Covid-19, political instability and rising levels of impunity all contributed to the region’s anti-corruption efforts grounding to a halt in 2021, according to the latest Transparency International (TI) report.
Despite concerted efforts to tackle corruption across the region over the past decade, TI’s newly released Corruption Perception Index 2021 (CPI), shows that a vast majority of countries demonstrated no improvement in perceived levels of corruption over the past year.
Countries are scored on a scale of 0-100 where a 0 equals the highest level of perceived corruption and 100 equals the lowest level of perceived corruption, and then ranked based on those scores.
Of the region’s countries, 22 showed no significant change in their corruption perception levels with an average overall score of 43. Uruguay, which scored 73 in the index, maintained its position as the country with the lowest perceived levels of corruption and ranked 18th worldwide. The country has a long history or strong and stable democratic institutions as well as an independent judiciary and its response to the pandemic over the past two years has proven much more successful than many of its neighbouring countries thanks to it heavy investment in the healthcare sector.
Meanwhile, Nicaragua (20) which saw the heavily contested re-election of President Daniel Ortega, and Venezuela (14), which continues to face deep economic and humanitarian crises, remain at the bottom of the scale, ranking 164th and 177th respectively, out of 180 countries included.
Some of the larger jurisdictions including Brazil (38), Mexico (31), Colombia (39) and Peru (36), faced a particularly challenging year as a result of political scandals, episodes of social unrest and the economic impact of the pandemic and showed no progress in terms of perceived levels of corruption.
Argentina (38) displayed the sharpest decline in public trust, dropping four points compared to last years report and coming in 95th place in the ranking, as a result of continuous interference in the judiciary process by political authorities and abuse of power during the pandemic.
Jorge Guillermo, head of the compliance, investigations and corporate criminal law at Bruchou, Fernández Madero & Lombardi, says that the unique situation created by covid-19 opened a space for corruption given the level of urgency with which business deals were taking place, particularly in sectors relating to healthcare. This was also further impacted by recent political changes.
“Since 2019’s change in administration, the government has loosened the judiciary system by releasing officials awaiting trial and cases where indictments were issued, were dismissed,” says Guillermo. “A compliance registry initiative was launched by the anti-corruption office in 2020, but to my knowledge, progress has been moving really slow,” he adds.
Corruption remains a serious problem in both Argentina’s public and private sectors, even though its legislative and institutional framework is still considered one of the strongest on the continent. Nevertheless, companies have often reported that bribes and irregular payments to buy political favouritism remain common, demonstrating low confidence in the country’s judiciary system.
“Currently, there are several initiatives in Argentina that are focused on anti-corruption compliance tools and resources to support anti-corruption compliance procedures,” says Gustavo Morales Oliver, head of the compliance, anti-corruption and investigations practice at Marval OFarrell Mairal. “However, no significant increase in enforcement with the courts has occurred,” he adds.
Across Latin America, governments were forced to turn their attention towards pandemic relief measures and the need for quick action placed added pressure on already weak democratic institutions. While governments engaged in emergency spending, the situation was further exacerbated by reduced oversight in public procurement which contributed to incidents of opportunism and malpractice from public officials and overspending on protective equipment and medical supplies.
Colombia’s inspector general opened hundreds of corruption cases against political donors who received lucrative contracts, and in an earlier investigation, the country’s minister of agriculture allegedly misappropriated funds related to covid-19. In February 2021, Argentine health minister Ginés González García resigned after it emerged that people were jumping the vaccination queue through connections with officials and politicians. Before that, former Brazil health secretary Francisco Araújo was arrested following the uncovering of fraudulent purchases of low-quality covid-19 test kits for inflated prices in August 2020.
For many local firms, the spike in corruption cases led to an uptick in work relating to compliance and investigations. Isabel Franco, head of Brazilian firm Azevedo Sette Advogados’ compliance practice, says that her team was very surprised by the amount of cases needing investigation in times of pandemic. “We have not been this busy in a long time and had to hire laterally on an emergency basis, given how major the 2021 demands were in our area”.
Brazil’s lack of progress in this year’s report may also be a result of a recent shift in terms of anti-corruption enforcement. While President Jair Bolsonaro had used the fight against corruption as a campaign rally, promising tougher measures to an electorate disillusioned with traditional politics, his decision to end all investigations related to the Lava Jato corruption scandal in early last year, was clearly in contrast with his promises.
Central America has experienced a steady decline in anti-corruption efforts over the past few years, which is evidenced in TI’s latest report.
Guatemala (25), which is ranked 150th in the index, has dropped eight points over the past 10 years. The country’s anti-corruption efforts have grounded to a halt since former president Jimmy Morales refused to extend the mandate for the International Commission against Impunity in Guatemala (CICIG) in 2019, after 12 years of operations. The CICIG supported corruption probes that resulted in the indictment of Guatemala’s former president Otto Pérez and the prosecution of dozens of prominent government officials, among other cases. Since then, no alternative body has been set up and country has seen a rise in impunity within its legal system further evidenced in 2021 decision by the US to sanctione the attorney generals office for obstructing investigations into corruption cases. Rodrigo Callejas, head of the litigation practice at Aguilar Castillo Love (Guatemala) says that, as the country enters the third year of the current administration, they have witnessed setbacks in the fight against corruption. “The government has publicly stated that the fight against corruption is one of its priorities,” says Callejas. “However, no results in this active participation have been proven deterrent to several corrupt practices that investigative journalism and NGOs have revealed to the public,” he adds.
Costa Rica (58) and Honduras (23) showed no significant improvement in perceived levels of corruption, with the latter reaching its historic law. However, last November Honduras elected president Xiomara Castro, who has committed to eliminating the laws that have facilitated impunity.
From the report, it is clear that the pandemic has fomented a distrust in governments and public institutions and had a strong impact on the perceived level of corruption throughout the region. Governments must, therefore, continue to scale up efforts to combat systemic corruption by addressing weaknesses in the legislative framework and enforcement efforts to prevent impunity and restore a general sense of trust in the legislative process as well as in public officials.
“The countries of the Americas are at a complete standstill in the fight against corruption [...] Decisive action is needed to reverse this trend, protect civil society and defend human rights and democracy,” says TI’s president Delia Ferreira Rubio in a statement released by the organisation.
Countries must promote the transparency, integrity and independence of their justice systems through financial and technical resources and by offering protection to prosecutors assigned to investigate cases of corruption and human rights abuses. In addition, the report calls for the international community to support civil society, activists, independent journalists and whistleblowers while demanding transparency in internationally funded projects and the establishment of independent monitoring procedures.
https://latinlawyer.com/covid-19/latams-anti-corruption-efforts-stalled-last-year-according-ti