Module 9 - Managing Conflict of Interest

Module 9 –  
Managing conflict of interest

Toolkit on Transparency, Accountability and Ethics in Public
Institutions
Module 9 – Managing conflict of interest
Training agenda
Time Day 1: Fundamentals Day 2: Ethics and public Day 3: Organizational Day 4: Individual ethical Day 5: Developing a
of ethics and public integrity at the change for enhanced behavior strategy, roadmap and
integrity institutional and policy ethics and integrity action plan for
level enhanced ethics and
public integrity
Morning Module 1 - How would Module 6 - Oversight Module 11 - Staff Module 14 - Ethical Module 18 - Preparation
a world without institutions management and leadership phase
corruption look lik? developing capacities for
integrity
Module 2 - Essentials of Module 7 - Social Module 12 - Creating an Module 15 - Assessing

ethics and public accountability organizational culture of personal vis-à-vis
integrity mechanisms ethics and integrity organizational values
Lunch break
Afternoon Module 3 - Module 8 - Integrity codes Module 13 - Transpa Module 16 - Behavioral Module 18 - Presentation
Transparency and public procurement insights and staff and feedback phase
accountability incentives
Module 4 - Module 9 - Managing Module 17 - How to

Understanding and conflict of interest promote desired
assessing corruption behavioral change?
Module 5 - International Module 10 -

frameworks for integrity Whistleblowing
and anti-corruption
Toolkit on Transparency, Accountability and Ethics in Public Institutions 2

Module agenda 01 Key terminology 02 Why is managing conflict of

interest important?
03 Good practices for 04 Practical examples

1. Legislatio
2. Interest and asset declaration
3. Resolutions
05 Activity: Case studies –

Conflict of interest or not?
UN Photo/Stuart Price

n
objectives
Learning
In this module you will learn:
• What conflicts of interests are, why are they risky and need to be managed;
• What the key components of an interest and asset declaration system are and
where challenges may exist;
• How countries across the globe are managing conflicts of interest through
information disclosure policies;
• Through case studies, how to determine whether a situation is a conflict of interest
or not.


interest important?

1. Legislatio
3. Resolutions


n
Key terminology
Conflict of interest
Situation in which a public servant
has a private or other interest
such as to influence, or appear to
Interests influence, the impartial and
objective performance of his or
A range of benefits which, at the time of
declaration, may not bestow any
her official duties. E. g., assigning Risk for corruption
public contracts or positions
particular advantage to the public Conflicts of interest constitute a
based on family ties or personal
servant, but could exert influence on an risk for corruption, which can and
relationships (OECD 2005: 97;
individual's decision-making (Jenkins should be managed appropriately
Council of Europe 2000).
2015). to avoid de facto wrongdoings.

Risk areas creating conflicts of interest

CONTRACTING (OECD
“INSIDE 2005: 106)
INFORMATION”
FAMILY AND
COMMUNITY
EXPECTATIONS
ADDITIONAL
EMPLOYMENT GIFTS AND OTHER
FORMS OF BENEFIT
ACTIVITY AFTER
PUBLIC OFFICE
OUTSIDE
APPOINTMENTS


interest important?

1. Legislatio
3. Resolutions


n
Importance of managing conflicts of interest

• Conflicts of interests constitute a risk for
corruption and public trust, but they are per se not
automatically corruption per
• Opportunities to take advantage of position to
pursue private advantage at the expense of the public
interest materialize, if potential conflicts of interest are
not prevented, identified promptly and managed
adequately
• Private advantage should be understood broadly
to include not merely illicit financial gain but also
attempts to curry favor with potential future
benefactors or employers and the professional
advancement of friends and family (OECD 2005:
95-96).
UN Photo/Mark Garten

;
Declarations covered in the UNCAC


interest important?

1. Legislatio
3. Resolutions


n
1. Legislation • Secondary employment

• Procurement
What is to be • The revolving door
• Sharing confidential information and insider
regulated? trading
• Nepotism and cronyism
• Private financial interests.
Who is to be • Seniority
• Discretion in decision-making
• Staff working on specific public policies
regulated? • Access to confidential state or political party
information ...
In what form is it • Laws

• Integrity codes
• Management guidelines
to be regulated? • Single or multiple (and potentially overlapping)
regimes ... (Mooney et al. 2018: 853ff.).
It is nearly impossible to legislate to prevent and detect all possible

conflicts of interest!

;

interest important?

