The culture of corruption

Arranged to completing The task of English Lab for International Relation

Arranged By : Siti Nurfitri Sylviani Wike Oktaviana R. Bian Lugina Soerianata Venny Vina Indrianie Imay Hendra Kartiwa Zensa Hidayatul Rahman Zildan Azmiwidiar 102030009 102030010 102030016 102030017 102030018 102030034 102030045

International Relation Department Faculty of Social and Politic Science Pasundan University 2011

You were in happiness on our sweat and blood Well, Well get our happiness when you all guys getting your pain, cause what youve did to us

List of Presentation:
1. Introduction, What is Corruption? 2. The History of Corruption 3. Varieties of Corruption 4. The Effects of Corruption 5. The Way to Decrease Corruption 6. Corruption in Indonesia 7. The Case of Corruption 8. Conclusion

1. Introduction, What is Corruption?

The word corrupt (Middle English, from Latin corruptus, past participle of corrumpere, to destroy : com-, intensive pref. and rumpere, to break) when used as an adjective literally means "utterly broken". In modern English usage the words corruption and corrupt have many meanings:

Political corruption, the abuse of public power, office, or resources by government officials or employees for personal gain, e.g. by extortion, soliciting or offering bribes.

Police corruption, a specific form of police misconduct designed to obtain financial benefits, other personal gain, and/or career advancement for a police officer or officers in exchange for not pursuing, or selectively pursuing, an investigation or arrest.

Corporate corruption, corporate criminality and the abuse of power by corporation officials, either internally or externally, including the fact that police obstruct justice.

Corruption (philosophical concept), often refers to spiritual or moral impurity, or deviation from an ideal Corruption Perceptions Index, published yearly by Transparency International Putrefaction, the natural process of decomposition in the human and animal body following death Data corruption, an unintended change to data in storage or in transit Linguistic corruption, the change in meaning to a language or a text introduced by cumulative errors in transcription as changes in the language speakers' comprehension

Bribery in politics, business, or sport

Rule of law, governmental corruption of judiciary, includes governmental spending on the courts, which is completely financially controlled by the executive in many transitional and developing countries.

2. The History of Corruption

Corruption is talked about openly in most countries these days and few countries deny they suffer from it. Which is a good thing, since it provides politicians, business and labour leaders, journalists and civil society with a rare opportunity: that of agreeing on the urgency of stamping it out. But agreeing on what exactly is meant by corruption is another matter. Even the most widely used definition, which is the abuse of public office for private gain, may err on the side of oversimplification. The early 1990s witnessed a proliferation of initiatives aimed at fighting corruption on the national, regional and international levels. Fighting corruption has engendered an unusually high degree of international co-operation, leading to an armoury of international instruments, such as the OECDs Convention on Combating Bribery of Foreign Public Officials in International Business Transactions, or indeed, the Council of Europes Criminal Law C onvention on Corruption. The reason the international community has mobilised to fight the

problem is simple: corruption respects no borders, knows no economic distinctions and infects all forms of government. In the long run, no country can afford the social, political or economic costs that corruption entails. It erodes public confidence in political institutions and leads to contempt for the rule of law; it distorts the allocation of resources and undermines competition in the market place; it has a devastating effect on investment, growth and development. Furthermore, corruption exacts an inordinately high price on the poor by denying them access to vital basic services. A whole host of conditions can influence corruption, its different manifestations, its pervasiveness and, indeed, its perception by ordinary citizens. Understanding the multifaceted dimension of corruption is essential in order to identify workable ways of dealing with it. Corruption comes in many guises. Bribery, extortion, fraud, trafficking, embezzlement but also nepotism and cronyism are all different manifestations of it. Even the most straight-forward acts of bribery need not always involve the exchange of money. Other gifts or advantages, such as membership of an exclusive club or promises of Scholarships for children, have been used as sweeteners to clinch deals. Whatever form it takes, corruption is always a two-way transaction; it requires a supply side (the briber) and a demand side (the one who receives the bribe). That is why measures must be designed to hit both sides of the corruption equation.

