Corruption in Kenya

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Introduction

That corruption remains one ofthe difficult areas in theprocess of Kenyas development isbeyond dispute. It is largelyconsidered that the recognition ofthis difficulty, taken together withimmense political pressure,precipitated the parliamentaryresponse in the formation of theKenya Anti-Corruption Authority(KACA). This institution was

established under thePrevention of CorruptionAct (Cap 65), which waspassed in parliament in1997. The Act, waseffected after theamendment of an earlierAct, last revised in 1993.

Among the lauded provisions ofthe amendments to the statute wasthe disarticulation of KACA fromthe Attorney Generals office withregard to the conduct of

investigations and the prosecution

o f o f f e n d e r s . K A C A w a sinstitutionalised to concentratewholly on corruption cases. Themere separation of the operations ofKACA in addition to its formationis a tacit admission of the problemof corruption in the country.

A director who is appointed by thePresident for a maximum period oftwo four-year terms heads KACA.

The statutefurther providesfor no moret h a n t h r e ea s s i s t a n tdirectors whoa r e a l lappointees ofthe president

upon the recommendation of theadvisory board. On its own, KACA

is a body corporate with perpetualsuccession.The act provides that the director or

CORRUPTION IN KENYA:A CALL TO ACTION

The POINT

U n p a c k i n g t h ebundle

2

KACAs dilemmas 3

CPI and BPI 4

Review of EconomicCrimes Bill

10

INSIDE THIS ISSUE

The pervasive and distortionary nature of corruption in Kenya is an acknowledgedfact. Whereas privately transacted, corrupt practices engender costs that are borneby the whole society. At a time when the moral infrastructure of society hascollapsed and the demand for rapid accumulation on the rise, the art and science of

corruption has acquired a sophistication that requires ingenious combat strategies.A good law is necessary but not sufficient. Early this year, the Institute of EconomicAffairs (IEA) held a forum to discuss the phenomena of corruption in Kenya duringwhich presentations were made by Justice Aaron Ringera, Director Kenya Anti-Corruption Authority (KACA); Hon. Musikari Kombo, Chairman of theParliamentary Anti-Corruption Select Committee and Mr. Job Kihumba, Chairman,Institute of Certified Public Secretaries of Kenya (ICPSK). The Point captures thehighlights of the meeting and also provides a sneak preview of the EconomicCrimes Bill expected to be tabled in Parliament soon.

This Bulletin has beenThis Bulletin has beenThis Bulletin has beenThis Bulletin has been

published with fundingpublished with fundingpublished with fundingpublished with funding

from the Hanns Seidelfrom the Hanns Seidelfrom the Hanns Seidelfrom the Hanns Seidel

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Bulletin of the Institute of Economic Affairs [ Issue No. 37 : August 2000

the mere separation of theoperations of KACA in

addition to its formation isa tacit admission of the

problem of corruption inthe country


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the assistant directors shall neither be a memberof parliament nor salaried employees of anypublic body unless the person is on secondmentto KACA.

In conformity with its mandate, KACA has sinceinception investigated and proceeded to

prosecute a number of public officials alleged toengage in corrupt practices as defined by the Act.

Corruption: Unpacking the bundle

Motive, Opportunity and the UnethicalOrientation (on the part of the offendingpeople) constitute the three major componentparts of corruption

As regards the motive, the relevant fact is thatone may wish for an advantage in the conduct of

business without necessarily paying for it. Insuch a case, the motive of theperpetrator of the corruption isthe desire to earn moneyw i t h o u t o b s e r v i n g t h eregulations that are in place.The motive then is primarilyfinancial.

Where the motive for a corrupttransaction does exist, the perpetrator will have tofind the opportunity to indulge the desire. Theopportunity will emerge for the perpetrator tooffer a bribe to a public official for the expectedgain to materialise. Hence, the intention findsexpression when the opportunity does arise.

Having had both the motive and the opportunityfor the corrupt to transact a corrupt practice, thecycle is complete only if the perpetrator doeshave an unethical orientation to complete the

corrupt practice. The unethical orientation is thedisregard of the fact that the action may harmanother, or the lack of a conscience and the mereconcentration upon the benefits that are derivedfrom the act. Corruption is often completed whenthe three factors of motive, opportunity and theunethical orientation converge. The actualpractice of corruption presupposes that there is apredisposition towards evil without anaccompanying feeling of guilt.

Effects of corruption

Whereas corruption may often occur inprivate, its implications for society ingeneral are grave and this must form the basis for

the unyielding response against it. Irrespectiveof the perpetrators of corruption, there are costsborne by society, which is the basis for therefusal to tolerate it.

