THE GOVERNMENT INSPECTORATE OF VIETNAM Managing Conflict of Interest in the Public Sector LAW AND PRACTICE IN VIETNAM HONG DUC PUBLISHING HOUSE THE GOVERNMENT INSPECTORATE OF VIETNAM Managing Conflict of Interest in the Public Sector Law and Practice in Vietnam Hong Duc Publishing House Hanoi, October 2016 @2016 The World Bank and Vietnam Government Inspectorate 1818 H Street NW, Washington DC 20433 Telephone: 202-473-1000; Internet: www.worldbank.org This work is a product of the staff of The World Bank and the Vietnam Government Inspectorate, with external contributions. The findings, interpretations and conclusions expressed in this work do not necessarily reflect the views of The World Bank, its Board of Executive Directors, or the governments they represent, or those of the Vietnam Government Inspectorate. The World Bank and the Vietnam Government Inspectorate do not guarantee the accuracy of the data inclued in this work. 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Cover design: Hong Duc Publishing House Table of Contents List of Tables ...................................................................................................................................................................................................................................................................................................................................................................................................................................................................... 4 List of Boxes ....................................................................................................................................................................................................................................................................................................................................................................................................................................................................... 4 List of Figures ................................................................................................................................................................................................................................................................................................................................................................................................................................................................. 5 Abbreviations ................................................................................................................................................................................................................................................................................................................................................................................................................................................................ 6 Acknowledgements ...................................................................................................................................................................................................................................................................................................................................................................................................................................... 7 Summary .................................................................................................................................................................................................................................................................................................................................................................................................................................................................................. 9 1. Context and Introduction to the Study ............................................................................................................................................................................................................................................................................................................. 15 2. Objectives and Scope of the Study ................................................................................................................................................................................................................................................................................................................................... 19 2.1. Objectives ................................................................................................................................................................................................................................................................................................................................................................................................................................... 19 2.2. Scope of the study ................................................................................................................................................................................................................................................................................................................................................................................................ 19 3. Conceptual Framework ........................................................................................................................................................................................................................................................................................................................................................................................ 21 3.1. Definition of conflict of interest ......................................................................................................................................................................................................................................................................................................................................... 21 3.2. Conflict of interest and corruption .............................................................................................................................................................................................................................................................................................................................. 22 3.3. Forms of conflict of interest ......................................................................................................................................................................................................................................................................................................................................................... 23 4. Methodology ........................................................................................................................................................................................................................................................................................................................................................................................................................................ 25 4.1. Reviewing legal frameworks and international experiences ................................................................................................................................................................................................................ 25 4.2. Surveys .............................................................................................................................................................................................................................................................................................................................................................................................................................................. 26 4.3. Group discussions .................................................................................................................................................................................................................................................................................................................................................................................................. 26 4.4. Limitations of the field surveys (surveys and group discussions) ............................................................................................................................................................................................. 27 5. Results 29 ...................................................................................................................................................................................................................................................................................................................................................................................................................................................................... 5.1. The legal framework for managing COI and international experiences 29 ................................................................................................................................................................... 5.1.1. Restrictions on income and assets 30 ........................................................................................................................................................................................................................................................................................... 5.1.2. Restrictions on business activities 32 ............................................................................................................................................................................................................................................................................................ 5.1.3. Restrictions on public office mandate 35 ............................................................................................................................................................................................................................................................................ 5.2. Field study results 39 ................................................................................................................................................................................................................................................................................................................................................................................................. 5.2.1. Awareness of COI 39 ................................................................................................................................................................................................................................................................................................................................................................... 5.2.2. Perception and experience of COI situations 44 .................................................................................................................................................................................................................................................. 5.2.3. Evaluating the effectiveness of enforcement of COI-related regulations 60 ............................................................................................................................ 5.2.4. The attitude of public employees toward COI situations ...............................................................................................................................................................................................66 6. Conclusion and Recommendations 67 ............................................................................................................................................................................................................................................................................................................................. 6.1. Conclusion .......................................................................................................................................................................................................................................................................................................................................................................................................................................67 6.1.1. COI has not been perceived by public servants, enterprises and citizens as a problem in public governance ................................................................................................................................................................................................................................................................................................................................................... 67 4 MANAGING CONFLICT OF INTEREST IN THE PUBLIC SECTOR:  LAW AND PRACTICE IN VIETNAM 6.1.2. COI and COI management have not been systematically institutionalized in legislation in order to improve the effectiveness of public governance and anti-corruption efforts ........................................................... 68 6.1.3. COI situations are prevalent in different forms and are likely to become a “common practice” in public affairs ............................................................................................................................................................................................................................................................................................................................................................................ 68 6.1.4. COI management is less effective and not well aligned with anti-corruption requirements .......................................... 69 6.2. Recommendations .............................................................................................................................................................................................................................................................................................................................................................................................. 69 6.2.1. Raising the awareness of COI .................................................................................................................................................................................................................................................................................................................. 70 6.2.2. Improving policy and legislation on COI management .................................................................................................................................................................................................... 70 6.2.3 Strengthening the capacity to manage COI and handle COI situations ..................................................................................................................................... 72 7. References .................................................................................................................................................................................................................................................................................................................................................................................................................................................... 75 8. Notes .............................................................................................................................................................................................................................................................................................................................................................................................................................................................................. 79 9. Annexes ................................................................................................................................................................................................................................................................................................................................................................................................................................................................. 81 Annex 1. Detailed field survey methods and samples ...................................................................................................................................................................................................................................................................... 81 Annex 2. COI Legal Review Matrix ......................................................................................................................................................................................................................................................................................................................................................... 84 Annex 3. Experience from OECD and transition countries on managing COI .......................................................................................................................................................................... 105 Annex 4. COI issues and specific recommendations ................................................................................................................................................................................................................................................................................ 128 List of Tables Table 1: Levels of COI ............................................................................................................................................................................................................................................................................................................................................................................................................... 22 Table 2: Should public servants be allowed to take gifts? ...................................................................................................................................................................................................................................................... 55 Table 3: Views on the importance of different factors in recruitment and appointment ...................................................................................................................... 58 List of Boxes Box 1: Gift-taking regulations in South Korea and Singapore .............................................................................................................................................................................................................................. 30 Box 2: Examples of restrictions on implementing government contracts ............................................................................................................................................................................ 35 Box 3: The Baltic States: Restrictions on participating in decision-making processes that affect personal interests .......................................................................................................................................................................................................................................................................................................................................................................................36 Box 4: Examples of restrictions on assisting family members and other persons in obtaining a job in the public sector .................................................................................................................................................................................................................................................................................................................................................................................. 38 List of Figures Figure 1: Evidence of state commercialization ......................................................................................................................................................................................................................................................................................................... 15 Figure 2: Level of disclosure of top decision-makers’ private interests in OECD countries ........................................................................................................................ 33 Figure 3: Level of disclosure of private interests of selected public officials in high-risk areas in OECD countries ....................................................................................................................................................................................................................................................................................................................................................................................... 34 Figure 4: “Conflict of interest” as understood by public servants, enterprises and citizens .................................................................................................................. 40 Figure 5: Do given situations reduce the objectivity and fairness of public servants’ decisions? (% agree) ............................................. 41 Figure 6: Cultural values and personal benefit seeking .................................................................................................................................................................................................................................................................... 43 Figure 7: Perceived prevalence of COI situations (% responding prevalent and very prevalent) ........................................................................................... 45 Figure 8: Perceived prevalence of COI situations among public servants (% responding prevalent and very prevalent) ................................................................................................................................................................................................................................................................................................................................................................................ 46 Figure 9: Experience of COI situations among enterprises and public servants (% responding knowing clearly of situations) .................................................................................................................................................................................................................................................................48 Figure 10: Comparison of COI experience between groups of public servants ...........................................................................................................................................................................49 Figure 11: Enterprises’ gifts given to public officials – The most recent gift-giving .....................................................................................................................................................50 Figure 12: Enterprises’ giving gifts to public employees –comparison between groups ................................................................................................................................51 Figure 13: Public employees’ gifts giving and receiving in their workplace ......................................................................................................................................................................................53 Figure 14: The reasons for not reporting on gift-giving and receiving by public employees – a comparison between groups .............................................................................................................................................................................................................................................................................................................................................................................................. 54 Figure 15: Views on most recent procurement ............................................................................................................................................................................................................................................................................................................. 56 Figure 16: View on public agencies implementing COI managing measures (%) ............................................................................................................................................................. 61 Figure 17: View on implementation of COI regulations in state agencies (%) ............................................................................................................................................................................ 62 Figure 18: The differences in the rate of non-compliance with COI-related regulations at different government levels ................................................................................................................................................................................................................................................................................................................................. 63 Figure 19: Assessment on the effectiveness of COI preventive measures (% responding effective and very effective) ......................................................................................................................................................................................................................................................................... 63 Figure 20: Factors influencing the effectiveness of COI regulations’ implementation ............................................................................................................................................ 64 Figure 21: Factors affecting the implementation of organizational measures and regulations – Public servants’ perspective ................................................................................................................................................................................................................................................................................................................................................................................................................... 