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	Constitution of Kenya Review Commission

TRANSPARENCY INTERNATIONAL – KENYA REPORT OF THE CONFERENCE ON CONSTITUTIONAL REFORM TO FIGHT CORRUPTION

WINDSOR GOLF AND COUNTRY CLUB

NAIROBI, KENYA

7TH MARCH 2002

EXECUTIVE SUMMARY

Transparency International-Kenya (TI-Kenya) held a one-day conference, on 7th March 2002 on constitutional Reform to Fight Corruption. It drew together a large number and wide variety of participants from the public and private sector, faith-based and civil society organizations, the Chair and commissioners of the Constitution of Kenya Review Commission (CKRC), members of the Kenya Diplomatic and donor community, and participants from other African countries.

The key objective of the conference, which was a consultative activity, held under licence from and on behalf f the CKRC, was to gather informed views of Kenyan and other stakeholders, on how to integrate the anti-corruption fight in the new constitution. A corollary objective was to coalesce consensus on what subsequent statutory, policy, administrative or other steps were needed to actualize the fight against corruption. Whereas the CKRC cannot effect these, it can highlight and propose them for implementation in a post-constitutional dispensation.

The conference commenced with opening remarks from the Vice-Chair of the TI-Kenya, Harris Mule, and the Chair of CKRC, Prof Yash Pal Ghai. It then had regional comparatives on the fight against corruption from Uganda and Nigerian, two commonwealth states that are substantially in a similar station as Kenya. It further had three thematic research presentations from leading Kenyan researchers and public sector analysts, in the areas of pro-poor policy making, public procurement and re-visiting possible parliamentary oversight of the Public Finance portfolio of the Executive, as a means of reducing corruption. There were then three simultaneous Break-out Workshops, which generated concise, practical proposals under the heads of institutional, public procurement and anti-corruption laws.

This is the full narrative report of the conference. It gives a sequential summary of the above sessions, followed by a synthesis of the day?s proposals and recommendation: - for the (new) constitution, for statute law; and for policy, administrative or other action. Full texts of the presentations as well as a collation of the conference illustrations of corruption are added in the Report appendices. A participant generated detailed proposals and reflections under each of these heads, including creation of specific constitutional and statutory institutions to oversee the whole or part of the pro-integrity and anti-corruption movement. The caution was articulated, however, against falling into the temptation of creating a multiplicity of institutions and offices leading to an institutional glut. Where possible, existing institutions and vehicles, such as parliamentary committees, the office of the Controller and Auditor-General, etc, should be re-examined and strengthened.

LIST OF ACRONYMS USED

CKRC Constitution of Kenya Review Commission

CSOs Civil Society Organizations

GDP Gross Domestic Product

GOK Government of Kenya

MP Member of Parliament

PAC Public Accounts Committee (of Parliament)

PIC Public Investment Committee (of Parliament)

TI Transparency International

TI (K) Transparency International-Kenya

CHAPTER ONE ? THE FIRST PLENARY

A OPENING REMARKS ? HARRIS MULE

The TI-Kenya Vice-chair invited all participants to the conference and under-scored the conference objectives of harvesting concise constitutional and other proposals and recommendations for the constitution of Kenya Review Commission (CKRC) on the fight against corruption. He located the conference, and TI-Kenya?s input to the CKRC, in the CKRC statutory mandate to convene and facilitate expert consultations and hearings at every stage of the process.

He then introduced the conference presenters, especially ?the two? foreign speakers, who are members of the global TI Movement, who would give regional comparative experiences on their countries? management of anti-corruption agendas. He highlighted prevalent public opinion in Kenya, which currently ranks corruption as an issue of higher priority than even constitutional reform itself. In doing so, he revisited, in a nutshell, the various far-reaching deleterious effects of corruption: on the economy, on the moral fibre of society, on governance and electoral politics, and on national stability and security. He then called upon Prof Yash Pal Ghai to formally kick off the conference.

B CONSTITUTIONAL REVIEW AND GOVERNANCE ? PROF YASH PAL GHAI

Prof Ghai thanked and congratulated Transparency International-Kenya (TI) for its consistent campaign against corruption and underscored that the Constitution of Kenya Review Commission (CKRC) was keen to work with organizations such as TI, as this not only eases its financial and logistical burden, but also helps it identify pools of expertise.

He pointed out that although the Constitution if Kenya Review Act does not explicitly mention corruption, it is very clear that its mission and creation was influenced by it. He reiterated that the framework for the Constitution is designed in large measure to combat corruption by emphasizing good governance, accountability and public participation in public affairs. A major challenge of the review, therefore, is to translate this aim into concrete institutions and procedures so that corruption is eliminated.

He further pointed out the CKRA sets out the purpose and objects of constitutional review, which were arrived at in a series of national conferences at safari Park on the key components of the future Constitution, and which thus represent a broad national consensus. He reiterated that these values are predetermined for inclusion in the Constitution and are binding to all who engage in the review. These include: -

1. Chapter 3A of the Laws of Kenya, establishing the CKRC

* National unity and the integrity of the Republic

* Inter-ethnic amity

* Democracy

* Free and fair elections

* Human rights, particularly the right to equality and equal treatment in the law

* Meeting the basic needs of all Kenyans, and, by implication, the eradication of poverty

* Transparency and accountability of politicians and public servants

* Equitable distribution of resources

* Gender equity

* Full participation of people in the management of public affairs

* Checks and balances

* Independence of the judiciary

* Integrity of the procedures for the management of public resources and public finance

Every one of these values is negated by the objectives and practices of corruption.

Prof Ghai went on to describe and elaborate upon the specter of corruption in great detail, some aspects of which are captured in Appendix A to this report.

He thereafter highlighted some already proposed values and instrumentalities that would facilitate the fight against corruption are:

* A free and democratic system of government that enshrines good governance, constitutionalism, the rule of law, human rights and gender equality

* An electoral system that ensures free and fair elections

* Separation of powers and responsibilities among the various state organs, including the executive, the legislature and the judiciary so as to create checks and balances between them and ensure accountability of the government and its officers to the people.

* Ensuring the competence, accountability, efficiency, discipline and independence of the judiciary

* Improvements to the existing constitutional commissions, institutions and offices and establishment of additional ones to facilitate constitutional governance and respect for human rights and gender equity

* Promotion of people?s participation in the governance of the country and public affairs

* Protection of the rights of women and children

* Provision of basic needs of all Kenyans

* Ensure conditions for a free exchange of ideas

These, if effectively followed, would vastly minimize, if not eradicate corruption.

He repeated the lamentation that Kenya appears to have failed in devising viable institutions to fight corruption and further that the courts have repeatedly struck down legislation on institutions established to combat corruption and struck out corruption prosecutions. Thus the new constitution provides an opportunity to ensure constitutional foundations that will help to sustain values, institutions and procedures that counter corruption. We must, through it, examine the practices of political parties, the norms of the public service, the accountability of parliamentarians, the use of codes binding those in public authorities, the ethics and practices of the corporate sector, the accountability of the police, ways of mobilizing public opinion and support against corruption and new complaints and enforcement agencies, among other measures.

In response to questions and issues from the participants, Prof. Ghai had this to say. More attention needs to be given to the design of institutions to enforce the law and fight corruption. Near total reliance on the Judiciary needs to be tempered by better fact-finding institutions such as an Ombudsperson Human Rights Commission, (Anti) corruption institution, etc. This proves the point that there are a variety of institutions and devices to tackle corruption, which can be included in a constitution. Kenyans now have the opportunity to lay the foundation for these values and institutions, never again to fall into the traps engendered by the current Constitution.

Since public awareness is a very important facet, we need to use the Constitutional Review process to continuously conscientize Kenyans against corruption and reinforce positive values. Corruption is multi-faceted, and the fight against it should also be multi-pronged with action at several levels.

In answer to other questions, Prof, Ghai stated that although free and fair elections are important, they do not by themselves, embody democracy. Democracy requires broader conception and embodies values such as the rule of law, respect for human rights, participatory policy-making, etc. It also requires dispersal of power horizontally between institutions of government as well as vertically from the center to the provinces, districts, etc.

Prof Ghai repeatedly highlighted that the CKRC has not itself addressed the above several issues and is keenly procuring the views of the public, which it must analyze and only then codify and propose.

C THE UGANDAN EXPERIENCE IN FIGHTING CORRUPTION ? HON AUGUSTINE RUZINDANA, MP

Hon Ruzindana commenced his presentation with the painful admission that Uganda had not yet broken the cycle of corruption; he thus proposed re-titling of his session to read: ? The experience of Uganda in fighting corruption.?

He then went on to give a historical account of corruption in post-colonial Uganda. He highlighted that systems of control and accountability had broken down during the decades of dictatorship and chaotic rule. The relatively high turnover in political office as well as in the public service led to a ?short-term? mentality where one tried to grab as much as she/he could during their short stint in the office. This led to the recasting of vice as virtue with the ideology of ?man eateth where he worketh.? This extended to ?eating? even where one did not work i.e. the philosophy of ?air-supply.?

He illustrated several instances of corruption, which are recorded in Appendix A to this Report. He noted that the efforts of the National Resistance Movement (NRM) government to fight corruption earned it massive public support, which, in turn buttressed and dictated the pace of the fight against corruption. He, however, decried the gap between the official pronouncements and overtures towards combating corruption and actual proactive steps taken towards implementing those pronouncements. He rightly pointed out that he situation obtaining in Uganda is true of most African countries.

He outlined the following measures, most of which Uganda has embarked upon, to varying degrees of success: -

1. Development of an adequate body of penal law. The provision of the Prevention of Corruption Act and the current provisions of the Penal Code are not enough. New law must be devised to outlaw all forms of official misconduct and every dishonest method of diverting public resources which criminal ingenuity can devise e.g. misuse of public facilities, time and labor of public employees, false claims, etc.

2. Abuse of official position to secure unjust advantage must also be criminalized even where the perpetrator is not the immediate beneficiary. Sometimes the benefits are, in the first instance, directed to members of the family, clan, tribe, region or political party e.g. dishing out jobs.

3. Conflict of interest, though difficult to define, must be criminalized.

4. Disclosure laws imposing a duty on officials to declare personal financial and property assets must be legislated or strengthened. Periodic (e.g. annual) and disclosure of reportable events must be incorporated.

5. Both the givers and recipients must disclose financing and material support of political activities; this is a refinement of the disclosure laws.

6. Laws to prohibit and punish obstruction or intimidation of investigators and/or prosecutions of corrupt practices must also be passed. Investigations, prosecutors and judicial officials must also be insulated.

7. Confiscation and forfeiture of corruptly acquired wealth must also be provided for in law. The 1988 Vienna Narcotics Convention provides for this, with regards to narcotics; this needs to be extended, in national legislations beyond drug offences. Any economic motivated form of serious crime should be subject to the forfeiture remedy.

8. Reversal of onus of proof regarding lawful origin of alleged proceeds or other property needs to be incorporated. This is also provided for in the aforementioned Vienna narcotics convention.

9. Forfeiture should be extended beyond government officials to cover, for instance, individuals or corporate bodies, which may benefit from corrupt sale of government assets or execution of corrupt supply or works contracts.

10. An over-arching Anti-Corruption Programme and/or Policy is also necessary which enumerates and contextualizes all the mechanisms and strategies to combat corruption. In Uganda, the programme has a three-year medium term frame and a five year full-term frame.

11. Public education to create awareness and proactivity among the broad populace. This requires innovative strategies to educate the masses on corruption despite the challenges of widespread poverty and illiteracy. In this, creative use of the mass media is essential.

