Content
1. Overview of corruption in Timor-Leste
2. Nature of corruption
challenges
3. Corruption in public financial
management and service delivery
4. Legal and institutional
anti-corruption framework
5. References
Summary
In little more than a decade since the achievement of
independence, Timor-Leste has made significant progress in the fight against
corruption, establishing part of the required legislative framework and a
number of institutions dedicated to combating the phenomenon.
Despite these successes, the process of state-building is
still on-going, and most state agencies and independent watchdog bodies
continue to lack the necessary human resources to tackle corruption
effectively. This problem is particularly acute in the public financial
management sector, with mounting concerns about the country´s over-dependence
on the massive financial inflows from the oil extraction sectors.
Indeed, while the growth in oil revenues has allowed the
Government to invest in much needed infrastructure and human development
initiatives, it has also created new opportunities for corruption and
administrative malpractice, as reflected in the increasing number of high-level
corruption cases being brought before the courts.
1.
Overview of Corruption in TIMOR-LESTE
Background
Timor-Leste
is one of the newest States in the world, having achieved independence in 2002.
After the end of Portugal's colonial rule in 1975, the country was militarily
occupied by Indonesia, which committed widespread human rights abuses to assert
its control in the face of popular resistance and the armed insurgent group Fretilin. Between 100,000 and 250,000 people died as a
direct consequence of the conflict and of the famines which it provoked (Benzing,
2005).
After a successful referendum on independence
in 1999, a United Nations Transitional Administration was established to run
the country, in what has been described as “the most radical state-building
exercise the United Nations has engaged in to date”
(Benzig). After another surge of military violence, East-Timor eventually
achieved full independence in 2002. However, the country struggled to reach
political stability, and in 2006 rioting and armed clashes erupted again, but
the presence of international peace-keeping forces helped to prevent the
escalation of the crisis (Freedom House, 2012).
Direct international involvement in Timor-Leste continued until
2012, when, in light of the significant progress achieved by the country in the
state-building process, the mandate of the United Nations Integrated Mission in
Timor-Leste was finally concluded (UNMIT, 2012). While the country's political
situation has remained relatively stable since then, Timor-Leste still faces a
number of major structural challenges.
Timor-Leste ranked 128th out of 187 countries included in the last
Human Development Report, displaying a life expectancy at birth of 67.5 years, and
4.4 mean years of schooling (UNDP, 2014). 49.9 percent of the population was
estimated to be in poverty and 70 percent of total employment is
vulnerable (World Bank, 2013a). Timor-Leste also
obtained the third-worst score on the 2014 Global
Hunger Index, which characterised the level of hunger in the country as
“extremely alarming” (International Food Policy Research Institute, 2014).
Extent
of corruption
Corruption
and wider good governance issues have begun to attract increasing attention
from both institutional actors and the public opinion in Timor-Leste. This is
also the result of a significant number of high-profile corruption cases
involving politicians and Government office-holders that have been brought to
court in recent years (see below). The country’s Prime Minister has recently
resigned, officially to allow younger leaders to come forward. However, this
might also in part have to do with allegations of corruption and nepotism that
have hit his party in the past months (BBC, 2015).
In
the latest Transparency International Corruption
Perceptions Index, Timor-Leste obtained a score of 28 on a scale from 0
(highly corrupt) to 100 (very clean). Thus, the country ranked 133rd
out of the 175 included in the survey, sharing its position with Nicaragua and Madagascar. In the whole of the Asia Pacific region, only
Laos, Papa New Guinea and Cambodia performed worse than Timor-Leste
(Transparency International, 2014).
The
country has also obtained consistently poor results on the World Bank’s Worldwide Governance Indicators. In
2014, Timor-Leste scored 21.5 out of 100 with respect to control of corruption,
showing no substantial improvement since 2006. Rule of law and government
effectiveness were highlighted as areas of particular weakness, with the
country scoring around 10 out of a 100 on both indicators. Voice and
accountability appeared on the other hand to be an area of relative strengths,
with Timor-Leste receiving a score of 51.7 out of a 100 (World Bank, 2014a).