1. Legislatio
3. Resolutions


n

• Disclosing the value of assets and
liabilities and sources of income;
• Deterrent against graft, collusion and
patronage in the public sector;
• Key instrument to prevent conflicts of
interest and uncover illicit enrichment;
• The effectiveness and credibility of a
system of disclosures is only as good
as its ability to detect violations and
penalize wrongdoing (Jenkins 2015;
Martini 2013).

Asset disclosure per year and region
World Bank / International Finance Corporation 2014: 2 World Bank / International Finance Corporation 2014: 4

Key components of a declaration system

1. SCOPE OF PERSONS
8. ONLINE WHO SHOULD
DISCLOSURE DISCLOSE
2. SCOPE OF
7. CONFIDENTIAL VS. INFORMATION TO BE
PUBLIC DISCLOSURE DISCLOSED
3. RESPONSIBLE
6. SANCTIONS BODIES
4. SUBMISSION
5. REVIEW PROCESS PROCESS

Scope
1. Who should disclose 2. Information to be disclosed
• At least the leadership of the executive, Assets; Financial investments; Business
legislative and judiciary as well as the senior assets; Bank accounts, interest-bearing
career civil service;
i n s t r u m e n t s a n d c a s h ; Ve h i c l e s ;
• Public servants in decision-making positions Liabilities; Sources of income; (Unpaid)
with large discretionary powers; private sector employment; (Unpaid)
• A two-tired system for declarations made boards and directorships; Other public
by public servants and members of sector employment; Lotteries, gambling,
government
…; Gifts; Participation in associations,
• Information about the assets of relevant not-for-profit organizations and trade
public servants’ spouses, children and unions; Post-tenure positions and
other household members (Martini 2013).
employment (Martini 2013).
;
Implementation (1)
3. Responsible bodies 4. Submission process
• An independent agency should receive, • Ensuring that declarations are submitted on
review and/or enforce asset declaration time and in adequate quality;
rules, and give impartial advice on filing;
• Frequency:
• It should have the necessary skills and
• Regularly, e.g. annually or every two years;
resources to review declarations to detect
potential or actual conflicts of interest; • “Event-driven”, i.e. after a significant
change;
• Need for cooperation with other bodies
• Twice, on entering office and on leaving.
such as tax authorities, anti-corruption
agencies or election bodies; • Frequency and coverage should be
• Agencies should enjoy investigative powers proportionate to the oversight system’s
and be able to request information held by capacity to process and manage info
other agencies (Martini 2013). (Martini 2013).

Implementation (2)
5. Review process 6. Sanctions
• Auditing by an independent third party (e Sanctions for late submission, non-
g. an outside, non-governmental auditor submission and submission of false /
(whether a private auditing firm or other); incomplete information:
• Summons;
• Combination of risk-based prioritization • Fines;
and random sampling to select • Temporary suspension of salary;
disclosures for audits. Types of checks: • Suspension from the performance of public
o Checks against public or private sector records; functions for a certain period;
o Checks against previous disclosures by the same public • Dismissal;
servant; • Imprisonment;
o Checks against the public servant’s lifestyle;
• Reputational sanctions such as the publication of
o Whether the interests declared by the public servant are the names of non-filers on the agency’s website
compatible with the exercise of his/her functions (Martini (Martini 2013: 4-5).
2013).

Types of disclosure
7. Confidential vs. public disclosure 8. Online disclosure
• Public disclosure: Publication of • Searchable database of declarations by
declarations filed through a public registry criteria such as submitter, time and date filed,
and in a timely and user-friendly manner; government agency etc.;
• Disclosure can be made public in full or • Collection of metadata for statistical analyses
partially, i.e. by omitting certain information; on e.g. compliance rates;
• Providing information on failed reporting • Removal of proprietary software and of
obligations, disciplinary, administrative or economic barriers such as access fees;
criminal penalties and measures to avoid or • Managing electronic authentication,
terminate conflicts of interest; identification, signature etc.;
• Benefit: Scrutiny by media, parliaments, • Automatic alerts on missing, incomplete or
government organizations, people and civil erroneous entries (Open Government
society enhances the effectiveness of Partnership 2014: 15-18; Chêne et al. 2015:
declaration regimes (Martini 2013). 2).

Challenges and lessons learned

Challenges
- Data protection and privacy issues
- Lack of capacity to handle administrative
burden
- Inappropriate verification systems (OECD
2011).
Lessons learned
- Consult public servants to create ownership
- Keep the system manageable through sound
samples and widen capacity only incrementally
- Make filing requirements clear and simple
(Open Government Partnership 2014: 8-10).

;

interest important?

