the procurement of a consultant would have little chance of affecting substantive change.
The OECD Principles on Corporate Governance of State-Owned Enterprises represent good practice internationally on governance of state-owned enterprises. According to these principles, the government is responsible for establishing well-structured, merit-based and transparent board nomination processes in State-owned enterprises. These boards are required to provide strategic guidance and monitor management, and are ultimately accountable for the Company’s integrity and performance.
Oleh Rybachuk, co-chair of NAKO, also said:
Given the allegations surrounding senior political leaders’ relationship with UkrOboronProm, it is absolutely vital that the Supervisory board is genuinely independent, said Drago Kos, co-chair of the NAKO. In a time of war, the largest state-owned defence enterprise must meet the needs of the troops – [not political leaders.] The only way for this to happen is through a supervisory board that is independent and trusted by the Ukrainian public.
NAKO announced that it would work with others to develop concrete recommendations on how to put in place an independent Supervisory board in 2018, and offered their continued support to the government on their implementation.
The Independent Defence Anti-Corruption Committee (Nezalezhny Antikorrupciynii Komitet z pytan oborony, or “NAKO”) is a joint initiative established by Ukrainian activists, journalists and international experts to fight corruption in the Ukrainian defence sector. The NAKO is a national-international project of Transparency International Defence & Security and Transparency International Ukraine, and is supported by the Ministry of Foreign Affairs of the Netherlands.
TI Defence & Security
The illegal trade between government-controlled Ukraine and the occupied territories in Donbas is conducted systematically, facilitated by Ukrainian defense and security institutions, according to new research. The illegal trade undermines defence capacity, and damages Ukraine’s economy and reputation. And it is so lucrative that those involved have an interest in sustaining the conflict, potentially prolonging the war.
The research, Crossing the line: how the illegal trade with occupied Donbas has undermined defence integrity, was completed by the Independent Defence Anti-Corruption Committee (NAKO), and is based on 40 interviews with ATO participants, security force representatives, civil society, judges, and residents of Donbas.
The government has taken steps to address the problem of illegal trade; in March 2017, the government banned the transport of all goods through the contact line except personal belongings and humanitarian aid. The government has also created “joint mobile groups” made up of servicemen and volunteers, and “fiscal groups,” of State Border Guard Service and State Fiscal Service officers. But these actions have not been effective in reducing the trade.
Olena Tregub, Secretary General of NAKO, said Tuesday:
“The illegal trade incentivizes conflict, and means that some profit as others suffer. When some servicemen collude with militants to facilitate trade, it has a huge impact on coordination between units and security institutions, the accuracy of our intelligence, the reputation of our forces, and has even caused the death of troops.”
The report describes 5 ways that goods are moved illegally across the contact line: 1) by car, through checkpoints 2) through humanitarian logistics centers, initially organised to enable retail trade 3) through railway corridors, by using the double bottom of the wagons or in undeclared additional wagons 4) by paying defence and security forces to enable movement outside of formal checkpoints, in the “gray zone,” in 2015 the payment for crossing all the checkpoints could vary from 25,000- 120,000 UAH (US $930-4,450); 5) through a process known as “terminated transit,” in which goods headed for the occupied territories are falsely registered as destined for Russia; once in Russia, they enter the occupied territories through the uncontrolled parts of the Ukraine-Russia border.
According to the analysis, this lucrative trade will not be completely halted as long as the occupation continues. It finds that current efforts, including the blockade, have been ineffective in stopping the movement of goods. The report makes a series of recommendations, including immediate steps to mitigate the problem short-term, and long-term solutions.
TI Defence & Security
5th September, 2017, London – Corruption is perpetuating violent conflicts around the world. New research from Transparency International – Defence and Security found that fighting corruption is rarely a foreign policy priority, despite mounting evidence it’s a major 21st-century contributor to global insecurity.
“The Fifth Column”, published today, found that states most affected by corruption are very often victims of deep conflict. Seven of the ten lowest-scoring countries in Transparency International’s Corruption Perceptions Index were also amongst the ten least peaceful countries in the most recent Global Peace Index.