With
regard to citizens’ perceptions of corruption, a survey commissioned by the
Timorese Anti-Corruption Commission in 2011 reported that 57 per cent of
respondents viewed corruption as a serious or very serious problem. 55 per cent
of those interviewed stated that the phenomenon was increasing, but a similar
percentage also believed that the government had a sincere interest in
combating it (International Crisis Group, 2012).
The
World Economic Forum's (2014) Global Competitiveness Report – which asks
respondents to rate their country on a scale from 1 to 7 (best) on a series of
various institutional dimensions – also revealed particularly negative
perceptions with regards to the frequency of irregular payments and bribes in
the awarding of public contracts (2.7), favouritism in the decisions of
government officials (2.5), and wastefulness of government spending (2.7).
2.
Nature of corruption challenges
The weakness of very young and immature state
institutions in Timor-Leste represents a major stumbling-block in the fight
against corruption in the country, compounded by low levels of education and
specialised technical knowledge. The presence of important oil reserves within
the country, as well as the significant levels of public expenditure required
in order to sustain the post-conflict state-building effort and meet ambitious
development objectives also creates opportunities for the diversion of public
funds.
Weak public administration
Timor-Leste’s state institutions are little
more than a decade-old, and have only begun operating without direct
international involvement for the first time in 2012. The challenges raised by
the state-building process continue therefore to characterise the present
situation in the country.
Lack of both financial and human resources is
perhaps the most acute issue across the board The number of civil servants
employed by the state has grown from 18,518 in 2008 to 27,000 in 2010, and
salaries have increased by 33 percent in the same period (Everett, 2012).
Nevertheless, a survey of public servants
by the Timorese Anti-Corruption Commission (2013) reported that 75
percent of respondents agreed that they sometimes do not have enough resources
and time to appropriately carry out their tasks, and that 67 percent agreed fully
that salaries for junior staff are not sufficient to sustain a family.
Another pervasive problem is the lack of well-educated
personnel, particularly within areas of the public administration which require
specific technical knowledge and financial expertise. Thus, a survey of public servants by the Timorese
Anti-Corruption Commission (2013) found
that 98 percent of public servants reported that they would
be interested in receiving further training, and about half of them said they
would like to have training in their specific subject area (Anti-Corruption
Commission, 2013).
Corruption, nepotism and cronyism are present at
different levels of the government administration: 36 percent of respondents had witnessed corruption, collusion, nepotism
or a conflict of interest at their
workplace within the last year; 15 percent
experienced receiving of money or other gifts for providing a service; and 13 percent observed false reports
and documentation being produced. A sense of impunity was prevalent,
particularly among higher level officials, only 44 percent of whom fully agreed
that senior managers are held to account. Therefore, 78 percent of public
servants agreed that, in their workplace, anti-corruption processes and regulations
could be improved significantly or greatly.
Undue political influence in the selection of civil
servants, as well as the decision-making process within the public
administration has also been reported to be widespread. Thus, while the
recruitment of state officials is handled by a supposedly independent Public
Service Commission on the basis of merit, candidates have sometimes being
reportedly being imposed due to personal or family connections (La’o Hamutuk,
2014a). Moreover, in many government agencies, ‘technical’ civil servants are
overseen by ‘political’ appointees. This, combined with a strong cultural
emphasis on hierarchical deference, means that higher-ranking superiors often
disregard technically-informed advice for their own private benefit (La’o
Hamutuk, 2014b)
The ‘resource curse’
The very considerable financial inflows generated by oil extraction
activities can contribute substantially to the social and economic development
of the host country. However, particularly in transitional contexts
characterised by low institutional capacity and poor accountability mechanisms,
they can also create opportunities for excessive rent-seeking, thereby fuelling
large scale corruption, as well as poverty, injustice and conflict (Natural
Resource Governance Institute, 2014).