1. Legislatio
3. Resolutions


n
3. Resolutions
Conflicts of interest, if properly identified, can be resolved or managed. Tools include:
Assignment of the conflicting

interest in a genuinely “blind
trust” arrangement
Recusal of the public Re-arrangement of the

servant from involvement in public servant’s
an affected decision-making responsibilities
process
Restriction of information
Resignation of the public access by the affected
servant from the conflicting public servant transfer of the
private-capacity function public servant to a non-
conflicting function (OECD
Divestment or liquidation of 2005: 103)
the interest by the public
servant


interest important?

1. Legislatio
3. Resolutions


n
examples
Practical
:
Mongolia
Georgia: Online
Asset
Asset on
Declarati
Declaration
System
:
Guatemala :
Indonesia
Asset
e Asset
Disclosur on
Rwanda: Asset Declarati
System Declaration System
System
: Asset
Argentina
on Unit
Declarati
the Anti-
(ADU) of
Office
Corruption

Guatemala: Asset Disclosure System

• System governed by 2002 • Due to raising • Difficulties stemming
Probity Law which created awareness of the from legal framework
Achievements
Challenges
Integrity Department (staff requirement to file a • Until 2008, high
System
of 15) in the Comptroller delcaration, personnel turnover,
General’s Office compliance rates budget and staffing
• Focus on the detection of could almost double constraints in view of
illicit enrichment over a relatively very large population
short period to ca. required to file and
• Declarations are 75% in 2008 lack of clear
confidential standards/criteria for
• Integrity Department
• Administrative sanctions for has started to build submission and
noncompliance with capacity on content verification
submission deadlines; personnel retention, • Declarations
enforcement at discretion of information protected by
implementing agencie technology confidentiality
• Content verification only capabilities internal excluding public
upon departure from office processes. access as oversight
• Poor reporting on
• Centralized submission of
disclosure statistics
hard copies from ca. 16,000
(Mastruzzi et al.
eligible individuals
2013)

.
Argentina: Asset Declaration Unit (ADU) of the Anti-Corruption

Office
• Anti-Corruption Office • Ca. 36,000 public • Administrative
created in 1999 under the servants required to burden: Work with
Achievements
Challenges
auspices of the Ministry of declare per year hard copies, limited
System
Justice; • Verification of ca. storage capacity for
• Mandate 4,000 declarations declarations, some
• Manage submission in total per year, time-consuming
compliance; including systematic manual kind of
• Verify declarations for review of the most- research for the
indicators of illicit high-ranking 5% of verifications
enrichment staff (1,600) and a • Reliance on
• Control and advise on targeted risk-based coordination with HR
conflicts of interest review of an offices in line
• Manage public access to additional ca. 2,500 agencies, e.g. on ‘Cross-checking an asset
information about
• Cross-checks of communication of declaration form can be
declarations. newly hired or
• Capacity: 12 staff (ADU) movable and completed in about 20
appointed officials
plus 37 (Investigation immovable assets
who are subject to the minutes.'
Department) against state
registries. requirement to file
• ADU has oversight function (Habershorn et al.
with regard to HR offices in 2013: 7ff.).
government agencies

Georgia: Online Asset Declaration

• Initiated by the Civil Service • Watchdogs are in a • Information was
Bureau (CBS) to replace better position to initially disclosed by
Achievements
Challenges
the previous paper-based monitor the honesty the government in a
System
declaration in force from and legality of format that made it
1998-2010 causing risks incomes and difficult to search and
• Ca. 2,800 senior public expenditures of use the data
servants are obliged staff • Over time, the
annually to declare assets • Government has government also
owned by them and family become more improved the data
responsive, cleaner format of the
• Submitted declarations are
and less corrupt declarations and
published instantaneously
added further
into a searchable, publicly • System has inspired
functionalities to the
accessible database that other government
online system
allows downloading for free agencies to launch
• System design was 2013 winner o
• CBS facilitates process by similar e- f the UN Pub
governance outsourced at about Service Award lic
sending reminders via text USD 20,000 plus an s for excellence
messages or email, and projects in preventing
annual maintenance corruption
providing a hotline and cost of about USD
online chat service to help 10,000 (Chêne et al.
with queries on declaring. 2015: 9-10).