65 Abbreviations APIM Asia-Pacific Institute of Management CCIA Central Party Committee for Internal Affairs COI Conflict of Interest FDI Foreign Direct Investment GI Government Inspectorate GIRI Government Inspectorate Research Institute HCMC Ho Chi Minh city MoNRE Ministry of Nature Resources and Environment MoT Ministry of Transportation OECD Organisation for Economic Co-operation and Development PAM Public Accountability Mechanisms PC People’s Committee T&C Consulting Transformation and Change Management Consulting Co., Ltd. UK-DFID United Kingdom - Department for International Development WB The World Bank Acknowledgements This study was jointly conducted by Nguyen Huong Giang (Division Head, the Government Inspectorate (GI) and International Cooperation Department). the World Bank in Vietnam. The overall The Task Force provided the essential process was guided by an Advisory link between the consultant team and Board comprising representatives from the provincial and ministerial contact GI, the Party’s Central Committee on persons for data collection, monitoring Internal Affairs (CCIA), the Ministry of and supporting the data collection Home Affairs (MOHA), and the World process. The Task Force also provided Bank. The Advisory Board was headed crucial comments on the research by Le Thi Thuy, Central Party Committee approach, initial data analysis and results. member, Deputy President of Central The World Bank team provided Inspection Committee, Former Deputy technical guidance and participated in Inspector General of the Government the pilot survey, and co-led the focused Inspectorate. group discussions, monitoring and The study received financial support quality assurance of the data collection from the World Bank and UK-DFID. process. The core members of the team Technical advice was provided by experts from the World Bank were Huong Thi from all the aforementioned institutions. Lan Tran (Team Leader), Maria Delfina The COI surveys were implemented by Alcaide Garrido (Consultant), Adu Trans­formation and Change Management Gyamfi Abunyewa, Hoang Xuan Nguyen, Consulting Co., Ltd. and the Asia-Pacific Loan Thi Phuong Nguyen, and Khanh Institute of Management, with support Linh Thi Le. The questionnaires and from GI, and the World Bank. approach were developed jointly by GI, Overall leadership for the COI CCIA, the World Bank, the team from Surveys was provided by a task force of T&C Consulting and APIM, which was seven people from GI. The task force, contracted to carry out the surveys, and which was established to support and individual consultants including Nguyen supervise the research process, was led by Thi Mai and Hoang Manh Chien. Dinh Van Minh, Director of Government The Consultant Team, led by Nguyen Inspectorate Research Institute (GIRI), Van Thang, included 10 researchers/ and comprised Phi Ngoc Tuyen (Deputy experts from T&C Consulting and Asia Director, Anticorruption Bureau); Pacific Institute of Management (National Nguyen Tuan Anh (Deputy Director, Economics University). The Consultant Legal Department); Pham Thi Hue Team helped develop the questionnaires, (Division Deputy Head, GIRI); Tran Van and took overall responsibility for data Long (Division Head, GIRI); Nguyen tion and quality assurance under collec­ Xuan Son (Deputy Director, International close supervision and strong support Cooperation Department), Ho Thi Thu from the World Bank team and GI Task An (Division Head, Legal Department), Force. The Consultant Team relied on 8 MANAGING CONFLICT OF INTEREST IN THE PUBLIC SECTOR:  LAW AND PRACTICE IN VIETNAM the support of 10 provincial team leaders Achim Fock (Portfolio Manager), during data collection, and more than 50 Sandeep Mahajan (Advisor, Managing interviewers. Director Unit), Sebastian Eckardt Data analysis and drafting of the (Program Leader), Robert Taliercio present report was carried out by Huong (Practice Manager), and Nicola Smithers Thi Lan Tran (World Bank), Maria (Lead Public Sector Specialist) for their Delfina Alcaide Garrido (Consultant), comments, guidance and encouragement and Nguyen Van Thang, Le Quang Canh, during the course of the study. We Nguyen Vu Hung, and Vu Cuong (T&C also appreciate the close guidance of and APIM). Phan Van Sau, Inspector General of the We are grateful for detailed comments Government Inspectorate, and Nguyen on the study concept from James Van Thanh, Deputy Inspector General Anderson, Soren Davidsen, Kathy of the Government Inspectorate, in the Lalazarian, Francesca Recanatini, completion of report. and Ivana Maria Rossi. Peer-review The study could not have been comments from Francesca Recanatini, implemented without the cooperation of Ivana Maria Rossi, and Charles Undeland 10 provincial inspectorates and 5 minis­ (WB), Vu Thu Hanh (Director, Research tries, the hands-on support of Govern­ Department, CCIA), Phan Ba (Director, ment Inspectorate Research Institute, as Southern Department, CCIA), and Ngo well as the online media outlet, VnExpress Manh Hung (Deputy Director, GI) were which provided the platform for citizen greatly acknowledged. We are grateful surveys. Special thanks are due to the to Victoria Kwakwa (Regional Vice 2,647 citizens, enterprise managers and President, East Asia and Pacific Region), public officials who provided their time Ousmane Dione (Country Director), and candid reflections. Summary Vietnam has made great strides in is to recommend measures for the socio-economic development in the Government of Vietnam and relevant transition from a central planning stakeholders to be aware of and minimize economy to a market-oriented one COI situations encountered by public during the past three decades. The servants2 in their work, improve the transition has seen Vietnam embark institutional quality of the public sector on many bold transformative processes and better prevent corruption. across all economic, social, and insti­ The study comprises: tutional frontiers. These processes are (i) A review of COI-related legal regu- characterized by an increase in the lations in Vietnam; interface between the public and private (ii) Field surveys of citizens, enterprises sectors, thus making government systems and public servants; and more susceptible to arising conflicts (iii) Research into international of interest. At the same time, there is experiences in managing COI that increasing demand from society for are deemed relevant for Vietnam’s more effectiveness and integrity in public context. institutions where decisions for resource In particular, this study examines COI in allocation are made in a transparent and six types of activities in the public sector, impartial manner. As Vietnam aspires including: to becoming a prosperous country • Public service delivery; with modern institutions by 2035, • Recruitment and appointment; managing conflict of interest is essential • Procurement; because this very process of institutional • Licensing and approval of projects; modernization will determine how • Inspection and auditing; and state and market institutions, rules and • Handling of violations. regulations are shaped for the next Four popular forms of COI examined in generation.1 It is, therefore, imperative this study are: that a clearer division between the public • Gift-giving/receiving (cash and non- and private spheres is set and that conflict cash gifts); of interest (COI) provisions are adopted to • Interest-sharing investment; enable better separation of these spheres. • Using inside information for personal This study is a first attempt to put interest; COI issues into perspective in Vietnam. • Making decisions in favor of family The ultimate objective of the study members. 10 SUMMARY Key findings Results from the legal review decisions made by public servants. The legal review shows that Vietnam’s Nevertheless, survey respondents existing legal framework does not were able to identify COI situations, yet provide a definition of COI and their common forms, and negative systematic COI management in the public impacts on the effectiveness, objectivity, sector. Current regulations, including and efficiency in the public sector. All the 2008 Law on Public Officials, the three groups of respondents, public 2010 Law on Public Employees, the officials, firms, and citizens agreed that 2005 Law on Anti-Corruption, the 2013 the following situations could distort Law on Procurement, the 2014 Law on objectivity and fairness in public servant Enterprises, the 2015 Civil Procedure decisions: Code and the 2015 Criminal Procedure • Public officials (working in tax, Code, have initially recognized and customs, inspection, police, pro­ proposed some forms of preventing curacy, and court) receiving material specific COI situations such as gift-giving/ (cash or in kind) from the people, receiving, doing business outside public who need to have their case solved; duties, post-service employment or in • Public officials taking gifts from procurement. The existing COI-related contractors; or regulations are sometimes inconsistent • Cadastral officials working as estate with other relevant legislations, making brokers implementation of these regulations Between 62% and 90% of participants less effective. This lack of cohesion and from the three respondent groups viewed consistency is also attributed to an absence these situations as having major impacts of a generally accepted understanding of on public servant decisions. In general, COI and the fact that COI has not been the percentage of enterprises and citizens seen as an issue that could hamper public aware of COI’s negative impact on public sector accountability in Vietnam. servant objectivity and fairness is higher than that of the public servant group. Understanding of COI A majority of public servants, enterprises, and citizens did not agree A majority of survey participants that cultural factors encouraged public misunderstood or did not fully servants to take gifts or make private understand the concept of COI. Over benefit-sharing investment at work. 60% of respondents viewed COI as Participants of group discussions argued conflict between parties. Only around most gifts given to public servants 25% of respondents properly understood represented personal interest, or even COI as conflict between personal and bribery. Therefore, genuine cultural public interests which are inherent in values do not support COI situations. MANAGING CONFLICT OF INTEREST IN THE PUBLIC SECTOR: 11 LAW AND PRACTICE IN VIETNAM Prevalence of COI COI present in six types COI situations happen But the three most of public servant activities most frequently in frequent forms of COI are 1. Public service delivery 1. Procurement 1. Gift-giving 2. Recruitment and 2. Project licensing and 2. Doing family members appointment appraisal or relatives favors 3. Procurement 3. Recruitment and 3. Using inside information 4. Project licensing and appointment. for personal benefit. approval 5. Inspection and audit 6. Handling of violations. A considerable percentage of public the gift-givers’ businesses. Both public servants who were surveyed (from 25% servants and enterprises agreed that to 35%) had witnessed COI situations, giving gifts has become a “trend”, including those infringing upon current “custom”, or even “a rule of the game”. regulations such as the recruitment and Enterprises give gifts in order to avoid appointment of family members or doing “discrimination”, while public servants family members favors to win contracts give gifts to supervisors to be “nice” or projects. Again, enterprises have a to them. Thus, current gift-reporting more “negative” view of COI prevalence regulations and/or implementation have in public sector activities than public not been as effective as expected. servants. Procurement and staff appointment, Gift-giving to public servants, a two activities perceived as most prone popular form of COI, was further to COI, were further examined. Public examined. Nearly 20% of surveyed servants viewed procurement activities public servants responded that they quite positively. Among 32% of have witnessed gift-giving/taking cases interviewed public officials, who knew in their agencies, related to the gift- about procurement activities taking givers’ businesses. In addition, a large place in their office during the previous percentage of enterprises responded that 12 months, 71% believed bidding was they have witnessed other enterprises transparent and objective. giving gifts to public servants (48%), or A small percentage of public servants public servants taking gifts and make assumed there was a “back door lobby” decisions in favor of the gift-givers (46%). in order to win the bid (12%) and there Nearly 70% of witnesses believed the was favoritism over family members or purpose of these gifts were to facilitate relatives (18%). By contrast, enterprises 12 SUMMARY held a more negative view. Among firms restrictions in the public sector is a cause bidding for a contract with a state agen- of concern. cy in the previous 12 months, only 36% The three most important causes for agreed bidding was objective and trans- such limited implementation, according parent while 38% believed there was to the survey respondents, include: a “back door lobby” and 50% thought • Lack of strict handling of violations; there was bias towards family members • Leaders do not act as a role model; or relatives of public officials. • Lack of effective tools to monitor the In recruitment and promotion, there implementation of COI restrictions. are considerably different views held between public servants, and the two The “culture” factor does not influence other groups of enterprises and citizens implementation of COI restrictions, on the importance of factors determining according to respondents. However, recruitment and appointment. Public “culture” is used by some public servants servants identify candidates’ (a) formal as an excuse for poor implementation training, and (b) competency, experience, of current COI restrictions, such as and good achievement record as the two regulations on gift-giving and receiving most important criteria in considering or on private business interests. recruitment or appointment (between 81% and 91%). By contrast, enterprises Recommendations and citizens believed (c) being related or having a good relationship with high- The study suggests situations in which ranking officials, and (d) using material COI can arise (potential COI) have be- benefit or other benefits were the most come prevalent in the public sector and important determining factors (between may occur in different fields and sectors. 44 and 70%). At the same time, measures to restrict COI actual situations are being poorly Implementation of COI manage- implemented and violations of COI reg- ment measures ulations are being loosely handled. The surveys show many existing An effective COI management system COI-restricting regulations are not is one that helps minimize risk of COI pro­ perly implemented. Between 25% situations in the civil service (potential and 40% of public servants reported COI), manages and removes “gaps” that their agencies did not implement COI can create COI (actual COI), and offers regulations (including requiring public timely detection and strict handling of servants to: report on gifts, not give favors violations of COI. In considering the on procurements to enterprises with findings from the surveys as well as which they are associated, not hold a relevant international experience, three management roles in private enterprises, sets of recommendations are put forward: not work in a particular areas upon post- employment, not favor investment in 1. Raising awareness of COI and COI enterprises that their spouses directly management manage, not recruit or appoint relatives). Such poor implementation of these It is crucial to communicate and MANAGING CONFLICT OF INTEREST IN THE PUBLIC SECTOR: 13 LAW AND PRACTICE IN VIETNAM improve understanding of public in understanding and in setting systems servants, citizens and enterprises about to manage COI, including handling of COI. It is important that public servants violations. are aware of and avoid COI situations In the future, other important laws while conducting public duties. COI relating to public sector governance will can have an impact on socio-economic need to be amended in accordance with development goals, reduce effectiveness in new provisions on COI management pre- resource allocation decisions, undermine scribed in the Law on Anti-Corruption. public confidence in the government, and make corruption harder to control. b. Expanding the governing scope In the short term, better communication of COI legal regulations to the public on COI, and incorporation of concrete examples of COI situations, Currently, only public servants them­ measures to identify, prevent and selves are governed by COI-related handle COI in training plans for public regulations. Public servants can use other servants are needed. In the longer term, close relationships to “disguise” COI professional training and guidance on situations for personal gain. Therefore, how to identify, prevent and respond apart from imposing “hard” restrictions to COI situations need to be developed on public servants, it is necessary to and made mandatory in recruitment, broaden the governing scope of COI appointment of, and education and regulations to other actors enjoying close training for, public servants. relationships with public servants. These may include spouses, biological and 2. Improving policy and legislation adoptive children, siblings, biological on COI management and adoptive parents (via marriage and family relationships). This set of recommendations includes passing into law several new regulations c. Revising regulations on gifts as well as revising current restrictions on giving and taking COI in Vietnam. It is important to revise regulations a. Defining COI and instituting on gift-giving and taking to reduce COI mechanisms for COI management risks in the public sector. It means public servants would be prohibited from taking It is important to adopt an agreed gifts of any forms and at any value. This definition of COI as well as mechanisms prohibition is particularly needed for for preventing, detecting and handling public servants working in sectors with COI violations within the legal framework a high risk of COI such as procurement, for public governance in Vietnam. More licensing, recruitment and promotion. specifically, in the up-coming revision of Other at-risk sectors that require work the Law on Anti-Corruption, provision with citizens and enterprises include for COI and COI management could be taxation, customs, and inspection. added. Translating COI restrictions into Gift-giving and receipt may be specific provisions in the Law on Anti- acceptable in exceptional circumstances Corruption would ensure consistency such as diplomatic events or receptions 14 SUMMARY under the names of the agencies or on asset and income declaration utilized organizations where the gifts represent by public bodies to better detect COI. spiritual and cultural values. Besides, it is The connection between the data on also important to assign a focal agency to declarations and other data on public follow-up, receive information, report on servants and enterprises’ business (for public servants’ gift-giving and taking, and example, tax), will help detect and adopt concrete sanctions for violations. effectively address COI situations. d. Engaging in outside employment 3. Strengthening capacity and post-employment in managing COI situations Although general restrictions on For effective management of COI in public servants engaging in outside the public sector, it is essential to assign employment and post-employment a focal agency for COI management. The activities have been mentioned in the focal agency, in coordination with agen- Law on Public Servants and Public cies in charge of public servant manage- Officials and Government Decree No. ment, would organize activities helping 102/2007/NĐ-CP (dated 14 June, 2007), raise awareness of COI and COI manage- it is recommended that concrete and ment as well assessing implementation specific restrictions, corresponding to and providing policy advice to strengthen the nature and requirements of different regulations. The focal agency would re- sectors and professions, be adopted. They view, handle and recommend solutions for would include which areas public servants handling COI-related cases and violations must not engage in after retirement, and according to their mandated authority. for how long. Not only do concrete COI Additionally, the development of a restricting provisions aid implementation, system that collects, provides feedback, they also help enhance transparency and responds to reports of COI cases from dif- integrity in the public sector and, at the ferent entities and from public ser-vants same time, do not deprive public officials themselves, should be a priority. The sur- of legitimate personal interests. vey shows public servants are reluctant to confront problems or they assume that e. Strengthening the management their complaints and reports are useless, of assets and income which might be the main barrier stop- ping them from reporting instances of It is important to reduce the number COI. Therefore, an effective mechanism of public officials who are required to file should provide confidential and protec- assets and income declarations in order tive measures with proper channels for for functional authorities to be able to receiving information and responding to track changes in assets and incomes of feedback and complaints. These should public servants. At the same time, the ensure people are not afraid of retaliation requirement to declare assets and income as a result of their disclosure. Moreover, needs applying to close family members the oversight role of the public, civil so- of public officials. An information ciety, and media in COI management in system on public servants’ assets and particular, and public service in general, income needs to be developed with data also needs to be promoted. Context and Introduction to the Study 1 Vietnam’s remarkable progress in increase in the interface between the public economic growth and poverty reduction and private sectors, as in all countries. over the past decades has been well In Vietnam, this interface is, however, documented. From one of the poorest characterized as a commer­ cialization of countries in the world, in just a quarter of the state, in which influential groups and century, Vietnam became a low middle- individuals seek to impact on government income country in 2009. The poverty decisions.3 Citizens and firms consistently headcount fell from 58% to 14% between report that connections to the state are 1998 and 2014 (WB-GSO). Annual important to succeed in business and that growth rates averaged 5%-6% during vested-interest groups are becoming more the past 10 years. The country is well influential. Meanwhile, relations with underway in its transition from central state agencies provide opportunities for planning to a market-oriented economy. government contracts, and access to land Vietnam’s transition has seen an and credit (Figure 1). FIGURE 1 Evidence of state commercialization A. Special interest groups are on the rise B. State connections are key to business Contracts, land, …, and other economic resources mostly 75% Totally disagree 1% fall in the hands of 97% enterprises that have strong 100% I do not Disagree 9% connections to local authorities know 21% Neither Preferential treatment to big 18% agree nor companies (both state-owned 35% disagree and nonstate) is an obstacle to 61% Totally their business operations agree 19% 6% Ease in getting state contract, 13% as privilege to state owned 35% economic group 56% 0% 25% 50% 75% 100% Top-performing province Agree 44% Firms agreeing Median province Bottom-performing province Sources: World Bank 2012. Sources: Provincial Competitive Index (PCI) 2013. 16 CONTEXT AND INTRODUCTION TO THE STUDY An increasingly commercialized of these spheres. After all, when public state sector that works closely with officials perform duties in a fair and business makes government systems unbiased way, and official decisions are more susceptible to conflicts of interest, not improperly affected by self-interest, new forms of conflict between individual the integrity of markets and fair business private interests of public officials and competition is supported, and state their public duties. When conflict- management effectiveness is enhanced. of-interest situations are not properly Managing conflict of interest in the identified and managed, public decision- very process of institutional reform making can be untransparent and is essential because this process will compromised by the private interests of determine how state and market public officials. This means that public institutions, rules and regulations are resources are not allocated in an efficient shaped for the next generation. The manner, which undermines not only the way the process occurs has critically effectiveness of the state, but also the important implications, both for the integrity of the public sector. In the worst structure and functioning of the market situations, it erodes public trust and can economy as well as for the nature of the result in corruption and social instability. state that results from the reform process. Yet, conflict of interest (COI) is a How Vietnam manages this reform concept that is understood differently process and the shifting boundaries by different people, both in Vietnamese between the state and the private sector society and among officials. While a COI will fundamentally shape what economy, situation refers to opposing interests state and society will look like. This will within one organization or one public be particularly critical when the private official, it is not uncommon to hear sector is expected to play an increasingly citizens, firms, or public officials referring bigger role in the economy. If not well to COI as a conflict or a dispute between planned, the institutions created could two or more persons or stakeholders. make it even more challenging to manage This might include a conflict over conflict of interests. working conditions between workers This study is a first attempt to put and employers, or a conflict between real “conflict of interest” issues into perspec- estate developers and a rural population. tive in Vietnam. The overarching goal Vietnam has set institutional reform as of the study is not to eliminate COI in a top priority for the coming decade. Such Vietnam. Rather, it seeks to raise aware- a focus is well lauded, particularly when ness of the need to address COI in public institutional reform has been seen as the conduct, and inform policy dialogues on fundamental challenge facing Vietnam. enhancing state accountability and an- To achieve Vietnam’s aspirations to ti-corruption, as well as a broader insti- becoming a prosperous country with tutional reform agenda in Vietnam. modern institutions by 2035, it is The report is organized as follows: imperative a clearer division between the next section (Section 2) describes public and private spheres is set. To do the objectives and scope of the study. that, provisions for managing COI need Section 3 provides a general discussion to be adopted to enable better separation on concepts pertaining to conflict MANAGING CONFLICT OF INTEREST IN THE PUBLIC SECTOR: 17 LAW AND PRACTICE IN VIETNAM of interest. Section 4 outlines the legal framework in Vietnam, pertinent methodology used for the study. Section international experience, and the results 5 presents the findings of the literature of field surveys. Section 6 concludes and review, including scanning the current deals with the report recommendations. Objectives and Scope of the Study 2 2.1. Objectives their interactions with the private sector. COI situations at organizational level and in the private sector do not fall into the This study aims to provide evidence- scope of this study. based recommendations to the govern­ ment and relevant stakeholders to better Geographic and sectorial coverage5 manage COI situations encountered by public servants4 in their work. In doing The study covers 10 provinces/ so, the aim is to improve public sector cities, namely Hanoi, Ho Chi Minh City institutions and prevent corruption (HCMC), Son La, Thai Binh, Dong Thap, more effectively. Specifically, the study Nghe An, Thua Thien Hue, Danang, addresses the following research Hai Phong and Can Tho6. The study questions: also collected data from officials of five 1. Which areas do current COI regula- ministries, including the Ministry of tions in Vietnam cover? Transport, Ministry of Construction, 2. What levels of awareness do public Ministry of Industry and Trade, Ministry servants, enterprises and general of Finance and Ministry of Natural public have of COI? Resources and Environment. 