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Ethics and Business Conduct in Defence Establishments: An International Review

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Abstract and Figures

The defence integrity system relies on numerous elements, including systems of internal controls to regulate the ethical and business conduct of employees. Often these regulations are formalised in Codes of Conduct. This article, based on the internal controls programmes of defence ministries and armed forces in 32 nations, forms an international study of the state of current regimes to address this issue in defence establishments. It assesses programmes on the basis of whether they are compliance- or ethics-based, the strength of regulations pertaining to bribery, gratuities/gifts and hospitality, conflicts of interest, and postemployment procedures, as well as training and dissemination of ethics and business conduct programmes. While some countries had well-developed regimes, others had poorly developed regulations in many cases, suggesting a pressing need to raise standards internationally in the field of ethics and business conduct in defence establishments.
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February 2009
ETHICS AND BUSINESS CONDUCT IN DEFENCE
ESTABLISHMENTS THE IMPROVEMENT OF
NATIONAL STANDARDS
Ben Magahy and Mark Pyman
Defence Against Corruption Programme
Building Integrity and Reducing Corruption Risk in
Defence Establishments
1
Transparency International’s defence and security sector programme works with
governments, defence companies, multilateral organisations and civil society to build
integrity and reduce corruption in defence establishments worldwide. Information on
Transparency International’s work in the defence and security sector to date, including
background, overviews of current and past projects, and publications, is available at
the Defence Against Corruption website, http://www.defenceagainstcorruption.org .
For further information, please contact
Anne-Christine Wegener (anne-christine.wegener@transparency.org.uk) or
Ben Magahy (ben.magahy@transparency.org.uk).
2
EXECUTIVE SUMMARY
Transparency International (UK), which leads on defence and security issues for the
global Transparency International movement, has for the last five years monitored
open source press documentation on corruption within the defence arena around the
world. The abundance of corrupt or allegedly corrupt incidents involving senior
defence officials across the world clearly indicates that globally there is either a
significant lack of comprehensive guidelines on how defence official should conduct
themselves, or that in many countries, the guidelines in place are not being
implemented.
This can have significant operational implications. Corruption within Defence
Establishments results in large-scale waste of money, inappropriate procurements,
reduced operational performance capability, and reduced effectiveness of the armed
forces. Confidence in the integrity of those who lead defence organisations is essential
to the general trust of a nation in their armed forces: having clear standards that each
officer and official upholds is a part of that overall integrity.
In order to compile meaningful data to determine the extent of the problem,
Transparency International (UK) has carried out research across some thirty nations
to establish what their standards for defence officers and officials are, how good they
are, and how well embedded they are through organisational ethos and training
programmes. Defence Ministries and Armed Forces of sixty nations were asked to
provide their detailed conduct standards and associated training programme. We
received detailed responses from thirty-two nations; an excellent response and a
reflection of how seriously many nations view this subject.
Conclusions from the survey
The general use of formal codes to regulate ethics and business conduct was much
lower than we expected, with clear potential impact on anti-corruption activities and
initiatives. The approaches to training were generally fragmented, and there was a
clear lack of a central set of standards or values in most countries. Of those nations
that did regulate ethics and business conduct through formal frameworks such as
codes of conduct, many were not able to refer to these codes as being unified into a
single reference source, but located them across multiple different sites and
documents.
Whilst no country had perfect regimes, some countries had well-developed
programmes, for example Australia, Canada, Chile, Germany, Norway, Romania,
South Africa, the UK, and the USA, though these did show deficiencies in some areas.
There is room for improvement in most areas within most nations.
The key findings on the specific areas were as follows:
Anti-Bribery Regulations
Anti-bribery regulations were in many cases assessed to be under-developed. In
nearly all cases, soliciting or receiving bribes was illegal. However, very few
countries were able to direct officials in how to proceed if they were in a situation
3
where they had been offered a bribe, or if they had good reason to suspect bribery
was occurring within their organisations.
Gifts and Hospitality
Gifts and hospitality regulations were present in many of the responses received.
Within the better performing countries, there were regulations for officials in terms
of what they could receive in quantitative terms, in terms of how offers of gifts and
hospitality should be recorded, and in the procedures to be followed for the correct
disposal of gifts. Several countries included blanket rules prohibiting the receipt of
gifts and hospitality. The reliance of some countries only that officials should not
accept gifts which would impair their impartiality was considered inadequate.
Conflicts of Interest
Insufficient attention was paid to conflicts of interest regulations in the majority of
cases, with some exceptions. Many countries relied on vague commitments that
officials should not have conflicts of interest, which were often poorly defined, and
in some cases not defined at all. Such lack of commitments was considered
inadequate.
Retirement and Separation (Post-Separation Regulations)
Post-separation and retirement regulations were mostly not addressed. Most
regulations which did exist had some focus to protect commercial sensitivity of
private firms, but few addressed the corruption risk involved in movements of
employees between the public and private sectors. Some countries did require
personnel to seek official approval before taking up employment after leaving
public service. In general most countries did not address the corruption risk, and
this is an area which deserves attention.
Training and Dissemination
Training and dissemination of ethical programmes within organisation was an area
which appeared to be weak. Formal courses were apparently not widely utilised
and most means of dissemination of material being done through presentation of
materials to initial recruits and updates to internal websites and bulletins, with
some special attention paid to sensitive positions (such as procurement) in some
cases.
Guidance for officials and mechanisms for change
Whilst formal ethical programmes, regulations, and codes of conduct are a necessity,
they are not sufficient as means of ensuring integrity in the personal conduct of public
officials and military officers. Rather, a strong, integrated ethical programme can
complement an effective organisation and strengthen a weaker organisation. An
internal ethos needs to be developed that consistently reinforces and promotes the
highest levels of integrity in all matters. This needs to be supported by a coherent set
of training and refresher programmes. The lack of a central set of standards or values
in many countries, and fragmented approaches to training suggest this area is much
less developed than nations would like to believe. There are four main elements:
A core Code of Conduct. The precise content of a Code of Conduct will vary from
nation to nation. As a general rule it should address: general principles and a
4
statement of ethical values; regulations related to bribery; regulations related to
receipt of gratuities, gifts, and hospitality; the means for disclosure and resolving of
potential conflicts of interest; and regulations for activities/employment after leaving
public service. A possible template for such a Code is given in Annexe 1.
Clear mechanisms for Change. Developing and implementing a good Code is
not an exercise for a small group, but needs to engage a wide cross-section of the
organisation. There are many good guides on how to go about strengthening
integrity standards in organisations, via private sector advice, non-governmental
organisations like Transparency International, and other organisations in the
international community.
Training and embedding the standards and values. This research indicates that
there is work to be done in many countries to embed clear standards, and for
strong leadership in ethics so as to allow a top-down cascade of values across
defence and military organisations.
Placing these standards within the overall framework of leadership and
accountability of the armed forces and the defence establishment.
Next steps
Transparency international has proposed a sample best practice statement in Annexe
1 of this report and we hope that nations and their defence academies will consider it,
adapt it, and build on it for their own defence establishments. We will also be happy to
follow up individually with any of the nations that responded to this survey if they wish
to see in greater detail how their responses compared to the average.
We also hope that other nations will consider the findings of this survey and use them
to strengthen their own practices and their own training programmes.
Thanks
Transparency International (UK) records its great appreciation of the many
governments and organisations that responded to our survey request.
5
ETHICS AND BUSINESS CONDUCT IN DEFENCE
ESTABLISHMENTS THE IMPROVEMENT OF NATIONAL
STANDARDS
CONTENTS
EXECUTIVE SUMMARY ........................................................................................... 2
Conclusions from the survey .................................................................................. 2
Guidance for officials and mechanisms for change ............................................... 3
Thanks ................................................................................................................... 4
1. Introduction ............................................................................................................ 6
2. Methodology .......................................................................................................... 6
Responses and Patterns ........................................................................................ 7
Caveats and Research Limitations ........................................................................ 8
3. Responses .......................................................................................................... 10
Structure of Ethics and Business Conduct regimes ............................................. 10
Bribery ................................................................................................................. 15
Gifts and Hospitality ............................................................................................. 16
Conflicts of Interest .............................................................................................. 18
Post-Separation Activities .................................................................................... 19
Training and Dissemination of Ethics and Business Conduct Programmes......... 20
4. Research Conclusions......................................................................................... 21
5. Practical implementation of an integrity programme for officials ...................... 24
Programme Design .............................................................................................. 24
Programme Implementation ................................................................................. 24
Annexe 1 - Sample Statement of Best Practice ....................................................... 25
Components of Ethics and Conduct Regimes ..................................................... 25
Statement of Values............................................................................................. 25
General Principles................................................................................................ 25
Bribery ................................................................................................................. 25
Gratuities/Gifts and Hospitality ............................................................................. 26
Conflicts of Interest .............................................................................................. 26
Activities and Employment after leaving public service ........................................ 26
Annexe 2 – Source Documents by Country ............................................................ 28
6
1. Introduction
This review of Ethics and Business Conduct in Defence Establishments has been
developed by Transparency International (UK)’s Defence Against Corruption
programme as a reference tool for Defence Ministry and Military officials, and for
interested civil society organisations, media, and other parties. Transparency
International (UK), which leads on defence and security issues for the global
Transparency International movement, has for the last five years monitored open
source press documentation on corruption within the defence arena around the world.
