September 19, 2016 Discussion Note STAFF ROTATION – A CORRUPTION RISK MITIGATION TOOL1 [Prepared for Innovation Lab, National School of Public Administration, Italy] Italy’s National Anti-Corruption Authority’s (ANAC’s) most recent 2016 National Anti-Corruption Plan2 (PNA) places staff rotation in the list of key tools that Italy’s public administrations should use in order to prevent or mitigate corruption risks. While the PNA provides detailed guidance on the application of staff rotation as corruption prevention measure, there are a number of practical concerns and issues that Italy’s public administrations have raised regarding the application of staff rotation policies. This Discussion Note provides a brief review of some of the pre-conditions that are important for a rotation policy to be implemented effectively as a mitigation measure. It also provides a brief description of alternative corruption prevention measures that could be used in those agencies, municipalities and administrations that may face practical problems of size, funding or staff skills that make staff rotation difficult to implement. The examples and ideas below have been developed from discussions with a number of World Bank colleagues who have been directly and personally involved in staff rotation programs in their home countries or who have worked with World Bank clients to help with the development and implementation of these policies. Attached as Annex 1 is a description of the staff rotation system in use in India along with the positive and negative impact that this system has had. Context for Staff Rotation – Link to Human Resource and Training Policies Examples of successful staff rotation policies generally start from the same place: the creation of a set policy promoting and facilitating staff rotation in the human resource management policies and procedures of a public agency. In France, rotation or “secondment” is built into the civil service corps and staff mobility is a key requirement for promotion to the director level for career civil servants. In fact, French civil servants can be seconded into other agencies or roles for 10 years or more and can even go to the private sector (for shorter periods) while retaining their seniority in the civil service. In Ghana’s Controller and Accountant General Department staff are required to rotate every three to five years. While staff rotation in France comes with the “side” benefit of preventing civil servants from developing corrupt practices, its primary role is as a part of the broader human resource policy for the French public service. In addition to developing and publicizing staff rotation as an established part of human resource procedures, the following conditions are also needed for the successful implementation of staff rotation in a public service: 1. Professional Career Development Policy – As noted in the PNA (section 7.2), staff rotation should be seen as one of the tools that public administrations can use to improve “overall professional capabilities” of their staff. In countries with high levels of corruption like India (see Annex 1) or Nigeria, staff rotation can itself become a part of the corrupt schemes that staff and managers use to profit from their positions; transfers can be used for political purposes or can be 1 This note was prepared by the Governance Global Practice team with inputs from Rajul Awasthi and Bertrand Rossert. 2 National Anti-Corruption Authority, National Anti-Corruption Plan 2016, adopted by Resolution 831 on 3 August 2016. 1 September 19, 2016 “purchased” by corrupt officials. To address this problem, countries have built their staff rotation policies directly into their career development guidelines where rotation can be seen as part of a skills acquisition process for staff. This has been done in large countries like France or in small countries like the Seychelles. 2. Established Rotation Criteria – The PNA notes that agencies should develop clear and transparent rotation criteria (section 7.2, Rotation criteria and union notice). If staff rotation is ingrained in an agencies career development policies then the criteria for rotation could include the length of service in a position; rotation options – functional and/or territorial moves; term of rotation; etc. 3. Link to Training – For staff rotation to be successful it should be closely tied to a broader policy of upgrading staff skills through training. (See PNA, section 7.2, Rotation and training.) Training through the School of Public Administration can both increase and expand skills of staff within a public administration as well as lay the groundwork for the more flexible workforce needed to implement a rotation system. As part of an administration’s pre-established human resource management policies, staff rotation can help staff with their professional development while providing the agency with a corruption prevention measure. Alternatives to Staff Rotation for Risk Mitigation There are likely to be a number of situations where the rotation of agency staff will not be practical, in small administrations or where the funding necessary to relocate staff and their families is unavailable. In these situations, both the Italian PNA and examples from other countries provide alternative tools or processes that could help to decrease the risk of corruption in a public administration. These alternatives include the following: 1. Segregation of Duties – The PNA identifies the “articulation of responsibilities” as an alternative corruption risk mitigation measure.3 Under this process specific jobs or processes are divided into tasks with each task assigned to different staff to ensure that sufficient checks are in place and no one staff member has authority or discretion over an entire process. As noted in the PNA (section 7.2.2) responsibility over the adoption of a decision should be segregated from the implementation of that decision and the subsequent audit or monitoring of the implementation. 2. Rotation of Work/Assignments – As an alternative to rotating staff, work or assignments could be rotated among staff who remain in their positions. Revising or rotating job contents can substitute for moving staff around by breaking the link between an individual staff member and her clients or the specific process she manages. For example, staff could be required to use new payment systems or updated accounting systems in order to limit their ability to manipulate or misuse existing systems. Or, as noted in the PNA (section 7.2.2, Alternative measures in the event that rotation cannot be implemented), staff could be asked to share responsibilities in order to increase transparency in an administration. 3. Short-Term Secondments, Assignments, Trainings or Holidays – To address budgetary issues, Ghana’s mandatory rotation policy allowed for rotating public servants within the same city or location so that staff (and their families) would not have to relocate. Priorities were set to cover staff with the longest tenure in a position and these were then rotated to similar positions in the 3 National Anti-Corruption Authority, National Anti-Corruption Plan 2016, Section 7.2 at p. 26. 