3. How prevalent is COI from the perspective of public servants, Types of respondents enterprises and citizens? The survey collected data from three 4. How are COI-related regulations im- groups of respondents: public servants, plemented? What factors impact their citizens and enterprises. Details on sur- effectiveness? vey samples are presented in the study 5. What international practices are methodology and Annex 1. relevant to Vietnam in minimizing COI in the public sector? Types of information collected in 6. Which measures can Vietnam apply the surveys in order to minimize and better manage COI situations? The surveys sought to understand awareness, perception and experience 2.2. Scope of the study of three respondent groups on the COI situation in the public sector. The forms With the afore-mentioned objectives, of COI studied included: this study focuses on COI situations facing • Gift-giving/taking to and by public individual civil servants and government servants; officials (generally referred to as public • Public servants doing favors for fami- servants) within the public sector and in ly and friends; 20 OBJECTIVES AND SCOPE OF THE STUDY • Public servants using inside informa- • Handling of violations. tion for personal gain; Given the fact that these types of • Public servants colluding with the activities are performed by most sectors, private sector for personal gain within this study did not place the focus on any their spheres of responsibility. particular sector. The surveys also gathered the Types of public sector activities viewpoints and assessment of public included in the surveys are servants on the implementation of current COI-related regulations, factors • Public service delivery; affecting implementation, and their • Recruitment and promotion; recommendations. Finally, the impact • Procurement; of cultural factors on COI issues also • Project licensing and approval; constitutes another set of questions to • Inspection and audit; the survey respondents. Conceptual Framework 3 3.1. Definition of conflict of interest COI is no longer a new concept in terms “personal interest” and “private state governance. COI management interest” are used interchangeably. is closely linked with such concepts as • Connection with public authority: public cadre ethics, accountability, integ- Personal interest itself may not cause rity, etc. Together, these measures create conflict of interest. The second factor an environment that encourages good leading to conflict of interest is that public sector performance while tackling concerned individuals participate in corruptions and/or irregularities. the decision-making process. Conflict Despite different interpretations of of interest arises when there is a direct the “conflict of interest” concept, the or predictable relationship between definition of conflict of interest (COI) is the participation of a public servant in generally consistent around the world. the decision-making process and his/ This study uses the definition of COI her personal interest. This factor can provided by OECD (2004) as following: be interpreted as: “Since I participated in and/or influenced the decision A “conflict of interest” involves a con- making process, I gain this personal flict between the public duty and pri- benefit (for example: receiving gifts).” vate interests of a public official, in which the official’s private-capacity While conflict of interest could interest could improperly influence the be applied to both individuals and performance of their official duties and organizations, this study just focuses on responsibilities.” COI among public servants. Conflict of interest exists at two main levels: (1) By this definition, two basic factors potential COI and (2) actual COI (Table that can create conflict of interest are the 1). If not properly managed, COI may presence of private (personal) interests affect the integrity and effectiveness of and participation (or authorized respon- the public sector, and/or undermine sibility) in decision making. public trust. When COI actually occurs • Private (personal) interest: The first (actual COI), the decisions of public factor is personal interest of public servants may not be objective. When servants. The main question is: “What there is potential for COI or even just an benefit does the public servant gain appearance of COI, the damage might from a public sector decision or no be already significant. Perception of COI decision issuance? Is such benefit might cause a loss of confidence and an valuable to them?” In this study, the erosion of societal harmony. 22 CONCEPTUAL FRAMEWORK 3.2. Conflict of interest to “behaviors”, while COI speaks of and corruption “situations”. COI situations might lead to corrupt acts when a public servant Conflict of interest and corruption makes decisions for his/her personal are two different but related concepts. benefit and harms public interests. In a narrow sense, following Vietnam’s In contrast, if public servants make 2005 Anti-Corruption Law, corruption decisions for common good, COI does is an act committed by a person holding not cause corruption. Theoretically, a position of power who has abused that corruption could be reduced signifi­ power for personal benefit. Thus, the cantly, but COI situations always concepts of corruption (in the current occur and should be managed to avoid law) and COI in this study have some corruption. similarities and differences: • Subject: The subject of both corrup- Thus, COI can be objective, arising tion and COI is public servants from functions, duties, policies, regu­ • Personal interest: Both concepts refer lations and operational mechanisms of to public servants’ personal benefit. organizations, sectors, localities, or the However, while personal benefit is whole country. Meanwhile, corruption is a clear corruption objective, it is not specific as it is about conscious behaviors necessarily so in COI. COI only refers and decisions of public servants. COI to conflict between public interest entails corruption risks, but does not and personal interest in the decision- necessarily lead to corruption. However, making process, regardless of whether COI situations are always challenging the public servant intends to act for for public servants in making decisions. that personal interest or not. Confining COI situations and/or issuing • Governing scope: Corruption refers clear guidelines for public servants to TABLE 1 Levels of COI Potential Conflict of Interest Actual Conflict of Interest A public official is in a position where he/ A public official is in a position to be influ- she may be influenced in the future by his/ enced by his/her private interests when do- her private interests when doing his/her du- ing his/her duties. ties. Example: The son of a senior manager in Example: An actual conflict of interest will a Ministry owns a construction company. occur if the senior manager does not dis- The company bids for a construction con- close the fact that his son’s company bids for tract managed by the Ministry. In this situ- the contract and participates himself in the ation, there is a potential conflict of interest. tendering process. MANAGING CONFLICT OF INTEREST IN THE PUBLIC SECTOR: 23 LAW AND PRACTICE IN VIETNAM properly handle these cases will help speculation/brokerage, and securities prevent corruption and lead to more investment. objective and just decisions. • Being in a position to make (or influence) decisions in favor of 3.3. Forms of conflict family members: Public servants of interest make decisions (or influence decision making process) that benefit their COI can be represented in different relatives when handling public duties, forms, depending on situations facing including influencing decisions for public servants. Based on the literature employment of close family members and legal reviews, the following four in the public sector. forms of COI are looked at: • Gifts giving-receiving (cash/in-kind In these situations, personal benefit and non-cash/non in-kind): Business could be directly to persons performing partners (or those related to a public their duties or indirectly to relatives servant’s decisions) give gifts to a (spouses, children, parents, brothers and public servant. sisters). Gifts offered to public officials • Interest sharing investment: Public can lead to decisions that do not serve servants invest then share the benefits the interest of the public. Contracts with businesses that operate in the awarded to backyard businesses could be public servants’ regulatory fields. more costly meaning resources are not These businesses are called public efficiently used. Likewise, employment servants’ “backyard businesses”. in the public sector based on patronage • Possessing inside information that can discourage talents joining the public can be used for personal interest: service and weaken public adminis­ Public servants use inside information tration. If these boundaries between gained from their employed position public and private spheres are not for their personal benefit. Examples properly policed, they can undermine include public servants using inside the effectiveness and accountability of information for investment, real estate the state. Methodology 4 This study deploys an innovative provisions from 90 countries in 2012, approach which combines different including Vietnam. The team adap­ ted methods in order to enhance the the PAM COI database framework for reliability of the results, including: legal review of Vietnam COI-rela­ ted • A desk review of the current COI-re- regulations and updated the most recent lated regulations in Vietnam, using legal provisions, including the 2013 the widely accepted COI framework Constitution; the Anti-Corruption Law of PAM and OECD. in 2005 and its amendments in 2007 and • A desk-study of international practices 2012; the amended Law on Bidding in and experiences in managing COI 2013; the 2014 Law on Enterprises; the from selected countries, the region 2008 Law on Public Officials; the 2010 and some transition economies. Law on Public Employees; the 2010 • Qualitative and quantitative surveys, Law on Inspection; the 2015 Criminal drawing from the results of the legal Procedure Code; and the 2015 Civil review, with the aim of understanding Procedure Code. The legal review also the prevalence of COI in Vietnam serves as a basis for the development and how current COI restrictions are of questionnaires for quantitative and implemented in practice. qualitative surveys that focus on COI high-risk areas. The breadth of the methodology The documentation of international allows for integrating information from experiences was based also on the various sources, comparing regulations “Public Accountability Mechanism” and practices, and triangulating per­ (PAM) of the 14 OECD countries and spectives from different groups. This selected transition countries. Transition approach is particularly important for countries selected for reference are all new and sensitive topics such as conflict middle income or high-income countries of interest. in South East Asia, Central Asia and Eastern Europe. 4.1. Reviewing legal frame- Apart from the PAM database, the works and international team made references to OECD reports experiences on COI management. The team used examples from several countries that The legal review draws primarily on are not in the PAM database, such as the the “COI management” database within Republic of Korea, China, and Singapore the World Bank’s initiative “Public and how these countries dealt with COI, Accountability Mechanism” (PAM)7. The in order to provide additional reference database consists of COI management points for Vietnam. 26 METHODOLOGY 4.2. Surveys The enterprise survey collected 512 completed responses8. The characteristics The survey was conducted in 10 select- of the enterprise survey sample are ed provinces/cities, namely: Hanoi, Ho mostly similar to those of the Vietnam Chi Minh City, Hai Phong, Danang, Can enterprise census conducted by GSO in Tho, Son La, Thai Binh, Nghe An, Thua 2013. However, the percentage of FDI Thien Hue, and Dong Thap. At the cen- enterprises taking part in the survey was tral level, the survey was carried out with lower than the GSO census. In addition, public servants of five Ministries: Ministry the percentage of medium and large of Finance, Ministry of Natural Resources enterprises in the sample was higher and Environment, Ministry of Transport, than that of the GSO one. In general, the Ministry of Construction, and Ministry of enterprise sample met requirements for Industry and Trade. statistical comparison or analysis. Three groups of respondents included The number of public servants partic- in this survey were: citizens, enterprises ipating in the survey at four administra- and public servants. The survey of public tive levels was as follows: servants was conducted through direct • Commune level: 538 people (39.2%) interviews at central and local level, while • District level: 537 people (39.1%) the survey of enterprises was carried out • Provincial level 247 people (18%) on-line using Survey Monkey. The citizen • Ministerial level: 52 people (3.8%). survey was conducted via VnExpress Public servants holding leadership online newspaper. Each survey group positions accounted for more than had its own questionnaire that was half of the samples (see Annex 1). designed and refined multiple times by World Bank experts in collaboration with GI, CCIA and the consultant team. 4.3. Group discussions Group discussions were conducted Survey samples and methodology for public servants and enterprises. The The surveys gathered responses from objective of these group discussions was 570 citizens, 512 enterprises and 1,374 to receive detailed views of public servants public servants. The citizen survey was and enterprises on COI concepts, real- conducted on the basis of voluntary life examples of COI situations, the participation and the number of res­ prevalence of COI, impacts of COI, and ponses was much higher than expected measures to prevent COI. (500). The average age of participants in The contents and methodology the survey was 35. The overall education of group discussions conducted with level of respondents is higher than that public servants and enterprises were of the national population. The sample agreed in advance to ensure that the structures in terms of education levels collected information is objective and and rural/urban population were similar comparable. In addition to the 20 focused in the citizen and public servant surveys discussion groups (for public servants (see Annex 1). This allows for comparison and enterprises) in 10 provinces, one of results of similar questions or situations group discussion was held with public in the questionnaires. servants at ministerial level in Hanoi. MANAGING CONFLICT OF INTEREST IN THE PUBLIC SECTOR: 27 LAW AND PRACTICE IN VIETNAM Group discussions were directly led by some forms of COI in a number of activ- T&C Consulting and APIM teams with ities by public servants. the assistance of the World Bank. Since the survey of citizens was A total of 84 enterprises participated conducted online via an electronic in 10 group discussions, in each of the newspaper, the representativeness of 10 provinces. The enterprises were of survey samples can not be ensured. different types of ownership and size, The results of this survey were used as a but most were small to medium private reference regarding public servants and enterprises. Group discussions with enterprises. public servants (11 discussions) attracted Finally, the group discussions participation of 107 public servants, enhanced the reliability of the study in mostly inspectors of provinces. various ways. Not only did the results of group discussions help explain 4.4. Limitations of the field survey results, they also synergize with surveys (surveys and group the surveys to generate better insights. discussions) However, public servants participating in the group discussions were not It would be difficult to cover all COI really diverse, with a large proportion situations in all areas of public duty in a coming from the Inspectorates only (of field study. This study only touched upon Departments/Ministries). Results 5 5.1. The legal framework for difficult in Vietnam. Most COI-related managing COI and interna- provisions are applied to individuals tional experiences who are public servants and employees, typically head of state apparatus, As mentioned above, the review of members of the National Assembly, the legal framework on managing COI ministers and members of the cabinet or was conducted based on analytical officials of peoples’ committees. Other frameworks for “conflict of interest COI-related provisions are applied to restrictions” and “financial disclosure”9 of their family members, but to a more the “Public Accountability Mechanism” limited extent and inconsistently across (PAM). The review shows there is not areas with high risks of COI. Depending yet an overarching legislation to COI in on the types of COI, spouses or relatives Vietnam. are also subject to regulations. Family The Constitution of Vietnam has members are subject to a COI regulation seve­ral prohibitions applying to govern­ in relation to contracts with government. ment members, in which government Annex 2 compiles detailed analysis members should not be members of the on current legal provisions for mana­ Standing Committee of the National ging COI in Vietnam, adapted from Assembly at the same time. The Law on the analytical framework of PAM. Anti-Corruption has introduced com­ This framework includes a set of key pre­hensive measures to prevent COI measures to restrict behaviors of public by establishing a code-of-conduct, pro­ servants and public employees in order fessional ethics codes and monitoring to prevent COI. The framework also public servant performance. Additionally, contains other measures to manage COI Law on Public Officials, Law on Public such as the requirements to disclose Employees, Law on Organization of the gifts, assets, liability and income, or National Assembly, Law on Organization outside employment of public officials, of People’s Councils, and the Law on resolutions of potential COI situations, Bidding also contain provisions to mini­ and monitoring and oversight of the mize COI to different extents. implementation. Although various laws and guidelines Behavioral restricting measures contain a number of COI restrictions help prevent public servants and public and require disclosure of some personal employees from performing or engaging interests, the concept of COI has not been in activities that can put themselves in clearly defined in any legal document. COI. The following sections summarize The absence of a consistent definition regulations restricting three main types of COI makes managing COI more of COI in Vietnam. These are restrictions 30 RESULTS on (i) income and assets; (ii) business Article 40 of the 2005 Law on Anti- activities; (iii) public office mandate. Corruption (amended in 2007 and 2012) Annex 3 provides examples from OECD and Decision No. 64/2007/QD-TTg countries and some transition countries specify that public servants and public in restricting these types of COI as well employees are prohibited from receiving as examples of how these countries money, assets or other material benefits manage COI in their public sector. from organizations or individuals in These examples are meant to provide connection with their duties. However, pointers for Vietnam in developing a these provisions do not apply to family COI management system in the future. It members of public servants. would require an additional analysis on Comparison of regulations on receiv- the types of governments and political ing gifts between Vietnam and a number systems in order to suggest specific of East Asian countries show a clear dif- institutions most suited for Vietnam. ference. Specifically, in other East Asian countries, regulations on receiving gifts 5.1.1. Restrictions on income and are applied to public servants’ family assets members. For example, in South Korea, a public Behavioral restrictions on income servant must prevent their spouse, and assets include restrictions on gift- and relatives from receiving gifts or taking, ownership or stock holding in valuables that they are not allowed to firms, ownership of real estate or land. receive. South Korea provides a long list Most OECD countries and the selected of gifts that public servants are allowed transition countries have restrictions on to receive, and all off-list gifts must be accepting gifts. These restrictions apply returned. In Singapore, public servants to civil servants and a number of high- are not allowed to accept any gifts. If a level officials in legislative and executive minister or his/her spouse or children bodies. In this respect, Vietnam is already receive a gift, such gift must be valued in line with this dominant pattern in and displayed at the ministry office OECD and transition countries. (Box 1). BOX 1 Gift-taking regulations in South Korea and Singapore South Korea’s code of Conduct for Public current public duties. A public official shall Officials prevent his/her spouse or lineal ascendants/ Restriction of receiving money and other descendants from receiving money or other valuables: A public official shall not receive valuables that are also prohibited for public money, valuables, real estate, gifts or gifts of officials. The above-mentioned provisions do entertainment, including from a duty-related not apply to the following items: public official and from an individual who • Money or other articles provided by a law- was a duty-related party or a duty-related ful ground of claim such as the payment public official in connection with his or her of debt; MANAGING CONFLICT OF INTEREST IN THE PUBLIC SECTOR: 31 LAW AND PRACTICE IN VIETNAM • Foods or convenience provided within Legal provisions on gift-taking in Singa- the scope of conventional practices; pore • Transportation, accommodation or foods If a public official is presented with a gift, they uniformly provided by a sponsor to all must reject it outright. If they are presented participants in an official event related to with a gift from a visiting dignitary, they are duties; to accept the gift and then surrender it to the • Souvenirs or promotional goods distrib- head of their department. The value of the uted to many and unspecified persons; gift will be assessed and the official may pay • Money or other valuables publicly pro- for it if they wish to keep it. vided to a public official in need who is Ministers are also required to refuse and afflicted with a disease or suffers other return all gifts. If it is believed that returning kind of disaster; the gift will cause an offense to the donor, then • Money or other valuables provided to a the Minister is required to turn the gift over public official to facilitate the performance to the Permanent Secretary of the Minister’s of his or her duties within the limit set by Ministry for disposal. If the Minister wishes the Agency Head; to purchase the gift, an evaluation of it must • A small gift offered according to common be performed, after which the Minister may practices; purchase it at its cash value, or if valued • A friendship society publicly offers mon- under $50, he/she may keep the gift without ey or other valuables; payment. If the Permanent Secretary believes • A superior public official offers money or that the gift is of interest to the government, other valuables to his or her subordinates then the gift may be displayed or used to promote their morale or to console, en- officially in the Minister’s premises. The courage or reward them. same rules apply when gifts are exchanged during official visits. If the Minister or his/ Sources: South Korea’s Code of Conduct for Public Officials (2008). her spouse or child receives a gift they may have it evaluated or may have it displayed in his/her premises. If the Minister wishes to reciprocate with a gift, the Minister may purchase one at the government’s expense. The evaluator of all gifts is the Accoun- tant-General of Singapore. Sources: Deployment for Democratic Development (DDD) global program of the Institute of Public Administration of Canada (IPAC), “Conflicts of Interest and Ethics in Government. Briefing Note: Sin- gapore”. 32 RESULTS Vietnam’s legal framework also Corruption and the Law on Public imposes restrictions on ownership in Servants, restricting public servants and business. The Law on Anti-Corruption, members of the families of agency heads the Law on Public Officials, the Law and deputy heads from enjoying benefits on Public Employees, and the Law on from private business operation and off- Enterprises prohibit public servants duty affairs. from establishing private businesses, In particular, public servants are limited liability companies, joint stock prohibited from engaging in management companies, cooperatives, private hos­ and operation of private enterprises, pitals and private research institutions. limited liability companies, joint stock In addition, heads and deputy heads companies, cooperatives, private hospitals of agencies and their spouses must not and private research institutions. In invest in enterprises directly managed by addition, public servants are not allowed those public servants. to act as consultants for organizations, Although public servants are restricted enterprises, and individuals in fields in business ownership, ownership of other related to confidentialities in their duties important properties such as real estate and state affairs, or to cases currently and land is not subject to restrictions. being dealt with. Relatives and family Current regulations do not contain members of agency heads and deputy provisions limiting public servants’ heads must be kept away from doing ownership or acquisition of those business in their duty-related fields. properties. There is only a restriction Decree No. 102/2007/ND-CP and (Article 37, Clause 1, of the Law on the Law on Public Servants also specify Anti-Corruption) of the use of internal that public servants are prohibited from information for personal interest, which working in areas that they previously could also apply to using real estate or land administered within a certain period of for private purposes. Some countries have time after leaving a position. In addition, controlling regulations over ownership of public servants working in confidential land and real estate. Public servants are areas in state affairs are prohibited not prohibited from owning real estate but from working for individuals, and are from taking advantage of information domestic and foreign organizations in or gift receipts to acquire real estate or their professions for at least five years important assets. after retirement. This restriction does not apply to family members of public 5.1.2. Restrictions on business servants. activities Several countries completely prohibit certain types of public servants from Most OECD countries and the select- engaging in employment outside their ed transition countries have provisions duties. According to the 2010 OECD limiting civil servants and senior officials Survey on Integrity, as much as 42% of from benefiting from private business OECD countries prohibit presidents, operation and off-duty business. prime ministers and ministers or cabinet Similarly, Vietnam also has provi­ members from engaging in affairs sions, mainly in the Law on Anti- outside their paid duties, and 26% of MANAGING CONFLICT OF INTEREST IN THE PUBLIC SECTOR: 33 LAW AND PRACTICE IN VIETNAM OECD countries prohibit top decision- duties: 24% for judges and prosecutors, makers from engaging in affairs outside 10% for legislators, 12% for tax collectors “unpaid duties” (Figure 2). and customs officers, 11% for procure- A smaller percentage of OECD coun- ment staff, and 6% for officers working tries prohibit other public positions from in financial management authorities engaging in affairs outside their main (Figure 2 and 3). FIGURE 2 Level of disclosure of top decision-makers’ private interests in OECD countries 100% Percentage of responding OECD countries 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Assets Liabilities Income Source Income Amount Outside position: Paid Outside position: Non-Paid Gifts Previous Employment Assets Liabilities Income Source Income Amount Outside position: Paid Outside position: Non-Paid Gifts Previous Employment Assets Liabilities Income Source Income Amount Outside position: Paid Outside position: Non-Paid Gifts Executive Branch Legislative Branch Judicial Branch Previous Employment Disclosure is not required Information is disclosed but not publicly available Information is disclosed and publicly available Activity prohibited Sources: OECD Survey on Integrity (2010). Note: Based on 35 OECD countries excluding Luxemburg. For the Executive branch, the data refers to the President, Prime Minister and Ministers or cabinet members. For the Legislative branch, the data refers to legislators in both the lower and upper houses. For the Judicial branch, the data refers to judges and prosecutors. 