For Immediate Release
Office of the Press Secretary
June 10, 2004
G8/Nicaragua Partnership
Compact to Promote Transparency and Combat Corruption: A New Partnership Between the G8 and Nicaragua
Nicaragua and the members of the G8 announce today their intention to
cooperate in a "Compact to Promote Transparency and Combat
Corruption." Nicaragua and the G8 share the view that corruption is a
threat to democratic institutions, economic development and to the
integrity of the international system of trade and investment.
Nicaragua and the members of the G8 recognize that promoting
transparency and integrity and fighting corruption require commitment
and action on all sides. Outlined below are the intentions and policy
commitments of the G8 and Nicaragua as they pursue cooperation through
the Compact in a spirit of partnership and mutual respect.
Statement of the Government of Nicaragua
The Government of Nicaragua is strongly committed to fighting
corruption. Accordingly, transparency, as a key element of justice and
economic growth, is a major pillar of development. For years Nicaragua
has been afflicted by corruption; this has eroded its credibility and
drastically reduced its capacity to govern under the basic principle of
accountability. The lack of a legal framework supporting a transparent
government structure did not allow Nicaragua a proper transition into
the third millennium. The Bolaos Administration has firmly decided to
take a strong hand in this matter, righting wrongs and fulfilling its
promise to its citizens to eradicate poverty. As part of its
objectives, this Administration has developed a set of standards and
procedures aimed at transforming the culture of public service. This
transformation seeks to improve government's managerial capacity, so
that the Government of Nicaragua can achieve good governance and
transparency at all levels of its operations.
Actions to Fight Corruption and Promote
Accountability
Among Nicaragua's accomplishments are the country's adherence to
the United Nations Convention against Transnational Organized Crime,
the Inter- American Anti-Corruption Convention, and the recently signed
United Nations Anti-Corruption Convention. This Administration has
proved it will not tolerate any form of corruption, and President
Bolaos has emphatically stated that "no one is above the law."
As a result of the Bolaos Administration's efforts, the
international community is actively supporting all initiatives aimed at
consolidating the country's financial management reform program. The
development and implementation of an Integrated Financial Management
System, known as SIGFA, provides the necessary accountability and
transparency for central government budgetary operations.
Significant progress has been achieved in public procurement, as
evidenced by the first phase of e-disclosure contained in the web page
(consultaciudadana.mhcp.gob.ni). This website provides up-to-date
information on annual procurement plans and government solicitations
that are underway. Training and related modernization of government
procurement units have also effectively contributed to transparency and
efficiency in government expenditures.
Nicaragua's General Treasury is being transformed into a modern and
automated institution capable of exercising effective control of all
revenues and efficient disbursement of budgetary allocations. The
Treasury is now using Secure Telephone Transfer of Funds (TTF) with
private banks and is in the process of migrating to Electronic
Transfers of Funds (EFT). It has also implemented a Standard
Government Deposit Slip, which in its first stage allows citizens and
banks to pay and receive tax revenues from customs duties and fees into
a Single Treasury Account known as CUT. In its second stage, this
innovation will encompass income tax collection, while its final stage
will cover the collection of all government revenues via a standard
procedure.
Internal and external auditors with access to government operations
are essential to guarantee transparency effectively. Consequently, it
has been a priority to train both internal, institutional auditors and
auditors from the General Comptroller's Office in the use of SIGFA.
The auditors are currently accessing SIGFA "on line," which reduces the
time of ex-post audits, thereby increasing effective control of
resource management. Congress (the Nicaraguan National Assembly) also
has access to SIGFA and may easily consult data needed for budgetary
approval and/or follow-up.
The key to accountability and transparency, however, lies in
complete access to government information. A well-informed citizenry
is indispensable to reducing corruption. The Ministry of Finance's web
page currently provides updated budgetary data and information on
projects funded by external resources. Many other government
institutions now have web pages that disclose internal procedures,
details of services provided and pertinent legal frameworks.
