As Cricket explores new frontiers, those who run the game must do more to protect it from Corruption

Billy Pratt, who is currently taking the Masters in Corruption & Governance at the Centre for the Study of Corruption, reflects on how the changing nature of broadcasting professional sport affects match-fixing in cricket and the corruption risks posed by the emergence of the professional women’s game.

Professional cricket may be currently on hold due to the COVID-19 pandemic, but corruption news never ceases. Towards the end of April, the Pakistan Cricket Board charged one of their own international players, Umar Akmal, for failing to report approaches to fix cricket matches, banning him for 3 years. News of Akmal’s suspension is welcome and strengthens the narrative that the governing bodies of cricket are taking action to root out match-fixing, from the game.

While professional sport faces several forms of corruption, match-fixing, or the act of playing a sporting contest to a pre-determined result in order for private gain (usually a bribe paid by a bookmaker), has been a scourge of cricket for decades – along with spot-fixing, in which a small incident is rigged rather than the whole game. In response to a high-profile fixing scandal centred around South Africa captain Hansie Cronje, the International Cricket Council (ICC) established an Anti-Corruption Unit in 2000 to prevent, detect and investigate match-fixing in the game. Akmal is now the third high-profile figure to be suspended internationally since 2017, joining Bangladesh captain Shakib Al Hasan and Sri Lanka legend Sanath Jayasuryia.

As positive as these signs are, there is an inevitable risk that as cricket expands to new territories and markets the opportunities for corruption will also grow. The rise of T20 and T10 cricket (shorter, more marketable forms of the game) has led to the creation of numerous franchise leagues around the world. Several early franchise leagues in established cricket markets had well documented match-fixing scandals, with the Indian Premier League, Pakistani Super League and South Africa’s Ram Slam T20 challenge suffering. Due to their high-profile status, these scandals prompted changes in domestic cricket anti-corruption policy, and so these leagues may no longer be the best place for match-fixers precisely due to the rise in scrutiny.

Outside of the core markets of the big cricket-playing nations, there have been new franchise leagues in territories such as Afghanistan, Canada, the UAE, Qatar, Hong Kong and Nepal. Out of sight from the more developed and better-funded governing bodies of cricket, these new leagues represent an exciting opportunity for those who want to fix cricket matches. The bizarre sight of Dubai Stars being bowled out for 46 against Sharjah Warriors in 2018 is – the media have widely alleged – a tragicomic symbol of this problem.

There are now more corruption risk factors facing cricket because of the expansion in these franchise leagues. The most obvious is that the opportunity for corruption has increased greatly because the number of live broadcast cricket matches to bet on has increased greatly. Before the advent of franchise leagues in 2008, corruptors relied on internationally televised matches to reach their betting markets and were therefore limited mostly to matches between nine international teams whose make-up of players remained stable throughout. Today, the corruptor can choose from a plethora of teams, players, tournaments and territories, with the rise of live streaming making it possible for a live coverage of a cricket match to reach any betting market.

The most pressing issue is perhaps that of player vulnerability. The growth of leagues in small cricket markets increases the number of players less familiar with anti-corruption codes and less well paid. For players based in these markets, less developed cricket infrastructures provides fewer pathways for advancement, making them more reliant on franchise leagues both for earning and developing a career.

Basic training and awareness are considered by the ICC as key tools in preventing the corruption of players. Yet while cricketers in England & Wales must undertake anti-corruption training before even setting foot on the field every season, the level of training in some newer territories hosting franchise leagues is much smaller. Peter Della Penna of ESPNCricinfo suggests the extent of anti-corruption training in the ICC’s smaller member countries is limited to 30-minute PowerPoint presentations before international events, meaning only players who play internationally receive any kind of training. Even then, it is much more limited than their counterparts in bigger cricketing territories.

Cricket authorities in England and Australia put player welfare at the centre of anti-corruption policy with education initiatives and well-advertised reporting channels. The wealthier, more developed cricket boards have started to make awareness of match-fixing – expressed as anti-corruption – an essential part of being a professional cricketer, in the same way that nutrition or fitness is. It is these players that are best equipped to avoid corruption.

This has not prevented a handful of high profile players from major cricket nations being suspended for match-fixing, showing us that cricketers can succumb to match-fixing even if they are familiar with anti-corruption codes or if they are well paid. However, given the levels of training and scrutiny, it is feasible that Sanath Jayasuryia, Shakib Al-Hasan and Umar Akmal are now the exception rather than the rule. By contrast, in the same period those players were suspended, no fewer than 8 players from the UAE, Hong Kong and Oman (countries with far less developed and rich cricket boards) have been charged with match-fixing.

The conclusion must be that a combination of factors – creation of franchise leagues, expansion into new territories, increase in player numbers, poor training and financial incentives – means that global franchise leagues have created a new army of cricketers vulnerable to corrupt approaches, and that the newer leagues with less sophisticated oversight are particularly at risk.