3. Varieties of Corruption
Bribery A bribe is a payment given personally to a government official in exchange of his use of official powers. Bribery requires two participants: one to give the bribe, and one to take it. Either may initiate the corrupt offering; for example, a customs official may demand bribes to let through allowed (or disallowed) goods, or a smuggler might offer bribes to gain passage. In some countries the culture of corruption extends to every aspect of public life, making it extremely difficult for individuals to stay in business without resorting to bribes. Bribes may be demanded in order for an official to do something he is already paid to do. They may also be demanded in order to bypass laws and regulations. In addition to using bribery for private financial gain, they are also used to intentionally and maliciously cause harm to another (i.e. no financial incentive). In some developing nations, up to half of the population has paid bribes during the past 12 months. In recent years, efforts have been made by the international community to encourage countries to dissociate and incriminate as separate offences, active and passive bribery. Active bribery can be defined for instance as the promising, offering or giving by any person, directly or indirectly, of any undue advantage [to any public official], for himself or herself or for anyone else, for him or her to act or refrain from acting in the exercise of his or her functions. (article 2 of the Criminal Law Convention on Corruption (ETS 173) of the Council of Europe). Passive bribery can be defined as the request or receipt [by any public official], directly or indirectly, of any undue advantage, for himself or herself or for anyone else, or the acceptance of an offer or a promise of such an advantage, to act or refrain from acting in the exercise of his or her functions (article 3 of the Criminal Law Convention on Corruption (ETS 173)). The reason for this dissociation is to make the early steps (offering, promising, requesting an advantage) of a corrupt deal already an offence and, thus, to give a

clear signal (from a criminal policy point of view) that bribery is not acceptable. Besides, such a dissociation makes the prosecution of bribery offences easier since it can be very difficult to prove that two parties (the bribe-giver and the bribe-taker) have formally agreed upon a corrupt deal. Besides, there is often no such formal deal but only a mutual understanding, for instance when it is common knowledge in a municipality that to obtain a building permit one has to pay a "fee" to the decision maker to obtain a favourable decision. A working definition of corruption is also provided as follows in article 3 of the Civil Law Convention on Corruption (ETS 174): For the purpose of this Convention, "corruption" means requesting, offering, giving or accepting, directly or indirectly, a bribe or any other undue advantage or prospect thereof, which distorts the proper performance of any duty or behaviour required of the recipient of the bribe, the undue advantage or the prospect thereof. Trading in influence Trading in influence, or influence peddling in certain countries, refers to the situation where a person is selling his/her influence over the decision process involving a third party (person or institution). The difference with bribery is that this is a tri-lateral relation. From a legal point of view, the role of the third party (who is the target of the influence) does not really matter although he/she can be an accessory in some instances. It can be difficult to make a distinction between this form of corruption and certain forms of extreme and poorly regulated lobbying where for instance law- or decision-makers can freely "sell" their vote, decision power or influence to those lobbyists who offer the highest retribution, including where for instance the latter act on behalf of powerful clients such as industrial groups who want to avoid the passing of certain environmental, social, or other regulations perceived as too stringent, etc. Where lobbying is (sufficiently) regulated, it becomes possible to provide for a distinctive criteria and to consider

that trading in influence involves the use of "improper influence", as in article 12 of the Criminal Law Convention on Corruption (ETS 173) of the Council of Europe. Patronage Patronage refers to favoring supporters, for example with government employment. This may be legitimate, as when a newly elected government changes the top officials in the administration in order to effectively implement its policy. It can be seen as corruption if this means that incompetent persons, as a payment for supporting the regime, are selected before more able ones. In nondemocracies many government officials are often selected for loyalty rather than ability. They may be almost exclusively selected from a particular group (for example, Sunni Arabs in Saddam Hussein's Iraq, the nomenklatura in the Soviet Union, or the Junkers in Imperial Germany) that support the regime in return for such favors. A similar problem can also be seen in Eastern Europe, for example in Romania, where the government is often accused of patronage (when a new government comes to power Nepotism and Cronyism Favoring relatives (nepotism) or personal friends (cronyism) of an official is a form of illegitimate private gain. This may be combined with bribery, for example demanding that a business should employ a relative of an official controlling regulations affecting the business. The most extreme example is when the entire state is inherited, as in North Korea or Syria. A milder form of cronyism is an "old boy network", in which appointees to official positions are selected only from a closed and exclusive social network such as the alumni of particular universities instead of appointing the most competent candidate. Seeking to harm enemies becomes corruption when official powers are illegitimately used as means to this end. For example, trumped-up charges are often

