The following questions and answers are designed to answer queries about the dangers of corruption and/or the lack of transparency in the humanitarian efforts to assist those affected by the recent tsunami disaster. They also address TI issues that are relevant to longer-term assistance to the region, including in the reconstruction and rebuilding phases to come, and the kinds of work TI is involved in as a response to this unprecedented disaster.

1. Where is there a risk of corruption in the emergency relief efforts following the tsunami tragedy in the Indian Ocean?
2. What is the value of a money-tracking system in the current situation?
3. Is such a tracking system in place at present?
4. Once reconstruction begins, to what extent is there a danger of corruption?
5. What steps can be taken to prevent corruption in the reconstruction process?
6. Indonesia is perceived to be the fifth most corrupt country ranked in TI's Corruption Perceptions Index? Should that prohibit aid (or certain types of aid) to Indonesia after the tsunami tragedy?
7. Does TI support debt relief or a debt moratorium for the afflicted countries?
8. What is TI doing on the ground?
9. What is the TI-Secretariat doing?

1. Where is there a risk of corruption in the emergency relief efforts following the tsunami tragedy in the Indian Ocean?
   The overriding importance of immediate emergency relief inevitably takes precedence over formal accountability mechanisms by those operating on the ground in the affected regions. The distribution of food, clean water, clothing and medical supplies in the relief stage is nevertheless susceptible to corrupt networks or individuals, who for personal gain might divert these resources from the intended recipients - those in urgent need of relief supplies and services - block distribution or access, or distribute low-quality goods. The destruction of infrastructure, including the disappearance of public records, combined with enormous inflows of international aid money, also provides huge scope for corruption.
2. What is the value of a money-tracking system in the current situation?
   It is essential to have in place a tracking mechanism, and it must be backed up by the commitment of both donors and recipients to exercise the utmost transparency in the budgetary and expenditure process. Governments in particular should publish money they have received and details of how it is being used - but so should NGOs and other agencies.Even during the earliest, time-sensitive efforts, one of the few feasible accountability mechanisms is on the side of the international donors and international aid organisations, who can track money amounts/flows intended to aid the disaster victims. Above all, they can track where money and aid has been targeted, and then assess whether the aid has really reached its destination. Such a tracking system can also assist national and local governments - and civil society groups on the ground - in monitoring the flow of aid to its intended targets.Tracking private donations is most difficult, but important because private donations can be as significant as the funds flowing through donor and aid agencies, and therefore have the capacity to introduce the same associated corruption risk, while at the same time lacking accountability and monitoring systems.
3. Is such a tracking system in place at present?
   Given the unprecedented scale of the current disaster in the Indian Ocean, as well as of funds made available by private and public sources around the world, the UN's Under-Secretary-General for Humanitarian Affairs and Emergency Relief Coordinator, Jan Egeland, announced on 9 January 2005 that his office was working with international financial experts, including the firm PricewaterhouseCoopers, all operating on a pro bono basis, to devise a public tracking system of most relief funds.This system should enable all stakeholders to monitor through the Internet the money committed to this disaster, as it works its way to those in need. It will indicate where the money has come from, how much money is made available, and what is being done with the money, i.e. how much money is being spent, by whom, and on what.The tracking system will be built from the ReliefWeb financial tracking system currently run by the UN Office for the Coordination of Humanitarian Affairs (OCHA), which provides an overview of pledges that countries have made to various United Nations projects.UN OCHA also announced that it is trying to create an investigation system to enable the examination of any allegations of mismanagement of relief monies. These considerable efforts reflect the dimension of the tsunami crisis, but are also a response to the reported mismanagement of the UN oil-for-food programme. TI welcomes this effort and will follow its development.We expect to learn more about this tracking effort as it develops, and to identify ways that it can be used locally for civil society monitoring of aid to the affected regions.
4. Once reconstruction begins, to what extent is there a danger of corruption?
   The immediate aftermath of an emergency situation leaves the regions affected particularly susceptible to weak oversight and a lack of infrastructure to monitor the planning or implementation of reconstruction efforts. The need to rebuild quickly should not be used to exclude the general public from consultation in the planning process and as an excuse to bypass formal tender procedures.To avoid large-scale corruption in the aftermath of the tsunami disaster, the main focus must be on the reconstruction process. While reconstruction is urgently needed, it is in the interests of victims and authorities alike that tendering procedures are transparent and that accountability mechanisms are in place. Reconstruction of housing and infrastructure must be of a high quality to ensure that it contributes to a sustainable economic recovery in the affected areas. In particular, we recommend that the following principles be followed:
   The need to rebuild quickly should not be used as an excuse to bypass formal tender procedures or to exclude the general public from consultation in the planning process.
   Transparency and accountability should be applied not only to the tenders for big reconstruction contracts, but also to the subcontracts deriving from them.
   It is preferable that reconstruction contracts be awarded through open tender procedures. If, for efficiency reasons, this is not possible, limited tendering processes, shortlistings, single-source contracts or direct contracts should be open to public scrutiny and their implementation should be monitored.
   Independent monitoring systems should be put in place with the participation of civil society and especially the affected communities, in order to monitor contract implementation.