This is something cricket boards must consider with the next likely big area for expansion: women’s cricket.

The last big cricket event before the COVID-19 pandemic was the Women’s T20 World Cup, the final of which was attended by over 86,000 people. Professional women’s cricket is a relatively new concept with the game still transitioning from amateurism even in the wealthier territories. As women’s cricket is televised more and more, it will become more of a target for fixers. It is imperative cricket boards commit enough resources to ensure the transition from amateur to professional happens not just in nutrition and fitness, but in anti-corruption training too.

The case of Emily Smith, who was suspended for posting team line-ups before officially announced, suggests this transition may not be happening at the same pace as other aspects of the professionalisation of women’s cricket. As ESPNCricinfo’s Isabelle Westbury argues, her transgression was not motivated by corruption but was a light-hearted gesture more at home in the amateur game. Cricket’s governing bodies must ensure this transition takes place across all territories, leagues and genders if it stands any chance of making the game corruption-free. If cricket authorities fail to do this, the rapid expansion of the game risks reducing cricket in these territories to the ‘kayfabe’ (staged performances) of professional wrestling. Cricket matches played in the interests of unregulated betting markets rather than fans paying for a genuine contest will do little to serve the commercial viability of the sport.

CORRUPTION: When the Cheese Moved

John Githongo, CEO of Inuka Kenya and a prominent figure in the global anti-corruption movement, explains how the nature and definition of corruption have changed over the past two decades.  He examines the intersection between complex financial transactions, professional enablers and unaccountable tech companies and warns that these ingredients allied to the Covid-19 crisis create long-term corruption risks

I have been involved in anti-corruption work in media, government, the academy, civil society and the private sector for 23 years. I have watched the topology of graft change over this time. By the time Transparency International was founded in the early 1990s corruption in the public sector was a particular focus especially vis-à-vis its impact on development, democracy and a free and open society generally. This was driven largely by the fall of the Berlin Wall in 1989 and the fact that of some of the essential political tools of Cold War political competition and leadership were essentially redesignated as ‘corruption’. Dictators across the world complained about this dramatic shifting of the goal posts by their allies and patrons in the West. A wave of democratic reform swept across Africa and Latin America in particular. Anti-corruption was an essential part of the reform package. For a while the interests of billions of citizens in developing countries coincided with the liberal democracy promotion efforts of the West as the Soviet Union fell apart and China started its rise.

Three decades later I have come to believe that ‘corruption’ has changed dramatically. This change has been driven first by the scale of financialisation of the global economy that globalisation forged, and the intersection of this financialisation with digital technology. Secondly, the nature of corruption, crime and other illicit networks of principal actors in corrupt transactions has also been transformed. This transformation has outstripped the capacity of governments to keep pace with it – to oversee and regulate its assorted permutations. The traditional private sector that makes and sells things, the political class, bureaucracy and security services were essential components of corruption networks from the 1950s through to the early 1990s. By the mid-1990s globalisation and deregulation meant that the service and technology sectors were far more central to corruption networks than ever previously contemplated. Technology acted and continues to act as an accelerator of the changes.

Once commonly viewed as corruption ‘enablers’, the banking; accounting and audit; law; big tech companies; and, other service sector players had become far more essential to the corruption reality – their transactional infrastructure increasingly central to the design of complex illicit endeavours in the hyper-financialised era. By 2010 it had become clear, for example, that the profound concentration of these actors in a few tax havens had caused trillions of dollars and the dealings that underlay them, to be lifted away from the effective oversight of nation-states. As entire chunks of the work lawyers and auditors once did have been rendered redundant by technology these professions have increasingly morphed into highly specialised ‘advisors’ to finance. This has nuanced the definition of corruption from being the ‘abuse of vested authority for private gain’ to also being ‘the illegitimate transfer of economic surpluses from those without power to the few who wield it’.

Prior to the current COVID-19 economic disruption UNCTAD warned late last year that the threat of recession had been attenuated by ‘excessive financialisation’ of a fragile global economy. It called for a ‘new approach that would boost public investment with an eye to averting environmental breakdown and promote wage led growth in place of finance-led growth.’ By 2017, total developing country debt had reached its highest level on record at 190 percent of GDP, most of it private sector debt which has risen from 79 percent of GDP to 139 percent of GDP in 2017 . An April 2020 blog by Homi Kharas for the Brookings Institution argued that “Emerging markets and developing countries have about $11 trillion in external debt and about $3.9 trillion in debt service due in 2020. Of this, about $3.5 trillion is for principal repayments. Around $1 trillion is debt service due on medium- and long-term (MLT) debt, while the remainder is short-term debt, much of which is normal trade finance.” Needless to say some of the egregious corruption scandals in the developing world over the past decade have emerged out of the acquisition and theft of sovereign debt by corrupt elites in collaboration with the service sector in the West and Chinese state owned entities. This will likely continue and accelerate in the coming months as a result of the COVID-19 pandemic.