Principally, corruption harms society and theeconomy by diverting resources towards less

deserving people. In this manner the moredeserving within the economy are short-changed. For instance due to corruption,resources may be allocated withoutconsiderations of priority and where the returnsmay be optimised. Examples of the effects ofcorruption where resources are not optimallyused are numerous in Kenya and do involveclaims of favouritism of some people or evenregions at the expense of others. If this occursagain and again, the people or institutions that

are capable of contributing to growth are stifled.

Corruption is equallyharmful to a society and theeconomy since its effect isequivalent to taxing honestwork and instead rewardingmediocrity and dishonesty.As such, genuine hard-working people are de-

motivated since merit ceases to be the basis of

reward. The competitive edge in institutions andpeople, which is essential to good service, isreplaced by competition in corrupt practices andthis distorts the nature of any market, and inturn the policies that govern such markets. Acommon argument heard in business circles isthat survival is impossible without competition.

Where corruption is perverse, injustice isperpetrated because those with an unethicalorientation get privileged access to resourcesand services to which others are excluded. Thisaggravates social injustice and increases povertywhile this social and economic exclusiontranslates into class disharmony. Exclusionmaintaining the tensions increase to the extentthat the whole society is under structural strain.Societies in which exclusion is reinforced bycorruption do experience instability that mayresult in violence and massive destruction.

Finally, at the purely commercial level,corruption does discourage investments becauseit raises substantially the transaction costs in theconduct of business. Due to the additional cost,

where corruption is perverse,injustice is perpetrated because

those with an unethicalorientation get privileged access

to resources and services towhich others are excluded


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the goods and services procured through thecorruption process are uncompetitive.Implications for the economy: a gradualdepression in the investments as the costscontingent to corruption cut down on theexpected returns. Businesses then withdraw toplaces or countries where there is an atmosphere

more conducive to investment. The primeconsequence to the economy is that corruptiondoes cause the loss of investment, both local andforeign.

The extent to which Kenya has lost foreigninvestment on account of corruption cannot betold with certainty but the potential investors areaware of the magnitude of the problem in Kenyaand are known to avoid countries with endemiccorruption. Since no rational investor will

knowingly establish a businessin a corrupt country, the needto deal decisively with thisproblem is imperative, asprivate sector investment hasbeen demonstrated to be themost influential factor indetermining economic growth. It is cleartherefore that corruption has contributedsubstantially to Kenyas underdevelopment.

Parliament and corruption

Kenyan legislators seem to respond to thepublic concern about corruption especiallywhere public officials are directly implicated.Whereas the Parliament Audit CommitteesPICand PAC-have historically done a splendid post-mortem job on corruption. Parliament deemed itfit to create a special committee on corruption. It,in 1998, established the Parliamentary Anti-Corruption Select Committee (PACSC) with

three mandates:- To study the nature and extent of

corruption in Kenya.- To identify the key perpetrators of

corruption in Kenya.- To develop a more comprehensive Bill to

widen the scope of the definition ofcorruption beyond Cap 65.

In its work, the Committee has taken due regardfor a paradigm developed by a scholar, Robert,

Kiitgaard and others that reduced corruption toa formulaic expression. Simply put, corruption isthe result of a monopoly of power added todiscretion in the absence of accountability.

corruption = monopoly of power + discretion- accountability

The above formula is apt for the description andunderstanding of the character of corruption inKenya. The explanation being that due to thepresent monopoly of power by the executive,together with wide discretion and lack of

accountability the Kenyan environment isstructurally conducive to corruption.

In these circumstances parliament must be moreassertive not just through its various committeessuch as the PIC and the PAC but also through aprogressive and proactive legislative agenda.Parliamentary institutions are to support thework of the Controller and Auditor General byidentifying the culpable officials and their alliesin the private sector. However, parliament must

to the extent possible,expedite debate on theA u d i t o r G e n e r a l sreports since delays oftenallow for the guilty to getaway with their crimesdue to the difficulty of

getting evidence after the lapse of many years.

Public resources need to be vigilantly protectedand the scope of public understanding of what

constitutes such resources must necessarilyencompass all loans that the government mayprocure through international agreements. Sincethese agreements do naturally bind succeedinggovernments and translate over time into publicdebt. Parliament needs to have a role beyondthat of mere rubberstamp. Consequently, theExternal Loans and Credit Act may need to beamended to clearly provide for parliamentaryconsent to international loan agreements

The general public's concern here is about themanner in which government has used the fundsprocured internationally, and the wish of somelegislators is therefore to ensure that thedeployment of such funds is as stated in theagreements and memoranda. Such legislativescrutiny would serve to substantially reduce themonopoly of power and add to theaccountability of government to the people.Legislative intervention in this scrutiny is not toemasculate the executive but rather to reduce the

incidence of arbitrary actions that aid corruption.