In
Timor-Leste, income from exporting petroleum wealth is channelled into a
Petroleum Fund, established in 2005 to help the country preserve resource
revenues for future generations in the face of the complex challenges posed by
transition and state-building (La'o Hamutuk, 2007). According to its latest
Quarterly Report, the Petroleum Fund (2014) has a capital of USD16.5 billion.
Considering the country’s level of development,
Timor-Leste’s natural resource governance framework appears to be remarkably
strong. Indeed, the country ranked 13th out of the 58 states and
territories included in the latest Resource
Governance Index (Revenue Watch, 2013). Timor-Leste obtained very high
scores in the areas of institutional and legal setting (with the exception of
freedom of information law, and environmental and social impact requirements),
reporting practices, and safeguards and quality controls (with the exception of
conflict of interest disclosure requirements). On the other hand, it performed
rather poorly in the enabling environment component, with government
effectiveness, rule of law, and control of corruption identified as the main
areas of weakness.
Since 2010, Timor-Leste has also been certified to
be compliant with the Extractive Industries Transparency Initiative
(EITI), whose aim is to promote
better natural resource governance and to reduce the risk of misappropriation
of funds generated by the extractive industries through joint cooperation between
governments, private sector companies, civil society groups, investors and
international organizations.[1]
Despite
these remarkable achievements in natural wealth governance, the ‘resource
curse’ remains a source of concern for Timor-Leste, this is one of the most
oil-dependent countries in the world. Indeed, the extraction
sector accounts for roughly three-quarters of its GDP per capita (USD 3,728 out
of a total 4,840) (International Monetary Fund, 2014). This has particularly
troubling implications for the long-term sustainability of the country’s
non-oil domestic production, as well as of its revenue strategy (see below).
3.
Corruption in PUBLIC FINANCIAL MANAGEMENT
Budget
The Timorese Government budget for 2015
was set at USD 1,570m, marking a 2.1% increase from the previous year (Ministry
of Finance, 2014). This is in line with the remarkable upward (but declining)
trend driven by increasing oil revenues in the last few years. Thus, in 2012,
the budget was estimated to have grown 245 percent compared to 2006 (Everett,
2012).
In the long term-vision for the country
up to 2030 set out by the Ministry of Finance's (2011) Strategic Plan, “attaining high quality and
responsive Public Financial Management services” was identified as the first
strategic goal. Some reforms have already been undertaken, notably the creation
of a Budget
Transparency e-portal providing access to financial
information on how the budget is being spent, and on the Government’s execution
record.
However, in the latest Open Budget Survey, Timor-Leste obtained
a score of 36 out 100, which placed it below the
survey average score of 43. Compared to its neighbours, Timor-Leste fared
better than Cambodia, Myanmar and Vietnam, but worse than Indonesia, Malaysia
and the Philippines (International Budget Partnership, 2012). The ensuing report
recommended Timor-Leste to increase the comprehensiveness of the executive’s
budget proposal by providing missing information on expenditures for individual
programs, actual expenditures and revenues of the year prior to the budget
year, extra-budgetary funds, transfers to public corporations, quasi-fiscal
activities, earmarked revenues, financial and nonfinancial assets, and
percentage of the budget devoted to secret items.
While
the Government is required to submit the annual state budget to Parliament for
discussion and approval, a number of factors undermined the effectiveness of
this measure. Thus, the report by
International Budget Partnership (2012) recommended the Government to have
a formal pre-budget policy debate prior to the tabling the budget proposal; to
consult with members of the legislature as part of its process of determining
budget priorities; and to establish a requirement to seek approval from the
legislature prior to shifting funds between administrative units and budget lines
as well as prior to using contingency funds.
More recent reports suggest that no
progress has been achieved on these issues. Thus, more than one-quarter of the 2015 proposed budget
consisted of "special funds" which the executive can still freely
shift among different large infrastructure projects, including ones which were
unmentioned in the budget itself (La'o
Hamutuk, 2014a). Moreover, in both 2013 and 2014, the Parliament merely
rubber-stamped the budget proposed by the executive without substantial open
debate (see below, section on Parliament).