34 RESULTS FIGURE 3 Level of disclosure of private interests of selected public officials in high-risk areas in OECD countries 100% Percentage of responding OECD countries 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Assets Liabilities Income Source Income Amount Outside position: Paid Outside position: Non-Paid Gifts Previous Employment Assets Liabilities Income Source Income Amount Outside position: Paid Outside position: Non-Paid Gifts Previous Employment Assets Liabilities Income Source Income Amount Outside position: Paid Outside position: Non-Paid Gifts Previous Employment Tax and customs o cials Procurement agents Financial authorities Disclosure is not required Information is disclosed but not publicly available Information is disclosed and publicly available Activity prohibited Sources: OECD Survey on Integrity (2010). Note: Based on 35 OECD countries. Luxemburg is not included. Getting government contracts is also also specifies restrictions in winning gov- regulated and restricted by law in Viet- ernmental contracts, but is only applied to nam. The Law on Anti-Corruption (Ar- managers of state-owned enterprises. The ticle 37) has a general clause prohibiting 2013 Procurement Law (Article 17, 75, 78, agency heads and deputy heads from let- and 89) provides similar restrictions, but ting family members do business in the is applied only to public servants engaged areas that they manage. However, this in procurement activities. clause does not specify if those restric- In most of the selected OECD and tions are applied to the case of awarding transition countries, gaining government government contracts. Moreover, current contracts is restricted to some types of legal restrictions only apply to agency public servants. The restrictions related heads and deputy heads of agencies, not to to gaining government contracts in these other senior agency staff. The Law on An- countries are usually general clauses and ti-Corruption (Article 37, items 4 and 5) applicable to other business activities, but MANAGING CONFLICT OF INTEREST IN THE PUBLIC SECTOR: 35 LAW AND PRACTICE IN VIETNAM some countries have specific restrictions include regulations limiting (i) decisions on holding government contracts. For that influence personal interests of public example, the Civil Servant Management servants, (ii) holding of conflicting posi­ Code of the United Kingdom stipulates tions such as policy making and policy departments and agencies are not implementing positions in one, (iii) allowed to award contracts to: assisting family or friends in obtaining • Any civil servant working in that de- public sector employment, and (iv) partment or agency; assisting businesses of family or friends • Any partnership that a civil servant in obtaining a government contract. working in the department or agency Decision-making process that affects is a member of; personal interests of public servants may • Any company where a civil servant include participation in the administrative working in the department or agency procedure of preparing or issuing a is a director, unless the civil servant has policy. Although, there is not yet a general fully disclosed the measure of his or restriction on the participation of public her interest in the contract and senior servants this process in Vietnam’s current management has given permission. legal framework, there are already some (Box 2). provisions under the Law on Audit, the Civil Procedure Code, the Criminal 5.1.3. Restrictions on public office Procedure Code, and Law on Inspection mandate limiting this sort of behaviors. In contrast, a majority of the selected Restrictions on public office mandate OECD countries and several of the BOX 2 Examples of restrictions on implementing government contracts Estonia: Civil servants may not conclude Croatia: A business entity in which a public transactions with the state through his/her official has at least 0.5% of its equity is not al- agency. (Public Service Act, 1995) lowed to engage in a business transaction with a state agency in which that official is working United Kingdom: Departments and agen- for, nor in a joint bid as a partner or subcon- cies must not give contracts to: any civil tractor. This applies to all business entities in servant in the department or agency; any which a family member of the public official partnership of which a civil servant in the has at least 0.5% of their equity in the case department or agency is a member; or any where that family member is able to acquire, company where a civil servant in the de- either directly or indirectly, the ownership in partment or agency is a director, unless the question or the shares of the in-question of- civil servant has fully disclosed the measure ficial from a period of two years prior to his of his/her interest in the contract and senior or her appointment or election to public office management has given permission. (Civil until the end of the exercise of office. (Act on Servant Management Code, 2010) the Prevention of Conflicts of Interest, 2011). Sources: Public Accountability Mechanisms (PAM) database, World Bank (2012); Croatia’s Act on the Prevention of Conflicts of Interest (2011). 36 RESULTS surveyed transition countries have this from participating in the preparation, type of general regulation. The laws of review or passing of decisions or from the Baltic States provide some good otherwise influencing the decision- pointers. In Estonia, for example, the making process, which may face a risk of Anti-Corruption Act prohibits public conflict of interest (Box 3). officials from making an action or a Vietnam does not have any legal decision “if the decision or the action is restriction stopping public servants from made in connection to the public official simultaneously holding policy-executing or a connected person to him or her”. and policy-overseeing positions. In fact, The Law on Prevention of Conflict of in some legal documents, certain public Interest of Latvia restricts heads of state, servants are allowed to play these two ministers, parliamentary members and conflicting roles. For example, in the civil servants from having a vote on Law on Complaints and the Law on policy decisions related to the official’s Denunciations, heads of government personal interests. In Lithuania, the Law bodies10 are assigned to play oversight on the Adjustment of Public and Private role that conflict with their primary role Interests in the Civil Service specifies as policy implementer. More specifically, that a person in the civil service and these two laws assign heads of government parliamentary members are prohibited bodies the role of dealing with complaints BOX 3 The Baltic States: Restrictions on participating in decision-making processes that affect personal interests Estonia Cabinet Instruction No. 1 “Principles of A public official is prohibited from making behavior for Civil Servants”, 2001). an action or a decision if: (1) the decision is made or the act is performed with respect Lithuania to the official’s interest or to a “connected A public servant in the civil service and person” to him or her; (2) the official is aware parliamentary members are prohibited of economic or other interests of that official from participating in the preparation, or a person connected to him or her, which review or passing of decisions or from may have an impact on the action or decision otherwise influencing the decision-making being made; (3) the official is aware of a risk process, where they may face a risk of of corruption. (Anti-Corruption Act, 2012). conflict of interest. A public servant in the civil service and parliamentary members Latvia shall not use his/her duties, authority or Head(s) of state, ministers, parliamentary title in order to influence other persons’ members and civil servants are restricted decision, which would result in the from voting on policy decisions related emergence of a conflict of interest. (Law to an official’s personal interests. (Law On on the Adjustment of Public and Private Prevention of Conflict of Interest, 2002; Interests in the Civil Service, 1997). Sources: Public Accountability Mechanisms (PAM) database, World Bank (2012). MANAGING CONFLICT OF INTEREST IN THE PUBLIC SECTOR: 37 LAW AND PRACTICE IN VIETNAM on issues that were administered by for other relatives and friends. themselves. Narrow scope of application is a Unlike Vietnam, almost all OECD and deficiency of the above-mentioned transition countries restrict parliamentary restrictions. Public servants (and family members from simultaneously acting members) who are not managers of as policy-makers and implementers state-owned enterprises or do not act as (Annex 3, Box 3). Those restrictions are agency heads or deputy heads are not stipulated in their constitutions and/or subject to comply with these restrictions. in laws regulating conflict of interest. In addition, these restrictions do not For example, the Czech Republic’s Act cover public servants’ relatives (such on Conflict of Interest specifies that as siblings-in-law) and others such as parliamentary members are prohibited public servants’ friends. from holding any position within public Another deficiency of the above-men- administration. Another example is the tioned restrictions is they do not capture Slovak Republic’s Constitution that states the risk that job arrangement for family “the discharge of a post in the government members can be delegated from a super- shall be incompatible with the discharge visor to his/her subordinates, from a sub- of a parliamentary member” (Annex 3, ordinates to his/her supervisors, or from Box ix). a public servant to his/her colleagues in Nevertheless, one positive aspect to another public agency or state-owned note is that the Law on Anti-Corruption enterprise. contains restrictions for public servants More than half of surveyed OECD from assisting family members to gain countries and transition countries have employment in the public sector. The restrictions regarding helping relatives Law on Anti-Corruption and the Law or friends in the public sector. Such on Enterprises do not allow managers countries as Japan, Poland or Croatia set of state-owned enterprises, agency a broader scope of application to cover heads and deputy heads to arrange for relatives of all public servants rather than close family members to hold certain of only agency heads and deputy heads. positions or perform some tasks in Moreover, the term “relatives” here is public agencies. There are no restrictions interpreted to include other such as for these public servants to arrange jobs spouses, cousins and friends. See Box 4. 38 RESULTS BOX 4 Examples of restrictions on assisting family members and other persons in obtaining a job in the public sector Restriction on civil servants in China: Public officials shall not influence work Where there is such relationship as arrangement or contract awarding through husband and wife, lineal descent, collateral public procurement. (Law on the Prevention consanguinity within three generations of Conflicts of Interest, 2011). or close affinity between civil servants, the concerned person shall not assume a Restriction on civil servants in Poland: subordinating post immediately under the Civil servants must be neutral and impartial same leader in the same agency or hold a in performing his/her duties. They must post relating to the immediate supervisor and avoid any risk of doubt regarding mixing subordinator, or engage in such work related private and public interests and, in to organization, human resource, disciplinary administrative issues. Civil servants shall investigation, supervision and inspection, not discriminate among cases and shall auditing and finance management in an avoid being under influential pressure as a agency where one concerned party is acting result of family relationship, friendship, or as the top leadership. (Civil Servant Law of membership. A subordinate-supervision China, 2005). relationship shall not exist between spouses or relatives or civil servants. (Civil Service Restriction on civil servants in Bulgaria: A Code of Ethics, 2002; Law on Civil Service, person shall not be appointed as a civil ser- 2008). vant in an agency where (s)he is immediate subordinate under management and control Restriction on the president, ministers of his or her spouse, linear descent, collateral and parliamentary members in the Slovak descent within four generations, or marriage Republic: The President, ministers and relationship within four generations. (Civil parliamentary members shall not use his/her Servant law, 1999). office or powers pertaining to his/her office and information acquired by the performance Restriction on public officials in Croatia: of his/her office or in relation therewith to Officials shall not offer a promise of his/her benefit, to the benefit of his/her close recruitment or any other benefit in exchange natural or legal relationships. (Constitutional for any gift or any promise of getting a gift. Act on Protection of Public Interest, 2004). Sources: Public Accountability Mechanisms (PAM) database, World Bank (2012); Civil Servants Law of China (2005). MANAGING CONFLICT OF INTEREST IN THE PUBLIC SECTOR: 39 LAW AND PRACTICE IN VIETNAM Vietnam’s COI legal framework also has persons involved in procurement. More­ restrictions on assisting family members over, the law does not explicitly define the in gaining a government contract. relationship of public servants with “sub- The Law on Anti-Corruption prohibits contractors” of bidders. managers of state-owned enterprises from awarding contracts to enterprises owned by close family members. In addition, the 5.2. Field study results law prohibits agency heads and deputy- heads from letting close family members This chapter presents the findings “do business” in their direct duty-related from the surveys of public officials, en- areas. As in the case of restrictions on terprises, and citizens on their awareness assisting family members in obtaining and experience of COI, the areas that employment, the restrictions stipulated are prone to COI, as well as how current in the law are limited. They do not restrict COI regulations are being implemented. public servants (and family members) who are not managers of state-owned 5.2.1. Awareness of COI enterprises or do not hold positions of Awareness and understanding of COI agency heads or deputy heads, members of the extended families of public servants concept (such as siblings-in-law), or friends in The survey results showed that most general. public servants (86%), business (89%), The 2013 Public Procurement Law and citizens (94.6%) had heard the addresses some deficiencies on the gaps in phrase “conflict of interest”. However, the the Law on Anti-Corruption. It prohibits meaning of this phrase was understood all public servants involved in procurement very differently. Survey results (Figure process from directly engaging in selection 4) and group discussions emerged two for packages bid for by members of their main issues: extended families (i.e. parent, parent-in- • The majority of survey participants law, spouse, natural child, adopted child, (60% of public servants, 70% of son-in-law, daughter-in-law, and sibling). enterprises, and 68% of people) Importantly, the Public Procurement Law believed the phrase “COI” refers to requires all bid inviters and evaluating conflicts of interests between parties. agencies to “ensure honesty, objectivity Only about a quarter of respondents and fairness throughout the bidding in the survey understood COI as process” and forces cancellation of the conflicts between personal benefit and bidding if violations occur. public interest that occur within a Although the Public Procurement Law decision made by a public servant. has a general requirement on integrity • There is no notable difference be- throughout the bidding process, it does tween public servants, enterprises, not explicitly prohibit public servants and people in their understandings of from assisting friends and other connected the COI concept. 40 RESULTS FIGURE 4 “Conflict of interest” as understood by public servants, enterprises and citizens 80% 70 Public servants Enterprises Citizens 70% 68 60% 60 50% 40% 30% 28 22 24 20% 11 10% 5 5 2 3 4 0% Con ict of interests Con ict between Con ict of private Other meanings between parties responsibilities and public interest and rewards within a decision Assessment of risk in specific situa- • In all given situations, the proportion tions of citizens who recognize potential effects on the objectivity and fairness Although only about a quarter of res­ of officials’ decisions was higher than pon­ dents understood COI in the same that of the public servants sample. way as the definition used in this research, The most remarkable disparity was most could identify potential COI in found in the situations where public specific situations. The questionnaire servants hold shares in enterprises listed specific situations and respondents under their field of supervision (70% were asked whether or not these situations of citizens compared with 50% of could affect objectivity and fairness in public servants), or doctors of public decisions made by public servants. The hospitals practice in private clinics results (Figure 5) showed: (35% of citizens compared with • Three groups were in agreement in the 22% of public servants), or officials view that situations in which officials receiving gifts from contractors (81% from tax, customs, inspectorate, of citizens compared with 70% of police, procuracy, and court offices public servants) and cadastral officers could receive gifts/money, or public engaging in real estate brokerage servants receive gifts from contractors, services (71% of citizens compared or cadastral officials act as real estate with 62% of public servants). brokers, etc. could greatly affect objec­ • Generally, enterprises held similar tivity and fairness of decisions made views as public servants. The most by involved public servants. From 62% diverse views between the two groups to 90% of respondents believed these was where a public servant supervises situations have significant influence on enterprises that are owned by his/her public servants’ decisions. relatives: Only 49% of public servants MANAGING CONFLICT OF INTEREST IN THE PUBLIC SECTOR: 41 LAW AND PRACTICE IN VIETNAM believed that this situation could affect sample agreed); the decisions of the public servant, • Affecting citizens’ confidence in the while the proportion of business state (67.5% of public servants in the managers was 63.5%. sample agreed); Public servants in the survey believed • Affecting public servants’ personal that a lack of objectivity and fairness reputation (74% of public servants in in decision-making might result in the the sample agreed); following consequences: • Setting a bad precedence in organi- • Damaging common good for the zations (61% of public servants in the public (66% of public servants in the sample agreed). FIGURE 5 Do given situations reduce the objectivity and fairness of public servants’ decisions? (% agree) 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 85 3. Tax, custom officials received gifts/money from firms 73 88 2. Inspectorate officials, auditors, policemen, prosecurators, 83 86 and Judges, received gifts/money from related parties 90 71 1. Officials received gifts or dine with contractors 79 81 63 7. Cadastrial officials provide real estate brokerage services 63 71 59 6. Members of Recruitment Committee have relatives as applicants 56 4. Healthcare staff receive gifts/money from patients 10. Government agencies negotiate with land-holders on behalf 53 of investors 55 50 9. Officials hold shares of enterprises in their supervisory fields 59 63 8. Leaders have relatives as owners of firms in their supervisory 49 64 fields 23 5. Public hospitals’ doctors practice in private clinics 35 Public servants Firms Citizens Note: Some situations were not asked in the surveys of firms and citizens to shorten the online survey questionnaires. 42 RESULTS Culture and the existence of COI • By contrast, up to 50% of public ser- situations vants and 65% of enterprises agreed that gift-giving/receiving by public Common COI situations such as servants is disguised bribery. gift-giving/receiving by public servants or doing favors for relatives are often justified as following “traditional culture” Group discussions converged with and therefore the existence of those the survey results. They indicated that: situations in Vietnam is “natural”. participants of the group discussions However, the majority of public recognized that gift-giving is a traditional servants, enterprises, and citizens in culture. However, gifts for public servants the survey did not attribute traditional rarely convey cultural or emotional value. culture as a promoter of gift-giving/recei­ Nearly all gifts for public servants hide ving or investment for personal benefit some personal interest, even bribery; by the public servants in their lines of and therefore, genuine traditional duty. Survey results (Figure 6) can be values do not promote COI situations. If summarized as follows: anything, “traditional culture” has been • Up to 62% of public servants did not abused by involved parties to justify acts agree that: “receiving gifts at work by of seeking personal benefit at the price of public servants is natural since gift- the common good. giving/receiving is considered as a cultural practice, or a way to express “There are some cases of gift-giving de- thanks”. A similar proportion of riving from sincere affection… but very enterprises have the same opinion. rare.” 64% of citizens disagreed with [a public servant in group discus- the phrase “gift-giving/receiving is sions] a cultural value, so public servants receiving gifts is normal.” “I am concerned about the consideration • 82% of public servants did not agree of gift-giving as COI. I think when that: “gift-giving is an expression of someone gives gift to a public servant, it cooperation, thus public servants re- should be regarded as bribery.” ceiving gifts is natural”. A lower pro- [a public servant in group discus- portion of enterprises, 67% disagreed sions] with this phrase. This partially reflects the willingness to exchange benefits “Definitely, gift-giving by enterprises with public servants by enterprises. contains COI.” • The Vietnamese old saying: “If a [a business leader in group discus- person is a state official, his whole clan sions] will receive favor from him”, which was used as a justification for public Business leaders in group discussions servants to do favors for their relatives, considered gift-giving to public servants was objected to by 84% of public as a normal, even necessary, business servants, 72.5% of enterprises and activity. They may not like that practice, 70% of citizens. but they are willing to accept the reality. MANAGING CONFLICT OF INTEREST IN THE PUBLIC SECTOR: 43 LAW AND PRACTICE IN VIETNAM FIGURE 6 Cultural values and personal benefit seeking Public servant sample 100% 5 7 90% 100% 16 16 8 100% 10 7 55 7 80%90% 16 16 16 16 88 90% 10 10 25 21 51 49 70%80% 80% 25 25 21 21 51 51 49 49 60%70% 70% 50%60% 60% 84 40% 86 16 16 50% 50% 84 84 30%40% 63 86 86 16 16 16 40% 16 59 20%30% 30% 63 63 59 34 59 33 10%20% 20% 34 34 33 33 0%10% 10% 1. Gift-giving/ 2. Gift-giving 3. Gift-giving 4. “One person 5. Gift-giving 6. Public servants 0% 0% taking is a is a way is an economic is mandarin, to public receiving gifts 1.Gift-giving/ cultural 1. Gift-giving/ value to2. Gift-giving thank 2. Gift-giving 3. Gift-giving the exchange 3. Gift-giving 4. “One 4. “One person clan wholeperson 5. Gift-giving servants is 5. Gift-giving 6. Public is mostly 6. Public servants servants takingis taking isaa way isaaway is isan is economic aneconomic ismandarin, get is mandarin, favor” mostly to to public apublic bribery receiving receiving gifts bribery receiving gifts cultural value cultural value to thank to thank exchange exchange the whole clan the whole clan servants servants is is is mostly is mostly Disagree Undecideget favor”Agree mostly getfavor” bribery receiving mostlyaabribery bribery receivingbribery Disagree Disagree Undecide Undecide Agree Agree Enterprise sample Citizen sample 100% 12 12 100% 12 13 19 18 80% 12 14 80% 23 17 100% 24 21 100% 100% 12 12 19 18 12 12 65 62 100% 12 12 13 13 60% 19 18 60% 65 80% 14 80% 23 17 40% 80% 24 24 21 12 12 7314 40% 80% 23 17 60% 60% 61 5821 67 65 1265 1762 62 60% 64 60% 70 146565 20% 20% 40% 40% 67 73 73 18 18 40% 40% 21 0% 61 61 58 58 67 0% 64 64 70 70 14 20% 12 12 17 17 20% 1 14 20% 1 2 3 4 5 6 20% 2 3 4 5 6 21 18 18 18 18 21 0% 0% Disagree Undecide Agree 0% 0% Disagree Undecide Agree 11 22 33 44 55 66 11 22 33 44 55 66 Disagree Disagree Undecide Undecide Agree Agree Disagree Disagree Undecide Undecide Agree Agree Notes: 1. Gift-giving/taking is a cultural value. 2. Gift-giving is a way to thank. 3. Gift-giving is an economic exchange. 4. “One person is mandarin, the whole clan get favor”. 5. Gift-giving to public servants is mostly a bribery. 6. Public servants receiving gifts is mostly receiving bribery. 44 RESULTS Thus, for most people, COI has not b) Giving / receiving gifts in another types been viewed as a sensible concept or (e.g. tours, study, health treatment), a systematic issue of state governance. c) Interest sharing investments with a While the legal review finding is that business, there is no adequate definition of COI in d) Taking advantage of inside infor­ Vietnamese regulations, COI situations mation gained from work position and consequences are clearly recognized for personal interest, such as buying/ by public servants, enterprises and selling real estates or stocks, citizens. Most public servants, enterprises, e) Making a decision (or influencing and citizens participating in this study did decision-making) in favor of family not accept the use of traditional cultural members. values to justify the existence of COI. Public servants were asked about the 5.2.2. Perception and experience of prevalence of the above COI types in six COI situations categories of public servant activities: (1) Public service delivery (charged or free of charge) This section presents the main (2) Personnel recruitment and appoint- findings related to the perception and ment experience of the respondents (public (3) Procurement management servants, enterprises, and citizens) with (4) Project licensing and approval COI situations. It covers: (5) Inspection, monitoring, auditing • Findings about perception of the pre­ (6) Handling of law violations. valence of COI situations • Findings about experience of COI situations Meanwhile, the enterprises were • Findings about actual practices that only asked about the prevalence of the result from COI situations, involving activities in which they were involved in, gift-giving/receiving, procurement including (3), (4) and (5).11 ma­ nagement, and recruitment and Firstly, for activities (3), (4) and (5), appointment. the questions regarding perception of COI prevalence were given to both groups of public servants and enterprises. Perception of the prevalence of COI Therefore, we can directly make compa­ situations rison between the two groups: Questions about the prevalence The results of the survey in these three of COI situations were not exactly activities showed that: the two forms of the same for public servants and COI (a) Giving /receiving gifts in kind enterprises. The research team wanted and/or in cash, and (e) Making a decision to ensure that respondents have the (or influencing the decision-making) in ability to respond reliably for given favor of his or her family members were situations of a specific activity. The COI the most common (Figure 7). forms (or types) include: A comparison between two groups a) Giving/receiving gifts in cash and/or also showed some noteworthy findings in kind, as follows: MANAGING CONFLICT OF INTEREST IN THE PUBLIC SECTOR: 45 LAW AND PRACTICE IN VIETNAM • Firstly, activities (3) (Procurement FIGURE 7 Perceived prevalence of COI situations management) and (4) (Project licen­ (% responding prevalent and very prevalent) sing and approval) were perceived by both groups as having the most 100% 100Procurement management (3) frequent COI situations. • Secondly, the enterprise group 80% 100 perceived COI situations as more 100% 58 62 60% 54 prevalent than the group of public 80% 40% 58 39 39 servants in all three situations. In 62 30 29 54 31 60% 21 particular, while the majority of the 20% 39 40% 39 public servants (above 50%) only 30 29 31 0% 21 perceived a prevalence of giving/ 20% a e c d b receiving gifts in kind and/or in cash 0% in (3) procurement management and a e c d b (4) project licensing and approval – the majority of the enterprise group, (4) Project licensing and approval 100% (over 50%) perceived the prevalence 80% 75 of both situations of giving/receiving 100% 60 gifts in kind and/or in cash and 60% 55 80% 75 50 making a decision (or influencing 41 40 40% 60 33 32 31 the decision-making) which would 60% 55 20% 50 22 materially affect family members in 41 40 40% 33 32 31 all three activities (3), (4) and (5). 