He then ventured some innovations and policy imperatives commenced in Uganda. One was on the independence (or attempts to secure it) of the office of the Director-General of Public Prosecutions (DPP), which is the office charged with prosecution of corruption-related offences. It has been made independent of the office of the attorney general, and initiates prosecutions independent of the latter. Secondly, the various government instrumentalities bestowed with various facets or aspects if the anti-corruption desideratum, e.g. the DPP, the Inspector-General of Government (Ombudsman), the Auditor-General, the Police, etc meet frequently to share notes and harmonize strategies.

He identified, as another crucial institution, parliament, especially through Parliamentary committees. He emphasized that Members of parliament (MPS) have an original and premier anti-corrupt mandate, having been elected by the people, and thus representing the people in ensuring accountability of government. The Ugandan Public Accounts Committee (PAC) has a Criminal Investigations Department (CID) squad permanently attached to it. Some CID officers attend PAC deliberations, and the PAC chair can instruct them to open an investigations file instantaneously. In his estimation 160 such investigations files have been opened, some having already progressed to prosecutions.

D PRACTICAL ASPECTS OF GOVERNMENTAL ACTION: FIGHTING CORRUPTION IN A TRANSITIONING COUNTRY: THE CASE OF NIGERIA ? MS OBY EZEKWESILI

Ms. Ezekwesili, in her prefatory remarks, thanked the CKRC and TI (K) for inviting her and affording her the opportunity to share her experiences with other African countries. She drew the spirit of kinship and commonality between Kenya and Nigeria, and said she hoped Kenya would benefit from some of her countries experiences in the fight against corruption.

Her presentation highlighted a number of key governmental organs and institutions in Nigeria, which have a role to play in the subject at hand. It is best to highlight them upfront.

1. The Federal Govt. of Nigeria (FGN), headed by the President, H.E. Olusegun Obasanjo.

2. The federal Parliament (National assembly), which, among other things, debates and passes the budget bill.

3. The independent corrupt practices and other offences Commission, headed by a respected retired chief Judge of the Appeal Court.

4. The Bureau of Public Enterprises charged with implementing the FGN Privatization Programme.

5. The Debt management office (DMO), that, crystallized the current effective structure and management of the country?s external debt and accelerated agreements with the Paris Club of creditors.

6. The office of the president.

7. The |Budget Monitoring and Price Intelligence Unit (BMPI), influentially located within OP, that administers the Due process Compliance (DPC) Instrument in all FGN offices and spending units.

8. The Budget Office, a full- fledged office within the FGN Ministry of Finance.

9. The Office of the Vice president.

10. The Economic Policy Co-ordination Committee, chaired by the Vice President, which ensures integrated economic management and eliminates duplication, inefficiency, corruption and waste in government programmes and policies.

11. The Office of the Accountant general of the FGN.

12. The federal executive Council, to which the Finance Ministry must submit the draft Budget proposal for approval and transmittal to the national Assembly.

Ms. Ezekwesili commenced her presentation by also giving a historical contextualization of corruption in post independence Nigeria, highlighting the perfidy and breakdown of systems that characterized the years of misrule and military dictatorship. She itemized the several challenges that her country faces, in its ambitions transition phase. For brevity, they shall not be repeated here, since the full text of her paper is produced in the Appendices in this Report. Some of the highlights though, are: public sector resistance to change; stoking of ethnic and religious tensions and conflicts by beneficiaries of corruption; public cynicism; the difficulties of pushing through reforms- and translating institutional and process reforms success into poverty reduction and improved quality of life- in a resource- starved and capacity-lacking economy, etc.

Some successes however include the prudent accumulation of several billions in oil revenue, in contradiction to previous regimes? propensity for squandering it all away, and the establishment of the Independent Corrupt Practices and other Offences Commission, headed by a highly respected retired Chief Judge of the Court of Appeal. Another is the stoicism with which the government through the Bureau of Public Enterprises has been implementing the Privatization Programme.

The BMPI and DPC

The presentation then narrowed down to its central focus. One Process, as a key financial policy imperative was formally established through a Treasury Circular issued by the Office of the Accountant General of EGN in October 2001. The BMPI, located in the Office of the President, is the institutional mechanism for administering that Due Process and its Compliance Instrument. (DPC Instrument)

The reform process commenced with the creation of a full-fledged Budget office in the Ministry of Finance in early 2000 that was followed by the creation of the BMPI in mid 2001. The BMPI carried out a Due Process Review of the FGN budget and expenditure management process mid last year, which extracted several systemic flaws that facilitated misappropriation and corruption in government financial activities. This year?s budget bill, currently before the National Assembly for deliberation, is the first to be arrived at through holistic use of the DPC and with a central oversight rule of the BMPI. Its passage and successes through the next financial year will be the first real test of these new fiscal policies and instruments.

The DPC instrument is designed to enforce compliance with due process in budgeting and expenditure in all federal spending units, assuring that budgets and spending are not only based on authentic, reasonable and fair costing, but are also appropriately geared to the realization of set priorities and targets that were generated from medium range strategic plans.

The strength of the BPI which administers it is amplified by its ?rapid response? nature, and its utilization of the best available Nigerian and international expertise and state-of-the-art information technology. It operates with a lean staff of highly professional individuals who are able to tap into and sub-contract the best skills and multi-sector technical capacities through consultancies, drawn from the open market. It has integrated the expectation that things should and will be done according to the rules of the game in the budgeting process, the procurement process and the public expenditure payment process. This is done at three stages.

1. Budget Preparation Certification

The paper enumerates the myriad benefits to government, and the country, of due process. It then goes on to itemize and particularize the process of Budget Preparation Certification, indicating that BMPI has developed some generic questions that they apply to any spending units budget proposals. These include a query on the proximate and spin-off benefits anticipated. In the final analysis, certification of a project for budget preparation entails a decision that such a project has fully satisfied all due process requirements for start of implementation. The certification falls in three categories: -

Category I - those projects that are fully prepared technically, i.e. those that meet all the set parameters. This category includes continuing (i.e. incomplete) projects that re being ideally administered.

Category II - those which are not fully prepared, but for which preparation could be completed within the next budget cycle. In principle, the Budget could fund limited consultancies, etc, if a preparatory nature, in anticipation of category I tabling at the next budget.

Category III - those whose preparation is flawed or seriously incomplete. These will be simply returned to the promoting Agency to abandon, shelve or drastically improve.

2. Contract Award Certification

After the Budget preparation Certification, and successful appropriation by the National Assembly, the expenditure management stream of the DPC commences. There is a second set of criteria which each appropriated project must meet, and it is the task of the BMPI specialists, working closely with the relevant spending unit(s), to assure this, upon which a Certificate of Compliance with contract award process will be issued by the BMPI. Then, and only then, can the spending unit proceed to sign the contract and advise the Treasury, through the Minister of Finance, to make payment of mobilization costs.

3. Completion Work Certification

This is a certification that a project has fully satisfied all due process requirements for release of additional funds. No further releases are made on an awarded contract until the BMPI Sector Specialist, working jointly with the relevant officials of each spending unit, issues a certification that a project has met all the conditions/ criteria formulated for this phase of the certification exercise.

CONCLUSION

In conclusion, the paper reiterates that BMPI operates a lean staff component, that is augmented by use of external sector specialists to both validate and track budget and expenditure activities effectively, efficiently and effortlessly. The presenter confirms the TI principle on the importance of the personal integrity of leadership as the critical ingredient for governmental action to curb corruption. The great challenge for Nigeria as well as for Kenya therefore is just how to attract not just competent but also impeccably honest people into all levels of public leadership in order to sustain governmental anti-corruption initiative.

E GENERAL DIALOGUE

The general dialogue sessions brought out several key issues, which this section attempts to highlight with some brevity and coherence.

A: QUESTIONS AND COMMENTS TO, AND RESPONSES BY HON. RUZINDANA

Perhaps the current waning of initial political will, backed by action, to fight corruption is due to the fact that the leadership has stayed in power for too long; it gets used to power and initial idealism and principle suffers attrition over time. Time in political office should thus be limited. Elections, and the cost of campaigns, have a corrosive effect on the moral fiber of a community or nation. Even when a politician/ aspirant may not be initially ?corrupt: one is approached by volunteer ?funders? with ulterior motives, who will seek a ?pay-back? once you are in political office.

It must be appreciated also that the war against corruption is a slow process and a continuous fight. As you struggle to eradicate certain forms of corruption, others appear. Also, weak accountability processes, and monitoring systems as well as non-deterrent punishment have contributed to the survival of corruption.

He surmises that, if we are to make any headway, it is impossible not to have a weak definition of corruption. The essence of power is decision-making. Corruption transfers decision-making power from the elected or appointed official to the corruptor! This is not always easy to prove especially where the corruptor is a foreigner and the proceeds may have already been transferred into private property status.

Even in Uganda, the Judiciary, which should be one of the key pillars against corruption, does not seem to be of much help yet. It has not yet given any favorable court decisions and has not agreed to open a separate court like the Traffic or Commercial Courts. He also highlighted the importance of public-private partnerships in the fight against corruption, especially in the procurement process. The Uganda manufacturer Associations (UMA) is represented on the Central Tender Board; procurement of major public works is subjected to third party evaluation by the private sector. Also, civil society is active on the issue of corruption with IT, the Uganda Coalition against Corruption, the mass media, etc.

B: QUESTIONS AND COMMENTS TO, AND RESPONSES BY, MS EZEKWESILI

Locating the Nigerian BMPI in the presidency was deliberate, in order to pass a strong message of requisite political as well as to enable easy access of BMPI to the highest political offices in the land.

Unfortunately, engendering a homegrown and effective anti-corruption programme, even a regime of transparent, accountable and pro-poor policymaking is no guarantee that international financial institutions (donors) will support a country. Politics alone will not eradicate corruption; the war against corruption must be multi-faceted in order to be successful; it must incorporate political will, institutional facilitation, awareness and education, etc. Again, consensus is very crucial to success in transforming African economies; a tree will not make a forest, however big it is. With regard to the pursuit of electoral integrity, this is a continuous challenge and learning experience for Africa as well as other world countries; even Japan and the USA have lessons to learn in this respect.

The crucial role of public education and awareness has to be underscored; civic education for the young (within schools) and the old. It advocates for coalition of efforts between the public, private and civil society sectors in order to entrench the anti-corruption fight. Ms Ezekwesili sees FGN?s privatization programme as exemplification of the government handing over to the private sector the leadership role in wealth generation. She notes that FGN Independent Corrupt Practices and Other Offences commission has performed well, but is currently facing a constitutional challenge at the Supreme Court level. She also clarified that the BMPI is not created by the constitution, although in broad terms, it is founded on the constitutional mandate of the Executive arm of government is to establish instrumentalities for performance of its constitutional tasks; in this case, those are to manage budgetary and public expenditure expenses. In a sense, one can say that the severity of tenure of the BMPI is thus a continuing challenge.

She reiterated that under the DPC regime, unless some proposed expenditure was in the budget, it would not be paid. The BMPI certificates that precede payment clearly state whether the proposed project or expenditure is in the Appropriations framework. She highlights that ever since the BMPI was launched, it has already saved the FGN billions of Naira.