This work developed out of our experience
1
of the abundance of press and media
reports of corrupt or allegedly corrupt incidents involving senior defence officials
across the world. This clearly indicated that globally there is either a significant lack of
comprehensive guidelines on how defence official should conduct themselves, or that
in many countries the guidelines in place are not being implemented. In discussions
with officials of defence ministries of various countries, we became aware that there
often was no clear guidance to officials and senior officers on how they should
conduct themselves in their relationships with third parties. Guidance always did exist,
but was often buried in detailed regulations, in recruitment letters, or in legal
regulations.
Our principle interest is in promoting best practice in the regulation of ethics and
conduct for Defence Ministry officials and Military officers in their relations with
business, through elaborating current practice in this field through a comparative
study. In identifying best practice, we are developing a basic framework so as to
inform defence officials seeking to build institutions which embody structures of
integrity and transparency, and which are free of corruption and bribery.
The regulations considered in this paper relate to the following areas: offers of bribery
made to public officials and serving officers; offers of gratuities, gifts, and hospitality;
conflicts of interest; and post-separation procedures.
2. Methodology
In our empirical survey, we requested information from about 60 countries as to how
issues related to corruption and business conduct are formally addressed among civil
servants in defence ministries and among officers in the armed forces. The requests
for information were sent to senior civil servants (at the level of Permanent Secretary
or equivalent) and to heads of armed forces (Chiefs of Staff or equivalent).
The formal approach for information requested the following:
Copies of the formal codes of conduct that exist for officials in relation to
business practice, specifically requesting coverage of the areas of conflict of
1
See Transparency International (UK)’s Defence Anti-Corruption Digests, available at
http://www.defenceagainstcorruption.org/index.php?option=com_content&task=blogcategory&id=43&Ite
mid=111
7
interest, bribery, accepting gifts, giving of hospitality, meeting with tenderers,
statements of personal wealth, and formal values of the organisation
Information as to what disciplinary action is taken when codes are broken
Information as to how such codes are disseminated and what forms of training
are conducted in these matters
Assessments of how such codes are perceived and embedded within the
organisation
In addition to formal requests for information, the researchers also conducted semi-
structured interviews with representatives of many of the organisations involved so as
to inform their responses and provide greater clarity.
Responses and Patterns
We received a response from 27 countries. Whilst the geographic spread of the
research requests was fairly even, the responses were heavily skewed towards
European countries, as demonstrated in the Figure 1 below:
The European breakdown of results is as follows in Figure 2:
Figure 1 Responses by Geographical Region
0
2
4
6
8
10
12
14
16
18
20
Europe Americas Asia/Pacific Middle East Africa
Number of Responses
8
In addition to the formal responses, we also received additional information on five
other countries: Transparency International’s local chapters in Russia and Pakistan
were able to provide comments and analyses of their respective countries’ work in this
field, and the South Africa Defence Forces, whilst not responding to repeated requests
for support, have a publicly available and previously much-trumpeted ethics and
business conduct programme, upon which we were able to inform our research. We
were also presented with a copy of Nigeria’s Traditions, Customs and Ethics of the
Nigerian Army from 2005, which is a partial representation of that country’s treatment
on the issue; and we were presented with a copy of Uganda’s code for public
servants, which is a partial representative of their position on these matters. These
research findings incorporate the information from these five sources, bringing our
total number of source countries to 32. The countries by geographical region are listed
below:
Europe: Albania, Bulgaria, Croatia, Denmark, Finland, Georgia, Germany, Ireland,
Latvia, Lithuania, Norway, Poland, Portugal, Romania, Russia, Serbia, Spain,
Sweden, the Ukraine, UK
Africa: Kenya, Nigeria, South Africa, Tanzania, Uganda
Americas: Chile, Canada, Colombia, USA
Asia/Pacific: Australia, New Zealand, Pakistan
Despite the considerable efforts of the authors to get responses from countries in the
Middle East, no countries from that region replied to repeated research requests.
Caveats and Research Limitations
In the sections which follow, we analyse the source material made available to us
under a variety of subject headings, making comparisons between the treatments of
issues and giving examples of the best practice in each field as well as commenting
on the general strength of the treatment of each issue throughout the sample. The
regulations are assessed against the sample statement of best practice offered in
Figure 2 Breakdown of European Responses
0
1
2
3
4
5
6
7
8
9
EU15 Member EU member since
2004/2006
Balkans Eastern Europe/
Caucuses
European Region
Number of Responses
9
Annexe 1 of this paper. The accuracy of the following is dependent on the accuracy of
the material received as part of our survey – for example, we only received documents
detailing codes of conduct from 20 countries out of 32; this does not necessarily mean
that the remaining countries could be categorically stated not to have such codes, only
that they did not provide these. In our research request, however, we did specifically
ask for this as part of our survey; Transparency International (UK) are not responsible
if respondents have failed to represent the state of their regulatory regimes to us in a
manner commensurate with their true treatment of the issue.
Further problems may arise from a selection bias amongst recipients. The countries
chosen to be part of this project were selected on the desire to have a regional
balance so as to provide as accurate a picture worldwide as possible from the sample.
However, at a response rate of 50%, there developed substantial gaps in source
material available to us, which have left us with a European skew, and which have left
several regions under-represented in the sample, and in the case of the Middle East, a
region not represented at all. This is regrettable, but is a consequence of some
countries failing to respond to repeated requests for information and support on this
project. The authors would, however, be happy to revise the research findings of this
paper in due course should further materials become available.
Of course, our aspiration to have a balanced regional response rate should not be
taken as an indication that regions or culture are reasons for variation between
countries
2
. A more likely prediction is that the most advanced internal controls
systems should be found in industrialised countries with professional armed forces
and strong rule of law. Other contributing factors specific to defence may include the
size of the sector, the level of expenditure on the military and defence, and the
strength of state institutions. The extent to which we can test this prediction is limited,
however, by the nature of the study we have undertaken, as we explain presently.
We are only able to consider the strength of the regulatory frameworks on the basis of
what is considered to be international best-practice in the public and private sectors.
We take current best-practice approaches to be ethics-based regimes, in which ethical
norms and values are inculcated throughout the organisation and are backed up by
hard rules and legal instruments. In the present section, our focus is on analysis and
comparison of currently existing regulation of ethics and business conduct in defence
establishments. What we are unable to offer at the present time is an assessment of
how well these regulations are enforced or how effective they are; we do have some
comments made in terms of self-assessment through the research responses and
through informal semi-structured interviews conducted with officials in some Defence
Ministries, but at the present time a dataset sufficient to provide a quantitative analysis
of the strength of these regimes in practice does not, to the authors’ knowledge, exist.
What follows, then, is an assessment of the ethics and business conduct programmes
in their formal structure, not in their implementation.
2
The authors are grateful to Steve Schooner for highlighting the need to clarify this point
10
3. Responses
Structure of Ethics and Business Conduct regimes
The defence integrity system relies on a large number of elements, of which internal
controls form a part. Well-organised, centralised organisations with clear chains of
command and strong dedication to public service are essential aspirations. Reliance
on competition and transparency in procurement and acquisitions are necessary.
Robust management of public finances with appropriate checks and balances are
indispensable. Transparent, accountable public organisations, where information can
be readily accessed and scrutinised at a single entry point are highly desirable.
Against such backgrounds, a strong internal controls programme can both
complement existing robust regimes, and help to strengthen weaker regimes. The
purpose of this paper is to consider current approaches to the regulation of ethics and
business conduct, and to elaborate best practice in this field.
The most immediate distinction which can be drawn between overarching approaches
to dealing with regulation of business conduct is that between compliance-based
regimes and ethics-based regimes. The former refers to a structure which is overtly
legalistic: public officials and serving officers are subject to the law, but there is little or
nothing in the way of guidance to contextualise their obligations or to state how an
individual’s obligations relate to an organisation’s obligations.
