(Talk delivered by Mr. N. Vittal, former CVC in the FAIRPRO Forum, Chennai on 21.10.99)
1. Integrity can be of different types. We can have intellectual integrity, financial integrity, moral integrity etc. What we expect when we use the term integrity is a certain amount of consistency and fairness. In the case of intellectual integrity it means that the person does not change his views or perception depending upon the circumstances or external considerations. On the same lines, moral integrity would mean observing the same principles irrespective of the situation. In the case of financial integrity, it will mean that one does not aspire for some body's else's money or property. After all corruption is the use of public office for private profit. Corruption definitely is an example of lack of integrity.
2 Transparency can be a guarantee for integrity. Transparency means that everything is visible and therefore one can make a judgement about the issues involved. If one is transparent in financial matters, automatically there will be greater integrity. In fact, in recent years, corporate governance has become a major issue of concern especially in the context of globalisation. When foreign direct investment takes place, the investors want to be sure not only that the management of resources will be done competently by the enterprises in which they invest but also ensure that the decision making will be on ethical principles. Honesty is the best policy used to be an old statement but then there is an increasing realisation that the honesty may be the best policy for even profitability.
3 When it comes to moral conduct, transparency is the best guarantee for consistency and integrity. Perhaps the best example of transparency is the life of Mahatma Gandhi who practiced what he preached. His whole life was an experiment with truth as he himself described it in his autobiography. We can therefore appreciate the linkage between transparency and integrity. If we want greater integrity, I think transparency can be a means of achieving that objective.
4 To begin with we must ask the basic question " Is integrity necessary for public life?" There have been thinkers like Machiavelli in the West and the Kautilya in the East who felt that the moral standards prescribed for a private individual cannot be applied when one deals with public life. There has been the traditional jokes that Ambassadors are those who are sent abroad to lie for their country. Nevertheless, it is being realised increasingly that in a democracy there is need for greater transparency to have credibility. We have seen for example in the United States how the intimate details of the private life of Presidents are scrutinised because the private life may have a bearing on public conduct. Even if we agree for a moment with both Machiavelli and Kautilya that the moral standards for public life are different from that of private life, the fact should not be lost sight of that ultimately the private conduct affects public decisions and hence must be looked into.
5 That brings me really to the basic issue of the dynamics of integrity and transparency in public life and business. There are three factors, which affect the level of integrity and transparency in public life. The first of course is the individual's sense of values. A person who has high moral standards is bound to take decisions, which are also in the public interest. Of course, in his book on diplomacy, Kissinger traced how there have been two broad approaches to handling international relations. When Metternich worked out the Treaty of Versailles at the end of the Napoleonic wars, it was the principle of balance of forces that prevailed. But, when Woodrow Wilson came on the scene at the end of the First World War, values and ideals also got injected into decision making and framing policies to govern diplomatic relations. We are today living in the post-Cold War era where the issues of integrity seem to have a bearing on the conduct of diplomacy. For instance, some of the moral issues like the non-exploitation of children or observing human rights are increasingly becoming part of international debates whether it relates to politics or economics.
6 Individual values are the first element in the dynamics of integrity and transparency in public life. The second important element is the social and professional norms. Here traditionally guilds, industry associations and professional associations have played an important role. We talk about professional ethics. Even the Bhagwat Gita talks about the dharma to be followed by the different professionals. In the Third Chapter of the Bhagwat Gita it is said, "Swadharme nidhanam shreya paradharmo bhayabhaha. Each must have to follow his dharma and trying to adopt somebody else's dharma, will be disastrous.
7 It is here that bodies of concerned persons like the Foundation for Fair Practices in Property Development (FAIRPRO) play an important role. We can therefore see that through the medium of such bodies, it may be possible to develop appropriate standards for the needs of the time and ensure that there is integrity and transparency in public life and business.
8 We then come to the third aspect of integrity and transparency in public life. Here systems become important. If we take the behaviour of people in any situation, we will find that the 10% will be honest whatever we do and 10% will be dishonest whatever we do, and 80% depend on the system. So, if we want greater integrity and transparency in public life and business, we will have to focus on the system. As CVC, I have been focussing on this aspect.
