Online, 25 November 2020 - The shift into the online realm – accelerated by the pandemic – has had a profound impact on patterns of transnational crime. UNODC research shows how, due to the Covid-19 crisis, a rapid rise in public spending, the relaxation of due diligence checks and simplified procurement rules have created conditions ripe for corruption and fraud. In Southeast Asia, a lack of financial transparency has made the proceeds of such corruption difficult to trace.
The States parties to the United Nations Convention Against Corruption have emphasized the need to utilize innovation and technology to fight corruption on several occasions. Already in 2015, the Conference of States Parties to the Convention adopted a resolution on “Promoting the use of information and communications technologies for the implementation of the United Nations Convention against Corruption”. Most recently, in a resolution of December 2019, the Conference called upon States Parties to make use of innovative and digital instruments to promote transparency and prevent conflicts of interest.
Currently most Southeast Asian countries lag behind in the introduction of the data analytics technology needed to enhance transparency and support investigations. Public agencies report limitations in available datasets, legal frameworks, inter-agency data sharing, and internal capacities/technological infrastructure. UNODC research suggests that less than 50% of key agencies in the region utilize some limited form of data analytics as part of anti-corruption, fraud or anti-money-laundering activities.
To promote the ethical use of data analytics to counter fraud and corruption in Southeast Asia, UNODC held a Digitalization Against Corruption webinar on 25 November 2020, to increase awareness about policy and operational next steps that Member States can take in order to enhance transparency through the use of data analytics. The event was organized in cooperation with the UK Government Digital Service, Open Contracting Partnership and Open Ownership, and supported by the Foreign Commonwealth and Development Office of the United Kingdom.
The webinar was opened by John Penrose MP, the UK Prime Minister’s Anti-Corruption Champion, who gave a broad strategic overview of how a digitalized approach to anti-corruption could not only lead to enhanced transparency, but to more efficient services and a revitalized economy. While Covid-19 has created new opportunities for corruption, he warned that a reduction in medical spending once the pandemic subsides would be unlikely by itself to reduce corruption risks. He explained that economic regeneration packages would instead present a new series of corruption opportunities, which entrepreneurial criminals would inevitably seek to exploit. “Digitalization will be key in ensuring that the gains of economic recovery are not siphoned off through corruption or lost to other forms of inefficiencies,” he stated.
Giovanni Gallo, Chief of the Implementation Support Section of the Corruption and Economic Crime Branch of UNODC, outlined how digitalization had formed a key part of governmental responses to the pandemic, including through the automatization of services, on-line asset disclosures, e-procurement, data mining and analytics and online whistle-blowing mechanisms for citizens to report on fraud and corruption. He explained how digital responses could fight corrupt practices that had become entrenched over the course of the pandemic, with the use of electronic data enabling the identification of conflicts of interest, the simplification of financial and anti-money-laundering investigations and the engagement of citizens to highlight embezzlement and mismanagement of public funds.
These are the main messages highlighted by speakers and participants:
Digitalization Can Enhance Transparency & Good Governance Alike
The case for data analytics in government can be made not only from an anti-corruption perspective, but for efficiency in public administration more broadly. Bernadine Fernz, the Head of Infrastructure at the Open Contracting Partnership, spoke of the power of open data and participatory mechanisms to improve efficiency, enhance competition, build credibility and trust, and deliver better value for money.
Screenshot of Digitalization Against Corruption webinar. The event received over 260 registrations from government, civil society and academic organizations, predominantly from countries within Southeast Asia.
Digitalization can save government revenues by building transparent procurement processes, reducing the sheer economic drain of corruption. Ms Fernz pointed out that public procurement has been the number one corruption risk for governments since long before the pandemic began. In Indonesia for example, 80% of corruption cases relate to public procurement, costing the government up to $4 billion USD per year (KPK 2019).
At the same time, the digitalization of government services bring enormous potential when it comes to cooperation between government agencies and beyond. Warren Smith, the Global Digital Marketplace Programme Director of UK Government Digital Service, argued that such technology unlocked efficient “internet-era business models”, in which services are co-designed and co-delivered together with multiple suppliers and business users. He framed this in the broader context of smart cities – an ongoing priority for the governments of Thailand and the UK – designed to promote smart infrastructure, open and secure data, sound urban governance and strategies on supporting smart citizens. He argued that digitalization should therefore not be thought of as a singular technique, but as a cross-cutting and enabling culture and set of principles that agencies will need to embrace collectively in order to maximize its effectiveness.
Thom Townsend of Open Ownership Presents Global Snapshot of Beneficial Ownership Commitments
Conversely, cooperation across governments is key to maximizing data transparency. Thom Townsend, the Executive Director of Open Ownership, stressed that because corruption is a transnational problem, it was important to be able to combine datasets from different jurisdictions in order to have a full picture of the power structures behind public infrastructure. Encouragingly, he argued that the need for beneficial ownership disclosures – showing who ultimately benefits from assets – is becoming more widely accepted as a global norm, alongside growing recognition of the need for ownership transparency and an awareness of the power of emerging technology to facilitate this.