An ethics-based regime, on the other hand, relies on contextualising decision-making
processes so that individuals shape their actions in a manner consistent with the ethos
of the organisation of which they are a part. There is a stronger reliance on the
application of personal judgement, and an expectation that not only will officials and
officers comply with their strict legal obligations, but that they will also act in a manner
designed to uphold the public integrity of their office. In this sense, the purpose of the
regime is to make anti-corruption and integrity-building serve the function of public
goods; public servants not only comply with the law, they strive to uphold a standard
befitting the trust embodied in them by the public.
Often an ethics-based framework will ask members of the organisation to consider the
following: whether an action can be considered ethical, whether to engage in courses
of action would invite scrutiny from the media, and whether a rational person would
question the pursuit of a certain course of action, while making a clear statement that
any conflicts of interest should always be resolved in favour of the public. Often a
simple but effective question an individual can ask of herself in a difficult ethical
situation is whether having engaged in a course of action she would feel comfortable
explaining what she had done to her friends and close family.
The most effective means of constructing a regime is to combine a common set of
ethical norms and values with clear regulations and a strong legal base; in this sense,
officials and officers know how they should act, and if they should fail in their
obligations, there is sufficient recourse to legal instruments to take appropriate action.
Communicating regulations and ethical obligations requires the development of a
common Code of Conduct that public servants are expected to adhere to. A code of
conduct is defined here as,
“Principles, values, standards, or rules of behaviour that guide the decisions,
procedures and systems of an organization in a way that (a) contributes to the welfare
11
of its key stakeholders, and (b) respects the rights of all constituents affected by its
operations.”
3
In order to quantify the use of various degrees of compliance- and ethics-based
procedures, we divide the components of the source material into three categories:
legal framework, statements of values, and codes of conduct, summarised in Figure 3.
In our research responses, the overwhelming pattern which emerged was that for
each country, there was a legal basis to regulate relations between defence officials
and officers and the private sector. This was expected. In Figure 3, the data shows
that 29 countries in our sample were able to point to a legal framework regulating
business conduct. The other columns in Figure 3 report how many respondents were
able to point to a Statement of Values and to a Code of Conduct for officials and
officers. Over a third of respondents were not able to refer to a Code of Conduct which
regulated business conduct in the defence sector; the most likely reason for this is that
they did not exist, as our research approach clearly requested access to these codes
of conduct or at the very least requested official comment on how regulations were
transmitted to officers and officials. Even fewer respondents, at a total of fifteen, were
able to refer to a Statement of Values for the organisation. Again, we explicitly asked
for these in our research request, so the most likely conclusion is that for many of
these countries, such statements did not exist.
Based on the materials we received, we were able to classify the approaches into four
regimes along the compliance-ethics spectrum: hard compliance regimes, soft
compliance regimes, ethics/compliance regimes, and ethics regimes. Hard compliance
regimes are those which had a legal base regulating behaviour but no wider
programme of ethics or guidance with which to provide context. Soft compliance
regimes had a legal basis and provided some guidance to officials, most often through
codes of conduct, but little in the way of ethical guidance or context. Ethics/compliance
regimes were those which had all the elements described above – legal basis, code of
conduct, and ethical values underpinning the regime but which did not at present
have a fully integrated programme; while ethics played a role in these internal controls
3
International Federation of Accountants (2007) International Good Practice Guidance: Designing and
Developing an Effective Code of Conduct for Organizations, International Federation of Accountants,
available at http://www.icaew.com/index.cfm/route/149292/icaew_ga/pdf
Figure 3 Components of Standards of Conduct Regimes
0
5
10
15
20
25
30
35
Legal Framework Statements of Values Codes of Conduc t
Components
Number of Countries
12
programmes, the approach still tended to place strong weight on compliance. Finally,
ethics programmes contained all the elements in a fully integrated programme in
which regulations were supplemented and fully contextualised in a wider programme
of ethics to guide decision-making and inculcate a common ethos of integrity.
Compliance-based regimes were overwhelmingly the most commonly utilised. In our
sample, 11 countries pursued hard compliance regimes and 14 pursued soft
compliance regimes. Three countries pursued ethics/compliance regimes: Chile, the
UK, and the USA. Four countries pursued fully integrated ethics regimes: Australia,
Canada, Norway, and South Africa. Each of these countries have developed these
programmes in recent years, reflecting current approaches to best practice in the field
of ethics and conduct.
Statements of Values
For some respondents, as for example the UK, the ethical statement forms a separate
document entirely to the formal code of conduct (indeed, in the UK’s response, there
were at least four separate statements of ethical values: one for Ministry of Defence
officials who followed the Civil Service Code, and one for each of the Service
Branches: Royal Navy, Royal Air Force, and Army). In other countries, the ethical
statement comes at the start of the code of conduct. For other countries, as for
example Canada in its Values and Ethics Code for the Public Service, the ethical
statement is the first of four chapters in a short booklet which details both ethical
context and outlines specific obligations for civil servants. The United States has a
similar approach, with a short statement of principles (one A4 page in length) which
immediately precedes specific obligations for all public defence employees (civil and
military). In none of the countries pursuing an ethics-based regime was there an
absence of a statement of values: all ethics-based regimes were supported by such a
statement. In the most impressive of these, such as Australia’s or Canada’s, such
values were continually reinforced throughout the texts.
Presentation of Material
The presentation and the specific format of the above frameworks is likely an
important factor in determining the effectiveness of a programme of ethics and
Figure 4 Regimes Alond the Compliance-Ethics Spectrum
0
2
4
6
8
10
12
14
16
Hard Complianc e Soft Compliance Ethics/Compliance Ethics
Regime Type
Number of Countries
13
business conduct. In this sub-section, we consider two aspects of presentation in
particular: whether there is a single code which applies to all defence employees,
regardless of their civil or military status, and whether material is presented in a single
document.
Figure 5 details the structures of the codes of conduct we received along these
dimensions.
It was generally the case that countries would have the same codes to apply to both
civil and military employees in the defence establishment. It should also be noted that
even where separate codes did exist for civil and military employees, it was often the
case that the actual obligations upon them in their business conduct were the same or
similar, and that where there were deviations between the treatment of civil and
military personnel, it was because the military were to face additional legal obligations
to those which civilian personnel faced typically, this meant that formally, military
personnel followed military as well as civilian law; in practice, this entailed no
difference in regulations for business conduct.
The more important comparison concerns whether countries presented their codes as
unified documents or in multiple documents, and from Figure 5, it is clear that in just
over half of countries which had formalised codes of conduct on this matter, the
majority of them did not present these as a unified document.
The seven countries which did present a unified document were the USA, Australia,
Chile, Norway, South Africa, Latvia, and Canada. Even within these countries, there
were numerous pieces of source documentation to refer to; the crucial difference
between these and the countries who presented material in multiple documents is that
in the former, regulations and obligations were collated into a reference material which
could be readily distributed and easily accessed by individuals. This is an important
means of making officials’ and officers’ obligations clear to them. Of these seven,
Australia’s Defence and Industry: An Ethical Relationship document and supporting
handbook Ethics Matters in Defence Management, produced by the Australian
Department of Defence, and Canada’s Code of Conduct and the wider document
supporting it, Duty with Honour, were exemplary in terms of formal structure. Chile’s
Figure 5 Structure of Codes of Conduct
0
1
2
3
4
5
6
7
8
9
Separate codes for
civil and military
employees
Standard code for civil
and military
employees
Code presented in a
unified doc ument
Codes presented in
multiple documents
Number of Countries
14
document, Transparencia y Probidad de la Administración, was also very well
constructed and put together.
We should note that whether the material is unified or not does not provide indications
as to the strengths or effectiveness of the regulations themselves. For example,
Germany and the UK both have strong regulations in ethics and business conduct,
elaborating clear and effective statements of acceptable behaviour and providing
elaborations of internal and external procedures officials should follow and outlining
the responsibilities of both individuals and organisations. The content of their codes of
conduct are among the best practice in operation today, as would be expected from
industrialised countries with highly professional armed forces. Where these countries
may be at a disadvantage relative to other high-performing countries such as the USA,
Norway, Canada, or Australia, is in the lack of a unified statement of their officials’ and
officers’ obligations in ethics and business conduct.
Values
In Figure 6, we collate the frequency of the values articulated in the eleven statements
of values from the source materials. The most frequently enumerated values were
honesty, openness, and transparency, and integrity.