;
Rwanda: Asset Declaration System ‘We maximize

• Administered by the Office • Office of the • Declarations are not performance of limited
of the Ombudsman of Ombudsman, police publicly available staff through
Achievements
Challenges
Rwanda which maintains a and Office of the verfications based on
System
• Conflicts between
staff of nine to oversee Prosecutor General randomization and
agencies on the gap
submission and analysis regularly use focus on high-risk
between
declarations for areas.‘
• As of 2011, there were ca. recommendations
investigations into
5,000 individuals who must and enforcement
corruption and
declare annually directly to
criminal behavior • While Office of the
the Office
Ombudsman
• Submission
• Design intended to detect recommends
compliance rate
and prosecute illicit imposition of
raised to 91% in
enrichment administrative
2008
sanctions for
• Declarations can be
• Deterrence with wrongdoings,
submitted electronically
only limited staff due however these remain
• Detailed audit procedures to random audits of at the discretion of the
declarations agencies in which the
• Declarations are
submitted (ca. 6% individual works
confidential; privacy of filers
per year) targeting
is protected specifically by • Limited staff (Barnes
high-risk areas
law 2013a: 173ff.).

.
Mongolia: Asset Declaration System

• The Anti-Corruption Law of • Enforcement of • No criminal penalties for
2006 created the system admin. sanctions on false statements on
Achievements
Challenges
and Independent Agency 50 public servants forms and vague
System
against Corruption (IAAC) is failing to submit criminal code vague on
illicit enrichment
responsible for its asset declarations
management (staff of nine) in 2008 • System focuses on
• establishing a baseline
• Decentralized submission High submission
of all income and assets
system with centralized compliance rate for
ints,
rce constra
of staff, i.e.
‘Given resou
monitoring some 250 top transparency, rather
ses
government staff than law enforcement
r d e d ic ate d IAAC focu
• Verification procedures and ou
declaring to IACC
up on
on following
which can be seen
trained staff who and 50,000 public
s of top
critical in view of weak
declaration
investigate servants declaring media
hilst
staff only, w
government
• Enforcement of sanctions of to designated ethics • Resource constraints for
officers in agencies g about the
not forgettin
administrative nature verifications and
re.'
bigger pictu
• Public access to modified • Demonstration that reliance on 120 line
a decentralized agencies to receive
income and asset
system can work declarations in a
declarations enabling public decentralized way
to do limited lifestyle with centralized
(Barnes 2013b: 153ff.).
checks monitoring.

;
Indonesia: Asset Declaration System

• Established in 2001 and • Increased • Fierce opposition to
managed by Corruption compliance rate the KPK has caused it
Achievements
Challenges
Eradication Commission from 56% in 2006 to to suffer setbacks
System
(KPK) - a specialized 85% in 2009 by that, although serious,
agency with a broad exerting pressure have to date hindered
mandate to prevent, within agencies and but not derailed the
investigate and prosecute creating a culture of institution
corruption and ca. 80 staff compliance through • By law, sanctions
internal apply for failure to
• Wealth-reporting function
administrative submit a declaration,
and ensuring compliance of
processes. but the nature of
officials required to submit a
declaration sanctions is not
specified. Wealth-
• Sample of 1-5 % of reporting requirement
declarations is verified, might be seen as a
primarily targeting staff in sole bureaucratic
high-risk agencies formality;
• Wealth disclosure reports • Strengthening of
published in the state verification capacity
gazette and online for (Habershorn 013:
public access. 97ff.).


interest important?

1. Legislation
2. Interest and asset declarations
3. Resolutions an
4. Preventive measures


,
Activity
UN Photo/Mark Garten

Case studies – Conflict of interest or not?

What
Why - On the following pages, you find a number of case
studies that may (or not) constitute conflict-of-interest
The purpose of this activity is to assist participants to situations
develop practical skills in recognizing conflict-of-interest
problems and in applying a sound decision-making - Identify whether situations presented constitute a real
procedure in a process of ethical reasoning. conflict of interest or not, give reasons for your decision
and, if applicable, propose how the conflict of interest
could be resolved.
Tim
- Reserve ca. 30 minutes for this exercise and adapt the
number of cases to be examined to this time limit
Resource
- You may for example select five cases and discuss each
- Versions of the case studies can be made available to
for 5 minutes
participants on paper or digitally.
- Discussion can happen with the full group of participants
or participants can discuss with each other in small groups
and present their resolution of the cases to the others.
OECD 2005: 75ff.