The monitoring of corruption by civil society is a

legislative intervention in thisscrutiny is not to emasculate the

executive but rather to reduce theincidence of arbitrary actions that aid

corruption


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major contribution towards the overallenhancement of the accountability sought by thepublic and donors. Parliament must aid theprocess by the enactment of laws that reduce themonopoly of power held by government officialsand individual discretion or arbitraryadministrative action. The role of KACA is

appreciated as a requisite step in furthertightening the space and controlling corruptpractices.

KACAs strategy

KACA acknowledges that first , Kenya faces aserious corruption problem in both theprivate and public sectors. Second, conventionallaw enforcement has so far been ineffective indealing with the problem.

In the pursuit of the goals for which it wasestablished, the institution has prepared a four-year strategic plan which starts with thedevelopment of a national plan againstcorruption. Wisely enough, the strategyrecognises the need for KACA to work inpartnership with other interested parties in thecreation of awareness of the causes and effects ofcorruption.

This is a laudable approach especially since thecontinued growth of corruption in Kenya ispartly attributable to the widespread ignoranceof its harmful effects. The plan also emphasisesthat all the cases under KACAs jurisdiction areto be investigated and prosecuted properly. Thepublic undertaking from the director is thatprosecution will be instituted against all corruptpeople without regard to position.

KACAs commitment to the achievement of the

objectives under the defined strategy fall intothree points.6 The consistent enforcement of the law

against corruption.6 The prevention of corruption by

removing the opportunities that facilitatethe crime.

6 The education of the public andenlistment of their support in the fightagainst corruption.

The three factors are necessarily complementary

of one another. In addition, they reflect theunderstanding that the fight against corruptionmust proceed cautiously and progressively. Penal

sanctions alone, however harsh, do not suffice inreducing corruption considering the levels of thevice in Kenya today. Which means that KACAmust go beyond the enforcement of the lawwhenever cases have been investigated and theevidence made available.

In order to improve on the enforcement of thelaw, KACA has established telephone hotlinesfor the members of the public to report inconfidence on any corrupt practices that theymay have witnessed or of which they may beaware. There is need for the public, civil societyand the private sector to work together incleaning the political and economic environmentof all corruption. Media support for the purposeof educating the public about the sanctionsattached to corruption is invaluable in addition

to objective investigative journalism.

Legislative support

Legislative support for the Kenya Anti-Corruption Authoritys efforts would comein two ways. The first way is through the carefulscrutiny of the Public Accounts Committee andthe Public Investments Committees reports andtheir recommendations to KACA to follow-up onany cases that fall under its jurisdiction. Second,provision within an appropriate framework toguarantee KACAs autonomy may be developed.It is contended that the AG still has substantialcontrol regarding the institution of proceedingsagainst persons even where the evidence isavailable. This need for preliminary consent fromthe A.G. erodes KACAs independence of actionespecially where the persons under investigationare members of the executive or are connected tothem in any manner. This is one of the reasonsthat may account for the continued protection of

the big fish and the sacred cows soconsistently cited in the reports of AuditorGeneral, PIC and PAC.

Under the head of prevention, KACA isempowered by the statute to take all legalmeasures for the prevention of corruption in thepublic, parastatal and private sectors. It is as wellcharged with the responsibility of advising thegovernment on ways and means of preventingcorruption.

In the public domain, the first move may involvethe simplification of procedures and reduction inbureaucracy. For instance, clearance of goods atthe port of Mombasa requires about fourteen


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different bureaucratic steps while in the mainport in Tanzania, no more than four bureaucraticsteps are involved. The unduly long clearanceprocess in the Kenyan port provides theopportunities for solicitation and extortion ofbribes. Solutions to the numerous problems suchas these must begin with the reduction in the

number of bureaucratic processes in thesetransactions.

Procurement procedures must also be re-examined as a lot ofcorruption takes placearound this. KACA iscommit ted to theidentification of bestpractices and creation of adatabase on the practices.

The application oftechnology for tracking procurement processeswould serve both to simplify the whole processand also to inject transparency and efficiency.Here the goals of KACA converge with those ofthe Private Sector Corporate Governance Trust intrying to make businesses adhere to minimumethical standards. The latters commitment tothese standards is evident in the unilateralpublication and circulation of a sample codedetailing best practices for corporate governance

and ethics.

An express endorsement and subscription to thecode would translate into a substantial reductionin the overall incidence of corruption. Theoptimism in the efficacy of the code is that thecommitment to it necessarily negates the motiveand opportunity and vicariously enhances therespect for honesty and adherence to rules.