There was no strong pattern emerging from the values elaborated in these
statements. Only Honesty/Openness/Transparency, Integrity, and Loyalty appeared in
over half of the documents. That there were 32 separate values across the eleven
Figure 6 Ethical Values
0 1 2 3 4 5 6 7 8 9
Honest y/O penness /Transp arency
Integ rit y
Loyalty
Courage
Professionalism
Impart ial it y
Team work ( ‘S ervic e’)
Respons ibil ity
Comply with obligation s under t he law
Diligen ce
Disc iplin e
Fairness
Protection of privileged commercial information
Efficiency in use of Public Funds
Disc lose was te, fraud , corrupt ion
Protect/Conserve Public Property
Objectivity
Fulfil obligations in good faith
Patriotism
Respec t
Accountability
Commit ment
Excellence
Dignit y
Respec t for Civili an Control of Armed Forces
Free Competition
Innovati on
Reputat ion
Credibil ity
Leadership
Freedom of Expression
Value
Frequency
15
documents is not particularly encouraging – we would expect a smaller number of
more frequently used values. In the private sector, for example, three values tend to
be most discernible in similar statements of values: integrity, responsibility, and
reputation (from Institute of Business Ethics
4
). Overall, by comparison, the treatment
of these statements of values tends to be underutilised by defence establishments.
Bribery
In the countries which responded to the survey, nearly all made reference to the
receipt and solicitation of bribery on the part of public servants being illegal. In Figure
7 below, we note this figure to be 29; this refers to explicit references in the source
materials that bribery was illegal. In all the codes of conduct presented to us, there
were references to bribery as being illegal. Bribery is near-universally regarded as a
criminal offence.
Five countries elaborated on the procedures to be followed if an official or officer was
in a situation where they were offered a bribe. The small number of countries doing
this may suggest that the illegality of receipt or solicitation of bribes on the part of
public officials is regarded as obvious and therefore not a point in need of further
elaboration. In the cases of countries which did proceed to give the issue further
treatment, the procedure elaborated was that the offer of a bribe should be reported to
a superior official within their department that is, that the procedure was internal.
Thus in the UK, for example, offers of bribes should be reported to Commanding
Officers (for military personnel), and to Line Managers (for defence officials).
Three countries, the UK, Norway, and Australia, made reference to external bodies in
the form of confidential hotlines which could be used by public servants to discuss or
report issues related to bribery and corruption. In the case of Norway, this was
instituted as part of its strategy for combating corruption risk. We also note the case of
Sweden, where although there was no recourse to external bodies elicited, once an
allegation is reported it automatically becomes subject to external investigation.
4
http://www.ibe.org.uk/code_content.htm
Figure 7 Treatment of Bribery
0
5
10
15
20
25
30
Countries expl ic it ly st at ing
bribery is illegal
Countries elic iting procedures
to follow if a bribe is offered
Countries making reference to
recours e to external bodies
16
Gifts and Hospitality
The treatment of gifts and hospitality across the sample is summarised in Figure 8.
Sixteen countries in the survey had reference to regulations concerning offers from
business entities of gifts and hospitality, which were recognised as attempts to gain
influence or as outright bribery. Of those who made reference to gifts and hospitality,
two countries relied on vague principles alone as means of regulating the issue: in
those countries, officials and officers were advised not to accept gifts or hospitality that
could raise questions as to their personal integrity and impartiality. Whilst this is a
correct sentiment, relying on principles without rules to support them is insufficient for
the treatment of offers of gifts and hospitality.
Fourteen countries referred to hard rules concerning the receipt of gifts and hospitality.
In three of those cases, regulations on the value of gifts and hospitality that could be
received was fully enumerated: officials and officers were informed through their
formal codes of conduct that they could not accept gifts above a threshold value – this
was $20 in the United States, £50 in the UK, and NOK200 (about US$40) in Norway.
In some countries the receipt of any offers of gifts was banned altogether, or banned
without the consent of the Minister of Defence. Compared to the threshold values
approach outlined above, this carries the benefit of simplicity, without complicated
regulations for officials to follow. However, the use of promotional gifts is a widely-
used business practice, and need not entail an offer of bribery if there is no intrinsic
value to the gift – if organisations wish to permit the receipt of such promotional items
of trivial value, then they must develop regulations in this area.
For those countries detailing hard rules as to the receipt of gifts and hospitality, the
restrictions were generally upon accepting gifts of a non-trivial value, which was often
elaborated to mean promotional items such as mugs or calendars bearing company
logos, which demonstrably have no intrinsic value. Of those fourteen countries with
hard rules in this area, seven made efforts to include an ethical guidance as well as
Figure 8 Treatment of Gifts and Hospitality
0
2
4
6
8
10
12
14
16
18
Countries
explicitly
referring to
Gifts and
Hospitality
regulations
Countries
using hard
rules only
Countries
using
principles-
approach only
Countries
combining
principles and
hard rules
Procedures for
Reporting
Procedures for
Disposal of
Gifts
17
hard rules as to the rules concerning the receipt of gifts, stating that in addition to
considering whether the gift was of trivial value, officials and officers also had to
consider the public perception that would result if the acceptance of an offer was
made public, and specifically whether a reasonable person would question the
impartiality of the public official if such a gift was accepted.
Most of the countries identified as having hard rules to deal with offers of gifts and
hospitality also had instructions as to the actions officials and officers should follow if
offered a gift; this was considerably more detailed than the equivalent elaboration of
procedures to be followed in the case of offers of bribes. The general requirement for
public officials being offered gifts or hospitality were to report all such offers, whether
accepted or declined, to a supervisor/line manager or equivalent for civil servants, and
to commanding officers or equivalent for military personnel. In some countries, the
offers were to be entered directly into a log book for central administration to take care
of the UK requires offers of gifts and hospitality to be recorded immediately in the
Hospitality Book, including details of what was offered, by whom, when, a description
of the event, and the actions taken by the public servant. The Hospitality Book is
regularly checked by line management.
Whether such registers are desirable is a matter which can draw debate. There is a
legitimate contention that in permitting receipt of gifts and in requiring registers to be
kept, there is a possibility that the book becomes overloaded with information and no
clear patterns can be discerned, thus little benefit can be gained
5
. This may indeed
turn out to have much relevance in practice, but the benefits of having registers of who
received gifts are that registers allow an audit trail to be constructed, and can affect
the incentives of officials offered and private entities offering gifts that is, an official
who knows an offer or receipt of a gift must be reported is likely to be more cautious
about what she is willing to receive, and a private actor offering a gift is less likely to
offer an inappropriate gratuity if she knows that the public organisation will be keeping
records of the offer.
The UK and USA also had procedures for the proper disposal of gifts, making clear to
officials that even a gift incorrectly accepted became the property of the organisation
for its disposal. The Australian Department of Defence, while not referring explicitly to
procedures for the disposal of gifts, also stated in clear terms that all gifts if accepted
became the property of the Department, not the individual official or officer.
Gifts and hospitality was generally seen as the appropriate forum in which to address
some of the more general requirements for officials and officers when meeting with
business contacts. In terms of the provision of meals and refreshments, the
regulations were generally less detailed than those for gifts. Regarding the provision of
light refreshments during meetings, there was generally little treatment of the issue in
formal regulations, with the general approach amongst those that did treat the issue
being that the provision of drinks such as tea, coffee, water, fruit juices, or soft drinks
was acceptable, as was the provision of light snacks such as biscuits or doughnuts.
Business meals constitute a slightly more difficult area, with a few countries such as
the UK and the USA detailing these areas more fully than others. The UK, for example
states that invitations to business meals, as either lunches or dinners, are acceptable
5
One of the referees for this paper described the register system as unworkable in real-life practice,
and ultimately not worth pursuing
18
so long as the purpose of the meal is to discuss official business and acceptance is
considered to be necessary in the business of the department; hospitality beyond this,
stretching into the areas of invitations to purely social events, overnight
accommodation, or holidays must be refused and reported. Holidays in particular are
treated as a “red flag” issue.
Several countries made specific reference to the inclusion of entertainment and tickets
to sporting or cultural events within the gifts and hospitality category. Though these
may be expected to be covered by gifts and hospitality regardless of whether it is
explicitly stated, it is common practice (both for regulations in the defence
establishment and other public and private entities) to make reference to this as a
means of clarifying obligations to individuals.
The above regulations would be easily applicable to public servants in any sector.
That does not negate their importance in defence to any degree. However, there are
specific areas in defence which may be peculiar to that sector, and therefore there
were some unexpected areas addressed in some of the regulations which are worth
reflecting upon. The most important area was addressed by Australia, in its outline of
regulations for defence officials attending industry-hosted events designed to
showcase new technology and products; this is indeed an area in which officials can
be confronted with ethical dilemmas, and where personal judgement is relied upon
heavily owing to the difficulty of predicting all eventualities. Australia’s regulations are
notable for being both clear and concise in terms of obligations for Defence
employees, and in upholding the ethical basis on which they are constructed.
Conflicts of Interest
The area of conflicts of interest is one of the less well treated areas. Figure 9 reports
the research findings on the treatment of conflicts of interest. Eighteen countries made
explicit reference to conflicts of interest; of these, eleven referred only to the existence
of a legal requirement that conflicts of interest should be avoided, without providing
any means of guidance as to what constituted a conflict of interest or what procedures
should be followed should a conflict arise.