2 September 19, 2016 same town. Alternative measures could also include short-term secondments or assignments in other positions which can serve to disrupt existing networks between civil servants and their clients at least temporarily. Required training courses outside of a public servant’s home base can also serve the same purpose. Lastly, the mandatory holidays for staff can also help to create “breaks” in service, allowing alternative staff to take over higher risk assignments which can help to train them for future rotation possibilities. Such a mandatory holiday of two consecutive weeks is suggested in the Model Code for financial market participants.4 4. Intensive Audit or Oversight and Evaluation – Notwithstanding the use of staff rotation or other substitute risk mitigation measures, strong oversight of staff performance and frequent evaluation of staff can serve as a strong deterrent to misconduct by agency staff. As noted in Annex 1, Indian authorities rely on agency-level vigilance committees to monitor agency operations and staff conduct. 4 ACI-The Financial Markets Association, The International Code of Conduct and Practice for Financial Markets: The Model Code, section 21 (February 2015). 3 September 19, 2016 Annex 1 Rotation of Civil Servants as a Measure to Fight Corruption – The Indian Experience Organized Civil Services Have a Policy of Rotation All organized civil services in India, whether at the central government level or at the level of the states, have a well-known policy of rotation of officers. Most civil service recruitment takes place through competitive examinations, and right from the beginning an applicant is made aware that if they are selected, they will have to comply with the extant policy on rotation. These policies exist for high-risk jobs such as tax collection and customs enforcement, but also for several so-called low-risk government jobs, such as that of school teachers (in the latter case for reasons of flexibility and the ability to deploy human resources where most needed). The highest level of central government civil services, i.e., where members of the service end up at the top management levels in government, recruit through a national, highly competitive examination (the Civil Service Examination). Successful candidates are allocated to various civil services based on their rank in the examination and their choices. The services that hire through this mechanism are the Indian Administrative Service, Indian Revenue Service, Indian Police Service, Foreign Service, and several other civil and defense services. In the case of all these services, there is a formal rotation policy, usually called a “transfer policy”. The Administrative and Police services recruits are allotted a state cadre which means they serve part of their careers in the state government and part in the central government. There are elaborate rules laid down for the duration of each central government “deputation”. Within the state, these officers can be transferred from their positions – and the city or district where they are serving – at any time, although guidelines exist to ensure they stay in a position for a period of time to guarantee “stability of tenure”. In the case of national level services, such as those of tax and customs, rotation policies in the form of formal “transfer policies” are laid down. These focus largely on locational rotation and specify the number of years an officer can expect to be posted in large cities such as the “metropolises” (Delhi, Mumbai, Kolkata, etc.) and in smaller cities (the so-called category ‘B’ cities). In large cities an officer can expect to stay for up to 8 years at a stretch, whereas the duration is shorter – 3-5 years – in smaller locations. Within a city location, an officer is again likely to be rotated between different types of job profiles; for example, in the tax service, an officer may be rotated between audit, administration, international tax, etc. The rotation between jobs in a given city location is usually not codified but is at the discretion of the head of the tax or customs office of that city. Usually these changes are effected at the beginning of every new financial year (April). These annual transfers generate a lot of excitement and apprehension which is not always positive; transfers can lead to grievances, too. Rotation of Officers Has Negative and Positive Implications As mentioned, transfers out of cities and towns on a regular basis can have negative implications, in the sense that family life can be disrupted. The higher civil services usually provide government built housing to officers, and other perquisites such as an office car, to make it easier to be “rotated”. Nonetheless, given the potentially disruptive nature of transfers, there is usually resistance to them, even if they are part of an established policy. As a result, transfers themselves can create a high risk for corruption! In 4 September 19, 2016 state governments, where there is greater discretion, and where transfers are usually managed by political leaders (a minister of a department) and not by other civil servants, this potential for corruption, or misuse for political ends is very real. Second, frequent movement between different types of jobs means an official does not develop deep specialization in any one area. This is especially true of the Administrative Service where an officer may be in the health department for a few years, and then may be moved to finance on the next rotation. On the positive side, rotation by its nature provides at the very least the opportunity to move fresh blood into sensitive positions. Second, many times it is quite difficult to prove allegations of corruption. In the absence of clear evidence of corruption, it is still possible to move out “high risk” officials from corruption- prone roles based on the established policy. Third, rotation ensures no one official develops deep roots and vested interests in a particular city location, thus preventing the development of opportunities for corruption. Rotation Can Reduce Corruption Only In Conjunction with Strong Vigilance Structures It is difficult to say that a rotation policy is successful in curbing corruption on its own. High-risk or corruption prone posts are usually referred to as “wet” jobs. These are usually those where there is direct contact with citizens, at the cutting edge of government regulation. It is easy to reason that rotation only serves to distribute more widely the proceeds of corruption and bribes, by ensuring a different official is posted to a “wet” position and is on the take every few years based on the rotation policy. Second, as mentioned above, since transfers are to be used to move officials away from “wet” jobs, staying on in these positions, and moving into these positions, develop their own corruption potential. So, in that case the rotation policy itself becomes a source of corruption. Third, a corrupt individual is likely to seek out opportunities for corruption wherever posted. Rotation cannot be a fool proof measure to ensure corruption is eliminated on its own and must be supplemented by strong vigilance and anti-corruption measures. India has well-established anti-corruption organizations, starting with the Central Vigilance Commission at the apex, with all government ministries, departments, and autonomous bodies having their own vigilance divisions. These are very active and constantly keep an eye on corrupt practices and officials who are disciplined with appropriate measures if needed. Of course, apart from these bodies, corruption is a crime under the Prevention of Corruption Act, and the police also gets involved in egregious cases. 5