Justice and legal reforms in Defence
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|Investigations & Prosecution||Administrative sanctions||Inspectors General|
|Suspension & Debarment||Legislation||Secondary legislation|
What are justice and legal reforms?
INVESTIGATION AND PROSECUTION△
ADMINISTRATIVE SANCTIONS △
INSPECTORS GENERAL △
SUSPENSION AND DEBARMENT △
When I was leading TI’s Defence programme, I was repeatedly asked by Defence Ministers and by Defence Procurement Chiefs: “We have any number of control systems and processes in place in our defence procurement, but they still don’t stop the bribery and corruption. What else can we consider doing?” It is a heartfelt plea: the defence sector has always been particularly vulnerable to corruption, with its large, technically complex projects; limited supplier base; and secrecy- and security-related constraints. To be sure, there is no single solution; Oversight alone has not staunched the problem.
Suspension and debarmentis another tool for combatting corruption. They add significant advantages lacking in other forms of oversight: they have immediate effects; they happen quickly; they require a low burden of proof; and they are easy for defence procurement agencies to do, as they can do it themselves, without the need for a separate prosecuting agency, courts or judges.
Suspension and debarment systems are typically administrative mechanisms that regulate contractor behaviour while operating within or by connection to a defence establishment, but still independent of it. These systems have the power to discipline corrupt contractors and even to debar them in the case of major wrongdoing. But, more to the point, these systems also have the power to require improved behaviour from companies without debarring them, thus initiating an
upwards cycle of improvement without the actual imposition of debarment, except when necessary.
There are four national systems (Brazil, Kenya, India, and the United States) and one international system (the World Bank). Within the United States, it is the U.S. Department of Defence that has most productively and usefully employed these sanctions.
How do they work? Read more >
A suspension and debarment system deters corruption, fraud, waste, and abuse—problems that threaten all stages of the procurement process, from when an agency just begins to determine its procurement requirements, to when contracts are awarded, performed, and closed-out. They deter these problems in both “specific” and “general” ways.
Specific deterrence occurs when a misbehaving contractor is individually stopped and removed from the procurement process, thus barring ongoing or future misconduct by that contractor.
General deterrence occurs because of the broader salutary impact that suspension and debarment can have on contractor conduct throughout the defence industry—in effect, the promotion of a broader culture of business ethics.1
A culture of business ethics is inculcated in several ways. For one thing, it is in a contractor’s financial interest to remain eligible to receive and perform public contracts; to that end, a suspension and debarment system institutionalizes and ratifies a procurement process that rewards ethical behaviour, not unethical behaviour. A contractor is incentivized to act ethically when a suspension and debarment system ensures that there are significant consequences for specified deviations from certain ethical norms, to include ineligibility for public contracts, and also benefits for complying with such norms. Indeed, to avoid sanction, a contractor must adopt internal compliance systems that are robust enough to prevent, identify, mitigate, and eliminate unethical or illegal behaviour. In turn, a broader, industry-wide culture and climate of ethical conduct and good corporate governance takes root.
To investigate whether it might make sense to initiate a suspension and debarment system in your defence sector, read the Ti report on the subject: Suspension and Debarment: strengthening integrity in international defence contracting, available here.The report illuminates how and why suspension and debarment systems actually function. This analysis will allow those in other countries to better understand suspension and debarment, and to get a feel for how their procurement systems and industries could benefit from the use of a suspension and debarment system.
Or be in touch with the Suspension and Debarment offices of the US military: of the three services, the largest S&D office is in the US Air Force. You can see their website here. You can also see a talk by one of their former Chief Officers, Steven Shaw, about how to set up an effective S&D office, here.
If you have a ministry where there are high levels of corruption and deep external mistrust of the ministry, one approach could be to inject a critical mass of outsiders into senior positions.
A common feature for forcing change in large organisations is to bring in senior outsiders into key positions. This helps particularly if the senior person comes in to the position as the new Minister. Several of the reforms discussed in this review have been catalysed by such top-level changes.
The same is also true of top positions such as head of Audit, Head of Procurement, Head of operations, Head of logistics. This is less common in defence ministries, usually in deference to the deeper expertise expected to be required.
But we also know of one highly imaginative alternative, in Ukraine, where the MOD brought in 12 outsiders, mostly lawyers working with civil society, into senior positions such as the Head of defence procurement.
We have not yet seen an evaluation of how this turned out. However, even if it was ultimately unsuccessful, it is an imaginative way to disrupt the corrupt relationships that exist inside a long-established highly bureaucratic ministry.
SECONDARY LEGISLATION △
Section 9 △