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Monday, September 26, 2022

A renewed approach to fighting corruption in Vietnam: Addressing the punitive side of the crime

Updated: 11:50’ - 20/12/2013

JAIRO ACUÑA-ALFARO[1]
Policy Advisor, Public Administration
Reform and Anti-Corruption
UNDP Vietnam

All countries in the world, one way or another, are affected by corruption. Vietnam is not an exception to this development ailment. What can be done to reduce it? The traditional textbook solutions for preventing corruption have been followed: an anti-corruption law is in existence since 2005 (with amendments in 2009 and 2012); an anti-corruption strategy was approved by the Government in 2009 (Resolution 21), the United Nations Convention against Corruption (UNCAC) was ratified in 2009; the Communist Party Plenum issued Conclusion No. 21-KL/TW/2012 of the Fifth Plenum of the XIth Party Central Committee on enhancing the role of the Party on anti-corruption;  an asset declaration system was put in place and amended in 2012 (Decree 78); steering committees have been created at all levels of the political system and many other regulations have been put in place.

However, the overall assessment is that besides this impressive number of legislations and regulations, the situation of corruption in Vietnam is not improving. Moreover, renew calls emerge towards stronger and bolder political willingness to deter corruption via “an honest and responsive government”. Hence, new approaches seem to be in order.

The ongoing process of revision of the 1999 Penal Code provides a unique opportunity to address the punitive side of corruption.[2] That is, to address corruption, it is crucial to remove the profit out of the crime with sanctions and penalties when prevention fails to deter abuses of public office for private gain. This is relevant in an environment as identified by the 2012 corruption diagnostics where firms that report not paying bribes do better in terms of efficiency than firms reporting payments, and even the latter (that is firms paying bribes) report efficiency gains.[3]

In relation to this, in November 2013 the European Chamber of Commerce (Eurocham) released its 13th quarterly Business Climate Index (BCI) survey report identifying corruption as the biggest challenge for doing business in Vietnam. Eurocham members identify the following four key challenges for doing business in Vietnam: corruption (72%); lack of or inconsistent implementation of legislation (67%); administrative difficulties (52%); and lack of transparency (45%).[4]

From a citizen point of view, a United Nations sponsored online survey on the occasion of the global post-2015 development goals consultation reaffirms that “an honest and responsive government” is a top priority for one in two Vietnamese citizens (52%). This is also the third overall priority after a good education (76%) and better healthcare (58%).[5] This is consistent with worldwide demands for a post 2015 world in which education (71%), health care (58%) and job opportunities (52%) come as top three priorities. As an emerging middle-income country, the country Vietnamese people want is similar to other countries and especially within the medium Human Development Index (HDI) group of countries.

The more educated, wealthier and better fed citizens become, the more quality they demand from their governments. Education and healthcare thus become a key area of concern, not growth or income alone. An emerging Vietnamese middle-class has grown in the past decade with an increasingly competitive purchasing power which is evident in the construction sector boom, the expansion of the financial markets and the spread of shopping malls around the metropolises of Hanoi and Ho Chi Minh City, where 15% of the total population lives.

Vietnam’s remarkable economic growth in the last two decades has not only made it a poster child for development, but also has in its own right provided greater job opportunities, enhanced the transportation and roads networks, increased access to water and sanitation and internet penetration, which is now one of the highest in the low middle-income countries. So why are Vietnamese citizens demanding a more “honest and responsive government” when it seems economic growth has provided other basic commodities?

Perhaps part of the answers comes from what citizens experience when interacting with governmental authorities. Indeed, the results of the largest ever governance and nationwide social audit instrument in Vietnam, the Provincial Governance and Public Administration Performance Index (PAPI), provides information and evidence on why this might be the case.[6] Over time, citizens remain relatively optimistic about their own economic situation, however the levels of awareness and information about institutions and transparency in local decision making remains limited. PAPI suggests citizens continue to demand more accountability from local authorities, better control of corruption in the public sector and better quality of administrative and public services.

