Intergrity guide Final

Central Board of Division

Government of Pakistan

INTEGRITYPOLICY DOCUMENT

January 2007

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Mohammad Talha (Member HRM)MODERATED AND REPORT COMPILED BY HRM WING

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TABLE OF CONTENTS

Page

Executive Summary3

Part 1Introduction to the Integrity Development Process:8

A. General 8B. Defining Integrity10C. The Elements of an Integrity Strategy

11D. Integrity Development Cycle12E. Methodology of the Workshop13F. Participants of Workshops

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Part 2 The Self-Assessment Process: 15

1. Leadership and Commitment152. Regulatory Framework 183. Transparency 204. Automation 235. Reform and Modernization256. Audit and Investigation 27

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7. Code of Conduct 308. Human Resource Management:32

8.1 Remuneration and conditions338.2 Recruitment, selection and promotion

348.3 Deployment, rotation and relocation

358.4 Training and professional development

368.5 Performance management/appraisal37

9. Morale and Organizational Culture3910. Relationship with the Private Sector

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Part 3 The Action Planning Process:44Action Plans

44Integrity Vision Statement 50Integrity Steering Committee

51Marketing Strategy

51Part 4 Action Plan Review, Evaluation and re-development

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Annexure (A-K) 53-69

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Executive Summary

1. General In view of the tremendous impact, which the

integrity of tax collectors has on the overall legitimacy and

ability of the tax collecting institutions to collect the due

taxes, the Integrity Management of the Human Resource cannot be

overemphasized. Recognizing this important aspect of Integrity

management of the workforce, the Secretary General

Division/Chairman CBR assigned the task of consulting the

prevalent best practices around the world to HRM Wing for

suggesting policy options.

2. During the course of this task the World Revenue

Organizations (WCO) Integrity Development Guide was found to be

most relevant and a professional document, which serves as a

resource material for its member administrations to develop their

own strategies for dealing with integrity issues with due regard

for each country’s own unique cultural and socio-economic

environment. The Guide is based on the philosophy of continuous

improvement i.e. by implementing an ongoing cycle of integrity

self-assessment, strategy development and progress evaluation.

Though the processes are designed for Revenue administrations but

from view point of usefulness and flexibility these are

practically applicable to all Collecting Agencies and even may

serve as a starting point for such endeavors to all government

organizations.

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3. Based on the Revised Arusha declaration, the guide focuses

on a number of core issues that are central to the development of

an effective and efficient integrity program. It provides a

framework to examine the management, administrative and integrity

strategies currently being employed and to identify opportunities

for further improvement.

4. Keeping in view its adaptation by various administrations

of other countries it was decided to use it as the basic

framework for Central Board of ’s Self assessment/evaluation of

its integrity management situation. The integrity development

cycle of the WCO Guide is designed to be undertaken as a group

exercise, drawing on the strengths and experience of a range of

people from within the organization, and where appropriate, from

outside the organization. To get the most out of this process it

was decided that the “Top Management” of CBR be invited to

deliberate the issues. Accordingly the First Strategic Integrity

Management workshop of the TOP Management was held on 9th and 10th

December, 2006 at Bhurban. The following are some of the key

developments arising out of the workshop.

2. Assessment/identification of weak areas of CBR on the 10

Elements. The participants assessed the prevailing conditions in

CBR on the 10 elements of the Arusha Declaration. This assessment

was done through a general vote for the element (to find out the

participants perception) and then through an assessment of the

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whole checklist provided with the integrity Development guide.

The results are as follows.

Ratings By Participants (By Vote)S.No Element Very

low(1)

Low(2)

Neutral

(3)

Good(4)

VeryGood(5)

1 Leadership & Commitment

3 7 8

2 Regulatory Framework 3 143 Transparency 7 94 Reform &

Modernization8 9

5 Automation 1 1 156 Audit &

investigation2 11

7 Code of Conduct 1 148 HRM (Separately)9 Morale & Corporate

Culture1 16

10 Relationship with Private sector

2 6 8

Ratings By Participants of HRM (By Vote)S.No Element Very

low(1)

Low(2)

Neutral

(3)

Good(4)

VeryGood(5)

1 Remunerations & Condition

CBR

2 Recruitment, Selection & Promotion

CBR

3 Development, Rotation & Relocation

CBR

4 Training & CBR

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Professional Development

5 Performance Management/Appraisal

CBR

Over all ratings based on calculation for each item of

check list

S.No Element Over allrating

1 Leadership & Commitment 3.162 Regulatory Framework 2.713 Transparency 2.524 Reform & Modernization 2.265 Automation 2.816 Audit & investigation 2.337 Code of Conduct 3.138 HRM (Separately) 2.739 Morale & Corporate Culture 2.5210 Relationship with Private

sector2.32

Over all ratings for various elements of HRM for each item of check list

S.No Element Over allrating

1 Remunerations & Condition 2.342 Recruitment, Selection &

Promotion 3.31

3 Development, Rotation & Relocation

2.37

4 Training & Professional Development

2.64

5 Performance Management/Appraisal

2.98

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3. Action plans for weak areas and its implementation leadership.

The following action plans and its implementation leadershipwere decided for its immediate adoption/approval by SecretaryGeneral Division/ Chairman,CBR.

Formal review of procedures and systems on at least annualbasis in consultation with field formations: (Member Legalin consultation with Member TP&R)

Simplification of procedures, facilitation of stakeholdersand quick disposal of complaints and regular surveys to seekfeedback of stakeholders. (Member FATE, Member FR&S and Repsof line members)

Effective and comprehensive internal controls should betested and put in place to prevent corruption. Informationshould be obtained and analyzed to identify trends,opportunities, vulnerabilities with a view to improvement.(Member Audit, DGs I&A, DG I&I & reps of line members).

Automation of Business processes and systems as perinternational standards to be reviewed by an externalindependent agency. ( Member TP&R, Member IMS, Member FR&S)

Development of codes of conduct for the private sector,which will clearly set out standards of professionalbehaviour. (Member FATE & Reps of Line Members)

Appropriate result-focused performance standards andindicators to be established and regularly monitored.(Member FR&S and reps of other wings)

Reactivate Cabinet Committee on Financial Reforms.(Chairman)

Revise/Improve Code of Conduct (Member HRM) Regular meetings with field officers/staff to educate them

on integrity & reforms (All Members & CommunicationSpecialist).

4. Development of Integrity Vision Statement

At the end of the conference the participants worked ondeveloping an integrity vision statement for the CBR. The

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statement was unanimously developed and accordingly submitted forthe approval of the Secretary General Division/Chairman CBR. A copy of the CBR Integrity Management Policy Statement signed byall the Members of the Board and the respective DGs is reproducedbelow.

4. Integrity Steering Committee.

The conference also approved an integrity steering committeewhich will oversee the implementation of the above mentionedaction plans. The committee was further tasked to develop a

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charter of its functions and steer the integrity vision andmanagement of CBR. The composition of the committee is asfollows:-

Member Direct Taxes Member Sales Tax & Federal Excise Member Revenue Member HRM Member Admin DG Intelligence & Investigation DG Audit & Inspection (Direct taxes) DG Audit & Inspection (Indirect Taxes)

MARKETING STRATEGY

In order to ensure that the results of the self-assessment andaction planning process are well understood and accepted by theexecutive and embraced by the majority of the organization’sstaff, the following marketing strategy was adopted.

• Involve as many people as possible in the process;• Secure political and media support;• Secure private sector support and involvement;• Sell the real benefits of an improved integrity regime to allstaff;• Gain executive management commitment to the Plan;• Ensure that those not present at the workshop are not overlysuspicious of the workshop’s outcomes and the rationale behindeach of the key elements of the Action Plan; and• Ensure that each of the workshop participants maintains anactive role in the implementation of the Action Plan.

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Part 1

INTRODUCTION TO THE INTEGRITY DEVELOPMENT PROCESS

A. General

administrations generally deal with four key issues:

collection, community protection, trade facilitation and

protection of national security. To effectively deal with these

issues, a high level of integrity is critical.

2. The adverse effects of corruption within a administration

include reduction in public trust and confidence in government

institutions; increased costs of business, which are ultimately

borne by the community; reduction in the level of voluntary

compliance with laws and regulations; leakage; distortion of

economic incentives; a reduction in national security and

community protection; and creating an unnecessary barrier to

international trade and economic growth.

3. Though probably some degree of corruption is present in all

countries and in all public institutions, yet the services,

because of the scope, nature and complexity of their work are

particularly susceptible to corruption. In order to both minimize

the negative consequences of corruption and to further develop

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and maintain public trust and confidence, administrations need

to address the issue in a logical and systematic way and develop

and implement solutions which are relevant to their needs and

which reflect their unique operating environment.

4. In recent years a significant amount of international

attention has also been devoted to this issue in a number of

conferences, declarations and conventions focused on the issue of

administrative corruption, attempting to identify the problem of

corruption and set out a range of standards and practices

considered necessary to deal with it. From services point of

view, three declarations: the WCO’s 1993 Arusha Declaration; the

1994 Columbus Declaration; and the 1997 Lima Declaration set

forward a range of Revenue-related recommendations. Additionally,

the OECD, the Organization of American States, the European

Union, the United Nations, the World Bank and Transparency

International have focused their attention on administrative

corruption.

5. In November 2001, the President of Pakistan approved the

Strategy Document of CBR’s Tax Administration Reform Project

(TARP). The vision of the CBR’s Reforms Programme is to transform

CBR into a modern, progressive, effective, autonomous and

credible organization for optimizing by providing quality

service and promoting compliance with tax and related laws. The

mission comprised of enhancing the capability of the tax system

to collect due taxes through application of modern techniques,

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providing taxpayer assistance and by creating a motivated,

satisfied, dedicated and professional workforce. Emphasis was

also placed on values which included integrity, professionalism,

teamwork, courtesy, fairness, transparency and responsiveness.

6. In view of the tremendous impact, which the integrity of tax

collectors has on the overall legitimacy and ability of the tax

collecting institutions to collect the due taxes, the Integrity

Management of the Human Resource cannot be overemphasized.

Recognizing this important aspect of Integrity management of the

workforce, the Secretary General Division/Chairman CBR assigned

the task of consulting the prevalent best practices around the

world to HRM Wing for suggesting policy options.

7. During the course of this task the World Revenue

Organizations (WCO) Integrity Development Guide was found to be

most relevant and a professional document, which serves as a

resource material for its member administrations to develop their

own strategies for dealing with integrity issues with due regard

for each country’s own unique cultural and socio-economic

environment. The Guide is based on the philosophy of continuous

improvement i.e. by implementing an ongoing cycle of integrity

self-assessment, strategy development and progress evaluation.

Though the processes are designed for Revenue administrations but

from view point of usefulness and flexibility these are

practically applicable to all Collecting Agencies and even may

serve as a starting point for such endeavors to all government

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organizations. Based on the Revised Arusha declaration, the guide

focuses on a number of core issues that are central to the

development of an effective and efficient integrity program. It

provides a framework to examine the management, administrative

and integrity strategies currently being employed and to identify

opportunities for further improvement.

8. The nature of corruption and developments in the field of

integrity, are constantly changing and accordingly there is a

growing body of knowledge and experience that authorities can

draw on to further develop their integrity strategies. However

the WCO guide contains a wealth of time tested checklists, which

are very relevant to the task in hand. Moreover keeping in view

its adaptation by various administrations of other countries it

was decided to use it as the basic framework for Central Board of

’s Self assessment/evaluation of its integrity management

situation.