0% 22 20% a e d c b • Thirdly, the perception of the prevalence of (a) Giving /receiving 0% a e d c b gifts is very significant in the enterprise group. In particular, all (100%) of the (5) Inspection, monitoring, and auditing enterprise respondents perceived the prevalence of gift giving/receiving 100% procurement management and not one person said that they did not 80% 72 100% know of this situation. This finding 60% 53 is also consistent with the results of 80% 72 40 40% 34 30 the latest World Bank Enterprise 60% 26 53 27 17 16 40 Survey for Vietnam which shows that 20% 12 40% 34 30 57% and 91% of firms are expected 26 27 0% 20% a e 17 c 16 d 12 b to give gifts to public officials to secure a government contract and to 0% CBCC CBCC Public servants DN DN e Enterprises “get things done”, respectively.12 The a c d b findings from in-depth interviews (a) Giving/receiving gifts in kind and/or in cash. (e) Making a decision (or influencing the decision-making) which would related to forms and nature of gift- materially affect his or her family members. giving and receiving are detailed in (d) Buying/selling real estates or stocks taking advantage of information provided from working position. the next part of this section. (c) Having investment and sharing interests with a business. (b) Giving/receiving gifts in other types (e.g.: tours, study, health treatment). 46 RESULTS For the three activities that the survey would have been significantly higher. For asked public servants only, namely (1) example, if the three response options public service delivery, (2) personnel were combined from “happening recruitment and appointment and (6) occasionally” to “happening very preva­ handling of law violations, the survey lently”, most enterprises (81%) and results showed that generally, the two public servants (68%) would have agreed situations where COI is considered most on the prevalence of COI where public prevalent are (a) Giving/receiving gifts servants “buy/sell real estate, stocks by in kind and/or in cash and (e) Making taking advantage of their privileged a decision (or influencing the decision- access to information”. making) which would materially affect In summary, the survey results showed his or her family members (Figure 8). that, public servants and enterprises It should be noted that results considered two activities (1) procurement shown in this section are about the management and (2) project licensing percentages of respondents agreeing and approval as the most prevalent COI about the prevalence of given situations situations. Meanwhile, giving/receiving including both “happening prevalently” gifts in cash/in-kind and making a and “happening very prevalently”. If we decision (or influencing decision- had included the response option of making) which would materially affect “happening occasionally” the prevalence his or her family members were said to be of the situations given by both groups the most common instances of COI. FIGURE 8 Perceived prevalence of COI situations among public servants (% responding prevalent and very prevalent) 60 44 38 40 31 26 24 27 21 20 16 17 16 15 15 11 9 6 0 (1) Public service delivery (2) Personnel appointment (6) Handling of law violation and recruitment (a) Giving/receiving gifts in kind and/or cash (e) Making a decision (or influencing the decision-making) which would materially affect his or her family members (d) Buying/selling real estates or stocks taking advantage of information provided from working position (c) Having investment and sharing interests with a business (b) Giving/receiving gifts in other types (e.g: tours, study, health treatment) MANAGING CONFLICT OF INTEREST IN THE PUBLIC SECTOR: 47 LAW AND PRACTICE IN VIETNAM Generally, enterprises seemed to have that they “knew clearly” that the more “negative” attitudes than those of situation had occurred. The situation public servants regarding the prevalence recognized by most respondents was of COI in the public sector. In fact, the authorities appointing, promoting vast majority of enterprises (53% - 100%) and recruiting relatives (35%); officials held the view that giving/receiving gifts receiving money or gifts to settle more and helping family members on work- favorably towards the giver (32%); related issues happened prevalently and officials having “backyard” enterprises very prevalently. Although perception (32%); and authorities facilitating may be different from what is actually relatives to receive contracts or projects happening, it is associated with personal (32%). These are high percentages, trust in the current economic, political, especially in regard to the fact that social systems with regards to COI most of the given situations involve problems. current law violations. • Secondly, a relatively high proportion Experience of COI situations of enterprises responded that they “knew clearly” of the different COI In this section, the survey on experi- situations occurring (ranging from ence asked the respondents if they “knew 29% to 48%). Similarly, the situation clearly” of COI situations in the previous experienced by most enterprises was 12 months. It should be noted that, the offering money or gifts to an authority question did not require respondents to so that a case is settled more favorably have experienced or been involved in (48%); officials receiving money or COI situations but they should know the gifts to settle more favorably for the situations happened (or not). giver (46%); and officials having Eight COI situations were used in “backyard” enterprises (37%). the survey. Out of the eight situations, • Thirdly, the share of enterprises two were used for the public servants responding they knew clearly of the only and one just for the enterprises. The different situations occurring was remaining five situations were used for higher than the share of public servants. both groups and these could be compared The biggest difference was found in the directly. The survey results showed some situation of officials receiving money noticeable findings (Figure 9): or gifts to settle more favorably for the • Firstly, there were between 25% and giver (46% of enterprises compared 35% of public servants who responded with 32% of public servants). 48 RESULTS FIGURE 9 Experience of COI situations among enterprises and public servants (% responding knowing clearly of situations) 0% 10% 20% 30% 40% 50% 60% 35 3. The authority appoints, promotes, recruits relatives 32 2. Officials receive money or gifts to settle more favorably for the giver 46 6. Officials have “backyard” enterprises 32 37 4. The authority facilitates relatives to receive contracts or projects 32 34 1.  Officials offer money or gifts to the authority so that his case is 29 settled more favorably 5. The authority has father/mother/wife/husband/children doing 27 business in the field of their direct management 32 7.  Officials buy and sell real estates or stocks thanks to advantageous 25 positions at work 29 1.a. Business offer money or gifts to the competent so that his case is settled more favorably 48 Public servants Enterprises The group discussions are consistent Finance], the head of division in charge with the survey results. Some of the of medical and educational assistance following quotes help illustrate the got his family business involved, existence and the variety of forms of benefiting from up to 5% of total these situations. revenue. His case was discovered due “There are many public servants who to mobile phone messages.” used to be enterprise leaders and still [Some citations from group discus- keep economic interests in business. If sions of public officials] they are still benefiting from a business, without monitoring or control, they Data surveyed from public servants will, of course, act in favor of the was used to compare with groups in enterprise under their authority.” central government and those in pro­ vincial government. The results showed “There are COI at the district (depart- significant differences between both ment) level. The program 135, provides groups. In particular, significantly more seeds and fertilizer for farmers ...but the of those in provincial governments suppliers are relatives of district officials.” experienced than those in central government, for most of the COI “In my agency [Department of situations (Figure 10). MANAGING CONFLICT OF INTEREST IN THE PUBLIC SECTOR: 49 LAW AND PRACTICE IN VIETNAM FIGURE 10 Comparison of COI experience between groups of public servants 0% 10% 20% 30% 40% 3. The authority appoints, promotes, recruits relatives 21 35 25 2. Officials receive money or gifts to settle more favorably for the giver 33 6. Officials have “backyard” enterprises 13 33 12 4. The authority facilitates relatives to receive contracts or projects 33 1.  Officials offer money or gifts to the authority so that his case is 17 settled more favorably 30 5. The authority has father/mother/wife/husband/children doing 13 business in the field of their direct management 28 7.  Officials buy and sell real estates or stocks thanks to advantageous 23 positions at work 25 Central Provincial In summary, survey results showed public servants giving/receiving gifts that the actual experience of public was not considered by respondents as servants and enterprises are similar to being excused by traditional culture and their perceptions on the prevalence of COI could affect the objectivity and fairness tuations. The most common situations si­ in decision-making by competent public involved: (1) officials receiving money or servants. The situation of giving/receiving gifts to settle more favorably for the giver; gifts related to COI was considered to and (2) the authority making decisions in occur quite commonly. favor of relatives (in both appointment and • To further analyze the issue, the two facilitation to win projects or contracts). In groups of respondents, public servants addition, official’s “backyard” enterprises and enterprises, were asked to describe are a fairly common situation according more specifically, situations of public to both respondent groups. The next servant giving/receiving gifts that they section presents specific findings detailing knew well (or had directly conducted experience relating to actual situations, for respondents from enterprises) including giving/receiving gifts, bidding, during the past 12 months. and appointment/recruitment. • The results for the enterprise group showed that 48% of surveyed Experience of giving/ receiving gifts respondents admitted to having given gifts to public officials in the last 12 As presented in the previous section, months. The time and form of gifts 50 RESULTS given by those enterprises showed giving gifts). The proportion of some noteworthy issues (Figure 11). enterprises giving gifts was 56%. • Firstly, the possibility of actual COI This indicates that the majority of when enterprises give gifts to public enterprises consider giving gifts to servants is high. The results showed public servants as a “must”. that the vast majority of enterprises • Thirdly, gift-giving was mainly direct have given gifts in cash and/or in-kind and seen as a way to solve business to public servants (98%) recently and matters for enterprises. The survey the value of most of gifts were over data showed that nearly 90% of most VND 500,000 – the threshold amount recent gifts had been directly given allowed by law for public servants to to public officials. The purposes of receive gifts. gift-giving was mainly for solving • Secondly, there exists situations where related business matters (66%) public servants abuse power in order rather than to build relationships to be given gifts by enterprises. The (31%). Consistent with these results, survey data showed that up to 44% of the survey data also showed that total incidents of recent gift-giving by 46% of most recent gift-giving had enterprises were as a result of demand been done before or to solve business (rather than enterprises proactively matters. FIGURE 11 Enterprises’ gifts given to public officials – The most recent gift-giving MANAGING CONFLICT OF INTEREST IN THE PUBLIC SECTOR: 51 LAW AND PRACTICE IN VIETNAM Given the above findings, the next in recent gift-giving. Specifically, the question is whether enterprises are group that better understands is less behaving this way because they have likely to actively give gifts to public limited awareness of the concept employees (40% compared to 61%, and impact of COI. To somewhat respectively), is less likely to give answer this question, we compared gifts to public employees before or two groups of enterprises: one has a during solving business matters (44% good understanding of COI concepts compared to 49%, respectively) and (including 55 enterprises that have given is more likely to give gifts during Tet gifts within the past 12 months) and the and other holidays (36% compared to other has an inaccurate understanding of 32%, respectively). COI concept (including 191 enterprises that have given gifts within the past 12 The result once again indicates that months). The comparison results show while raising awareness within enterpris- several noticeable points (Figure 12): es regarding COI is an important step, it • Firstly, no matter how accurately will not eradicate COI-related gift-giving. the COI concept is understood, the The result from group discussions percentage of enterprises giving gifts with enterprises shows that gift-giving to public employees out of the total to public employees by businesses is number of enterprises for each group motivated by three factors. Firstly, giving are the same at 48%. gifts serves as a competitive weapon • Secondly, the group of enterprises with to gain favor and advantage. This often better understanding of COI concept occurs in project bids and in gaining may have behaved more “positively” project approval. The gift’s value varies than the compared group with a due to the contract or project’s value. limited understanding of COI concept “I consider public employees as my FIGURE 12 Enterprises’ giving gifts to public employees – comparison between groups 80 61 60 48 48 49 40 44 40 36 32 20 11 11 9 7 0 Having given Taking initiative Before or during After business On Tet holidays/ Regularly gifts to public business process process other holidays employees in the With poor understanding of COI concept (N=191) past 12 months With good understanding of COI concept (N=55) 52 RESULTS company’s customers. When trying to avoid discrimination and to follow the promote our products, it is a common “trend”. This form of gift-giving often practice to give gifts to customers, occurs when businesses need to undergo which helps my company stand out administrative procedures. and get customers’ attention.” “Actually I am following the trend as I see others doing so.” “The gift could be the commission that is taken from the funding that we “Many times when we haven’t given receive. If it is a long-term business gifts, things still happen, but with gifts relationship, the commission could be given, we feel more confident.” higher.” [Extracts from group discussions with Secondly, giving gifts helps develop enterprises] and maintain relationships for future businesses. Gifts for this purpose are A similar survey on gift-giving often given during Tet and other holidays and receiving was also conducted and are not related to specific business with public servant respondents but transactions. questions focused on whether they “Giving gifts is to keep in touch and knew it was clear that these gifts were maintain relationships. If the contact is ted to public servants carrying rela­ not made regularly, they may forget us.” out their work. The result shows that nearly 20% of public employees asked “Each enterprise somehow makes were well aware of incidents related to contact with one or two persons who gift-giving. It should be noted that this are related to their enterprise but not figure reflects the percentage of public necessarily direct related to their enter­ employees being aware of gifts given prise. Businesses give regular gifts to in their own workplace, which should develop the relationship as well as using be lower than the percentage of public these people to approach other people.” employees being aware of gift-giving in general (32%) in the past 12 months as Thirdly, gifts are given in order to mentioned above (Figure 13). MANAGING CONFLICT OF INTEREST IN THE PUBLIC SECTOR: 53 LAW AND PRACTICE IN VIETNAM FIGURE 13 Public employees’ gifts giving and receiving in their workplace However, forms of gift-giving and 54% before or during the process of receiving (Figure 13) under these circum­ business, and up to 62% of gift giving stance can be noteworthy as follows: was directly for business. Only • Firstly, the majority of gifts is in cash or 32% of gifts given were recognized in kind (with 79% in cash and 21% in by public employees as being for kind), while a considerable percentage maintaining relationships. of gifts are valued over VND 500,000 • Thirdly, most gifts were given by (40%) and are received (70%). These persons from other agencies (68%). results are notable, as the value of Within one’s own agency, the gifts gifts acceptable is made clear in legal were usually given by lower-level regulations. This raises the question staff to upper levels (71%). The of the effectiveness and relevance of high percentage of gifts given by current gift-taking regulations. lower-level staff (rather than by • Secondly, the purpose of gifts is upper level or same level) is worthy clearly related to solving business of concern. matters (which is likely to cause • Finally, only 6% of those who received actual COI). The survey data suggests gifts reported receiving them while less that 74% of gifts were given directly than 10% of incidents were reported rather than through a third person, by someone else who knew of it. The 54 RESULTS fact that the rate of report is low, no to be negatively affected (respectively matter how likely it is related to COI, 31% and 37% for two groups). raises concerns over implementation • Notably, there is a remarkable of current policies related to COI. percentage of public employees who know about the gift reception and Similar to the enterprise group, a assume that it is not mandatory to comparison between two groups of report (respectively 26% and 24% for public employees is conducted: one with two groups) and consider that normal a better understanding of COI concepts (respectively 21% and 22% for two and the other with a poor understanding. groups). Results from the comparison do not show much difference between these two Group discussions with public groups (Figure 14). Specifically: employees also show similar findings. • The result shows that, no matter how Specifically, public employees generally well public employees are aware of consider gift-giving and taking as a COI concepts, the rate of reporting “habit” or “custom” in the public sector, gift reception is low (respectively 9% to obtain “business results”, rather than and 10%). to show an appreciation. Some public • The major reason for such low employees state that gift rejection is reporting rate is that they do not against the trend and prompts hostility want to interfere with others’ business from colleagues. (respectively 50% and 47% for two “I give gifts because I don’t want to be groups) and do not want themselves different from others.” FIGURE 14 The reasons for not reporting on gift-giving and receiving by public employ- ees – a comparison between groups With poor understanding of COI concept (N=188) With good understanding of COI concept (N=80) 60 50 47 40 37 31 24 26 22 21 20 10 9 0 Having reported Assuming that it is Considering Not wanting to Not wanting not mandatory it normal interfere with others' themselves to be business a ected MANAGING CONFLICT OF INTEREST IN THE PUBLIC SECTOR: 55 LAW AND PRACTICE IN VIETNAM “Taking gifts has become a habit. If they don’t give gifts to Ms. Manager someone does not give gifts to me, I but to her husband or Mr. Manager’s think that person “does not know how mother. His mother will say ‘They visit to behave.” me even more often than you [Mr. Manager], without him taking me to the “If gifts are given when we are in a hospital that day, I might be dead now.’” group (for example, when a group of us go on an inspection at an enterprise), [Extracts from group discussions with later I will return the gift. If I don’t public employees] receive the gift, while others do, they will feel uneasy and think that I am like The question now is whether public this or that.” employees should be allowed to receive gifts. The question was asked of both [Extracts from group discussions with businesses and public employees and public employees] results show nearly 60% of enterprises asked agreed with allowing public Another thing to consider is that many employees to receive gifts in work, while gifts for public employees are considered the rate among public employees is a “payable debt”, due sooner or later. Some lower (34%). Notably, among businesses gifts are directly in return for a specific supporting allowing public employees to favor. Other gifts are to create a sense of a take gifts, only 23% agree with the current relationship debt, which makes receivers legal limit of 500,000 VND. (Table 2) finding it hard not to favor givers. In reality, businesses support the “Giving gifts does not necessarily mean idea of “allowing” gift-giving to public a specific connection with a project but employees so as to facilitate their generally signifies some kind of trust. It business. This result is clearly shown from means that when the gift is given, there is the group discussions with businesses. no specific benefit attached at that point, In summary, gift-giving and taking but they should remember me later.” among public servants shows signs of COI from both businesses and public “Giving gifts … has become an art. Now employees’ perspectives. Current gift- TABLE 2 Should public servants be allowed to take gifts? Public servants sample Businesses sample Not allowing gift-taking 66% 41% Allowing gift-taking 34% 59% Under VND 500,000 56% 23% 56 RESULTS giving and taking practice might be Notably, public employees have quite a a “trend” that both benefits and puts positive view on recent procurement with pressure on public employees. However, 71% thinking that (agreed or strongly current policies on gift-giving and taking agreed that) the procurement process have not effectively enabled reporting on was transparent and impartial. Only 12% COI-related incidents. and 18% respectively assumed there was “bribery” to win the contract or favoritism Experiencing situations with COI in was given to relatives. Businesses have a procurement management more negative view. The corresponding rates are 36% (transparent and impartial), Next, a question was raised for both 38% (there was “bribery”) and 50% (there enterprise and public servant groups was favoritism). to see if they are aware of procurement Findings from group discussions also activities in their agencies or in their show formally declared procurement businesses’ participation in bidding processes may be less complicated for procurement. The result shows than current actual process. Formally, 32% of public employees were aware of all procure­ ments would strictly procurement in their agencies and 18% of follow fair and transparent processes. businesses were bidding for procurement However, in less formal procurement, in the past 12 months. The result (Figure such criteria might be distorted for 15) covers three criteria for evaluation, other non-transparent purposes. Im­ which were compared directly between par­tiality in procurement process can enterprise and public servant groups. be “distorted”. FIGURE 15 Views on most recent procurement 100% 80% 12 18 36 38 50 60% 71 40% 62 57 20% 31 31 24 13 0% Public servants - Businesses - Public servants - Businesses - Public servants - Businesses - Transparent, Transparent, There was There was There was There was impartial impartial "bribery", and "bribery", and favoritism favoritism secret secret agreement agreement to win the to win the contract contract Disagree/Strongly disagree Neutral Agree/Strongly agree Do not know/ Do not respond MANAGING CONFLICT OF INTEREST IN THE PUBLIC SECTOR: 57 LAW AND PRACTICE IN VIETNAM • Firstly, the project owner can impose successful and getting nothing out of it, selection criteria that match the many businesses do not bid. That is the designated enterprise thus disqua­ reason why there is courtesy procure- lifying other bidders (although many ment bid, in which businesses only bid of these criteria do not necessarily help for the sake of appearance. They al- improve the quality of work). ready know the designated winner. The • Secondly, favored businesses might backyard enterprise’s power is huge.” have the advantage of knowing information in advance to better [Extracts from group discussions with prepare for the bid. businesses] • Thirdly, some bidders may taking part in the procurement process just to “In the construction field, direct ensure it appears competitive without procuring and collusion have been any actual influence on the result. prohibited but only formally. In most cases, contracting is agreed from the Some typical quotes illustrate this point: top level so bidding evaluation is just “...the agency calling for the bid in a for the purpose of formality.” procurement will put forward criteria that fit my company’s capacity, the “Bidders, utilizing relationships, (for influence of the senior leader of the example, inviting the project owner project is very important.” to dinner) do not receive any benefits such as the contract right away, but the “Bid-rigging happens sometimes: benefit will come later. In order to win some businesses know the criteria the contract, businesses can take care of beforehand, so if they want to win the the project owner for years.” contract, they will include additional criteria to disqualify competitors, [Extracts from group discussions with though these additional criteria do not public employees] improve the quality of the project.” In summary, public procurement management retains a lot of COI poten­ “Bidding collusion happens too. Many tial. From