By educatingthe public, it is possible for Kenyansto understand more acutely the subtlemanifestations of corruption and its extent withinthe society in general and microcosms of it. IfKACA were to succeed in passing thisinformation to the public, then the public mayrespond more confidently in whistle blowingandenhance resistance to corruption. Hopefully, anunderstanding may then emerge of theconnection between the endemic corruption andthe poor state of the economy. This educationmay then involve religious leaders for thepurposes of ethical reinforcement, civil society forresearch and lobbying, and consistent mediacoverage.

It is imperative for the citizens of Kenyaparticularly to comprehend the fact thatcorruption has an adverse effect upon theeconomy and this is reflected in lost revenue,poor policies and increased cost of goods andservices procured through corruption. The role ofthe public in sustaining corruption can also

emerge when the overall economic effects ofcorruption are common knowledge.

Data driven approaches are favoured by KACAas indispensable in thepresentation of the factsrelated to corruption. As aresult of this, KACA didconduct a survey in which itbroadly assessed the extentto which Kenyans were

aware of the effects of andextent of corruption within the country. Thissurvey forms a platform that allows for a moreinformed approach to the fight againstcorruption. In addition, the results of the surveyenable the institution to assess the publicsperception of the manifestation of corruption andtheir own attitudes towards it. The developmentof education material is then based on suchinformation.

The KACA dilemmas: Of laws andconfidence

While every Kenyan readily appreciatesKACAs huge role in the prevention ofcorruption, common consent has it that theorganisation tends to be cautious in the pursuitof the perceived perpetrators of grandcorruption. The organisations credibility thussuffers from the allegations that it only pursuesthe soft targets and that whenever it does move

against the big fish, it is often because suchpersons no longer enjoy executive protection.This is the primary challenge that the directors ofKACA must confront if the public is to beexpected to increasingly have faith in it. In short,KACA must widen the dragnet to fry the big fishand slay the sacred cows of Kenyas corruption.

On the other hand, it must be accepted thatKACA operates under a statute that necessarilydelimits the scope of its action. Part of the

limitation comes from the narrow definition thatthe Prevention of Corruption Act gives tocorruption and the affiliated powers of thedirectors to gather evidence and present the

by educating the public, it is possiblefor Kenyans to understand more

acutely the subtle manifestations ofcorruption and its extent within the

society in general and microcosms of it


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same before courts. Naturally, therefore, theorganisation cannot go beyond its powers andexpect to sustain its cases in court. It, therefore,behoves the legislators to considerably expandthe powers of the organisation to deal moredecisively with corruption. Being the institutionin place, its ability to act independently will

largely determine any progress that Kenyansexpect in the short term.

Strengthening KACA must, therefore, involveamong other details the following:v An appropriate legislative framework.v A more comprehensive definition of

corruption.v Protection of informers and whistle

blowers.v The extension of police powers to KACA

officers.v Judicial decisiveness in expeditious

determination of cases prosecuted byKACA.

International responses to corruption

Corruption is a phenomenon that attractsmuch discussion in the globalised worldand is certainly not unique to Kenya. This,however. is not consoling because Kenyasrelatively high levels of corruption are knownwell beyond the national borders. In response tothe problem of corruption worldwide,Transparency International (TI) was formed outof the ideas of a German academic Dr. Johann G.Lambsdorff of Gottingen University in the mid1990s. The TI has developed an index ofcorruption and whose publication yearly since1995 has proved unflattering to Kenya. Thisinnovative index is known as the CorruptionPerception Index (CPI) and ranks given countries

of the world for the purposes of comparison.

Indices of corruption

That an international organisation wouldemerge with the purpose of keeping tabs onworldwide trends in corruption shows therecognition that the vice is quite perverse.Perhaps there is also the recognition of the factthat corruption has cross-border effects. The needto reduce the amount of corruption ininternational transactions makes sense only if the

efforts are consolidated. Partnerships must bedeveloped between the developing anddeveloped countries for a common front to bepresented against corruption.

The 1999 Corruption Perception Index (see Table1) ranked Kenya 90th hence the tenth mostcorrupt country in a list comprising 99 countries.More particularly, Kenyas CPI score after 4surveys was 2 points with Cameroon emergingas the most corrupt in that list with acorresponding score of 1.5 points. Such

revelations may not surprise many but haveserved to make the country re-examine theperception of the country by investors morecritically.

The CPI is a system of ranking that TI developedas a numerical method derived from theperception of corrupt practices within givencountries. It acts as a means of assessing thecorruption levels in different countries asperceived by business people, the public and

political analysts. As an index of corruption it isfairly accurate and reliable in identifying thecountries that are perceived by business peopleto have problems with corruption.