Timor-Leste does
not have a citizen’s budget. There is a provision for parliamentary hearings
covering key administrative units, in which testimony from the public has been
sought in the past. The Parliament has also previously invited input for budget
discussion from civil society organisations. However, this has not happened in
2014, when public involvement in the process was particularly limited (La'o Hamutuk, 2014a).
Spending
The sustained growth in oil revenues
enabled a five-fold increase in public spending between 2006 and 2012. This was
also a response to domestic pressure on the Government to invest in development
and infrastructures, transfer wealth to previously disenfranchised groups, and
counter declining incomes and stagnant employment (World Bank, 2014b).
The allocation of
expenditures of the 2014 Annual Budget reflects these priorities, with goods
and services accounting for the largest
part of the budget (USD 476m), followed by infrastructures (USD 425m), and
public transfers (USD 292m) (La'o Hamutuk, 2014c).
Actual execution
of expenditure however remains problematic.
Well under 75% of the $1.65 billion appropriated
for 2013 was spent by the end of the year. The issue is particularly pronounced
in the infrastructure sector, where budget execution was estimated at less than
15 percent for most projects (Wallis and Myat, 2013).
Social assistance expenditure has also been
criticised for disproportionately favouring veterans of the independence
struggle at the expense of a more equitable distribution. Households that fell
in the bottom quintile accounted for 27 percent of all beneficiaries of social
assistance programs, compared to 14 percent accounted for by the richest group (World
Bank, 2013b).
The transparency of the process of allocation
of 'public transfer' expenditure is particularly low, as much of this
information is not included in the detailed budget submitted to Parliament by
the Government (La'o Hamutuk, 2014d).
Procurement
The laws regulating procurement are
complex and fragmented. On the Ministry of Finance's webpage relating to procurement, a
non-exhaustive list of 10 different decrees is provided, highlighting the
potential risk of confusion and uncertainty.
Since 2011 Timor-Leste has an eProcurement portal, where all open tenders and
related contracts are made publicly accessible. However, in 2013, 3,019 of the 4,117 tenders posted on the
portal during the year were not open, and the related contracts of award - some of which were for a value of several
USD millions – were thus not accessible by the public (La'o Hamutuk, 2013a). This also points to the very
weak implementation of regulation limiting single-source procurement in order
to ensure openness and competitively in the allocation of Government contracts.
Existing conflict of interest laws have
been blatantly by-passed in a number of cases involving high-profile office
holders. In one such case, occurred in 2012, the Minister of Finance was
accused of having approved a procurement contract for a company founded, owned
and directed by her husband (Tempo Semanal, 2012). In the same year, an
ex-Minister of Justice and ex-Director of Procurement were also both convicted
for their undue involvement in the allocation of a contract to the company of
the former's husband (Millennium Challenge Corporation, 2012).
A number of other key pieces of legislation have still not be
adopted at all. For example, there is no single system to track companies that
have been convicted of corruption-related crimes in order to prevent them from
participating in future procurement bids. In practice, various such
'black-lists' are reportedly kept, both by Parliament and by the National
Procurement Commission. However, due to a lack of transparency in their
compilation, observers have cast doubt on their exhaustiveness, as well as on
the extent to which they are actually enforced (La'o Hamutuk, 2014a).
In 2013, for instance, the Government came under public criticism
after granting a contract to a Chinese state-owned company that in 2008 had
failed to fulfil the terms of a USD 300m contract – the largest in East-Timor's
history at the time. In light of the
Chinese Government's record of generous aid donations, suspicions were voiced
that undue influence had been exercised in the assignation of a new contract to
the company (Benner, 2013).
The process of appeal by unsuccessful
bidders is also considered to lack the necessary transparency because the process is handled within the Ministries and agencies themselves,
rather than by an independent judicial organ (La'o Hamutuk, 2014a).
