Advancing Transparency and Accountability in Public Utilities Prepared for Regulated Industries Commission Symposium Series held on the 25th of February, 2010 Bldg 7, Unit 4-12, Fernandes Industrial Centre, Eastern Main Road, Laventille, Trinidad + Tobago, W.I. Tel/Fax +(868)

2 Annual Total Costs of Corruption (Including: Bribes, Cartel Pricing, Fraud, Illicit Trade and Money Laundering) THIS DWARFS THE SPENDING ON: United Nations Millennium Development Goals - US$60 billion World Food Program US$3.72 billion (146 million people including 62.2 million children) Haiti Reconstruction (estimate) - US$11 billion Polio eradication programme (3 year) - US$2.6 billion US$1 trillion – US$1.6 trillion COST OF CORRUPTION Sources: World Bank, TI Global Corruption Barometer 2009, United Nations, The Guardian, World Health Organisation, World Food Program

Corruption in Public Utilities 3

CORRUPTION FUELS INEQUALITIES Example: In the Water Sector 1.2 billion people worldwide without water 2.6 billion without adequate sanitation Corruption exacerbates the water crisis faced by the poor and vulnerable Cost US$210 billion annually for developed countries Accounts for as much as a 30% increase on connections to domestic households in developing countries 4

5 WHY ARE PUBLIC UTILITIES SO VULNERABLE TO CORRUPTION? Underdeveloped management systems Inadequate management information Weak accountability structures Weak procurement Large investment of state funds in complex projects Its where private and public agencies meet Involves informal service providers e.g. water trucks No penalties for failure

HOW CAN THE SECTOR RESPOND TO THE RISK OF CORRUPTION? Implementation of Business Ethics systems Institute preventative measures e.g. transparent procurement systems Whistleblower protection Integrity pacts Enforce sanctions for breaches of ethics Higher levels of transparency 6

CHARTING A WAY FORWARD Supporting and initiating more research into understanding corruption in public utilities. Strengthening current regulatory framework with a review mechanism. Ensure transparency, accountability, value for money in awarding contracts. E.g. use of the TI Integrity Pact as a legally binding instrument. Encourage participation by stakeholders in oversight and governance of the sector. 7

THANK YOU! 8