brought up against journalists or writers who bring up politically sensitive issues, such as a politician's acceptance of bribes. In the Indian political system, leadership of national and regional parties are passed from generation to generation creating a system in which a family holds the center of power, some examples are most of the dravidian parties of south India and also the largest party in India - Congress. Electoral Fraud Electoral fraud is illegal interference with the process of an election. Acts of fraud affect vote counts to bring about an election result, whether by increasing the vote share of the favored candidate, depressing the vote share of the rival candidates, or both. Also called voter fraud, the mechanisms involved include illegal voter registration, intimidation at polls, and improper vote counting. Embezzlement Embezzlement is outright theft of entrusted funds. It is a misappropriation of property. Another common type of embezzlement is that of entrusted government resources; for example, when a director of a public enterprise employs company workers to build or renovate his own house. Kickbacks A kickback is an official's share of misappropriated funds allocated from his or her organization to an organization involved in corrupt bidding. For example, suppose that a politician is in charge of choosing how to spend some public funds. He can give a contract to a company that is not the best bidder, or allocate more than they deserve. In this case, the company benefits, and in exchange for betraying the

public, the official receives a kickback payment, which is a portion of the sum the company received. This sum itself may be all or a portion of the difference between the actual (inflated) payment to the company and the (lower) market-based price that would have been paid had the bidding been competitive. Kickbacks are not limited to government officials; any situation in which people are entrusted to spend funds that do not belong to them are susceptible to this kind of corruption. Kickbacks are also common in the pharmaceutical industry, as many doctors and physicians receive pay in return for added promotion and prescription of the drug these pharmaceutical companies are marketing. (See: Anti-competitive practices, Bid rigging.) Unholy alliance An unholy alliance is a coalition among seemingly antagonistic groups, especially if one is religious,[9] for ad hoc or hidden gain. Like patronage, unholy alliances are not necessarily illegal, but unlike patronage, by its deceptive nature and often great financial resources, an unholy alliance can be much more dangerous to the public interest. An early, well-known use of the term was by Theodore Roosevelt (TR): "To destroy this invisible Government, to dissolve the unholy alliance between corrupt business and corrupt politics is the first task of the statesmanship of the day." 1912 Progressive Party Platform, attributed to TR[10] and quoted again in his autobiography[11] where he connects trusts and monopolies (sugar interests, Standard Oil, etc.) to Woodrow Wilson, Howard Taft, and consequently both major political parties. Involvement in organized crime An illustrative example of official involvement in organized crime can be found from 1920s and 1930s Shanghai, where Huang Jinrong was a police chief in the French concession, while simultaneously being a gang boss and co-operating with Du

Yuesheng, the local gang ringleader. The relationship kept the flow of profits from the gang's gambling dens, prostitution, and protection rackets undisturbed. The United States accused Manuel Noriega's government in Panama of being a "narcokleptocracy", a corrupt government profiting on illegal drug trade. Later the U.S. invaded Panama and captured Noriega.

4. The Effects of Corruption

Corruption poses a serious development challenge. political In realm, the it

undermines democracy and good governance by flouting or even subverting processes. in legislative bodies reduces accountability and distorts elections formal Corruption and in in

representation

policymaking; corruption in the judiciary compromises the rule of law; and corruption in public administration results in the inefficient provision of services. More generally, corruption erodes the institutional capacity of government as procedures are disregarded, resources are siphoned off, and public offices are bought and sold. At the same time, corruption undermines the legitimacy of government and such democratic values as trust and tolerance.