9 We may begin our analysis by looking into the relationship between ethics and business. An unusual phenomenon is taking place in the Indian business scene. Business organisations are talking about ethics. Business is supposed to be an exercise in pragmatism. If corruption is taken as a part of the scene of doing business in a country, business enterprises factor this aspect also into account and arrange their action accordingly. In fact, the German NGO Transparency International publishes annually the Corruption Perception Index of countries, which is based on the perception of the business enterprises operating in different countries.
10 The current debate in the Indian business community about ethics is based on the growing realisation that ultimately the old adage, 'honesty is the best policy' may have not only a grain of truth but can be a practical guide to operations. The dramatic collapse of the currencies in the tiger economies of South East Asia, especially Thailand and Indonesia, which used to be known for crony capitalism and corruption, brought home the fact that ultimately corruption may turn out to be a not good for business in the long run.
11 Five years ago there were hardly discussions about corporate governance. It is the increasing role of foreign institutional investors in emerging economies that has made the concept of corporate governance a relevant issue today. The increasing concern of the foreign investors is that the enterprise in which they invest should not only be effectively managed but should also observe the principles of corporate governance. In other words, the enterprises will not do anything illegal or unethical. This need for re-assurance is felt by the FIIs due to the fact that there have been cases of dramatic collapse of enterprises which were apparently doing well but which were not observing the principles of corporate governance.
12 There has also been a campaign led by the United States for ensuring that multinationals do not encourage corruption in the countries in which they are doing business. Thanks to the U.S. efforts, 34 countries of the OECD have signed the anti-bribery convention in 1997. It is therefore obvious that the current concern for better corporate governance and also checking corruption arises out of the fundamental dharma of the business community namely, the principle of enlightened self-interest.
13 India is listed as 66th among 85 countries in the Corruption Perception Index (1999) by the Transparency International. Corruption has been very much a fact of life for doing business in India. There have been, however, glorious exceptions of companies consciously adopting the ethical principle of integrity and honesty in doing business. One such illustrious company is the Chennai based Alacrity Foundation, which decided up front that they would not indulge in illegal actions and deal with black money even though they were in the business of building houses. The Urban Land Ceiling Act and the Income Tax Act had ensured that real estate became a gold mine for black money. In that sector, for a company to adopt ethical standards was unbelievable and the fact that they succeeded is really incredible. The question is, if Alacrity Foundation can afford to be honest, why not other companies?
14 In India corruption is an all embracing phenomenon. There are five elements, - the corrupt politician, the corrupt bureaucrat, the corrupt businessman, the corrupt NGO and the criminal who are major players in the corruption scene. But if the Indian business community were to adopt healthy principles of good corporate governance and avoid corruption in their transactions, India could really take a step forward to becoming a less corrupt country and improving its rank in the Corruption Perception Index.
15 A little reflection will show that perhaps if for a change Indian business were to adopt a more ethical conduct, it may stand to gain. As happened in the case of Alacrity, a reputation for integrity itself can boost the morale of the people working in the organisation. It appears that a new executive recruit of Alacrity went to an office in Chennai and the public servant wanted a bribe. When the executive pointed out that he was working for Alacrity, it seems that the public servant said, "Why did you not say that you were working for Alacrity? If you would have said it, I would not have made the request for the bribe at all". This indeed is very heartening. The impact of such an incident on the morale of the recruit and the people working in the organisation can be imagined. After all, in the highly competitive global market, the morale of the people in an organisation is the most important competitive element. This is because ultimately it is by energising the people to give their best output in work that companies can compete effectively.
16 There is yet another dimension. If a company is considered to be a company with high ethical standards, it will help greatly to build brand equity. Again, the Alacrity example comes to mind. Brand equity is one of the inputs on the basis of which competition will take place in the global market, especially when productivity and quality of services become increasingly similar among the competing companies. Therefore, there may be an advantage in adopting ethical practices as a USP.