The first 20 years of anti-corruption research and advocacy saw considerable discussion of a national integrity system based very much on an institutional, legal and civic infrastructure informed by the value of transparency as a public good in a society that aspires to openness and equity. We’ve gone from advocating national integrity systems to realising that integrity cannot be digitised. Everyone from tax dodgers, the titans of digital technology whose business model does not anticipate great oversight and accountability because it is changing quicker than lawmakers can keep up with; the corrupt, organised crime, drug traffickers etc – are combining to change the rules of the game so that you don’t have to steal when global public relations, lobbying, legal, management consultancy, audit firms together form a bulwark with the power to amend the law so your unethical behaviour does not offend it.

Much corruption has effectively been legalised by the transfer of such a huge proportion of the transactions of financial intermediation being digitised. In South Africa, the term for this repurposing of governance institutions to serve private interests is state capture. In truth, its morbid symptoms in a variety of countries have been exposed by the media and data leaks with increasing frequency over the last 15 years. The Panama Papers, Paradise Papers, Malaysia’s IMDB scandal that cost US$4 billion, the 2014 scandal that led Ukraine’s President Victor Yanukovych to flee to Russia are examples. So is the fate of assorted Eurobond borrowing in a whole raft of developing countries where huge sums borrowed have been predated upon by venal elites confident that using sovereign bonds as instruments of theft in processes tightly managed by the financial services sector makes them immune to accountability.

The COVID-19 pandemic could be about to take this to the next level as digital solutions are proffered for education, commerce, manufacturing, even health and transport etc in an era where humans have temporarily become biohazards. The planet’s apex predator has bumped into a resilient viral opponent. Additionally, though a huge amount of money is about to be spent quickly saving economies from the devastating impact of the measures introduced to mitigate the pandemic. As is the case when massive responses are necessitated by major disasters this is often a recipe for ‘leakages’ caused by incompetence and outright corruption. The COVID-19 response will likely play out over a longer period making mitigation of these risks all the more urgent.

Should I do a Masters in Corruption?

Robert Barrington, Professor of Anti-Corruption Practice at the University of Sussex’s Centre for the Study of Corruption (CSC), looks at the arguments for and against doing a Masters degree in Corruption at this unusual time of a global pandemic and economic uncertainty.

Sitting at home during the lockdown, I’ve been trying to predict how many students will enrol next year on the Centre for the Study of Corruption’s  three Masters courses.  On the one hand, they are the only courses of their type in the world, and we have had good recruitment in the past (both here at Sussex, and online, and in Doha).  But on the other hand, we are in the midst of a global crisis,  international travel is mainly suspended – most of our students are international – and student numbers are predicted to fall across the board.

If I were making a decision about this right now, for myself, I would have in mind three considerations:
1. Will it be a worthwhile use of a year of my life?
One of the main draws for me to move from running Transparency International to join the Centre for the Study of Corruption was the exceptional quality of the faculty.  Academics need a good combination of communication skills for teaching, and analytical and writing skills for research.  CSC is unusually blessed in the quality of the faculty, and has gathered at Sussex some of the UK’s foremost experts on corruption.  It is the largest concentration of corruption academics in the country, and possibly globally. So as a student on the MA courses, there is a chance to learn from experts.
The courses are also characterised by the varied backgrounds of the students.  As well as a number freshly graduated from Sussex itself, we have students from all around the world, ranging from early- to mid-career professionals.  This year alone we have a serving police officer, a couple of government officials, a senior advocate from Transparency International and an elected official from the US, to mention but a few.  This mixture of faculty and students is highly stimulating; especially when studying one of the world’s most pressing issues.
2. Is it still worth enrolling even if some of the course is not run on campus?
For many Masters courses, the sudden switch to virtual teaching caused by the global lockdown will have been hard, both for students and the teaching faculty.  The CSC already runs a fully-online MA course, which can be taken over the course of several years in single-module bites.  This meant that as a teaching faculty, we have been very aware of the difference between a properly-constructed interactive online course, and simply recording lectures and posting them online.  In consequence, even if teaching does not start again on campus in the autumn, we are as well-equipped as any Masters programme around the world to deliver our courses to the standards we aspire to.

3. Will it help me get a job in a changing world?For undergraduates, the uncertain jobs market for the forseeable future provides a good rationale to do further study.  If the pandemic accelerates the shift into different ways of working and a more tech-driven working environment, those with advanced skills will be better placed.  The varied skills you learn on the Masters course – not simply about corruption – should stand our alumni in good stead.

