International Bodies, Government Seek Ways to Deter Corruption in Aid

To ensure that the tsunami aid funds will be appropriately managed and benefit the people affected by the tragedy, the Indonesian government and three international institutions will on Thursday jointly host a two-day international meeting on graft prevention.

The three bodies are the Asian Development Bank (ADB), the Organization for Economic Cooperation and Development (OECD) and Transparency International (TI).

The meeting -- which will also be attended by representatives of five other tsunami-affected countries in the region, the World Bank and related civil society organizations -- will discuss possible risks of the misuse of the funds and identify new ways to effectively channel the money for emergency relief efforts and future reconstruction projects.

ADB governance and regional cooperation division director, Jak Jabes, said on Wednesday that the meeting was important as it would address the international community's concern over the corruption issue.

Media reports said part of the funds had already been used to finance the government's Infrastructure Summit in January and just recently, two Geneva-based newspapers insinuated that aid money may have been used to purchase a US$8 million villa for the residence of the country's United Nations ambassador there.

Although Jabes said details on the preventative measures against possible risks would be discussed during the meeting, ADB believes there should be a central organization managing the disbursement of the funds as well as an audit center.

In response to public wariness that government officials, some of whom also have close ties with local businesspeople, may use their positions to secure reconstruction contracts, Jabes emphasized that they should not participate in the bidding for any projects.

ADB governance advisor Staffan Synnerstrom said the bank had established an emergency support project, which would include improving financial governance and improving the capacity of audit agencies.

The OECD's anticorruption initiatives coordinator Fr‚d‚ric Wehrl‚ said the organization -- comprised of the world's richest nations, who were the largest donors -- would take preventative measures in the interest of donor countries.

He said the OECD had established a legal framework among its members to prevent the bribing of public officials in tsunami-stricken countries.

He also pointed out that OECD members required recipient countries to ensure that the aid funds were not tainted by corruption.

"The framework carries sanctions, which include imprisonment of up to 10 years, and the company itself would be sanctioned, which would badly affect its credibility."

Transparency International (TI) regional director for Asia and the Pacific, Peter Rooke, said many of the major donor agencies, such as the Red Cross, were not aware of the potential corruption practices that might occur during their activities in some countries.

"They have very good processes inside their organizations, but the corruption issue still concerns them a great deal," he said.

Devastated infrastructure following the Dec. 26 massive earthquake and tsunamis will obviously increase the risks of corruption, considering the huge amount of funds channeled to the reconstruction projects.

"The badly damaged infrastructure that also affects the government's administration, not to mention pressure to do things quickly, despite poor coordination, increases the risks," Rooke said.

He gave two thumbs up to the mechanism by the United Nations and external auditors in coordinating the flow of funds by setting up an electronic tracking system for them.

"Not all the money will go through the system, but a great deal of it will," he said. "This is an important innovation."

Donor countries raised US$6 billion in pledges to be managed by the World Bank, and most of that will be disbursed for Indonesia, which was hit hardest.