CHAPTER TWO ? THE SECOND PLENARY

A MAKING AND IMPLEMENTING PRO-POOR POLICIES IN KENYA: THE IMPORTANCE OF TRANSPARENCY AND ACCOUNTABILITY IN THE PROCESS ? DR KANG?ETHE WAMAITHA GITU

The presenter, a former career civil servant, succeeded, in a concise yet comprehensive paper, in drawing the link between corruption, bad governance and poverty. His thesis was that transparency and accountability are essential in the process of making and implementing pro-poor policies.

He observed that despite the existence of well-written policy documents with very noble and desirable objectives since Kenya?s political independence in 1963, achievement of these has been largely elusive, exemplified by the rise in poverty levels to almost 56% of the population, rises in the incidence of disease, and lack of decline of the levels of illiteracy. He noted that, to make any significant headway on the above, increased economic opportunities for the poor must be availed, together with access to basic goods and services such as education, health, nutrition, water, new technologies, markets, credit facilities and information.

He proposed that successful poverty reduction is incumbent upon making and implementing pro-poor and pro-growth policies, which engender sustained economic growth, improve the quality of life of the majority and which must establish and strengthen transparency, ensuring accountability foe effective management of economic and socio-political affairs. In this, the ultimate responsibility and authority for defining and effective policies, programmes and strategies must rest with the poor themselves. They must be empowered to demand good governance.

He reiterated that the government, the private sector, non-governmental organizations, researchers and the poor themselves share the responsibility for poverty reduction. A good government will thus forge links with such organizations and groups and attempt to involve them in policy-making and implementation. Pro-poor policies must not only aim at generating economic growth, but also at equitably distributing the fruits of growth, be inclusive of all social sectors and eschew marginalization of the under-resourced and under-privileged in society. Some elements of these are: -

1. Free and fair elections.

2. A reliable, neutral and independent Judiciary.

3. Clear, established legal frameworks that provide uniform security for the vulnerable as the more able.

4. Empowerment of the individual and civil society through education, information, control over their own resources and the opportunity to participate in the affairs of the state.

5. A committed, competent, accountable and incorruptible administration.

6. An accountable and transparent system of public management with clearly delineated and universally applied delineation of powers and responsibilities.

Repeating the new-common adage that, ?if you are not part of the solution, you are part of the problem,? he enthused participation in policy making since it is the subject of the policy who best know their aspirations, resource base, need, limitations and how best to plan to meet the policy challenges and to exploit opportunities. Participatory policy-making engenders commonality of purpose and a spirit of togetherness; it also implies domesticating and localizing pro-poor policy making and implementation. This should be through consultation through regularly scheduled programmes, which also appreciate that there are regional symmetries and specificities to which a national policy must adopt in order to succeed.

Pro poor policy must be demand-driven rather than supply driven, in order to generate continuity ad support of both implementers and beneficiaries. Again all stakeholders must have the skills, tools and sufficient time to enable them to participate. Again, the relevant information levels must be accessed to enable stakeholders to not only make sound decisions but also monitor implementation. Control and power to make decisions needs to be shared, since if these are unduly concentrated in the hands of decision makers and implementers and the poor are powerless, meaningful feedback is limited. Again, consensus, built by participation in the policy process is crucial, in order to build policy confidence; otherwise the policy is almost certainly doomed to failure. Further, mutual trust among players, and commitment to the agreed upon policy paths are essential, and these are guaranteed by full accountability and transparency.

The presenter underscored the link between policy decisions and sub-optional pro-poor policy-making and implementation. Examples of these are distortions in producer prices, over valued exchange rates, high tariffs aimed at protecting inefficient state owned enterprises, symbolic budgets disconnected from actual funds available and identified priorities, deliberate sabotage of projects by political rivals, lack of meritocracy in selecting policy implementers, etc. Others are political instability and social tensions which discourage investment, promote capital flight, encourage brain drain destroy social, economic and political infrastructure, displace people and bring on the collapse of civil society.

The presenter then focused on the effects of corruption in policy (especially pro-poor policy) making. It includes over-regulation and diversion of resources from vital, pro-poor projects. It undermines government?s ability to enforce laws and collect revenue for further investment in pro-poor and pro-government development. Finally, he highlighted the deleterious effects of policy instability and ad hoc changes in institutional leadership. He gave the example that between 1992 and 2001, in the implementation of small and micro-enterprises (SME) program, a key pro-poor and pro-government strategy, there is a flux of 6 ministers, 12 permanent secretaries and 6 directors were involved. The effect of the lack of consistency and instability on stable, pro-poor policy making and implementation is self-evident!

B INSTILLING TRANSPARENCY AND ACCOUNTABILITY IN THE PUBBLIC PROCUREMENT PROCESS ? PROF GERRISHON K. IKIARA

The presenter delivered a thoughtful and incisive paper that explored in-depth the trends and deleterious effects of corruption in public procurement. He referred to a number of international or national instruments, some as tools to measure public procurement efficacy and some as good models on which to structure ideal public procurement systems and processes. It is perhaps useful to highlight these up-front.

Some Instruments on Public Procurement

1. The United Nations Commission on international Trade (UNCITRAL) model Law or Procurement of Goods, Construction and Services (United Nations, New York, 1995)

2. The code of Good Practice on Fiscal Transparency: Declaration on Principles (International Monetary Fund 1998).

3. The Inter-American Convention against Corruption (Organization of American States (OAS), 1996.

4. The Convention on combating Bribery of Public Officials in International Business Transactions (Organization for Economic Co-operation and Development (OECDI, 1998).

5. The 25 Principles developed by the Global Coalition for Africa at its February 1999 meeting in Washington DC USA.

6. The Ten Point Plan on Procurement (The Republic of South Africa).

Otherwise, in his prefatory remarks, he acknowledged that there is an emerging consensus worldwide that governments? fiscal policies in general, and procurement procedures in particular, are closely linked to the state of economic governance in the country. The manner and efficiency by which a country spends and collects its resources is one of the key determinants of its quality of economic governance and greatly influences success or failure in the struggle against poverty and other forms of features so prominently in the international and national instrumentalities enumerated above. In fact, principles of open, fair and transparent public procurement are encapsulated in the South African Constitution!

The above in a cognisance of the enormous amounts that pass through public procurement. In developed countries, central government purchases account for between 5% and 8% of their Gross Domestic Product (GDP). This rises to 9% to 13% in African countries. The total amount of resources handled through public procurement in Africa is estimated to be between USD 30 ? 43 billion, Nigeria and South Africa account for between USD 16 ? 23 billion, while in the rest of Africa this ranges between USD 13 and 19 billion. It constitutes the single most important and largest domestic market and accounts for between 50% and 70% of imports in most developing countries.

The presenter posits that appropriate procurement procedures enable governments to obtain good and services cost-effectively and fairly, and frees enormous resources to invest in poverty eradication. Thus a procurement mechanism should facilitate government acquisition of ?the right item at the right time and at the right place?.

In reviewing African procurement systems, he establishes that the majority is not ideal in terms of structure and composition of tender boards or in appropriate checks and balances against corruption and waste. Further, they do not conform to the prevailing internationally accepted principles, especially with the UNCITRAL Model Law on procurement of goods, construction and services (UN, New York, 1995). This has been evidenced in many countries, by the Country Procurement Assessment Reviews (CPARs), carried out under a World Bank supported programme. Some key characteristics are: -

1. Lack of well-defined, clear or comprehensive criteria or procedures for evaluation of tender bids.

2. Lack of transparency or adequate bid information in procurement procedures.

3. Lack of articulation of pre-determined criteria for awards before tender award process.

4. Even where clear tendering rules and procedures are articulated, they are not often adhered to in practice.

5. Lack of effective anti-corruption provisions, codes of ethics, etc and lack of enforcement mechanisms that would intervene when corrupt or inappropriate procurement practices are detected.

6. An overbearing influence of central government officials in procurement vehicles for central government, local authorities and even parastatals.

7. Poor, if any representation of strong public sector or civil society institution, which would demand information and transparency in public procurement and other spending activities. However, this has been changing in a number of countries in last decade, with some private sector representations or tender boards.

Some Case Studies in Public Procurement

The presenter gave several case studies, including Kenya. He noted that Kenya?s Public Procurement is three-tiered:

(i) Central government;

(ii) Local authorities and:

(iii) Parastatal enterprises.

He delineated the roles of the Central Tender Board, District Tender Committees and ministerial committees and the various calibrations of purchases that can be made without quotations, or without tender board approval or open tendering. He noted that economic liberalization and decentralization of public administration was evolving an environment in which individual ministries, public enterprises and local authorities had greater freedom to procure the goods and services they require. He lamented that, although inspired by noble motives, it tended to multiply channels of corruption. He also noted efforts to involve the private sector, especially on those tender committees that lacked technical or specialized expertise.

He applauded the Ugandan practice of local and international advertisement of tenders as a way of promoting transparency. He also supported strong parliamentary oversight roles in Uganda and Zimbabwe, especially in the latter. He noted that the South African Constitution explicitly provides for proper procurement. This has led to its ?ten point plan on procurement? whose main is to enhance the participation of small and medium enterprises in the country?s procurement activities.

Some Common Abuses in Procurement Procedures

The Paper identifies these as:

1. Procurement without competitive bidding. This sometimes causes huge losses.

2. Overvaluation of goods and services often aggravated due to the lack of industry comparatives that would have been evident from competitive bidding. Sometimes, even when there is open tendering, manipulation by bidding cartels may still result in this.

3. Variation Orders. Sometimes, in connivance with tendering authorities, suppliers bid low in order to win contracts, and thereafter apply for major variations to those contracts.

4. Payments for goods or services not supplied at all, usually with the connivance of unscrupulous public officers (?air supply?)

Some Common Flaws of Procurement Systems

1. Scattering of procurement guidelines, principles or procedures in a multiplicity of documents thereby making them unclear and difficult to follow.

2. Scarcity or outright unavailability of the documents referred to above.

3. Inadequate preparation before tenders and quotations are sought and released. This sometimes facilitates formation of bidding cartels that collude to deliberately quote exaggerated values.

4. Decision-making based on inadequate or false information. Most tender boards or committees rely heavily or briefing from government officials, who could be compromised, by inducements, intimidation or personal interest.

5. Absence of strong reward and punishment instruments for those involved in public procurement systems, as a means of promoting discipline and ethical behavior in tendering.

Some factors behind weaknesses in public procurement systems

1. Lack of political will to stick to prescribed procedures. For instance, in Kenya, despite decades of annual, detailed reports by the controller and the Auditor-General, hardly any action has been taken to punish the culprits.

2. Loopholes in some national procurement systems, which have been abused, for instance, the introduction of limited flexibility for tender boards to sometimes override strict provisions for open and competitive procedures.

3. Lack of effective codes of conduct, so that there is no framework and no measurement tool for supervision or evaluation of implementation of government contracts. This is compounded by the lack of strong disciplinary measures against professionals who fail to deliver services as required.

4. Lack of well established institutions and practices to provide checks and balances in national economic and political administrative set-ups. A prominent example is the chronic inability of several countries? Parliaments to act as effective checks against the excessive powers of their respective Executives.

Reform Proposals

The presenter noted there is a movement, globally, to reform public procurement systems, but that this is even more urgent in developing countries, especially in Africa. He outlined reform efforts at various levels and fora, such as the World Trade Organization (WTO), most prominently at its Ministerial Conference in Singapore, 1994, The Global Coalition for Africa, which is trying to develop an African Convention or instrument to fight corruption and the World Bank. He gave the example of Uganda, which has established a Task Force for Public Procurement Reform. Another was the example of Guinea, which has enacted the key elements of its procurement reforms in 1998 Public Procurement Code. A synthesis of the presenter?s proposals, as moderated by the consensus of participants, is included in Chapter 4.0 below.

