CLA News / Declaration Of Assets And Lifestyle Audits – Invaluable Tools In The Fight Against Corruption by Musa Mwenye SC
Author: Musa Mwenye, SC,
Position: Former Attorney General of Zambia and former Chairperson of the Zambia Anti-Corruption Commission. Currently Senior Partner of Mwenye & Mwitwa Advocates – Zambia
Email:musa@musamwenye.com
Introduction
Corruption impedes national development and hampers the actualisation of economic social and cultural rights. An effective asset declaration statutory regime is an indispensable tool in the fight against corruption. Declarations of assets, interests, and liabilities are a financial disclosure mechanism made by specified individuals that are useful in detecting conflicts of interest, unexplained assets, and illicit enrichment. The existence of an effective declaration statutory regime is often a good indicator of the resolve to fight corruption. The converse is often true. When public and elected officials resist the establishment of an effective declaration regime, then, in all likelihood, there is a low or non-existent will to fight corruption among those officials. Public and elected officials who serve the public should avail themselves of transparency and accountability in their financial dealings and affairs. This is an indispensable first step in fighting corruption in most jurisdictions.
Declaration of assets
Article 7.1 of the African Union Convention on preventing and combating corruption implores state parties to pass laws requiring all designated officers to declare their assets when they assume public office and after their term of office. Article 8(5) of the United Nations Convention Against Corruption (“UNCAC”) implores States parties to endeavour to establish measures and systems requiring public officials to make declarations of their outside activities, employment, investments, assets, and substantial gifts or benefits from which a conflict may result concerning their functions as public officials.
In varying degrees, the vast majority of African countries have failed to give full effect to the precepts of these international covenants. The failure has been in three major respects. Firstly, some countries, like Zambia, have not yet enacted comprehensive legislation that covers all key and important public and elected officials especially those that handle or are influential in public procurement, regulation, and licencing. Secondly, others like Ghana may have the regulatory framework for lodging of the declarations but those regulations have complex or non-existent sanction mechanisms that make punishment for failure to comply with the law virtually ineffective. Thirdly there are those countries that have both the statutory framework that requires public declarations and which also have the statutory sanctions for failure or refusal to declare, like Kenya, but which may need more aggression in enforcing the law and may also be facing challenges where it comes to verifying the declarations made.
As a minimum, an effective statutory declaration regime must have the following four ingredients for it to be effective:
- There must be codification of the requirement for heads of state and government, Ministers of state, heads of Government Ministries, and every key or influential public or elected official involved in procurement, regulation, or licencing to declare their assets upon assumption of office and thereafter annually on the anniversary of the assumption of office;
- There must be penal and/or administrative sanctions for failure to declare assets which should, in appropriate cases include loss of office;
- The declarations must be open to public scrutiny and must be easily accessible by members of the public; and
- There must be a mechanism for verification of the declarations lodged.
Ideally, these declarations must be lodged with specialised units of the corruption fighting agency or the lead body in charge of enforcing ethics and financial integrity.
Life style audits
The asset declarations made by public officials must be verified by inter alia lifestyle audits. Ordinarily, Lifestyle audits should be triggered when the observable lifestyle of an individual appears to exceed their known income. This can be done through a net worth analysis by assessing the individuals’ income, assets, and investments against extravagant income. It must also be borne in mind that, for lifestyle audits to be effective, law enforcement agencies must be resourced with the tools to enable them gather and analyse information on public and elected officials.
Article 20 of UNCAC implores States to criminalise significant increase in assets of a public official which he/she cannot reasonably explain. Article 1 of the African Union Convention on Preventing and Combating Corruption defines illicit enrichment as, significant increase in the assets of a public official or any other person which he or she cannot reasonably explain in relation to his or her income.
Admittedly, lifestyle audits are not an end in and of themselves but they are an important aide in the fight against corruption.
Conclusion
We cannot seriously fight corruption without effective asset declaration regulatory regimes that encompass sanctions for refusal or failure to abide by them and whose enforcement necessarily includes the verification of the declarations and lifestyle audits.
The fight against corruption, and the building of financial integrity in State institutions, does better under public scrutiny and any attempt to shroud asset declarations of public officials in secrecy impedes the fight against corruption. In this regard, in encouraging the enactment of asset declaration regimes in various countries, we must insist that these declarations of assets, interests and liabilities must be open to public scrutiny. To be effective, asset declarations and lifestyle audits must be aided by an open and vigilant press and an active and well-informed civil society.
It is no secret that in many poor or underdeveloped countries, one of the major reasons for lack of development is corruption. The financial and economic returns on an effective fight against corruption in these countries are very clear. Therefore, the fight against corruption is more than just a matter of law enforcement, it is a smart economic strategy and a matter of social justice.