But most of our Masters students at CSC are professionals already in a career.  What are the prospects if they take a break and study?  The first thing to say is that two of our Masters courses can be followed part-time – the LLM based in Doha, and the fully online ODL course.
For the full-time course on campus, I don’t think anyone can predict with confidence what the job market will look like for corruption specialists in summer 2021.  However, a few things are certain: corruption will remain a problem of both global and national importance – possibly more than ever; there will still be relevant jobs available, in the public sector, private sector and civil society, and those who are well-qualified will be best-place to secure them; and even in ‘non-corruption’ jobs, a thorough understanding of this complex issue may prove to be a valuable asset.
We are living in strange times.  Deciding to do a Masters course, in any subject, can be a big decision even in normal circumstances, especially if it means living abroad or giving up a secure job.  Whether you do the CSC’s Masters courses in corruption full-time, part-time, online or on campus, they are a specialised area.   You will become one of an elite group of academically-trained specialists in corruption.  It is impossible to predict the state of the world or the global economy over the next few years.  But you can be certain that this subject will remain fascinating, and studying it in-depth with some of the world’s experts will be a rewarding experience.

Details of the CSC’s three Masters courses on corruption can be found here https://www.sussex.ac.uk/research/centres/centre-for-study-of-corruption/courses-and-teaching

Brexit is here and the EU’s procurement standards will no longer apply: what does this mean for Britain’s public procurement?

Alvaro Quintero Casillas, who is currently taking the Masters in Corruption & Governance at the Centre for the Study of Corruption, looks at the UK’s options for public procurement reform post-Brexit, drawing on models from South Korea and Ukraine to conclude that the UK government has an unusual opportunity both to save money and make economic and social gains – if it creates a fair and transparent system.

Whether you agree with the idea or not, the United Kingdom is no longer a member of the European Union. According to the withdrawal agreement, the United Kingdom entered into a transition period that ends on December 2020 where the European directives on procurement will no longer apply.  This leaves us with a question: what kind of regulations should the United Kingdom implement regarding public procurement, especially for the control of corruption?

Due to its economic size, public procurement is an area with inherent risks of corruption. According to the Organisation for Economic Co-operation and Development (OECD), public procurement represents almost 32% of UK’s government expenditure, slightly above the OECD’s average. And we are not just talking about the purchase of paper and pens for the government: key elements such as the purchase of medicines for the NHS, the catering for schools, key infrastructure projects and the supplies for the defence sector are obtained through public procurement.

We might usually think that risks of corruption in procurement are an issue for developing countries, where official moguls – using Michael Johnston’s terminology – abuse the procurement procedures in order to enrich themselves, benefit their cronies or create patronage networks to be kept in power. However, in a paper from 2019, Adam Graycar found that around one quarter of the investigations of the New South Wales (Australia) Independent Commission Against Corruption were related to procurement. We do not have to look to the other side of the world to find evidence of corruption risks in public procurement:  research from Elizabeth David-Barrett and Mihály Fazekas found that in the United Kingdom around 10% of the procurement market is associated with partisan favouritism.

The UK does have the simple option of abiding by the General Procurement Agreement (GPA) of the World Trade Organization. However, the GPA standards are looser than those of the EU, as they do not even make mandatory the use of electronic procurement systems (e-procurement). Acknowledging the relevance of public procurement in the United Kingdom, as well as the risks of corruption in this activity, it is important to look for good practice that could be replicated. South Korea (KONEPS) and Ukraine (ProZorro) are two countries with interesting experiences in e-procurement that could provide a model for the UK.

In 1997, the Public Procurement Service of South Korea launched the KONEPS (Korea ON-line E-Procurement System), as a way to deliver efficiency and reduce corruption in the procurement processes of that country. Before its implementation, it was common to find collusion in the South Korean procurement processes, where the big conglomerates that formed during Korean’s industrialisation monopolized the contracts with the government, limiting the participation of small and medium enterprises, as noted by Jesse W. Campbell.

As a result, KONEPS created a more competitive environment, with an easier way to oversee the whole procurement process. The use of big data regarding public procurement allows easier audit, as well as establishing objective “red flags” of cases to examine in depth. The Korean Fair-Trade Commission’s Bid Rigging Indicator Analysis System (BRIAS) uses the information provided by KONEPS to assess the tenders and detect malpractice. Each month, BRIAS draws information regarding bidding prices, number of participants in each process and the method of competition employed to generate a bid-rigging likelihood score, allowing a better allocation of resources to audit those processes with higher chance of corruption.

This comprehensive e-procurement system has raised the trust in the procurement processes in South Korea: an integrity assessment conducted by South Korea’s Anti-corruption and Civil Rights Commission found that the integrity perception index score of the public procurement agency had increased from 6.8 to 8.5 out of 10 since the establishment of KONEPS. This system has been so successful that the OECD now cites it as an example of a good practice on public procurement.