C RESTORING ACCOUNTABILITY TO THE LEGISLATURE AS A MEANS TO COMBAT CORRUPTION ? NJERU KIRIRA

The presenter gave an incisive paper, which clearly outlined that Parliament could take to enhance executive accountability in order to combat corruption. He began by enumerating various forms of corruption and their deleterious effects on the economy. The bottom line was that there are weak and inappropriate institutional arrangements to facilitate proper legislative oversight of the executive. Appointments to key executive and judicial posts are the preserve of the presidency without any institutional check. Further, especially for several key executive offices, sustenance in office is also at the pleasure of the Chief Executive so that ministries and departments under them are created, also appointed, transferred, abolished and personalities within them also appointed, transferred or sacked at executive whim. This leads to wastage of public funds, inability to finish projects or achieve national objectives as well as creating a ?desperado? mentality among public officials wherein they try to make as much corrupt ?hay while the sun still shines? on them.

There appears to be too much executive discretion exercised without transparency. Further, using instruments such as the Official Secrets Act, there is little or no information to the public or government operations, and disregard of public opinion at any rate.

The paper illustrates how the budget process is a mere legal formality and the treasury of individual ministries can totally disregard it with regard to raising extra revenue engaging in un-budgeting public expenditure. This is clearly provided for in the constitution especially article 99 to 101, and in subsequent statutes such as section 5 of the Exchequer and Audit Act (Chapter 412 Laws of Kenya). Further, there are funds created for specific purposes but which, for the most part, operate with very little transparency or accountability hence providing a slush fund for executive operatives. These extra budget schemes include: -

* The National Social Security Fund (NSSF)

* The National Hospital Insurance Fund (NHIF)

* The Rural Electrification Fund (FEF)

* The Sugar Development Fund (SDF)

The presenter illustrates that the provisions and procedures for public borrowing commend themselves to corruption and executive abuse since there are no instruments or mechanisms for legislative or other oversight. The executive has thus over-contracted public projects and borrowed, externally and internally, to unmanageable levels! He proposes a statutory limit to total public debt especially domestic debt. Even the ceiling or external debt, currently at a flat rate of Ksh.500 million, needs to be related to the Gross Domestic Product (GDP) or government revenue. At any rate, he argues, it is already too high to be meaningful.

The presenter proposes more effective parliamentary supervision of regulatory agencies, such as the Central Bank of Kenya. He further proposes revision of section 48 of the constitution to allow any MP to introduce a Finance Bill to Parliament. In the current scenario, only the President, through a Minister can do so, allowing the executive to solely dictate or manipulate public revenue and expenditure.

(j) Presidential prerogative to summon, prorogue or dissolve parliament should be removed and rested in parliament itself.

(k) Appointments of the chief Justice, Judges and the Director of Prosecutions should be vetted by parliament.

The paper outlines in detail the budget preparation provisions, contained in sections 99 to 103 of the constitution and highlights that, whereas the constitution and laws may not be responsible for people acting in bad faith, the constitution does not give Kenyans an instrument to stop misuse of public resources. In this case, he highlights how MPs have no formal channels to procure sufficient information to scrutinize the budget. He also illustrates how loose budgetary and public expenditure provisions allow the executive to commence ?political projects? prior to an election or by-election and abandon them immediately thereafter, so that the government has a huge stock of unfinished public projects in which it has already invested a substantial portion of national resources.

The paper also illustrates how discretion to waive taxes, duties and licences, without objective criteria or reporting procedures has been misused for political or corrupt ends. He proposes provisions for regular reporting, to parliament, or exercise of these provisions, the financial connotations, and their contribution or otherwise to the national interest. It also illustrates how the civil contingencies fund, created by section 102 of the constitution has been abused to cover up for ministerial failures to budget properly and to provide a cash for political or corrupt purposes. He shows how the controller and Auditor General?s Reports lament that the operations of this fund reflect lack of budget honesty and commitment. This can be attributed to lack of an appropriate constitutional tool with which parliament can discipline the executive.

The presenter proposes that parliament should hold ministers and permanent secretaries personally responsible and accountable to it and liable to refund the public for resources lost due to corruption, gross negligence or incompetence.

He proposes establishment of public Audit Board which will supervise the Controller and Auditor General and recommend, appoint and retirement from that office. In conclusion, the presenter intones that any organization can only be as effective as its managers, and that appointments and retention in office should reflect integrity, qualification and competence and regular performance evaluations be institutionalized.

D GENERAL DIALOGUE

In this wide-ranging dialogue and consensus session, several issues were debated. Participants were invited to appreciate the steps the current (eighth) parliament had taken to secure its institutional independence, and divorce itself from executive control, such as empowerment of parliamentary committees. Njeru Kirira, one of the presenters, also noted that we are witnessing the nett result of accumulative damage on institutions of government, starting from constitutional amendments in 1966. He further proposed that the judiciary, in addition to being independent, should be subjected to regular evaluation. Parliament should also play a more prominent role in supervising the cost of general elections and by-election. The centrality of separation of powers was under-scored; many things are done in the president?s name, some perhaps without his knowledge!

The dual role of the Permanent Secretary to the Treasury ? in both awarding tenders as well as being the forum for appeal on tenders awarded ? was castigated. G K Ikiara, another presenter, explained that this was yet another attempt by Executive to retain control and hamper total independence. It was also noted that Public Procurements Appeals Tribunal, although a positive step, was only the result of aids conditionalities. It was hoped that the CKRC would foster an enabling environment for civil society Organizations (CSOs) to be more clearly involved in and impact on governance generally, and on the institutional fight against corruption in particular.

The Hon Musikari Kombo, a member of parliament, lamented that there seemed to be no public outrage against corruption and bad governance, such as that which led Philippine or Argentine citizens to take to the streets and forced their4 governments to resign. Some participants that perhaps this was because the majority of the citizenry was struggling full time just to survive! Again this is largely due to the effects of widespread corruption on the economy and society: a classic chicken-egg situation!

Participants called for evidence-based research on the effect of corruption on marginalized, social sectors such as women and children. Further that the anti-corruption fight should be ?trickled down? to the rural communities and areas. They also distinguished between corruption and inefficiency in public office, terming both as criminal and inviting criminal sanctions. An example was given of the Permanent Secretary to the Treasury, who is required to serve on twenty or more boards. Obviously, she/he cannot fully serve on all these and monitor and receive reports from alternates serving in his/her place.

Participants categorically and vitriolically criticized the recently acquired practice of top public servants awarding themselves hug pay-rises, get totally ignoring lower-level public servants whom they work with daily or plight of the citizenry, who maintain them in public office in the first place! It was highlighted that, in the recent past, only members of parliament, judges and Permanent Secretaries awarded themselves pay-hikes, amidst the din of calls ? and strike threats- from teachers, nurses and other public servants and despite the cries of over-burdened and under-serviced taxpayers. This raises both moral and legal questions.

In conclusion, participants proposed multiple levels of institutional checks and balances, and further suggested constitutional entrenchment of these.

CHAPTER THREE ? THE REPORTS OF THE

BREAK-OUT WORKSHOPS

A THE CHALLENGES OF INSTITUTIONAL RENOVATION

MODERATOR: Dr. David Ndii, Kenya Leadership Institute

RAPPORTEUR: Duncan Okello, Institute of Economic Affairs

The group?s deliberations were reported under the following heads: (i) A summary of the Points of Caution, and of (ii) The Principles and Proposals; and thereafter (iii) a longer Narrative Report of the group?s deliberations, prefaced with some key questions and dilemmas.

I. THE POINTS OF CAUTION

a. At the core of constitutional engineering, is institutional design and reform. The implementation of the Constitution has to do with the kind of institutional reform agenda that we embrace.

b. Kenya?s institutions have been victims of subversion and creative criminality. Institutions exist but they are not working. Informal institutions are more functional than formal ones. This is what allows private interest and conflicts of interest to prevail. The fundamental challenge we face is how can we design institutions that cannot be subverted. How do we narrow the gaps that allow mischief and criminal innovation to thrive? We need to focus on institutional principle as opposed to detail. Laws and institutions that are dense with detail are more susceptible to subversion. More is not necessarily better.

c. In our eagerness to stem corruption, we must watch against institutional inflation/glut. Far too many institutions may lead to incoherence and conflicts. There is even the danger of these institutions adopting a conspiratorial behavior against the people.

d. In designing institutions, we must re-conceptualize the State from its pre-globalization context and give it an institutional character that accurately reflects the reality of globalization. We have been off loading responsibilities from the state, but not resources, which in itself has created an avenue for corruption.

e. Clear inter-institutional relations are crucial in design maters so as to avoid contagious decay. We need a systemic conception of State institutions and see them as parts of a whole.

II. THE PRINCIPLES AND PROPOSALS

a. Limit and decentralize discretion:

There is too much discretion, sometimes to the wrong people, that need to be checked and or eliminated. We must define who holds what discretion and what are its limits or latitudes. Discretion is also a bit too concentrated at the centre and only in a few offices. In instances where there is discretionary power, this power needs to be dispersed so that its enjoyment is not curtailed by a distanced and far removed bureaucratic arrangement. One of the challenges facing us is how to balance the objective need/benefits of discretionary power and subjective abuse of those powers.

b. Establish Complaints Mechanisms:

Kenyan citizens sometimes have complaints but the mechanisms for redressing or processing these are lacking. These need to be established and in particular:

(i). The Office of the Ombudsman

(ii). Independent Police Complaints Commission to process complaints against the police

(iii). An array of Appeals Boards or Tribunals. Even these must have performance monitoring mechanism so that they do not in themselves become captives of a select professional, business or government elites. We must learn from the non-functioning nature of the complaints commissions established by a number of the professional bodies whose organs seem not to work as robustly as initially intended for purposes of protecting the public. If poorly designed, complaints institutions may themselves become objects of complaint against which there is no recourse for the public.

c. Ensure Institutional Stability:

Our institutional culture has been one of uncertainty and unpredictability. Offices get established and abolished at will. Those that are not easily ?abolishable? are undermined from within. Thus, in designing new institutions, we must aspire to reclaim and restore institutional stability by insulating key offices from whimsical executive actions either by appointments, dismissals or ?capacitation?. Senior public appointments need to be subjected to confirmatory hearings either by Parliament or a specially constituted constitutional body.

d. Disclosure of Information:

The right and freedom of information should strongly underpin our constitutional principles and institutional formation. The right and access to information should constitute a core component of the Bill of Rights. We need to enact a Freedom of Information Act; strengthen the independence of the media; establish Information Appeals Tribunals.

e. Shift Sovereignty from the State to the Citizens:

The present residency of sovereignty is in the state not the people. This needs to be reversed. Thus, in our institutional designs, we should provide for citizen civil litigation on matters related to financial mismanagement and fraud, or, abuse of office. This will ensure that if supreme audit institutional reports are not acted on then, the citizens can, on their own, initiate or institute proceedings. This principle could be expanded to incorporate taxpayer litigation in respect of the quality of services offered or not offered by the government.

f. Regulate Conflict of Interest:

Public servants or officials ? be they ministers, Permanent Secretaries, Commissioners, Members of Parliament ? adjudicate on matters, such as tenders, salaries, benefits, in which they have direct interests. This is wrong and a key principle of institutional design should ensure that this does not happen. There probably should be an overall Public Institutions Salaries, Remuneration and Benefits Commission charged with the task of setting these limits and reviewing them periodically. This will also allow for a coordinated approach to remuneration in the country.