17 Fortune magazine comes up with a list of most admired companies. A practice of adopting similar standards to rate companies in India from the ethical point of view can provide a boost for a movement towards building a cleaner life in business in India. Even more important perhaps is to start the process of encouraging greater cleanliness in Government organisations. Why cannot a business association or an academic institution or a NGO start an exercise similar to the Transparency International and come up with a Corruption Perception Index listing Government departments, public sector banks and public enterprises in the order of increasing corruption? Such a list will have the advantage of creating a healthy and informed debate about corruption in the country. What is more, it may at least shame those who are very badly off and perceived to be very corrupt, to start a process of internal re-generation. Is this too difficult for us to achieve?
18 We may now come to the approach of the CVC for tackling the issue of corruption from a system point of view. As Central Vigilance Commissioner, I have a direct responsibility to see that at least corruption is eliminated so far as public servants are concerned in the Government of India. Ministries, Departments, Organisations like public sector undertakings and banks, and, organisations of the Government of India should be freed of corruption. Is this possible? I think this is possible and for achieving this we have to have a clear idea about the dynamics of corruption, why corruption flourishes and how it can be tackled? Corruption flourishes in our system because of five basic reasons. These are:
Scarcity of goods and services
Red tape and complicated rules and procedures
Lack of transparency in decision making
Legal of cushions of safety we have built for the corrupt people under the very healthy principle that everybody is innocent till proved guilty, and
Tribalism or biradari among the corrupt who protect each other. We say "thick as thieves" not thick as honest people.
19 As CVC I am adopting a three-point plan to check corruption and hopefully one day, eliminate it. The first is simplification of rules and procedures. Corruption is like malaria. One can deal with malaria by giving medicine to those who are affected by this or prevent the breeding of mosquitoes. Many of our rules and procedures breed corruption. I have therefore issued orders trying to check and simplify the procedures. One example is a ban on post tender negotiations in government purchases except with the lowest bidder. Such negotiations are a flexible source of corruption.
20 The second step is empowering the public and bringing greater transparency. It is where that Rotary and other such organisations can play an important role if they want to tackle corruption. All the orders of CVC regarding checking corruption are in the public domain. They can be easily accessed through the web-site of CVC at http://cvc.nic.in. One such order I have issued is that there should be no post-tender negotiations except with lowest tenderer. Many industrialists have used this today to ensure that the corrupt practices, which used to flourish in the post-tender stage, are brought down substantially. Another order I have issued is that in every office there should be a board saying, "Don’t pay bribe. If anybody asks for bribe, you can complain to the CVO, CVC etc." When I suggested this, my office people said that just like under NO SMOKING sign, people smoke, under NO PARKING sign, people park vehicles, under NO BRIBES sign, people will take bribes. But, by putting this idea into effect, what we will be doing in effect is that we will be educating all the public who come to every small office of the Government of India and other organisations like banks and public sector undertakings that there is a way out if they do not want to pay bribe. Out of the 10,000 people who come to an office, at least one person may turn out to be a person who would like to take on the system and fight corruption. He has an ally in the CVC.
21 The third important part of my strategy is effective punishment. It is here that we have miles to go. Punishment of the guilty is possible under two circumstances, one is through departmental inquiry and another is through prosecution. So far as departmental inquiries are concerned, I found that there are no time limits for the inquiries. There have been classic cases where an inquiry officer was appointed after five years and he took two years, and by the time the inquiry was completed, the public servant retired. I am forcing to see that in all the Government organisations retired honest people are employed to conduct the departmental inquiries so that the inquiry is completed within six months. This means that at least the public servant will know that the punishment will be quick. On the other hand, when it comes to prosecution, we have really miles to go because the courts are extremely slow. I am monitoring at least the cases, which are handled by the CBI under the Prevention of corruption Act. As of now, nearly 3000 and odd are pending and many are pending from two years to ten years. If punishment is so slow, how are we going to bring the corrupt to book and then elimination of corruption will always remain in India a myth and not a reality.