Corruption Perception Index (CPI)

The CPI was first published by TI in 1995and became shortly thereafter the subject ofdiscussion on the soundness of the methodology.Sceptics also raised queries regarding itsreliability in the diagnosis and monitoring ofcorruption. As the number of countries includedin the CPI increased, it has come to be considereda credible index of corruption in the perceptionof businesspeople. A minimum of 3 surveys percountry was required for the CPI score to becalculated. In the 1999 CPI, the number ofsurveys per country varied from 3 to 12.

The main bone of contention is whether the CPIsuffices as data because it is derived from theperception of corruption and does not measurecorruption specifically. Given the secrecy thatnecessarily goes with corruption, therepresentative value of the CPI as a measure ofcorruption is discussed with caution.Its significance, despite the controversy is thatthe CPIIts significance, despite the controversy is thatthe CPI is frequently used in therecommendation of countries that should receivebilateral aid.

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Countryrank

Country 1999CPI score

Standarddeviation

1 Denmark 10.0 0.8

2 Finland 9.8 0.5

3 New Zealand 9.4 0.8

Sweden 9.4 0.6

5 Canada 9.2 0.5

Iceland 9.2 1.2

7 Singapore 9.1 0.9

8 Netherlands 9.0 0.5

9 Norway 8.9 0.8

Switzerland 8.9 0.6

11 Luxembourg 8.8 0.9

12 Australia 8.7 0.7

13 United Kingdom 8.6 0.5

14 Germany 8.0 0.5

15 Hong Kong 7.7 1.6

Ireland 7.7 1.9

17 Austria 7.6 0.8

18 USA 7.5 0.8

19 Chile 6.9 1.0

20 Israel 6.8 1.3

21 Portugal 6.7 1.0

22 France 6.6 1.0

Spain 6.6 0.7

24 Botswana 6.1 1.7

25 Japan 6.0 1.6

Slovenia 6.0 1.3

27 Estonia 5.7 1.2

28 Taiwan 5.6 0.9

29 Belgium 5.3 1.3

Namibia 5.3 0.9

31 Hungary 5.2 1.1

32 Costa Rica 5.1 1.5

Malaysia 5.1 0.5

34 South Africa 5.0 0.8

Tunisia 5.0 1.9

36 Greece 4.9 1.7

Mauritius 4.9 0.7

38 Italy 4.7 0.6

Countryrank


Standarddeviation

39 Czech Republic 4.6 0.8

40 Peru 4.5 0.8

41 Jordan 4.4 0.8

41 Uruguay 4.4 0.9

43 Mongolia 4.3 1.0

Poland 4.2 0.8

Brazil 4.1 0.8

Malawi 4.1 0.5

45 Morocco 4.1 1.7

45 Zimbabwe 4.1 1.4

El Salvador 3.9 1.9

Jamaica 3.8 0.4

50 Lithuania 3.8 0.5

50 South Korea 3.8 0.9

53 Slovak Republic 3.7 1.5

54 Philippines 3.6 1.4

Turkey 3.6 1.0

56 Mozambique 3.5 2.2

Zambia 3.5 1.5

Belarus 3.4 1.4

China 3.4 0.7

Latvia 3.4 1.3

58 Mexico 3.4 0.5

58 Senegal 3.4 0.8

63 Bulgaria 3.3 1.4

Egypt 3.3 0.6

Ghana 3.3 1.0

Macedonia 3.3 1.2

Romania 3.3 1.0

68 Guatemala 3.2 2.5

Thailand 3.2 0.7

70 Nicaragua 3.1 2.5

71 Argentina 3.0 0.8

72 Colombia 2.9 0.5

India 2.9 0.6

74 Croatia 2.7 0.9

Ivory Coast 2.6 1.0

Moldova 2.6 0.8

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Table 1: The 1999 Transparency International corruption perceptions index (CPI)


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As an illustration of this growth, 52 countrieswere featured in 1997, 85 in 1998 and 99 in the1999 CPI. The CPI ranks countries from all thecontinents in the world in a descending orderwith the least corrupt in the first position downto the one perceived as the most corrupt.

These surveys have proved important asobjective assessments of the perception ofcorruption by the people who are most likely toencounter and perhaps engage in it. Due to theincreased acceptance of the CPI, it has become apowerful indictment of all governments withregard to the probity of its public officers. TIs

role in the commissioning of the surveys and thecomputation of the CPI is also a reflection of theinternational concern for the improvement ofgovernance and accountability.

