Transparency is key for development organisations but how do you talk about corruption and complaints without risking your reputation?
NGOs are no more immune to corruption than companies in other sectors but for development organisations it can be especially harmful and have a knock-on effect on reputation, funding and donations.
It’s a significant issue; an estimated $17.1bn (£10bn) was spent on humanitarian work in 2011 and without proper strategies in place, accountability can be difficult. Corruption, which includes nepotism, bribery, fraud, kick-backs and double funding, can divert resources, feed conflict and increase basic costs of services for the poor – undermining the very work of NGOs.
It is perhaps telling that 11 out of 17 of France’s largest NGOs refused to participate in a confidential Médecins du Monde study on corruption in 2008, which looked into managing risk and organisational procedures to tackle the problem.
A Transparency International report the same year found procurement, transport, food and medicine distribution and use of building materials among the most vulnerable areas to corruption.
There is no doubt that adopting a pro-active and transparent approach to dealing with corruption can pose short-term risks to an NGO’s reputation. But there are signs that NGOs are changing, keen to show better operational efficiency and accountability.
DanChurchAid (DCA), a major Danish NGO, has been publishing its annual corruption report since 2008, and a second which logs all complaints made against the organisation. But why did DCA decide to take the risk, despite initial reservations from the organisation’s communications directors?
Lisa Henry, DCA’s humanitarian director, says both reports are important elements in DCA’s drive to be more accountable, transparent and to improve its work.
“The most effective way to fight corruption is to expose it,” says Henry, who is also chair of the Humanitarian Accountability Partnership, set up in 2003 to promote accountability in humanitarian NGOs. “Nobody (organisations or persons), likes to be mentioned in a corruption report. We carefully publish our findings with an emphasis on ‘lessons learned’ and we use them as active learning cases, and don’t sit and wait passively for the next case to surprise us.”
Learning from experience is important but so to is involving all organisation staff and partners in the strategy and being open and committed to its importance – a significant cultural and operational challenge.
“Corruption is a sensitive issue,” acknowledges Henry. “The operational challenge is to communicate the subject in an understandable way. Be consistent and clear in the message. Get staff to be comfortable working with it by making your reporting system simple to use and non-threatening. Get senior management to prioritise the issue.”
It’s one thing to deal with corruption within an organisation but what about operations in territories where corruption – bribery, for example – is ingrained in how business is done, for example corrupted police, non-transparent government structures and crooked judiciaries.
“[You] still need to acknowledge that cultures differ and that corruption is an integrated part of developing countries,” says Henry. “One of the effective ways of supporting partners in developing countries to improve work is to more systematically involve local communities in the humanitarian and development work. DCA also works through local partners to combat these issues with strong advocacy work. In many places where DCA and its partners work (internationally but also in Denmark) a complaints system has also been established in addition to regular monitoring systems. [This] provides relevant information which helps partners and DCA to adjust our work to improve it.”
“Inviting people to honestly comment or complain is often a challenge but it is not an insurmountable challenge. And once partners and DCA staff work through the dynamics of what is being opened up for, most people feel empowered by the system. As one woman told me in Swat Valley, Pakistan, ‘nobody ever asked my opinion before.'”
DCA found that funding and donations were not adversely affected by its drive for public transparency.
“Creditability and trust is any NGO or private company’s main driver,” explains Henry. “There is a perception that corruption can harm trust/image/brand. That is true – especially if the issue is mismanaged or hidden instead of being openly and pro-actively presented.
“From our own experience, attitude change can drive a change in behaviour. But this requires clear commitment from the bottom to top in an organisation. And there is a need to state loud and clear that we have a strategy of being transparent, accountable. And that we will learn from our mistakes and improve our work based on constructive input from those with whom we work.”
And despite the initial scepticism, now completely gone says Henry, DCA’s transparency and accountability systems and mechanisms are now “some of the most convincing tools to fundraising, credibility and brand recognition” and is used by face-to-face fundraisers, volunteers and PR to promote the organisation.
The introduction of the Bribery Act 2010 in the UK also means that NGOs must ensure they have robust programmes in place. Anti-bribery guidelines developed by Transparency International, Bond and Mango and a working group of NGOs gives simple, clear and practical principles for putting effective anti-bribery measures in place. Transparency also runs anti-bribery workshops for humanitarian and development NGOs.
Tim Boyes-Watson, director of Mango, set up 13 years ago to strengthen the financial management and accountability of NGOs, says time pressure is one of the single biggest causes of bribery risk. “The main focus of anti-bribery effort should be on risk assessment, planning and staff training which will enable NGOs to prevent money being lost to corruption and time being spent investigating and prosecuting fraud or bribery. Indeed one of the greatest bribery risks and frustrating challenges for NGOs is interacting with authorities on cases of fraud or bribery. Prevention is a lot more effective and efficient than cure.”
Boyes-Watson has some top tips for NGOs who want to embed anti-corruption practices into their operations:
• Make a strong and clear commitment to a zero-tolerance approach to corruption.
• Assess where you are most at risk and prioritise your efforts to mitigate the risks which most undermine your mission and threaten your reputation.
• Devise and implement procedures which mitigate those risks by enabling you to resist, avoid or prevent bribery.
• Conduct due diligence on partners and other key agents or contractors.
• Disseminate and communicate your policy and procedures inside and outside your NGO.
• Monitor and evaluate how well your anti-bribery programme is going.
• Work with other NGOs to share your experience and take collective action to prevent corruption.
Source : Theguardian