Corruption is endemic in Myanmar, despite a range of anti-corruption initiatives. Many businesspeople rate corruption, a weak rule of law and complex and opaque licensing systems as
a serious barriers to investment and trade in Myanmar. The country
suffers from high levels of corruption across all sectors. In November
2015, Myanmar held its first national election, ending 50 years of
military rule. Aung San Suu Kyi's National League for Democracy (NLD) won a landslide victory, which is widely interpreted as a step towards an opening of the previously isolated country. The Anti-Corruption Law criminalises
public sector active and passive bribery, abuse of office and attempted
corruption, but it does not cover facilitation payments.
The maximum punishment for corruption is fifteen years' imprisonment
and a fine. Gifts can be interpreted as bribery and are thereby illegal,
but they are common in Myanmar's business culture. Judicial System
Companies face a high risk of
corruption and political interference in Myanmar's judicial sector.
Courts are neither independent nor impartial as they are controlled by
the military and government (HRR 2014). Businesses report that irregular payments and bribes are frequently exchanged in order to obtain favourable court decisions (GCR 2015-2016). Enforcing a contract takes on average 1,160 days and is more costly than the South Asian average (DB 2016). In this setting, local arbitration is unreliable, and companies that face adverse administrative decisions have no recourse (ICS 2015).
Furthermore, administrative detention laws allow to forgo a fair trial,
and individuals can be held without charge, trial, or access to legal
counsel for up to five years if they are classed as a threat to state
security or sovereignty (FitW 2015). Nevertheless, only one in ten surveyed companies consider the court system to be a major constraint to business (ES 2014).
In 2015, two judges were dismissed
for corruption; One judge had her property confiscated while the other
was sentenced to ten years with hard labour and had her property
confiscated (HSF, Oct. 2015).
Police
There
is a high risk of encountering corruption when interacting with
Myanmar's police due to low salaries and a lack of training and
expertise (HRR 2014). Companies should note that Myanmar's police exert influence over local inhabitants, who fear arbitrary arrest (HRR 2014). The
police force enjoys impunity as there are no legal mechanisms to
investigate or punish police abuse (HRR 2014). Despite reforms, public
trust towards the police force is tainted by a history of misconduct and
corruption (The Interpreter, Feb. 2015). Business executives do not feel they can rely on the police (GCR 2015-2016).
Public Services
There is a very high risk of corruption and bribery for companies when acquiring licences and other public services in Myanmar. Businesses report occasional informal payments and bribes in connection with public utilities (GCR 2015-2016). Around one in three firms expect to pay facilitation payments to public officials to get things done, and almost forty percent of surveyed firms expect to give gifts or exchange irregular payments when obtaining an operating licence (ES 2014). Obtaining a water licence or electrical licence frequently involves irregular payments (ES 2014). Regulations in Myanmar are not transparent and subject to frequent, and sometimes unannounced, changes (ICS 2015). Starting a business takes only half as much time (13 days) but costs significantly more than the regional average (DB 2016).
Land Administration
There is a high risk of corruption in Myanmar's land administration. Property rights are not well established (ICS 2015), and land belongs to the state and is confiscated from people and businesses if needed for government projects (BTI 2014). Half of surveyed firms expect to give gifts or exchange irregular payments to obtain a construction permit (ES 2014). Obtaining a construction permit takes around 95 days, which is less time than elsewhere in East Asia (DB 2016).
Tax Administration
Companies face a high risk of
corruption in the tax administration in Myanmar. Irregular payments in
connection with tax payments are commonly exchanged (GCR 2015-2016). Almost forty percent of firms expect to give gifts in meetings with tax officials (ES 2014). Businesses in Myanmar spend on average 188 hours per year preparing, filing and paying taxes (DB 2016).