While the implementation of data analytics is still in its infancy in many countries, transparency makes it increasingly easy for public services to be evaluated effectively by different actors. Khairil Yusof, Co-Founder and Coordinator of the Sinar Project in Malaysia, argued that an increase in the number of open datasets means that it is possible to link up information that had previously been viewed in isolation, such as information on Politically Exposed Persons (PEPs), beneficial ownership registries and procurement contracts, serving to expose corruption and protect the integrity of public services.
Given the uncertainty with which many governments are currently faced, one strategic advantage of digitalization is that it can facilitate an adaptable and forward-facing approach. Ms Fernz explained how the Open Contracting Red Flags methodology is able to identify potential collusion at the bidding/tender stage, proactively preventing corruption from happening instead of only addressing it afterwards. 
Bernadine Fernz (Open Contracting Partnership): Red flags can identify potential instances collusion, e.g. organizations repeatedly winning contracting bids together.
Data Sharing Requires Common Standards
The webinar underlined the importance of frictionless data sharing through common standards and frameworks, developed using participatory mechanisms that include civil society input. Examples of this include the Beneficial Ownership Data Standard (BODS), developed by Open Ownership, that seeks to ensure that data is compatible across jurisdictions so that it can be analysed at scale. Statements about beneficial ownership within this framework are regarded as claims, which can overlap or contradict one another. Because the ownership of assets is often shifted between individuals (e.g. between spouses) to evade anti-corruption investigations, it is critical to retain a historic record to ensure that ownership changes remain recorded.
On the procurement side, the Open Contracting Data Standard (OCDS) developed by the Open Contracting Partnership guides the publication and use of data at all stages of the contracting process. This framework regards data as a means of further analysis, rather than an end in itself, inviting interventions to be tailored depending on who will use the data and which data fields and features needs to be prioritised.
The Open Contracting Data Standard covers all stages of the procurement process
Open data standards can be important for empowering anti-corruption practitioners across a vast array of contexts. Drawing on the guidance of the OCDS Red Flags methodology, Khairil Yusof explained how algorithms could be replicated in order to apply anti-corruption tools within “data constrained environments”. Meanwhile, the guidance and common language within open data standards helps to make complex technical areas more accessible, for example among non-procurement specialists and within resource-limited organizations.
Digitalization Growing in Southeast Asia
Giovanni Gallo pointed out that, when it comes to using the power of technology, Southeast Asia holds considerable potential. More than half of the region’s population is under the age of 30, and hence born in the era of the internet. In 2020, despite the spread of COVID-19, the number of tech startups in South East Asia has continued to climb, as levels of internet penetration reach new heights. More people are living and working on-line than ever before – a phenomenon that the pandemic has accelerated significantly. This holds great promise for the prospects of corruption prevention in the region.
To illustrate progress within Thailand, Pattaraporn Vorasaph, Deputy Director of the Comptroller General's Department (CGD) at the Ministry of Finance, outlined the Open Government Data of Thailand e-governance platform, which centralizes searchable information from numerous government departments, including on bidding and procurement. To enhance transparency, the input of multi-stakeholder groups were sought through programmes that include the Integrity Pact and CoST (Infrastructure Transparency Initiative). She explained that using clear and non-technical language was important to build an inclusive space where stakeholders from different backgrounds could enhance their understanding of how to hold government departments to account.
Rowena Candice Ruiz, Executive Director of the Government Procurement Policy Board (GPPB) of the Philippines, spoke about the challenges posed by the disruption of global supply chains. She outlined the role of the GPPB Online Portal in safeguarding the integrity of emergency procurement, and the GPPS Online Blacklisting Portal that centralizes the repository of blacklisted entities across government departments. She explained that moves were underway to develop analytics dashboards to identify buying patterns, the volume and amounts of awarded contracts, average procurement periods and timelines, the basic gender profiles of procurement officers, risk registries and levels of compliance.
Visualizations of procurement fraud indicators in Indonesia among tender participants (left) and procurement committees (right)
Mochamad Hadiyana, the Deputy for Information and Data at the Corruption Eradication Commission (KPK) of Indonesia, explained that while procurement itself was decentralized across government departments, the National Public Procurement Agency (LKPP) has centralized information from across local and central procurement entities in the form of INAPROC and SIRUP e-portals. Currently, the results of digitalization efforts are used to guide corruption investigations, gather evidence in corruption cases, recommend improvements to procurement management systems and to detect patterns of fraud.
Ultimately, emerging technology has already revolutionized the field of anti-corruption. Khairil Yusof explained that the rapid growth of open data has empowered even smaller organizations, by enabling them to build on open datasets and common frameworks already in place. As an example, he drew on his experience inputting basic information from news articles into datasets, which then enabled him to visualize the complex relationships between companies and to identify additional instances of potential corruption. “Even without access to a huge amount of high quality data, it is now possible to make use of data analytics in the fight against corruption.” He explained that the next big challenge will be using digitalization not only to expose corruption publicly, but to build cases for prosecution.
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