9. The integrity development cycle of the WCO Guide is designed

to be undertaken as a group exercise, drawing on the strengths

and experience of a range of people from within the organization,

and where appropriate, from outside the organization. To get the

most out of this process it was decided that the “Top Management”

of CBR be invited to deliberate the issues.

10. This present paper is based on the proceedings of the First

Strategic Integrity Management workshop of the TOP Management

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which was held on 9th and 10th December, 2006 at Bhurban based on

the aforesaid framework of WCO.

B. DEFINIG INTEGRITY

At the outset, an appreciation of the implications of the terms

“corruption” and “integrity” is imperative.

2. There is no universally agreed definition of corruption.

However, most useful definitions focus on three key themes,

namely:

The departure from, or contravention of, public duty; The provision or receipt of some form of improper

inducement; and An element of secrecy.

3. Thus for an act to be considered corrupt, it usually needs

to involve the contravention of public duty, the receipt of some

form of improper inducement, and it needs to occur in an

environment of secrecy, or at least without official sanction. At

the same time, there are many specific behaviours and

combinations of behaviours, which are generally regarded as

corrupt. These typically fall under three broad headings:

bribery, nepotism and misappropriation.

4. In recent times, however, the focus of anti-corruption

efforts has expanded to incorporate the more positive aspects of

integrity development as well. For example, some administrations

have redefined the concept of integrity to not only include

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combating abuse of power or corruption but also conforming to a

standard in service performance such as service standards or

client charters. In many administrations, the concept of

integrity now means delivering services to meet the expectations

of taxpayers and stakeholders.

Integrity therefore can be defined as:

“A positive set of attitudes which foster honest and ethicalbehavior and work practices”.

In other words, integrity is more than simply the absence of

corruption. Rather, it involves also the developing and

maintaining a positive set of attitudes and values, which give

effect to the organization’s aims, objectives, and the spirit of

its integrity strategy.

C. THE ELEMENTS OF AN INTEGRITY STRATEGY

The Arusha Declaration (Revised) is the hallmark of the

commitment of international Revenue community towards good

governance and integrity in Revenue.

2. The ten elements outlined in the (Revised) Arusha

Declaration provide the most practical basis for the development

and implementation of a range of integrity or anti-corruption

strategies relevant to the operating environment. These elements

are:

1. Leadership and Commitment2. Regulatory Framework

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3. Transparency4. Automation5. Reform and Modernization6. Audit and Investigation7. Code of Conduct8. Morale and Organizational Culture9. Relationship with the Private Sector10. Human Resource Management

D. INTEGRITY DEVELOPMENT CYCLE

The Integrity Development Cycle comprise of the followingphases:-

Phase One:

Assessment phase: to Identify the key elements of an effective integrity

strategy; and

Provide a practical guide, or checklist, to assist managersto both assess the usefulness of their current strategiesand to identify areas of future improvement.

Phase Two:

Action Plan phase: To develop an Integrity Action Plan thatincludes a range of key integrity development strategies,identifies responsible officials, establishes timelines, and setsverifiable performance indicators.

Phase Three:

The evaluation phase: This is for administrations that havealready undertaken the integrity self-assessment process and haveimplemented an Integrity Action Plan. It is designed to beconducted at least 12 months after implementation of the

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Integrity Action Plan has commenced, and is aimed at assistingadministrations to:

Assess their integrity strategies to determine whether they have achieved the anticipated outcomes;

Determine where there are areas that require further attention and/or new initiatives that might be introduced;

Develop an enhanced Integrity Action

E. Methodology of the Workshop

The conference was moderated by Mr. Alan Gilmour (HR Advisor to

CBR). The participants which comprised all the Eleven Members of

the Central Board of and the Director Generals of Training and

Research (Revenue as well as direct taxes), Director General

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Intelligence and Investigation, Director General Post Clearance

Valuation, Directors’ General Audit and Inspection (Direct and

Indirect Taxes) were divided into three syndicates based on their

individual competencies (syndicate composition and the topics assigned are

at Annex K). The three syndicates were then given three elements

each from the above mentioned “Elements of Strategy” given in

para C. The syndicates accordingly discussed threadbare the

topics assigned to them with the help of the checklist of

initiatives indicated in the Integrity Guide in its direct

relevance to CBR and its business processes. The assessment was

made for each item on the scale of 1-5, with 1 standing for the

lowest score and 5 for the highest. The same assessment was also

made for every topic collectively (Ratings on each checklist are placed

as Annex A-J). The general consensus of the conference was that any

individual checklist item receiving a score of less then 3 needs

a priority and accordingly actions were identified for these

along with the timeline for taking corrective action as well as

delegation of implementation responsibility. Due to the relative

importance as well as the overriding impact of HR policies on any

integrity situation the HR topic was discussed/rated separately

by all the syndicates collectively.

2. The specific findings of the work shop on each element of

Integrity strategy have been discussed in detail in the next

section of this report.

F. Participants of the Workshop

1. Mr. Mumtaz Ahmad, Member (Legal)

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2. Mr. Mohammed Talha, Member (HRM)

3. Mr. Salman Nabi, Member (Direct Taxes)

4. Mr. Shahid Rahim Sheikh, Member (Revenue)

5. Ms. Mussarat Jabeen, Member (Sales Tax & Federal Excise)

6. Maj. Gen (Retd) Mohammad Yasin, Member (Administration)

7. Mr. Abdul Razzaq, Member (Audit)

8. Mr. Habib Fakhurrudin, Member (FATE/TP&R)

9. Mr. AAmir Z. Chaudhry, Member (IMS)

10. Dr. Ather Maqsood Ahmad, Member (FR&S)

11. Mr. Munir Qureshi, DG (Training & Research, Direct Taxes)

12. Mr. Mehmood Alam, DG (Training & Research, Revenue, SalesTax& Federal Excise)

13. Mr. Usman Khalid Mirza, DG (Audit & Inspection, Direct

Taxes)

14. Mr. Sher Nawaz Khan, DG (Audit & Inspection, Revenue,Sales Tax& Federal Excise)

15. Ms. Razia Sultana, DG (Post Clearence Audit)

16. Maj. Gen (Retd) Fahim Akhtar Khan, DG (Intelligence &

Investigation)

17. Mr. Nasiruddin Ahmad, CEO (PRAL)

18. Mr. Imran Ghaznavi, Communication Specialist. (TP&R Wing)

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Part 2

PROCESS OF SELF-ASSESSMENT

1. LEADERSHIP AND COMMITMENT

The (Revised) Arusha Declaration states:

The prime responsibility for corruption prevention must rest with

the head of Revenue and the executive management team. The need

for high levels of integrity must be stressed and commitment to

the fight against corruption maintained over the long term.

Revenue managers and supervisors should adopt a strong leadership

role and accept an appropriate level of responsibility and

accountability for maintaining high levels of integrity in all

aspects of Revenue work. Revenue managers should demonstrate a

clear and unequivocal focus on integrity and be seen to set an

example that is consistent with both the letter and spirit of the

Code of Conduct.

1.1 An effective integrity programs require a high level of

management support and leadership coupled with responsibility. It

is important that there are clearly defined supervision and

decision-making structures and obligations. Managers as well as

Staff at all levels must accept an appropriate degree of

responsibility and accountability. For example, a system of

accountability could be introduced to make supervisors at least

partly answerable for their subordinates’ misdeeds. Staff at all

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levels should be encouraged to identify and report breaches of

integrity, including within their own work team.

1.2 For assessment of this aspect a questionnaire containing

checklists (Anex A) was analyzed by syndicate.

1.3 The checklist for Leadership and commitment as a whole was

rated 3.16 (on a scale of 1 to 5, with 1 being the lowest

rating). The syndicate acknowledged the need for firm commitment

at the highest political level to maintaining a high standard of

integrity throughout the civil service and particularly in

services. This is particularly important in a society where

corruption is a widespread ‘systemic’ problem, and does not just

involve individual cases.

1.4 The syndicate expressed satisfaction on the high level of

commitment and strong leadership role being expressed by the

Chairman and the senior management team in the promotion of

integrity in CBR.

1.5 It was generally acknowledged that there is bipartisan

support for the integrity program in : politicians are aware of

the organization’s integrity efforts: the Government actively

promotes the maintenance of a high level of integrity within the

civil service and/or : the CBR receive adequate resources to

allow it to fulfill its functions effectively and efficiently:

all new projects, policies and initiatives are examined to take

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into account integrity risks: there is a strategy in place to

address the issue of integrity among the Senior Management Team:

in the selection for management positions, appropriate

consideration is given to the personal integrity of the officers:

the selection process takes account of their commitment and

ability to implement the CBR’s anti-corruption policies:

supervisors take a strong leadership role for promoting integrity

and leading by example: the Chairman and the Senior Management

Team lead by example, provide leadership and demonstrate an

active commitment to the integrity program: there is proactive

and visible leadership on the issue of integrity from the highest

levels of management: and the Chairman actively promotes

integrity with external stakeholders.

1.6 AREAS REQUIRING IMPROVEMENT: However, while there is a

satisfactory level of commitment and proactive promotion of

Integrity at the top level of CBR the following weak areas were

identified for suitable augmentation in order to further improve

the situation.

There is room for improvement on the aspects of supervisors

being held accountable for corrupt practices and malpractice

of staff under their supervision: specifying their

responsibility and increasing their competence to undertake

this task and redefining their role to be held accountable.

Encouraging managers to work with staff to identify any

weaknesses and vulnerabilities in relation to processes and

procedures.

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Holding members of a work team accountable for corrupt

practices engaged in by other members of the work team.

Providing internal management training programs adequately

addressing management responsibilities for corruption

prevention and detection strategies.

Increasing the level of political support for integrity in :

and providing a system in place to assist managers to identify

staff that, by virtue of temporary personal circumstances, may

be vulnerable to corruption and malpractices.

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2. REGULATORY FRAMEWORK


Revenue laws, regulations, administrative guidelines and

procedures should be harmonized and simplified to the greatest

extent possible so that Revenue formalities can proceed without

undue burden. This process involves the adoption of

internationally agreed conventions, other instruments and

accepted standards. Revenue practices should be reviewed and

redeveloped to eliminate red tape and reduce unnecessary

duplication. Duty rates should be moderated where possible and

exemptions to standard rules be minimized. Systems and procedures

should be in accordance with the International Convention on the

Simplification and Harmonization of Revenue procedures (Revised

Kyoto Convention).

2.1 Complex regulations, procedures or administrative guidelines

allow corrupt practices to develop and flourish. Possible

strategies to minimize regulation include the adoption of

internationally agreed standards and good practices. A key

initiative is the adoption of risk management principles to

ensure that not only the trade and risks are assessed but

diagnostic and preventive mechanisms are also available to

identify and investigate integrity risks within the organization

of CBR.

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2.2 Questionnaire on Regulatory framework (Annex B) received an

overall score of 2.71 indicating a compelling need for

improvement. The syndicate agreed that complex regulations,

procedures or administrative guidelines allow corrupt practices

to develop and flourish. However, it also observed that the

principles underpinning modern regulatory frameworks are being

adopted in CBR and all efforts are being made to eliminate

corruption including a curbing of monopoly power and official

discretion.