Tax administration
Timor-Leste has the second-lowest total
tax rate in the world: 11 percent, compared to an Asia and Pacific regional
mean of 34.4, and an OECD mean of 41.3. Nevertheless, in 2013 the country could
boast a budget balance of 31.1 percent of GDP. This positive overall balance,
however, obscures the potentially dire consequences of the government’s fiscal
dependence on oil extraction revenues. Thus, non-oil overall balance for the
same year was estimated at –92.8 percent of GDP. In other words, the
non-oil deficit was 130 percent of non-oil GDP (World Bank, 2013a).
While International Monetary Fund’s (2014) data showed a
modest increase of non-oil domestic revenue (from 2.3 to 3.5 percent of GDP)
between 2010 and 2015, this was still dwarfed by petroleum revenue (estimated
at 52.5 percent of GDP in 2015). The World Bank (2013a) also noted with
concern that the Government was drawing double the estimated sustainable income
from the Petroleum Fund to address pressing development needs.
The issue is made all the more pressing by projections
according to which reserves from fields currently under production
may not last beyond 2025 at current rates of extraction. Consequently, both the World Bank (2013) and the International
Monetary Fund (2014) have called upon Timor-Leste to take measures to ensure
long-term fiscal stability by cutting expenditure and while at the same time implementing
projects that build a sufficient non-oil revenue bases.
In order to do so, a rapid and sustained growth of the
private domestic sector is necessary. The World Bank’s (2015) Doing Business data, however, provide
some measure of the obstacles that must be removed in order to meet that
objective. Timor-Leste ranked 172 out of the 189 included in the survey,
registering no change in score since 2013 but a relative loss of three
positions in the rank. On three categories, namely registering property,
enforcing contracts and resolving insolvency, the country actually classified
in the overall last position.
With
specific reference to revenue collection, paying taxes in Timor-Leste took 276
hours per year, compared to an Asia and Pacific average of 204 and an OECD
average of 175 (World Bank, 2014). Moreover, respondents interviewed for the
World Economic Forum’s (2014) Global
Competitiveness Index assigned their country a mean score of 3.3. on a
scale from 1 to 7 (best) on the question of the frequency of irregular payments
and bribes in annual tax payments.
4.
Legal and Institutional anti-Corruption
Framework
Most of the key anti-corruption mechanisms
and institutions have been established under the auspices of the United Nations
Integrated Mission in Timor-Leste, which –together with the wider international
donor community– provided not only the political impetus, but also
indispensable financial and technical assistance to the initial state-building
effort.
Domestic political elites have not
demonstrated a consistent commitment to obtain results in the fight against
corruption. In fact, the number of corruption allegations and scandals
concerning high-level politicians – including the conviction of a number of
former Government ministers – seems to point to a lack of transparent ethical
standards within government and political parties themselves.
A number of independent watchdog institutions
have been created. In particular, the Anti-Corruption Commission has played an
active role in monitoring and holding public officials to account, obtaining
important results in terms of investigations and successful prosecutions.
However, most of these bodies suffer from a pervasive lack of resources of both
a financial and human kind. The legislative framework is deficient in a number
of important respects, which would have to be amended in order to enable a more
effective fight against corruption.
Legal framework
International conventions
The Government
of Timor-Leste has signed and ratified the United Nations Convention against
Corruption in 2008. However, Timor-Leste is not a party to the OECD Convention
on Combating Bribery of Foreign Public Officials in International Business
Transactions.
National legislation
The
Timorese Penal Code criminalises acts of active and passive corruption, which
punishable with up to three years of imprisonment and/or the payment of a fine
(Articles 292 and 293). Embezzlement is punishable with 3 to 10 years of
imprisonment (Article 295); misappropriation of public assets with up to 2
years (Article 296); abuse of public power with 1 to 4 years (Article
297).
Political party financing is an area of particular regulatory
weakness. The law does not establish limits on private donations to political
parties or individual candidates, nor does it provide for a disclosure
requirement. While there is a complete ban on corporate donations to parties,
this does not extend to individual candidates. Moreover, the ban is
systematically disregarded.