Economic effects Corruption undermines economic development by generating considerable distortions and inefficiency. In the private sector, corruption increases the cost of business through the price of illicit payments themselves, the management cost of negotiating with officials, and the risk of breached agreements or detection. Although some claim corruption reduces costs by cutting red tape, the availability of bribes can also induce officials to contrive new rules and delays. Openly removing costly and lengthy regulations are better than covertly allowing them to be bypassed by using bribes. Where corruption inflates the cost of business, it also distorts the playing field, shielding firms with connections from competition and thereby sustaining inefficient firms. Corruption also generates economic distortions in the public sector by diverting public investment into capital projects where bribes and kickbacks are more plentiful. Officials may increase the technical complexity of public sector projects to conceal or pave the way for such dealings, thus further distorting investment. Corruption also lowers compliance with construction, environmental, or other regulations, reduces the quality of government services and infrastructure, and increases budgetary pressures on government. Economists argue that one of the factors behind the differing economic development in Africa and Asia is that in the former, corruption has primarily taken the form of rent extraction with the resulting financial capital moved overseas rather than invested at home (hence the stereotypical, but often accurate, image of African dictators having Swiss bank accounts). In Nigeria, for example, more than $400 billion was stolen from the treasury by Nigeria's leaders between 1960 and 1999.[2] University of Massachusetts researchers estimated that from 1970 to 1996, capital flight from 30 sub-Saharan countries totaled $187bn, exceeding those

nations' external debts.[3] (The results, expressed in retarded or suppressed development, have been modeled in theory by economist Mancur Olson.) In the case of Africa, one of the factors for this behavior was political instability, and the fact that new governments often confiscated previous government's corruptly-obtained assets. This encouraged officials to stash their wealth abroad, out of reach of any future expropriation. In contrast, Asian administrations such as Suharto's New Order often took a cut on business transactions or provided conditions for development, through infrastructure investment, law and order, etc. Environmental and social effects Corruption facilitates environmental destruction. Corrupt countries may formally have legislation to protect the environment, it cannot be enforced if officials can easily be bribed. The same applies to social rights worker protection, unionization prevention, and child labor. Violation of these laws rights enables corrupt countries to gain illegitimate economic advantage in the international market. The Nobel Prize-winning economist Amartya Sen has observed that "there is no such thing as an apolitical food problem." While drought and other naturally occurring events may trigger famine conditions, it is government action or inaction that determines its severity, and often even whether or not a famine will occur. Governments with strong tendencies towards kleptocracy can undermine food security even when harvests are good. Officials often steal state property. In Bihar, India, more than 80% of the subsidized food aid to poor is stolen by corrupt officials.[4] Similarly, food aid is often robbed at gunpoint by governments, criminals, and warlords alike, and sold for a profit. The 20th century is full of many examples of governments undermining the food security of their own nations sometimes intentionally.

Effects on Humanitarian Aid The scale of humanitarian aid to the poor and unstable regions of the world grows, but it is highly vulnerable to corruption, with food aid, construction and other highly valued assistance as the most at risk.[6] Food aid can be directly and physically diverted from its intended destination, or indirectly through the manipulation of assessments, targeting, registration and distributions to favour certain groups or individuals. Elsewhere, in construction and shelter, there are numerous opportunities for diversion and profit through substandard workmanship, kickbacks for contracts and favouritism in the provision of valuable shelter material. Thus while humanitarian aid agencies are usually most concerned about aid being diverted by including too many, recipients themselves are most concerned about exclusion.[6] Access to aid may be limited to those with connections, to those who pay bribes or are forced to give sexual favours. Equally, those able to do so may manipulate statistics to inflate the number beneficiaries and syphon of the additional assistance. Other areas: health, public safety, education, trade unions, etc. Corruption is not specific to poor, developing, or transition countries. In western countries, there have been cases of bribery and other forms of corruption in all possible fields: under-the-table payments made to reputed surgeons by patients willing to be on top of the list of forthcoming surgeries, bribes paid by suppliers to the automotive industry in order to sell poor quality connectors used for instance in safety equipment such as airbags, bribes paid by suppliers to manufacturers of defibrillators (to sell poor quality capacitors), contributions paid by wealthy parents to the "social and culture fund" of a prestigious university in exchange for it to accept their children, bribes paid to obtain diplomas, financial and other advantages granted to unionists by members of the executive board of a car manufacturer in exchange for employer-friendly positions and votes, etc. Examples are endless.