Future Plans
Though achievements so far have been exemplary, they are far from
enough. Budgetary information must be made accessible to the user, so
that it can be easily interpreted by all citizens, thus improving
public confidence. Procurement must advance to the next stage, which
will allow suppliers to bid openly and "on line," thus increasing
transparency and efficiencies in contract bidding and contract
payment. Laws must be reformed, and those that do not yet exist must
be developed and enacted by Congress, so that an appropriate legal
framework supports all government financial management activities.
Structural reforms must be analyzed and proposed, so that government
can be downsized to a more efficient body of capable, well-trained
public servants, through implementation of the Civil Service Law that
has already been approved.
Additionally, an e-government strategy is being developed to
provide citizens with "on line" services, thus eliminating expensive
and lengthy procedures. Bringing citizens closer to the government and
vice versa are part of the decentralization effort that has been
articulated in Nicaragua's National Development Plan.
As a statement of the Government of Nicaragua's political will and
its responsible, coherent determination to fight corruption, the Bolaos
Administration has promoted legislative initiatives directed at
preventing and stemming corruption:
Law of Partial Reform to the Criminal Code:
This law, passed in June 2002, makes the following crimes for public
servants for the first time: fraud, embezzlement, illegal enrichment,
influence peddling and acceptance of bribes from abroad.
Public Debt General Law: This law regulates the process of
public indebtedness, so that the financial needs of the government and
its payment obligations can be met at the lowest possible cost. Passed
in December 2003, the law is now in effect.
The following initiatives continue this process and constitute
priority legislative agenda items for the Government of Nicaragua in
2004:
Public Service Ethics Law: This would govern
the ethics of public employees during their term in office. The law
would require that civil servants declare their assets before assuming
office. The bill is currently in draft stage and stands a good chance
of passage.
Judicial Career Law: This bill would
ensure a merit-based, competitive, transparent process for selecting
judicial officials, as well as provide for disciplinary sanctions.
Because of its relation to national politics, this proposed law is
controversial, and several drafts currently exist. It has a moderate
chance of passage.
Reforms to the State's Contracting
Law: The government is in consultation with civil society on the
changes needed to this law to make government procurement more
cost-efficient and transparent. It is still in pre-draft form, but
should stand a good chance of passage.
Fiscal
Responsibility Law: It seeks to limit public debt to levels that
are prudent and compatible with tax revenues and public assets; adopt a
stable and predictable tax policy; establish a multi-year budgetary
planning framework; adopt international public sector accounting
standards; and create a fiscal stabilization fund. Now in draft
stages, the law has a good chance of passage.
Public
Sector Financial Management Law: This initiative aims to establish
standards to regulate and coordinate the financial management system.
Now in draft stages, it stands a good chance of passage.
Access to Information Law: This law would promote transparency
through citizen access to public information. The Government of
Nicaragua is now consulting with civil society on this draft law, which
stands a good chance of passage.
In view of the above and the need to streamline procedures, provide
continuity and consistency to existing efforts, and improve public
sector management: - The Government of Nicaragua welcomes the
G8's Evian Summit initiative to support with bilateral technical
assistance those countries committed to a partnership to increase
transparency, good governance and the rule of law.
- The
Government of Nicaragua requests inclusion in this G8 initiative, as it
has repeatedly demonstrated its commitment to fight corruption,
increase transparency and promote good governance.
While much is yet to be done, it is only through the will of the
people that goals such as ours can be achieved. The Bolaos
Administration is committed to fulfilling its promise to the people of
Nicaragua to make transparency, accountability and integrity
requirements of its daily activities. The support of the international
community spurs us on in that resolve.
Statement of the G8 Governments
General Statement of Policy Commitments
For their part, G8 countries committed at Evian and Sea Island to
act together to fight corruption and increase transparency. At Sea
Island, the G8 agreed to pursue specific actions to follow up their
Evian commitments. As set forth in more detail in their Declarations
in Evian and Sea Island, the G8 intend to: - Become parties to
the UN Convention Against Corruption and call for rapid signature and
completion of all necessary steps to ratify and implement the
Convention, and support the convening in Vienna of a multilateral
"Friends of the Convention" process for promoting active and effective
implementation.
