AN AGENDA FOR ETHICS IN GOVERNANCE

- P S Bawa*

Since the new government of the UPA has secured the mandate of people for a period of five years, we urge upon top leaders to fulfill the aspirations of common citizens to deal with the scourge of corruption that has eaten into the vitals of social, economic, and political regimes. One can forget the previous coalition of various interests that might have prevented the government from carrying out its will. Now without any hurdle from ‘vested’ interests that were required to keep the show going, the new government must pledge itself to doing the right things first.

We, at the Transparency International India, are conscious that mere homilies and exhortations of being ‘good’ and ‘ethical’ shall not deliver. There have to be concrete steps towards achieving and enforcing integrity in public services. It has to be a meaningful action in consonance with the earnest intentions of the government. We, therefore, present the following specific agenda for reform that shall deal with issues concerning all the three components of government – legislature, executive, and the judiciary.

Ratification of the UNCAC

In order to ensure of retrieval of black money lodged in Swiss and offshore banks, it is essential that the government ratifies the UN Convention against Corruption. Signing of the Convention is not enough. Ratification of the same shall secure international cooperation. So far, the GOI has not taken keen interest in the matter and shown any serious concern. TI India had made a gap analysis, presented

to the government, two years ago and found that all that is required of the nation state is already complied with by India.

Benami Transaction (Prohibition) Act

The Act was passed by the legislature in 1988. The rules under the Act have not been notified, even after 21 years of the passage of the Act. This has rendered the Act and the intention of the parliament infructuous. Notification of rules is an imperative for its operation. Till then, the Act is a dead letter and serves no purpose. I had filed a petition under the Right to Information Act. The government has been advised by the Central Information Commissioner to take action in the matter, without specifying any time schedule. The issue shall lave to be pursued further, as this legislation is one that can create some effect on the corrupt officials who own property by proxy.

Corrupt Public Servants (Forfeiture of Property) Act

In order to deal with the problem of corruption, there is a need for forfeiture of property of corrupt public servants whose conduct is under inquiry so that they cannot alienate the assets during investigation. Government of J&K has enacted such a provision. Government of Bihar is considering the legislation on this score. For a serious action, GOI must legislate on this issue.

Lok Pal Bill

The Lok Pal Bill was presented in the parliament eight times. It was aborted on all occasions on one ground or the other. There is thus no control over the legislators and ministers committing any misdemeanor. It is essential in public interest and for probity among those who exercise tremendous powers of the State. The legislators have always avoided any control over their functioning. Since the existing institution in the form of house committee is not effective, such a bill is needed. The Second Administrative Reforms Commission too has recommended the institution of Rashtriya Lokayukta, which is the same thing as the Lokpal.

Whistleblowers Act

In order to protect the interest of a whistleblower, such an enactment is required so that insider information on the corrupt practices is available. This would bring about more transparency in the functioning of the organization.

Independence of the CBI

The decision of the Supreme Court in Vineet Narain case that had granted independence to the CBI was undone by amendment of the Delhi Special Police Establishment Act in 2003. It also dealt a blow to the equality clause by bringing back the Single Directive that empowers the Government to grant permission to CBI even at the stage of conducting an enquiry. So whereas in the case of an ordinary public servant there is single protection at the stage of granting sanction to prosecute, for officers of the rank of joint secretary and its equivalents, there is a double protection. The decision of the Supreme Court is required to be restored.

Strengthening of the Central Vigilance Commission

The role of the CVC is recommendatory and therefore ineffective. Even in the cases where the decision to grant sanction to prosecute is delayed, the most the Commission can do is to place the report in parliament. The government and the public sector undertakings had been flouting the recommendations of the Commission with the result that it is not as effective as it ought to and can be, given the freedom.

Strengthening the Judicial System

The safety of the individual and community, security and integrity of the nation, and the state of economy depend upon an efficient justice system that is also required to deal with the problem of corruption. In order to restore confidence of people in the judicial institutions that is plagued by the delay in the disposal of cases, special attention needs be given to strengthening all the components of the system. The population-judge ratio requires improvement from the existing 10.5 per million people to at least 50, even though the advanced countries have almost double the proposed figure. This has been recommended by various commissions and the apex court. Similarly, the investigative agencies at the state level, prosecution branch, and prisons have to be attended to. This is possible only if the CJS is considered as a plan subject or given sufficient resources for improvement. The modernization grant does not deal with the basics of reform.

Judicial Commission

To deal with incidence of judicial corruption and also to ensure transparency of higher judiciary, it is imperative to provide statutory machinery for judicial accountability. The Judges Enquiry Bill, containing the setting up of the Judicial Commission, is required to be passed. The in-house procedure has not delivered so far.

State and National Security Commission

The reforms in police, directed by the Supreme Court in the Prakash Singh judgment, have not been taken to a logical conclusion by the government, both at the national level and the states. The government must in all seriousness comply with the directions of the Supreme Court. Tainted legislators not to be in cabinet

The days of the criminal-politician seem to be over. To make it a reality, the government needs to amend the Representation of People Act to deny anyone, charge-sheeted for commission of a heinous offense, to contest elections to the legislature. In the meantime, the least the government has done well not to give a ministerial post to any person facing criminal charges. The proposal made by the Election Commission in this behalf must be accepted by the government and suitable amendment made in the People’s Representation Act..