Figure 9 Conflicts of Interest Regulations
0
2
4
6
8
10
12
14
16
18
20
Treat ment o f
Conflic ts of
Interest
Legal bas is only Hard Rules and
Supporting
Guidance
Procedures for
Reporting
Conflic ts of
Interest
Procedures for
Resolving
Conflic ts of
Interest
19
Conflicts of interest are an area where there is a clear need for rules and clarifications,
and a reliance only on an obligation that officials should avoid conflicts of interest is
grossly insufficient. Seven countries were able to refer to both hard rules and
supplementary guidance in the area of conflicts of interest, and some were able to
contextualise this in an ethical framework, most notably Canada and Australia.
Detailed treatments covered procedures for reporting perceived conflicts of interest,
generally through voluntary disclosure through line management for civil servants or
though the chain of command for military officials, with individuals encouraged to
report any perceived conflicts as soon as they arose so that adequate decisions could
be taken as soon as possible as to whether action was needed to resolve the conflict.
The most impressive procedures in conflicts of interest regulations were those of
Canada, which outlined very clearly the chain of command, what the various remedies
for conflicts of interest were, what forms should be filled in as part of the procedure,
and indications as to what timeframes individuals were expected to report in.
Canada’s regulations were impressive in detailing in clear expression what was
acceptable behaviour in regards to reporting the potential conflict of interest and in
their enunciation of what the procedure was for both the organisation and the
employee the result is to settle employees, as the existence of a conflict of interest
should not imply that an individual has engaged in any wrongdoing; employees for
whom conflicts of interest arise only begin to engage in wrongdoing should they fail to
report the conflict, or indeed, should they use their positions to benefit their non-official
interests.
The USA is also worthy of special mention for its treatment of conflicts of interest, with
the most strongly elicited details of what constitutes a conflict of interest.
In terms of resolving conflicts of interest, procedures generally included divestment of
the interest, or the reassignment of officials who have a conflict to other parts of the
organisation.
Post-Separation Activities
Post-separation activities, encompassing regulations for leaving the public sector
either in retirement or to pursue careers in the private sector, are the areas receiving
least treatment from the countries in the sample. For the purposes of this paper, we
are defining post-separation activities as rules and regulations which apply after an
employee has left the organisation this means we do not include regulations which
apply to current employees seeking employment elsewhere, which we have treated as
conflicts of interest. Only six countries made reference to the treatment of post-
separation activities as we have defined them, with one of these considering such
regulations with reference to the area of commercial sensitivity, impressing upon
officials the importance of not revealing privileged commercial information
accumulated during their public service. This is an area of huge concern in the
development of relations between the public and private sectors in defence,
particularly when it comes to striking the balance between building robust anti-
corruption systems and pursuing productive relationships. However, without reference
to the corruption risk in movements between the public and private sector (often
referred to as “revolving door syndrome”), these countries did not address the issue of
post-separation activities sufficiently. This left five countries in the sample which
addressed corruption risk in post-separation activities, as demonstrated in Figure 10.
20
Of these five countries, four referred only to post-separation employment, and only
one, Germany, referred to other post-separation activities.
In the UK, there is a two-year period upon leaving public service during which
approval must be sought for taking up business appointments. The regulations make
clear, however, that this process is designed in part to protect commercial sensitivity,
with reference also to the corruption risk and the maintenance of public trust in the
integrity of public servants and the organisations and institutions they serve, and that
in most cases applications for outside employment will be granted without condition.
There has been public debate in the UK surrounding the adequacy of these
procedures (both within the defence establishment and the wider public sector), and
whether they should be tightened
6
.
The USA has a well-elaborated set of regulations for dealing with post-separation
activities, imposing various restrictions of between one and two years in length on
former public employees taking up private sector employment in matters in which they
were involved during their public employment.
Germany, however, had the strongest regulations by considerable distance. For post-
separation employment, public sector employees required Ministry approval, subject
to the strict condition that it should not impair official interests. This restriction on
taking up employment lasts for five years, which is substantially longer than the two-
year periods which apply in the UK and the USA. Germany, moreover, is the only
country which extended regulations concerning the receipt of gifts and hospitality and
public disclosures of activities for five years after leaving public service.
Training and Dissemination of Ethics and Business Conduct Programmes
Of the 32 countries in the sample, ten commented on their training procedures in
ethics and business conduct. Training in general was an area which appeared to be
6
see Hansard, Corrected Transcript of Oral Evidence on Lobbying HC 137-iv, Public Administration
Committee, House of Commons, UK Parliament, 21 February,
http://www.publications.parliament.uk/pa/cm200708/cmselect/cmpubadm/c137-iv/c13702.htm
Figure 10 Regulations for Post-Employment Activities
0
1
2
3
4
5
6
Treat ment o f Corrupt ion Ris k in
Post-Separation Activities
Treat ment o f empl oyment
activities
Treat ment o f othe r p ost -
separation activities in addition
to employment
21
fairly weak, with formal training and refresher courses apparently not utilised and most
means of dissemination of material being done through presentation of materials to
initial recruits and updates to internal websites and bulletins.
Some countries did refer to training courses and presentations and seminars on the
matter, whilst some pointed out that corruption was covered as part of courses at
defence universities. There also appeared to be more emphasis placed on training of
corruption risk and awareness for officials and officers engaged in financial
management and procurement, judicature duties, and personnel management, which
is to be expected.
The issue of training and dissemination of anti-corruption policy would perhaps be
better addressed by a separate research paper. However, the above conclusions are
representative of the responses we received on this matter from our research
requests.
4. Research Conclusions
Overall, for many countries there is much room for improvement in the treatment of
internal regulations in relation to ethics and business conduct for defence
establishments. Some countries had well-developed programmes, for example
Australia, Canada, Chile, Germany, Norway, South Africa, UK and the USA, though
even these were deficient on some areas. Many of the other countries in the sample
performed well in some areas of their programmes, but some had serious deficiencies.
Most commonly this was in treatment of conflicts of interest and in post-separation
activities, but sometimes also in structure.
Structure of Ethics and Business Conduct Programmes
Those organisations utilising ethics-based approaches did so as one component of
their programmes, and were made on bedrock of hard rules. In over half of cases,
however, regimes relied on a compliance-based approach, sometimes including a
code of conduct, sometimes being wholly legalistic. The authors’ preferred approach is
to combine ethics and hard rules, so as to contextualise decision-making and promote
anti-corruption and integrity as public goods, so as to make clear to officials what is
expected of them and what they may expect of others, and so as to have clear
recourse to legal instruments should violations occur.
Statements of values, where they existed, tended to include a wide degree of
variation. Most emphasis was placed on values such as honesty or openness, and
integrity. There was, surprisingly, relatively little focus on the importance of leadership
and the importance of establishing a top-down cascade of ethical values and ethos.
There needs to be better consideration as to the integration of ethics into codes of
conduct, and better attempts to provide contextualisation to persons working in
defence establishments. The work done in this area by Australia and Canada is
exemplary, and serve as excellent templates upon which other organisations could
begin their enquiries.
The use of formal codes of conducts as part of regulation of ethics and business
conduct was lower than expected. About two thirds of countries in the survey were
22
able to point to Codes of Conduct for their organisations; far fewer were able to refer
to these codes as being unified into a single reference source. This may result from
under-utilisation of codes of conduct as resources, or from misrepresentations of
officials’ own countries in their responses. In any case, the extension of the use of
codes of conduct appears to be an important means forward.
For the countries which provided detailed source information to the authors, whilst the
avoidance of bribery was universally noted, the clearest rules were elaborated in the
areas of gifts and hospitality; the most neglected areas were those of conflicts of
interest and post-separation employment and activities.
Bribery
Bribery regulations were in general poorly developed. In nearly all cases where we
had detailed regulations to consider, soliciting or receiving bribes was illegal.
However, very few countries were able to direct officials in how to proceed if they are
in a situation where they have been offered a bribe, or if they have good reason to
suspect bribery is occurring within their organisations. This is of great concern,
because the integrity of the organisation depends in part on personnel being able to
form credible expectations that violations of codes of practice and of law can be
detected and punished, that they are able to report problems that arise, and that they
can receive guidance on ethical and legal matters. For individuals to take bribery and
corruption and the integrity of their organisations seriously, they must believe that the
organisation takes these issues seriously.