Ukraine’s e-procurement platform ProZorro is a relatively new story. After the 2014 revolution, a multi-stakeholder group composed of government officials, Ukrainian volunteers, Transparency International and the Open Contracting Partnership gathered to discuss what an ideal procurement platform would look like. In less than two years, this developed the procurement platform that later became officially accepted by the Ukrainian government as part of the new procurement law of 2017.  Its outcome has been impressive: it has increased the average number of bidding competitors and this has enabled savings of around 20% in each tender.

The United Kingdom has around eight months to re-think its procurement rules. It has already convened a specialist advisory panel to advise on the changes, and promises a public consultation before the changes are made.  This is a big opportunity to have a world-class system, which saves costs for the public purse, is demonstrably transparent and fair, reduces corruption risk and also promotes economic, social and environmental well-being.  That is an achievable objective, as suggested in a report by Demos last October. Implementing a new electronic system that follows the good practice found in South Korea and Ukraine might allow the United Kingdom to save tens, even hundreds, of millions of pounds and improve the procurement market, with more actors and fairer rules. Brexit is already here, and reforming public procurement is a chance for the UK government to demonstrate there is an upside – for both the economy and society.

The struggle against corruption in public life in modern Britain

Historian Ian Cawood, Associate Professor in British Political & Religious History at the University of Stirling, explores the findings of a conference funded by the British Academy which looked at why the quality of governance in the UK seemed to improve dramatically between 1800 and 1900.

Historians working on the campaigns against civic corruption in modern Britain have tended to focus on three issues: the campaign against ‘old’ (or political corruption) in Britain until 1832; the impact of the Northcote-Trevelyan report of February 1854; and the elimination of corruption in local government at the end of the nineteenth century.

The Oxford conference was organised to explore systematically the means whereby corrupt behaviours such as patronage, misuse of public office and the pursuit of personal gain were gradually challenged by a more meritocratic ethos in the public administration of modern Britain. The concept of a ‘public service ethos’ in administration has only recently attracted historical attention as, previously, studies of public institutions merely emphasised the growing ‘professionalism’ of the public services in Britain in the nineteenth century, as if the behaviours required by public servants were value-free and uncontested.

Some of the key themes which emerged from the conference were

1) The significance of the period between 1780 and 1830 in which a dominant discourse of mutual benefit among elites was replaced by an emphasis on ‘the common good’, ‘unselfish government’ and ‘Christian virtue’ by critics of the governing classes which gained traction among the wider public and formed a central aspect of the reforms to the Old Constitution after 1832.

2) The series of crises of governance, most notably the failures in the Crimean War of 1853-56, which, when reported by the press, were ascribed by critics to the failure to expunge fully the ‘culture of corruption’ and which led to a wave of anti-corruption drives throughout the Victorian period and into the twentieth century.

3) The significance of the ethical training and personal probity of ‘principal agents’ who could act as conduits of good governance and models of public service in particular bodies in particular locations: a form of ‘contagious virtue’. It was noted that such training tended to emerge from the Scottish universities, the nonconformist Churches, European examples, evangelical politicians and Benthamite philosophers.

4) The failure of key elements of the British establishment to accept the need for such ethical training among cultural influencers, such as Church leaders, University tutors and politicians, at Westminster, the provinces and across the Empire. The consequence of this failure was the haphazard and sporadic nature of anti-

corruption across the nineteenth century and the persistence of privilege, patronage and patrimony in the British polity and public administration.

5) If virtuous government, created by an institutionalised system of meritocracy was one of the key aims of Victorian liberalism, one must conclude that, in this respect at least, the project failed and Britain at the start of the twentieth remained firmly in the grip of privately educated, Oxbridge graduates who had a very narrow understanding of the social and economic conditions in which the bulk of the British nation subsisted. This has proved an intractable failure of the British political class since that time. How does this relate to the present day? A closing panel of experts reflected on contemporary challenges and what might be learned from the past. The panel included Anneliese Dodds (Oxford East MP); Robert Barrington, (then Executive Director of Transparency International UK); Rosemary Carter (Ofqual); Andrew Feinstein (Founding Director of Corruption Watch); and Oonagh Gay (Senior Researcher in the Parliament and Constitution Centre). The panellists agreed that although significant progress had been made over the course of centuries, corruption remains a significant problem. They assessed that it was not just that corruption continued to be practised by unscrupulous officials, ministers, MPs and businessmen, but that the very suspicion that those who hold public office were corrupt, served to undermine public trust in democratic governance, which itself was hugely damaging.

Among the key findings highlighted by the panellists were:

1) Electoral corruption was widespread before 1880, but improved significantly with the introduction of new laws and mechanisms of electoral oversight.

2) Personal probity and discipline of those in public office is a crucial guard against corruption, beyond the existence of rules and codes of conduct.