Before the 2012 elections, for instance, several companies that had been awarded lucrative government tenders
were reported to have pledged a total of USD 2.6 million for the electoral
campaign of the Prime Minister’s party (Murdoch, 2012). The Prime Minister himself did not
deny the reports, but merely responded that the money was essential for the
campaign, and rejected the accusations of corruption were “politically
motivated”.
A
number of other key legislative safeguards against corruption is also absent. The
Supreme Court does not have judicial review powers vis-à-vis the executive, but
only on legislative acts by Parliament. While the head of State and ministerial-level
officials (but not members of the legislature) are required to submit asset
disclosures to the Court of Appeal, these are neither independently audited,
nor made publicly available. There is no norm prohibiting members of the
executive to accept gifts and hospitality; no limits on parties’ expenditure;
no legislation to prevent the phenomenon of “revolving doors” between public
administration and private sector. Conflict of interest laws for public
servants do exist, but their implementation is regarded as very ineffective
(La’Hamutuk, 2014a).
East-Timor
also lacks specific whistle-blower protection laws. A report by the Anti-Corruption
Commission (2013) found that a quarter of the civil servants
interviewed in the study did not report the transgression they had witnessed
due to fear of other people’s revenge or retaliation.
Currently, there is no law giving citizens the right
to request government information and records. The
Government has declared its intent to pass
a freedom of information act, but this has not yet been presented (La'o Hamutuk,
2014a).
Some government agencies already publish
online information of public interest on a discretionary basis. Thus, as
already mentioned, the Ministry of Finance web-page gives public access to
various e-portals on the subjects of budget transparency, procurement and aid
transparency. However, it must be underlined that, in 2012, only 0.2 percent of the population had
access to the internet (UNIMT, 2012), which raises doubts about the practical
effectiveness of such initiatives.
Institutional framework
Anti-Corruption Commission
Law No. 8/2009
established an Anti-Corruption Commission (CAC) consisting of a Commissioner,
Deputy Commissioners and support staff, and entrusted with a mandate “to
undertake preventive action and criminal investigation action against
corruption in any of its forms”. CAC does not have power to arrest
or prosecute, but passes its findings over to the Prosecutor-General, who
together with the police and the courts, decide whether to continue the case.
The law confers to
the CAC “a legal personality with technical independence and administrative and
financial autonomy”, and makes available to it a yearly
budget “sufficient to cover its operational costs and adequate to maintain its
independence, impartiality and efficiency”.
The Commission is
generally believed to be an independent and fairly effective institution. Under
Commissioner Soares, a previous advisory board member of the local
anti-corruption NGO La’o Hamutuk, CAC has opened several investigations on allegations
of corruption against high-level government officials, a number of which
ultimately resulted in the conviction of the suspects (La'o
Hamutuk, 2014a).
The CAC has in
some occasions been attacked by politicians, including recent accusations of undue
interference by the Prime Minister (East Timor Law and Justice Bulletin, 2013).
In October 2014, both Parliament and Government passed resolutions terminating the
contracts of a number of international legal officials on the basis of an
unspecified “national interest”. Some of these were advisors to the
Anti-Corruption Commission (La'o Hamutuk, 2014g).
Despite the
President of the Court of Appeal's statement that the acts were
unconstitutional, the personnel targeted by the resolution eventually had to
leave the country. It is widely speculated that the decision was connected with
ongoing corruption investigations
involving current and former members of the government. Concerns have also been
voiced that the decision will have a negative impact on the capacity of the CAC
and other anti-corruption institutions to effectively carry out their functions
(Marx, 2014).
Provedoria for Human Rights and Justice
Established
in 2004, the Provedoria for Human Rights and Justice (PDHJ) has a two-fold
mandate in the areas of human rights and good governance. Its functions include
receiving and investigating complaints from the public against the public
administration. PDHJ is also required to refer complaints potentially involving
criminal charges to the CAC or the Office of the General Prosecutor. Next to
that, the PDHJ also plays a broader role, which includes promoting
awareness-raising initiatives and making recommendations for government on good
governance practices (UNDP, 2010).