Corruption was found to be contributing to violent conflict in a number of ways, including:
By failing to address these risks, governments are ignoring a major cause of conflict. Transparency International recommends corruption is treated as a serious foreign policy concern and that states should:
Katherine Dixon, Director Transparency International Defence and Security, said:
“Its high time that states made corruption a top-tier foreign policy priority, as important as non-proliferation and counter terrorism efforts. Until they do that, efforts to end conflict, promote global peace and stability, will be falling short of the mark.”
“Corrupt regimes are unstable and dangerous, and supporting them is rarely the right choice for building stability either nationally or regionally. From Syria to Ukraine, corruption has fuelled conflicts, undermining the long-term future of those states and contributing to the loss of many lives.”
TI Defence & Security
On Thursday, Transparency International Senior Advisor Sir Ian Andrews, and Defence and Security Director Katherine Dixon facilitated a day of high level discussions with the leadership of the Nigerian Air Force. The aim was to identify the corruption risks which face the Nigerian armed forces, discuss the initiatives already taken, and to begin to develop mechanisms to address them.
Sessions included a full discussion of the challenges facing the Air Force including issues surrounding defence budget processes, personnel integrity, and procurement systems. TI facilitators presented lessons from international best practice, including the vital role of political leadership, a commitment to transparency, and external independent oversight mechanisms which had been crucial factors underpinning successful defence transformations in other context, such as Colombia.
The entire leadership of the Air Force was present or represented, including the Chief of Air Staff, Air Officers Commanding and Branch Chiefs.
Katherine Dixon, Director Transparency International Defence and Security, said:
“We welcome the positive participation of the Air Force. The purpose of the event was to create a forum for the leadership to discuss openly the corruption risks as they see them. The Nigerian Air Force outlined the steps they had taken to address these challenges and we strongly encouraged them to end the presumption towards secrecy and open these measures up to public scrutiny.”
Transparency International has outlined a number of recommendations for systemic reform of the Nigerian Defence sector including the development of unified anti-corruption strategy, extending public access defence and security information, and strengthening external oversight particularly over confidential procurements.
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May 24 2017 | Kyiv
International security assistance to Ukraine is not always used effectively, according to new research on corruption risks in security assistance by the Independent Defence Anti-Corruption Committee. The report identifies improvements in how assistance is monitored, but calls for improved regulation and oversight of security assistance, and greater transparency of key strategic planning documents like the State Defense Order and defence budget. The report also called on donor countries to use international aid as a leverage to push for systemic anti-corruption reform in the Ukrainian defense sector.
Corruption in Nigerian defence sector benefitting Boko Haram
18th May, London – Deep-rooted corruption in the defence sector is crippling the Nigerian military in the fight against Boko Haram, according to a new report by Transparency International. To effectively combat Boko Haram, Nigeria’s international partners must build anti-corruption measures into all defence deals.
Increase transparency in the security sector to defeat corruption.
18th May, Abuja – An opaque and secretive security sector will jeopardize President Buhari’s ambitious anti-corruption drive and is derailing the fight against Boko Haram, according to a new report by Transparency International.
25th April 2017, London – New bi-partisan legislation to treat international corruption as a national security threat is a vital development following the February repeal of Section 1504 of the 2010 Dodd-Frank Act.
The Combating Global Corruption Act of 2017, introduced by US Senators Ben Cardin (D-Md.) and David Perdue (R-Ga.) with support from Feinstein, Rubio, Blumenthal, Collins, Merkley, Booker, and Leahy requires the State Department publish an annual report on the state of corruption worldwide. It provides that national anti-corruption programs be ranked according to a three-tiered ranking system and, crucially, requires that US agencies (Department of State, Department of Defense, USAID) pursue specific transparency and accountability measures where national efforts are considered insufficient.
Katherine Dixon, Director Transparency Defence and Security, said:
“The link between corruption and development is simple: corrupt leaders that siphon state funds and resources away from vulnerable populations bring about weak states and public unrest, creating fertile ground for terrorists and organised crime.”
“The February repeal of Section 1504 was a step back for US anti-corruption efforts. But, with the Combatting Global Corruption Act, we have the chance to make some big moves forward. In evaluating how seriously countries take corruption on their home turf, the US has raised the spectre of global corruption and elevated it on the foreign policy agenda.”
TI added that the US must set the gold standard at home if it is to fight corruption elsewhere.
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