Customs Administration
There is a high risk of corruption at the border of Myanmar when importing and exporting goods (GETR 2014). Irregular payments when importing and exporting are commonplace (GCR 2015-2016). Half of surveyed firms expect to give gifts when obtaining an import license (ES 2014). Import and export licences are awarded on a case-by-case basis, leaving discretionary space to the public officials (BTI 2014). Some businesses avoid high import and export taxes by bribing customs officials (BTI 2014).
Public Procurement
There is a risk of corruption in public procurement in Myanmar. Public funds are frequently diverted, and favouritism often influences the decisions of government officials (GCR 2015-2016). One in three firms expect to make irregular payments and give gifts in order to secure a government contract (ES 2014).
After years of
isolation, Myanmar is committed to increasing openness, which is
illustrated in the awarding of tenders to foreign businesses (ICS 2015).
Nevertheless, big parts of the economy remain in the hands of
state-owned enterprises (SOEs), as the government reserves many
lucrative sectors deemed sensitive for SOEs (ICS 2015). In a process of
increased privatisation, problems of cronyism and nepotismare highlighted in the awarding of contracts, and the process lacks transparency (FP, Oct. 2015).
Natural Resources
There is a high risk of encountering
corruption in Myanmar's natural resources sector. In particular, the
jade industry, which accounts for about half of the country's GDP, is
known for a lack of transparency, cronyism and nepotism (Global Witness, Oct. 2015). Companies should note that Myanmar's natural resource industries are commonly controlled by state-owned enterprises (ICS 2015).
This includes, for example, the exploration of natural gas in inland
areas and downstream operations as well as the exploration and
extraction of teak, pearl, jade, and precious stones, and exports
thereof (ICS 2015).
There exists a large-scale illicit timber trade between China and Myanmar worth hundreds of millions of dollars every year (EIA & EU, Sept. 2014 ). In 2015, 155 Chinese nationals were arrested and
handed life sentences in July for illegal logging, but they were
released in a mass presidential pardon the next day due to diplomatic
tensions (MMTimes, Sept. 2015).
Legislation
Myanmar's anti-corruption laws are inadequately
enforced, but corruption and the prosecution of abuses of office are
gaining attention (BTI 2014). The Anti-Corruption Law covers most forms of bribery in the public sector, including active and passive bribery, extortion, attempted corruption and abuse of office (Herbert Smith Freehills,
2015). The Law requires all officials in the executive, judicial and
legislative branches of the government to declare their assets, allowing
penalties for those who do not comply. Facilitation payments are
not explicitly included in Myanmar's Anti-Corruption Law, meaning they
will likely remain common when doing business in Myanmar. The
Anti-Corruption Law mandates Myanmar's Anti-Corruption Commission to address graft and bribery. The Myanmar Penal Code covers
some public sector bribery offences, but it is unclear how much the
Code will be invoked following the introduction of the Anti-Corruption
Law (HSF, 2015). Whistleblower's should be protected under the
Anti-Corruption Law, but this is untested in practice (HSF, 2015).
Maximum sentences for corruption offences are fifteen years for persons
who hold political power, ten for civil servants and seven years for all
others; additional fines may apply (HSF, 2015).
Myanmar has ratified the United Nations Conventions against Corruption but has not signed the OECD Anti-Bribery Convention.
Civil Society
The press in Myanmar is considered 'not free' (FotP 2015). Restrictive media laws in place, and independent outlets face prosecution and harassment (FotP 2015). Freedom of expression and freedom of assembly are frequently restricted in Myanmar (FitW 2015). Nevertheless, civil society groups report on various issues of human rights abuses and instances of abuse of office (HRR 2014). Opposition
parties and civil society organisations increasingly expand their right
to assemble and protest and increasingly exert influence in public
policy (BTI 2014).
Ref:http://www.business-anti-corruption.com/country-profiles/myanmar
Cleaning Up Corruption in Myanmar!
Corruption, though, takes many forms. A payment to a
low-level government official is the most common and well known form of
corruption – but not necessarily the most damaging.
In a large, plain government office on the outskirts of Yangon, Frontier has visited to ask about corruption.