- Translate the words of the UN Convention into
effective actions and assist third countries, particularly developing
countries, in accomplishing the objectives of the Convention.
- Implement a new G8 partnership to detect, recover and return
illicitly acquired proceeds of corruption.
- Put in place new
methods to coordinate G8 asset recovery actions, including by:
- Establishing G8 accelerated response teams
- Enhancing G8
asset recovery case coordination; and
- Holding G8 asset
recovery workshops.
- Adopting rules and measures or creating
best practices to track and recover assets in corruption
cases.
- Seek in accordance with national laws to deny
safe haven to public officials guilty of corruption, by denying them
entry, when appropriate, and by using extradition and mutual legal
assistance laws and mechanisms more effectively.
- Work with the
international financial institutions (IFIs) and UN agencies to
encourage anti-corruption and transparency actions by developing
countries. The G8 intend to:
- Encourage countries to meet the
high disclosure and transparency standards set by the IFIs.
- Support World Bank and related programs to help developing
countries achieve accountability in public finance and expenditure and
procurement.
- Seek agreement to disclose country assistance
strategies, performance evaluations and reports on country budget
procedures from the World Bank, International Monetary Fund and
regional development banks.
- Invite developing countries to
prepare anti-corruption action plans to implement their commitments in
regional and international conventions.
- Adhere
rigorously to an updated peer review schedule for the OECD Anti-Bribery
Convention and honor our pledges to serve as lead examiners to monitor
our enforcement of anti-bribery laws. Send prosecutors and other law
enforcement officials to participate in peer reviews.
- Encourage efforts of our private sectors to develop and implement
corporate compliance programs to promote adherence to laws that
criminalize the bribery of foreign public officials.
- Implement
the Financial Action Task Force (FATF) revised 40 recommendations and
promote implementation of the UN Transnational Organized Crime
Convention (TOC).
- Work towards including in G8 regional and
bilateral trade agreements provisions requiring transparency in
government procurement and the awarding of concessions, as well as
provisions on trade facilitation.
Proposed Actions to Launch a Nicaragua Transparency
Compact
A number of G8 countries are prepared to work to find ways to
support the efforts of Nicaragua to enhance transparency, use public
resources wisely and fight corruption. Participating G8 countries
intend to join in a voluntary and cooperative partnership with
Nicaragua to help improve transparency in the specific areas identified
as national priorities by the Government of Nicaragua. The future work
plan for the transparency compact is expected to focus on efforts to
promote transparency and prevent corruption in the following areas:
- Public budgets and financial management, including revenues
and expenditures;
- Government procurement; and
- Letting
of public concessions.
These are the key channels for public resource management and use.
Participating G8 countries intend to work in consultation with the
Government of Nicaragua to consider, within their budgetary
possibilities, country-specific technical assistance, political support
and policy guidance in areas where Nicaragua identifies a need for
capacity building to enhance transparency. G8 partners may help to
support efforts by the Nicaraguan authorities to make information
available to the public, to develop appropriate rules and regulations
and to build support for pro-transparency reform among domestic
constituencies. Assistance from participating G8 partners may include
stepped-up coordination with the international financial institutions
to ensure that new assistance complements existing and future
transparency work with Nicaragua in those institutions.
Next Steps
Representatives of the Government of Nicaragua and of participating
G8 countries intend to meet soon to carry the compact forward to the
next operational stage. The partner countries intend to work together
to develop a technical plan of action. The technical plan would be
based upon Nicaragua's stated priorities to build on its current
efforts and actions in the realm of transparency and public financial
management and accountability.
Participating G8 countries and the Government of Nicaragua further
intend to adopt a procedure to measure and evaluate progress as the
pilot compact moves forward.
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