g. Public Vetting of Seekers of Public Office:

Seekers of public office should be vetted before thy take up their appointments.

h. Local Accountability and Domestication of Information:

The principle of local accountability should be emphasized. We tend to focus primarily on accountability at the national level and ignore accountability at the local level. Mechanisms should be established to enable local people to control their local governance institutions. The local authorities, as they are constituted today, are effectively beyond the control of the locals beyond the elections of councillors. Similarly, information, especially of the financial kind, such as budgetary allocations to the local areas should be domesticated. Reports about resource movements, allocations and expenditures, should be published and made accessible to the public in a friendlier, ?consumer-able? fashion.

i. Higher Reporting and Enforcement Mechanisms/ Requirements:

The present government-reporting requirements are very low. Institutions do not release or publish periodic reports. Information on government appropriations is erratic and technically inaccessible. The basis of distinction of what information should be disclosed and which one shouldn?t is unclear. We must proceed from the premise that all information is public until certified otherwise by a court of law. Even then, Parliament should be able to access this information even if under oath.

j. Preface the Constitution with ethos, principles, aspirations, and national objectives:

Our Constitution begins rather too abruptly. We need to preface the constitution with certain key principles, ethos or aspirations that Kenya stands for. We need also to constitute ourselves and define the residency of sovereignty and the contracting parties to the Constitution. One of these principles could be the use of public finance efficiently and equitably.

k. Enhance Parliamentary autonomy, powers and capacity:

Parliament should possess the powers to conduct confirmatory hearings for senior appointments. It should also have the capacity to enforce its own decisions. We should enhance the research capacity of the House; we need to establish a Parliamentary Budget Office; involve the House in the preparatory stage of the Budget; formalize and strengthen the Parliamentary Committees? powers of summon. Further, Parliament should have its own autonomy especially in deciding its own calendar.

l. Sanctions Philosophy to Expand from Malpractices to Non Performance:

We need to punish incompetence as well. Thus a performance monitoring and evaluation scheme needs to be drawn up that shall be used to assess performance and against which judgement can be made.

m. Overarching Philosophy of National Interests that Each Institution Seeks to Achieve:

We need to produce an over-aching National Institutions Services Charter, which declares in general but useful terms the aspirations, and public good or interests that all the institutions we create are meant to serve. This will secure institution from the mischief that too much detail may permit. As of today, national or public interest is un- defined. This Charter would cure this problem. These principles may be made justiciable.

n. Checks and Balances:

There should be inter and intra- institutional system of checks and balances in order to avoid excesses. This is a theme that should run through all the institutions that are designed.

SOME KEY QUESTIONS/DILEMMAS

1. Should confirmatory hearings be tasked to Parliament - before which some professionals may not want to appear - or should they be made the responsibility of a specially constituted national panel.

2. What is the optimal number of institutions that is desirable?

3. How do we expand the Bill of Rights to protect citizens not just from the state but also from the rising power of corporations and selected professions?

4. Are there some key institutions that we would like to completely shield from any form of executive action or interference?

III. THE NARRATIVE (HANSARD) REPORT OF GROUP PROCEEDINGS

The moderator in his opening remarks restated the brief that the Group was expected to execute. He briefly presented an overview of the key components of the task before the Group. In his discussion, he focused primarily on two issues ? the institutional questions and the issues of financial accountability and corruption.

Institutional Choices

He argued that the core function of the review process is that of institutional design. At the bottom line of constitutional engineering is institutional reform. Implementation of the Constitution ultimately has to do with institutional reform.

Broadly but not strictly, the choice is between presidential and parliamentary systems. The presidential system has a strong separation of powers component though this separation does not apply to the civil service, which is very political as evidenced by the US White House culture where the entire staff is replaced whenever there is change of government. The parliamentary system, on the other hand, is weak in terms of separation of powers. The three arms or branches of government confluence and fuse variously. However, it has a more independent civil service. However, there are gradations in between the presidential and parliamentary systems and Kenyans need not necessarily be stampeded into making choices from these two. Our institutional designs need to be creative and experiential rather than imitative.

Financial Accountability and Corruption.

Under our present Constitution, the office of the Controller and Auditor General (CAG) has two functions: the control function and the audit function. Presently, this office seems to focus primarily on the latter - the exposure function. It has been dormant in exercising its control function, which requires of it to authorize all withdrawals from the Consolidated Fund. It needs to begin to discharge its control function.

Similarly, the audit philosophy that underpins the practice of this office is pure financial audit. The CAG does not undertake performance or value for money audits. This means that the CAG may find that proper expenditure procedures were followed but as to whether those expenditures matched the quality of services or goods bought the CAG remains spectatorial. To protect public interest, the CAG should be mandated to undertake value for money audits in addition to financial audits.

Prosecution ? need for an independent prosecution office. The Attorney General?s office needs to be rationalized so that it stops straddling all three arms of government creating conflicts of interest and impeding institutional independence.

Integrity of public servants is crucial to the proper management of public finance. One way of ensuring that we get public servants of impeccable ability and character is to vet all senior appointments. What needs to be done is to protect public officers from arbitrary removals.

Discretion

Participants felt that there is too much discretion, sometimes to the wrong people. The review should focus on who has what discretion and what is the acceptable latitude of exercising it. Discretion has been the route for corruption. It is what makes corruption thrive as it provides an opportunity to corrupt decision-making process. Even in situations where discretion is necessary and useful, our centralized orientation or culture towards government has made us to centralize discretion to. The result is that, rather than facilitating decision making, it has instead fostered delay. Members of the public are held at ransom by officials with discretionary powers in a bid to extort bribes from them. Thus we need to decentralize and have multiple accountability.

One of our biggest problems is also conflict of interest. Ministers adjudicate tenders in their own ministries in which they have interests. What are the criteria when conflict of interests arises?

In most cases when you talk to members of the public, they complain that they have problems but do not know where to take their complaints. We recognize that the public suffers injuries but we are yet to provide effective institutions of relief. We need to establish effective and functional complaints mechanisms and channels for the public. These may include more Appeals Boards on Procurement and on Information, for example. But the public must have faith and confidence in these institutions for them to make sense.

Our institutions also lack external or peer evaluation to ascertain whether they are performing. We need regular checks and audits by eternal experts or peers. Professionals must check on each other. In the past in the universities for example there used to be Visitation Committees, which occasionally verified the curriculum content and training methodology.

Participants also noted that there are institutions and rules in Kenya that are very detailed and fairly well intentioned. For example, the Exchequer and Audit Act, the Government Financial Regulations and Procedures etc regulate the government financial management in substantial detail. Thus, the issue in Kenya is not whether institutions exist but, rather, whether institutions work. And the reason they are not working is because of our lack of an arms length culture. We have a culture of short cuts. Informal institutions therefore preponderate over formal institutions. This is what allows for conflicts of interest to prevail; it is what permits private interests to prevail.

Our history therefore shows that we design institutions and quickly subvert them. We have a very strong inclination towards institutional subversion and informal dealings. The challenge is how to design institutions that cannot be subverted. This subversion has sometimes been aided by too much detail. Our institutions are long in detail but short on principles. We need to embed institutional principles in the Constitution; details can be possible to escape. We may need an over-arching National Institutions Service Charter.

We have also treated our laws a bit too casually. Thus we create and abolish offices without reflecting these changes in law. For example, the Paymaster General exists in law, but not in reality. The Financial Secretary exists in reality but not in law.

Public interest is not defined anywhere in our laws. Article 1 of the Constitution, which could have done this by capturing our aspirations, principles, ethos, values or defining some directive principles of state policy, begins rather too abruptly. It immediately declares Kenya a Republic without identifying the contracting parties and the basis of their coming together.

On the basis of the discussions above, are there institutions that we may want to secure so that they cannot be whatsoever modified by executive action?

A participant contributed that the reason why our institutions are subverted is that there is high degree of criminal innovation. The CAG?s constitutional independence, for example, has been subverted by undermining its officers who are employees of the Public Service Commission and therefore do not enjoy security of tenure. Constitutional independence of institutions or offices needs to be complete.

We need to create institutional oversight mechanisms. Institutions also need to be accountable to themselves. Institutions must have capacity and independence to check themselves.

Parliament should have the power to withhold ministerial allocations for purposes of keeping ministries in check.

Participants agreed that parliament needs essential support. Its capacity needs to be enhanced e.g. in legislative drafting and research. We cannot demand so much from Parliament if we do not give it the powers and resources to discharge its mandate.

We have inverted the state ? it competes with its own people rather than facilitating them.

One of the big issues we have to confront is that we are dealing with the State in pre-globalization terms. We have continued to fritter responsibilities away from the State yet we have not reduced resources to it to reflect this shift. Most of the responsibilities initially undertaken by the State have been transferred to the individual and civil society. The State has resources without responsibilities. This has enhanced corruption.

We also nee to ask ourselves some fundamental questions such as: ?Why these institutions?? ?Why are we Kenyans?? ?What do we want to achieve; what tasks are necessary to do it; and how do we coordinate these tasks?? ?What is it that we want to collectively achieve??

The Moderator intervened and asked, given the tenor and thrust of the discussions so far, it is probably germane to ask at this point: What kind of institutions do we need to design given that we are the same people with strong inclination to subvert the same institutions we create Who is the custodian of public property or interests?

A participant ventured that, so far, we have focussed on sanctions against malpractices but not against non-performance. It was agreed that the Police force requires an oversight body; establish an independent complaints commission for the police force to process complaints against the police. The present system of complaining to the same institution that has committed offences against the public is untenable.

We must also confront the problem of cumulative institutional decay. The contagion of non-performance that one institution passes to the others needs to be checked

We need to recognize the importance of information as a political and economic resource. Our access to information regime is woefully weak. Its orientation is geared towards protecting the State rather than facilitating citizen information and knowledge. We need to re-examine the Officials Secrets Act, enact a Freedom of Information Act and include access to information as an integral part of the Bill of Rights. Disclosure of information on corruption should be exempted from any secrecy law or regulation. Public officials who disclose corruption related information (whistle blowers) need to be protected from mischievous and punitive measures by the executive. Key institutions such as the police, prisons, etc should be compelled by law to publish annual or periodic status reports. These should be made available to the public. Getting information from these state funded institutions is presently a nightmare.

A participant, C. J. Mills of the Karen-Lang?ata District Association proposed that: -

* Establish an Office of Public Service and Ethics with a Commissioner.

* Consider making corruption a capital offence.

* There is not just too much discretion but abuse of discretion. The interference of Executive in the day-to-day running of government affairs needs to be stopped. As long as discretion is exercised with accountability it can make things work.

* Establish an Ombudsman office.

* We need annual declaration of wealth by those seeking public office.

* Parliament?s salary levels be linked to the performance of the economy.

* Independent parliamentary calendar necessary to cushion it against executive mischief.

* We must embrace the principle of Equity in law for all citizens.

* Basic education be made a right.

* Cabinet should not be more than 25% of the legislature. President should not be able to abolish offices without reference to Parliament. Public servants should not hold office at the pleasure of the president.

* National president; not party president

* PSs to be truly permanent and be accountable to parliament.

* Statutes of Limitation should be brought in but it should exclude corruption cases.

Another, Sam Mwale, proposed a shift of sovereignty from the state to the people. Allow for privately instituted civil prosecutions. Provide for citizen enforcement mechanisms to cure the problem of Executive inertia in prosecution. Further that it is vital that we create the office of Custodian of Public Assets. Presently, it is not clear who keeps an inventory of all public assets. Neither is it clear whose responsibility it is to secure them. There was also consensus on the need to strengthen the media through stronger freedom of information principles or provisions.