e
Case study 1: Soccer World Cup

The case: You are the chief Anti-Corruption Officer for the Ministry of Justice. Your
Deputy Minister has overall responsibility for the ministry’s current major review
of the national Criminal Code. A consultant from the company which is advising on
Question 1: Isproject
the review a conflict
asksofyou
interest
whetherissue involved
it would “causein difficulties”
this offer? if the company
A: were
Yes. The gift from
to invite yourthe consultant
Deputy risks
Minister to being
attendseen
the as an attemptSoccer
forthcoming to compromise
World Cupthe deputy
minister’s
finals inindependent
a neighboring decision onThe
country. theconsultant
review. Thesays
gift that
maythealsocompany
be seen as intended to
would
influence
providethe
theminister’s
airfares anddecision-making
accommodation, on further
and the projects in whichwould
Deputy Minister the company may be
also be a
interested.
guest in the company’s corporate hospitality tent at the National Stadium. This
would give the Deputy Minister a good opportunity to meet other ministers from
Question 2: How
neighboring would you
countries whoadvise the
will also beMinister
there. Theif Deputy
asked to?Minister is very keen on
A: soccer
To refuse
andthe offer.
is a ThePresident
former event is unrelated to the minister’s
of your country’s national official
Soccer responsibilities.
Federation.
Question 1: Is a conflict of interest issue involved in this offer?

Question 2: How would you advise the Minister if asked to?
OECD 2005: 75ff.

Case study 2: The lunch

The case: On occasions, and often in their own time, the most senior public servants
Question: What areagency
of a government the integrity issues of
(the Ministry here?
Infrastructure Development) attend
A: While some social contact between public
lunches or dinners with a wide range of business servants and representatives
people, of the private
including representatives
sector is inevitable,
of schools, and the
churches, maylocal
often be desirable,
newspapers andthe
TV,provision
propertyand timing of the (reportedly)
developers,
“lavish” lunch ismanufacturers
consultants, likely to raise suspicions about the
and construction integrityThis
companies. of the
haspublic
beenservants
understood involved
in the
partdecision,
of seniorand the servants’
public integrity of the contract
activities in thisprocess of the
ministry, andministry.
as there The
is nolunch
fee oralso
creates,
other at minimum,
money an apparent
involved. conflicthave
These activities of interest
never for
beenthe public
seen as aservants.
problem forIn this
the
example,
Ministry.it is irrelevant that the lunch occurred during their free time (they cannot claim to
be present in a “private
On one recent capacity”).
occasion, three of these public servants attended what was reported
Theinministry
a newspaper mustthebe able
nextto demonstrate
day that
as a “lavish” the hosted
lunch contracting process was
by a prominent appropriately
local
free of impropercompany.
construction or corruptThis
influences.
occurredIfaitweek
cannot, thisthe
before situation
ministrymay be an example
decided finally onof a
form of “statea capture”
awarding number of – obtaining a favorablecontracts.
major construction official decision by covertthat
It was reported influence
the of public
servants
company through
whichcorrupt methods
had hosted and should
the lunch won the bemajority
investigated.
of the contracts.
Question: What are the integrity issues here?

OECD 2005: 75ff.

Case study 3: The recruitment

The case:
Question: A middle-level
Is there a seriousmanager employed
conflict of interestby a public
here, or isauthority repeatedly
it just a matter refuses
of personal
to recruit, or to select for training opportunities, staff from a particular religious and
preference?
ethnic
A: This background,
is an example ofeven whenconflict,
a serious individuals
and are wellabuse
actual qualified and skilled,
of office, because,
in the form as
of self-
he says,
dealing. The“those
manager people
usesare nothing
indulges but trouble”.
his/her personal prejudice against the ethnic group
concerned, at the expense of the employer’s interests [in obtaining trained staff, and in
Question:
having Is there
a reputation asaaserious conflict of
good employer, forinterest
treatinghere, or isequally
all staff it just aand
matter of personal
fairly].
preference?
Of course, the legitimate interests of those staff who are excluded from training are also
being denied.
The community at large may also be seen as disadvantaged, in that equal access to public
employment opportunities for all qualified people is being prevented by this manager’s
conduct. The manager’s conduct may also cause the organization to breach applicable anti-
discrimination/equal opportunity law(s), potentially exposing the organization (and the
government) to penalties, including the payment of compensation.
OECD 2005: 75ff.

Case study 4: The driver

The case:
Question: Asacceptable
Is it part of his for
official
the duties,
driver an officialout
to carry driver is required
his private to use in
business thethe
ministry’s
ministry’s vehicle Or
vehicle? to deliver
is this amessages and to carry out official errands. His job, which
case of corruption?
not well
A: This paid, requires
arrangement mayhim to beas“on
be seen call” and away
“reasonable” from
if other the ministry
official businessfor
islengthy
not delayed, and
periods
there is no on most days,
significant and he is
additional trusted
cost to to
or risk carry out his duties with minimal
the organization.
Butsupervision.
it may also be The driver
seen has
as an been with
apparent the ministry
conflict for many
of interest, years andof
and favoritism has
thenever
individual
been any trouble. Because of the flexibility of the driver’s work arrangements,
concerned: The appearance of a public servant using a government vehicle for private he
finds itmay
purposes veryalso
useful to carry out personal business, such as shopping, or taking his
be problematic.
children
Using to school,
the ministry during
vehicle forthe working
private day. is not “corrupt” provided that the ministry
purposes
knows of, and approves of, the practice. But “personal” arrangements (e.g. tacit approval by
Question:
a local manager,Is itwithout
acceptable for documentation)
formal the driver to carry canoutbe his private business
misunderstood, and in
maythebe unlawful.
ministry’s vehicle? Or is this a case of corruption?
OECD 2005: 75ff.