2.3 The results on positive note indicate that most of the

internationally agreed standards have either been implemented or

they are scheduled for implementation: systems and procedures are

periodically reviewed and/or re-engineered to eliminate red tape

and avoid duplication: changes are based on periodic review and

introduced in a transparent manner: when systems and procedures

are being reviewed attention is paid to eliminating the

corruption inducing combination of monopoly power, official

discretion and accountability: there are regular representation

at interdepartmental level for promotion of trade and

activities: regulations, procedures and legislation, are

transparent and communicated to stakeholders: and the opinion of

stakeholders is given due consideration on whether legislative

provisions and procedures are workable and understandable.

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2.4 AREAS REQUIRING IMPROVEMENT: while appreciating the positive

aspects the he syndicate also identified some weak areas, which

need to be improved. These include:-

Suggestions that application of administrative penalty system

needs to be more simple and straightforward and applied in a

consistent manner:

The organization requires improving a formal system to

implement a ‘continuous improvement’ strategy:

Risk management needs to be supported by automated systems:

and improved risk management policies and practices need to be

in place to identify high-risk areas.

The staff that performs the functions or procedures involved

in the review process has to be strengthened,.

A need for close liaison and co-operation with other agencies

to ensure that policies and procedures are coordinated

effectively and that opportunities to reduce or eliminate red

tape are explored.

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3. TRANSPARENCY


Revenue taxpayers are entitled to expect a high degree of

certainty and predictability in their dealings with Revenue.

Revenue laws, regulations, procedures and administrative

guidelines should be made public, be easily accessible and

applied in a uniform and consistent manner. The basis upon which

discretionary powers can be exercised should be clearly defined.

Appeal and administrative review mechanisms should be established

to provide a mechanism for taxpayers to challenge or seek review

of Revenue decisions. Client service charters or performance

standards should be established which set out the level of

service taxpayers should expect from Revenue.

3.1 Transparency is a key issue for all administrations.

Increasing accountability and maintaining an open and honest

relationship with taxpayers and all stakeholders is crucial to

maintaining public trust and confidence in the performance of

government functions.

3.2 Any deviations from laws, regulations and discretionary

power should be justified and documented for later review. There

should be a capacity for administrative or judicial review. In

the first instance, such review should be made on an internal

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basis. However, taxpayers should have access to independent,

external review. In developing or implementing appeal or review

mechanisms an appropriate balance should be struck between the

need to make the process inexpensive, timely and accessible and

the need to ensure it is not used inappropriately for frivolous

appeals.

3.3 Client service charters are a way of increasing

accountability and demonstrating Government’s commitment to

providing quality service to taxpayers. Service standards should

be challenging but realistic and be fully supported by the

organization’s systems and procedures. A high level of

transparency is not an easy task but it is vital to the

development of a comprehensive integrity program.

3.4 The results of assessment for Transparency on the checklist

(Annex C) on a positive note indicate that taxpayers are provided

with sufficient accurate, consistent, accessible and user-

friendly information to allow them to meet their responsibilities

to . Mechanisms are in place to report new initiatives,

decisions, or changes in legislative requirements and procedures

that may impact upon taxpayers: for access to information the

Customer Help Desks/Call Centers, Information Centers, Industry

Consultative Committees, and displays and signage are being

employed: all fees and charges levied are published in order to

allow traders to calculate more accurately the costs involved in

complying with requirements: electronic media is used for

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dissemination of information to taxpayers and there are

mechanisms in place to interact with the media: results of

performance is made publicly available (i.e. Internet, annual

reports etc): simple processes or systems for seeking advice

are being established in order to provide taxpayers with a degree

of certainty and predictability.

3.5 The syndicate noted with satisfaction that electronic media

is increasingly being used for dissemination of information to

the taxpayers and now there are mechanisms in place for regular

interaction with media. The syndicate further expressed

satisfaction on the availability of various review and appeal

mechanisms (or independent adjudication) available to taxpayers

to seek a review of their tax grievances. However the overall

rating of 2.52 in the sphere of Transparency indicates the

compelling need for improvement too.

3.6 AREAS REQUIRING IMPROVEMENT: Potential weak areas requiring

attention, identified by the syndicate are as following:-

There is need of easier accessibility of seeking

advice/rulings with development of a library or database of

previous decisions.

Mechanisms need to be developed and implemented which monitor

and evaluate the organization’s performance against

established standards and international best practices.

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Citizen or service charters for realistic service standards

with ability to be supported by the organization’s systems and

resources, require to be developed indicating clearly the

level of service that the taxpayers should be able to expect

and displayed at public as well as work places.

Once developed the staff would need to be aware of the

standards contained in service charters and those holding

service positions would be provided with training in client

service.

Attention is required to be given to informing taxpayers of

their rights when dealing with and this information needs to

be more easily accessible.

The basis or criteria upon which officials exercise

discretionary power needs to be clearly defined and made

publicly available and, where appropriate, the reasons for

decisions should be conveyed to those affected.

In cases of non-compliance with procedures systems are

required to analyze and determine if the cause is a lack of

adequate communication from .

Suitable controls over procurement procedures and tendering

for work need to be developed.

Taxpayers may be consulted to determine their information

requirements and preferred media.

There is a need for a system for monitoring consistency

between different offices, provinces or regions concerning

decisions, procedures and information provided.

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4. AUTOMATION:


Automation or computerization of Revenue functions can improve

efficiency and effectiveness and remove many opportunities for

corruption. Automation can also increase the level of

accountability and provide an audit trail for later monitoring

and review of administrative decisions and the exercise of

official discretion. Where possible, automated systems should

be configured in such a way as to minimize the opportunity for

the inappropriate exercise of official discretion, face-to-

face contract between Revenue personnel and taxpayers and the

physical handling and transfer of funds.

4.1 The Guide suggests that Information and Communication

Technology systems should complement processes that cannot be

automated, the design of computerized systems should ensure that

the most vulnerable points in the manual system are not

replicated and that the new system does not simply shift the

point of corruption to a part of the process that is not being

automated

4.2 The syndicate noted that whereas CBR has made momentous

achievements in the automation and computerization of its work

processes in order to reduce the need for direct interaction

between taxpayers and tax collectors. However with an overall

rating of 2.26 on the Checklist (Annex D) reflects that still a

lot requires to be done in the field of automation.

33

4.3 The results on positive note indicate that there is adequate

separation of tasks between those officials associated with

identifying risk and those officials involved in the subsequent

processes of collection. The opportunity for unnecessary day-to-

day contact between officials and taxpayers has been reduced:

there is a program of developing business partnerships with the

business aiming at increasing voluntary compliance: the automated

systems are been designed with elimination of corruption in mind

and appropriate security and firewall provisions are in place to

protect the systems from external misuse. STARR AND STREAM are

functional on Sales Tax side. On the Revenue side, the PACCS will

be rolled out throughout the country to replace “ONE Revenue”

within this year and the Integrated Tax management System,

linking all tax streams is under active evolution.

4.4 AREAS REQUIRING IMPROVEMENT: However, as stated earlier,

still there are certain weak areas which require attention, and

which are given as follows:-

The external consultants and contractors involved in the

provision or support of computer systems, require being

subject to security checks.

Supervision and accountability systems need to be established

to monitor performance.

The use of on-line transactions supported by self-assessment

and audit-based controls needs to be promoted.

34

A comprehensive risk assessment or review is to be conducted

to assess the corruption risk posed by automated systems:

processes have to be in place to ensure that the system is not

vulnerable to staff with relevant system knowledge.

CBR needs to have an on-line action plan supported by an IT

security strategy addressing the risks associated with on-line

electronic transactions: the automated payment systems needs

to be firmly established to eliminate or limit the physical

handling and transfer of funds between officials and

taxpayers.

Attention needs to be paid to increasing official supervision

and accountability at those points in the process that cannot

be automated.

The numbers of officials with access to the system’s

programming need to be limited and controlled.

Access to secure information needs to be strictly controlled,

monitored, and regularly audited to ensure that information is

not being viewed for inappropriate or private purposes: and

the appropriate operating procedures to support the use of

electronic transactions have to be developed.

35

5. REFORM AND MODERNIZATION:


Corruption typically occurs in situations where outdated and

inefficient practices are employed and where taxpayers have an

incentive to attempt to avoid slow or burdensome procedures by

offering bribes and paying facilitation fees. Revenue

administrations should reform and modernize their systems and

procedures to eliminate any perceived advantages that might be

obtained through circumventing official requirements. Such

reform and modernization initiatives should be comprehensive

in nature and focus on all aspects of Revenue operations and

performance. The Revised Kyoto Convention provides a sound

reference point for such initiatives.

5.1 Reform and modernization of administration should be based

on a comprehensive diagnosis of needs and be tailored to the

individual circumstances and aspirations of the administration

concerned.

5.2 The syndicate noted that reform and modernization process

has been in full swing at the CBR for the last five years and

many milestones have been achieved since then. But with an

overall rating of 2.8 on the checklist for Reform & Modernization

(Annex E) the syndicate felt that the process of reforms still

needs further augmentation.

36

5.3 The results on positive note indicate that the CBR’s reform

and modernization process is based on a comprehensive diagnosis

of the administration’s capacity needs: the reform and

modernization program is comprehensive in nature and address all

the key functional areas of : due attention has been paid for

ensuring active involvement of key stakeholders, including the

private sector and other government agencies: it is focused

specifically on improving integrity and the administrative

controls designed to deter corruption and foster integrity: job

design is focused on eliminating the corruption inducing factors

of monopoly power, officer’s discretion and low levels of control

or accountability: performance targets are being set for core

processes: the reform and modernization program focus on the

adoption of agreed international standards and instruments: and

the possibilities for electronic data submission have been

increased.

5.4 AREAS REQUIRING IMPROVEMENT: On the weaker notes following

was observed:-

There is need of more human and financial resources allocation

to the reform and modernization program.

The staff within the CBR needs to have access to expert advice

and assistance necessary to ensure effective implementation of

reform and modernization initiatives and need to have a

stronger sense of ownership and commitment to the reform and

modernization program:

37

staff needs to participate in the reform and modernization of

their processes: relevant industries need to be consulted more

well in advance of reforms: other government agencies need to

be consulted more and areas of common activity simplified.

The reform and modernization process requires including an

external review of the changes and an external audit to ensure

that the reform is cost effective and efficient.

There is a need of developing a process review mechanism to

ensure cyclical improvement: the processes have to be

benchmarked with other administrations.

Identification of compliant taxpayers is required for fast

tracking their transactions and targeting of risky taxpayers.

38

6. AUDI T AND INVESTIGATION

The (Revised) Aretha Declaration states:

The prevention and control of corruption in Revenue can be

assisted by the implementation of a range of appropriate

monitoring and control mechanisms such as internal check

programs, internal and external auditing and investigation and

prosecution regimes. Such regimes should strike a reasonable

balance between positive strategies to encourage high levels

of integrity and repressive strategies designed to identify

incidences of corruption and to discipline or prosecute those

personnel involved. Revenue personnel, taxpayers and the

general public should be encouraged to report corrupt,

unethical or illegal activity and when such information is

provided it should be investigated in a prompt and thorough

manner and sources should be protected. Where large scale or

complex investigations are warranted or in administrations

where corruption is widespread there should also be recourse

to independent anti-corruption agencies.

6.1 Mechanisms to detect and prevent corruption are a primary

element of any corruption prevention strategy. Internal and

external audits can review processes and procedures with the aim

of focusing on areas that have a high risk associated with their

function. Audits also provide an independent opinion regarding

the efficiency and effectiveness of procedures and controls.