The PDHJ is regarded as sufficiently protected, both in
law and in practice, from political interference. However, concerns have been
raised that PDHJ staff mostly lacked the necessary analysis and investigative skills, limiting the
institution’s effectiveness on issues requiring in-depth technical or financial
knowledge (La'o Hamutuk, 2014a).
High Administrative, Tax and Audit Court
An independent High Administrative, Tax and Audit
Court (HTAC) has only been established in 2012 (UNDP, 2012). Its mandate is to
“monitor the lawfulness of public expenditure and to audit State accounts”. Due to
lack of qualified personnel, however, the HTAC is currently is functioning as
part of the Court of Appeals, whose judges are appointed to it on a rotational
basis (La'o
Hamutuk, 2014a).
The institution was initially charged with carrying out audits
on any public expenditure exceeding USD 500.000, but this threshold was
subsequently raised to USD 5m. While this was justified as a consequence of the
objective lack of resources and staff, some observers have speculated that the
decision might also reflect a political desire to limit the activities of the
HTAC.
By the end of 2014,
the HTAC had only concluded two reports covering the financial years 2010-2012
for two state institutions. These were published online, but are only available
in Portuguese, which most Timorese citizens do not speak. The institution is
expected in the future to publish annual reports and make other information
available online (La'o Hamutuk, 2014f).
Office of the Prosecutor General
The
Office of the Prosecutor general is mandated with investigation and prosecution
of criminal offences, including corruption-related crimes. By the end of 2012,
372 serious crimes had been investigated since 2007, and 61 were pending. The
backlog of cases was said to be due to the difficulty in undertaking special
investigations requiring specialized instruments, skills and techniques, as
well as witness issues (UNDP, 2013).
The
linkage between the Prosecution and the Police is also not yet well-established
clarify “the responsibilities of each body of criminal police working in the
field of criminal investigation” in order to “guarantee the functional stability
of criminal investigation, clarify, rationalize and operationalize the
organization of criminal investigation, establish the boundaries of technical
and tactical autonomy of police forces and distribute responsibilities between
the different bodies of criminal police (Government of Timor-Leste, 2015).
With
specific reference to the issue of corruption, 40 new cases were brought to
court in 2013 alone, bringing the total count of cases under investigation to
seventy-five (US Government, 2013). In 2014, the present Minister of Finance
was also indicted for alleged abuse of power and corruption, generating a
significant political crisis in the executive (Australian News, 2014).
Judiciary
After
22 years of Indonesian military occupation, the new state of Timor-Leste
inherited a virtually non-existent justice system, and building local
institutional capacity was therefore a key priority of successive UN
peace-keeping missions and donors alike. International jurists continued to
perform both advisory and line functions until October 2014.
While
significant improvements in the formal justice system had been made, a majority
of Timor-Leste’s citizens were more confident with local justice mechanisms,
with a risk of contradiction and confusion between the two levels. Lack of human resources, infrastructure, and
legal awareness were cited as persisting challenges (Asia Foundation, 2013).
Despite
these shortcomings, a number of judgments on high-profile corruption cases
involving government officials and office-holders have been delivered in recent
years. In 2012, for instance, a former Minister of Justice was sentenced to
five years’ imprisonment for her involvement in the improper
award of a government contract (East Timor Law and Justice Bulletin, 2012). In
2013, a former Secretary of State for the Environment and two of his former
staff were also found guilty of corruption and embezzlement, and sentenced to
five years (US Government, 2013).
Since no Supreme Court has yet been established, the Timorese Court
of Appeal has to perform a dual role, which according to critics does not
ensure the necessary independence of judicial review. Recently, judges of the Appeal Court have
disqualified their President
from taking part in the proceedings concerning an appeal by the former Minister
of Justice convicted of corruption (see above), due to a bias in favour of the defendant. The affair was
perceived by observers as a blow to the credibility of the Court (East
Timor Law and Justice Bulletin, 2013b).