Case study 5: The market

The case: Your Office issues licenses to traders who have restaurants and food stalls
Question: What are the ethical issues here?
in the town. Your job is to process the license applications. One day a popular food
A: The
stalloffer of a valuable
operator, gift intothese
Mr A, comes yourcircumstances creates
office to seek urgent a conflict
renewal of interest.
of his business
Unwarranted delay in processing the applications of those traders
license, which expires tomorrow. He says he has been away on urgent businesswho had appliedand
in time is
also annot
did issue.
notice the renewal date. It normally takes a week in total for your Office to
Theprocess
claim that the trader
a license will bethrough
application offendedthe
if you refuse
various his “gift”
steps. Your is irrelevant.
Office The gift
has a strict offered
policy
is actually a bribe unlicensed
of prosecuting to influencetraders:
you to not apply
if Mr A is the office’s
caught administration
trading procedures
without a license in this
he could
case,
be that is, to treat
disqualified fromhim more favorably
holding thanlose
a license and other
his traders.
place in the Market. To show his
appreciation for helping him, Mr A offers to provide you and your family with free
meals for a month if you will agree to process his license renewal application today.
This is a valuable offer, amounting to a week’s salary for you. He will be very offended
if you refuse his gift. The Office has a strict anti-bribery rule, but you know that the
rule does not prohibit gifts of food. If you agree to do as he asks, it is inevitable that
approval of several other applications will be delayed by three days, as today is Friday
and Monday is a religious holiday.
OECD 2005: 75ff.
Question: What
Toolkit are the
on Transparency, ethicaland
Accountability issues
Ethics inhere?
Public Institutions 39

Case study 6: The survey

Question 1: Is
The case: A the public
public servant
servant actingto
is directed wrongly in this
summarize theexample?
public’s responses to his
A: Yes. This isrecent
ministry’s an actual conflict
survey on theof interest.
Government’s proposed changes to the laws
regulating environmental protection in the forestry industry. The public servant
Question
secretly2:discards
What is those
wrong with putting
survey responsesforward
which your
are inown views,
conflict withasher
long as well-
/ his you have a
clear conscience
considered that you
personal are about
beliefs right?the need for stronger government protection of the
A: The public servant
environment, is “putting
and forests forward her
in particular. The/ public
his views” in this
servant is aexample: S/he is
well-qualified secretly
and
distorting the survey
experienced by scientist.
forestry destroying government information to advance a personal objective.
This is in a strict sense, corrupt conduct – i.e. acting dishonestly, or in breach of trust, as a
public servant
Question 1: and gaining
Is the publican advantage
servant forwrongly
acting a private
in interest in so doing.
this example?
TheQuestion
fact that2:protecting forestswith
What is wrong generally
puttingmight be argued
forward your ownto be “in the
views, as public
long asinterest”
you havedoes
notaremove the conflict
clear conscience of interest
that in this case.
you are right?
OECD 2005: 75ff.

Case study 7: The road

The case: An elected Councillor in the municipal council in a small community has
voted in favor of a new, and controversial, road, which is to be built through an old
forest which was a popular place for wilderness tourism. The road will benefit the
Question: Whatbrother,
Councillor’s are the byintegrity issuesaccess
giving better here? to his farm. It is alleged by opponents
A: The
thatCouncilor
the road has
will a clearaway
drive conflict of interest
hikers, in this
by reducing case,
the as a relative
remoteness is involved
of the area, andin the
decision. In some
increasing countries
pollution thisstreams
of local form of conflict mayOpponents
and rivers. be prohibitedhavebyclaimed
law as anthat the
“incompatible” relationship (“incompatibility”).
Councillor had a conflict of interest, which should have been declared, as it was a
It isbreach
not acceptable for the Councilor
of the Council’s new code of to ethics
decidetonot to observe
vote the code
on a Council matterof ethics simply
in a way which
because he assumes
secretly benefitedthat “everyone
a relative. knows” all
In response, the
the relevant facts
Councillor about
used his who haswith
influence an interest
local
in matters before council. Codes of ethics for public servants set important
newspapers to conduct a campaign to damage the reputations of those people who public standards
or benchmarks
have complainedand can
aboutestablish
him. Whena kind of contractthe
questioned, with a relevant
Councillor community
said: “This is a as to how
small
positions of trust
community andwill be exercised.
conflicts of interest don’t mean anything here, as everyone knows
While it may be
everyone a small
else and manycommunity,
people aretransparency as a process
related by family has an Anyway,
or marriage. important value in
everyone
keeping
knows public
whatservants accountable.
is being decided by the Ensuring
Council,everyone is informed
and ‘academic’ codes about important
of ethics and so on
governance matters can be very important, even
are unnecessary: that’s just the way we do things here”. at the level of very small communities.
OECD 2005: 75ff.
Question: What
Toolkit are the
on Transparency, integrity
Accountability issues
and Ethics here?
in Public Institutions 41

