The top five corruption risks of the COVID emergency response

19 May 2020

Around the world, government responses to the coronavirus (COVID-19) emergency have been mixed, but some corruption risks are common:

Lack of accountability control and oversight of economic stimulus packages;
Procurement and compliance risks, as contracts are awarded without open tender processes and risk assessment;
Press freedom and whistleblower protection under threat, as governments seek to control messaging and information;
Rule of law compromised, when governments grant and take advantage of new executive and emergency powers
Business Integrity at risk, as companies seek to cut costs, wind back due diligence and risk-assessment practices and pursue opportunistic bail outs

Any crisis brings an increased risk of corruption, bribery, fraud and integrity violations – COVID 19 is no different

This was the clear message from the OECD Global Anti-Corruption and Integrity Forum that I attended on 13 May.

When governments respond to a crisis, decisions must understandably be made at a cracking pace. But we can’t lose sight of the fact that in any emergency there are corruption risks – COVID-19 included.

Around the world COVID-19 is disrupting the role and function of oversight committees, internal controls, and national audit functions. This is exacerbated when governments suspend parliaments and grant themselves extraordinary executive powers.

This is when corruption, including bribery and violations of our standards of political integrity, can undermine our democratic processes because the usual safeguards and oversight mechanisms are not in force.

Governments need to be allocating more resources to monitor corruption, fraud, bribery, and integrity risks during COVID-19. Of course, getting the virus under control is paramount, but now is not the time to put fighting corruption and promoting integrity on the back burner. The two can and must go hand in hand.

We need to ensure that our democracies have safeguards in place, that our governments consult with integrity experts, and that the decisions of our political leaders are transparent.

Three principles should guide our response: transparency, accountability and integrity.

We can steer ourselves out of this health and economic emergency by strengthening our democratic systems.

As the OECD also highlighted, we need to value:

Transparency over political decisions

This is particularly important for economic stimulus packages, procurement and economic bailouts for companies.

Supply constraints of medical equipment has highlighted procurement and corruption risks. The tables have been turned. Often companies engage in bidding wars to secure government contracts but now we see governments outbidding each other and paying high prices to secure scarce supplies.

While economic bailouts for companies may be needed, robust due diligence must be done to check who is the ultimate beneficiary and their track record, including tax evasion, involvement in crime and corruption and political links.

Anti-corruption controls to minimise the risk of corruption within the public service

Integrity risks within the public sector are heightened. With the usual checks and balances on hold, and attention diverted to the crisis, there is an added risk that decisions are made that could benefit family and friends. We could see a spike in conflict of interest and undue influence by special interest groups. And in corruption-prone jurisdictions an economic recession may leave poorly paid public servants open to bribery temptation.

The role of press freedom and whistleblowers

We need to come out of this crisis with a better understanding and recognition of the importance of press freedom, public interest journalism and the protection of whistleblowers.

Good governance and internal controls

Public trust in Government is contingent on open process, transparency and scrutiny. In Australia, Transparency International Australia and others have raised concerns about the National COVID Coordination Committee which lacks transparency, accountability and independent oversight. Appointments have been handpicked, which raises concerns about potential conflicts of interest as some sectors, such as energy and infrastructure are prioritised, and approvals fast-tracked in the recovery phase.

We can minimise corruption risks and build a better response to this emergency by being transparent and accountable.

Serena Lillywhite
About the Author

Serena was the CEO of Transparency International Australia from March 2017 to July 2022.

Serena is an experienced corporate accountability practitioner, researcher and advocate, with an extensive career in responsible business conduct. Her expertise includes governance, corruption, human rights, labour rights and land and resettlement issues. She has worked across the financial services, mining and garment and apparel sectors.