enterprises’ perspective, businesses win contracts although transparency is only for the formal surface they are incapable. After winning the of public procurement. COI could be contract, they resell it to my company.” hidden inside. It varies and happens even well before the bidding process. “Early disclosure, procurement ap- pointment, and inclusion of technical COI in public personnel appointment requirements are some of the tactics. and recruitment Knowledge of regulation of joint ven- tures, sub-contracting and slice and Job appointment and recruitment are procurement package bidding can be activities that have a high potential for used to legalize the bid result” COI in Vietnam. In order to get a clearer picture of this, questions are raised for “...knowing for sure that they won’t be all three groups of respondents: public 58 RESULTS servants, businesses and citizens. They or having a good connections with, a were asked to rank the importance (from competent public servant (just 17% to the most to least important) of different 20%), up to 35% of public employees were factors in current recruitment and job aware of appointment and recruitment appointment practice in public agencies. of relatives of persons in authority (see The result from the survey shows the previous section). a contrast between the public servant Besides, findings from group discus­ group and the other two. sions with businesses and public employees Specifically, according to public em- also indicate that the likelihood of COI ployees, the two most important factors in recruitment and appointment activity in recruitment and job appointments are does exist. On one hand, many public (a) formal training, and (b) ability, ex- employees thought that current reform perience and good achievement record in recruitment and appointment in the (from 81% to 91%). Meanwhile, the two civil service has brought about positive most important factors ranked by busi- change. Recruitment through formal nesses and general public are (c) being processes increases transparency and relatives or having good connections fairness and reduces cases of recruiting with a competent public servant, and (d) public employees’ relatives. Many agencies using material benefits or other benefits appoint staff using a transparent process (from 44% to 70%), in which, being rela- and open exams. Although the impact of tives or having good connections is seen such positive change takes time to show, it as the most important factor (Table 3). is still an optimistic sign. It should be noted that although the On the other hand, public employees public servant group does not highly and businesses both admitted that value the factor of being a relative of, helping relatives in the recruitment and TABLE 3 Views on the importance of different factors in recruitment and appointment Percentage agreeing first Public servants Businesses Citizens and second importance Recruit- Appoint- Recruit- Appoint- Recruit- Appoint- ment ment ment ment ment ment a) Formal training 91 81 40 38 40 36 b) Ability, experience and 82 85 41 44 44 46 good achievement record c) Being relatives or having 17 20 69 70 67 68 a good connection with a competent public servant d) Using material benefits or 9 11 47 44 46 46 other benefits e) Pleasing everyone 4 7 4 4 4 5 MANAGING CONFLICT OF INTEREST IN THE PUBLIC SECTOR: 59 LAW AND PRACTICE IN VIETNAM appointment process is still happening pressure is huge, because whether a lot in the public sector. The reasons recruiting them or not, it will be a matter vary. First, the demand for a job in a of mutual diplomatic relationships.” government agency is high. Under such circumstances, pressure is put on public “The Ministry applies a strict recruit­ employees to help relatives. Second, the ment process with high requirements. recruitment process is not completely However, they will get in the Ministry open or strictly monitored, leaving by taking the exams at local level, loopholes for manipulation. getting a job there and then being Interference within the recruitment transferred to the Ministry level. Some and appointment process can be even even do that kind of transfer process in more sophisticated. In some cases, exam a very short time, and become a leader scores are pre-arranged, even more so right after the transfer.” with interview scores. The interview score is the most difficult part to check. “Job appointments also follows certain Another way is to arrange for a relative criteria, however, these criteria have to apply for less competitive position been ‘tailor-made’ to fit designated appli­ (for example, a vacant positions at local cants, which serves as a way to legitimize level). After being recruited, the relative the appointment of applicants.” will be “transferred” to the preferred position. The third way is to use specific [Extracts from group discussions with selection criteria that qualify the public employees] intended applicant and disqualify other applicants. Thus it can be seen that COI is The following typical quotes illustrate considered to exist in recruitment and this approach: appointments. In particular, the thoughts “Some people use their relationships of the general public and businesses so they can get a job. Considering the seems very negative on this matter. current workload, one week’s work here In summary, the result from the survey in the department can take just one suggests five types of COI may appear day to handle. The question is why it in all six activities of public servants. takes so many people to handle such a However, procurement mana­­gement, small workload.” project licensing and approval, and [Extracts from group discussions with personnel recruitment and appointment businesses] are considered three activities most common to have COI. At the same time, “They are recruiting 100 new staff in gift/money giving, helping relatives the Ministry where I work, but there (in different activities such as winning are almost 500 applications. My unit procurement contracts and recruitment/ is recruiting 10 persons, but my boss appointment), and using an information said that over 100 applicants were close advantage are the three most popular types relatives of people from the Ministry. likely to involve COI. In addition, there Many others are close relatives of is a disparity in terms of the perception officials from other ministries. The on prevalence of COI situations among 60 RESULTS different groups. Our findings show Developing and implementing orga- enterprises are more likely to perceive the nizational measures prevalence of COI-related situations than that of public servants. Among public Development and implementation of servants surveyed, more of those from COI measures in each agency is critical local government perceive COI situations for managing COI. Public servants are than those from central level (excluding asked to evaluate the implementation of gift giving/receiving in procurement and six COI managing measures in their own project licensing, approval). agencies. These measures are:13 Notably, there is a considerable • Agency code of conduct and code of percentage (25% to 35%) of public ethics servants who responded knowing clearly • Dissemination of COI-related regula- of COI situations. The incidents include tions to employees cases that violate current policies. • Regular training on COI-related issues Finally, gift-giving and taking seems • Assign a focal point that provides to remain a “habit” and “trend” in public support to public servants when they servants’ workplaces. The majority of encounter COI situations businesses actively give gifts (56% recent • Measures to monitor public officials’ gift-giving) and wish to continue to allow behaviors public employees to take gifts at work • Handling of violations. (59%). This creates both the opportunity and “pressure” to receive gifts. Between 62% and 96% of agencies Related recommendations should have developed the above COI managing consider all issues related to perception, measures, depending on the situation. awareness and policies regarding the The two least used measures are “regular prevention of COI for different groups, training on COI-related issues” and including public servants, businesses and “assign a focal point that provides citizens. Evaluation of the effectiveness support to public officials when they of current policies and regulations encounter COI situations”, at 67% and regarding this issue will help shed 62% of agencies, respectively. light onto what can be expected from “All measures have already been recommended solutions. developed and/or issued. However, they aren’t used.” 5.2.3. Evaluating the effectiveness [Focus group discussion with public of enforcement of COI-related reg- officials] ulations “In my opinion, these measures [on This section addresses the development COI managing] are good, but they are and implementation of COI managing not very effectively implemented, just measures and regulations in government 30% to 40%”. agencies. It is based on survey results and [Focus group discussions with enter- factors that influence implementation prises] of regulations as part of seeking feasible Public servants were asked to give solutions for managing COI in Vietnam. their opinions on implementation of six MANAGING CONFLICT OF INTEREST IN THE PUBLIC SECTOR: 61 LAW AND PRACTICE IN VIETNAM major COI managing measures in their measures is lower than expectation. agencies. Depending on the measures, Among the developed measures, the only 36% to 73% of agencies fully one measures such as issuing the code implemented them, according to the of conduct, code of professional ethics public servants (Figure 16). and regulations on handling violations Centrally-governed cities have a were well done by all agencies. However, higher rate of full implementation than for everyday operating measures such as in other provinces in all measures, with guidance on implementation, the rate of differences ranging from 5% to 14%. implementation is lower. Agencies at ministerial level have a lower “There are plenty of regulations and rate of full implementation compared mechanisms; however who will imple- with that at local level in almost all ment them and what is the mechanism organizational measures, except the for enforcement and monitoring?” measure of “assign a focal point that provides support to public officials when [An opinion from public officials in they encounter with COI cases.” focus group discussions] The two measures on “training” and “focal point/person in charge” are the Implementation of state regulations least fully implemented overall, and only around one third of agencies in provinces The government has issued regu­ fully implemented these two measures, lations on COI management in differing according to public servants. legal documents. Unlike agency Obviously, organizational measures internal measures, these regulations are have been widely developed by agencies. mandatory. Depending on the specific However, the implementation of these measures, from 46% to 96% of the FIGURE 16 View on public agencies implementing COI managing measures (%) 80% 72 75 80% 72 68 70 70 70 71 73 70% 67 66 70% 61 62 62 60% 54 60% 56 50% 42 50% 40 42 37 40% 33 40% 37 36 31 30% 30% 20% 20% 10% 10% 0% 0% ent atio n sue s nts nce ing ent atio n sue s nts nce ing lopm emin ed is g poi veilla andl lopm emin ed is g poi veilla andl e t n r h e t n r h dev dis s rela idi or s u tion dev dis s rela idi or s u tion COI Gu avi iola COI Gu avi iola COC ation g eh V COC a tion g eh V ul inin ls’ b ul inin ls’ b Reg Tra cia Reg Tra cia O O Ministry 5 central-managed cities Provinces Locality 62 RESULTS surveyed public servants, reported that local-level agencies in all regulations sur- their agencies have implemented those veyed (Figure 18). regulations (Figure 17). The lower the level of state agencies, Two regulations, seen by the the more likely they did not comply respondents as being implemented by with these regulations. For example, most agencies include the declaration of regarding regulations on gift-taking income and making public recruitment reporting, up to 46% of public officials and promotion. Only 43% to 68% of at commune level thought that their public officials in the survey admitted agencies did not comply. This rate that their agency implemented the six is 43% at district level, and 29% and remaining measures. Particularly, 25% 6% at provincial and ministry levels, to 40% of public officials responded respectively. Obviously, implementation that their agencies did not implement and monitoring of regulations at local these six measures. This is a concerning levels are critical in the enforcement of issue as these measures are legally COI regulations. mandatory. Public servants were asked how The rate of implementing the above effectively these COI managing measures regulations is very different among the were implemented at their agencies four administrative levels. At ministerial (Figure 19). The rates of evaluating the level, the rate of agencies implementing implementation as “effective” and “very eight regulations on managing COI is effective” are from 47% to 81%. The high, ranging from 79% to 98%; while at effectiveness for gift-taking reporting local level, this rate is from 45% to 95%. regulations was the lowest, at ministry Ministry-level agencies have a consider- level (32%). ably higher rate of implementation than FIGURE 17 View on implementation of COI regulations in state agencies (%) 100% 6 12 7 7 2 1 90% 14 14 80% 70% 60% 46 53 54 57 65 68 90 96 50% 40% 30% 20% 40 33 40 32 28 25 10% 8 3 0% Do not work in Auction Report Capital Do not manage Relatives Transparency in Income and the eld after management on gifts contribution or execute recruited recruitment asset stopping while having taking of leaders/ private and and declaration working as a relative spouse companies promoted promotion manager auctioneers Yes No Do not know MANAGING CONFLICT OF INTEREST IN THE PUBLIC SECTOR: 63 LAW AND PRACTICE IN VIETNAM FIGURE 18 The differences in the rate of non-compliance with COI-related regulations at different government levels Report on gift taking 50% Do not manage or Income and asset 40% execute private declaration 30% companies 20% 10% Transparency in Do not work in the recruitment and 0% eld after stopping promotion working as a manager Relatives recruited Capital contribution and promoted of leaders/spouse Auction management while having relative auctioneers Commune District Province Ministry FIGURE 19 Assessment on the effectiveness of COI preventive measures (% responding effective and very effective) 90% 82 82 80% 78 78 76 72 69 68 70 72 70% 65 67 68 60% 53 50% 48 40% 32 30% 20% 10% 0% Report on Auction Do not Do not work in Relatives Capital Income Transparency gifts taking management manage or the eld after recruited contribution and asset in recruitment while having execute stopping and of leaders/ declaration and promotion relative private working as a promoted spouse auctioneers companies manager Ministry Locality 64 RESULTS Another considerable result was made in a way that was impossible to that the rate of implementation of those implement.” regulations was higher at ministry level. [Focus group discussions with enter- However, evaluation on effectiveness of prises] such implementation was higher at local level. This suggests that public officials The result from the survey also at local levels were more optimistic than indicates a gap in implementation and those at ministry level in viewing the effectiveness of implementation of COI effectiveness of enforcement of COI regulations between local and ministry managing regulations. level. While the rate of implementation The results from the public official was high, the effectiveness was far survey were supported in focus group behind. The question is - what factors discussions with enterprises (it should be can contribute to a good implementation noted that this question is not included of COI-related regulations? in the enterprise survey). A majority of enterprises said that there were The factors affecting implementation many regulations but they were poorly of COI regulations implemented. Public officials were asked to evaluate “Most of the government’s regulations the impact of 11 factors effecting  COI on managing COI are not implemented regulations’ implementation (Figure in practice” 20). These factors are shared in govern­ ment officials’ reports, studies, and Regulations (related to COI) were communcations materials on mass media. FIGURE 20 Factors influencing the effectiveness of COI regulations’ implementation Non strict handling 7 17 77 Leaders lacking integrity 13 18 69 Ine ective monitoring 10 24 65 Do not want to handle 13 24 63 Unclear regulations 14 24 62 Insu cient awareness 14 28 58 Low salary 16 27 57 Hardly a ected Common practices 22 24 54 A ected O ers of enterprises and citizens 19 28 53 No one in charge 17 34 49 Much a ected Culture 27 37 36 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% MANAGING CONFLICT OF INTEREST IN THE PUBLIC SECTOR: 65 LAW AND PRACTICE IN VIETNAM The overall result affirms that the similar among five centrally-governed three most important factors affecting cities and the other five provinces. How­ the implementation of COI regulations ever, there are differences among the are: public officials’’ opinions regarding the • Violations are not strictly handled; three most influential factors (Figure 21). • Leaders do not act as a good role “Leaders does not act as a role model, so models; and all regulations are merely a formality” • Inspection and monitoring have not been effectively done. “The implementation was not effective due to a lack of supervision” Cultural factors were believed to have very little impact on the implementation [Focus group discussions with public of these regulations. The result is quite officials] FIGURE 21 Factors affecting the implementation of organizational measures and regulations – Public servants’ perspective Commune District Culture Culture Common Common No people in No people in 80% practices charge 80% practices charge 60% 60% O ers of O ers of Insu cient Insu cient 40% enterprises and awareness 40% enterprises and awareness citizens 20% citizens 20% Unstrictly 0% Unstrictly 0% handling Low salary handling Low salary Unstrictly Non-integrity Unstrictly Non-integrity monitoring leaders monitoring leaders Unclear Unclear Do not want to handle regulations Do not want to handle regulations Ministry Province Culture Culture 80% No people in 80% Common No people in charge Common practices 60% charge 60% practices Insu cient O ers of 40% enterprises and Insu cient 40% O ers of awareness awareness enterprises 20% citizens 20% and citizens 0% 0% Unstrictly handling Low salary Unstrictly Low salary handling Unstrictly Non- monitoring Non-integrity leaders Unstrictly monitoring integrity Do not want to leaders Unclear regulations Unclear handle Do not want regulations to handle 66 RESULTS Public servants at lower levels are more those at ministerial level. likely to attribute poor implementation The question is - why are they unwilling to higher levels, such as leaders not to discuss and/or report COI cases. handling violations strictly, not acting as Common reasons include public a role model, and/or not closely super­ servants are reluctant to report others’ vising implementation. The fact that irregularities; they do not believe in “receiving gifts has become a habit/ unsettling those in authority; or COI common practice” has a big impact on situations directly involve people in the implementation of COI managing power. Public servants at ministry level measures and regulations, according to do not report COI cases since they do local public servants. In contrast, public not know who to report to (14%) and servants at ministerial level tend to believe cases are common practices attribute poor implementation of COI and not necessary to report (10%). managing measures and regulations to Meanwhile, public servants at local objective factors such as low wages and level avoid reporting against others, unclear regulations. disbelieve in the violation handling of “…I must say that as a public officials, leaders, and are concerned that COI my wage is not enough to pay my cases directly involve upper authority children’s school fees that is why gift- levels. This result reinforces previous taking now becomes a cultural part of findings that only few state agencies life”. have a focal point/person in charge [Focus group discussions with public to provide support on COI managing servants] measures and regulations. “Everybody knows, the managers know, 5.2.4. The attitude of public em- and so do the leaders but violations are ployees toward COI situations not handled. What happens to me if I speak out?” COI management measures and [A public official in a focus group dis- regu­lations are developed to encourage cussion] individuals to report COI situations they have recognized or witnessed. This In summary, the findings show survey explores public servants’ possible that implementation of regulations actions and reasoning when they face is still weak, especially at local level. COI situations. Important reasons include un-strict According to the survey, 87% of public handling measures, lack of role-model servants said they would be willing to leaders, and lack of effective monitoring report COI cases. 81% of public officials at mechanisms. A significant proportion ministry level said they would discuss or of public officials are reluctant to report report when seeing COI cases, compared as they are wary of being exposed to 88% of public servants at local level. against when encountering COI cases. There is still a significant percentage of In other words, regulations are issued public servants who are unwilling to but motivation and discipline in discuss or report COI cases, especially implementation are weak. Conclusion and Recommendations 6 COI refers to specific situations 6.1. Conclusion where public servants make decisions or behave in a way to benefit him/herself in civil service. The prevalence of COI 6.1.1. COI has not been perceived situations may affect the effectiveness of by public servants, enterprises state apparatus and the socio-economic and citizens as a problem in public development of each and every nation. governance COI undermines the objectivity of public resource allocation decisions and This study shows that the majority of deteriorates their effectiveness. COI is survey respondents do not understand or also among the main contributors to have a full understanding of the concept corruption. Therefore, managing and of COI. Only around 25% of respondents mitigating COI situations not only help demonstrated proper understanding improve effectiveness in performance of COI as a conflict between public of state apparatus but also strengthen servants’ personal and public interests, integrity and prevent corruption in which is derived from the public servants’ public affairs. decisions. Nevertheless, respondents This study provides initial evidence can identify situations, manifestations to support policy makers and public and negative impacts of COI on the administrators in developing a more objectivity, efficiency and effectiveness of effective mechanism to manage COI state governance. situations. This study is particularly It is notable that there was little important considering the fact that the difference between public servants, new manifesto of the 12th National enterprises and citizens in how they Congress of the Vietnam Communist understand the term “COI” and Party (2016-2021) strongly emphasizes the how they identify COI situations in importance of improving the effectiveness practice. The only difference arose in and better controlling corruption in the how they see the impact of COI on the public administration. The study is also objectivity and fairness of decisions. an important background document Specifically, enterprises and citizens saw that can inform medium-to-long-term COI as having a more negative impact institutional reform efforts of Vietnam and than public servants. Although the boosts Vietnam’s development towards a “perception” did not always match “the nation of prosperity, innovation, inclusion real experience”, the “perception” could and democracy by 2035.14 Managing COI still lead to the potential risk of losing should be seen as a priority among those trust of enterprises and citizens in public institutional reform efforts towards these servants and public administration. ambitious goals. While COI can be identified in specific 68 CONCLUSION AND RECOMMENDATIONS situations, it has not been considered a be enjoyed directly by a public servant, critical problem in public governance. or indirectly by his/her spouse, children, This leads to an inconsistent and other family members or relatives. fragmented introduction of intervention Personal interest could be realized before, to manage and mitigate COI in different during or after the managerial decisions legal documents, instead of being or conducts occur. proposed via a systematic approach. At present, concrete COI-directly- related regulations have not been 6.1.2. COI and COI management compatible or aligned with other relevant have not been officially institu- legislations. Managing COI-related tionalized in legislation in order to tions is specified in a number of situa­ improve the effectiveness of public codes15. At the same time, many other governance and anti-corruption legal documents regulate COI situations efforts and COI management. There is a lack of necessary alignment and compatibility A review of legal documents showed among legal documents to guarantee that existing legislation has not offered enfor­cement16. Those deficiencies are an official definition of COI and COI also attributed to the absence of a com­ management. They have just initially mon understanding on COI and the recognized and proposed measures for underestimation of COI as systematic handling ad hoc COI cases such as: problem in state governance. • Gift-giving and receipt (material benefits); 6.1.3. COI situations are prevalent • Making decisions and/or influencing in different forms and are likely to in favor of himself/herself, or his/her become a “common practice” in family members; public affairs • Making investments or sharing in- vestment returns with other investors; The survey shows that COI situations • Taking advantage from information are prevalent in various forms. They learned as part of his/her duty. occur in all six categories of activities conducted by public servants, most likely The absence of a concrete definition in procurement management, licensing of COI has resulted in a lack of forma­ lity and project approval, and recruitment and comprehensiveness in current COI- and appointment. The three most related regulations. From international popular forms of COI are: experience, managing COI is related (i) Gift-giving; not only to individual public servants. It (ii) Doing favors for friends or relatives; should be seen in broader relationships, (iii) Using inside information for per- including working relationships in public sonal benefit. affairs, family relationships, friendship and social relationships at large. Personal In general, the prevalence of COI interest pursued by a public servant can situations was perceived much more be tangible (i.e. assets and other valuables) seriously by businesses and citizens or intangible (i.e. spiritual value or non- than by public servants, typically in the material benefits). Personal interest could fields of procurement, recruitment and MANAGING CONFLICT OF INTEREST IN THE PUBLIC SECTOR: 69 LAW AND PRACTICE IN VIETNAM appointment. No matter what is the tools are listed as the three most import- main cause, this perception gap should ant factors undermining enforcement. be filled in order to rehabilitate trust Besides, lack of incentives for citizens of businesses and citizens in Vietnam’s and other public servants to investigate, public governance. report or disclose COI situations, and The study results show real concern weaknesses in dealing with specific COI that differing forms of COI are considered situations, remain an important cause of the “rules of the game” when interacting low effectiveness of COI management. with public servants. One of the “rules” is “Culture” was not considered of giving gifts to public servants. Businesses great influence on effectiveness of COI give gifts to public servants to create com- management. This result is aligned with petitive advantage, maintain relationship citizens and enterprises’ views that gifts and avoid “discrimination” when exposed intentionally given to public servants (as a to public administrative procedure. prevalent form of COI) are “rent-seeking” Similarly, gifts exchange among public rather than a “tradition”. “Tradition” is servants is carried out mainly for personal used as an excuse by some public servants purposes, and it has increasingly become to mask a lack of determination, integrity a “common practice”, the “norm” and and/or competence in implementing being recognized as “well behaved” in state regulations. working relationships. Such “rules of the game” or “practices” are contradictory to 6.2. Recommendations existing regulations and need to be better managed in a more effective manner. The results show COI situations have become prevalent in different 6.1.4. COI management is less sectors of the public sector. However, effective and not well aligned with management of COI and the handling anti-corruption requirements of COI violations continue to be limited. An effective COI management system is The survey shows that measures for one that can help minimize risk of COI COI prevention and management have situations in public affairs conducted by been internally developed in all state public servants (potential COI), manage agencies. However, the effectiveness and fill the “gaps” in public administration of such measures remains low due to that can create COI (inherent COI), and lack of guidance and implementation promptly detect, as well as strictly punish, support. The lower the hierarchical levels violations with COI regulations. these state agencies are, the poorer the The recommendations in this study implementation is. Similarly, many COI focuses on three groups of measures management measures required by laws to reform institutions, improve the have not been enforced. Over a quarter effectiveness of public governance and of surveyed public servants admitted prevent corruption in Vietnam. their agencies did not implement some They include: COI management regulations. (i) Raising awareness; Lenient sanction against violations, (ii) Institutional improvement; and leaders not acting as role models and lack (iii) Strengthening of enforcement of of effective monitoring and assessment COI regulations. 