A plethora of strategies and official documents have been issued to address the problem of corruption. There is recognition that corruption is a systemic problem in Vietnam that threatens the stability of the regime and endangers the development outlook. The PAPI findings reveal that corruption and bribery remain a constant problem. For instance, graph 1 highlights citizens agree with statements that bribes are required to receive medical care (42%, an increase from 31% in the previous year); to get a job in the civil service (44%, compared with 29% earlier); to receive a land use right certificate (32% as opposed to 21% the year before); for children to receive better treatment at schools (25%, from 17%) and to apply for a construction permit (22%).In addition, PAPI provides evidence that bribe requests impact a significant portion of citizens and the amounts paid are substantial when compared with other costs associated with accessing those services.

Graph 1: Perception of corruption and bribery in the public sector: 2011-2012

Source: The Vietnam Governance and Public Administration Performance Index (PAPI): Measuring Citizens’ Experiences. Available at www.papi.vn  

 

There is now evidence on the impact of corruption on those who refuse or cannot afford to pay bribes. These citizens are unfortunate and increase the number of dissatisfied Vietnamese who lose out from the economic bonanza. They are not only less likely to have adequate titles to their property, which affects their ability to start and grow small businesses, but also receive inadequate health care, which influences their livelihoods and the health prospects of their children. This is not to mention they are shut out of educational opportunities after primary education, which will affect downstream career advancement and wealth. It is these indirect effects of activities that should now become more important to the policymaking process as they symbolize an unfair playing field that will have far-reaching consequences for the country’s economic growth and socio-economic development.

Therefore, “an honest and responsive government” is a win-win policy direction for Vietnam to move away from the current spiral of increasing citizens’ dissatisfaction and businesses’ concerns. Corruption is a political as well as a development problem. International experiences suggest that countries with honest and responsive governments, where the rule of law is applied consistently and equally, and clear accountability mechanisms are in place, have escaped the middle-income trap. Will Vietnam be able to do it? It all boils down to choices governments make and how the rule of law is applied and exercised.

The revision of the Penal Code in the near future thus provides a great opportunity towards a great escape away from corruption. It also provides an opportunity to consolidate “an honest and responsive government” by removing from public office individuals who commit crimes of corruption and abuse of position. The UNCAC review process has identified three major gaps in Vietnam’s legislation in comparison with the international framework set up by this Convention. Among others, the review identifies the urgency to criminalize corruption and bribery in the private sector (article 16 UNCAC), address illicit enrichment or the unexplained substantive increase in wealth from public officials (article 20) and liability of legal entities to corrupt acts (article 22).[7]

But why is it important to turn the anti-corruption towards the penal code amendment? There are several ways to answer this question. One is that there seems to be limited consistency between the Anti-Corruption Law and the Penal Code in the definition of corruption and corrupt practices.[8] Secondly, but perhaps more significantly, it seems that despite the great deal of efforts on prevention, the response from the punitive side in terms of number of cases reaching the judicial system is not responding adequately to the wide-spread perception that corruption might be on the rise. Graph 2 illustrates this by providing an overview of cases prosecuted (sentences) on crimes of corruption and abuse of office according to its respective Penal Code articles.

Graph 2. Vietnam: Sentences on Crimes of Corruption (2009-2013*)

Note: *Includes first nine months of 2013 only. Source: Bureau of Crime Statistics, Supreme People’s Procuracy.

 

Graph 2 includes information about number of sentences based on Articles 278, 280, 281 and 282 of the Penal Code. There were 335 sentences of embezzlement (Article 278) in 2009, while from 2010 to 2013 the number of sentences for the same crime hovered at around 200 a year. The relative number of sentences for crimes of abuse of position (Articles 281 and 283) suggests the crime of corruption and abuse of power are being handled by less stringent administrative channels. The low level of fines (as principal penalty) also seems to be negligible, suggesting a limited capacity/response from the prosecution to recuperate ill-gotten financial gains and limiting the prospects of removing the profit/incentive away from these crimes.