Declaration of an authority to grant sanction to prosecute

In the Narasimha Rao case, the Supreme Court had avoided to tread into the domain of the legislature and thus proposed, after deciding that a legislator is a public servant and hence not immune to the operation of the Prevention of Corruption Act, that the Parliament may decide the manner in which sanction to prosecute is to be granted, as a trial cannot be held unless this condition is fulfilled. The Parliament has not yet attended to this issue, even though the Court had proposed this in 1998.

MPLADS not to be increased

Whereas the Member of Parliament Local Area Development Fund deserves to be closed due to its misuse for which a PIL is pending in the Supreme Court, the least the government can do is not to propose an increase in it and the legislature not to accept this, even if the case ends in government’s favour. Teaching of Ethics There is a need for a course on ethics in all the training institutes of the country, especially the ones dealing with higher services. Aristotle said, ‘Ethics can be taught’. The purpose of including ethics in the training curriculum is to give a serious thught to the subject so that the officers are oriented to a desirable value system. TI India has designed a course on ‘Ethics in Action’ for the business schools. A copy of the same is attached. The same can be designed for the administrators by making suitable changes.

Ethics in Action – Syllabus

Objectives

Ethics should no longer be the domain of philosophy, ascetics, or religion, and it was never intended to be. It is necessary to bring ethics down to the practical plane of everyday life. The objectives of the course are to develop

• ethical behavior, leadership and responsibility

• response of organizations to employees, stakeholders, and public

• negotiation between consequences of decision that may not be in consonance with organizational goals and personal values

• theoretical understanding of regulations in business

• an understanding of the role of government

• an appreciation of law

• good labor management relations, and

• an understanding of environment protection.

The students must get interested in practical life issues. The purpose is that the students must develop an all-rounded personality.

Normally all MBA programs lay emphasis upon the bottom line, operations, supply chain, marketing, general management, strategy, statistics, technology, etc. Ethics may be having a marginal reference, if at all. Is business only about making money? Does success mean money, accumulations, consumption, exciting life style, and corporate power? Do the students realize the ethical dimensions of their goals? It is therefore necessary that the students come to grip with ethical problems in a systematic manner. ‘There is more to life than money, power, fame, and self-interest’, says Etzioni. Incorporating behavior ethics in MBA teaching is thus critical, especially in view of the scandals in the business and governmental spheres in view of the business, middleman, government, politician nexus that has created a mismatch in public life and a feeling of mistrust among public. The Non Performing Asses of banks and losses in the public sector are phenomenal. The recent exposures of scandals at the Enron, WorldCom, Arthur Andersen, Harshad Mehta, Securities scam, and a few others have highlighted the need for pursuit of ethics in business. The course on ethics contains both theoretical and pragmatic issues.

The students must appreciate that ethical conduct wins in the long run, and ethical companies and businesses are solid, stable, and successful. This results both in employee loyalty, public confidence and support, and helps the economy grow faster. There is thus a need to (1) acquaint students with ethical issues, and (2) produce ethical graduates who are aware of the social, legal, ecological, political environment in which the business operates. This would also enable students to evaluate existing legislation, and provoke them to explore their role in shaping policy and regulation of business. The course has a focus on enhancing awareness on the pitfalls of misconduct, general greed, and corporate malpractices.

Ethics is not something one is born with, although the environment may have an indirect influence. However, a conscious effort has to be made in inculcating ethical behavior. It has to be inculcated. That is why Aristotle mentioned that ethics can be taught.

Course contents – Topics

• Concept of ethics, morality, norms. Need for integrity in personal and business life. Corruption Perception Index; Bribe Payers Index.

• Hazards of ethical misconduct: Impact of such conduct on the economy, investments, employment, banks, environment, and politics.

• Code of conduct; code of behavior; conflict of interest

• Ethics and leadership; ethical leadership; Spirituality of work (ethics in business)

• Ethical issues: Environment Management and public policy, labor management relations; sexual harassment at work; rights of workers like provident fund, insurance, workmen’s compensation; etc. Decisions of the Supreme Court like the Bandhua Mukti Morcha, Vishakha, and on issues of environment.

• Human rights: Ethical framework of the Constitution – rights, duties, directive principles of state policy, and protection of rights.

• Legal environment. (a set of permissions/prohibitions.) - Indian Penal Code, Code of Criminal Procedure, Indian Evidence Act, Prevention of Corruption Act, UNCAC, Company Law. UNCAC, Minimum Wages Act (concept of living wage), Workmen’s Compensation Act, Copyright Act. TRIIPS. (What is where and how to find out.) Sarbanes-Oxley Act, Securities Regulations.

• Tools – Integrity Pact, Transparency, Right to Information Act, monitoring through inspections, role of civil society (Civil Action).

• Obedience and authority; culture of indifference. Philip Zimbardo on ‘Why Good Men Turn to Evil’.

• Corporate governance: social responsibility vs. corporate irresponsibility. Business is not all about profits

• Communication of values – mission; objectives; standards; crisis plans; corporate responsibility. Bad is more powerful than the good.

• Marketing, servicing, product liability emphases.

• Taxation regime.

• Role of government; Regulatory Process and public policy; (telephone, power, food safety, piracy, property regime), chartered accountants, inspections. SEBI. Role of ASSOCHAM, FICCI, Chambers of Commerce.

• Personal ethics.

Teaching ethics

• Visit to a prison and meeting the white collar criminals (optional).

• Integration of ethics with other themes of instruction.

• Book, article, or a film on ethical dilemmas.

• Interviewing executives and magnates of companies with ethical record.

• Transparency International India’s activities

• Ethics in accounting and marketing.


* Mr. P S Bawa is Vice Chairman, Transparency International, India

April - June, 2010