Another, Jeremiah Opar, of the Institute of Policy Analysis and Research (IPAR), cautioned that we must check institutional inflation. What happens when anti-corruption institutions collude or collaborate against the people? Uganda has most of the institutions we are proposing but corruption still thrives ? why? She has a Parliamentary Budget Office; a Privatization Act; Inspectorate of Government, which is an equivalent of an Ombudsman etc yet the misuse of public resources continues unabated. We must be careful not to engage in an institutional creation binge. We may actually discover that what we need are fewer institutions and the strengthening on the existing ones. We may want to even merge some of these bodies for their optimal functioning.

Secondly, we need to provide a mechanism for social audit. We need to protect whistle blowers.

Thirdly, we need to provide a mechanism or framework for disclosure of public expenditure in a friendly fashion. The Government Appropriations Accounts are not only irregularly published but they are presented in a manner that obviously invites dis-interest.

It is unethical for people to hold public office and be able to vote themselves salaries and benefits. This responsibility needs to be shifted to an independent body which may be specific to the sector or even be national in character to govern all the welfare issues of all holders of public offices ? ad hoc or permanent.

There was also consensus on the need to provide in law that any tax waiver should be reported to Parliament. This will check abuse in the application of ministerial discretion. Further, we need to make the budget legally binding. Presently the minister can suspend a section or the entire budget and still be within the parameters of the law.

Prof Ghai, the Chair of the Constitution of Kenya Review Commission (CKRC) added that, in addition to focussing on the national accountability institutions it is important to think about local accountability mechanisms as well. This is particularly so in view of the rising demand for devolution or decentralization. In CKRC meetings and encounters with the public in the field, there is a strong quest for local control. He noted that the CKRC would be interested in thoughts and proposals on this front and probably TI-Kenya and other organizations may be interested in pursuing this further.

B TRANSPARENCY AND ACCOUNTABILITY IN PUBLIC PROCUREMENT

MODERATOR: PROF. T. RYAN, University of Nairobi

DISCUSSANTS: MR. JOB KIHUMBA, Association of Professional Societies in East Africa (APSEA) and DR MBUI WAGACHA, Institute of Public Policy Analysis and Research (IPAR)

RAPPORTEUR: KWAME OWINO, Institute of Economic Affairs

The Report covers the two discussants? presentations, sequentially; it incorporates the group?s responses and general consensus in each of the two sub-sessions.

First Discussant: Mr. Job Kihumba: Transparency and Accountability in Public Procurement

It is only possible to see the question of corruption in public procurement in Kenya by looking at the practical issues that face government and the institutions that manage public resources in the country. Till very recently, government procurement was coordinated through the Ministerial Tender Boards (MTB) and the Central Tender Board (CTB). The MTB was largely responsible for procurement by the ministry by administering the procurement and authorization of payments. As matters developed and as scrutiny of its operations became more critical, it became apparent that the MTB operated inefficiently and non-transparently. In response to the concerns that the structure and composition of the MTBs did not allow for effective scrutiny of their decisions, the government set out to establish a new system for the management of public procurement.

Public procurement in Kenya is a critical area in the reduction of corruption because public officers tend to have unlimited discretion in procurement. While seeking to inject a high measure of transparency and accountability in the arena of public procurement, we should adequately address ourselves to the fact that procurement consists of both goods and services. Both goods and services are consumed by government in fairly large amounts and attention should therefore be cast towards services are these are intangible and therefore easier to inflate in terms of cost. Corrupt practices have occurred in both the procurement and delivery of services and goods hence the need to realize that statutory and constitutional responses must take the broader view and capture services too.

A new set of public procurement regulations were gazzetted in March 2001. It is thought that while there had been calls for the government to revise the system of public procurement, the impetus for the new regulations came entirely from donor insistence. These new regulations essentially formalized the establishment of the Central Tender Board (CTB). There are some flaws to these regulations that already affect the ability of the CTB to operate above-board and transparently.

Some of the Flaws

The regulations require that the Chief Executive Officer of the organization doing the procurement should be the chair of the tender committees that consider proposals. This means that at the district and ministerial levels for instance, the District Commissioner and the minister respectively would chair the tender committees. This administrative structure undermines some major principles of good public procurement to the extent that it centralizes procurement power in a single office(r). Procurement decisions should be subject to review for the purposes of transparency and accountability and this is made especially difficult when the powers are centralized.

Secondly, given the expanded role of the chief executive officers of the institutions carrying out the procurement function, the Central Tender Board that had a limited oversight function has been declared redundant. It is not possible for the CTB to continue in this function as it would be duplicating the role that has since been taken up by the tender committees.

Thirdly, the Appeals Board takes up all appeals that result from applicants. The Permanent Secretary of the ministry that awarded the tender is mandated to be the vice chair of the appeals board. This definitely raises the possibility of conflict of interest when it is considered that the ministries take a lot of procurement decisions that may be the subject of review by the Appeals Board. It would be difficult to trust that the Permanent Secretary would be impartial since the majority of the appeals would emanate from decisions taken at the ministry, including decisions that the Permanent Secretary may have been privy to.

The three points on the regulations that drive the administration of the Ministerial Tender Boards show that the government was more or less forced to try to make the procurement process more transparent and open. However, the new regulations that resulted from external pressure established structural flaws hence do not go far enough in terms of avoiding conflict of interest and establishing an impartial appeals system that is crucial for public procurement. Efficient procurement can only be guaranteed where the procurement officers are aware that their actions will be scrutinized objectively and that they have no interference from superior government officers. This point then leads to the realization that public procurement cannot be divorced from the use of power by public officials. This implies that the unless there is an restructuring of the power relations within the ministries, the good public procurement will still be compromised by the ability of senior officers to manipulate procurement officers.

Points to Consider in strengthening the New Regulations

1. Government must build in more stringent checks and balances to reduce the level of discretion that individuals may have in the decisions on public procurement.

2. Good leadership is imperative in the tender boards since procurement is essentially a management process.

3. There must be a reliable adjudication process that is neither technical nor time-consuming. This will ensure that decisions are made quickly enough so that the procurement process is not unnecessarily held up during appeals.

4. The public should be empowered to understand the processes of public procurement through disclosure of the process before and after the awards.

5. Procurement should not be monitored at the point of central government since a lot of public institutions are involved in the procurement of goods and services.

6. Government should consider decentralization of the appeals since the Appeals Board cannot convene and hear the appeals from all over the country. This is necessary so that appeals are dispensed with promptly.

Second Discussant: Dr. Mbui Wagacha: Public Finance Issues and Public Procurement

The government has adopted the Medium Term Expenditure Framework (MTEF) as the principal instrument for budgeting and for the management of public finances. The MTEF consists of budgeting through the adoption of a three-year cycle. This means that budget priorities are always seen in terms of the three-year plans and the expenditures reflect medium terms goals. While MTEF is imperfectly applied in Kenya, it can be improved significantly to impact upon effective use of public finances through successive budgets. This is primarily because it would compel government to determine the expenditure priorities in line with the realistic revenue collection target. It is understood that part of the problem in Kenya that the MTEF would correct is that of inconsistency in policy application. Until recently the nature of planning in Kenya is such that it was done with absolutely no involvement of the people.

The MTEF approach to budgeting could help government in management of public resources in the following three ways:

* Entrench Fiscal Discipline

In that government may meet the development and recurrent expenditures that individual budgets require, revenue collection targets would have to be strictly set and met. The MTEF approach would ensure that revenue collection is stringent and that expenditure forecasts reflected in the budget are based on affordability. Affordability ought to be accorded more emphasis since the development challenges are great and yet the resource envelope is limited. Depending on the plan that has been put in place in the budget, government may then make the decision on the amount of deficit financing that is required. Because the expansion of public debt should always be a last resort, there should be some required legal (either constitutional or statutory) provision that embeds a deficit financing benchmark that the Minister of Finance may not exceed without seeking legislative approval. The main intention of this provision is not usurp ministerial powers in finance but merely to limit the discretion that government through the Minister for Finance has in expanding public debt arbitrarily. For instance, if the provision required the minister to seek authority from parliament if the financing gap were more than 5%, then the minister would have to justify the sum being sought and the legislature would scrutinize the proposals.

* Sector Priorities

The MTEF is also indispensable in the sense that its practice requires government to adopt consultative mechanisms before committing the use of public resources. Under the MTEF, it is expected that the government is obliged to find out people?s growth and development priorities and reflect them in the budget according to the resources that are available. These needs and priorities can then be translated by government into concrete expenditure plans that will be in line with the medium term framework.

* Checking

Through the MTEF, it is possible for government to constantly check the efficiency and effectiveness of the resources committed and spent in the preceding financial year. Because each budget in the cycle is supposed to be a follow up of the last one, then it is also easier to monitor the progress that has been made in respect of some development plans and whether the real expenditures reflect the priorities that were agreed upon. Government expenditures may then be audited not only in terms of the real expenditure on the items that were planned but also a value audit to ensure that the money was used in the most efficient manner.

In trying to ensure that public finances are well utilized and guarded, it is absolutely instructive to first examine the pattern of losses and identify the points of leakage and how they may be sealed. These windows of failure may then be closed through constitutional guarantees of the three MTEF rubrics i.e. entrenched fiscal discipline, sector priorities and keeping a check on efficiency and effective expenditures.

The 5 Windows of Failure

* Wasteful expenditure

These occur through where there is no authorization for expenditures. Examples include direct embezzlement and unplanned and arbitrary expenditure of public funds. Also included here are the instances when goods and services are overpriced with the intent of ensuring that more money is paid out than would be due.

* Undelivered Goods and Services

Where prompt payment is made for goods and services that are not delivered. Because in such instances there is the intention to defraud the government, it may well be that the goods were never required at all.

* Irregular Payments

Where sums of money are paid without documentation specifying for whom and for what services the money is due.

* Unsurrendered and Uncollected Funds

This occurs in various instances where the money that is due to the government from particular ministries is not paid in. More significantly, it may also involve the conspiracies that allow for goods passing through the country to evade taxes.

* Pending Bills

Occurs because of the wide discretion allowed to the Minister of Finance to use pending bills by converting them into debt. This discretion is often used to absorb unauthorized expenditure without legislative scrutiny.

General Issues to Take into Account

1. It is important to find out whether the windows of failure result from constitutional failure or from other statutory failures that allow particular officials too much discretion. This is necessary to avoid overloading the Constitution with details and provisions that may be better dealt with at the statutory level.

2. The Permanent Secretary as the chief accounting officer within the Ministry should ideally be able to judge the quality of expenditure and determine whether the procurements were carried out transparently. The Permanent Secretary should be able to apply some sanctions in situations where public finances are not being efficiently and effectively used. It may therefore be surmised that the windows of failure reflect the lack of complete vigilance by the permanent secretaries.

3. The main constitutional question in public finance and procurement is the clear division of power. The clearer the power is divided between the various officials such as the ministers, the permanent secretaries and the internal auditors, the better the nett result because it will be possible to determine faults whenever they occur.

4. It is also necessary to note that the Directorate of Personnel Management appoints the officials within the Ministry while the permanent secretary is an appointee of the president.

5. In light of the policy inconsistency that has characterized planning in Kenya in the past, it is prudent to consider whether plans sanctioned by the legislature could be captured in law so that budgeting would be based on these plans.