39

6.2 The organization must have the necessary resources to follow

up any information provided. This may require an internal affairs

or investigation capability with sufficient independence and

autonomy to allow it to undertake its investigations. People

selected for such work must be given appropriate training and

management support and be free of any integrity-related

suspicions. There should be mechanisms in place to encourage

staff and stakeholders to report corrupt practices, including

confidentiality provisions.

6.3 The syndicate deliberating on this issue rated the overall

position of audit and investigation function at 2.33 (Annex F),

highlighting the need for improvement.

6.4 The results on positive note indicate that effective

internal audit and internal investigation/affairs units and

programs are being re-engineered. In the field the inspections

and examinations are subject to regular internal audit, peer

review, and/or independent review. The results of audits are

reported and regularly followed up for review. Special task

forces exist to conduct unannounced inspections at high-risk

posts: staff is aware of the positive role of the special task

forces and where large-scale corruption is suspected or alleged,

access is available to an independent anti-corruption

investigation authority. The allegations of corruption are

followed up and actions are taken as a result of audit and

investigation.

40

6.5 AREAS REQUIRING IMPROVEMENT: Despite above, the syndicate

thought that much is still desirable on this count. Some areas

identified for improvement are as follows:-

The role and functions of Audit, Inspection and Intelligence

units need to be promoted within the organization, including

procedures for reporting instances of alleged corruption.

The people selected to perform Audit, Inspection and

Intelligence functions need to be sufficiently trained, have

appropriate powers of investigation and kept at arms length

from the officials they are investigating.

Sufficient audit program have to be in place to ensure regular

review of high-risk work areas and functions.

Data obtained from audits and investigations needs to be

analyzed to identify trends, vulnerabilities, and

opportunities for improvement: the extent to which major

activities carry an inherent risk of corruption (dealing in

cash, approving applications, etc.) need to be benchmarked and

systems have to be put in place to identify and manage these

risks.

The general control environment (internal controls, audit

trails, reporting relationships, level of staff competence,

delegations etc.) require to be more conducive to maintaining

high levels of integrity.

Records of all high-risk decisions made by officials for later

review and audit need to be kept and taxpayers, the general

public and third parties such as banking institutions need

41

active encouragement to report instances of corruption or

attempted corruption.

Staff has to be made aware of the channels they should follow

to report instances of corruption, while provisions have to be

made to enable the staff to report instances of corrupt

activities in a way that bypasses their immediate supervisor

or work area, for example directly to an internal affairs

unit.

42

7. CODE OF CONDUCT:

The (Revised) Arusha Declaration states

A key element of any effective integrity program is the

development, issue and acceptance of a comprehensive code of

conduct, which sets out in very practical and unambiguous terms

the behaviour, expected of all Revenue personnel. Penalties for

non-compliance should be articulated in the code, calibrated to

correspond to the seriousness of the violation and supported by

appropriate administrative and legislative provisions.

7.1 A Code of Conduct describes the standards of behaviour and

conduct required of employees to ensure that the integrity and

good reputation of organization is maintained. An effective code

of conduct must describe in very practical and clear terms the

standards of behaviour expected of all officials; and provide a

guide to solving ethical issues for those working in the

department and those who have dealings with officials.

7.2 The Code should be regularly reinforced to staff.

Management must lead by example and take appropriate action when

staff falls short of the required standards. Appropriate

conditions of employment, remuneration, and administrative and

legislative provisions must support the practical implementation

of the Code and be sufficient to provide a positive incentive. If

a general civil service code exists, care should be taken to

ensure the organizational specific code is complementary but does

not replace the general code.

43

7.3 The syndicate deliberating on this issue rated the overall

position regarding Code of Conduct matters at 3.13 (Annex G).

Although overall it was seen to be encouraging however, room for

improvement was also felt in certain areas.

7.4 The results on positive note indicate that the organization

has a formal Code of Conduct: which provides guidance for dealing

with ethical issues that are relevant to the different types of

work carried out by staff. The code of conduct is readily

accessible to all staff, and is periodically promoted within the

organization and the staff is required to sign a provision

indicating that they have read and understood the Code, and

accept its provisions, obligations and responsibilities. There

are appropriate sanctions for non-compliance with the Code and

effective disciplinary measures exist in the form of legislations

such as Establishment code and the Removal from Service Ordinance

(2001). The Code describes management and staff responsibilities

in respect to the collection, storage, maintenance and

dissemination of information obtained in the course of duty: and

includes provisions related to the acceptance of gifts, rewards,

hospitality and discounts: staff is required to declare their

investments, assets, indebtedness and possible conflicts of

interest. Procedures are also in place to investigate alleged or

suspected breaches of the Code: members of the senior management

team lead by example in a manner that is consistent with the

44

spirit of the Code of Conduct: and the Code describes the values

of the administration in a practical way.

7.6 AREAS REQUIRING IMPROVEMENT: Following are some areas

requiring improvement.

It was felt that the new and existing staff needs to be given

more extensive training in the application of the Code.

Staff should be required to declare any financial problems or

hardships they might be facing and appropriate mechanisms be

put in place to provide financial support to officials facing

temporary hardship in order to ensure that they are not

tempted to engage in corrupt practices to overcome financial

problems.

Appropriate mechanisms needs to be devised for the staff to

report suspected breaches of the Code.

Supervisors and managers have to take appropriate action when

staff falls short of required standards and breaches of the

Code need to be fully investigated.

There is also a need for considering the introduction of a

limited amnesty as an element of the integrity strategy.

Training through Directorates of Training in the code of

conduct needs to be improved and accelerated with increased

frequency.

45

8. HUMAN RESOURCE MANAGEMENT:


The implementation of sound human resource management policies

and procedures plays a major role in the fight against corruption

in Revenue. Human resource management practices which have proved

useful in controlling or eliminating corruption in Revenue,

include: -

Providing sufficient salary, other remuneration and

conditions to ensure officials are able to maintain a decentstandard of living

Recruiting and retaining personnel who have and are likelyto maintain high standards of integrity

Ensuring staff selection and promotion procedures are freeof bias or favoritism and based on the principle of merit

Ensuring that decisions on the deployment, rotation andrelocation of staff take account of the need to removeopportunities for officials to hold vulnerable positions forlong periods of time

Providing adequate training and professional development toRevenue personnel upon recruitment and throughout theircareers to continually promote and reinforce the importanceof maintaining high ethical and professional standards

Implementing appropriate performance appraisal andmanagement systems, which reinforce sound practices andwhich foster high levels of personal and professionalintegrity

8.1 A key element in any effective integrity strategy or

programme is managing the personal integrity of staff. People

management is just as important as the reform of systems and

procedures.

46

8.2 Human resource policies should not only be aimed at

recruiting the right people, but also improve staff skills, and

provide a quality work environment which recognizes and supports

the work efforts of staff. Just as a high standard of work

performance and integrity is expected from staff, staff expects a

high level of integrity in the administration and implementation

of associated HR polices and procedures which underpin the work

environment.

8.3 The issues of human resource management will be further

discussed under the following headings:

Remuneration and conditions Recruitment, selection and promotion Deployment, rotation and relocation Training and professional development Performance management/appraisal

8.1. REMUNERATION AND CONDITIONS

8.1.1 Appropriate conditions of employment and in particular

remuneration that can sustain a reasonable standard of living is

extremely important.

8.1.2 Remuneration may in certain circumstances include

social benefits such as health care, housing, and/or incentive

payments. Non-monetary rewards such as transfer, training,

travel, praise, and publicity can also be used to encourage

positive behaviour.

47

8.1.3 Staff facing serious debt problems may be more

vulnerable to corruption. When staffs are identified as facing

severe financial difficulties they should receive counseling and

close supervision, and where appropriate, transferred away from

high-risk areas.In the opinion of Syndicate the situation of

whole ambit of this area both collectively and individually needs

improvement. With an overall rating of 2.34, it was observed that

the staff does not receive sufficient remuneration to maintain a

reasonable standard of living. Some specific weak areas requiring

augmentation are as follows:-

Weak Areas Requiring Improvement

The remuneration levels for officials are not comparable to

similar public/private sector positions and does not take into

consideration the opportunity presented by work to supplement

income through illegal commissions.

Mechanisms are not available to identify signs of serious

indebtedness of staff.

The reward system and its fair administration scored very low

indicating the need for its fair administration.

The reward system needs to share the benefits widely amongst

all staff that demonstrate appropriate ethical standards and

encourage the development and maintenance of high standards of

work performance, rather than only recognizing a small number

48

of those officials who work in a particular area where

seizures and prosecutions are commonplace.

The government needs to be made aware of the important role

that condition of service, and in particular, adequate

remuneration, plays in maintaining high standards of

integrity.

8.2. RECRUITMENT, SELECTION AND PROMOTION

8.2.1 Recruitment and staff selection procedures should focus

on selecting staff on the basis of incorruptibility as well as

academic, professional and/or technical competence. It should

also take into account the characteristics of honesty,

dependability, and high standards of personal behaviour.

8.2.2 Staff selection and promotion should be based on merit.

The process should be objective and immune from interference.

Each recruitment or promotion committee should be composed of

independent members selected from different work areas of the

organization. This arrangement can minimize the chance of

nepotism and corruption.

8.2.3 Examining previous employment records the element of

honesty should be taken into account when screening potential

staff. It may be necessary to use outside expertise to examine

and suggest improvements to internal selection processes and

procedures. This policy is particularly important for positions

49

where the exercise of discretion is unavoidable and supervision

is difficult.

8.2.4 The syndicate showed satisfaction on situation in this

area with an overall score of 3.31 and assigning 3 or more points

to all except one question. It observed that the selection

criteria is published and strictly adhered to for all vacancies:

it focuses on high ethical standards as well as job specific

knowledge and technical competence: the appointment and selection

process is based on merit. The staff is fully aware of the

selection process and results are communicated promptly:

selection committees are impartial and their members are chosen

on the basis that they come from different work areas.

Qualifications are always checked: and the acceptance of the Code

of Conduct is a prerequisite for employment. However the extent of

tolerance to conflicts of interest and permission to engage in secondary

employment is a weak area, which requires attention.

8.3. DEPLOYMENT, ROTATION AND RELOCATION

8.3.1 The staffs that have remained in posts for a long

period of time are more vulnerable to corruption. Removing

opportunities for such staff to hold vulnerable positions for

long periods of time is an important integrity measure.

Decisions on posting of officials should be based on established

objective criteria and the basis for posting decisions recorded.

50

8.3.2 Attention should be paid to the design of jobs to

ensure that individual officials are unable to exercise

discretionary power without reference to other officials. For

example, in keeping with accepted accounting practice, officials

should not be able to both initiate and certify payments.

8.3.3 In cases where examinations or inspections need to be

undertaken, allocation to individual officials may be made on a

random rather than on a commodity, industry or geographical

basis.

8.3.4 The conduct of examinations or inspections can also be

subject to regular peer and independent review.

8.3.5 In the opinion of the conference situation in this area

also needs improvement. With an overall score of 2.37, the

participants acknowledged that the working environment

fosters the development of an inappropriate relationship

between staff and taxpayers. The following are some

specific areas requiring improvement.

Weak Areas Requiring Improvement

The rotation guidelines are not clear and rotation/mobility

needs to be more clearly understood.

Consideration has to be given to a separate rotation scheme

for technical positions.

51

Rotation policy needs to be enforced fully and subject to

independent review.

