Strengthening Anti-Corruption Investigations in Viet Nam

Da Nang (Viet Nam), 4 May 2021 - Viet Nam’s anti-corruption drive continues to make headway in identifying and purging elements of corruption from public institutions. Last month, this led to the jailing of one former minister, while the Government Inspectorate found as much as $4.16 billion USD associated with economic violations in the first quarter of this year. Enhancing financial investigations are a crucial part of the fight against corruption in Viet Nam, where an estimated $9.1 billion USD was lost to illicit outflows over 2006-2015, according to Global Financial Integrity (2019).

To address this, UNODC partnered with the Ministry of Public Security for a training on anti-corruption investigations over 26 – 28 April 2021 in the city of Da Nang. The training brought together 36 officers (7 = F; 28 = M) from investigative bodies, police academies and law enforcement agencies across Southern and Central Viet Nam. The syllabus covered financial investigations, asset tracing, constructing timelines, investigating legal persons and practical exercises on simulated cases. The structure of the training drew on the successes of a similar workshop in the North of Viet Nam, which took place in September 2020.

Investigators from Viet Nam take notes on emerging anti-corruption challenges

Key issues discussed during the workshop included:

Forms of Corruption May Differ Along Stages of the Procurement Process

As a highly lucrative proportion of public spending, procurement is particularly vulnerable to corruption worldwide, accounting for an average loss of 10-25% each year. As a country with one of the highest ratios of public investment to GDP in the world, vast sums of public funds are at stake when it comes to Viet Nam’s public procurement. One area under increasing scrutiny is the medical device industry, where in March 2021 the Government Inspectorate found breaches of procurement protocols across 63 cities and provinces, as well as within the Ministry of Public Health. The past year has also seen the arrest of senior hospital personnel and state officials, under charges of bid rigging and overpricing.

Previously, experts have issued a range of recommendations that include a common code of conduct for procurement officials, measures to ensure the consistent application of procurement rules at the provincial and local level and the development of specialized procurement units within procuring entities (Towards Transparency 2019).

Corruption in procurement can take multiple forms. Where it is prearranged as part of the planning stage of the procurement process, it may be exposed by identifying artificial markups. This can take the form of unnecessary purchases or investments, an overestimation of goods or services to favor a particular provider or the inclusion of kickbacks in the budget for a pre-selected firm.

Slide from Mr. Richard Messick Summarizing Stages of Procurement Process

Meanwhile, corruption may be facilitated as part of the bidding process. Commonly, this may be attempted through an unannounced change in the submission date or place, a bid lacking a time stamp or the acceptance of a bid which has been submitted late. Conversely, in order to favor a particular supplier, not all bids may be brought to the bid opening ceremony. Investigators may consider whether the integrity of the process has been compromised by bids not being in a sealed envelope or otherwise not being kept in a secure location.

Corruption taking place at the award stage is often manifest in recommendations or disqualifications that are poorly justified. Attempts may be made to use evaluation criteria that differ from those issued in the bidding documents. Corrupt personnel may change the scoring of bids in order to engineer the desired results.

A full recording and written summary of a recent UNODC webinar on procurement reform, held in Indonesia, is publicly available here.

The Inefficiencies Produced by Corruption Can Be Viewed as Red Flags

Even as it enriches perpetrators, corruption creates a trail of wasted public funds, poor quality services and products, a lack of competition, cost overruns and time delays. In an attempt to cover up these undesired results, companies may introduce contract renegotiation or “change orders” to accommodate changes to the timeframe or cost of the project. When analyzing procurement contracts, investigators can consider whether contract terms differ from the original terms of reference, with regards to the specifications, delivery dates and times. Lengthy delays between the contract award and signing – on a case-by-case basis or as part of macro-level data analysis, as per the visualization below – can be used as a corruption red flag. In the case of Viet Nam, design changes have been identified as one of the most significant factors behind the cost overrun of large infrastructure projects.

Slide by Mr. Richard Messick Summarizes Average Time/Cost Overrun on Construction Projects

The event was the latest UNODC anti-corruption workshop in Viet Nam, following others focusing on criminal justice approaches, public procurement, corruption risks in the local Covid-19 context and non-conviction based asset forfeiture measures. In addition, UNODC has worked with the Ministry of Agriculture and Rural Development (MARD) to produce a Guide on Inspecting for Procurement Corruption and Fraud, which is due to inform the ministry’s internal trainings going forwards.

Group photo marking the opening of training on Anti-Corruption Investigations

This article is part of activities made possible with the support of the UK Government.

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