This excerpt is reproduced from an article published on FrontierMyanmar.net. Frontier Myanmar is an English-language weekly magazine.
The NLD government says
fighting corruption is a priority but tackling the problem will require
smart strategies, much patience and an acquiescent public service.
In a large, plain government office on the outskirts
of Yangon, the official settles into his chair. He slowly undoes the
buttons on his daik pone, worn for an urgent meeting earlier that
morning with the new regional chief minister, U Phyo Min Thein.
Frontier has visited to ask about corruption. He
gives the boilerplate response: there is no corruption in his department
now, although it was sometimes an issue in the past.
But one question provokes a more animated and honest response: Do civil servant salaries need to be increased to fight graft?
“Do you even need to ask? Everybody knows the
answer,” he said, before turning the question around. “How much do you
make a month?” He waits impatiently for the answer, and continues: “I’ve
been working here for more than 30 years, I’m a director – and I get
only K300,000 (US$255) a month.”
Because it takes place – at least normally – in dark
corners, away from public scrutiny, the extent and impact of corruption
is hard to quantify. Surveys on the topic have been rare in Myanmar
because it was considered taboo until recently.
The most widely cited study is Transparency
International’s annual Corruption Perceptions Index, which last year
placed Myanmar 147th out of 168 countries – on the same level as
Democratic Republic of the Congo and Chad, and above only Cambodia in
Southeast Asia.
But some additional research is beginning to emerge
that paints a more detailed picture. In 2014, the World Bank conducted
an enterprise survey of 642 firms in which 42.9 percent of respondents
had been asked to pay a bribe, above the regional average of 35.9
percent, and well above the total average of 17.6 percent. Those
surveyed estimated that in 35 percent of all public transactions it was
expected they pay a bribe or give a gift – compared to the regional
average of 29.3 percent and overall average of 12.9 percent.
Ms Vicky Bowman from the Myanmar Centre for
Responsible Business said the World Bank survey arguably provided a
better picture of corruption, because it was based on businesses’ real
experiences rather than perceptions.
“Overall, I suspect that corruption isn’t much worse than some of Myanmar’s ASEAN neighbours, and may well be better,” she said.
One of the more surprising statistics from the World
Bank survey is that few of the businesses surveyed regarded corruption
to be a major constraint: just 9.3 percent, below both the regional
(16.1 percent) and total (32.8 percent) averages.
Supporting this assessment, several Myanmar business owners told Frontier that they were concerned about the impact of anti-corruption efforts on the economy.
“Without an incentive on top of their salaries, why
will civil servants do whatever you want them to do?” asked one. “They
will not be willing to work. Already we have to wait too long for
everything to be approved.”
Another said, “The NLD wants to control everything.
They should focus on encouraging businesses to grow first, because the
most important thing is jobs. Look at the police crackdown on bars and
massage parlours — this could leave thousands out of work.”
An adviser to the NLD, who asked not to be named,
said the leadership knows that civil servant salaries need to be
increased, but also that broad pay rises are not immediately affordable –
the most recent increase, in 2015-16, put the budget K3 trillion in the
red.
Publicly, the party has promised not to embark on
large-scale sackings of civil servants, but the adviser said this was
dependant on government staff – including workers at state-owned
enterprises – being corruption-free and open to retraining as the
government seeks to reshape the bureaucracy. The party anticipates many
will not meet these criteria, and this will free up room in the budget
to increase the salaries of competent and professional government staff
over time. “For now, they need to show us they are clean, and we’ll take
care of salaries later,” he said.
But there are other elements that could be introduced
to this carrot and stick approach to change the corruption game. Bowman
calls these “system changes” – basically, ensuring transparency and
cutting red tape. For example, if more government processes were handled
online through electronic transactions, opportunities for graft would
decline dramatically. Similarly, if fees for government services were
always clearly stated, users of the services would know if officials
were inflating them for personal profit.
“It needs … changes to culture, red tape and
regulations, and a move away from the socialist/security control
mindset, with its 1984-style requirement for multiple permits and chops,
to a more streamlined system that cuts out the people in favour of
automated processes,” Bowman said.