Among the lessons to be learnt from the CPI,which now appears regularly, is the fact thatKenyans in particular have come to appreciate thelevels of corruption and in response embark on adebate on the need to deal more decisively with it.Whenever the CPI is published, newspapers inturn publish articles and commentaries on Kenyas

ranking and suggestions on initiatives that mayhelp to inspire investor confidence. That the CPI isoften quoted when making recommendations forbilateral aid cannot escape the notice of countriesthat require such assistance.

Whereas the CPI serves the purpose of showingthe perceived levels of corruption in a comparativecontext, it does not present the nature andcharacter of corruption within a nation. Thenational chapters of the organisation would be

best placed to do this. However, it still suffices asan indictment of the public service especially byshowing it what the private sector, politicalanalysts and the public think of it. An examinationof the CPI reveals for instance that the countrieswith the highest scores have fairly high standardsof living. But more importantly, while virtually allthe Scandinavian countries rank within the topten, consistently the top African nation in the 1999CPI is Botswana at 24th.

TI labours to correct the impression that the CPI ismeant to show which categories of nations are themost corrupt. Instead, the CPI is a manifestation ofthe assessment of the respondents to thecorruption in specific countries. With this in mind,the scores are more significant than the rankingssince the countries featured are merely a sample ofthe globe. Still the index is fairly authoritative forcomparing corruption within countries and as ameasure of the perceived degree of itspervasiveness.

Social scientists and economists particularly givecredence to the CPI because it correlates rationallywith other economic data. Analyses of the CPIacross countries have revealed the connectionbetween the degree of corruption as reflected bythe CPI and the level of economic development.Many of the worlds poorest nations areperceived as being among the worlds mostcorrupt and the CPI has been instrumental in

drawing attention to this link1

. It is possible thento understand that corruption is both aconsequence and cause of underdevelopment.

Coun-tryrank


Standarddeviation

75 Ukraine 2.6 1.4

Venezuela 2.6 0.8

Vietnam 2.6 0.5

Armenia 2.5 0.4Bolivia 2.5 1.1

82 Ecuador 2.4 1.3

Russia 2.4 1.0

84 Albania 2.3 0.3

Georgia 2.3 0.7

Kazakhstan 2.3 1.3

87 Kyrgyz Republic 2.2 0.4

Pakistan 2.2 0.7

Uganda 2.2 0.7

90 Kenya 2.0 0.5

Paraguay 2.0 0.8

Yugoslavia 2.0 1.1

93 Tanzania 1.9 1.1

94 Honduras 1.8 0.5

Uzbekistan 1.8 0.4

96 Azerbaijan 1.7 0.6

Indonesia 1.7 0.9

98 Nigeria 1.6 0.8

99 Cameroon 1.5 0.5

80

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The implication is that the existence of corruptionaggravates poverty and thereby creates anatmosphere conducive for more corruption. Thuscorruption and underdevelopment are mutuallyreinforcing. It is imperative then that thedeclarations of government about the need forpoverty reduction also recognise the

interrelationship between poverty andcorruption.

For all its value, the CPI only represents theperceptions about corruption levels of publicofficials. As it stands alone, it presents a clear butincomplete picture of corruption. It fails to showwho is on the other side of the corruption

process. In response to this, TI promptlydeveloped a Bribe Payers Index (BPI). Thisdecision was informed by the fact that thereduction of corruption must involve theidentification of both the payers as well as thereceivers.

Bribe payers index (BPI)

Because corruption is often perceived as aproblem exclusive to developing nations,the BPI serves to provide a more comprehensiveview. Most of the major bribe payers are fromthe developed nations and are often therepresentatives of multinational corporations. Intaking together the CPI and BPI it is recognised

that corruption is as much a public as it is aprivate sector problem. It is therefore

important to expose both the payers and

receivers of bribes.

TI acknowledges that graft often involvespeople from different countries each with adifferent motive but nevertheless with anunethical orientation. Bribery is a two-waystreet. We can blame those who take bribesbut we must not forget that there are alsothose, equally involved, who pay bribes.Tools which shed light on all facets ofcorruption will go a long way in helpingdevise solutions to it2.

The BPI ensures that it is recognised that thevilification of receivers alone gives theerroneous impression that it is moreacceptable to be the payer. Implicit in this isthe finding that the public officials ofdeveloping countries have willing allies inthe officials of some multinationalcorporations.

The first BPI published in 1999 sought torank countries, which are the home of thepayers of international bribes. While the listdoes not match the comprehensive nature ofthe CPI of the same year, it provided deepinsights into the nature of bribery as anaspect of corruption.

