Defending defence costs

Transparency International on Tuesday released a fascinating first-time study on global defence corruption that ranks 82 countries on their accountability. Together, they account for 94 per cent (US$ 1.6 trillion) of the global military expenditure in 2011.

Sri Lanka is placed in Band E, among motley of nations including Afghanistan, Iran, Iraq and Tunisia. Though Sri Lanka scored low, so did 70% of the countries that were surveyed, showing the seriousness of corruption in this sector. Sri Lanka’s score means that political corruption vulnerability is high, with the strong Executive power that undermines the potential for effective scrutiny or transparency and limits debate considerably.

Transparency International points out that post-war arms control is unclear ─ no international protocols are known to have been signed. The scrutiny of defence budgets and audits of defence expenditure are de-emphasised by the Government. In short, evidence indicates low institutionalised political activity to stem corruption in national defence and security establishments. In the field of finance corruption risk, the study says there is no transparency on asset disposals or on information classification, the latter having strong risk of being overly centralised following a history of Emergency Regulations. It also points out that there is no detail of money spent on secret items while the Financial Regulations of the Government enable ‘secret payments’. Meanwhile, the defence sector’s development of commercial business in the post-war has been extensive and faces negligible ─ if any ─ scrutiny.

In the field of personnel corruption risk, whistle-blowing is considered potentially treacherous. The president wields control over recruitment of personnel at the most senior levels, and there is a high risk of favouritism and politicisation in recruitment processes at other senior levels.  Transparency International also emphasised that the problem of facilitation payments is reported to be widespread.

With regard to operations corruption risks, there is no codified military doctrine in which anti-corruption provisions are covered, and acts pertaining to the armed services do not include anti-corruption aspects either. There is no evidence of anti-corruption training, monitoring, or guidelines on contracting that relate to operations. There is a lack of transparency regarding the extent of the operations of Private Military Contractors (PMCs) and whether they are regulated or scrutinised.

Finally, in the field of procurement corruption risk, it is noted that the Joint Operations Headquarters under the Ministry of  Defence is responsible for procurement, but legislation is not public and has limited application under the official remit of ‘national security’. There is little or no transparency on purchases, pre-bid standards for companies to meet, or on a strategy guiding procurement.

In terms of competition in defence procurement, the principle of open competition is assessed to be likely to be undermined in practice, while tender boards or anti-collusion efforts are lacking in effectiveness. There is no transparency at all regarding control of agents or sub-contractors, or financing packages. Finally, political factors are assessed to influence defence procurement, the study insists.

It goes on to suggest that a responsible Government would conduct a detailed analysis on shortcomings and establish a strong legal framework to address the loopholes. It also calls for a strong civil society and media to keep track of public expenditure – ideals that will likely remain utopian.