News 08th Jul 2020

Corruption & COVID-19 – the story so far

Daniel Bruce

Chief Executive

Daniel joined Transparency International UK as Chief Executive in October 2019. He is an experienced senior leader in international charities, previously serving as Chief Executive of the press freedom and media development organisation Internews.

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Fighting Corruption Worldwide 2020

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The Covid-19 Pandemic has turned the world on its head. It has exposed fault lines we did not know were there, and underscored others that we did. Looking forward, government, business and civil society around the world will have to decide how we can do things differently – and better. Fighting corruption must remain a priority. Sadly, no global crisis will eradicate corruption. In reality, it can make things worse – increasing opportunities for those with entrusted power to abuse their position for personal gain.

We have already seen how pressure on stretched health resources creates openings for corruption in research, procurement, supply chains and contracts. These vulnerabilities exist at other times too and across society. The toll is huge. In the worst cases, corruption costs lives. It steals public money destined for vital services and erodes democracy, provoking instability and public distrust.

We must also remember that the UK is not an innocent bystander. You need only look at the £100 billion of dirty money flowing into Britain every year or the £5bn of UK property bought with suspicious wealth to understand the scale of challenge. Again, so often, these are ill-gotten gains that deprive others around the world of the opportunity to live a life of dignity, self-determination and prosperity.

In these uncertain times, Transparency International UK’s mission to combat corruption in the UK and wherever the UK has influence is more important than ever. This is our moment to push for powerful change.

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Six months ago few of us had heard of, or paid much attention to COVID-19. The idea of living in ‘lockdown’ would have been unimaginable. How quickly things change. Now we witness soaring unemployment, health services stretched to breaking point and COVID’s profound toll on the poorest among the collateral damage of this insidious pathogen.

We’ve also learned there’s another profoundly damaging problem lurking beneath these headlines: the breeding ground the virus has created for corruption. Supply chain shortages, the need for a rapid response and the general disruption caused by the pandemic have made governments, public sector procurement, and business easy targets for those who would exploit the crisis for personal gain. It is now without doubt that corruption has already hampered many well-intentioned government responses and deprived some people of access to the most effective care and support.

Several months into the pandemic, with the UK and other countries attempting tentative steps towards normality, it’s appropriate to reflect on the key areas Transparency International UK has found to be most susceptible to corruption. Moreover, we must set out the steps that need to be taken in the coming months and years in preparation for any future crises.

Procurement, particularly health procurement

Governments worldwide, particularly in the first few weeks of the pandemic, were in desperate need of medical supplies, including ventilators and Personal Protective Equipment (PPE) for health workers and carers. In many countries, including the UK, normal oversight in the health procurement process was bypassed in the name of expediency. With no opportunity for external scrutiny, hundreds of decisions were made rapidly and without transparency.

The consequences and risks of these emergency measures soon become clear – the first antibody tests the UK government bought in bulk proved to be so unreliable that they were unusable. Other equipment also proved to be substandard – wasting taxpayers’ money, depriving public services of urgently needed equipment and ultimately hampering the response.

Elsewhere, Brazil, the US, Slovenia, Bosnia and Romania are among the countries where lucrative contracts were awarded to the well connected, potentially to the detriment of those with more expertise. In some cases, businesses with no experience at all in the sector were given million-pound orders.

While many businesses have acted responsibly during the pandemic, others have also seized on the crisis to attempt to aggressively influence decisions governments are taking to prop up their economies. The disruption caused by COVID-19 combined with the need for swift decisions has created the perfect conditions for these irresponsible lobbying practices to thrive.

We have to take a step back from the heat of the health emergency to understand the corruption risk here. In the UK, the rules around corporate lobbying and ‘cash for political access’ have been in dire need of an overhaul for years. They are woefully inadequate compared with the rigour seen in Ireland or Canada for example. Lobbyists and shareholders will derive personal benefit from their connected firms being awarded 9-figure contracts in the heat of a crisis; but if they got the contracts because of ‘who they knew’ rather than demonstrably being the best firm for the job, then private interest has been allowed to trump public interest.

 

The race for a vaccine and effective treatments

With an unprecedented number of biotech companies and universities competing to create a vaccine and effective treatments, the temptation to cut corners will be huge. Too many pharmaceutical companies and public research bodies are already notorious for failing to publish full results and lack of transparency in their data, creating opportunities for data manipulation which, in turn, can put the public at risk.