Established mechanisms require to be in place to oversee the

rotation of staff at regular intervals and this process needs

to be free of bias or favoritism.

Mechanisms are also required to be in place to ensure suitable

control, accountability and supervision of staff working in

vulnerable environment for e.g. at point of interaction with

the public such as passenger and cargo control points.

Mechanisms are required to prevent prior knowledge that

particular officials will perform particular functions at

certain times: and functions segregation in areas that are

vulnerable to corruption is required.

8.4. TRAINING AND PROFESSIONAL DEVELOPMENT

8.4.1 Education and training, both informal and formal, play

a major role in the fight against corruption. This is

particularly appropriate when an organization has in place a

formal Code of Conduct. Training should focus on the standards of

behaviour expected of all staff and the mechanisms available to

report breaches of the Code. A sense of group or shared

responsibility should be fostered wherever possible.

8.4.2 While on-the-job training is very important, care needs

to be taken to ensure it is both positive and structured and does

not inadvertently reinforce certain inappropriate practices that

52

have developed over time. To maintain the credibility of the

informal and formal training that is provided, it is essential

that the content of the training accurately reflect what is

happening on the job.

8.4.3 In the opinion of syndicate, this area also bore a weak

situation with an overall ranking of 2.64. Though the syndicate

noticed that the CBR provides formal professional training and

structured on-the-job training for staff covering both general

and specialist skills but a number of specific areas were

identified for more concerted actions. These include:-

Weak Areas needing improvement

All formal training should cover and reinforce the

integrity/anti-corruption message and focus on the standards

of behaviour expected of all officials.

New recruits should specifically be given introductory

training regarding integrity principles/Code of Conduct in the

organization.

On-the-job training should be structured to reinforce the

integrity policies of the CBR.

There should be a program of succession planning to ensure

that the administration does not become over-reliant on a few

key individuals.

53

The effectiveness of training should be periodically

evaluated.

Responsibilities and accountabilities for corruption

prevention and detection should be clearly identified and

understood by all staff and these responsibilities should

include identifying and correcting any behaviour that falls

below expected standards.

The performance management/appraisal system should identify

development needs and reinforce integrity principles.

Local operating practices should be consistent with the

content of formal training programs.

8.5. PERFORMANCE MANAGEMENT/APPRAISAL

8.5.1 A performance appraisal and management system concerns

the day-to-day management of people and their performance.

Performance appraisal is a process where managers can assess the

performance of staff, identify developmental opportunities,

recognize and reward staff for good work, and contribute to the

achievement of an organization’s goals.

8.5.2 Performance appraisal can also provide incentives for

model behaviour by reinforcing the desired workforce

characteristics and conduct. Regular appraisal encourages staff

to take responsibility for maintaining high levels of personal

and professional integrity.

8.5.3 The performance appraisal process should be linked to a

comparable reward system. This may include salary advancement, as

54

well as non-monetary rewards such as transfer, training, travel,

praise, and publicity to further encourage positive behaviour.

Such rewards may recognize immediate good performance, however

the appraisal system should be designed with the aim of

optimizing staff performance in the long term.

8.5.4 Performance appraisal should be undertaken on a regular

basis. Management should be accountable for the performance of

their staff and actively manage performance issues.

8.5.5. With an over all score of 2.98, situation in this area

was found by the syndicate, to be hanging in balance with a set

of almost equal strong and weak points. It was noted that

although a customary annual reporting system is in place (which

is undertaken on a regular basis) with demonstration of a high

level of personal and professional integrity specifically

included as an appraised quality, but a CBR specific performance

appraisal system is a prerequisite for management of its HR on

modern lines.

AREAS REQUIRING IMPROVEMENT:

The syndicate observed that the reward system needs to be

linked more closely to the performance appraisal system which

needs to be more fairly administered and regularly monitored

and reviewed.

The reward system should share the benefits widely amongst all

staff that demonstrate appropriate ethical standards and

55

encourage the development and maintenance of high standards of

work performance, rather than only recognizing a small number

of those officials who work in a particular area where

seizures and prosecutions are commonplace.

The performance appraisal system should link performance to

the CBR's Code of Conduct and staff should have the

opportunity to challenge their performance assessment if they

disagree with any aspect of their appraisal.

56

9. MOR ALE AND ORGANIZATIONAL CULTURE:


Corruption is most likely to occur in organizations where morale

or ‘esprit de corps’ is low and where Revenue personnel do not

have pride in the reputation of their administration. Revenue

employees are more likely to act with integrity when morale is

high, where human resource management practices are fair and

where there are reasonable opportunities for career development

and progression. Employees at all levels should be actively

involved in the anti-corruption program and should be encouraged

to accept an appropriate level of responsibility for the

integrity of their administration.

9.1 Before organizational change can occur, it is firstly

necessary to understand the culture and practices that currently

exist within the administration and determine the most

appropriate methods for achieving real and sustained improvement.

The extent of the changes necessary must be based on the

administration’s current situation and its capacity to

appropriately support and embrace the necessary cultural change.

9.2 Changes in attitude and organizational culture are extremely

difficult to achieve, particularly when corruption is widespread

or endemic. Without change, however, even if those guilty of

corrupt behaviour are replaced, corruption may occur with their

replacements. Improving organizational culture in a way that

57

staff has pride and loyalty in the service is vital for breaking

this cycle. For this purpose, staff and staff associations should

be actively involved in this process.

9.3 The syndicate assigned an overall score of 2.52 to the

questionnaire relating to morale and organizational culture

(Annex I). On the positive note it observed that the senior

management leads by example and demonstrates their commitment to

integrity and fairness through their behaviour and its decision-

making which is both open and transparent. The CBR’s systems and

culture recognizes and respects the rights of staff and the need

for fairness in all human resource management matters: staff are

recognized or rewarded for performance and the penalties for

corrupt behaviour are also sufficient to deter inappropriate

behaviour. However a wide room for improvement was also

identified.

AREAS REQUIRING IMPROVEMENT:

The following are some areas identified by the syndicate as

requiring further improvement:-

It was felt that staff needs to be more encouraged,

recognized, acknowledged or rewarded for identifying methods

by which corruption can occur and for suggesting improved

control mechanisms.

Special project teams need to be used to develop integrity

strategies for their work areas and all staff needs to have

the opportunity to contribute.

58

Activities are required to be undertaken to measure levels of

morale, such as staff surveys to gather feedback and provide

suggestions.

Mechanisms need to be available in which staff can raise,

discuss and resolve any cultural and/normal issues which

impact on the CBR’s anti-corruption efforts.

Meetings and staff journals are required to be used to

communicate the standards of behaviour expected, reporting

instances of meritorious behaviour, and exposure of those

found to be involved in corruption.

Internal communication mechanisms need to be developed to

discuss integrity and ethical issues and cases of corruption

openly.

Prompt action needs to be taken against those who fail to meet

integrity standards and more effective legislation needs to be

in place that protects staff who report breaches of integrity.

Staff at all levels needs to be encouraged to identify and

report breaches of integrity and the staff that comes forward

to report corrupt practices should be rewarded rather than

victimized.

59

10. RELATIONSHIP WITH THE PRIVATE SECTOR:


Revenue administrations should foster an open, transparent and

productive relationship with the private sector. Client groups

should be encouraged to accept an appropriate level of

responsibility and accountability for the problem and the

identification and implementation of practical solutions. The

establishment of Memoranda of Understanding between Revenue and

industry bodies can be useful in this regard. Likewise, the

development of codes of conduct for the private sector, which

clearly set out standards of professional behaviour, can be

useful. Penalties associated with engaging in corrupt behaviour

must be sufficient to deter client groups from paying bribes or

facilitation fees to obtain preferential treatment.

10.1 It is important to focus attention on the central role that

client groups play in controlling corruption. After all, many

forms of administrative corruption require the active involvement

of external partners.

10.2 Performance standards and/or client service charters may

provide a useful starting point and a practical monitoring

mechanism. When undergoing a major integrity program it may be

useful to have feedback through client surveys on their

perceptions of service quality and operating effectiveness. This

60

may be in addition to the quantity and timeliness standards that

are measured under a client service charter.

10.3 Liaison committees can provide an important vehicle for

administrations to clearly communicate the standards of behaviour

expected of taxpayers. It may be appropriate to establish a

joint organization/client anti-corruption task force to identify

practical solutions and identify corrupt officials. Co-operative

mechanisms can be established with industry groups, to encourage

the provision of information to identify unusual or suspicious

activity related to illegal activities such as drug trafficking

and money laundering.

10.4 Taxpayers, the general public and third parties such as

banking institutions and trade associations can provide potential

sources of information about an organization’s most vulnerable

points, or indeed, about actual instances of corruption.

Providing guarantees of anonymity can facilitate the provision of

information, as can setting up a hotline and a complaints and

compliments system. Information received needs to be thoroughly

investigated, and it should be clearly apparent that the

administration has responded effectively.

10.5 A comprehensive communication strategy could include setting

up Customer Information centers and hotlines to provide

information on all processes and procedures, information

leaflets/official notices, as well as promoting the achievements

61

of organization via the media. These initiatives need to be well

publicized and easily accessible.

10.7 AREAS REQUIRING IMPROVEMENT: With an overall rating of

2.32 (Annex J), the syndicate felt that almost the entire ambit

of this area needs serious thoughts. The areas which require

augmentations are as follows:-

All relevant stakeholders and taxpayers need to be identified

and their support and co-operation be obtained.

The client groups need to accept a share of responsibility for

both the problem and the solution.

Appropriate consultative mechanisms needs to be established to

facilitate communication and co-operation between and client

groups.

Major client groups need to be involved in the development of

CBR’s administration’s anticorruption strategies.

Formal co-operative arrangements are required to be

established with industry bodies which can deliberate on all

important issues affecting the stakeholders.

There is a need for development of codes of conduct for the

private sector, which clearly set out standards of

professional behaviour.

When corrupt practices are detected involving members of

client groups the taxpayers should be penalized for engaging

in such behaviour and the penalties imposed should be

sufficient to deter future violations.

62

The taxpayers, the general public and third parties such as

banking institutions need to be actively encouraged to report

instances of corruption or attempted corruption. Mechanisms

are required to be in place to report instances of corruption,

such as through hotlines or a complaints and compliments

system and these mechanisms need to be regularly promoted to

stakeholders.

Some form of guarantees/commitments should be provided to

taxpayers and third parties that any information provided will

be treated confidentially and these commitments should be

honoured.

Mechanisms are also required to be in place to investigate

information provided to from third parties: taxpayers should

accept their share of responsibility for maintaining a

corruption free environment: and there should be a client

communication strategy to not only provide information to

taxpayers, but also promote the achievements of Division.

63

Part 3 – THE ACTION PLANNING PROCESS

The self assessment arrived at in the last section wassubsequently prioritized to ascertain the importantopportunities/problem areas that were identified during theprocess. The identified areas were prioritized on the basis ofthe following criteria:

• Importance• Urgency• Consequence of failure• Probability of obtaining executive and staff commitment• Impact• National/International obligations• Ease of implementation• Cost

3.1 Action Plans

After prioritization action plans were developed by theparticipants for some of the high priority areas including adecision for its implementation leadership and timelines forachieving the desired results. They are as follows:-

3.2 Immediate and most important action Plans and implementationLeaders

1. Formal review of procedures and systems on at least annualbasis in consultation with field formations: (Member Legal inconsultation with Member TP&R)

2. Simplification of procedures, facilitation of stakeholders andquick disposal of complaints and regular surveys to seekfeedback of stakeholders. (Member FATE, Member FR&S and Repsof line members)

3. Effective and comprehensive internal controls should be testedand put in place to prevent corruption. Information should beobtained and analyzed to identify trends, opportunities,

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vulnerabilities with a view to improvement. (Member Audit,DGs I&A, DG I&I & reps of line members).

