March 28-29, 2012. Bangkok, Thailand.
In many countries certain categories of public officials (such as MPs, heads of state, cabinet members, etc) are required to declare their assets, income, liabilities, positions in the private sector, etc. Financial disclosure by public officials can be a powerful mechanism both for the prevention and detection of corruption. Disclosures can also provide information and evidence for the investigation and prosecution of corruption.
In order to promote knowledge-sharing on financial disclosure systems for public officials, and foster regional and country-level dialogue on disclosure systems' impact on governance outcomes, the World Bank organized a regional conference, entitled “Financial Disclosure by Public Officials: Practices, Challenges, and Lessons Learned in Asia” which took place on March 28-29, 2012 in Bangkok, Thailand. The conference studied in-depth policy and operational challenges of financial disclosure systems.
The conference was a joint endeavor of the Financial Market Integrity (FFSFI) and Public Sector and Governance (PRMPS) units with support from the World Bank’s East Asia Governance Hub and funding from the Governance Partnership Facility (GPF) and the Stolen Asset Recovery Initiative (StAR).
During the two day event financial disclosure practitioners exchanged with counterparts from across Asia experiences and lessons learned on the following areas:
1) setting up a financial disclosure system: lessons on basic design elements;
2) effective verification of declarations;
3) addressing the data management challenge: tools used to meet financial disclosure objectives;
4) public access, communications and complaints mechanisms;
5) inter-agency coordination, investigations and enforcement of sanctions.
The Conference brought together senior financial disclosure practitioners from 14 countries
in the East Asia Pacific and South Asia regions: Bhutan, Cambodia, China, Indonesia, Republic of Korea, Malaysia, Mongolia, Pakistan, Philippines, Singapore, Sri Lanka, Thailand, Timor-Leste and Vietnam. A delegation from South Africa's Public Service Commission and representatives from international organizations (UNODC, DFID, UNDP, IOM) also attended.
The audience included practitioners from both emerging disclosure systems and more established ones. It is hoped that all practitioners will take the lessons shared by their peers at this event to help address particular implementation challenges and to develop strategies for improving the effectiveness of their systems.
The event, which was opened by Joel Turkewitz (Program Coordinator, Regional Governance Hub, World Bank office Bangkok), provided an opportunity for practitioners from across Asia to exchange experiences and insights on challenges, good practices and lessons learned from the design and implementation of financial disclosure systems.
World Bank financial disclosure experts Laura Pop (FFSFI) and Alexandra Habershon (PRMPS, StAR) shared with the participants the findings of global research that the World Bank has undertaken on financial disclosure systems, both on the legal framework underpinning disclosure requirements, and on implementation practices, including some of the strategies adopted by different countries to address the key requirements and overcome challenges in building an effective disclosure regime.
The World Bank’s global research shows that, out of the 176 economies for which data has been analyzed, 138 have disclosure legislation and are implementing the requirement. In the East Asia and Pacific Region 65 percent (of 23 economies) have disclosure systems and in South Asia region 71 percent (of 7 economies).
The presentations of the World Bank experts also focused on the tools the Bank has developed to help strengthen the implementation of financial disclosures. These include: training and guidance on the design and management of disclosure systems, training on financial investigation for disclosure practitioners, developing risk analysis to support the verification of disclosures, developing a data management framework for disclosure systems, etc.
The event coincided with the launch in Washington, DC, of the new World Bank/StAR publication “Public Office, Private Interests: Accountability through Income and Asset Disclosure”. Presenters also shared with participants the findings of a recent Financial Market Integrity study “Using Asset Disclosure for Identifying Politically Exposed Persons”.
A selection of the most salient issues that emerged during the discussions with the participants includes:
1. The “Ghost ownership” of assets (identifying the beneficial owner of assets) represents a major challenge for disclosure regimes;
2. Widespread cash and face-to-face transactions were noted as complicating factors in the process of verifying the content of disclosures;
3. Accessing information on overseas bank accounts and credit cards is a stumbling block to effective verification and enforcement;
4. Assuring the enforcement of sanctions for violations of disclosure regimes was raised as an impediment to the effectiveness and credibility of disclosure systems;
5. Bank secrecy and tax secrecy laws can make verification of disclosures particularly challenging;
6. More sustained work on better communication, cooperation and information exchange with other agencies is necessary;
7. Improved data management for managing and monitoring compliance, and for verification purposes is a priority area for many disclosure agencies.
While there are many challenges to overcome in the functioning of disclosure systems, the experiences shared by participants emphasized that disclosure agencies can be adept at finding solutions to increase effectiveness. For example, data management solutions have been developed in spite of limited resources by using in-house expertise and focusing on the most-cost effective choices which would have the highest impact.
It was also noted that disclosure systems that are overburdened with numerous declarations to manage could benefit from allocating resources to focus on a limited number of declarations using a risk-based approach. One approach to dealing with bank and tax secrecy, which has been adopted in a number of jurisdictions is to request filers to grant permission for disclosure agencies to access information from financial institutions or the tax administration.
The regional conference on financial disclosure in Asia brought an important contribution to the global dialogue on the subject. The event sought to establish foundations for continued technical dialogue between practitioners and experts beyond the conference, and to encourage practitioners to use the contacts established during the regional conference to seek consultation and support for their on-going work.