3) Corruption flourishes in an environment where public and private interests are allowed to mix, without adequate or robust administrative and public oversight.

4) Significant anti-corruption reform has been stimulated by high poverty and inequality, and as a reaction to political crises such as that which resulted in the widening of the franchise in 1832.

The panel concluded that the current issue of Brexit might prove to be a similar crisis to that of 1832, but that it also carries considerable perils, not least because it might prompt Britain to lower its standards of corporate transparency and public tendering and procurement in pursuit of favourable trading relation with other nations where standard of public life are less regulated or insufficiently monitored.

A full transcript of the plenary discussion – including the full comments on illicit financial flows, money laundering and lobbying made by Anneliese Dodds, the recently-appointed shadow Chancellor – can be found here.

Dr Cawood and Professor Barrington now intend to organise a series of symposiums across Europe to investigate the transnational history of anti-corruption, exploring the reasons for the emergence of and increasingly impartial, neutral and altruistic public service in a series of northern and western states between 1800 and 1880. Designed for academics, students, policy-makers, civil servants and other stakeholders, these events will provide a forum for discussing what lessons we can learn from history when trying to reduce corruption in modern administrative systems. Please contact Dr Cawood at ian.cawood@stir.ac.uk if you wish to find out more or participate in one of these events

Corruption in government purchases during pandemic

In pandemics and other emergencies, public procurement is even more exposed to corruption risks than is normally the case. In this blog post, CSC PhD Researcher Irasema Guzmán explains the risks and discusses key cases of emergency healthcare procurement being abused in the past, in Mexico and elsewhere.

Time is treasure during sanitary crises and pandemics. Many decisions must be made on how and what to spend. Every penny counts as it should be invested for prevention, detection and treatment, under threat of a virus spreading quickly and the potential collapse of the health system. Within this context, governments purchase under emergency conditions; hence, it is mandatory to buy fast, open and smart as there is a big opportunity for corruption to occur, with serious consequences for the treatment of patients.

In emergencies, there is high demand for certain items and as a result, short supply. For instance, many of us have found sanitizing gel to be overpriced; as soon as the population heard about the virus spreading, this item could hardly be found on the market. It also happens with necessary items in hospitals such as ventilators and personal protective equipment. Many companies in the business of producing cars or electronic gadgets have been asked to switch up their production lines to make healthcare items instead. As few companies are able to produce these goods, there is a high risk of bid rigging and collusion, i.e., a few firms colluding to decide who will win a contract. It also means that firms can conspire to set high prices. A lesson from the H1N1 swine flu is related to overpricing. The US pharmaceutical giant Baxter was accused of fraudulently overcharging for medicines as part of the Medicaid health programme which supports the poorest families in the United States. The company was found to have overpriced medicines by as much as 1,300%.

Secondly, an emergency requires purchases in the shortest time possible; for this reason, it is likely governments will purchase items by direct awards to firms instead of using fair competition procedures. In times of emergency, direct awards allow buyers to skip the long procurement procedure that usually involves firms competing with each other. But they also bring potential corruption risks; a direct award may benefit firms close to politicians’ circles that would not have won in more competitive conditions, and may be the subject of much lobbying. In 2009, during the H1N1 outbreak, Mexico acquired the vaccine directly from the laboratory Birmex instead of obtaining it from the firms that produced it, Sanofi Pasteur Inc. or Glaxo Group Limited. As a result, according to the Supreme Audit Institution (SAI), the Mexican government spent much more money than necessary, $118 million pesos (£5.6 billion), by the difference between the unit cost prices offered by the laboratories that produced the vaccine and the one who got the contract, Birmex. Therefore, there was a misuse of public resources and inefficient public spending.

Furthermore, there is a risk that suppliers may provide substandard equipment substituting lower quality components to reduce costs. In 2015, US prosecutors charged a man from Burkina Faso over a USD 12.2 million fraud after he misused international aid by buying 2 million anti-malaria nets at a very low cost and very low quality (without sufficient insecticide) from an unnamed Chinese company. The terrible consequence was to put people’s lives at risk.

Another risk is that supplies may not be delivered to patients. In 2010, the Mexican SAI found, in a revision of direct award contracts to attend the influenza H1N1 pandemic, seven amendments authorising extensions to companies of delivery due dates. That is, through such amendments, up to 160 additional days were granted for the supply of items.