Helping Myanmar tackle corruption: it's time for a change
Posted on 28 March 2016
As the new Government of Myanmar is now in place, at
the UNODC we are stepping up our support to the country's authorities
in their efforts to fight corruption.
A little background note to begin with: UNODC
supported Myanmar first with the drafting of the Anti-Corruption Law and
then with the ratification of the United Nations Convention Against
Corruption in 2012. The country will complete the first cycle of the
review process provided for by the Convention in the first quarter of
2016.
As international assessments point out, corruption is still a major issue in the country. The 2014
World Bank
Enterprise Survey has shown that 42.9% of the interviewed firms in
Myanmar experienced at least one bribe payment request and almost 40% of
the firms consider corruption as an obstacle for business operations.
To face corruption the government has recently
undertaken significant legislative reforms, including the adoption of
the Labour Organizations Law and the Peaceful Demonstration Law, as well
as the amendment to the Political Party Registration Law.
Moreover, Myanmar had been publishing online basic
company data which includes incorporation data, addresses, types of
business and information on company directors since the end of 2014,
scoring 30 out of 100 in the
Open Company Data Index,
with many richer countries obtaining a lower score. This new
availability of data implies that every citizen can easily check the
involvement of public officials in big and powerful companies.
Government reformers have also adhered to the
Extractive Industries Transparency Initiative (EITI), an international framework for combating corruption.
Open Company Data Index, data provided by Opencorporates with support from The World Bank Institute
What are we going to do?
As UNODC, we will start by taking a close look at how Myanmar is doing with the implementation of the
United Nations Convention Against Corruption:
the country will undergo a review of compliance with respect to
criminalization, law enforcement and international cooperation measures
by the end of the first quarter of 2016. The review will provide a
series of recommendations to bridge gaps in terms of legal and
institutional frameworks for the implementation of the Convention.
Following the
Convention's review mechanisms, Myanmar's reviewing countries will be Thailand and Burundi.
In parallel we are going to work closely with two prominent institutions in Myanmar's anti-corruption framework: the
Anti-Corruption Commission (ACC) and the
Supreme Court. The ACC is a 15 member
body formed in 2014 and responsible for investigating corruption
allegations. It is also in charge of checking the truthfulness of asset
declarations and advising national institutions on policies and action
plans to tackle corruption. The Commission is quite new and in need of
support: we are going to produce a detailed analysis of its work and we
will plan a multi-year support strategy for it, also in cooperation with
our friends and colleagues of the
SEA-PAC.
The Supreme Court is the highest court of appeal and
was established in 2010. It has appellate and revision powers but it
also has original jurisdiction on some cases. It has produced an
interesting
strategic plan
for 2015-2017 with the aims of protecting public access to justice,
promoting public awareness, enhancing judicial independence and
accountability, ensuring equality, fairness and integrity of the
judiciary. We are going to start by supporting the efforts of the
Supreme Court to enhance integrity and transparency of the judiciary; a
key element for the democratic transition. This will include a close
examination of judicial training, disciplinary measures for judges,
immunities, promotion and removal processes as well as codes of conduct
and integrity of court personnel; it will also look at broader issues
such as the overall functioning and independence of the judiciary.
Follow our webpage to be updated with our activities and with the outcomes of our engagement in Myanmar!
Ref:https://www.unodc.org/southeastasiaandpacific/en/what-we-do/anti-corruption/topics/01-work-myanmar.html
Corruption in Myanmar...