Gifts and Hospitality
Gifts and hospitality regulations were present in many of the materials we reviewed. In
some countries there were regulations for officials in terms of what they could receive
in quantitative terms, in terms of how offers of gifts and hospitality should be recorded,
and in the procedures to be followed for the correct disposal of gifts. Several countries
included blanket rules prohibiting the receipt of gifts and hospitality, which is an
acceptable alternative to quantitative limits and carries the benefit of simplicity. Again,
however, there may be a need to elaborate procedures for the recording of offers and
for the disposal of gifts either incorrectly received or those received in exceptional
circumstances, for example as part of international protocol. The reliance of some
countries on a requirement that officials should not accept gifts which would impair
their impartiality is inadequate as we have stressed throughout this paper, ethical
values are an excellent and desirable complement to but no substitute for hard rules.
Conflicts of Interest
In general, grossly insufficient attention was paid to conflicts of interest regulations,
with some exceptions. The USA had exemplary language on the definition of conflict
of interest regulations, while Canada had extremely well-written regulations which
provided clarity and ethical guidance to officials in the area. Spain and the UK also
had detailed regulations. Many countries relied on vague commitments that officials
should not have conflicts of interest, which were poorly defined or even not defined in
many cases. Strong regulations require a definition of what constitutes a conflict of
interest, ethical guidance for officials as to how they should identify conflicts of
interest, requirements for recourse to a body which can advise on potential conflicts of
interest, and means of remediation of those conflicts. An effective statement will be
able to reassure personnel should a potential conflict of interest develop so that there
23
is a voluntary declaration, for violations occur not when conflicts of interest develop
but when they are not disclosed.
Post-Separation Activities
Post-separation activities and the regulation thereof were generally not addressed. In
the defence sector, there is much concern over the appropriate regulation of relations
between public and private actors, with the latter often mistrusting the former in terms
of commercial sensitivity. Thus most regulations focus on this point, and make
restrictions on movements between the public and private sectors in relation to the
potential release of commercial secrets to competitors. Some countries do recognise
the potential for corruption in such movements, and therefore require personnel to
seek official approval before taking up employment after leaving public service. The
USA and Germany were notable for their thorough treatment of the issue. In general,
however, most countries did not address the potential for corruption in movements of
persons in between public and private sector employment, and this is an area in
severe need of redress.
Training and Dissemination of Codes of Conduct
Training, communication, and dissemination of ethical programmes within
organisations was in general an area which appeared to be fairly weak, with formal
courses apparently not utilised and most means of dissemination of material being
done through presentation of materials to initial recruits and updates to internal
websites and bulletins, with some special attention paid to sensitive positions (such as
procurement and financial management) in some cases.
Whilst no countries had perfect regimes, there was encouragement from some
countries in their treatment of these issues. There were also clear areas where strong
variations occurred between them. Analysis of the state of regulation for public officials
in defence establishments in the ethics and business conduct generally indicates that
there is much room for improvement in most areas within most nations.
As a word of caution, however, we add that while formal ethical programmes,
regulations, and codes of conduct are necessary, they are not sufficient as means of
ensuring integrity in the personal conduct of public officials and military officers. Such
programmes need to be enforced and an internal ethos needs to be developed that
consistently reinforces and promotes the highest levels of integrity in all matters. This
not only means that organisations need to devote resources to communicating
effectively codes of conduct and the values they embody, but that organisations need
to have in place dedicated senior officials (be they called ethics officers, ombudsmen,
human resources personnel) with authority and accountability in this area. Most
importantly, the building of a strong ethical ethos in an organisation and the
development of effective ethics codes depends on the “tone at the top” of
organisations leaders in the military and in defence establishments, just as leaders
in industry, need to demonstrate constantly and consistently by their example to their
subordinates and to broader publics that they abide by the highest standards of
integrity in all of their dealings, public and private.
24
5. Practical implementation of an integrity programme for officials
Programme Design
Whilst some nations have a comprehensive and practical integrity programme for
officials within the military and civil sectors, they are few in number, and even if in
place all will require regular revision. Full review of programmes every two years is
recommended, or more regularly if there are demonstrable issues which merit
immediate or early attention.
Integrity programme design and content will vary from nation to nation and will be
dependent upon a significant range of factors including: political will; active support of
senior military and civil leaders; practical and effective support from the legislature; the
current culture of the population; training (both initial and continuation) and education
methodology and resources; programme oversight, feedback loops and remedial
methodology; publicity and media involvement; possibly even remuneration scale of
officials when compared to the civil sector; but above all a genuine desire to
implement change.
A full system review, honestly undertaken will identify shortfalls and provide the basis
for a redesigned programme. The template at Annex 1 provides a recommended
structure and content, when analysed and compared against the in-place programme
the major areas of reform necessary should be clear. Often officials are reluctant to
identify or report system imperfections; this can be facilitated by the use of external
expertise from respected NGOs or trans-national organisations; the Transparency
International defence team can provide impartial advice.
Importantly, it is highly desirable that the programme has clear guidance to
commanders on the penalties applicable to offences; the balancing between minor
indiscretions through major fraud will require careful formulation.
Programme Implementation
Programme implementation should be against a full and transparent plan, with clear
milestones for delivery, together with a publicity and education programme covering all
involved from the most senior to the most junior irrespective of the position held within
a military or government department.
Honest and impartial implementation, including disciplinary action taken as necessary
against those transgressing, together with regular dissemination of information,
especially relating to offences and subsequent action, is essential.
The programme should be reviewed, and adjusted as necessary, on a regular basis,
but one of the main priorities, especially during the early stages, should be a vibrant
and active continuation training programme. Media, and in many cases international,
interest to an integrity programme should be used to stimulate and promote its
implementation. The programme should have the highest visibility and support at the
highest level.
25
Annexe 1 - Sample Statement of Best Practice
Components of Ethics and Conduct Regimes
The organisation should provide reference material to persons in the defence
establishment outlining their obligations in ethics and business conduct. Defence
officials and members of the armed forces should follow the same regulations, which
should be presented in a single Codes of Conduct document.
Statement of Values
The Statement of Values should provide a structure in which the subsequent Codes of
Conduct have been contextualised. The statement should outline the values that drive
the organisation and what norms are expected to be adhered to, with the aim of
inculcating a common ethical basis among officials and officers.
General Principles
The Codes of Conduct framework should have clear goals, such as the following:
Government business should be conducted pursuant to the highest ethical
standards, maintain the public trust, and act in a manner commensurate with
the public interest at all times.
The Defence Ministry and Armed Forces shall prohibit bribery and corruption in
any form whether direct or indirect.
The Defence Ministry and Armed Forces shall commit to this as part of the
implementation of a wider Programme to counter bribery. This wider
programme should rely on a system of internal controls, with a clear chain of
accountability, and with information on ethical programmes (including relevant
laws, codes of conduct, and policy) accessible centrally and transparently. In
the final instance, there should be recourse to external bodies should officials
feel cause to bypass the internal control system.
There should be details of the appropriate authorities in corruption related matters
such as: superiors in management or the chain of command; ethics officers; dedicated
anti-corruption agencies within the organisation; external authorities; and if applicable,
anonymous hotlines. The Codes should state commitments to accurate record-
keeping, adherence to established procedures of accounting, and reporting of actions.
Bribery
Bribes in this context are payments offered in cash or kind to public officials in order to
gain access to a scarce benefit or to avoid a cost, for receipt of a benefit or avoidance
of a cost which is not scarce but where discretion must be exercised by officials, or to
prevent others from sharing in a benefit or to impose a cost on someone else
(definition from Pope 2000:16-17).
Officials should be prohibited from arranging or accepting bribes from customers,
agents, contractors, suppliers, or employees of any such party, for the official’s benefit
or that of the official’s family, friends, associates, or acquaintances.
The organisation should ensure there are internal and external bodies to which
officials can report offers of bribery. The organisation should ensure there are
procedures in place for reports of bribery made to officials to be investigated and to
26
notify external prosecutors. The organisation should ensure that there are procedures
in place for employees to report allegations of bribery on the part of other employees.
Gratuities/Gifts and Hospitality
Officials should be prohibited from the receipt of gifts from persons in industry. It is
acceptable for exceptions to be made for gifts of trivial value, which should be
correctly defined. The organisation should set a low threshold value for gifts which
may be accepted in the local currency.
Officials should be prohibited from accepting hospitality from persons in industry
where to do so would compromise the perception of impartiality. Business meals and
light refreshments of low value are acceptable if made on legitimate official business
and if received infrequently; otherwise, any offers for hospitality should be refused,
including offers of tickets for sporting, entertainment, or cultural events.
Registers of all offers of gifts, whether accepted or refused, should be kept and
routinely updated within the organisation. The organisation should ensure there are
procedures for proper disposal of gifts which are accepted by officials as a matter of
international protocol.
Conflicts of Interest
Conflicts of interest can take many forms, most commonly either professional or
organisational conflicts or interest, or personal conflicts of interest. In this statement,
our treatment concerns personal conflicts of interest only, which arise in this context
when a public official is influenced by personal considerations when performing their
official duties (definition from Pope 2000:195).