5. What steps can be taken to prevent corruption in the reconstruction process
   Non-transparent contracting processes are susceptible to corruption where public officials allocate tenders based on bribes rather than the quality and value for money of a bid. The private sector, local authorities and international donors should agree on a transparent system of tendering and reporting on expenditure - and should include civil society participation in the planning and monitoring of reconstruction projects. Public hearings should be organised wherever possible. A corruption-prevention strategy is also necessary to avoid the diversion of funds for private gain, and also to ensure value-for-money, and safety and quality standards in the reconstruction process. Corruption prevention should be a priority to ensure that money is well-targeted and used efficiently.The best approach is a no-bribes Integrity Pact, where all parties make a binding commitment not to pay or accept bribes or to collude in a particular tender. The Pact should be backed up by sanctions, including termination of the contract and blacklisting from bidding on future projects and should be subject to independent monitoring.Public hearings are also useful tools in preventing corruption. They can be used to discuss reconstruction priorities at the local and national level or to discuss the terms of contracting for those reconstruction efforts. A public hearing is a mechanism to ensure that priorities are not set by corrupt networks or in a way that ignores or misrepresents the community's needs. For these purposes, public hearings should include the participation of the relevant stakeholders, including the local communities.Other strategies include the setting up of community-based monitoring systems that follow up the flow of aid and other funds until the service/goods are delivered. Ultimately, it is important to ensure that local authorities have the capacity to manage transparent and effective reconstruction contracts so that the project is sustainable in the long run.
6. Indonesia is perceived to be the fifth most corrupt country ranked in TI's Corruption Perceptions Index? Should that prohibit aid (or certain types of aid) to Indonesia after the tsunami tragedy?
   TI's Corruption Perceptions Index ranks countries according to perceived levels of corruption among public officials, and is a three-year rolling poll. It should not be used as a determinant of aid levels. What is most important are the policies of the current government, in particular the level of political will to practise good governance and introduce anti-corruption reforms. For instance, Indonesia has a new President, elected on an anti-corruption mandate, and a new government: they should not be condemned due to high corruption levels in the past.At the same time, a history of high corruption makes even more important the need for strong anti-corruption measures, such as Integrity Pacts in public tendering, and strong conflict of interest rules governing the conduct and financial interests of politicians and public officials at both the national and local level. But the responsibility to prevent and counter corruption does not lie with the recipient country alone.Other stakeholders, including international donors, international and local NGOs and the media can play an important part in monitoring expenditure and providing access to information. Likewise, the private sector - both national and international - must conduct their business with integrity, and compete on quality and value for money, not through paying kickbacks or providing favours to public officials or politicians and by supporting transparency and openness in the contracting processes. Companies bidding for tenders should certify that they have anti-bribery codes in place in their subsidiaries as well as in the offices of the parent company, and that clear procedures are in place to ensure that no staff member or agent will engage in bribery, and that they will be dismissed and turned over to the authorities if they breach the procedures.
7. Does TI support debt relief or a debt moratorium for the afflicted countries?
   TI believes that dedicated disaster relief and reconstruction efforts should be subject to effective monitoring, such as the donation-tracking scheme announced by the UN last week. The emphasis throughout the coming months should be on providing maximum access to information about both sources and expenditure of funds. Independent monitoring of aid disbursement and project implementation is essential, including civil society monitoring.Governments must also consider the vulnerabilities of different aid pathways. Debt relief is no substitute for effectively targeted disaster relief and expert assistance in the worst-affected areas. To the extent that debt relief is given, experience shows that, as with direct budgetary support to governments, it makes most sense where a government has made a major commitment to high governance standards, in particular budget transparency, and to civil society monitoring of expenditure allocation.
8. What is TI doing on the ground?
   TI Indonesia is very involved in the emergency operation undertaken by the Coalition of Indonesian NGOs for Humanitarian Operation in Aceh, including establishing a management system for operations in the western coast of Aceh. Most managers of TI Indonesia have been seconded to support the emergency operations. TI is working with Indonesian Corruption Watch, which is planning a two-year civil society monitoring programme of relief efforts in Aceh.TI Sri Lanka has issued a call for politicians, both government and opposition, and all Sri Lanka's communities to unite together around a "national strategy on relief distribution and reconstruction to be planned and implemented with the participation of all sectors, and the effort should be properly co-ordinated to achieve optimum benefits to the victims and affected areas". It has offered the President of Sri Lanka its assistance in efforts to ensure transparency and accountability and made a formal proposal to TAFREN - the Task Force For Reconstructing the Nation - to minimise corruption and waste in the rebuilding exercise.The affiliate of TI India, Lok Sevak Sangh, is organising relief camps at various places in India. Towards these efforts, it has used its own funds as well as donations from various volunteers and institutions. Its volunteers are already in the affected areas to assist needy victims.
9. What is the TI-Secretariat doing?
   The TI Secretariat is working closely with the TI national chapters in the region and with resource persons to identify appropriate expertise and to assess the policy issues at stake in the tsunami disaster and the rebuilding that will follow. It is also working to raise international awareness on the appropriate measures needed to prevent corruption in the reconstruction efforts.TI-S is planning a regional expert meeting on combating corruption in the tsunami relief work. The provisional venue is Indonesia in early March 2005. The Asian Development Bank and OECD, as the Secretariat of the Anti-Corruption Action Plan for Asia and the Pacific, have agreed to be co-hosts. Working with relevant chapters and given the dynamic nature of this event, we are evaluating further follow-up on an ongoing basis, and remain open for input and suggestions from across the anti-corruption movement as to what we can contribute.