Published in the same manner as the CPI, itranked Sweden first with a score of 8.3

points while China (including Hong Kong)ranked last with a score of 3.1 points out of atotal 19 countries. These countries are

1999 Transparency International bribe payersindex (BPI) : Ranking 19 Leading Exporters

Rank Country Score

1 Sweden 8.3

2 Australia 8.1

Canada 8.1

4 Austria 7.8

5 Switzerland 7.7

6 Netherlands 7.4

7 United Kingdom 7.2

8 Belgium 6.8

Germany 6.2

United States 6.2

11 Singapore 5.7

12 Spain 5.3

13 France 5.2

14 Japan 5.1

15 Malaysia 3.9

16 Italy 3.7

17 Taiwan 3.5

18 South Korea 3.4

19 China(including Hong

Kong)

3.1

9

Table 2: Bribe Payers Index (BPI)


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among the worlds leading exporters. Sweden,Australia and Canada ranked as the top threenations in the matter of probity while Taiwan,South Korea and China ranked as the homes ofthe payers of bribes.

While the 1999 BPI (see Table 2) is not

comprehensive, it is significant that Asiancountries registered the lowest scores while thecountries with the highest scores in the sameindex are those whose governments exercisevigilance in the way its nationals conductbusiness. The BPI shows also that these countriesare able to attain high standards of life evenwhile reinforcing high ethical standards. Thereare countries also that do not tolerate briberywithin their borders but do allow forcorporations based in their countries to receive

rebates of up to 50% of the amounts paid inbribes abroad. TI is opposed to it because itamounts to taxpayers helping corporations topay bribes.

The BPI is distinguishable from the CPI in termsof methodology because the former is a singlepoll whose respondents included executives ofcorporations, chartered accountants, commercialbanks and even law firms. Unlike the CPI, it is anintegrated survey while the CPI which is a poll of

polls.

Governments of countries with low CPI scoresneed to do far more to publicly acknowledge theproblems, to confront the issues, to subject thecorrupt companies and the corrupt officials toprosecution, and to earn public confidence bytheir anti-bribery policies3. The foregoingstatement by Peter Eigen, the Chairman of the TIBoard of Directors gives advice that governmentand all legislators will be wiser to heed.

Now that mechanisms have been developed thatprovide an objective quantification of the facts ofcorruption, Kenyans must show the desire toreduce corruption by supporting anti-corruptioninitiatives KACA and demanding probity ingovernment officials.

The Anti-Corruption and EconomicCrimes Bill : A Review

For a long time, the informed contention hasbeen that the Penal Code on its own doesnot provide for sufficient deterrence andretribution against corruption in Kenya. Sucharguments are made because both the

investigation and prosecution of offenders hasnot registered appreciable success. Through theParliamentary Anti-Corruption SelectCommittee, a bill has been drafted forpresentation to parliament as a response to theendemic corruption in Kenya. Notice that at thetime of this publication, the Bill has yet to begazetted.

The rationale for this bill is that quite apart fromthe poor record of prosecution againstcorruption, the Penal Code is constructed suchthat corruption under it is only construed asbribery. Without faulting the drafters, it can beargued that corruption has since become moresophisticated in both the public service and theprivate sector that such a law cannot be effectiveagainst the corruption industry existing in Kenyatoday.

The draft law is comprised of 12 parts with the

preamble qualifying that the act is intended toprovide for the prevention and punishment ofcorruption and economic crimes. It attemptsright from the beginning to widen the scope ofthe bill to cover crimes that would otherwise notfind coverage under the Penal Code.

KACA and Economic Crimes Board

Part 2 of the act details the establishment of anew body referred to as the Kenya Anti-Corruption and Economic Crimes Board to work

in conjunction with the Kenya Anti-CorruptionAuthority (KACA). The Board is constitutedwidely and comprises nominees from the LawSociety of Kenya, the Institute of Certified PublicAccountants, forum of religious organisations,Kenya Bankers Association, Federation of KenyaEmployers, a member nominated by theInternational Federation of Women Lawyers(FIDA) and a Director General who shall be anex-officio member and the Secretary to the Board.

The composition of the Board is indubitablyintended to ensure wide representation fromprofessional and religious organisations.

References:1 Transparency International: the coalition a g a i n s t

corruption Annual Report, 1999, Page

2 Ibid3 www.transparency.orgTable 1 & 2 are references from the TI website(www.transparency.org)


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However, it may be questioned to what extentonly FIDA qualifies to represent women on theBoard as there are other institutions that wouldalso be interested in such representation. Inaddition, the specification of FIDA does notconform to the rule where all other nominatingorganisations tend to be a joint forum. All the

nominating bodies must forward the names ofsuch nominees to the Attorney General who shallsubsequently submit the names to the Ethics andIntegrity Committee of Parliament for approval.