These various manifestations of corruption can ultimately present a danger for the public health; they can discredit certain essential institutions or social relationships. Corruption can also affect the various components of sports activities (referees, players, medical and laboratory staff involved in anti-doping controls, members of national sport federation and international committees deciding about the allocation of contracts and competition places). There have also been cases against (members of) various types of non-profit and non-government organisations, as well as religious organisations. Ultimately, the distinction between public and private sector corruption sometimes appears rather artificial and national anti-corruption initiatives may need to avoid legal and other loopholes in the coverage of the instruments.

5. The Way to Decrease Corruption

Mobile telecommunications and radio broadcasting help to fight corruption, where especially forms in of developing regions like Africa, other communications are limited. In the 1990s, initiatives were taken at an international level (in particular by the European Community, the Council of Europe, the OECD) to put a ban on corruption: in 1996, the Committee of

Ministers of the Council of Europe, for instance, adopted a comprehensive Programme of Action against Corruption and, subsequently, issued a series of anticorruption standard-setting instruments:

the Criminal Law Convention on Corruption (ETS 173); the Civil Law Convention on Corruption (ETS 174); the Additional Protocol to the Criminal Law Convention on Corruption (ETS 191); the Twenty Guiding Principles for the Fight against Corruption (Resolution (97) 24); the Recommendation on Codes of Conduct for Public Officials (Recommendation No. R (2000) 10); and the Recommendation on Common Rules against Corruption in the Funding of Political Parties and Electoral Campaigns (Rec(2003)4) The purpose of these instruments was to address the various forms of

corruption (involving the public sector, the private sector, the financing of political activities, etc.) whether they had a strictly domestic or also a transnational dimension. To monitor the implementation at national level of the requirements and principles provided in those texts, a monitoring mechanism - the Group of States Against Corruption (also known as GRECO) was created. Further conventions were adopted at the regional level under the aegis of the Organization of American States (OAS or OEA), the African Union, and in 2003, at the universal level under that of the United Nations. Mobile telecommunications and radio broadcasting help to fight corruption, especially in developing regions like Africa, where other forms of communications are limited.

In the 1990s, initiatives were taken at an international level (in particular by the European Community, the Council of Europe, the OECD) to put a ban on corruption: in 1996, the Committee of Ministers of the Council of Europe, for instance, adopted a comprehensive Programme of Action against Corruption and, subsequently, issued a series of anti-corruption standard-setting instruments:

the Criminal Law Convention on Corruption (ETS 173); the Civil Law Convention on Corruption (ETS 174); the Additional Protocol to the Criminal Law Convention on Corruption (ETS 191); the Twenty Guiding Principles for the Fight against Corruption (Resolution (97) 24); the Recommendation on Codes of Conduct for Public Officials (Recommendation No. R (2000) 10); and the Recommendation on Common Rules against Corruption in the Funding of Political Parties and Electoral Campaigns (Rec(2003)4) The purpose of these instruments was to address the various forms of

corruption (involving the public sector, the private sector, the financing of political activities, etc.) whether they had a strictly domestic or also a transnational dimension. To monitor the implementation at national level of the requirements and principles provided in those texts, a monitoring mechanism - the Group of States Against Corruption (also known as GRECO) was created. Further conventions were adopted at the regional level under the aegis of the Organization of American States (OAS or OEA), the African Union, and in 2003, at the universal level under that of the United Nations.