The management of conflicts of interest in relation to bribery and corruption should be
clearly elaborated, including the means of disclosure of potential conflicts, sources of
guidance available to employees, and procedures to remediate the conflict of interest
once arisen.
Officials and officers should be prohibited from performing official work on a particular
matter that will affect the financial interests of:
themselves
their spouses, their children
their general partners
any organisations with which they are negotiating or have arrangements for
future employment
any organisation for which they serve as an employee, officer, director, trustee,
or general partner
Activities and Employment after leaving public service
Officials should face a period of time after leaving public service whereby acceptance
of offers of employment is subject to official permission from the previous employer.
Such a period should be between two and five years in length. Officials and officers
should be prohibited from receiving gifts, hospitality, and payments not related to
official employment from prohibited sources for a period of two years after leaving
office, and should remain bound by the requirements to report all such offers to the
27
appropriate authorities in their former departments in the Defence Ministry and armed
forces.
28
Annexe 2 Source Documents by Country
Links to some of these materials can be found on Transparency International’s
Defence Against Corruption website, http://www.defenceagainstcorruption.org.
Country
Documents
Albania
Written response
Statutes regulating conduct of officials and officers
Australia
Written response
Legislation
- Defence Act 1903
- Defence Force Discipline Act 1982
- Public Service Act 1999
- Financial Management & Accountability Act
Chief Executive Instructions
Defence Instructions (General)
- DI(G) PERS 06-3: Visits to Defence
Establishments by Organisations Offering
Financial Advice Targeting Members of the
Australian Defence Force
- DI(G) PERS 25-2: Employment and
Voluntary Activities of Australian Defence
Force Members in Off-duty Hours
- DI(G) PERS 25-3: Disclosure of Interests of
Members of the Australian Defence Force
- DI(G) PERS 25-4: Notification of Post
Separation Employment
- DI(G) PERS 25-5: Employment of Immediate
Family Members in the Same Chain of
Command and/or Working Environment
- DI(G) PERS 35-3: Management and
Reporting of Unacceptable Behaviour
- DI(G) PERS 45-5: Defence Whistleblower
Scheme
- DI(G) FIN 12-1: The Control of Fraud in
Defence and the Recovery of Public Moneys
- DI(G) ADMIN 01-02: Defence Instructions
(General)
- DI(G) ADMIN 08-1: Public Comment and
discussion of information by Defence
members
- DI(G) ADMIN 10-6: Use of Defence
telephone and computer resources
Departmental Administrative Instructions
- DAI 1/05: Application of Defence Instructions
(General)
Departmental Procurement Policy Instructions
- DPPI 9/2002: Providing Purchasing Authority
and Financial Delegations to Contractors
29
Defence Information Management Policy
Instructions
- DIMPI 19/2000: Defence information
environment corporate advertising and
commercial activities
Departmental Security Instructions
- DSI 7/1999: Handling of Official Information
- DSI 8/1999: Personal Responsibility for
Security [Information]
Departmental Circular Memorandums
- DCM 53/1998: Guidelines on Conflict of
Interest Issues for Defence Personnel
- DCM 5/2000: Defence Travel Arrangements
- DCM 32/2000: Setting the Standard in
Communications
Joint Directives
- Joint Directive 6/2006 Post Separation
Employment – Conflicts of Interest
Ethics Matters Handbook
Defence Fraud Control Plan
Defence and Industry – An ethical relationship
Defence Procurement Policy Manual
Defence Capability Manual
Defence Intellectual Policy Manual
Defence Workplace Relations Manual
Bulgaria
Written response
Canada
Written response
Directives
- DAOD 7021-0, Conflict of Interest and Post-
Employment
- DAOD 7021-1, Conflict of Interest
- DAOD 7021-3, Acceptance of Gifts,
Hospitality and Other Benefits
Values and Ethics Code for the Public Services
Queen’s Regulations and Orders for the Canadian
Forces
Duty with Honour: The Profession of Arms in
Canada
An Ethical Relationship
Chile
Written response
Transparencia y Probidad de la Administración del
Estado
Colombia
Written response
Semi-structured interview
Ley 836 de 2003 Por la cual se expide el
relamento del Régimen Disciplinario par alas
Fuerzas Militares
Croatia
Written response
Law on the prevention of conflict of interest in
30
holding public office
Ethical code of conduct for civil servants
Military service regulations
Denmark
Written response
Statutes
- The Military Penal Code
- The Penal Code
- Military Disciplinary Code
- The Rules of Public Administration
Code of Conduct: God adfærd i det offentlige
Finland
Written response
Statutes regulating conduct of officials and officers
- Finnish Penal Code
- Public Servants Act
- Finish Administration Act
- Finish Act on unsound business conduct
Defence Command Memorandum 51/3.2/D/I
Benefits Offered to Defence Forces Officials by
Outside Actors
Georgia
Written response
Germany
Written response
Statutes
- Federal Civil Service Act
- Legal Status of Military Personnel Act
Federal Government Directive Concerning the
Prevention of Corruption in the Federal
Administration, and Guidelines on implementation
Circular on the Ban on Accepting Rewards or Gifts
Excerpts from the German Criminal Code
Fighting Corruption in the German Bundeswehr
Ireland
Written response
Kenya
Written response
Armed Forces Standing Orders
Armed Forces Code of Conduct and Ethics
Armed Forces Terms and Conditions of Service
Statutes
- Anti-Corruption and Economic Crimes Act
Act No. 3 of 2003
- Public Officer Ethics Act – Act No. 4 of 2003
- The Public Procurement and Disposal Act
2005
Latvia
Written response
Statutes
- Public Procurement Law
- Law On Prevention of Conflict of Interest in
Activities of Public Officials
- Law On Prevention of Squandering of the
Financial Resources and Property of the
State and Local Governments
31
Lithuania
Written response
Law of the Republic of Lithuania on the
Organisation of the National Defence System and
Military Service
Law on Prevention of Corruption
Law on Adjustment of Public and Private Interests
in the Public Service
Law on Public Procurement
Law on the Declaration of the Property of Residents
of the Republic of Lithuania
Discipline Regulations of the Armed Forces of the
Republic of Lithuania
The Code of Lithuanian Soldiers’ Ethics
New Zealand
Written response
Standards of Integrity & Conduct
Managing Conflicts of Interest in the Public Sector
Managing conflicts of interest: Guidelines for public
entities
Nigeria
Traditions, Customs and Ethics of the Nigerian
Army
Norway
Written Response
Semi-structured interview
Formal values of the Armed Forces
Basic principles for ethical behaviour for the
Ministry of Defence and the Armed Forces
Code of ethics for the Armed Forces
Ethical guidelines regarding business contacts for
the defence sector
Regulations regarding Acquisition for the Armed
Forces
Policy regarding the Armed Forces support and
sponsoring of civil arrangements
Code of ethics for government service
Guidelines for quarantine and prohibition in certain
cases for officials and civil servants in change of
employment to outside public administration
Pakistan
Written comments from Transparency International
– Pakistan
Poland
Written remarks from official in Ministry of National
Defence
Portugal
Written response
Statutes
- Status of Military Condition
- Military Discipline Regulation
Public Sector Codes of Conduct
Romania
Written response
Ethical Code for the National Defence Ministry
32
Personnel
Government Emergency Ordinance No. 34/2006
Russia
Written comments from Transparency International
– Russia
Serbia
Written response
Statutes
South Africa
Code of Conduct for Uniformed Members of the
South African National Defence Force
Code of Conduct for Public Servants
Spain
Written response
Codigo del Buen Gobierno
Estatuto del Empleado Público
Reales Ordenanzas par alas Fuerzas Armadas
Sweden
Semi-structured interview
On Bribery and Conflicts of Interest
Tanzania
Written response
Leadership Code
Defence Forces Regulations
Procurement Act
Uganda
The Code of Conduct and Ethics for Ugandan
Public Servants
Ukraine
Written response
Statutes
United Kingdom
Written response
Semi-structured interviews
Zero Tolerance regarding Fraud, Theft and
Irregularity Note from PUS and CDS
Policy Statement regarding Irregularity, including
Fraud, Theft and Corruption from PUS and CDS
Defence Instruction Notice The Reporting of
Irregularity, including Fraud and Theft
Defence Instruction Notice Departmental
Engagement with Industry
Policy for Gifts, Reward and Hospitality
Business Activities and Private Interests (Navy)
Acceptance of Business Appointments (Army)
Outside Appointments Activities (All MoD staff)
The Rules on Acceptance of Outside Appointments
by Crown Servants (All MoD Staff)
Civil Service Code
Ethos, Core Values and Standards of the RAF
Values and Standards of the Army
Naval Service Core Values and Standards
United States of
America
Written response
Employees’ Guide to the Standards of Conduct
Statutes
U.S. Department of Defense Standards of Conduct
Office, http://www.dod.mil/dodgc/defense_ethics/
33
34
35
Transparency International (UK)
Defence Against Corruption Programme
Downstream Building
1 London Bridge SE1 9BG
UK
www.defenceagainstcorruption.org
www.transparency.org.uk
... Punishment is one of the important elements of a compliance-oriented ethics program. It refers to the negative reinforcement that an organization implements to curtail undesirable behavior (Basyouni and Chahine 2011) and increase the compliance behavior of employees (Magahy and Pyman 2010). Several researchers found that the implementation of the punishment control element can influence an individual's perceived threat appraisal process by increasing his/her perceived severity and perceived vulnerability of negative consequences (Békir et al. 2016;Hofeditz et al. 2015;Waheeduzzaman and Myers 2010). ...
