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Harry Cassin
Publisher and Editor

Andy Spalding
Senior Editor

Jessica Tillipman
Senior Editor

Richard L. Cassin
Editor at Large

Elizabeth K. Spahn
Editor Emeritus

Cody Worthington
Contributing Editor

Julie DiMauro
Contributing Editor

Thomas Fox
Contributing Editor

Marc Alain Bohn
Contributing Editor

Bill Waite
Contributing Editor

Shruti J. Shah
Contributing Editor

Russell A. Stamets
Contributing Editor

Richard Bistrong
Contributing Editor

Eric Carlson
Contributing Editor

Bill Steinman
Contributing Editor

Tackling Corruption, Transforming Lives, Part II

The report published by the United Nations Development Program about public bribery in Asia that we talked about yesterday, Tackling Corruption, Transforming Lives, examines corruption in utilities, the courts, police departments, land offices and hospitals, among others. The impact of graft on the development and delivery of water supplies, for example, is astounding. The U.N. believes that eliminating corruption would help conserve as much as 70% of the world’s water resources. The World Bank says that globally up to 40% of water-sector finances are lost through “leakage” — by dishonest and corrupt practices.

The U.N.’s research into water supplies revealed the following areas of risk and damage:

Inefficiency. Corruption seriously undermines the performance and effectiveness of both public and private sectors, discouraging the investment urgently needed to improve supplies. In one major city in Asia the public utility allegedly held back on improving water supplies in the areas supplied through kiosks or hydrants, for fear of losing the side payments that the hydrant operators paid to utility officials. The operators of water tankers are often controlled by powerful mafias that capitalize on inept water distribution systems and have effectively privatized the supply: after paying corrupt officials to turn a blind eye, they sell the water to hotels and other businesses.

Warped distribution. Corruption skews decisions on who is likely to get services. Residential suburbs, for example, can be left without water because the supply has been siphoned off to service the farm of a prominent politician.

Capital-intensive investment. Corruption also biases investment towards large new infrastructure projects and away from smaller scale but less lucrative investment in the rehabilitation of systems or in improving operation and maintenance.

Weak finances. Corruption undermines the long-term financial stability of utilities and thus their ability to offer reliable services to a wider population, while also diverting government revenues that could be used to improve water supply and other services.

Environmental damage. Corruption constrains overall water-resource management by encouraging inefficient use of freshwater or over-extraction of ground and surface water.

Public health. Reducing supplies of drinking water directly undermines public health, and more so for the poor. Corruption in utility services can also undermine standards of health. In the Republic of Korea, for example, in order to avoid paying the costs of reconstruction of underground water sites, water quality testers were bribed to provide fake test results. Subsequently 1,753 water sites were found to have contaminated water, with high levels of nitrates, which can cause a condition known as methemoglobinemia or ‘blue baby’ disease.

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It’s not all doom and gloom though. The U.N. report notes that the antidote to a lot of public corruption, petty and grand, is simple: cut the red tape and increase transparency.

That’s what the Hyderabad Metropolitan Water Supply and Sewerage Board did in the 1990s. It consolidated applications for new connections – previously a major source of corruption. Rather than filing an application in their local district office, the report says, customers now go to the Board’s headquarters to a “Single Window Cell” which manages all the related activities, such as obtaining a road-cutting permit or land surveying. The Board publishes the fee schedule for various plot and connection sizes in its office and in the press, thus reducing the opportunities for staff to levy excess charges. The process, the report says, has been designed as a one-visit operation so the customer rarely leaves without an “application token number,” the equivalent of a receipt for acceptance of the application.

In Korea, too, the Seoul Metropolitan Government is using transparency to fight corruption. A public, online application system for licenses and other permits was launched in 1999. Called OPEN — the Online Procedure Enhancement for Civil Applications — the system covers 54 common procedures. By March 2001, about 1.5 million people had visited the website and there had been 39,000 civil applications. The site now attracts some 2,500 visitors a day. The U.N. report says the OPEN system has made the administra­tion more transparent because officials responsible for corruption-prone areas, such as permit or approval procedures, now have to upload reports and documents to enable citizens to monitor the progress of their applications.

Support for similar programs around the world would be a nice adjunct to corporate compliance programs among the companies that set the standards for global best practices.

View Seoul’s OPEN system here.
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