Corruption in Myanmar is an
extremely serious problem. Owing to failures in regulation and
enforcement, corruption flourishes in every sector of government and
business.[1][2][3] Many foreign businesspeople consider corruption “a serious barrier to investment and trade in Myanmar.”[4] A U.N. survey in May 2014 concluded that corruption is the greatest hindrance for business in Myanmar.[5]
According to 2016 results of Corruption Perception
Index of Transparency International, Myanmar ranks 136th place out of
176 countries.[6]
In the Myanmar Business Survey 2014, corruption was
the most frequently identified obstacle to business, especially with
respect to obtaining firm registration, business licenses and permits
from government authorities.[7]
Anti-corruption efforts
While Myanmar was still under military control, its Central Bank
implemented controls in accordance with the IMF’s Anti-Money
Laundering/Combating the Financing of Terrorism (AML/CFT) guidelines. As
a result, Myanmar was removed from the international Financial Action
Task Force’s list of “Non-cooperative Countries and Territories” in
October 2006.[9]
President Thein Sein has introduced a number of policies intended to reduce corruption in business.[4]
A key theme of his inaugural speech on 30 March 2011, was fighting
government corruption. He said that “democracy will [be] promoted only
hand in hand with good governance. That is why our government
responsible for Myanmar’s democratic transition will try hard to shape
good administrative machinery.…We will fight corruption in cooperation
with the people as it harms the image of not only the offenders, but
also the nation and the people.”[9]
Thein Sein has reportedly made “significant efforts to minimise
corruption in the extractive industries” in hopes of attracting foreign
investment.[32]
In August 2012, an anti-bribery bill was approved. In August 2013, an Anti-Corruption Law was passed.[9]
In April 2013, several senior government officials
charged with corruption were compelled to retire or to leave departments
working on investment.[9]
The Myanmar Centre for Responsible Business (MCRB)
was founded in 2013. Its seeks to promote “more responsible business
practices in Myanmar.” An MCRB initiative called Transparency in Myanmar
Enterprise (TiME) “publishes information about anti-corruption,
organizational transparency, and concern for human rights, health, and
the environment among the largest businesses in Myanmar. Using criteria
laid out by Transparency International the project has produced rankings
of companies according to the above criteria by analyzing information
they post online.”[9]
Anti-corruption laws “were further amended in 2014 to allow for the parliament to establish a committee to investigate allegations of corruption among government officials.”[9]
The Anti-Corruption Commission was established in February 2014. It
focuses mainly on bribery, which can be punished by fines and up to
fifteen years in prison.[9]
By December 2014, it had received almost 600 written complaints, but
had addressed only three, saying that it could not act without
documented evidence. MP U Ye Tun stated that the commission did not have
the authority to take action effectively. An expert in governance and
anti-corruption, stated in December 2014 that the commission would be
unlikely to target the government or its ministries, which is where the
bulk of corruption in Myanmar takes place.[1]
A February 2014 report said that the Myanmar Police Force
(MPF) had improved its ability to identify and acknowledge corruption.
In 2013 the MPF arrested two senior police officers for involvement in
drug smuggling.[30]
The Money Laundering Eradication Law (2015) provides
for the recovery of funds tied to illicit or criminal activities. The
Anti-Money Laundering Rules, the establishment of a special police unit
for financial crimes, and the passage of Rules Combating the Financing
of Terrorism also aid the struggle against corruption. The Financial
Institutions of Myanmar Law and the Foreign Exchange Management Law both
criminalize fraud and other crimes committed in financial institutions.
Myanmar’s Competition Law allows for the prosecution of
anti-competitive business activities. Prosecution under these laws,
however, is relatively rare, owing largely to a lack of governmental
resources.[33]
In October 2015, Aung San Suu Kyi, the Nobel Peace Prize winner and opposition leader, said in a speech that she had looked to Singapore for advice on combatting corruption in her own country, due to Singapore's incredibly low levels of corruption.[24]
In Myanmar, Coca-Cola
adopted a policy of zero-tolerance for corruption at its facilities and
trucking routes. All drivers of Coca-Cola trucks carry an
anti-corruption card stating that they are forbidden to bribe the
traffic authorities and that they are required to report any
solicitation of bribes to their supervisors. This procedure initially
met with resistance but over time has been respected by police.[34]
Need See more...https://en.wikipedia.org/wiki/Corruption_in_Myanmar
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