Indeed, public infrastructure necessary to treat patients may not even be completed. After the influenza epidemic in 2009, the Mexican government decided to produce the vaccine in the country to reduce costs. In 2011, the firm Birmex was awarded a contract through an open international tender to adapt a manufacturing plant for the vaccine production. In 2013, the Mexican SAI found that this company spent more than 217 million pesos (£8.5 billion) in the construction of the plant, a cost overrun of 78 million pesos (£3 billion). The SAI also found improper payments authorised by contracting authorities that do not correspond to the aim of the contract. In 2015, Birmex agreed to finish the infrastructure through a public-private partnership (PPP) contract with the government. However, by 2017, the SAI found that the plant did not have the optimal capacity to bear the intended load; hence, it was agreed to demolish it and build a new one. The SAI concluded that these irregularities caused a major delay in the influenza vaccine production project (from 2009 until 2017) and involved a massive social cost with the final price 231.4% higher than had been envisaged when the PPP started in 2015.

Lessons from the past can inform improved policy. Evidence from procurement in pandemics shows that governments may not have purchased wisely and that emergency decisions involve potential corruption risks. The costs are high and clear: misuse of public resources and putting people’s lives at risk. It is possible to overcome this situation by improving accountability and disclosing procurement data. Open data allows tracking emergency spending: how governments decide which resources will be allocated to address the problem, how decisions are taken to purchase, which firms win contracts and whether the items are delivered in hospitals as planned. Furthermore, enforcement is needed. External audits are an ex-post instrument to track irregularities in expenditures and expose potential corruption cases, but we also need to punish actors involved in irregularities and transform ex-post actions to ex-ante policies to prevent corruption.

The Bribery Act 2010: Wider Impacts?

Joseph Sinclair, a lawyer currently enrolled on the Masters in Corruption & Governance, evaluates the success of the Bribery Act on its tenth anniversary by looking at the issues of corporate culture and international impact.

The UK Bribery Act (UKBA) has seen some notable prosecutions and settlements, which have both tested key parts of the law in the courts, and shown that companies of all sizes can be held to account. Ten years on, we can also start to evaluate how the new law has worked beyond prosecutions.

Impact on Business Culture

The Bribery Act contained several innovative approaches, none more so than Section 7, the ‘failure to prevent bribery’ offence. The defence for this would be for a company to have in place adequate procedures to prevent bribery. This, of course, immediately gave rise to the question of what constituted an adequate procedure.

Although it provides a defence, Section 7 has also caused worry within the business community about thresholds and definitions: is corporate hospitality allowed?; can I take my client to Ascot or is this a bribe? This led to a F1 team expressing concern that the Act may drive corporate sponsors away from sport. To this end the UKBA required that the Ministry of Justice (MOJ) publish guidance.

Effective in 2011, it is unlikely to have allayed the fears of the F1 team (the MOJ’s answer is “it depends”). It nevertheless offers 6 practical principles for companies: proportionality, top-level commitment, risk assessment, due diligence, communication and training, and monitoring and review – the cornerstones of effective anti-corruption governance.

A quick search on Google shows there was no shortage of consultants, lawyers and accountants warning companies to get their houses in order. As the then chief criminal counsel at the FSA put it, “…the level of consternation about the Act has no doubt to some extent been fomented by professional advisers who have spotted a lucrative new practice area, and are frightening their clients to death about it”. And to some extent they are right to do so. The Act takes a “no ifs, no buts” approach. It is described as the strictest legislation in the area to date.

But all this is bluster if it does not translate into a different working culture for those engaged in business in the UK and overseas. The authorities cannot prosecute everyone that falls foul of the law. Like a prisoner in Bentham’s Panopticon, the business community should feel the authorities over their shoulder. Both Standard Bank’s and Airbus’s cooperation with Serious Fraud Office (SFO) investigations suggests that this is the case. As the following examples show, the Bribery Act has already achieved a great deal in setting corporate expectations and moderating behaviour.

In their Global Economic Crime Survey 2018, PWC reported that nearly a quarter of respondents had been asked to pay a bribe, compared to 5% in 2016. PWC’s explanation was that, rather than there being a sudden surge in global demands for bribes, there had been improvements in how businesses detected bribery, as the UK was now “…at the forefront of global anti-corruption efforts”. Three-quarters of respondents in the 2018 survey had a formal programme of ethics and compliance in place; 62% said that this included provisions for anti-corruption and bribery (above the 50% global average). Similar trends were identified in a survey undertaken by EY in 2017; 34% of respondents said that corrupt practices happen widely – up from 18% in 2014.

Goldstraw-White and Gill’s study gives further credence to the interpretation that British companies were becoming better at identifying bribery. Their survey showed that the UKBA had imposed additional obligations and raised awareness of anti-bribery good practice. One-third of respondents (64 organisations based in the Middle-East), had introduced some form of anti-bribery and corruption policy. A majority felt that leaders were committed to tackling corruption. Many had reviewed their policies in anticipation of the Act.