4. Automation of Business processes and systems as perinternational standards to be reviewed by an externalindependent agency. ( Member TP&R, Member IMS, Member FR&S)

5. Development of codes of conduct for the private sector, whichwill clearly set out standards of professional behaviour.(Member FATE & Reps of Line Members)

6. Appropriate result-focused performance standards andindicators to be established and regularly monitored. (MemberFR&S and reps of other wings)

7. . Reactivate Cabinet Committee on Financial Reforms.(Chairman)

8. Revise/Improve Code of Conduct (Member HRM)

9. Regular meetings with field officers/staff to educate them onintegrity & reforms (All Members & Communication Specialist).

3.3 Syndicate Wise/Topic Wise Detailed action plans

(SYNDICATE A)Leadership and Commitment

Short Term Measures Long Term measures1. Change in CBR Act (Rules)2. Reactivate Cabinet Committee on

Financial Reforms (CCFR)3. Communication plan4. Implementation Plan5. Top Leadership to be briefed

about the integrity Policy6. Superior Judiciary to be briefed7. Fixed Tenure of Chairman for 5

years

Federal Board of Act

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Code of Conduct

Short Term Measures Long Term measures1. Formalize/regularize Training2. Circulate/disseminate/communicate Code

Of Conduct3. Urdu Translation for lower staff4. VCDs/media to ensure implementation

Audit/Inspectionauthorized toconduct/supervisechecks/audit to checkimplementation.

Violators of Code OfConduct to be de-notified from specialpay

DGs to check & enforceCode Of Conduct

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Morale & Organizational Culture

Short Term Measures Long Term measures1. Subsidised Transport Pick & Drop.2. Medical Insurance3. CBR Housing Society4. Training in Decision Making5. LUMS6. IBA7. Participatory Work

environment8. Physical Environment9. Work ethics10. Quick Promotion of all

levels/eligible employees11. Merit/integrity/competency

based promotions(New PMS)12. Timely completion of PERs

Housing/ accommodation Expansion of CBR House CBR Colony at Islamabad CBR Foundation

(SYNDICATE B)Regulatory Framework

Short Term Measures Long Term measures1. All the Risk Management Systems

for all taxes should be supportedby automated systems.

2. (Quarterly meetings should be held with other concerned government agencies)

3. Base line surveys of performance measurement should be done acrossall taxes and then later (yearly)surveys to compare with the base

1. BPR teams should be institutionalized to ensure continuous improvement at CBR level.

2. Risk Management should bedeveloped /applied acrossall taxes

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line to determine efficiency. 4. The same should be published

yearly in CBR year Book.

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Transparency

Short Term measures Long Term measures1. Periodical surveys should be

conducted to ascertain the clients’ requirement of information.

2. Simplified and realistic procurement procedures should be devised and implemented. Alltaxes should devise mechanisms to determine that if their lackof compliance is due to a lack of communication from the respective department.

3. Sufficient infrastructure/manpower be employed to conduct meaningful audit and investigation.

4. Each Wing should develop a library/database of decisions.

5. Simplified and realistic procurement procedures should be devised and implement.

6. CBR needs to develop a system for ensuring consistency/ informality in all taxes through out the country. To be executed at the CBR by each taxwing.

7. Staff should be trained in the service charters.

1. CBR needs to develop systems for ensuring consistency/uniformity in all taxes throughout the country. To be executed byeach tax wing.

2. Each Wing should develop aLibrary /Database of decisions (long term availability on internet)

Audit & Investigations

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Short Term measures Long Term measures1. Officials should be properly

trained to handle corruption complaints and CBR to take strong action where gross violation of law and procedures are established.

2. Data should be obtained and analyzed to identify trends, opportunities, vulnerabilities with a view to improvement.

3. Effective and comprehensive internal controls should be testedto prevent corruption.

4. Decisions should be recorded and archive created for important decisions.

5. Private sector should be encouraged to report any instancesof corruption ensuring its confidentiality and secrecy.

6. Mechanisms be put in place to encourage officials to report corruption to the identified authority.

Risk based Audit programme should be devised and implemented.

Syndicate-C

Reform & modernisation

Short Term measures Long Term measures1. Upgrade and Debug2. TMS/STMS/ONE REVENUE

1. Replace with ITMS/PACCS

3. Implement TMS and STMS 2. Replace with ITMS/PACCS4. Data cleansing and 3. 100% reliable data base

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matching, updating and conversion in electronic format

5. Conceptualization of DWH 4. Development of DWH6. Develop Audit trail 5. Fully implement audit

trail by ITMS and PACCS7. Intensive hands on

training of staff on IT Systems

6. Education of personnel inadvanced courses to reachand sustain a paperless environment

Automation

Short Term measures Long Term measures1. E-filing by tax payers 1. Full implementation2. CPR generation (Pilot) 2. Full fledged CAP

implementation3. Existing code of conduct

of CBR employees to be revised and extended

3. Code of conduct for private sector to be developed and implementedin consultation with private sector

4. Education of trade and industry, sensitizing the need for reciprocity.

5. Make a clear distinction between facilitation for compliant taxpayers and strict enforcement for non-compliant taxpayers

4. Seeking political will for effective enforcement.

Relationship with the Private Sector

Short Term measures Long Term measures1. Create ownership and

commitment to the reform

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thru effective communication with all stakeholders

2. Identification of further administrative reforms to deter corruption and foster integrity

3. Policy reforms –removal ofinconsistencies and anomalies in relevant lawsand business processes

4. Participation of officers and staff in the reform and modernization of the processes

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3.4 INTEGRITY VISION STATEMENT

At the end of the conference the participants worked ondeveloping an integrity vision statement for the CBR. Thestatement was unanimously developed and accordingly submitted forthe approval of the Secretary General Division/Chairman CBR. A copy of the CBR Integrity Management Policy Statement signed byall the Members of the Board and the respective DGs is reproducedbelow.

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3.5.1 Integrity Steering Committee .

The conference also approved an integrity steering committeewhich will oversee the implementation of the above mentionedaction plans. The committee was further tasked to develop acharter of its functions and steer the integrity vision andmanagement of CBR. The composition of the committee is asfollows:-

Member Direct Taxes Member Sales Tax & Federal Excise Member Revenue Member HRM Member Admin DG Intelligence & Investigation DG Audit & Inspection (Direct taxes) DG Audit & Inspection (Indirect Taxes)

3.6 DEVELOPING A MARKETING STRATEGY

In order to ensure that the results of the self-assessment andaction planning process are well understood and accepted by theexecutive and embraced by the majority of the organization’sstaff, the following marketing strategy is suggested.

• Involve as many people as possible in the process;• Secure political and media support;• Secure private sector support and involvement;• Sell the real benefits of an improved integrity regime to allstaff;• Gain executive management commitment to the Plan;

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• Ensure that those not present at the workshop are not overlysuspicious of the workshop’s outcomes and the rationale behindeach of the key elements of the Action Plan; and• Ensure that each of the workshop participants maintains anactive role in the implementation of the Action Plan.

PART 4 – ACTION PLAN REVIEW, EVALUATION AND RE-DEVELOPMENT

The review, evaluation and re-development process should beundertaken at least 12 months after the Integrity Action Plan hasbeen implemented. It will assist CBR to:

Assess whether they have achieved the outcomes anticipated in theIntegrity Action Plan that has been developed; determine theareas that require further attention and/or initiatives thatmight build on the momentum already established. And result intoan enhanced Integrity Action Plan. The evaluation phase should only be undertaken after both theself-assessment process and implementation of an integrity actionplan have been completed. The result of evaluation will be acomprehensive integrity gap-analysis that will determine whetherthe administration needs to revisit certain aspects of the self-assessment process to develop a revised action plan to furtherdevelop the organization’s integrity program. The review,evaluation and re-development process should involve a secondself-assessment process using the same checklist questions whichwere used for this self assessment and are contained as annexurewith this report. The answers to the questions together with anexamination of the verifiable performance indicators identifiedin the Integrity Action Plan should provide the necessary dataupon which to evaluate the success, or otherwise, of theindividual strategies or activities included in the Action Plan.

Indicators of performance that might prove useful is assessingthe success of the Integrity Action Plan include:

• Results of client/stakeholder satisfaction surveys;• Number of complaints or allegations against Revenue personnel;

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• Number of successful investigations and/or prosecutions forintegrity breeches;• Positive/negative media coverage of integrity in Revenue;• Reports by international agencies;• Number and nature of ombudsman complaints;• Complaints by the traveling public, Revenue brokers orimporters;• Results of internal and external audits;• Achievement of performance targets/client charter standards;and• Increase/decrease in operational performance statistics.

Once this review and evaluation process has been completed, it isnecessary to develop a new Integrity Action Plan. The new Planwill include:

• Ongoing activities and strategies that require continuedattention;

• A range of activities and strategies that are designed toimprove or re-focus elements that were addressed in the previousAction Plan; and A range of new activities and strategies.The revised Integrity Action Plan will include the identificationof existing problems or opportunities for improvement, identifiedsolutions, responsible officials, timelines for Implementationand verifiable performance indicators. Following this process,appropriate attention should be paid to ensuring executiveendorsement and commitment to the revised Action Plan and theeffective marketing of it to staff and relevant stakeholders.

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CHECK LISTS (Annex- A)LEADERSHIP AND COMMITMENT

S.# Items Rating1 Does the Government actively promote the maintenance of a

high level of integrity within the civil service and/orspecifically?

3.4

2 Is there bipartisan support for the integrity program in? 3.2

3 Are politicians aware of the organization’s integrityefforts? 3.2

4 Is the Minister responsible for held accountable for theintegrity performance of the organization? 2.4

5 Does the administration receive adequate resources toallow it to fulfill its functions effectively andefficiently?

3.6

6 Are strategies in place to increase or maintain politicalsupport for integrity in 2.4

7 If so, are they effective? 2.28 Can they be improved? 4.49 Does the CEO actively promote integrity with external

stakeholders? 4.4

10 Does the CEO and the Senior Management Team provideleadership and demonstrate an active commitment to theintegrity program?

4

11 Is there proactive and visible leadership on the issue ofintegrity from the highest levels of management? 4

12 Does the CEO and the Senior Management Team lead byexample? 3.8

13 How does the CEO and the Senior Management Team deal withor respond to allegations of corruption? 3.4

14 Is there a strategy in place to address the issue ofintegrity among the Senior Management Team? 3.4

15 Is there a system in place to assist managers to identifystaff that, by virtue of temporary personalcircumstances, may be vulnerable to corruption andmalpractice?

2.4

16 Are managers held responsible and competent to undertakethis task? 2.4

17 In selection for management positions, is appropriateconsideration given to the personal integrity of theofficer?

3.4

18 Does the selection process take account of their 3.6

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commitment to and ability to implement theadministration’s anti-corruption policies?

19 Do managers work with staff to identify any weaknessesand vulnerabilities in relation to processes andprocedures?

2.8

20 Do internal management training programs adequatelyaddress management responsibilities for corruptionprevention and detection?