... The code of ethics is "a distinct and formal document containing a set of prescriptions developed by and for a company to guide present and future behaviors on multiple issues of at least its managers and employees towards one another, the company, external stakeholders and/or society in general" (Kaptein and Schwartz 2008). It helps to intermingle the compliance obligation of individuals with the compliance obligation of organizations (Magahy and Pyman 2010), and can motivate employees to pursue the recommended ethical behavior (Wong 2013). A code of ethics can enhance employees' belief in the recommended compliant behavior's efficacy by removing the existing ambiguity regarding rules and regulations (Kaptein 2015). ...
... Organizations introduce different fear-based control elements such as punishment and monitoring at workplaces by arguing that the perceived threat of punishment will combat unethical behavior (Magahy and Pyman 2010). Perceived severity and perceived vulnerability are two important components of the threat appraisal process (Rogers 1983). ...
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While a corporate ethics program is expected to reduce employees’ unethical behavior, understanding the effects of the ethics program elements on reducing the unethical behavior is a crucial issue. This study aims to explore how a corporate ethics program with multiple control elements, including punishment, monitoring, internal reporting, code of ethics, ethics support service and ethics training, influence employees’ threat appraisal process, coping appraisal process and unethical behavior at workplaces. The data to verify proposed research hypotheses were collected by administering questionnaire survey on four autonomous government organizations in Bangladesh. Research findings show that only punishment and monitoring have significantly negative relationships with unethical behavior. Monitoring and internal reporting have significantly positive relationships with threat appraisal. The code of ethics, ethics support service and ethics training are associated positively with coping appraisal. The mediation results reveal that coping appraisal mediates the relationship between ethics program elements and unethical behavior; but the mediation effects of threat appraisal are not significant. This study provides valuable insights into how a corporate ethics program with multiple control elements reduces employees’ unethical behavior as well as how employees’ threat and coping appraisal processes are related to the corporate ethics program and unethical behavior in organizations.
... According to Magahy and Pyman (2009), the application of conflict of interest as one characteristic of objectivity is generally much weaker because the difficulties to determine what constitute as conflict of interest. The poor definition and the lack guidance of conflict of interest make it difficult to be applied in the real world. ...
... First, many researches in Indonesia emphasize on the influence of professional commitment and independency toward ethical behavior (Indrayanti 2010;Ramdani 2010;Yuliani 2010). Objectivity and professional responsibility are two fundamental principles that are rarely held as focus of a research; in fact those principles are difficult to be applied in the real business world and are therefore significant to be mastered by accountants (Gaffikin and Lindawati 2012;Magahy and Pyman 2009;Scott 2005;Solbrekke 2008;Sullivan and Rosin 2008). Second, the impact of ethical behavior to prevent fraud is also rarely tested in researches in Indonesia. ...
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The objectives of this research are to get knowledge about what contributions that higher education can provide to build students’ ethical perception and awareness of fraud prevention. To achieve these objectives, the research was conducted toward accounting students at Yogyakarta State University. Data were collected using questionnaires distributed to 149 students. The analysis of the data used path analysis. Based on the result of the survey to the respondents, the research provides evidence that higher education has a positive and significant influence to build students’ ethical perception through internalizing objectivity and professional responsibility in the intermediate auditing course. In addition, it is also proven that accounting students who have high level of ethical perception are able to build awareness of fraud prevention.
... These could decrease moral sensitivity for PECoI if risks of information exchange after employment are not recognized. Moreover, strong subcultures could be a ground for blurring moral standards (Lee et al. 2013) and reluctance to report (Loyens 2013;Magahy and Pyman 2010;Punch 2000). ...
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While post-employment conflicts of interest (PECoI) carry important risks of integrity violations, empirical research is scarce. This paper provides insight into the meaning and the perceptions of PECoI in the Dutch (military) police compared to those in other public and private organizations, to draw lessons for the public management of ethics. The study combines document analysis with interviews (N = 32) and a quantitative vignette study (N = 75). We find that PECoI are a blind spot and ambiguous. Five (possible) manifestations of PECoI were identified, like the (mis)use of classified information for commercial purposes and of relations with former colleagues.
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Defence officials and senior military officers frequently tell us directly why they care about corruption risk in defence establishments: - It is a waste of scarce resources; It impacts on operational effectiveness; It reduces public trust in the armed forces; Defence budgets are an easy target for politicians looking for re-election funds; International companies shun corrupt economies In relation to national security, we get an immediate response – those responsible for national security are all too well aware that corruption can completely invalidate security strategies. What we also see, however, is that work to improve security, for example border security or arms control, often pays lip service to corruption issues but does not seek to address them. Corruption is often central to the problem of peace support and state-building, but they are usually not recognised explicitly. The authors of the stabilisation strategies, and sometimes the commanders of the intervention forces, have viewed corruption as an inevitable side issue, rather than a central dynamic of the conflict that needs to be considered. It is thus very clear why we should care about this issue: it matters, and it is not being adequately addressed. What has been missing is the confidence to address it. It was a taboo subject all the way through the Cold War period. Yet we are living through a time of sweeping change, and the security landscape is utterly different from ten years ago. Governments are also less ready to accept the waste that comes with corruption. And the general topic of corruption has come of age: it is better understood, it is less sensitive, and there are good ways to measure and monitor it.
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There has been an outcry from the civil society, media and public, in conjunction with a growing demand that the provincial government of Eastern Cape Province should prevent the delusion about code of conduct by the employees from becoming an all-consuming problem. Hence, the study assesses the impact of the code of conduct on promoting good governance at the University in the Eastern Cape Province in South Africa. The study adopts a descriptive survey research design. The simple random sampling technique was used to select ninety respondents. The experts in the faculty of Business Management and Administration validated the instrument, and Cronbach’s alpha was used to measure its reliability. A little above eighty-two percent of the respondents agree that the code of conduct promoted good governance and 17.7 percent were uncertain. The results showed that the seventy-six percent of the respondents were aware and used the code of conduct. In conclusion, there are some areas, which have to be improved in order for the code of conduct to yield the results, which it was intended for.
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This paper asks whether predatory behavior by corrupt politicians distorts the composition of government expenditure. Corruption is found to reduce government spending on education in a cross section of countries.
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We analyse the determinants of the number of military personnel, military expenditure and arms imports using a panel data of all available countries with data from 1984-2006. The number of military personnel increases with the extent of external threat and with conscription. There is evidence for both economies of scale and the existence of 'ghost soldiers'. Expenditure, given the number of military personnel, increases with the extent of internal threat and the area of the country. Arms imports increase with the extent of external threat, GDP per capita and corruption. Finally, both arms imports and military expenditure impact upon corruption.
Strategic Public Investments to Manage Corruption Risks Naval Postgraduate School Defense Resources Management Institute Working Paper Series
  • F Melese
Integrity Practices in Defence: Developments in Europe , Paper presented at Best Practices Forum, Defense Industry Initiative on
  • M Pyman
  • H Edleston
The National Export Strategy: Working for America Trade Promotion Coordinating Committee, Department of Commerce, Seventh Annual Report to the United States Congress
  • W M Daley
Developing a Code of Ethics Institute of Business Ethics
  • S Webley
Creating a Values-Based Culture, Paper presented at 3rd European Annual Anti-Corruption Forum London
  • D Harris
Creating a Pro-Active Effective Anti-Corruption Compliance Program, Presentation at the International Bar Association 6th Annual Anti-Corruption Conference
  • L Reber
  • J Wexton
Offsets and Corruption Risk , Paper presented at Global Industrial Cooperation Conference
  • M Pyman
Corrected Transcript of Oral Evidence on Lobbying HC 137-iv, Public Administration Committee, House of Commons, UK Parliament
  • Hansard