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____ Tuesday March 22, 2016 ____


State Corruption

Building Foundations for Transparency – Designing Tools for Transformation at the State Level

A new report from the World Economic Forum, Building Foundations for Transparency, focuses on the second phase of the Partnering Against Corruption Initiative (PACI) project to address the needs of the infrastructure and urban development industries; The report provides a solutions-based framework, a deep-dive at the state level in India and a diagnostic tool that can be replicated and enhanced.

Geneva – The World Economic Forum, in collaboration with Deloitte, has released a new report on increasing transparency, specifically addressing corruption risks in infrastructure, engineering, construction and real estate through a pilot project in India. Building Foundations for Transparency looks at collective action and hands-on solutions to address corruption using technology to tackle two key areas: greater transparency in permits and licences; and land purchase, land title acquisition and registration processes at the state level in Maharashtra.

The report is part of the second phase of the Forum’s Partnering Against Corruption Initiative (PACI) project to address the needs of the infrastructure and urban development industries. India has garnered strong interest from the PACI community over the years, in particular from the PACI’s community of Vanguard CEOs.

Rather than continuing discussions on key risk areas through various platforms, the report focuses on practical outcomes, as well as key solutions developed by participants in a Mumbai workshop held in December 2015 that focused on collective action and public-private cooperation.

Drawing on a solutions-based framework and the principal agent theory in relation to corruption, the report identifies key messages from the activities in India, including the need for action to make the construction and real estate industries in the country less prone to corruption; and for solutions that enhance the transparency of processes and the importance of technology-based solutions as the optimal channel to address the challenge. Using solutions developed during the regional workshop as well as expert interviews and a survey of industry experts, the report provides guidance on how the framework can be implemented on a local level and replicated in other regions.

The report also contains an online diagnostic tool developed by the project’s steering and advisory committees to advance the agenda for greater transparency within the infrastructure and urban development (IU) industries. This front-end platform seeks to inform stakeholders and interested parties about ongoing efforts and provides a visual aggregation of data from various indices and rankings related to corruption and the ease of doing business.

“Global organizations are increasingly challenged by industry and country-specific corruption risks, which they have difficulties in handling on their own. It is imperative to engage relevant stakeholders in collective action to foster an environment of fair competition. The latest report from the World Economic Forum, Building Foundations for Transparency, succinctly outlines the key outcomes of a deep-dive at the state level in India, and the development of hands-on approaches to collective action that can now be replicated in other regions,” said Ken B. Graversen, Corporate Ethics and Compliance Officer, Danfoss, Denmark.

“The Building Foundations for Transparency project has great value for local urban bodies in India and the report showcases this. Many of these bodies are keen to evolve a new transparent process. With support from PACI in the next phase of the project, we hope that the World Economic Forum will continue to help implement real change at the local level by offering expert and best practices from across the world,” said Pranjal Sharma, Consulting Editor of Businessworld, India, and a Member of the Forum’s Global Agenda Council on Transparency and Anti-Corruption.

“A key outcome of this project is an online diagnostic tool that provides governments and businesses with a real-time look at the progress that has been made in reducing corruption in the infrastructure, engineering, construction and real estate industries in Maharashtra, India. With greater transparency, governments now have a roadmap for developing the standardized procedures required to design corruption out of the system. Most importantly, the output from this project can now be extended geographically, allowing input and feedback to be shared across business, government and citizens in the future,” noted James H. Cottrell, Project Adviser and Partner, Deloitte, USA.

“This project leveraged the potential of digital technology as an enabler for transparency and citizen participation. The results indicate a shared, general belief that technology-based solutions can be quickly adopted and scaled-up beyond city and state levels. The tangible benefits and long-term impact of digital-based solutions rely on eliminating multiple layers of decision-making in public administration while providing a modern, transparent front-end to all stakeholders who are committed to disclosing information and reforming permitting and licensing processes in India,” said Pedro Rodrigues de Almeida, Head of Basic Industries, Member of the Executive Committee, World Economic Forum.

In the next and final phase of the project, the PACI is working with its signatories and Partners of the World Economic Forum to develop new forms of public-private cooperation to tackle corruption-related risks across industries with a focus on rebuilding trust and integrity through high-level dialogues with industry and government. In addition, 2016 will see project workshops and the replication of the diagnostic tool in other regions, including Africa and Latin America. Throughout 2016, the Forum will advance these efforts; begin early-stage project preparation through dialogues aimed at disseminating the best practices collected over the three phases of the Building Foundations trilogy; and work on furthering the anti-corruption agenda in Africa, Latin America and South-East Asia.

Download the full report here

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