2.4

21 Do supervisors take a strong leadership role forpromoting integrity and leading by example? 3.4

22 Is this a requirement of their role and are they heldaccountable? 2.8

23 Are supervisors held accountable for corrupt practicesand malpractice engaged in by staff under theirsupervision?

2

24 To what extent are members of a work team heldaccountable for corrupt practices engaged in by othermembers of the work team?

2.8

25 Are all new projects, policies and initiatives examinedto take into account integrity risks? 3.2

Overall Rating for leadership & Commitment 3.16

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(Annex B)

REGULATORY FRAMEWORKS.# Items Ratin

g1 Have the principles that underpin the Revised WCO Kyoto Convention

been implemented? If not, is its implementation and ratification ofthe Convention a high priority and scheduled for introduction in thenear future?

4

2 Have other internationally agreed standards such as the HS TariffConvention, the WTO Valuation Agreement, the ATA CarnetConvention/Istanbul Convention and the WTO Intellectual Property(TRIPS) Agreement been implemented or are they scheduled forimplementation?

3

3 Are systems and procedures periodically reviewed and/or re-engineeredto eliminate red tape and avoid duplication? 3

4 If so are the staffs that perform the functions or proceduresinvolved in the review process? 2

5 Does the organization have a formal system to implement a ‘continuousimprovement’ strategy? 2

6When systems and procedures are being reviewed is attention paid toeliminating the corruption inducing combination of monopoly power,official discretion and minimal accountability?

4

7 Are steps being taken to eliminate or reduce non-tariff barriers(such as quotas, import licenses, permit etc)? 4

8 Is there regular representation at interdepartmental liaison on thereduction of tariff and non-tariff barriers to trade? 3

9 Are exemptions, concessions, regulations, procedures and legislation,transparent and communicated to stakeholders? 3

10 Are changes based on periodic review and introduced in a transparentmanner 3

11 Are stakeholders consulted on whether legislative provisions andprocedures are workable and understandable? 3

12 Is the authority to approve exemptions limited and strictlycontrolled? 4

13 Are appropriate risk management policies and practices in place toidentify high-risk cargo/passengers etc. and allow the speedyclearance of low risk ones?

2

14Are risk management systems and procedures in place reviewed andaligned to the provisions of the WCO Revised Kyoto Convention?

2

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15Is the application of any administrative penalty system simple andstraightforward and is it applied in a consistent manner?

1

16 Is risk management supported by automated systems? 117

Is there close liaison and co-operation with other border agencies toensure that policies and procedures are coordinated effectively andthat opportunities to reduce or eliminate red tape are explored?

2

Over All Rating For Regulatory Framework

2.71

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TRANSPARENCY(Annex c)

S.# Items

Rating1 Are clients provided with sufficient accurate, consistent,

accessible and user-friendly information to allow them to meet their responsibilities to ?

3

2 Are mechanisms in place to report new initiatives, decisions, or changes in legislative requirements and procedures that may impact upon clients ( Client Notices etc.)?

3

3 Is attention given to informing clients of their rights when dealing with ? 2

4 Is this information easily accessible? 25 For example, Customer Help Desks/Call Centers, Information Centers,

Industry Consultative Committees, displays and signage 3

6 Use of electronic media for dissemination of information to clients 4

7 Are clients consulted to determine their information requirements and preferred media? 2

8 Are there mechanisms in place to interact with the media? 49 Are instances of non-compliance with procedures analyzed to

determine if the cause is a lack of adequate communication from ? 2

10 Is there a system for monitoring consistency between different offices, provinces or regions concerning decisions, procedures and information provided?

2

11 Have simple processes or systems for seeking tariff classification and valuation rulings prior to importation been established in order to provide clients with a degree of certainty and predictability?

3

12 Are these easily accessible (is there a library or database of previous decisions?) 1

13 Is the basis or criteria upon which officials exercise discretionary power clearly defined and publicly available and, where appropriate, have the reasons for decisions been conveyed to those affected?

2

14 When a official has exercised discretionary power, are the grounds upon which the decision was made, required to be documentedclearly and retained for later review?

3

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15 Have appropriate review and appeal mechanisms been implemented to allow clients the opportunity to seek review or challenge decisions, with the possibility of independent adjudication if required? If so, are the procedures published and promoted?

4

16 Is there an independent external appeal mechanism in addition to internal mechanisms? 5

17 Have citizen or service charters been developed which clearly statethe level of service clients should be able to expect? If so, areservice standards realistic and able to be supported by theorganization’s systems and resources?

1

18 Are service charters displayed in public areas such as airports, cargo inspection areas and Houses? 2

19 Are staff aware of the standards contained in service charters and are those holding service positions provided with training in client service?

1

20 Have mechanisms been developed and implemented which monitor and evaluate the organization’s performance against established standards?

1

21 Are the results of performance made publicly available (i.e. Internet, annual report)? 4

22 Are all fees and charges levied published in order to allow tradersto calculate more accurately the costs involved in complying with requirements?

3

23 Are there suitable controls over procurement procedures and tendering for work? 1

Over All Rating For Transparency 2.52

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AUTOMATION(Annex D)

S.# Items Rating1 Have your automated systems been designed with elimination of

corruption in mind? For example, have all opportunities toreduce the risk of corruption been considered?

3.4

2 Is there adequate separation of tasks between those officialsassociated with identifying risk and those officials involvedin subsequent procedures such as cargo inspection and collection the processes of:

3

collection, - Risk assessment/target identification and - Inspection/investigation? -3 Has a comprehensive risk assessment or review been conducted

to assess the corruption risk posed by your automated systems?

1.8

4 Has the opportunity for unnecessary day-to-day contact between officials and clients been reduced? 3.2

5 Has the system been designed to minimize the input of data byofficials and to limit the routine requirement for physical presentation of documents to ?

2.8

6 Are appropriate security and firewall provisions in place to protect the systems from external misuse? 3.2

7 Are processes in place to ensure that the system is not vulnerable to staff with relevant system knowledge? 2.6

8 Is the number of officials with access to the system’s programming limited and controlled? 2.8

9 Is access to secure information strictly controlled, monitored, and regularly audited to ensure that information is not being viewed for inappropriate or private purposes?

2.8

10 Is staff aware of the need to maintain privacy when dealing with confidential information? 3

11 When automated systems have been introduced, has appropriate attention been paid to increasing official supervision and accountability at those points in the process that cannot be automated (for example, cargo examination)?

2.8

12 Have automated payment systems been established which eliminate or limit the physical handling and transfer of funds between officials and clients?

2.6

13 If external consultants and contractors are involved in the provision or support of computer systems, have they been subject to security checks, and have supervision and accountability systems been established to monitor performance?

1.8

14 Does the administration have an on-line action plan supported 2.4

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by an IT security strategy addressing the risks associated with on-line electronic trading?

15 Are standardized data requirements as defined in the WCO data model applied? 2.2

16 Are there appropriate operating procedures to support the useof electronic trading? 2.8

17 Is the use of on-line trading supported by self-assessment and audit-based controls? 1.2

18 Is there a program of developing business partnerships with business with the aim of increasing voluntary compliance withelectronic commerce requirements?

3

Over All Rating For Automation 2.26

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REFORM AND MODERNIZATION(Annex E)

S.# Items

Ratings1 Is the administration’s reform and modernization process

based on a comprehensive diagnosis of the administration’s capacity needs?

3.50

2 Is the reform and modernization program comprehensive innature and does it address all the key functional areas of ?

3.00

3 Have sufficient human and financial resources been allocated to the reform and modernization program?

2.83

4 Does staff within the administration have access to expert advice and assistance necessary to ensure effective implementation of reform and modernization initiatives?

2.67

5 Has attention been paid to ensuring the active involvement of key stakeholders, including the private sector and other government agencies?

3.00

6 Has relevant industry been consulted well in advance of reform?

2.67

7 Does staff have a strong sense of ownership and are theycommitted to the reform and modernization program?

1.67

8 Has the reform and modernization program focused specifically on improving integrity?

3.67

9 Are your administrative controls designed to deter corruption and foster integrity?

3.33

10 Has job design and redesign focused on eliminating the corruption inducing factors of monopoly power, officer discretion and low levels of control or accountability?

3.50

11 Have other government agencies been consulted and areas of common activity simplified?

2.17

12 Has the reform and modernization process included an external review of the changes?

2.83

13 Has reform and modernization included an external audit to ensure that the reform is cost effective and efficient?

1.67

14 Are performance targets being set for core processes? 3.00

15 Have you developed a process review mechanism that will ensure cyclical improvement?

2.17

16 Does staff participate in the reform and modernization of their processes?

2.17

17 Have processes been benchmarked with other

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administrations? 2.17 18 Does the reform and modernization program focus on the

adoption of agreed international standards and instruments (for example, the revised Kyoto Convention)?

3.33

19 Have you increased possibilities for electronic data submission?

3.67

20 Have you identified compliant traders so you can fast track their entries to enable targeting of risk traders?

2.83

21 Have you considered the post-release collection of taxesand duties?

3.17

Over All Rating For Reform & Modernization

2.81

(Annex F)AUDIT AND INVESTIGATION

S.# Items

Rating1 Have effective internal audit and internal investigation/affairs

units and programs been established and appropriately resourced? 3

2 Are the role and functions of such units promoted within the organization, including procedures for reporting instances of alleged corruption?

1

3 Are the people selected to perform such functions at arms lengthfrom the officials they are investigating? 1

4 Are they sufficiently trained and have appropriate powers of investigation? 2

5 Is the audit program sufficient to ensure regular review of high-risk work areas and functions? 1

6 Is any data obtained from audits and investigations analyzed to identify trends, vulnerabilities, and opportunities for improvement?

2

7 Is the general control environment conducive to maintaining highlevels of integrity (internal controls, audit trails, reporting relationships, level of staff competence, delegations etc.)?

2

8 To what extent do major activities carry an inherent risk of corruption (dealing in cash, approving applications, licenses, permits etc.) and what systems have been put in place to identify and manage these risks?

2

9 Does the audit function ensure that effective and comprehensive internal controls are in place to prevent corruption? 2

10 Are inspections and examinations subject to regular internal audit, peer review, and/or independent review? 4

11 Are the results of audits reported and regularly followed up forreview? 3

12 Have special task forces been established to conduct unannounced 3

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inspections at high-risk posts?13 Are staff aware of the positive role of the special task forces? 314 Are records kept of all high-risk decisions made by officials

for later review and audit? 1

15 Where large-scale corruption is suspected or alleged, do you have access to an independent anti-corruption investigation authority?

4

16 Are clients, the general public and third parties such as banking institutions actively encouraged to report instances of corruption or attempted corruption?

1

17 Are staff aware of the channels they should follow to report instances of corruption? 1

18 Can staff report instances of corrupt activities in a way that bypasses their immediate supervisor or work area, for example directly to an internal affairs unit?

1

19 What guarantees/commitments are provided to clients, third parties and staff that any information provided will be treated confidentially? Are they kept?

2

20 Are allegations of corruption followed up? Does the audit and investigation function include education and other preventative strategies?

3

21 Are actions taken as a result of audit and investigation 322 Are these actions communicated to staff? 323 Are sufficient resources available to ensure allegations are

fully investigated? 2

Over All Rating For Audit & Investigation 2.33

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(Annex G)CODE OF CONDUCT

S.# Items Ratings1 Does your organization have a formal Code of Conduct? 52 Was your organization’s Code developed in consultation with

clients, other government agencies and staff at all levels? 3.4

3 Does the Code provide a range of practical examples and guidancefor dealing with ethical issues that is relevant to the different types of work carried out by staff in ?

