In 2015, new anti-corruption legislation came into force which required all public agencies in Ukraine to develop risk-based anti-corruption programs. To support this work, the National Agency on Corruption Prevention, which is responsible for the training and implementation of the state’s anti-corruption policy, approved a methodology for carrying out corruption risk assessments as well as recommendations for the development of these programmes. At the end of 2017, using this methodology, the Ministry of Defence (MoD) established a corruption risk assessment committee, which identifies spheres with the biggest risks. Dr. Soloviov was a member of the committee and lists the highest risk areas in defense processes.
Which spheres have been designated as having a high risk for corruption?
It is well known that big money acts as a magnet for corruption. Since 2015, the total budget for defense and security has been fixed at 5% of the GDP, with defense retaining 3%. This is why the defense sphere is so attractive for corrupt people in power, especially with regards to the State Defence Order – the primary defense procurement plan which is implemented in secrecy. The excessive secrecy prevents effective oversight of defense procurement, leaving room for manipulation, political and grand corruption.
Corruption risks in the procurement phases
1. Risks in the pre-bidding phase.
- Abuse of office to receive illegal benefits through manipulation of the process for establishing the tender committees and the decision-making process within the tender committees, restriction of time and scope of data for a preliminary in-depth study of the terms of contracts;
2. Risks in the bidding phase:
- The issue of whether Tender committee members are in situations of conflict-of-interest is not adequately dealt with by the MoD;
- Superfluous expenditures of budget funds because of the procurement of overpriced goods, works or services.
- Conspiracy between the customer and the producer regarding the pricing or procurement of specific commodities;
- Financial losses due to non-observance of legal and economic requirements for the procurement of commodities, works and services due to incompetence within the MoD as the recruitment process does not adequately train staff to perform the procurement function.
3. Risks in the post-award phase (contract management, order and payment).
- Quite often, the MoD does not have sufficient resources to check the quality of all procured items.
Corruption risks in the sphere of education and scientific activity
- Inefficient use (irrational allocation) of budget funds due to the incompatibility of the organizational and staffing structure of higher military educational establishments with the functions and objectives of scientific centers.
- The possibility of using one’s own authority of office or the possibilities connected to it to receive illegal benefits through a formal evaluation of the results, knowledge, skills and other professional qualities.
- Superfluous (unjustified) expenditures of budget funds and receipt of illegal benefits through the conduct of irrelevant scientific and research work (work with no practical application) for the defense sphere.
- Violations of the rules and procedures for the selection and enrollment of candidates to associate professor and doctorate programs.
Corruption risks in leasing and divesting military immovable property and defense land, household and utility services
- Abuse of office by military or civilian officials during the implementation of the provisions of lease contracts on the military’s immovable property.
- Activity of military or civilian officials aimed at receiving illegal benefits in the course of the use of land parcels and immovable property, as well as the preparation of title documents thereto.
- Receipt of illegal benefits by using the discrepancies in the registration of defense land, the absence of title documents for some of the land parcels, and the artificial reduction of the price of land.
Corruption risks in construction, housing procurement or other construction works.
- Potential abuse of office by military or civilian officials in the course of procurement of commodities (works and services) regarding the overhaul of structures, approval of the results of work regarding the capital repairs of facilities.
- Signing of contracts between state enterprises (subjects of economic activity) of the MoD and private companies for military construction projects without the approval and participation of the MoD which has been purposely excluded.
- Abuse of office to receive illegal benefits in the process of procurement of different types of household property.
Corruption risks in the field of human resources
- There is the threat that the official will use his/her discretionary powers or related possibilities to gain illegal benefits in the course of making HRM decisions. It could involve an appointment made without open competition that should have been organized on merit-based principles or extra bonuses for loyal staff, extraordinary promotions or military ranks, etc.
- Those working in the Provision of Administrative Services could potentially accept proposals, promises or illegal benefits by an official of the military commissariat, archive, headquarters of a military unit, housing and utility services or other institutions and organizations in the course of providing administrative services.
- Creation and/or preservation of factors which encourage the commission of corruption offenses and the abuse of discretionary powers, due to the system’s substandard efficiency vis-à-vis an expert anti-corruption review of the draft legal and regulatory acts of the defense sphere.
- Lack of leadership and an absence of zero tolerance for corruption. Potential for the commission of a corruption crime as there is insufficient legal knowledge or education aimed at increasing the awareness of staff on the requirements of the Code of Ethics, the management of conflicts of interest, established bans and restrictions, responsibility for corruption activities and violations of rules and standards.
- Non-regulated procedure for controlling the implementation of anti-corruption programs and corruption prevention activities at enterprises, institutions, and organizations subordinate to the MoD.
- According to the methodology of assessing corruption risks in the activities of public authorities, the corruption risk assessment report shall contain the description of the identified corruption risks, corruption risk factors and possible consequences of a corruption offense and proposals regarding actions for eliminating or minimizing the detected risks.
- Identification of corruption risks is only the first step of remediation. This year, the MoD and Armed Forces of Ukraine is scheduled to implement an effective anti-corruption program, and it is will be a challenge for them.
(1) The views expressed in this article are those of the author and do not necessarily represent the views of, and should not be attributed to, the Expert Anti-Corruption Advisory Committee under the Ministry of Defence of Ukraine or the Centre for Integrity in the Defence Sector or Norwegian Ministry of Defence.
Dr Viktor Soloviov
Member of the Expert Anti-Corruption Advisory Committee under the Ministry of Defence of Ukraine and regional expert of the Centre of Integrity in Defence Sector
Tel: +1 647 523 1980