Director of Public Prosecutions
The Director of Public Prosecutions is solely
responsible for deciding whether to initiate court proceedings against those
accused of a crime, including corruption. This decision is made on the basis of
information presented to the director by either the ICAC or the police, who
prepare the case files (Transparency International 2007: 34). The director is completely independent and
not accountable to anyone.
Parliament
Elected
representatives have two main functions in the fight against corruption. On the
one hand, they carry the main responsibility for taking the legislative actions
required in order to establish an effective anti-corruption regulatory
framework. On the other hand, Parliament has a crucial role to play in the
system of checks and balances designed to ensure oversight of the executive.
The track record
of the Timorese legislature on the issue of corruption is mixed. While a comprehensive
anti-corruption bill has been presented to Parliament by the Minister of Public
Administration, no further action has been taken to date (Anti-corruption
Commission, 2014). Some anti-corruption activists have also complained of the
scarce attention paid by most elected officials to good governance issues.
Concerns
have also been raised with regard to the ability of Parliament to properly hold
the Government to account. As already mentioned, the annual budget must be
reviewed and approved by the Parliament. However, in both 2013 and 2014 the
discussion of the budget was moved out of an open, televised plenary debate
into a closed-door ad hoc committee, whose recommendations were approved by the
plenary without substantive discussion (La'o Hamutuk, 2013c and 2014a). The International
Budget Partnership (2012) Open Budget
Survey also called into questioned the parliamentary Budget Research
Office’s ability to effectively due to under-funding and lack of staff.
Other actors
Civil society
Civil Society
Organisations (CSOs) played a significant role in the path toward Timor-Leste's
independence, and have since then gradually shifted their focus toward “active
citizenship” in the context of the on-going process of nation-building
(Wigglesworth, 2012).
Freedom of association is protected
under Article 43 of the Timorese Constitution. In 2013, there were 323 national and 57 international NGOs actively
operating in Timor-Leste. Some of them – notably La'o Hamutuk – have a specific
anti-corruption focus. In 2014, there
were no reports of
anti-corruption activists or NGOs having been shut down by the government, imprisoned
or physically harmed (La'o Hamutuk, 2014a).
However, civil
society organisations are not required to disclose their sources of funding,
which can undermine trust in their independence. Some representatives of
anti-corruption NGOs also complained that they had little access to, and were
not taken seriously by, policy-makers (La'o Hamutuk, 2014a).
Media
The Timorese
Constitution guarantees freedom of the press, as well as “the right to inform
and be informed impartially” (Article 40).
A 2013 study
reported that, both in law and in practice, Timorese media were free to operate
without government censorship or other undue restraints. The Press Freedom
Index also ranked Timor-Leste 90th out of the 179 countries included
in the study, making it one of Asia's freest presses (Reporters Without
Borders, 2013).
However, a new
media regulation law approved by the Parliament in 2014 was heavily criticised
for its stifling effect on freedom of information. The act sought to create a
mechanism to control who can qualify as a journalist by establishing a press
council, partly staffed by parliament-appointed members with the power to deny
and revoke licenses (Economist, 2014). The law was eventually ruled
unconstitutional by the Timorese Court of Appeal, but concerns persisted over
government's attempts to interfere with freedom of press (Global Voices Advocacy).
Lack of funding
also remains a serious issue, leading to a perceived lack of strict
professional standards. Moreover, major societal factors also hamper the
ability of the media to effectively exercise their function. In 2011, 16
percent of the population did not access any form of media; and most people
still said they relied on community leaders for information (UNMIT, 2011).
5.
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“Anti-Corruption Helpdesk Answers provide practitioners around the
world with rapid on-demand briefings on corruption. Drawing on publicly
available information, the briefings present an overview of a particular
issue and do not necessarily reflect Transparency International’s official
position.”
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