LeBaron and Rühmkorf undertook a comparison of the impact of the Modern Slavery Act 2015 and the Bribery Act 2010 on corporate accountability within global supply chains. They analysed the codes of conduct of 25 FTSE 100 companies within several sectors. In respect of the UKBA they found that “…the Bribery Act has achieved traction towards its aim of ‘steering’ company behaviour… companies had clear and strict policies… which they communicated to suppliers”. Bribery was a “genuine compliance issue”, with strict language used that highlighted the consequences with a greater reach in other areas of businesses’ reporting, such as corporate social responsibility and sustainability. Companies pro-actively engaged with bribery in their policies and private contracts with suppliers. This was contrasted with the language used in respect of the Modern Slavery Act 2015 (an area where the UK is considered a forerunner), which was “aspirational” and less stringent.

Collective Action

Since the Bribery Act was passed, entire sectors have entered into collective action initiatives. The combination of the Bribery Act and other legislation, such as the US’s FCPA, have given companies the impression that there is a tightening legal net globally which cannot be ignored.

Shipping is an area exposed to high corruption risks; it operates in corrupt environments, and offers services to high risk sectors, such as defence. It often uses intermediaries and has a lot of contact with public officials. It is an area particularly susceptible to facilitations payments.

An example of this is the Suez Canal, dubbed the “Marlboro Canal”, through which 8% of global sea-borne trade travels. Officials will often request cartons of cigarettes in exchange for safe passage and not imposing fines. A sailor’s Facebook post recounts how “…[a] high-ranking canal official reportedly demanded a bribe of 17 cartons of cigarettes, nuts and dried fruit for Ramadan, fruits, bottled water and on top of that helped himself to a hot meal onboard the ship, all while threatening to impose a fine of $20,000”.

Handing over the cigarettes is an offence under the UKBA with no exceptions (the CPS two-stage prosecution test aside). In response to these risks (of both bribery generally and prosecution under the UKBA and FCPA), a group of ship-owners established the Maritime Anti-Corruption Network (“MACN”) in 2011. The MACN now has over 100 members. It describes itself as “…one of the pre-eminent examples of collective action to tackle corruption”.

In 2015 the MACN launched a “Say No” pilot campaign in the Suez Canal, where ships would reject demands for bribes. Following positive feedback, it became a member-wide campaign. Members have reported a dramatic decrease in the demand for cigarettes and danger to the safety of crew and vessels. Those taking part have been passing through the canal without issue or delay. One company, Höegh Autoliners, found that the campaign made it easier for captains to refuse demands, and the frequency of demands decreased. Other shipping companies have expanded the campaign globally.

Changing the Narrative

Section 7 was described in 2011 by a corporate lawyer as potentially “alarming”. Perhaps rightly so. In essence, the structure of Section 7 shifts the burden to the defendant company to show that they had put in place sufficient measures to prevent bribery. Although each case will turn on the jury’s view, the Skansen case, which was the first Section 7 prosecution, seems to suggest that a company will need to be doing a great deal in order to use this Adequate Procedures defence successfully.

From the preceding sections, we can see that the UKBA is having a positive effect on the business communities’ conduct and attitude to bribery. They are putting measures in place to prevent bribery, and some are self-reporting where things go wrong to avoid prosecution.

It seems that Parliament has realised this because they have extended the Section 7 approach to tax evasion. Enter the Criminal Finances Act 2017. Part Three of this Act creates two offences. The first follows the wording of Section 7, but applies to UK tax evasion (a business facilitates UK tax evasion, irrespective of its location). The second applies to foreign tax evasion by companies incorporated, operating or undertaking the offending conduct in the UK. Both have a defence of having “sufficient procedures”.

To date there have been no prosecutions under the 2017 Act. In a survey conducted by Her Majesty’s Revenue and Customs (HMRC), a quarter of businesses were aware of the law and had made changes as a result. Although this may not make for happy reading at HMRC, it remains a positive development. It is unlikely that these offences would be in place without the Bribery Act as a torch-bearer.

Global impact

The change in narrative applies not only to domestic law, but to other OECD members. Across the Channel, the French national assembly has adopted Sapin II aligning France’s anti-corruption legislation with those of the UK and US. Article 17 draws inspiration from Section 7. It requires the senior or managing directors of specified companies (over 500 employees or part of over 500 employees with a parent company headquartered in France, and an annual revenue of €100 million) to put in place a corporate compliance programme to detect corruption in France and abroad.

Where next?

After ten years, we can see that the UK Bribery Act has had an impact on corporate culture and globally, as well as through prosecutions and settlements. The wider impacts are not solely attributable to the UK Bribery Act, but because it is part of a broader international approach linked to the OECD Anti-Bribery Convention.

However, there have been signals from the US that President Trump does not favour the FCPA; and the global Coronavirus pandemic may fundamentally change the world’s economic and political balance.

This has been a decade of success for the OECD Convention and spin-off national legislation like the UK Bribery Act. It is by no means guaranteed that the next decade will see such progress.