Opinion The conventions of corruption

For the last few months,government officers have been tossing the file on corruption across ministries. The file in question is the global compact on corruption that India has not ratified so far — the United Nations Convention against Corruption — five years after it “came into force.” Among the major world economies,that makes India a loner,putting it in a small club that includes Saudi Arabia,Sudan,Thailand and some of the former Soviet republics. The problem the Indian government has not been able to fix is how to evolve a machinery to track private sector corruption without it degenerating into a witch-hunt in the hands of successive administrations.

Usually UN conventions are generally exercises of goodwill,like the one that gave us the Millennium Development Goals. After all it does not cost much to say “we believe in stamping out corruption.” But this one is different — and therefore has given India a reason to hold back.

Among the must do-es of this convention is the need to prosecute any domestic entity accused of giving bribes abroad. If you thought that was easy,just glance at the list of Indian companies that the World Bank has put up on its site for suspected corruption. None of them have faced any penal action in India so far.

One obvious area where this can create trouble is defence contracts for the Indian armed forces. The Quattrocchi case is only one of those. In other sectors,too,there could be trouble,like during the oil-for-food scam. In addition to nailing them,the convention will require India to make public every year,in the General Assembly,details of the punishment handed out — and if there are delays,the reasons for them. In the cloak-and-dagger world of Indian investigations,where few cases ever wind to their logical conclusion,this is a horrendous possibility.

The reason for the delay has,therefore,got a lot to do with the trouble we have in not being quite able to follow through cases that we’ve launched. This could become rather too public. In other words,once India signs the convention,our investigative agencies will have to tell the world why they could not follow up. This is despite the loose wording of the convention,as per international practice. So the CBI et al will not have to share the precise details of the cases they have tracked,but only the bottom line. Yet even this imposes a high compliance cost.

In the case of private-sector corruption,the major reason for the file to be shuttling across the bhavans is that no ministry wants to take on the responsibility. Relations with foreign countries are determined by the foreign affairs ministry,while how grains will be distributed through ration shops are determined by the food ministry. We even have a ministry for culture,as we are a ministry-led nation. But there is no ministry in India that seeks to stamp out corruption. In the first few decades it was assumed that only government agencies were capable of big-ticket corruption,so the department of personnel and training was handed the job of keeping track of errant government employees. Thus the CBI and the CVC came into being under that department.

But now that the private sector has taken up a large space in India’s economic life,the CVC or the CBI can do precious little to keep tabs on them. The CBI is,for sure,often roped in — but each time that has to happen on the basis of a specific mandate from the government.

In other words the trouble we face in ratifying the convention makes it apparent why it is so difficult to keep a lid on corruption in India. We do not have a full-fledged architecture to tackle the disease.

The work in progress across different ministries is therefore a very critical piece of governance. The various ministries are not sure if they should set up one more bit of investigative machinery,but that too on the table. Corruption,incidentally as per the convention,includes not only bribes but also trading in official influence and general abuses of power.

Setting up the mechanism will be important for India to cede more space to the private sector in freely working with the government and the public sector. It will be like a strong referee,who knows when to blow the whistle in a fast-paced soccer match.

For the private sector,attempts to work with the state most often get wrapped in layers of accusations of corruption. Just check out the award of contracts for highways or the PPP model for non-metro airports. This makes those corporates who have a reputation to protect give up. The net loser is the economy,as costs climb.

But it is essential. Corruption is the first and often the most effective card losers and other interested parties in any deal use,with deadly effect,to paralyse decisions. As I said earlier,it will be difficult to work out a legal structure that can overcome this problem. The government has a job on its hands. The whistleblower bill can be one of the first steps to deal with the problem. While regulatory laws like the one that set up Sebi,or the Companies Act,do run to some penal provisions,these are just not enough to police corruption.

The writer is Executive Editor (News),‘The Financial Express’

subhomoy.bhattacharjee@expressindia.com