22 In this context, therefore, I have taken another initiative. Corruption flourishes because it is a low risk, high profit activity. I have suggested to the Government that the ill-gotten property of the corrupt must be confiscated. Justice Jeevan Reddy, Chairman, Law Commission agreed with me and has drafted an Act, called the Corrupt Public Servants (Forfeiture of Property) Act. If this Act is enacted, then the CVC will have powers at least to ensure that the corrupt do not enjoy the benefits of their corrupt practices. But, the law is yet to be enacted. I do not know when this will take place. In the meanwhile, I learnt that there is another Act, called the Benami Transaction Prohibition Act. This can be effectively used. Even the Act was passed in 1988, which provides that the benami property can be confiscated, there is no procedure prescribed so far to confiscate the property. I have requested Government to empower the CVC and prescribe the procedure. Eleven years are nearing and we are still waiting for the Government to act.
23 It is therefore possible by adopting these strategies to tackle corruption by public servants, but what about the political corruption? Here, the following options are possible. While we can tackle, to some extent, the problem of public servants in the area of corruption, what about political corruption? The way our elections are conducted and the role of the money power and muscle power in elections, how are we going to tackle this issue? The Supreme Court judgement in the JMM case has declared that the Members of Parliament and Members of Legislative Assemblies are public servants. We must build the public opinion in this country so that the Members of Parliament and Members of Legislative Assemblies, as public servants, are also required to give their annual property returns to the Speaker or the Chairman of the Rajya Sabha, as the case may be. If they happened to have benami property, then it should also be liable for confiscation, if Government would come out with a procedure for confiscation of benami property after a delay of more than 11 years.
24 We must also be able to initiate action to check the very process by which political leaders are able to realise large amounts of money. This comes in the form of various decisions in Government starting with, of course, transfers, contracts, clearance of projects and so on. In this process, the political leaders will not be able to get the financial benefits unless they have also the collusion of the corrupt public servants. There are, of course, exceptions where the political leaders could still make money even without the collusion of the public servants. I was told that there was a Minister in one of the departments of the Government of India who insisted that only honest people must handle all tender cases. All the tender files will have to be submitted to him. He can then indulge in post-tender negotiations while taking final decision. In such cases, even though the record will show that a correct decision has been taken. If the files are delayed at the minister’s level, the ready excuse is that Minister unlike a public servant has many responsibilities and cannot be expected to clear files fast. There would have been kickbacks, which will escape notice. Thanks to globalisation, the salting of money and ill-gotten wealth in foreign bank accounts and countries abroad is also easier.
25 A healthy development is that OECD countries came up with an anti-bribery convention. The United States Vice-President, Al Gore, took an initiative in February 1999 to call a meeting of 89 countries to talk about fighting corruption globally. While global public opinion may be slowly growing against corruption, what we have to tackle is corruption within the country.
26 The CBI, with the revised position of the CVC, is today in a position to take independent action. A corrupt politician whether in power or not is as much liable for criminal action under the Prevention of Corruption Act as any other citizen. It should therefore possible to use the CBI to bring the corrupt politicians to book. But then, as I mentioned earlier, there are many areas in which we have to initiate action. First, to beef up the CBI's strength. Second, to see how the investigation procedures can be speeded up, and third, of course, is to see how the prosecution processes can be improved and speeded up so that the delay in every stage of prosecution is removed. The main point to note is that if public opinion is in favour of bringing the corrupt politicians to book, there is a method today which is possible to achieve this objective.
27 What about the jhola, the dada and the lala? Once we are able to check at least the babu and the neta, perhaps there will be a salutary effect and these sectors can be brought under control. In other words, I want to seriously put before you the proposition that we can eliminate the corruption in the country. It is question of mindset. If you are determined, we can do it. Today, in our country corruption is accepted cynically and with a defeatist attitude the people have become apathetic. I want to change this apathy and acceptance into an anger and action.
28 Is eliminating corruption a myth or reality? I would say, corruption is like God. God is everywhere and those of us who believe in God can realise him. Those who are sceptics and atheists can never see God. So, whether God is a myth or reality depends on you, your mindset and your faith. It depends on you. Do we believe that corruption can be eliminated? If so, it can be eliminated, if not, it will remain a reality. When Vivekananda went to meet Ramkrishna Paramhansa, he asked the direct question, "Does God exist? Do you believe in Him?" Ramakrishna Paramhansa is supposed to have replied, "Yes, not only I believe in Him but I can also make you see Him?" Vivekananda has described the experience where as the Ramakrishna touched him, he could feel the presence of God.
