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Corruption Risk Assessments (CRAs) are both an analytic and due diligence exercise to identify issues associated with, contributing to, or otherwise facilitating corruption in a particular setting. An area where improved understanding of corruption risks, and the adaptation of development aid interventions to take them into account, is seen to be of crucial importance is in the implementation of programmes for Reducing Emissions from Deforestation and Forest Degradation (REDD+). This U4 Issue considers two recent approaches to corruption risk assessment for REDD+ in the Democratic Republic of Congo and the Philippines. The intention is to provide development practitioners who may be unfamiliar with the study of corruption, or with the methods employed by CRAs, an overview of the approaches currently available for REDD+ schemes. Referring to recent literature on the evidence for the effectiveness of donor anti-corruption approaches, some practical considerations for development practitioners to improve the way in which CRAs are used are discussed. more...

Poor water infrastructure in Kyrgyzstan from the Soviet era led international donors to support investments in agricultural irrigation and potable freshwater systems. The financial investments made, however, did not always underpin improvements in local water delivery and the Kyrgyz Vice President once noted that “the lion’s share of the credit was stolen”. This U4 Practice Insight contrasts two project approaches to local water management in Kyrgyzstan from an anti-corruption perspective. It examines the extent to which project goals were affected by issues of corruption and fraud, and identifies lessons for future donor engagement in the country’s local water sector. more...

Forest certification schemes regulate forest exploitation and trade across many countries. In the absence of a multilateral agreement on limiting deforestation, they provide rules to balance the social, economic and ecological values of forest resources. Expansion of these schemes into tropical countries that display poor governance and high levels of corruption has raised questions about these schemes’ performance in such contexts. Referring to the case of the Forest Stewardship Council – a global forestry certification system – the authors looked at whether forest certification schemes can address corruption issues. While forest certification schemes are not primarily geared towards detecting and preventing corruption, they may have some anti-corruption effects in countries where corruption is sporadic but not systemic. This is due to their role in documenting forest management practices and applying third-party monitoring. more...

Donor-backed programmes for Reducing Emissions from Deforestation and Forest Degradation (REDD) intend to financially reward individuals, communities and countries that cut carbon emissions from forests as part of a global climate regime. But countries with the highest volumes of deforestation – and therefore a focus of REDD support - are also those with some of the poorest scores on established indicators of governance. Addressing challenges related to governance and corruption is an acknowledged goal among major donors supporting REDD, and actions are being taken intended to improve and monitor forest governance performance in REDD host countries. Yet despite recognition of the importance of practically addressing and analysing forest-linked governance and corruption challenges for REDD, detailed explorations of these issues have to date been scarce and potential policy approaches are still in their infancy. This U4 Report aims to add nuance to discussions on how donors might approach challenges of governance and corruption with special reference to REDD schemes. It offers a state-of-the-art review of literature on REDD, forest governance, and corruption, and draws evidence from fieldwork in three countries either embarking or about to embark on their path towards REDD implementation: the Democratic Republic of Congo (DRC), Kenya, and Tanzania. more...

Use of Afghanistan’s oil and gas resources, if properly handled, could have considerable spinoff effects for development and reduce dependence on high-cost energy from neighbouring countries. But mistrust between local and central authorities, and a perception among domestic and international actors that corruption risks are widespread, suggests that governing the country’s hydrocarbons will be far from straightforward. Specific corruption challenges are compounded by insufficient skills and coordination within the hydrocarbon sector, plus the ongoing fragility of security where resources are located. Given these constraints, donors should seek further clarity from Afghan authorities on how they aim to develop and use their hydrocarbon resources, including how they plan to address corruption risks. more...

Prominent contributions to the resource curse literature suggest that weak governance and corruption are key factors behind continued poverty in resource-rich countries. How poor governance and corruption influence revenue management and the possible welfare benefits derived from oil are widely discussed. How they impact upon volumes of oil produced, however, attracts little attention. This U4 Issue paper addresses the basic forms suboptimal solutions in oil production may take. It aims to expand our understanding of how weak governance and corruption impact upon the oil sector and the possible welfare benefits derived from oil. Such explanations are of particular concern to donors and other actors engaged in policy reform and capacity building initiatives linked to oil governance in developing countries. more...

Norad has been engaged in capacity building and provision of technical support to the Afghan Ministry of Mines since 2007. A part of this engagement relates to the development of the Afghan Hydrocarbons Law, and commercialization of gas and oil reserves through an international bidding process. The Afghan oil and gas industry has been in production since the mid 1980s, but is in need of major investments. Afghans interviewed are of the opinion that oil and gas reserves are national property, to be used for the benefit of all Afghans. The review has identified a range of risks and challenges to the further process, and Norad is advised to consider: To await further engagement on policy matters until there is further clarity as to how the Government of Afghanistan aims to develop and utilize these resources. But consider to provide: • Advice on the political/diplomatic process of negotiating agreements for utilization and division of underground natural resources; • Assist in training and development of Afghan technical expertise in oil and gas exploration, production and management; • Assist in the further development of the hydro power and alternative energy sector. more...

Les ressources naturelles fournissent souvent un terreau favorable à la corruption. Etant donné qu’un grand nombre de pays partenaires de la coopération au développement sont riches en ressources naturelles, l’efficacité de l’action des bailleurs de fonds relève de la gageure. Le risque de corruption s’immisce dans plusieurs filières de ressources naturelles, allant des ressources non renouvelables telles que le pétrole, le gaz, les minéraux et les métaux, aux ressources renouvelables forestières, halieutiques et agricoles. Toutefois, les enjeux de ces filières en terme de corruption ainsi que les démarches permettant de les relever sont multiples. more...

La corruption constitue un véritable fléau dans de nombreux pays riches en pétrole et autres ressources naturelles. Elle est en grande partie responsable du faible développement socio‑économique de ces pays. Depuis peu, il est envisagé d’inscrire la transparence dans un processus de réforme afin de lutter efficacement contre la corruption et d’autres problèmes liés à la malédiction des ressources. Ces constats nous amènent à nous interroger sur le véritable rôle de la transparence dans la lutte anti‑corruption des pays riches en pétrole. more...

This U4 Issue explores the topic of grand corruption in the regulation of oil. It focuses on how and why corruption can distort or prevent efficient regulation of the oil sector. The authors suggest that, though voluntary initiatives and capacity building programmes are important, they should not replace establishment of formal state-sponsored regulations. more...

Natural resources often provide fertile ground for corruption. Since a substantial number of partner countries in development cooperation are richly endowed with natural resources, these contexts pose a particular challenge for effective donor action. The risk of corruption cuts across natural resource sectors - from non-renewable resources such as oil, gas, minerals and metals, to renewable resources such as forests, fisheries and land. There are, however, important variations in the challenges presented by these sectors and the manner in which corruption in relation to them can be addressed. more...

Petroleum-related aid programmes and projects are a key part of donor activities in oil-rich developing countries. This U4 Issue explores the petroleum-related activities of three bilateral donors: Norad, CIDA and USAID. While governance issues are beginning to receive more attention in these types of programmes, they still form a minor part of programme activities. The petroleum-related aid activities of the donors in question address the issue of corruption only to a limited extent. Given the commercial and political interests of donor countries, questions about the integrity and credibility of these types of programmes can be raised. Moreover, the narrow, sector focus of these programmes makes it unlikely that they will produce the institutional changes needed to lift the ‘resource curse'. more...