6. The main institutions and offices that could impact on the public finance and public procurement are the Permanent Secretaries, the Controller and Auditor General and the Central Bank. The roles of these constitutional offices and institutions must be fortified within the constitutional review dispensation.

7. While the office of the Controller and Auditor General (CAG) is meant to perform both the audit and control functions, it only performs the audit role. This renders the office highly ineffective in the reduction of wastage of public resources as the reports always come after the finances have been misused.

8. The Central Bank of Kenya should play a critical role in the management of the public debt that the government may issue. The Central Bank ought to be the primary agency in monetary policy and this should be secured to the extent possible through independence from the Executive and Treasury.

Pertinent Issues for the Constitution of Kenya Review Commission

1. There is recognition that the appointment of members of the cabinet and permanent secretaries are the prerogatives of the President as the chief executive. However, in the appointment of the permanent secretaries, the Constitution should provide for either a parliamentary committee or a joint board to vet the professional record of the nominee. This vetting may be done by the establishment of the Constitutional Office Holders Appointments Board that would consist of some members of the legislature, professional groups and other objectively appointed persons.

2. As the chief accounting officer within any ministry, the permanent secretary should be identified by the Constitution as the individual who is accountable for ministerial expenditure. This makes the office responsible to the legislature for ensuring that all expenditures are in accordance with the approved budget plans.

3. Because the Controller and Auditor General?s office is already a constitutional office, its further independence should be secured through independent budget provisions for the performance of its role. This may be done through allocations from the Consolidated Fund Services (CFS).

4. There should be an expansion of the duties of the Controller and Auditor General to enable the office to be involved in the internal audit functions within ministries.

5. The Constitution should consider the increase in the independence of the entire Central Bank of Kenya by disentangling it from the Treasury and executive?s influence. A provision should be made for the President to appoint the Central bank Governor and allow for the parliament or the proposed Constitutional Office Holders Appointments to vet the nominee. In order to eliminate the possibility of professional misconduct, the legislature should be empowered to entertain a motion of impeachment of the governor for a just cause. The removal and vacation of office can only be secured by at least two-thirds of the legislators voting in favour of such motion.

C LAWS TO FIGHT CORRUPTION

MODERATOR: Ms Raychelle A. Omamo, Chair, Law Society of Kenya (LSK)

DISCUSSANTS: Messrs Lee Muthoga, Advocate and George Kegoro, Secretary, LSK

RAPPORTEUR: Philip Kichana, Institute of Education in Democracy

The purpose of this session was to address and make draft proposals on various questions of legislation such as: -

* What if any new laws are necessary to institutionalize anti-corruption in Kenya?

* At what level should such laws be enacted (Constitutional amendment vs. Ordinary Statute)? Should there be new special jurisdiction adjudication bodies created to deal with corruption? If new courts are created should a new appeals structure also be created?

* Will it be necessary to consider retrospectivity to anti-corruption laws in order to give them efficacy?

* What Codes of Conduct should be legislated and in respect of which public officials should they be enacted?

First Discussant: Mr. Lee Muthoga

With regard to the current legal regime in Kenya and its efficacy in fighting corruption, the discussant cautioned that it is not so much what law we make; it is the manner in which it is made and it is implemented that counts. He said the current law that deals with corruption is the Prevention of Corruption Act1. It is not the lack of law that has put us in the abyss that we find ourselves in today. The decay was initiated when private service was introduced into public service. Mzee Jomo Kenyatta, Kenya?s first President, set the culture of corruption rolling when at a public rally he castigated Mr. Bildad Kaggia saying he gave him a number of positions, but the latter gained nothing-from holding those positions; this was read to mean that if you have a position use it to get rich.

The Ndegwa Commission also had its contribution to the growth of corruption. The Commission found that one could be a public servant and still engage in private business. This killed the check encapsulated in the doctrine of conflict of interest. Recalling the principle that one must not be a judge in his own cause, appointment to certain bodies/authorities should be streamlined so that self-interest is checked.

On ethical codes, he said these were necessary because the public does not as yet see what is wrong with reaping from public coffers. It views reapers from public coffers as heroes - rich men are good; no one cares how they become rich - once rich one can wine and dine with anyone. Codes of Conduct will help in changing attitudes and bringing to an end the visualization of rich men as necessarily good.

Public selection laws should be changed. These are laws, which relate to authority and administration. Such laws should limit people from getting obedience by use of their offices. He concluded by saying that abuse of office cases which have declared that one may not be prosecuted if the crime was committed 7 years ago are wrong. There is no limitation period to when a crime may be prosecuted.

On the basis of the above remarks, Mr. Muthoga proposed that:

* A constitutional provision to enable prosecution of corruption cases be provided.

* There is no need for special courts.

* To contain the perfidy of corrupt influence it is better to have the Office of an Ombudsman to check abuse of power by public officials.

* Public officials, Judges, and MPs, should be required to observe a set Code(s) of Ethics

* Criminal law should remove the honour and security acquired from corruption. This should be done by restitution of property acquired corruptly to the public.

* Those convicted on corruption charges should be prohibited from holding public office.

Second Discussant: Mr. George Kegoro

George Kegoro began by cautioning that there is always a danger in the process of reviewing adequacy of existing law because the existence of law is not an end in itself. Good laws represent standards by which conduct in a given area may be judged. He then went on to propose a three-pronged analysis of systems of fighting corruption, namely:

* Systems that exist to assist in the detection and documentation of that which is corrupt.

* Systems that prosecute those who are accused of corruption offences.

* Systems of punishing those accused of being corrupt.

He then paused the question whether the above systems are in place under Kenyan law. In answer, he proved that indeed systems that assist in the detection and documentation of that which is corrupt are in place, naming at least 9 public institutions: -

1. Office of the President which has authority over parastatals

2. Office of the Auditor-General

3. Office of the Auditor-General - Corporations

4. Parliamentary Accounts Committee

5. Parliamentary Investments Committee

6. Office of Inspector of State Corporations

7. State Corporations Committee

8. State Corporations Appeals Tribunal

9. Local Government Oversight Board

He submitted that at the level of documenting corrupt activities, these institutions are in place. They contribute to fighting corruption (in the context of systems that assist in the detection and documentation of corrupt activities)

In addition to the institutions named above, there have been ad hoc commissions, for example the Ndegwa Commission, that have prepared reports in given areas of concern.

At the second level, that is systems that prosecute those accused of corruption, he submitted that the Attorney General sits alone. But it is incumbent upon him to look at the reports of the above offices and decide whether or not to take action.

At the third level (punishing those guilty of corruption offences), one finds the judiciary, which he submitted, also sits alone.

Having set the above scenario, he concluded that we have well documented accounts of corruption but that is where it all ends. He castigated the Office of the Attorney General, as a culprit in the systematic set up. He gave the example of a judge and another person on whom there is well-documented evidence of corruption, in the hands of the Attorney General yet he has not commenced prosecution. This, he said, was ample indication that the Attorney General?s office is not interested in prosecuting corruption cases.

Mr. Kegoro then proposed that there is need for a public tracking system of the Office of the Attorney General. After detection and documentation of corruption is completed, the Attorney General should give an account of how many of those cases he has prosecuted, how many he has not prosecuted and reasons why he has not prosecuted and when he will prosecute. This audit of the said office should be presented to the public periodically.

He termed the recent Gachiengo and Arap Ng?eny decisions, perfidious. It is would be absurd to say that 7 years after a corruption offence was committed, the culprits would not be prosecuted.

What options are available to streamline the justice system so far as corruption is concerned? Do you set up special courts? Do you change personnel in the judiciary? Or do you write more rules? Mr. Kegoro singled out judicial power and the discretion that goes with it as the most abused power. He said that setting up special courts and change of personnel in the judiciary would be for the better. In fact he referred to the Economic Crimes Bill intended to resurrect the Kenya Anti-Corruption Authority (KACA), as an attempt to set up special courts, which in his view are needed.

He added that a serious purge or retrenchment of judiciary personnel is needed. The process does not need new rules because it will take the form of truth and reconciliation hearings. Amnesty would then be given to judicial officers who confessed their participation in corrupt activities and who named the givers of bribes.

He noted that the Office of the Auditor General Corporations was provided for illegally under an Act of Parliament. If the office has to exist it must be provided for in the Constitution. It has however not been a useful office, there has been no improvement in government parastatals audit nor has there been improvement in the performance of parastatals.

General Dialogue

The Moderator the opened the discussion by throwing the following two questions: -

* Are the existing laws sufficient for detecting and documenting corrupt activities?

* Is there prosecution of corrupt activities in Kenya today?

A respondent emphasized that there is need for a constitutional basis in the fight against corruption. A constitutional provision would facilitate follow-ups and prosecution of cases on evidence in the Parliamentary Accounts Committee (PAC) and the Parliamentary Investment Committee (PIC) reports. He also proposed the initiation of a process of identifying a number of statutes that need to be amended. In his view the most abused statutes, which need amendment, are:

* The Traffic Act

* The Immigration Act

* Licensing statutes

* Electoral Statutes

* Public Services statutes (for example, the Employment Act)

* Customs

* Regulatory statutes

These statutes should have clauses providing for investigative and prosecutorial powers.

He also proposed the establishment of an anti-corruption commission with in-built mechanisms for investigation and prosecution.

A second participant pointed out that what is needed is the integrity of individuals and systems. He proposed that Kenya follows the Ugandan and South African constitutions, which have entrenched provisions on integrity stated in the constitution. He added that constitutionally established commissions be set up and held as constitutional offices. These will act as a check against civil servants. He concluded by urging that we must look at integrity issues beyond government (in response to Mr. Kegoro?s analysis). We must also look at Acts establishing professional bodies and the concomitant disciplinary bodies. These bodies must be joined in the fight against the perfidy of corruption. He suggested the Association of Professional Societies of East Africa (APSEA) should formulate a Code of Conduct for professional bodies, then each professional association ? lawyers, doctors, accountants, architects, engineers, etc ? can then formulate its professional code and disciplinary organs in this light.

A third participant proposed that the appointment of members to the Public Service Commission and Judicial Service Commission should be subject to Parliamentary approval.

The Moderator intervened asking participants to address, among others; the questions- is the office of Attorney General sufficient? Is the judiciary sufficient?

Respondents reiterated that ethical standards must be set and observed. We must transcend the law and look for short-term and long-term measures like introducing civic education in the school curriculum right from primary school to University. Such education should emphasize good citizenship and inculcate anti-corruption values. It was also restated that morality is part of growth, and that civics, which was previously taught and examined in school, should be reinstated into the school curriculum.

It was noted that there is an urgent need to make existing bodies sensitive to fighting corruption. The Kenyan judiciary does not seem to be sensitive to the national fight and public policy against corruption.

It was proposed that the office of the Attorney General be delinked from the Executive arm of government completely.

A participant observed that there was need to address transitional issues. He said there was need to redefine or improve the existing anti-corruption framework. How will new institutions, which take a long time to establish, be designed and welded into our legal system? How do we balance the institutional changes (slow) with the people?s desire for immediate change? Another participant expressed a different view in that, transitional or no transitional justice, there is no limitation to prosecution in criminal cases. He wondered how one would deal with corrupt judges, 40 years of age, with security of tenure. This participant added that there were several options that could be pursued. One is to go for severe surgery and kill a patient or two, administer drugs to the patient slowly until recovery or thirdly wait upon the patient to recover naturally. He emphasized that whatever option was taken, the assertion of the rule of law must be upheld and existing laws reinforced. There is need to set up constitutional organs that can endure the assault of corruption.