Case study 8: The business dispute

Question: What are the integrity issues here?
Theis
A: This case: The husband
a difficult case: Onofthe
a Parliamentary Deputy has
one hand, the deputy is involved
a role ininadvocating
a businessabout
dispute
“public
over a contract with a private sector company to provide security services
interest” concerns, and the specific concerns of a constituent. The deputy concerned appears including
not armed
to be a guards.
ministerThere
or to has
havebeen considerable
a specific public debate
responsibility for the in the national
public newspapers
policy issues involved.
and TV recently, concerning the need for reform of the security service
On the other hand, the deputy’s husband’s interests are commercial, and apparently not industry,
involving
closely related allegations of connections
to the matters about which with organized
there is publiccrime, usingNothing
concern. illegal immigrants
is known aboutas
the employees,
facts of the failure
dispute: toItperform the be
should not services
assumedcontracted
that the for, tax evasion,
deputy’s husband andhastrafficking
a justified
in drugs and
cause of complaint. illegal weapons. The Parliamentary Deputy writes on parliamentary
Theletterhead to the head
deputy’s husband mayoforthemayministry which licenses
not be entitled to havecompanies who provide
this particular security on
deputy advocate
his services: Shemust
behalf: This complains about the
be established asconduct of the
a question company
of fact. andcircumstances,
In these asks for their business
writing as a
license to be reviewed.
parliamentary deputy, on official parliamentary letterhead, and requesting review of the
company’s license to operate, could appear to be an improper use of public office and
Question:
resources What are
for private the integrity
advantage. Theissues
deputyhere?
has, at minimum, an apparent conflict of
interest.
OECD 2005: 75ff.

outcomes
Learning
In this module you have learned that:
✓ Public servants are required to take as much care to avoid apparent
conflicts of interest as to avoid actual or potential ones;
✓ If not managed properly, conflicts of interest can be a serious risk for
corruption;
✓ Managing conflicts of interests requires a holistic approach: Prevention
and detection through legislation, declaration regimes, resolution and
measures such as awareness-raising and training work best as a system.