29 One country, which tackled this problem, was Hong Kong where the Independent Commission Against Corruption was set up in 1974 after a notorious reputation developed by the Hong Kong Police and other departments. Something drastic was to be done to reduce corruption. Apparently, the ICAC was able to systematically bring down corruption by taking all stakeholders into confidence and discussing with them to initiate a number of processes to check corruption. There was also a strike by the Hong Kong Police against the ICAC and a series of measures were taken to bring down corruption. We have seen, Lee Kwan Yew, single-mindedly making Singapore one the cleanest Governments in the world. In Italy and France, the magistrates, who were empowered, were able to take on the mafia and tried to reduce corruption in Italy. In France also, the Italian experience has been repeated. It is true that some of the magistrates had to pay the ultimate price of their lives in Italy. But the fact is that these countries had made efforts made to bring down corruption. In a different context in New York, where the crime was rampant, Rudi Giuliani came up with the concept of zero tolerance and brought down the level of crime substantially. The point to note therefore is that corruption can be fought and corruption can be eliminated. What we need first is a determined mindset.
30 In India we find corruption everywhere. The books - Shiv Vishwanathan’s THE FOUL PLAY and S.S. Gill’s THE PATHOLOGY OF CORRUPTION - dramatically list and describe the various cases of corruption which have been seen in the last 50 years and our pathetic stage today. The important point brought out, for example, in S.S. Gill’s book is that corruption is all pervading. We have corruption among the bureaucrats, among the business community, among the political community and even the NGOs. In fact, I would suggest that today the five major players in corruption are the neta, babu, lala, jhola and dada – the corrupt politician, the corrupt bureaucrat, the corrupt businessman, the corrupt NGO and the criminal. Criminalisation of politics can also be directly traced to the corruption, which flourishes because of the need forever increasing funds for political purposes in the country.
31 If all these sectors are connected with corruption then, is there a way in which the corruption can be eliminated? Can corruption be fought by a civil society? I think today opportunities exist for fighting corruption. If we can bring three elements together, perhaps we can succeed. The first is the CVC in its new avatar, which thanks to the Supreme Court judgement in the Vineet Narain case, has statutory powers and also exercises superintendence mainly over CBI and to some extent over ED. The second is to look at the supply side of corruption and see whether apart from focusing on the demand side of corruption, we can also do something about the supply side. The third of course is mobilising the youth to fight the menace of corruption.
32 Ultimately the level of corruption depends upon three factors. One is the individual value of the person in an organisation. The second is the social standards of acceptance of corruption. The third is the systems. So far as the systems aspect is concerned, we have seen in the foregoing paragraphs analysis of what could be done by the CVC as well as by the organised industry. When in comes to individual values and thereby shaping social values, perhaps we will have to focus on the youth. As Rabindra Nath Tagore observed every time a child is born it shows that God has not lost faith in humanity. The youth perhaps still have a spark of idealism with them. It may be a good idea if we can start in all colleges and educational institutions, anti corruption clubs. These may be particularly authorised by the CVC so that they have a right to go and expose corrupt practices in various public organisations. They should also be able to participate and help in conducting raids and organise traps for corrupt public servants. This should give a sense of involvement. In this way, the youth may have a sense of achievement that they are playing a role in cleansing the rot in our society.
33 I have placed before you some ideas about what could be done for improving greater integrity and transparency in public life and business. Ultimately, it is by following the optimistic sloka of building a better life that we can survive. Amantram aksharam nasti na aushadhi vanaspati ayogyo purusho nasti yojakah tatra durlabha. There is no letter from which a mantra cannot be made. There is no plant from which a medicine cannot be extracted. There is no person who can be called incompetent. What is needed are the yojakas who unfortunately are in short supply. But, with organisations like FAIRPRO bringing committed persons, thinkers and leaders under one forum, I think we have the beginning of an instrument for shaping a better India where there will be greater integrity and transparency in public life.