A notable proportion of the first-wave of COVID vaccine trials were found to have significant design shortcomings.  Furthermore, a significant proportion of COVID clinical trial sponsors have a pre-existing poor record of clinical trial transparency or in some cases have no experience in registering clinical trials or publishing the results on a clinical trial registry, in breach of EU directive requirements.

We have seen this time and time again over the years. Think back to Tamiflu, the swine flu treatment that transpired to be far less effective than the medical community had been led to believe at the time.  Millions of dollars were wasted stockpiling a drug no more powerful than paracetamol.

More recently, we have seen allegations that a small US company fabricated a database. The data was purportedly from the medical records of nearly 100,000 COVID-19 patients treated in 167 hospitals. Two scientific papers based on this data were published in two of the world’s most influential medical journals. Both have since been retracted by the journals, but the damage has already been done.

With public health and trust in scientific data at stake we cannot let this continue. We need governments and multilateral institutions to demand higher and consistent standards of clinical trials transparency – and to introduce sanctions for those who do not comply. Only then, can we weed out rogue or corrupt operators pursuing financial gain instead of an effective and trustworthy vaccine.

 

Government transparency and accountability

The UK government, along with many, others around the world have offered billions in fiscal support and stimulus during the pandemic to struggling businesses. Yet in the UK there remains a concerning lack of transparency about the companies receiving these taxpayer-funded loans, which at the time of writing total £35 billion. Many of the payments were issued with few checks on the companies or individuals who received them. This opens the door for criminals and corrupt insiders to defraud the UK.

Transparency International UK, together with the Fraud Advisory Panel and Spotlight on Corruption, have now publicly urged the Treasury to publish the names of all the recipients of the loans, 830,000 small businesses, to secure taxpayer confidence that money does not end up in the wrong hands.

 

Emergency laws and the military

The pandemic has resulted in emergency laws being enacted around the world, which has seen armed forces and other parts of the security sector given key roles in supporting the COVID-19 response. Across Europe we have seen a worrying trend of battlefield rhetoric being used to justify 'all means necessary' - an approach traditionally reserved for war footings.

In Nigeria, recent data has shown that state forces have been responsible for 65% of violence targeting civilians directly related to the coronavirus, under the justification of enforcing the lockdown. Elsewhere, armed forces impunity and exemptions for defence actors flouting the rule of law have increased dramatically during the pandemic. In Peru, defence and security forces were granted legal exemption should they harm or kill civilians in their response activities. At a time of crisis, we should ensure the most transparent governance of emergency legislation and the mobilisation of the military – not the abuse of the crisis to harm civilians or embolden the powerbase of the elite.

 

Key steps to prevent corruption in times of national and global crisis

Our research has shown time and time again that transparency is the best vaccine against corruption – even in times of crisis. If properly embraced, it enables governments, the private sector, scientists and medical researchers to maintain the public’s trust and is critical to avoiding economic waste and inefficiency.

Here are some clear steps that can be taken by governments, business and civil society based on what we’ve learned so far in the COVID-19 crisis:

  • Insert anti-corruption measures and transparency at the core of new legislation to respond to any emergency.
  • Make contracts that govern financial flows and procurement associated with the crisis publicly accessible.
  • Transparency must be central to all procurement decision making even during crises; where emergency measures have been introduced that reduce the controls to prevent corruption, these should contain clear 'sunset' clauses that enable legislatures to reassess and re-determine their continuance at regular intervals.
  • There should be clear and enforced rules that require lobbying activity to be published and that prevent political access from being bought and sold.
  • Holders of public office must go further than simply declaring their conflicts of interest. To ensure decisions are exclusively taken in the public interest, there needs to be distance between conflicted parties and public decision-making.
  • Clinical trials must be published in full; the British government should act upon calls from civil society, including Transparency International, to introduce sanctions for those institutions who fail to comply with clinical trial reporting requirements.
  • Ensure that military deployments to help manage the emergency have clear timelines, independent oversight and are subject to review and audits.

While COVID-19 has thrown the world into disarray, we must not jettison commitments to fighting corruption and to transparency in a misguided belief they are not important in times of crisis. The costs are too high: loss of trust in government and business around the world, hampered medical responses, increased inequality and the risk of increased insecurity and conflict around the world.