3.2

4 Is staff required to sign a provision indicating that they have read and understood the Code, and accept its provisions, obligations and responsibilities?

3.4

5 Is new and existing staff given training in the application of the Code? 2.4

6 Is the Code readily accessible to all staff and periodically promoted within the organization? 3.4

7 Does senior management promote the Code with their staff and lead by example? 3.2

8 Do supervisors and managers take appropriate action when staff falls short of required standards? 2.8

9 Is the Code promoted to clients, especially in relation to acceptance of gifts and tokens, and appropriate relations with stakeholders?

3

10 Are there appropriate sanctions for non-compliance with the Code? 3

11 Does the Code describe management and staff responsibilities in respect to the collection, storage, maintenance and dissemination of information obtained in the course of duty?

3.2

12 Does the Code include provisions related to the acceptance of gifts, rewards, hospitality and discounts? 3.8

13 Are staff required to declare their investments, assets, indebtedness and possible conflicts of interest? 4.6

14 Are staff required to declare any financial problems or hardships they might be facing? 2.4

15 Are appropriate mechanisms in place to provide financial supportto officials facing temporary hardship in order to ensure that they are not tempted to engage in corrupt practices to overcome financial problems?

1.8

16 Do effective disciplinary measures exist in or public sector legislation? 4

17 Are there appropriate mechanisms for staff to report suspected breaches of the Code? 2.6

18 Are there procedures in place to investigate alleged or suspected breaches of the Code? 3.4

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19 Are breaches of the Code fully investigated and the results madeavailable? 2.8

20 Has the introduction of a limited amnesty been considered as an element of the integrity strategy? 1.4

21 Do members of the senior management team lead by example and model behaviour that is consistent with the spirit of the Code of Conduct?

3

22 Does the Code describe the values of the administration in a practical way? 3

Over All Rating For Code of Conduct

3.13

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(Annex H)HUMAN RESOURCE MANAGEMENT

8.1 Remuneration and ConditionsS.# Items Rating1 Does staff receive sufficient remuneration to maintain a

reasonable standard of living? 2.22 Are remuneration levels for officials comparable to similar

public/private sector positions? 23 Is the government aware of the important role that condition of

service, and in particular, adequate remuneration, plays in maintaining high standards of integrity? 2.9

4 Do remuneration levels for officials take into account the opportunity presented by work to supplement income through illegal commissions? 2.4

5 Are mechanisms available to identify signs of serious indebtedness of staff? 2.5

6 Is there a reward system and is it fairly administered? 2.57 If so, does the reward system share the benefits widely amongst

all staff that demonstrate appropriate ethical standards, does itencourage the development and maintenance of high standards of work performance, or does it only recognize a small number of those officials who work in a particular area where seizures and prosecutions are commonplace? 1.9

Over All Rating For Remuneration and Conditions 2.34

8.2 Recruitment, Selection and Promotion

S.# Items Rating1 Are selection criteria published and strictly adhered to for all

vacancies? 3.32 Do the selection criteria focus on high ethical standards as well

as job specific knowledge and technical competence? 3.73 Is the appointment and selection process based on merit or does

it help to know someone in ? 3.64 Are all staff fully aware of the selection process and are

results communicated promptly? 3.25 Are selection committees selected to ensure they are impartial? 3.76 Are members of selection committees chosen on the basis that they

come from different work areas? 3.67 What external checks are performed on new recruits (for example

background and police checks, previous employment records, references)? Are references and qualifications always checked? 3

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8 To what extent are conflicts of interest tolerated? Are officialsallowed to engage in secondary employment, and if so, do they have to obtain approval to do so? 2.7

9 Are officials nominating for promotion assessed on merit and their willingness to accept an appropriate level of responsibility for corruption prevention and promotion of integrity? Is acceptance of the Code of Conduct a prerequisite for employment? 3 Over All Rating For Recruitment, Selection and Promotion

3.31

8.3 Deployment, Rotation and Relocation

S.# Items Rating1 Is staff prevented from holding vulnerable positions for long

periods of time? 32 Is staff expected to transfer or rotate at regular intervals? 3.13 Are rotation guidelines clear and is rotation/mobility a clearly

understood condition of service? 2.14 Has consideration been given to a separate rotation scheme for

technical positions? 1.95 Is the rotation policy enforced and subject to independent

review? 1.96 Are there established mechanisms in place to oversee the

rotation of staff at regular intervals? Is this process free of bias or favoritism? 2.2

7 Does the working environment foster the development of an inappropriate relationship between staff and clients? 3

8 If so, what mechanisms are in place to ensure suitable control, accountability and supervision of staff working in such environment? 1.8

10 At point of interaction with the public such as passenger and cargo control points, are there mechanisms in place to prevent prior knowledge that particular officials will perform particular functions at certain times? 2.5

11 Are functions segregated in areas that are vulnerable to corruption? For example is it possible for an individual official to initiate, check and authorize payments? 2.9

12 Are examinations and inspections allocated on a random basis, rather than on a commodity, industry or geographical basis? 2

13 Are inspections subject to regular independent review? 2 Over All Rating For Deployment, Rotation and Relocation

2.37

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8.4 Training and Professional Development

S.# Items Rating1 Does the administration provide formal vocational training and

structured on-the-job training for staff covering both general and specialist skills? 3

2 Does all formal training cover and reinforce the integrity/anti-corruption message and focus on the standards of behaviour expected of all officials? Are new recruits specifically given introductory training regarding integrity principles/Code of Conduct in the organization? 2.7

3 Is the on-the-job training structured and positive and does it reinforce the integrity policies of the administration? 2.8

4 Is there a program of succession planning to ensure that the administration does not become over-reliant on a few key individuals? 2.1

5 Is the effectiveness of training periodically evaluated? 2.26 Are responsibilities and accountabilities for corruption

prevention and detection clearly identified and understood by allstaff? Do these responsibilities include identifying and correcting any behaviour that falls below expected standards? 2.9

7 Does the performance management/appraisal system identify development needs and reinforce integrity principles? 2.7

8 Are local operating practices consistent with the content of formal training programs? 2.7 Over All Rating For Training and Professional Development

2.64

8.5 Performance Management/Appraisal S.# Items Rating1 Does the administration have a performance appraisal system in

place? 3.52 If so, is the system fairly administered and regularly monitored

and reviewed? 2.73 Are performance appraisals undertaken on a regular basis?

3.54 Is there a reward system linked to the performance appraisal

system? 2.55 If so, does the reward system share the benefits widely amongst 2.4

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all staff that demonstrate appropriate ethical standards, does itencourage the development and maintenance of high standards of work performance, or does it only recognize a small number of those officials who work in a particular area where seizures and prosecutions are commonplace?

6 Does the performance appraisal system link performance to the administration's Code of Conduct? 2.6

7 Is demonstrating a high level of personal and professional integrity specifically included in the performance appraisal process? 3.4

8 Do staff have the opportunity to challenge their performance assessment if they disagree with any aspect of their appraisal?

2.79 Are managers required to take an active role in managing the

performance of staff?3.5

Over All Rating For Performance Management/Appraisal

2.98

93

(Annex I)MORALE AND ORGANIZATIONAL CULTURE

S.# Items

Rating1 Does senior management lead by example and demonstrate their

commitment to integrity and fairness through their behaviour? 3.6

2 Is senior management decision-making open and transparent? 3.83 Are staff encouraged, recognized, acknowledged or rewarded

for identifying methods by which corruption can occur and for suggesting improved control mechanisms?

2.6

4 Are special project teams used to develop integrity strategies for their work areas? Do all staff have the opportunity to contribute?

1.6

5 Are activities undertaken to measure levels of morale, such as staff surveys to gather feedback and provide suggestions? 1.6

6 Are mechanisms available in which staff can raise, discuss and resolve any cultural and/normal issues which impact on theadministration’s anti-corruption efforts?

1.4

7 Are meetings and staff journals used to communicate the standards of behaviour expected, instances of meritorious behaviour, and exposure of those found to be involved in corruption?

2.2

8 Does the administration’s systems and culture recognize and respect the rights of staff and the need for fairness in all human resource management matters?

3.4

9 Are staff recognized or rewarded for performance that demonstrates the highest levels of integrity? 3.2

10 Are internal communication mechanisms used to discuss integrity and ethical issues? Are cases of corruption discussed openly?

1.6

11 Is prompt action taken against those who fail to meet integrity standards? 2.6

12 Is effective legislation in place that protects staff that report breaches of integrity? 2.6

13 To what extent is staff at all levels encouraged to identifyand report breaches of integrity? 2

14 Are staff that comes forward to report corrupt practices rewarded or victimized? 2

15 Are penalties for corrupt behaviour sufficient to deter inappropriate behaviour? 3.6

Over All Rating For Morale & Organizational Culture 2.52

94

(Annex J)RELATIONSHIP WITH PRIVATE SECTOR

S.# Items

Ratings1 Have all relevant stakeholders and clients been identified

and their support and co-operation obtained?

2.67 2 Do client groups accept a share of responsibility for both

the problem and the solution?

1.67 3 Have appropriate consultative mechanisms been established to

facilitate communication and co-operation between and clientgroups?

2.83

4 Have major client groups been involved in the development of your administration’s anticorruption strategies?

2.17

5 Have formal co-operative arrangements been established with industry bodies incorporating aspects such as the knowledge of ’ procedures, information exchange and two-way training?

2.50

6 Has the development of codes of conduct for the private sector, which clearly set out standards of professional behaviour, been established?

1.83

7 When corrupt practices are detected involving members of client groups are the clients penalized for engaging in such behaviour? Are the penalties imposed sufficient to deter future violations?

2.00

8 Do legal provisions appropriately recognize all parties involved in corrupt practices or do they only cover the officials involved?

3.17

9 Are clients, the general public and third parties such as banking institutions actively encouraged to report instances of corruption or attempted corruption?

2.33

10 Are mechanisms in place to report instances of corruption, such as through hotlines or acomplaints and compliments system? Are these mechanisms regularly promoted to stakeholders?

2.17

11 What guarantees/commitments are provided to clients and thirdparties that any information provided will be treated confidentially? Are these commitments kept?

2.33

12 Are mechanisms in place to investigate information provided to from third parties?

2.67

13 Do clients accept their share of responsibility for maintaining a corruption free environment?

1.67

14 Is there a client communication strategy to not only provide information to clients, but also promote the achievements of ?

2.50

95

Over All Rating For Relationship with Private Sector

2.32

96

(Annex K)

Syndicate compositions and topics assigned

Syndicate A Syndicate B Syndicate CComposition Member (HRM)

Member (ADMIN)

Member (DT)

DG (DOT, Revenue)

DG (A&I, Revenue

Member (Revenue)

Member (Legal)

Member (Audit)

DG (I&I)

DG (A&I) DT

Member (TP&R

Member (ST&FE)

Member (IMS)

Member (FR&S)

DG (PCA)

DG (DOT, DT)Topics/

Checklists

Assigned

Leadership&

Commitment

Code of Conduct

Morale & Corporate

Culture

Regulatory Frame

work

Transparency

Audit &

Investigation

Reform &

Modernization

Automation

Relationship with

private sector

97

Intergrity guide Final

Documents