70 CONCLUSION AND RECOMMENDATIONS Managing COI needs to run in parallel COI cases and measures to identify, with public administrative procedure prevent and handle COI into anti- simplification, better management of corruption plans and training curricula public affairs systems, and strengthening for public servants is needed. In the long of transparency, publicity, and accoun­ term, professional training and guidance tability of public administration. on how to identify, prevent and respond Accelerating administrative procedure to COI situations need to be developed reform also helps reduce the risk of and made mandatory in recruitment, COI occurrences in practice due to the appointment of, and education and removal or minimization of direct contact training for, public servants. between public servants and citizens Similarly, prevention of, and response and enterprises. Better management of to, COI situations also need to be public affairs systems can help prevent incorporated in the Code of Conduct COI occurrences by imposing tight for business operation, which should be restrictions on public servants, including considered an integral part of the inte­ managing their assets, income and grity enhancement agenda in business performance, which makes it possible conduct. to detect and handle arising violations. Strengthening transparency, publicity 6.2.2. Improving policy and legisla- and accountability will help manage tion on COI management COI situations and reduce the risk of violations. Following these three groups Improving policy and legislation of measures, concrete recommendations remains a key factor for better managing are presented hereafter. Additionally, COI in Vietnam. This group of measures Annex 4 also presents a detailed list of includes the issuing of several new findings on COI based on this study regulations as well as amending existing and correspondingly recommended COI management regulations. solutions with references to international good practices. a. Setting COI definition and mecha- nism for COI management 6.2.1. Raising the awareness of COI It is important to adopt an agreed It is crucial to communicate and raise definition on, as well as mechanism public servants’, citizens’ and enterprises’ for preventing, detecting and handling awareness of COI. COI should be COI violations, in the legal framework perceived as a need-to-avoid issue in on public governance in Vietnam. public governance since it directly Specifically, in the coming comprehensive affects socio-economic development revision of the Law on Anti-Corruption, goals, reduces effectiveness in resource COI and COI management should be allocations, deteriorates public trust in added. Translation of COI regulations the government, and makes corruption into specific law articles in the Law on harder to control. Anti-Corruption will ensure consistency In the short term, better commu­ in understanding of COI, measures nication and incorporation of concrete applied to manage COI, and organization MANAGING CONFLICT OF INTEREST IN THE PUBLIC SECTOR: 71 LAW AND PRACTICE IN VIETNAM of law implementation, management and c. Revising regulations on gift-giving handling of violations. Articles related to and receipt COI and COI management in the Law on The study shows that regulation on Anti-Corruption need to provide: gift-taking has not been effectively • Definition of COI; implemented. Administrative reports on • Signals for identifying COI risks; anti-corruption efforts also confirm that • Principles for handling COI violations; statistics on gift-giving and receipt do • Different types of sanction applied to not accurately reflect reality. COI violations; and In order to address this shortcoming, • Process, procedure and authority for it is important to revise regulations on handling COI violations. gift-giving and receipt towards adopting framework principles to reduce COI Based on these legal articles, the risks in the public sector. It means public government and relevant agencies in servants should be fully prohibited from public administration will be responsible taking gifts in any form and at any value. for detailing and guiding implementation. Especially, for those public servants In the future, other important laws working in sectors with a high risk of related to public affairs systems and COI such as procurement, licensing, organizational arrangement will need to recruitment and appointment, or other be revised in alignment with new articles sectors that require a lot of transactions on COI management prescribed in the with citizens and enterprises such as Law on Anti-Corruption. taxation, customs, and inspection. Gift-giving and receipt may be b. Broadening the scope of applica- acceptable in some exceptional occa­ tion of COI-related regulations sions such as in diplomatic events or The survey results suggest that receptions under the names of agencies currently, only public servants are or organizations, and the gifts contain subject to COI-related regulations. mostly spiritual and cultural value. But, This is among the main causes leading it is also important to assign a focal to severe impediments in managing agency to follow-up, monitor and receive COI in practice, since public servants information and report on public servant can use other relationships to “mask” gift-giving and taking practice and specify COI situations. Therefore, apart from concrete sanctions for violations. imposing “hard” restrictions on public The study also suggests that the servants as direct subjects being governed “culture” attribute is not the primary by regulations on COI management, purpose of gift-giving and receipt in it is crucial to broaden the scope of public sector, in contrast to critics application of COI regulation to cover stating that a prohibition on gift-giving other actors having close relationship and receipt would deteriorate this with public servants, including spouses, cultural value. Therefore, it is crucial to birth children, adopted children, adopt a stricter attitude and standpoint siblings, parents and adoptive parents in developing legal regulations on (via marriage and family relationship). gift-taking and giving in public affairs 72 CONCLUSION AND RECOMMENDATIONS in order to make a critical switch in should develop a database on public perceptions and attitudes of public servants’ incomes and assets, and servants, enterprises, and citizens. utilize information extracted from that d. Managing outside employment database. The connection between and post-employment data gathered from public servants’ self-declaration of incomes and assets Built on existing regulations on and other data relevant to them and to public servants, enterprises, and other business operations (for example, for tax fields of public administration, it is purposes), will help detect and effectively recommended to continue to review and respond to COI situations. update restrictions on public servants To ensure effectiveness of the regula­ from engaging in outside and post- tions, reducing the number of public employment in accordance with the officials who are obliged to declare their nature and requirements of different incomes and assets will be essential. At sectors and professions. Although this the same time, the requirement to declare has been mentioned in the Law on Public assets and incomes needs applying to Officials and the Law on Public Employees close family members of public officials and Government Decree No.102/2007/ too. Strengthening the control system ND-CP (dated 14 June, 2007) specific over changes in public servants’ incomes restrictions in typical sectors and areas and assets will also be crucial. have not specifically instructed, causing ineffectiveness, inconsistency and a lack 6.2.3. Strengthening the capacity to of a solid base for implementation. This, manage COI and handle COI situa- in turn, affects the effectiveness of COI tions management. It is also urgent that regulations are Apart from improving policies adopted on public servant engagement and legislation on COI management, in outside public employment in order to strengthening capacity to prevent, detect ensure transparency and publicity of these and handle COI violations is critical. activities. Such regulation would also Accordingly, assigning an agency or help better manage additional income organization to act as a focal point arising from outside employment, which in managing COI needs to be taken contributes towards preventing and into consideration. The focal agency, detecting corruption effectively. Clear in coordination with the agencies in restrictions in this respect will also help charge of public servant management, ensure legitimate personal business will organize activities that help raise interests of public officials and their awareness of COI and COI management, family members. take stock of implementation and provide policy advice to strengthen regulations. e. Strengthening effectiveness of The focal agency would review, handle or assets and income management recommend solutions for handling COI- related cases and violations according to To be proactive in identifying COI their mandated authority. situations, law-implementing agencies Additionally, the development of a MANAGING CONFLICT OF INTEREST IN THE PUBLIC SECTOR: 73 LAW AND PRACTICE IN VIETNAM system that collects, provides feedback protective measures or design proper on, and responds to complaints and channels for receiving information and reflections on COI-related cases from responding to feedback and complaints. different entities, especially those from The mechanism or channels need to public servants, should be a priority for ensure that information providers are early action. free from fear of being threatened or The survey prevails that public avenged for their disclosure. Moreover, servants are reluctant to confront the intensifying checking and inspection problem or they usually assume that activities over public affairs in general and their complaints and reflections are COI management practice in particular, useless. Such an attitude and mindset is also needs to be emphasized. In this the main barrier that prevents them from regard, the oversight role of the society, reporting on COI situations. Therefore, media, civil society organizations, as well an effective mechanism should provide as businesses cannot be underestimated. References 7 CIEM (Central Institute for Economic No.78/2013/ND-CP of July 17, 2013 Management of Vietnam) and others on transparency of assets and income. (2011-2013). “Characteristics of the Vietnamese business environment: Hellman, Joel (2014). “Managing Risks in evidence from a SME survey”. 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Dataset on financial World Bank (2012). Corruption from disclosure. Prepared by the Public perspective of People, Enterprises Accountability Mechanisms Initiative and Public servants. Published by the of the World Bank Public Sector and National Political Publishing House, Governance Group. Hanoi. Notes 8 1 Vietnam 2035 - Towards Prosperity, 7 http://www.agidata.org/pam Creativity, Equity and Democracy. 8 The number of enterprises partici- 2016. pating the survey was 570, however, 2 Public servants in this study also 512 of which completed the ques- cadres and officials working in tionnaire and only these complete peoples’ councils at local levels, responses were used for analysis. and public employees working in 9 Financial disclosure covers the dec- public service delivery units. In this laration of interests, income and as- report, the terms “public servants” sets. and “public officials” are used 10 Heads of People’s Committees of interchangeably. all local levels, departments of pro- 3 World Bank; Ministry of Planning vincial-level People’s Committees, and Investment of Vietnam. (2016). ministries and equivalent bodies, Vietnam 2035: Towards Prosperity, agencies of ministries and equiva- Creativity, Equity, and Democracy. lent bodies. https://openknowledge.worldbank. 11 This question was not included in org/handle/10986/23724 the survey of citizens due to the 4 Public servants in this chapter in- need to shorten the online ques- clude also cadres and officials work- tionnaire. ing in peoples’ councils at local lev- 12 The World Bank Enterprise Surveys els, and public employees working are regularly conducted with a rep- in public service delivery units. resentative sample of an economy’s 5 The provinces, cities, and Ministries private sector. The surveys have selected for this study are also been conducted in 126 countries those selected for the 2012 Anti- so far. The latest survey for Viet- Corruption Diagnostics jointly nam was carried out in 2015. http:// conducted by the World Bank and www.enterprisesurveys.org/data/ the Government Inspectorate. exploreeconomies/2015/vietnam 6 Hai Duong was one of selected 13 These measures are based on ex- provinces to take part in the survey. isting regulations or international However, for some reason, public practices. servants in Hai Duong could not 14 Vietnam 2035: Toward Prosperity, participate in the survey and were Innovation, Equity and Democracy, replaced by ones from Thai Binh. 2016. The enterprise survey was still 15 Law on Public Officials in 2008, conducted with enterprises in Hai Law on Public Employees in 2010, Duong as planned. Law on Anti-Corruption in 2005 80 NOTES (amended and supplemented in Information Access, the Ordinance 2007 and 2012), Law on Enterprises on Protection of State Confidentials in 2014, Law on Inspection in 2010, and other legal documents regarding etc., and the documents providing internal control of information details and guidance for implemen- in government agencies) has not tation. been well developed. Specifically, 16. Such incompatibility and misalign- there is an absence of effective ment are manifested in several as- measures to manage internal pects as follow: information and enforcement when - Legislation on public servants violated. Declaration of assets and provides for what public servants income is legally compulsory and shall not do, including using duty- implemented every year; however, related information for personal there is a lack of tools to keep track gains. However, sector-related laws as over time income and wealth on such areas as procurement, flows as well as a lack of overarching business operations, and banking regulation to control incomes of and finance do not provide guidance public servants and other actors for identifying actual owners of legal in society. Similarly, regulations entity, which indeed is required base on gift-giving and receipt is for nullifying violated transactions; developed while a mechanism for - Restrictions are imposed on public implementing, monitoring and servants in order to prevent COI; dealing with violations is not yet however, measures to manage available. behavior of public servants’ spouses, 17 ‘Public servants’ in the survey with children, and especially relatives public servants include both offi- are lacking, while these actors play cials working at People’s Councils at key roles in benefit capturing for all levels and ones at public offices. public servants (in such form as 18 H= Head(s) of state; M= Ministers/ running “backyard” businesses or cabinet members; MPPC= seeking rents from duty-related Members of Provincial People’s information); Committees; MP=Members of - Similarly, legislation on public Parliament; CS= Civil Servants; servants prescribes how to manage PE= Public Employees; Close COI potentially happening from family members = parents, spouses, holding duty-related information. children and siblings; Broad family Unfortunately, legislation on members  = Close family members information management in state and other relatives. agencies (including the Law on Annexes 9 Annex 1. Detailed field survey enterprises could be members of the methods and samples Board of Directors or the Head of Planning, Logistics, Administrative, Similar to the 2012 survey, three or Accounting Departments. The groups of respondents were included in questionnaire-based survey was this survey: conducted online using the Survey - Public servants17: Public servants who Monkey tool. The study team sent participated in this survey are at all e-mails to enterprises asking them four levels: ministry, province, district to appoint appropriate persons to and commune. At ministry level, join the survey. There was a single respondents were Head of Directorate respondent per enterprise. or Department and below. Ministers - Citizens: Citizens who were 18 years or Vice Ministers were not included old or older were eligible for the survey. in the survey. At the province level, Surveys with citizens were conducted respondents were staff members up online, through VnExpress online to Department Head. Higher level newspaper. Any citizen can go online officials included representatives and answer questions. The viewpoints of the provincial People’s Councils. of the citizens do not represent the People’s Committee Chairmen or households or organizations but are Vice Chairmen were not included in simply personal opinions of their the survey. perception and experience of conflict - Enterprises: The survey was aimed of interest. The answers of those under at formally registered enterprises 18 years of age (if any) were not used whose headquarters are located in 10 in the analysis. provinces / cities. Respondents from 82 ANNEXES Features of surveys of public officials and citizens Features Public servants Citizens Total respondents 1,374 570 Average age 43 35 Female (%) 37.1 45.3 Urban (%) 79.1 8.2 Education background (%) University and post graduate (public servants)/ 87.1 45.4 Post graduate (citizens) Junior college & College (public servants)/ 12.2 49.8 College & University (citizens) Others 0.7 4.8 Location of work (%) Ward/Commune 39.2 District 39.1 Province/ City 18 Ministry/ Central 3.8 Highest position (%) Head /Deputy Head of the Department 34.6 Head /Deputy Head of the Division 26.3 Other positions 5.8 Not holding any position 33.2 MANAGING CONFLICT OF INTEREST IN THE PUBLIC SECTOR: 83 LAW AND PRACTICE IN VIETNAM Features of survey samples and Viet Nam enterprise survey Criteria Survey Viet Nam Criteria Survey Viet Nam sam­ Enterprise sam­ Enterprise ples Survey ples Survey (%) (%) (%) (%) Ownership Year of operation FDI 6.1 2.6 Under 2 yrs 6.4 27.1 State capital 1.2 0.9 From 2 to 5 yrs 36.9 35.4 100% pri- 92.8 96.5 Above 5 yrs 56.6 37.5 vate capital Scale Field/Industry Small 81.1 96.0 Industry 15.0 17.2 Medium 14.7 1.8 Trade, services 64.1 50.6 Large 4.2 2.2 Construction, 20.1 29.6 Property Others 0.8 2.7 Note: The figures of Vietnam firms in general were taken from the 2013 Enterprise Survey conducted by the GSO. BOX i Enterprise survey The survey with enterprises was conducted After three weeks, the team sent invitations online using an online survey tool, namely to another 2,000 enterprises and later called Survey Monkey. Selected enterprises for ones participating in the survey to complete the surveys are ones with name, address, the questionnaire. In the last week, the team phone number and email listed in the 2013 made phone calls to enterprises at provinces Enterprise survey carried out by the General where the number of participating enterprises Statistic Office. At first, the consultant team was less than expected, asking them to fulfill sent emails to 5,000 enterprises (that is 10 the questionnaire. After six weeks of data times the number of enterprises expected collection, the number of complete responses to respond) and then called ones which had was above expectation in nine provinces, and answered but not completed the questionnaire. Son La was the exception. 84 ANNEXES Annex 2. COI Legal Review Matrix Conflict of Interest in the Legal Framework of Vietnam COI Short Detailed Coverage18 Citation regula­tory issue I. General characteristics of the legal framework Laws Yes The Conflict of Interest H, M, Anti- regulating (COI) legal framework MPPC, Corruption Law conflict of of the Socialist Republic MP, CS, (2005, amended interest of Vietnam is laid down PE in 2007 and in several laws and their 2012); Law on implementing decrees Cadres and Civil and decisions. The laws Servants (2008); regulating COI restrictions Law on Public and disclosure are listed Employees in this citation section. (2010); Law The Anti-Corruption on Bidding Law is the one that covers (2013); Law COI prevention measures on Inspection more comprehensively. In (2010); Law addition, there are some on Enterprises laws that regulate specific (2014), Law on enforcement aspects, Audit (2014), such as the Criminal Criminal Procedure Code, the Civil Procedure Code Procedure Code, the Law (2015), the Civil on Complaint and the Law Procedure Code on Denunciation, the Law (2015). on Inspection, etc. Consti- Partial The Constitution just H, M Constitution tutional prohibits the members of (2013). requirement the Standing Committee of to avoid the National Assembly to be specified members of Government at conflict(s) the same time. of interest MANAGING CONFLICT OF INTEREST IN THE PUBLIC SECTOR: 85 LAW AND PRACTICE IN VIETNAM COI regula­ Short Detailed Coverage Citation tory issue Code of con- Yes The Code of Conduct, Rules H, M, Section 3, An- duct/ethics of Professional Ethics, MPPC, ti-Corruption Law in the Anti-Corruption MP, CS, (2005, amended in Law, establishes conflict of PE 2007 and 2012). interest restrictions for all public servants. General Yes Cadres and civil servants H, M, Articles 15 and restriction shall practice diligence, MPPC, 18, Law on Cadres on conflict of thrift, integrity, public-spir- MP, CS, and Civil Servants interest itedness and selflessness in PE (2008); Article 16, performing public duties. Law on Public Em- Cadres and civil servants ployees (2010). are prohibited to take ad- vantage of or abusing tasks and powers; using civil ser- vice-related information for self-seeking purpos- es. Public employees have the general obligations of “adopt healthy lifestyles, to be honest, industrious, thrifty, incorruptible, up- right, public-spirited and selfless” and “self-improve and self-train in profession- al ethics and code of con- duct of public employees”. Clear No Although the laws of Anti-Corrup- definition of Vietnam establish some tion Law (2005, conflict of restrictions related to amended in 2007 interest conflict of interest and and 2012); Law on require the disclosure of Cadres and Civil some private interests, Servants (2008); they do not define conflict Law on Public Em- of interest clearly and ployees (2010); Law explicitly. on Bidding (2013); Law on Organiza- tion of National 86 ANNEXES COI regula­ Short Detailed Coverage Citation tory issue Assembly (2001, amended 2007); Law on the Orga- nization of Peo- ple’s Councils and People’s Commit- tees (2003); Law on Inspection (2010); Law on Enterprises (2014); Law on Au- dit (2014), Crim- inal Procedure Code (2015), Civil Procedure Code (2015). Inclusion of Partial The legal framework of H, M, Anti-Corrup- family mem- Vietnam on conflict of MPPC, tion Law (2005, bers and interest does include MP, CS, amended in 2007 friends of pub- family members of public PE and 2012); Law on lic servants servants, but only partially Cadres and Civil and unevenly. Depending Servants (2008); on the type of conflict-of- Law on Public Em- interest issue, the family ployees (2010); Law members are not included on Bidding (2013); at all (e.g. accepting gifts), Law on Inspection close and extended family (2010); Law on members are included Enterprises (2014); (e.g. firm ownership), or Law on Audit close family members (2014), Criminal are included (e.g. doing Procedure Code business in the area (2015), Civil Proce- managed by the public dure Code (2015). servant). Friends of public servants are not included, except for those provisions on disclosure that apply to everybody (e.g. disclosure of recruitment results). MANAGING CONFLICT OF INTEREST IN THE PUBLIC SECTOR: 87 LAW AND PRACTICE IN VIETNAM COI regula­ Short Detailed Coverage Citation tory issue II. Behavior Restrictions Restrictions on Income and Assets Accepting gifts Partial Public servants cannot H, M, Article 40, Anti receive money, properties MPPC, Corruption Law or other material interests MP, CS, (2005, amended from organizations or PE in 2007 and 2012); individuals involved in Prime Minister affairs that fall under their Decision No. 64 respective management. (2007). However, the regulations on accepting gifts do not apply to spouses, children or other family members. Ownership of Yes Public servants cannot es- H, M, Article 37, Points private firms, tablish or participate in MPPC, 1 and 2, Anti-Cor- state-owned the management and ad- MP, CS, ruption Law (2005, enterprises, ministration of private en- PE, amended in 2007 and/or stock terprises, limited liability spouses and 2012); Article holdings companies, stock compa- 18, points 2d, Law nies, cooperatives, private on Enterprises hospitals and private scien- (2014). tific research institutions; and agency heads, deputy heads and their spouses cannot contribute capital to enterprises over which they directly manage. Ownership of Partial The relevant laws do not in- H, M, Article 37, Point real estate or clude a specific restriction MPPC, 1, Anti-Corrup- land on this, but there is a restric- MP, CS, tion Law (2005, tion on the use of internal PE amended in 2007 information for self-seek- and 2012) ; Article ing purposes. However, this 18, Law on Cadres restriction does not explic- and Civil Servants itly mention real estate and (2008). 