References (1) Barnes, D. W. (2013a). Rwanda, Ch. 9. In World Bank (Ed.). Income and Asset Disclosure Case Study Illustrations - A companion volume to Public Office, Private
Interests: Accountability through Income and Asset Disclosure (pp. 173-186). Washington: International Bank for Reconstruction and Development / The
World Bank. Retrieved from http://documents.worldbank.org/curated/en/664561468340842190/pdf/Income-and-asset-disclosure-case-study-illustrations.pdf
(last accessed on April 7, 2020).
Barnes, D. W. (2013b). Mongolia, Ch. 8. In World Bank (Ed.). Income and Asset Disclosure Case Study Illustrations - A companion volume to Public Office, Private
Interests: Accountability through Income and Asset Disclosure (pp. 153-172). Washington: International Bank for Reconstruction and Development / The
Bertók, J. (August 2007). Conflict of Interest: Tools for implementation and enforcement. OECD Public Governance and Territorial Development Directorate. Retrieved
from https://www.oecd.org/site/adboecdanti-corruptioninitiative/39368002.pdf (last accessed on April 7, 2020).
Chêne, M., Messick, R., Mulukutla, H. & Hoppe, T. (September 2015). The use of technology for managing income and asset declarations. U4 Expert Answer. U4
Anti-corruption Resource Centre. Retrieved from https://www.u4.no/publications/the-use-of-technology-for-managing-income-and-asset-declarations.pdf (last
accessed on April 7, 2020).
Council of Europe (2000). Recommendation No. R 10 of the Council of Europe committee of ministers to member states on codes of conduct for public officials.
Retrieved from https://search.coe.int/cm/Pages/result_details.aspx?ObjectID=09000016805e2e52 (last accessed on April 7, 2020).
Habershon, A. & Berger, T. (2013). Argentinia, Ch. 1. In World Bank (Ed.). Income and Asset Disclosure Case Study Illustrations - A companion volume to Public Office,
Private Interests: Accountability through Income and Asset Disclosure (pp. 7-26). Washington: International Bank for Reconstruction and Development / The
Habershon, A. & Mulukutla, H. (2013). Indonesia, Ch. 5. In World Bank (Ed.). Income and Asset Disclosure Case Study Illustrations - A companion volume to Public
Office, Private Interests: Accountability through Income and Asset Disclosure (pp. 97-114). Washington: International Bank for Reconstruction and
Development / The World Bank. Retrieved from http://documents.worldbank.org/curated/en/664561468340842190/pdf/Income-and-asset-disclosure-case-
study-illustrations.pdf (last accessed on April 7, 2020).
Jenkins, M. (June 2015). Topic Guide: Conflicts of Interest. Transparency International. Retrieved from https://knowledgehub.transparency.org/guide/topic-guide-on-
conflicts-of-interest/5483 (last accessed on April 7, 2020).
Martini, M. (July 2013). Declaration of Interests, Assets and Liabilities: Oversight mechnaisms, Disclosure policy and sanctions. Anti-corruption Helpdesk. Transparency
International. Retrieved from https://www.transparency.org/files/content/corruptionqas/Declaration__of__interests__assets__and__liabilities.pdf (last accessed
on April 7, 2020).
Mastruzzi, M. (2013). Guatemala, Ch. 3. In World Bank (Ed.). Income and Asset Disclosure Case Study Illustrations - A companion volume to Public Office, Private
Interests: Accountability through Income and Asset Disclosure (pp. 59-80). Washington: International Bank for Reconstruction and Development / The World
Bank. Retrieved from http://documents.worldbank.org/curated/en/664561468340842190/pdf/Income-and-asset-disclosure-case-study-illustrations.pdf (last
accessed on April 7, 2020).
Mooney, J., Ferguson, G. & Bildfell, C. (2018). Public Officials and Conflicts of Interest, Ch. 9. In Ferguson, G. (Ed.). Global corruption: Law, theory & practice (pp.
853-887). University of Victoria (Canada). Retrieved from https://dspace.library.uvic.ca/bitstream/handle/1828/9253/Ch.%2009_April2018_web.pdf?
sequence=10&isAllowed=y (last accessed on April 7, 2020).
OECD (2005). Managing Conflict of Interest in the Public Sector: A Toolkit. Retrieved from https://www.oecd.org/gov/ethics/49107986.pdf (last accessed on April 7,
2020).

References (2) OECD (2011). Asset Declarations for Public Officials: A Tool to Prevent Corruption, Paris: OECD Publishing. Retrieved from http://www.oecd.org/daf/anti-bribery/
47489446.pdf (last accessed on April 7, 2020).
Open Government Partnership (November 2014). Open Government Guide. Cross Cutting Topics. Customised Report. Assets disclosure and conflicts of interests
(authored by Global Integrity in lead). Retrieved from https://www.opengovpartnership.org/wp-content/uploads/2019/06/open-gov-guide_summary_cross-
cutting-topics.pdf (last accessed on April 7, 2020).
United Nations Convention against Corruption. Adopted by the UN General Assembly on 31 October 2003, by resolution 58/4. Retrieved from https://www.unodc.org/
documents/treaties/UNCAC/Publications/Convention/08-50026_E.pdf (last accessed on April 7, 2020).
World Bank / International Finance Corporation (April 2014). Asset Declaration Systems. Panel 1: Introduction to Asset Disclosure. Presentation held at MENA
Regional Conference. Retrieved from http://siteresources.worldbank.org/PUBLICSECTORANDGOVERNANCE/Resources/
285741-1233946247437/5810405-1399294268994/AD-International-and-Regional-Trends.pdf (last accessed on April 7, 2020).

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Module 9 –

Managing conflict of interest

Module 2 - Essentials of Module 7 - Social Module 12 - Creating an Module 15 - Assessing

Module 4 - Module 9 - Managing Module 17 - How to

Module 5 - International Module 10 -

Toolkit on Transparency, Accountability and Ethics in Public Institutions 2

Module agenda 01 Key terminology 02 Why is managing conflict of

03 Good practices for 04 Practical examples

05 Activity: Case studies –

Toolkit on Transparency, Accountability and Ethics in Public Institutions 3