High Risk of Corruption in BiH Defense Sector

London, 29^th January 2013- Transparency International UK, within the Programme for Defense and Security, has released the Government Defense Anti-Corruption Index, which analyses what 82 countries do to reduce corruption risks. Countries included in the Study accounted for 94% of the global military expenditure in 2011, equivalent to $1.6 trillion. Each country is scored in bands from very low risks of corruption (A) critical risk (F), according to detailed assessment across 77 indicators that cover five prominent risk areas in the sector: politics, finance, personnel, operations, and procurement.

According to the first ever index measuring how governments prevent corruption in the defense sector indicates that 70% of countries leave the door open to waste and security threats as they lack the tools to prevent corruption in the defense sector. Countries with poor controls include two-thirds of the largest arms importers and half of the biggest arms exporters in the world. Germany and Australia are the only countries that have strong anti-corruption mechanisms, which include a robust parliamentary oversight, very strict standards for the companies in the defense sector and responsible intelligence agencies. On the other side, there are nine countries- Algeria, Angola, Cameroon, the Democratic Republic of Congo, Egypt, Eritrea, Libya, Syria and Yemen- which exhibit critical risk of corruption thanks to lack of basic control and accountability mechanisms. In the Appendix 1 there is a general overwiev of the raitings for all the countries included in the study.

Bosnia and Herzegovina has been marked with a band D, which implies high risk of coruption. Comparing with the political risks,even though regulations for the control of formal policy of the defense and security exist there is no transparency in the decision making process or effective supervision over the defese and security budget.

When it comes to financial risks, control over the distribution of property has yet to be established, while at the same time media reports have been pointing to an illegal sale of assets and weapons. Although, the audit reports have been delivered to the Parliament the percentage of the defense and security budget allocated to the ‘’secret items’’ is unavailable to the public. In terms of personnel, there are no laws which would protect whistleblowers and facilitate reporting irregularities. Even though the formal system for appointing and promoting of the personnel exists, in practice some irregularities have been identified. Although corruption is not recognized as a strategic issue in military doctrine, within the category of operational risks, the personnel has been subjected to training on corruption, including corruption in the procurement process. When it comes to procurement area, there is lack of oversight mechanism in the legal framework. Bidders are not subjected to the special demands to compliance with the provision of the law and codes and, also there is lack of sanctions for collusion among bidders. Ratings for individual indicators for Bosnia and Herzegovina are located in Appendix 2.

Transparency International calls on governments to make this traditionally secretive sector, which involves large public contracts, more open to the public. Defense establishments should increase citizens’ access to information about defense budgets and procurement. Legislators should have stronger controls and oversight of the sector, as well as the will to prevent corruption.

Appendix 1. General Overwiev

A-Very low risk of corruption (2 countries): AUSTRALIA, GERMANY

B-Low risk (7 Countries): AUSTRIA, NORWAY, SOUTH KOREA, SWEDEN, TAIWAN, UNITED KINGDOM, UNITED STATES

C-Moderate risk (16 countries): ARGENTINA, BRAZIL, BULGARIA, CHILE, COLOMBIA, CROATIA, CZECH REPUBLIC, FRANCE, GREECE, HUNGARY, ITALY, JAPAN, LATVIA, POLAND, SLOVAKIA, SPAIN

D- High level (30 countries):

D+ BOSNIA AND HERZEGOVINA, CYPRUS, INDIA, ISRAEL, KENYA, KUWAIT,L EBANON, MEXICO, NEPAL, SERBIA, SINGAPORE, SOUTH AFRICA, THAILAND,UKRAINE, UNITED ARAB EMIRATES (UAE)

D== BANGLADESH, BELARUS, CHINA, ETHIOPIA, GEORGIA, GHANA, JORDAN,

KAZAKHSTAN, MALAYSIA, PAKISTAN, PALESTINE, RUSSIA, RWANDA,

TANZANIA, TURKEY

E- Very high level (18 countries): AFGHANISTAN, BAHRAIN, COTE D’IVOIRE, INDONESIA, IRAN, IRAQ, MOROCCO,NIGERIA, OMAN, PHILIPPINES, QATAR, SAUDI ARABIA, SRI LANKA, TUNISIA,UGANDA, UZBEKISTAN, VENEZUELA, ZIMBABWE

F- Critical level (9 countries): ALGERIA, ANGOLA, CAMEROON, DRC, EGYPT, ERITREA, LIBYA,

SYRIA, YEMEN

Appendix 2 Ratings for individual indicators