Among the principal functions of the Board areto advise KACA on the exercise of its powersunder the proposed act and also to approve theacceptance of grants and donations to KACA.The members of the Board other than the ex-officio members hold office for a single term of 5

years. In the course of service to the Board, thetenure of members may be terminated forincompetence, physical or mental infirmity,conviction for an offence and unauthoriseddisclosure of the Boards business.

Section 16 of the bill provides for the existence ofKACA and prescribes largely the nature of itswork in conjunction with the Board. TheAuthority is to take necessary measures for theprevention of corruption in the public,

parastatals and private sectors. The Authoritymay assume the responsibility for investigatingany matter commenced by the police for anyoffences that fall under the bill. This provisionwill invariably widen the ability of the Authorityto act independently in the performance of itsduties and allow it to hire investigators as it mayrequire.

Section 21 of the bill requires parliament to formthe Ethics and Integrity Committee in accordancewith part XIX of parliamentary standing orders.This committee will generally approve theappointment of persons to the Board, examinethe annual report by the Authority and also toreview laws and policies related to corruptionand economic crimes. The committee is as wellrequired to educate legislators on the ethicalstandards applicable to them and to inquire intoqueries raised in parliament as the regular Housecommittees do.

Economic Crimes Court

Apart from the Board and the Authority, theother significant public institution createdby the bill is the Economic Crimes Court.Whereas the court shall remain subordinate tothe High Court, it shall have and exerciseunlimited jurisdiction in respect of crimes under

the bill itself. This provision is calculated to aloneensure that the case backlog affecting the courtsin general will not necessarily affect this court.However, appeals to the High Court will still beavailable to any person aggrieved by theEconomic Crimes Courts findings.

The bill vests power in the Authoritys officers toconduct investigations, obtain informationnecessary for presentation before the court, effectarrest for offences under the bill, and the

interception of private information upon an exparte application to the court. Sticklers for dueprocess may raise queries regarding some of thesearch, arrest and seizure powers.

The Authoritys officers under the Act wieldwide ranging powers under Section 17 of the Bill.Quite apart from the general powers the officerswill have all the powers of police officersequivalent to an inspector of police. Disciplinarymatters for KACAs officers will be directed by adisciplinary code issued by the Director General.An average officer of the authority bears far morepowers than the police officer.

Specific duties of the Director General of theAuthority shall require the submission of theBoard and an annual report containing theAuthoritys financial statements and the activitiesof the authority. Additionally, a report onactivities by the same officer shall be submitted

to the Attorney General for presentation toparliament within 30 days. Public scrutiny of theactivities of the authority is therefore possiblewhile the financial scrutiny is the task of theAuditor General Corporations.

Within the bill are also the definitions ofeconomic crimes and the manner of establishingculpability of persons involved in the crimesthemselves. Interestingly, the bill responds to the

problem of abuse of Harambee by making it anoffence for public officers to use their offices forsoliciting funds. In the punishment and


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deterrence of corruption, the bill also recognisesthe importance of protection for informersagainst intimidation by suspects.

This elaborate bill reflects both the genuine questto tackle corruption decisively as well as anadmission of the failure of the existing

mechanisms to meaningfully reduce corruption.It rightly acknowledges that corruption issophisticated and hence must have a widedefinition beyond mere bribery and that theestablishment of the court may make someheadway especially where crime has occurredand punishment must follow.

It also commits Kenyan citizens irrespective ofthe place of residence to adherence to theprovisions of the bill. No doubt the debate and

passing of the bill will be an important index ofthe commitment of the legislature towardsKenyas redemption from bad CPI ranking.

In conclusion, this Bill intends to establish anactive authority to respond to the corruptionindustry on Kenya. However, the wide powersthat this Bill seeks to grant to the authoritysofficers may be used by the over-enthusiasticofficers to intimidate Kenyans all in the Name ofexercising the statutory powers. These officers

must understand the limits of the powers from

the outset as KACA may instead turn into a bodyfor harassment of citizens hence lead to violationof constitutional rights.

Still the excesses may be moderated withoutaltogether stifling the authority because it isobvious that the authority needs sufficient

powers to begin to impact upon corruption inKenya. No doubt this bill will have the supportof many, subject to the moderation of some of theexcessive powers.

On the other hand, parliament will show itsseriousness about both the prevention andpunishment of corruption in the way it reacts tothis bill. It is hoped that the deliberations on thisbill will transcend partisan interests.

Reference

Draft of Anti-Corruption andEconomic Crimes Bill, 2000

Corruption in Kenya

Documents

Transcript of Corruption in Kenya