Yet another proposed that transitional justice may be achieved through a truth and reconciliation process. Both agreed, however, that laws (constitutional and statutory) do not need to be contradictory, they may be complementary.

The Moderator then posed the question: How do we deal with corrupt judges? Sack them and ask them to reapply? Establish a commission to investigate them or an amnesty framework that incorporates return of corruptly acquired wealth?

Some respondents felt that we had already come to a dead end with the death of an internationally supported Kenya Anti-Corruption Authority (KACA). We have to begin as if we were in a nursery nurturing a newborn baby. We need to develop a new court structure, a new court system right from the subordinate courts to the highest court in the land. Today, we have seen Pinochet and Milosevic prosecuted for crimes against humanity and war crimes. So the notion that crime prosecution may suffer a limitation period is wrong.

He went on to state that corruption crimes are crimes of unjust enrichment. Transitional justice should therefore, aim at freezing accounts in this country and those abroad while proceedings are instituted anywhere in the country. Freezing assets will ensure that trials will not be in vain.

The Moderator also posed the question: What if the money was brought back and forgiveness sought, would we forgive? We also need to be mindful of the fact that we can paralyze a new system with old cases.

The process of truth and reconciliation was revisited; a participant felt that this process could not apply in corruption cases because the former is personal and rights-based while corruption is property based. Mr. Kegoro gave the example of Hong Kong where the government authorities gave culprits a cut off date to return stolen property or face prosecution. In his view it is the same people who commit crimes that are involved in corruption. He observed that the judiciary has not been engaged in the fight against corruption. How are we going to re-organize the judiciary without making overtures to it to co-operate? He submitted that there has got to be a political process of integrating it in its reformation before beginning the purge.

There was some consensus that the CKRC is the ideal body to deal with the judiciary. If it does not, then there will be no change. There was an anecdote that, after a mutiny there is always need to restructure institutions in their own way. Our judiciary should develop a mechanism that allows a process of reapplication for jobs. Recommendations for a higher court were okay if people of integrity would staff it. There is need for caution here because although desirable such a court may face a crisis of expectation. Participants drew examples from South Africa where an Economic Investigation Unit was set up to look into corruption cases. It provided a mechanism where those guilty of corruption could pay restitution or a given percentage of the corruptly acquired property, then be allowed to go on with business.

A participant proposed the registration of a voluntary organization to provide a corrupt-free asset certification service to be applied to those who wish to serve the public. It would clear citizens and corporations by interrogating how they acquired their assets and will issue certificates to those who are ?clean.? Those who are not certified or who do not submit themselves to the examination will be barred from bidding for contracts for public works. There would also be exemption from prosecution of all persons who submit to the vetting process. If any such person or corporation is found to possess proceeds of corruption, these would have to be repaid to the relevant government department before that person or corporation can take part in public works.

It was agreed that a code of conduct should be created for all categories of public servants. The Association of Professional Societies in East Africa (APSEA) should develop a Code of Ethics/Conduct for professionals in the private sector. Then each professional society would be expected to realign and refine its own professional practice guidelines and codes of ethics and conduct to reflect the APSEA principles. Each would also be expected to realign and refine its disciplinary mechanisms to appropriately punish conduct found to be unethical in this regard.

It was further agreed that the public needs to be engaged and involved more on the question of amnesties. There was also need to revisit the Criminal Procedure Code and the Penal Code and redefine the crimes and penalties that relate to corruption. In this exercise, provisions for forfeiture of stolen property in lieu of imprisonment need to be considered and provided for.

D FINAL PLENARY

In final plenary, a number of issues were raised or revisited. Among these was the fact that it was difficult in the current Kenyan context, to agree on what should or should not go into the constitution, there is a tendency to want to incorporate everything into the constitution. The point was made that law, whether constitutional or statutory should be seen as a starting point ? a means and not as an end in itself. Further that the laws must be supplemented with strong public education to achieve a holistic anti-corruption strategy. It was also accepted that, where there were contradictory arguments or proposals (i.e. proposals in the alternative), there should be an attempt to combine these proposal or ideas into hybrid solutions.

A further suggestion was made that, perhaps we should create one institution to scrutinize and harmonize terms and conditions of service for all public officials and government employers. Participants also reiterated that the controller and auditor general should carry out performance and value for money audits as well as the traditional financial audits.

Harry Mule, the Vice-Chair of TI-Kenya, in his concluding Remarks, summarized the day?s output thus: -

1. That corruption is a very important and serious issue.

2. That it should be addressed by and in the constitution to give it a firm foundation.

3. That its specifics should also be articulated in Acts of Parliament.

4. Further that it goes beyond the constitution and the law? it also has social, cultural economic and moral facets and therefore requires a multi-faceted approach that includes ? among other things ? public education and advocacy.

5. That there are good comparative experiments and experiences that had been given in the course of the conference.

6. That very specific points of consensus and recommendations around the three thematic areas of laws and policies, public procurement and Parliamentary action had been rendered, which should be employed, first by the CKRC, but also by parliament, government in general and other stakeholders.

He finally thanked everyone for their patience and participation.

Prof Yash Pal Ghai, the CKRC Chair, in his Formal Closing Remarks, also thanked all participants for their had work and sacrifice. He also appreciated and recognized the valued contribution of several Civil Society Organization, Thinks Tanks, etc especially in publications and written memoranda presented to the CKRC. He looked forward to a concise and easily assimilabe Conference Report.

He then gave the following specific responses to issues directed at or affecting the CKRC.

1. The CKRC will highlight and entrench the role of civil society in the constitution. He remarked that not many constitutions explicitly articulate this; the Philippine Constitution does, perhaps because of the central role of citizen mass movement that removed the Marcos dictatorship from office and necessitated writing of a new constitution.

2. The CKRC already appreciates the importance of underscoring the nation?s principles and values into the constitution and will do this. He identified the mechanisms of doing this as the preamble and directive principles of state policy. He also noted that in modern constitution making, it is also common to have them at the beginning of every chapter of the constitution.

3. The CKRC appreciates public sentiment, also raised at this conference, or appointments, (and proper criteria thereof) to public office, including the judiciary, diplomatic corps and permanent secretaryship within the Executive arm of government. He agreed that some countries now have a very representative constitutional office holder appointments board, vested with enough power, authority and to be effective.

4. On the transitional justice issues and recommendations, he noted that these were not explicit, even though they may be implicit, in the CKRC statutory terms of reference. He further reported that they had received only a few representation on this matter and therefore the CKRC had no clear sense of how important this was to Kenyans. He suggested that TI-Kenya take up this agenda and pushes its horizons.

5. He also noted that some duties and roles had been imposed on non-state actors such as the private and corporate sectors, the professions, etc. He requested for more representations on these, and perhaps Kenyans? views and proposals on constitutional provisions protecting citizens against these players.

CHAPTER FOUR ? SUMMARY OF PROPOSALS AND RECOMMENDATIONS

This is the Rapporteur?s synthesis and summary of the key proposals and resolutions arrived at during the conference in general, and especially in the plenary reporting of the three breakout workshops.

A FOR THE CONSTITUTION

1. Explicit articulation, in the Preamble to the Constitution, of the deleterious effects of our corrupt past, and of the commitment for a meaningful pro-integrity and anti-corruption ethos for all organs of government and sectors of society.

2. Explicit and comprehensive articulation, in the Directive Principles of State Policy in the Constitution, of the mainstreaming a pro-integrity and anti-corruption focus in all organs, structures, procedures and activities of government. This could also include a principle on the use of public finance efficiently and equitably.

3. Creation and entrenchment of a national anti-corruption body in the Constitution, complete with provisions for its institutional independence, autonomy of finances and operations, and insulation from state, private sector or other interference.

4. Creation of the Office of an Ombudsperson.

5. Senior public appointments need to be subjected to confirmatory hearings either by Parliament or a specially constituted constitutional body. This principle should be reflected in the Directive Principles of State Policy.

6. The right of access to official information should constitute a core component of the Bill of Rights. The right to and freedom of information should strongly underpin our constitutional principles and institutional formation.

7. Due regard to other constitutionally created or mandated bodies that can champion the pro-integrity and anti-corruption initiative and/ or play an oversight role over governmental organs, offices and officers. Key among these are: -

a) The Legislature, especially as an overseer and institutional check on the Executive, Executive budgeting and expenditure, and public procurement.

b) Parliamentary Committees, especially the Parliamentary Accounts Committee (PAC), Parliamentary Investments Committee (PIC), the Judicial and Legal Affairs Committee (proposed). This could include establishment of a Parliamentary Budget Office.

c) The Controller and Auditor General.

d) The Governor of the Central Bank (The Central Bank should play a critical role in the management of the public debt that the government may issue.)

Further underscored was the need to re-orient these offices and institutions, especially the Controller and Auditor General, to be able to conduct value-for-money audits and performance audits, in addition to mere financial audits.

B FOR STATUTE LAW

1. Clear and comprehensive elaboration, in one statute, of a national anti-corruption body. The body will already have been entrenched in the Constitution. The statute will set out its mandate, structures, scope of operation, principal organs and offices, and will flesh out its independence autonomy and insulation from external interference.

2. Encoding, in one statute, the government?s procurement guidelines, principles and procedures, whether at central government, local authority or parastatal levels and spheres of operation.

3. Abolishing the Office of Auditor General (Corporations) and its enabling statute, since it is unconstitutional in the first place, has proven to be ineffective and a watering-down of the constitutionally created Office of the Controller and Auditor-General.

4. Establishment, under statute, of an Independent Police Complaints Commission to receive and investigate complaints against the police and offer appropriate redress and remedial action.

5. Enactment of a Freedom of Information Act, which establishes a system of Information Appeals Tribunals; also strengthening the independence of the media.

6. Establishment of the office of Custodian of Public Assets. Presently, it is not clear who keeps an inventory of all public assets. Neither is it clear whose responsibility it is to secure them.

7. Sufficiently deterrent punishments and motivational rewards to be written into statute law, especially for public servants e.g. those involved in public procurement.

C FOR POLICY PAPERS, ADMINISTRATIVE OR OTHER ACTION

1. A written, national Anti-Corruption Policy and Strategy Paper that clearly contextualizes and outlines the mandate, scope and ambit of the various governmental, private sector and civil society actors. This policy should be reviewed and/ or overhauled periodically to keep pace with environmental changes and societal development.

2. The Association of Professional Societies in East Africa (APSEA) to draw from the national Anti-Corruption Policy and Strategy Paper, and from the Constitution and all other instruments, a comprehensive Plan of Action and model Code of Professional Conduct and Ethics. This would lay the basis, set the pace and identify the issues for its various member professional societies ? accountants, architects, engineers, doctors, lawyers, land and quantity surveyors, etc ? to review the content of their individual Codes of Conduct, practice guidelines and the efficacy of their disciplinary organs and enforcement mechanisms.

3. Consideration for the need for urgent establishment of a broadly representative Task Force for Public Procurement Reform for Kenya.

APPENDICES

A CONFERENCE ILLUSTRATIONS OF CORRUPTION

Some of the manifestations and illustrations of corruption captured by the Conference Presenters as well as participants are: -

Acts of omission or commission

Betrayal of public trust

Breakdown of set systems/ control mechanisms

Bribery ? becomes a prerequisite to obtaining simple public services

?Commercial deals? that may prevent pro-poor policies, e.g. partnering with pharmaceutical firms and therefore resisting generic medicines, or collaborating with import firms thus reducing incentives for local industry

Conflict of interest

Court decisions