6. Corruption in Indonesia
Bribes by firms in Indonesia arise principally from regulations --licenses and levies --imposed by local government officials. Regulations generate direct revenues (fees) plus indirect revenues in the form of bribes. The expected value of the latter is capitalized into lower salaries needed by localities to compensate public officials. Localities in Indonesia are hampered by insufficient revenues from formal tax and transfer sources to pay competitive salaries plus fund demanded' levels of public services, because local tax rates are capped by the center and inter-governmental transfers are limited. Thus the direct and indirect revenues from local regulations are critical to local finances. The paper models and estimates the key aspects of corruption -- the relationship between bribes, time spent with local officials, and different forms of regulation. It models how inter-jurisdictional competition for firms limits the extent of local regulation and how greater sources of tax or intergovernmental revenues reduce the need for regulation and corruption. The paper estimates a large reduction in regulation in better funded localities. The findings are directly relevant to Indonesia where corruption is high and the country is in the throes of major decentralization and local democratization efforts.

7. The Case of corruption

Indonesia is unique country. The country not only was breaking the world record to have the longest towel, but also have the longest coast line, the largest Moslem country, but also the International survey give the point that Indonesia is the most corrupt country in the Asia Pasific, and probably alson in the world. More than a decade after the collapse of former President Suhartos 32 year dictatorship, many people believe the greatest threat is not terrorism, a weak education system, poor infrastructure or even poverty, but graft. Graft or which we

know as corruption is the greatest threat in Indonesia now. And many people wants the worst corruptors to be put to death. That is why so many institutions to establish to ardicate the corruptions, collusions, and nepotisms such as Corruption Eradications Commission (KPK) and other similar organizations like Independent Police Investigators. The latest cases is about the Gayus Tambunan cases who is a government tax officer which the Police suspect him was engage in graft of money Rp 28 billion which Gayus Tambunan receipt as a bribery from the taxpayer who want pay less. Gayus Hamoloan Tambunan (born in Jakarta,May 9,1979, age 31 years) is a civil servants group III/a in the Directorat general of Taxation. His name became famous when Komjen Susno Duadji mention that Gayus has $25 billion in his bank account plus foreign currency and jewelry $60 billion worth of 14 billion in bank safe in the name of his wife and that all property suspected of being Haram.in subsequent developments. Gayus had fled to Singapore along with his wife and children before it picked up again by the Task Force mafia law in Singapore. Gayus case tarnished the reform of the Ministry of Finance of the Republic of Indonesia that has been rolled out and destroy the image of Sri Mulyani Indonesian tax authorities.

8. Conclusion
In the light of the diverse range of corrupt actions, and the generic nature of the concept of corruption, it is unlikely that any precise and detailed definition of institutional corruption is possible. Nor is it likely that the field of corrupt actions can be neatly circumscribed by recourse to a set of self-evident criteria. Rather we should content ourselves with the somewhat vague and highly generic definition of institutional corruption provided above; and then proceed in a relatively informal

and piecemeal manner to try to identify a range of moral and/or legal offences that are known to contribute under certain conditions to the undermining of morally legitimate institutions. Such offences obviously include bribery, nepotism, and some but not all cases of fraud. But under certain circumstances they might also include breaches of confidentiality that compromise investigations, the making of false statements that undermines court proceedings or selection committee processes, selective enforcement of laws or rules by those in authority, and so on and so forth. The wide diversity of corrupt actions has at least two further implications. Firstly, it implies that acts of institutional corruption as a class display a correspondingly large set of moral deficiencies. Certainly, most corrupt actions will be morally wrong, and morally wrong at least in part because they undermine morally legitimate institutions. However, since there are many and diverse offences at the core of corrupt actions, there will also be many and diverse moral deficiencies associated with different forms of corruption. Some acts of corruption will be moral deficient by virtue of involving deception, others by virtue of infringing a moral right to property, still others by virtue of infringing a principle of impartiality, and so on. Secondly, the wide diversity of corrupt actions implies that there may well need to be a correspondingly wide and diverse range of anti-corruption measures to combat corruption in its different forms, and indeed in its possibly very different contexts.