In addition, two areas that emerge from reading this graph are regarding on the accuracy of the cases/sentences and on the political willingness to deal with crimes of corruption. On the former, it seems there are a substantially larger number of sentences for embezzlement than on abuse of position and substantially less on the reception of bribes. On the latter, it is worth to highlight that an area requiring special consideration is about the actual sentences and the severity of punishment.[9] From the total cases under Article 278 regarding embezzlement, about one in three received “suspended sentences” in 2009, while one in four sentences were suspended in 2012 and 2013.

Corruption in Vietnam is systemic, and Resolution 21 with the anti-corruption strategy towards 2020 recognizes this as such. This means that for every walk of life, every Vietnamese citizen must face an endless path of exactions both large and small. Businesses as well as citizens endure this burden. By the end of the day, it is the individual citizens and the small and household businesses who suffer the most and have lower capacities to avoid the corruption and/or bribery trap. This endless stream of corruption is combined with economic mismanagement and waste. The result is millions of dollars wasted or diverted towards non-productive areas. The ongoing criminal corruption charges happening today are a testament of the pervasiveness of the problem and of the permissive environment supported by low prosecution rates failing to remove the incentive out of corruption.

More needs to be done, starting from stronger and bolder political determination beyond rhetoric and issuance of normative documents. To deal with the systemic problem of corruption, new approaches must be taken. There seems to be a tendency of “adding old wine to a new bottle”. Addressing the punitive side of corruption implies considering corruption as a crime. For this, the Penal Code plays a key role, and the upcoming review process provides an ideal momentum to add a new and fresh approach to the fight against corruption and establishing an honest and responsive government. This also helps to send strong messages to investors and companies that doing business in Vietnam benefits from a level-playing field and that wrongdoings that threaten development sustainability and stability are not tolerated.-



[1] jairo.acuna@undp.org. I would like to thank Do Thanh Huyen from UNDP; Nguyen Thi Kim Lien from DFID and Mathieu Tromme from Coffey International for valuable comments and suggestions. This paper reflects on opinions discussed at several policy discussions including workshop in Da Nang organized by the Government Inspectorate on “Criminalization of Corruption and other related aspects: International Experiences and Applications to Vietnam”, September 5-6; the 7th Legal Policy Forum by the Ministry of Justice and UNDP on “Criminal laws in Vietnam in the context of international integration”, August 29; the 12th Anti-Corruption Dialogue in Hanoi on “Role of Business in Anti-Corruption”, November 12; a national workshop on amendments of the Penal Code with the Ministry of Justice on “Improvement of the Penal Code on Criminalization of Corruption in the Spirit of UNCAC”, November 28-29, and a UNDP-DFID policy roundtable on December 2. The views expressed do not necessarily reflect the official views or positions of UNDP.

[2] See Doig et al (2013) Criminalizing Corruption: A Study of International Practices and Application for Vietnam.

[3] See Government Inspectorate and World Bank (2012) Corruption from the Perspective of Citizens, Firms and Public Officials. Results of Sociological Surveys. (Reference book). UKAid, UNDP and T&C Consulting. National Politics Publishing House.

[4] See http://www.eurochamvn.org/node/12728 .

[5] See www.myworld2015.com  for further results for Vietnam and other countries.

[6] See UNDP, CECODES and VFF (2013) The Vietnam Provincial Governance and Public Administration Performance Index (PAPI): Measuring Citizens’ Experiences. Hanoi, Vietnam. Available at www.papi.vn .

[7] See Government Inspectorate (2012) Country Review Report of the Socialist Republic of Vietnam. Labor and Social Publishing House. Hanoi.

[8] See Painter, Martin, Dao Le Thu, Hoang Manh Chien, and Nguyen Quang Ngoc (2012). International Comparative Analysis of Anti-corruption Legislation: Lessons on Sanctioning and Enforcement Mechanisms for Vietnam. A Joint Policy Discussion Paper on Anti-corruption commissioned by the Department for International Development (DFID) of the United Kingdom and the United Nations Development Program (UNDP).

[9] From a human rights perspective, severity of punishment should not be confused with death penalties. It is possible to be strict without handing down a death sentence. In that sense, a further consideration for the review of the Penal Code is to continue the process started in the 2009 amendment and remove the death penalty from the Penal Code.

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