88 ANNEXES COI regula­ Short Detailed Coverage Citation tory issue land  and does not cover other types of conflicts of interest that could result in the ownership of these assets. Restrictions on Business Activities Outside em- Yes Public servants cannot es- H, M, Article 37, Points ployment and tablish or participate in MPPC, 1 and 4, Anti-Cor- private firm the management and ad- MP, CS, ruption Law (2005, work ministration of private en- PE amended in 2007 terprises, limited liability and 2012); Article companies, stock compa- 18, points 2d, Law nies, cooperatives, private on Enterprises hospitals, private schools, (2014). and private scientific re- search institutions. In addition, public servants cannot act as consultants for enterprises, organiza- tions and individuals on issues related to state and work secrets, or affairs that fall under their respective settling jurisdiction. Post-employ- Yes Public servants cannot H, M, Article 37, Point 1, ment work in domains that they MPPC, Anti-Corruption previously had managed MP, Law (2005, amend- within a given period of CS, PE ed in 2007 and time after they resigned. 2012); Decree No. A Decree regulates the 102 (2007); Article periods of business-ineli- 19, Law on Cadres gibility for the various do- and Civil Servants mains. In addition, cadres (2008). and civil servants working in areas related to state secrets cannot, for at least MANAGING CONFLICT OF INTEREST IN THE PUBLIC SECTOR: 89 LAW AND PRACTICE IN VIETNAM COI regula­ Short Detailed Coverage Citation tory issue five years from their retire- ment, work for national or foreign organizations or individuals on work related to their previous branch or profession. Holding Partial The Anti-Corruption Law H, M, Article 37, Points government prohibits public servants MPPC, 4 and 5, Anti-Cor- contracts managing state enterprises MP, CS, ruption Law (2005, to conclude contracts with PE, amended in 2007 businesses of their close family and 2012); Articles family members. It also members 17, 75, 78 and 89, prohibits heads and depu- Law on Bidding ty-heads of agencies to let (2013). their close family mem- bers “do business” in the areas they directly manage. The Bidding Law prohibits public servants involved in procurement to participate in the tendering activities managed by the public ser- vant. It also prohibits public servants involved in pro- curement to participate in the process of selection of bidders for bidding packag- es in which their extended family members participate. Neither the Anti-Corrup- tion Law nor the Bidding Law contain any explicit restriction on holding gov- ernment contracts appli- cable to public servants in general. 90 ANNEXES COI regula­ Short Detailed Coverage Citation tory issue NGO or labor No This restriction is not co­ Section 3, An- union member- vered in the relevant laws. ti-Corruption Law ship (2005, amended in 2007 and 2012); Law on Cadres and Civil Servants (2008); Law on Public Employees (2010). Restrictions on Public Office Mandate Simultaneous- Partial While a Member of Gov- H, M, Article 90, Con- ly holding a ernment cannot at the same MPPC stitution (2013); policy-making time be a member of the Article 6, Point 3, position and a Standing Committee of the Law on Organi- policy-execu- National Assembly, there is zation of National tion position, no restriction on holding Assembly (2001, or two distinct other policy-making or pol- amended 2007); policy-making icy-executing positions e.g. Article 52, Law on positions deputy of National Assem- the Organization of bly (NA). While a Member People’s Councils of People’s Committees can- and People’s Com- not concurrently be a mem- mittees (2003). ber of the Standing Bodies of the People’s Councils at the same level, there is no restriction on holding oth- er policy-making or poli- cy-executing positions e.g. deputy of People’s Councils. Simultaneous- No The relevant legislation does Constitution (2013); ly playing a not include this restriction, Law on the Or- policy-execu- for example, a member of ganization of the tion role and an the government can con- National Assembly oversight role currently be a member of (2001, amended the National Assembly. 2007); Law on the Organization of Government (2001); MANAGING CONFLICT OF INTEREST IN THE PUBLIC SECTOR: 91 LAW AND PRACTICE IN VIETNAM COI regula­ Short Detailed Coverage Citation tory issue Law on the Orga- nization of People’s Councils and Peo- ple’s Committees (2003); Anti-Cor- ruption Law (2005, amended in 2007 and 2012); Law on Cadres and Civil Servants (2008); Law on Public Em- ployees (2010). Assisting family Partial The Anti-Corruption Law H, M, Article 37, Points or friends in prohibits heads and dep- MPPC, 3 and 5, Anti-Cor- obtaining em- uty-heads of agencies, or- CS, PE, ruption Law (2005, ployment in the ganizations and units to close amended in 2007 public sector arrange their close family family and 2012). members to hold certain members positions or conduct cer- tain tasks in their agencies, organizations or units. In addition, the Law stipulates that public servants manag- ing state enterprises cannot arrange their close family members to hold certain positions or conduct cer- tain tasks in their enterpris- es. These restrictions have a limited coverage. Public servants (and family mem- bers of public servants) who do not manage state enter- prises or do not hold head or deputy head positions are not covered by the re- strictions. The restrictions do not cover the extended family members and other 92 ANNEXES COI regula­ Short Detailed Coverage Citation tory issue persons such as friends of public servants, either. Moreover, the restrictions do not capture the possi- bility that the arrangement of employment for family members is delegated from a superior public servant to his/her subordinated public servant, from a subordinat- ed public servant to his/her superior/friend public ser- vant, or from a public ser- vant to his/her friend public servant in another agency, organization, unit or state enterprise. Assisting (busi- Yes The Anti-Corruption Law H, M, Article 37, Point 5, nesses of) fam- prohibits public servants MPPC, Anti-Corruption ily or friends managing state enterprises CS, PE, Law (2005, amen­ in obtaining to conclude contracts with extended ded in 2007 and a government businesses owned by their family 2012). contract close family members. It members also prohibits heads and deputy-heads of agencies to let their close family mem- bers “do business” in the areas they directly manage. As in the case of the restric- tions on assisting family in obtaining employment, these restrictions have a limited coverage. The Law on Bidding addresses some of the coverage gaps of the Law on Anti-Corruption. The Law on Bidding pro- hibits all public servants in- volved in procurement (i.e. MANAGING CONFLICT OF INTEREST IN THE PUBLIC SECTOR: 93 LAW AND PRACTICE IN VIETNAM COI regula­ Short Detailed Coverage Citation tory issue heads and individuals of the bid solicitor and the invest- ment owner) from directly participating in the selec- tion of a bidder for bidding packages in which their extended family members participate (i.e. parent, par- ent-in-law, spouse, natural child, adopted child, son- in-law, daughter-in-law, sibling). Importantly, the Law on Bidding requires all bid solicitors and evaluat- ing organizations to “ensure honesty, objectivity and im- partiality throughout the process of tendering” and mandates the bidding can- cellation for violating cases. Participating in Partial Circular No. 05/2014/TT- CS, PE Article 9, Circular official deci- TTCP dated October 16, No. 05/2011/TT- sion-making 2014 requires that the leader TTCP; the Law on processes that and members of inspection Inspection (2010); affect private teams should not have par- the Law on Audit interests ents; parents-in-law; spou­ (2015); Articles 16, ses, biological children; 75 and 87, Civil son-in-law or daughter- Procedure Code in-law, brother, biological (2015); Articles siblings among the subject 21, 67, 72, 53, the of inspection or possessing Criminal Proce- a close relationship with dure Code (2015); the subject of inspection, Article 28, Law on to ensure the objectivity of State Audit (2014). inspection; the Civil Proce- dure Code provides regu- lations to ensure impartial- ity and objectivity in civil proceedings; the Criminal 94 ANNEXES COI regula­ Short Detailed Coverage Citation tory issue Procedure Code provides regulations to ensure the impartiality and objectivity of the stakeholders includ- ing defense counsel, the judge, the witnesses in the process of conducting legal proceedings; the Law on Audit requires that the audit team members should not have capital contribution or economic benefit in the audited agencies, or have family relationships with the head, the chief accoun- tant or the person in charge of the audited agencies. III. Disclosure Requirements Gifts Partial Accepted gifts must be dis- H, M, Articles 9-12, closed internally only i.e. to MPPC, Prime Minister the agency or unit of the con- MP, Decision No.64 cerned public servant. Public CS, PE (2007). disclosure is not required. The regulations do not apply to spouses, children or other family members. Assets, lia- Partial External publicity is not H, M, Article 46a, An- bilities and required. The disclosure of MPPC, ti-Corruption Law income the declarations of assets MP, (2005, amended and income must be done CS, PE, in 2007 and 2012); one of the following man- spouses Articles 13 and ners, to be decided by the and 14, Decree No. 78 head of the organization or children (2013). unit: (a) posting them at the office of the organization or unit; or (b) announcing them at internal meetings. MANAGING CONFLICT OF INTEREST IN THE PUBLIC SECTOR: 95 LAW AND PRACTICE IN VIETNAM COI regula­ Short Detailed Coverage Citation tory issue The disclosed declarations must include the assets and income of spouses and un- derage children. Outside em- No The disclosure of this is not Anti-Corrup- ployment required in the relevant tion Law (2005, laws. amended in 2007 and 2012); Law on Cadres and Civil Servants (2008); Law on Public Em- ployees (2010). Previous em- No The disclosure of this not Anti-Corrup- ployment required in the relevant tion Law (2005, laws. amended in 2007 and 2012); Law on Cadres and Civil Servants (2008); Law on Public Employees (2010); Decree No. 102 (2007). Recruitment Partial The Anti-Corruption Law H, M, Article 30, An- and promotion mandates transparency and MPPC, ti-Corruption Law of civil servants publicity in the recruitment, MP, CS, (2005, amended and public promotion and appoint- PE, all in 2007 and 2012); employees ment of cadres, civil ser- appli- Art. 17 and 34, vants and public employees. cants Decree No. 24 Decrees No. 24 and 29, ap- (2010); Art. 17 and plicable to civil servants and 31, Decree No. 29 public employees, respec- (2012). tively, require the public posting of recruitment re- sults, but promotion results are just required to be inter- nally notified. Importantly, there is no requirement of 96 ANNEXES COI regula­ Short Detailed Coverage Citation tory issue transparency of the deci- sion-making processes e.g. rating obtained by each ap- plicant, reasons for selection and rejection, handling of complaints from applicants. Recruitment Partial The Anti-Corruption Law H, M, Article 18, An- and promotion has some important re- MPPC, ti-Corruption Law in state enter- quirements on transparency MP, CS, (2005, amended in prises and publicity for state en- PE, 2007 and 2012). terprises. For example, the all Law mandates to publicize appli- “the appointment of leading cants and managerial positions in state enterprises” and the “full name, duty, salary and other incomes of persons in Members’ Council, Board of Directors, Director General, Deputy Director General, Director, Deputy Director, Controllers, Chief accoun- tant”. However, there is no requirement of transparen- cy of decision-making pro- cesses e.g. rating obtained by each applicant, reasons for selection and rejection, handling of complaints from applicants. Bidding Partial Both the Anti-Corruption H, M, Article 13, An- activities and Bidding Laws have MPPC, ti-Corruption Law strict requirements on pub- MP, CS, (2005, amended licity of bidding activities PE, all in 2007 and 2012); and their results. Notices of bidders Article 8, Law on invitation, short lists of bid- Bidding (2013). ders, and results of contract selection are required to be MANAGING CONFLICT OF INTEREST IN THE PUBLIC SECTOR: 97 LAW AND PRACTICE IN VIETNAM COI regula­ Short Detailed Coverage Citation tory issue disclosed. Although some transparency of some de- cision-making processes is required (e.g. information on the individuals/orga- nizations violating regula- tions, information on the handling of violations), other key aspects of the de- cision-making process are not required to be publi- cized e.g. reasons for selec- tion and rejection. IV. Monitoring, Oversight, and Sanctions Enforcement Yes The institutional set-up for H, M, Chapter V, An- body for COI the enforcement is specified, MPPC, ti-Corruption Law restrictions is but there are multiple bodies MP, (2005, amended specified involved and none of them CS, PE in 2007 and 2012); is specialized on conflict of Articles 74-75, Law interest or ethics. The en- on Cadres and Civil forcement of the anti-cor- Servants (2008); ruption regulations (includ- Article 87, Law on ing the COI restrictions) is Bidding (2013). the responsibility of multiple bodies: Government Inspec- torate, State Audit, Ministry of Public Security, Ministry of Defense, Supreme People’s Procuracy, Supreme People’s Court, National Assembly and People’s Councils. The performance of tasks and exercise of powers by cadres and civil servants (includ- ing the provisions on ethics) are enforced by the inspec- torates of all levels, and the specialized inspectorate of 98 ANNEXES COI regula­ Short Detailed Coverage Citation tory issue the Ministry of Home Affairs and provincial Departments of Home Affairs. The banned acts in bidding (including COI acts) are enforced by the Public Procurement Agen- cy’s Inspectorate. Enforcement Yes State inspection, oversight H, M, Article 32, Decree body for disclo- and audit agencies have the MPPC, No. 78 (2013); sure of private responsibility to detect vio- MP, CS, Article 17, Prime interests is lations of the provisions on PE Minister Decision specified gifts. The responsibility to No.64 (2007); provide instructions, urge, Chapter V, An- inspect, and recapitulate the ti-Corruption Law provisions on transparency (2005, amended of assets and income is as- in 2007 and 2012); signed to different bodies or Article 87, Law on authorities, depending on Bidding (2013). the agency, organization or unit of the public servant. Ministers, ministerial agen- cies, Governmental agen- cies, People’s Committees of central-affiliated cities and provinces are responsible of the overall guidance and en- forcement of the provisions on transparency of income and assets. The enforcement of the disclosure of the re- sults of recruitment, pro- motion, and bidding pro- cess is the responsibility of the various anti-corruption bodies specified in chapter V of the Anti-Corruption Law and the Public Pro- curement Agency’s Inspec- torate. MANAGING CONFLICT OF INTEREST IN THE PUBLIC SECTOR: 99 LAW AND PRACTICE IN VIETNAM COI regula­ Short Detailed Coverage Citation tory issue Mechanism Partial Either limited or no mech- H, M, Articles 47 and to investigate anisms are specified to in- MPPC, 47a, Anti-Corrup- conflicts of in- vestigate improper conduct MP, CS, tion Law (2005, terest based on based on the disclosed in- PE amended in 2007 the disclosed formation on private inter- and 2012); Chapter information ests. In the case of assets and 4, Decree No. 78 income, there is a process (2013); Articles of verification of the decla- 13, Prime Minister rations that starts with cer- Decision No.64 tain denunciations, requests (2007). or presumption grounds, but investigations based on anonymous denunciations and proactive investigations of selected declarations are not contemplated. As far as gifts are concerned, there is not a clear mechanism. It is only required that gift-dis- posing agencies and units notify the agencies and units managing gift-givers “for consideration and handling thereof ”. Similarly, there is no specified mechanism for using the disclosed in- formation on recruitment, promotion, and bidding process to investigate and detect improper conduct. Public over- Yes The Anti-Corruption Law sight includes the role of soci- ety (citizens, enterprises, mass-organizations, profes- sional organizations, peo- ple’s inspections boards, press) in supervising the observance of the An- ti-Corruption Law (includ- 100 ANNEXES COI regula­ Short Detailed Coverage Citation tory issue ing the COI restrictions and H, M, Chapter VI, An- the provisions on disclo- MPPC, ti-Corruption Law sure), and detecting and de- MP, CS, (2005, amended nouncing corruption acts. PE in 2007 and 2012); The Vietnam Fatherland Decree No. 47 Front and associate organi- (2007); Chapter zations must supervise the 6, Decree No. 59 implementation of the reg- (2013); Article ulations on transparency of 33, Decree No. 78 income and assets. (2013). Complaints and Partial While there is a system in H, M, Articles 7, 8, 11 denunciations place for complaints and MPPC, and 17-23, Law on system denunciations on corrup- MP, CS, Complaints (2011); tion acts and violations of PE Articles 19, 20 and the anti-corruption law, 31, Law on Denun- the current system has ciations (2011); two major drawbacks to Chapter 3, Section be effective in the denun- 3, Anti-Corrup- ciation of COI cases: (1) tion Law (2005, the full name and address amended in 2007 of the complainant or de- and 2012); Chapter nunciator are always re- 6, Decree No. 59 quired, and otherwise the (2013). complaint or denunciation may be rejected; (2) when the heads of government agencies or organizations are involved in the first settlement, then the im- partiality of the settlement is not gua­­ranteed. Anon- ymous  de­­nun­ciations “of corruption” that are “clear and provide concrete ev- idence and grounds for investigation” are the only explicit exception to point (1). MANAGING CONFLICT OF INTEREST IN THE PUBLIC SECTOR: 101 LAW AND PRACTICE IN VIETNAM COI regula­ Short Detailed Coverage Citation tory issue Fines are Yes According to the Penal H, M, Articles 281, 282 stipulated for Code, public servants who MPPC, and 283, Penal violations of abuse their powers and/or MP, CS, Code (1999, COI regula- positions (including COI) PE amended in 2009); tions restricting may be fined. According to Articles 68-69, An- behavior the Anti-Corruption Law, ti-Corruption Law persons who commit acts of (2005, amended in corruption or acts violating 2007 and 2012). the provisions of the An- ti-Corruption Law (includ- ing the COI provisions) are subject to disciplinary or criminal handling. Administrative Yes According to the Penal H, M, Articles 281, 282 sanctions are Code, public officials who MPPC, and 283, Penal stipulated for abuse their powers and/or MP, CS, Code (1999, violations of positions (including COI) PE amended in 2009); COI regula- must be banned from hold- Articles 68-69 and tions restricting ing certain posts from one to 53a, Anti-Corrup- behavior five years. According to the tion Law (2005, Anti-Corruption Law (An- amended in 2007 ti-Corruption Law), persons and 2012). who commit acts of corrup- tion or acts violating the provisions of the Anti-Cor- ruption Law (including the COI provisions) are subject to disciplinary or criminal handling. Temporary work suspension or temporary transfer to other positions will be applied to cadres, civil servants and public employees being presumed of having acts violating law related to corruption. Accor­ding to the Law on Cadres and Civil Servants 102 ANNEXES COI regula­ Short Detailed Coverage Citation tory issue (CCS Law), cadres and civ- Articles 78 and il servants who violate the 79, Law on Cadres CCS Law (including the and Civil Servants COI provisions) are, de- (2008). pending on the nature and seriousness of violation, subject to one of the follow- ing disciplinary forms: rep- rimand, caution, salary re- duction, demotion, removal from office and sack. Under both the CCS Law and An- ti-Corruption Law, public officials committing a crim- inal offense and sentenced by court will be sacked. Penal sanctions Yes According to the Penal H, M, Articles 281, 282 are stipulated Code, public officials MPPC, and 283, Penal Code for violations who abuse their positions MP, CS, (1999, amended in of COI regula- (including conflict of PE 2009); Articles 68- tions restricting interest violations) must 69, Anti-Corruption behavior be banned from holding Law (2005, amended certain posts from one to in 2007 and 2012). five years. According to the Anti-Corruption Law, persons who commit acts of corruption or acts violating the provisions of the Anti- Corruption Law (including the COI provisions) are subject to disciplinary or criminal handling. MANAGING CONFLICT OF INTEREST IN THE PUBLIC SECTOR: 103 LAW AND PRACTICE IN VIETNAM COI regula­ Short Detailed Coverage Citation tory issue Sanctions are Yes According to the Anti-Cor- H, M, Articles 68-69, An- stipulated for ruption Law, persons who MPPC, ti-Corruption Law violations of commit acts violating the MP, CS, (2005, amended the regulations provisions of the Anti-Cor- PE in 2007 and 2012); on disclosure of ruption Law (including the Article 28, Decree private interests provisions on transparency No. 78 (2013); Arti- and publicity) are subject cle 19, Decision No. to disciplinary or crimi- 64 (2007). nal handling. According to Decree No. 78 on transpar- ency of income and assets, disciplinary actions (repri- mand, warning or heavier penalties) will be imposed to persons responsible for late disclosure of income and assets declarations. Ac- cording to Decision No. 64 on gift giving, receipt and hand-over, agencies, units, cadres, civil servants and public employees that re- ceive gifts in contravention of regulations, fail to report or make untruthful report shall, depending on the na- ture and severity of their violations, be handled ac- cording to law. V. Other measures to prevent conflicts of interest Individual re- Partial The relevant legal frame- Anti-Corrup- sponsibility for work does not specify the tion Law (2005, identifying and responsibility of public ser- amended in 2007 resolving COI vants for identifying and re- and 2012); Law on situations solving COI situations. The Cadres and Civil only responsibility that is Servants (2008); legally specified with regard Law onPublic Em- to private interests is to an- ployees (2010); 104 ANNEXES COI regula­ Short Detailed Coverage Citation tory issue nually declare income and Articles 7 and 10 assets, which shall be used of Decree No. 78 “for serving recruitment, (2013). appointment and dismissal of public servants”. Howev- er, the information of such declarations is not related to whether it conflicts with public duties. Moreover, the identification and dec- laration of other important private interests that poten- tially conflict with public duties is not regulated. Procedures for No The relevant legal frame- Anti-Corruption resolving COI work does not specify the Law (2005, amended situations procedures for resolving in 2007 and 2012); conflicts of interest situa- Law on Cadres and tions. Civil Servants (2008); Law on Public Em- ployees (2010). Institutional No The relevant legal frame- Anti-Corruption responsibili- work does not specify an Law (2005, amended ties for advis- individual or agency tasked in 2007 and 2012); ing on COI with providing guidance Law on Cadres and situations on conflict of interest situ- Civil Servants (2008); ations. Law on Public Em- ployees (2010). * H= Head(s) of state; M= Ministers/cabinet members; MPPC= Members of Provincial People’s Committees; MP=Members of Parliament ; CS= Civil Servants; PE= Public Employees; Close family members = parents, spouses, children and siblings; Broad family members = Close family members and other relatives. MANAGING CONFLICT OF INTEREST IN THE PUBLIC SECTOR: 105 LAW AND PRACTICE IN VIETNAM Annex 3. Experience from OECD and transition countries on managing COI Understanding how other countries, bear relevance to the current context both OECD and transition ones have of Vietnam. An effective conflict of addressed and managed conflict of interest system will be based on shared interest in their public sector is important expectations of what constitutes conflict for Vietnam in the development and of interest, the structure of relevant implementation of a conflict of interest government institutions, and the state’s management system. What follows is capacity to monitor the private interests selected examples of how countries have of public officials. dealt with pertinent COI aspects that 106 ANNEXES BOX i Examples of constitutional requirements to avoid conflicts of interest Constitution of the Czech Republic property and scientific, pedagogical, literary or Members of Government may not engage in ac- artistic activity. tivities, which are by their nature incompatible If the President elect is a Member of Parlia- with the performance of a Minister’s duties. ment, a Member of Government of the Slovak Republic, a judge, a public prosecutor, a mem- The office of Deputy or Senator is incompatible ber of the armed forces or the armed corps, or with holding the office of the President of the Re- a member of the Supreme Audit Office of the public, the office of judge, and with other offices Slovak Republic, he or she shall discontinue to to be designated by statute. Deputy or Senator’s perform his/her previous function on the day of mandate shall lapse on the day she/he assumes the election. The President shall hold no other the office of President of the Czech Republic, paid position in any profession, business and the office of judge, or other offices incompatible shall not be a member of executive board of a with the office of Deputy or Senator. A Deputy legal entity conducting entrepreneurial activity. or Senator’s mandate shall lapse when an incom- patibility of offices of a Deputy or a Senator and The offices of judge of the Constitutional Court President of the Czech Republic arises. and judge are incompatible with any other function in public administration or civil ser- The office of a judge is incompatible with that vice. The office of a judge of the Constitutional of the President of the Republic, a Member of Court is incompatible with that of the Member Parliament, as well as with any other function of Parliament and member of the Government. in public administration; a statute shall specify which further activities are incompatible with A Public Defender of Rights cannot be a mem- the discharge of judicial duties. ber of a political party or movement. Constitution of the Slovak Republic Constitution of Croatia The discharge of the post of a Member of Go­ The Prime Minister and the members of the vernment shall be incompatible with discharge Government may not perform any other public of a Member of Parliament’s mandate, or professional duty without consent of the Gov- with discharge of a post in another public ernment. authority, with public service relationship, with employment or with a similar labor relation, with The President of the Republic shall not perform an entrepreneurial activity, with membership any other public or professional duty. Once in governing or control body of a legal person, elected, the President of the Republic shall re- which pursues an entrepreneurial activity or sign from membership in any political party and with another economic or gainful activities shall notify the Croatian Parliament thereof. apart from the administration of his or her own Source: Public Accountability Mechanisms (PAM) database, World Bank (2012). MANAGING CONFLICT OF INTEREST IN THE PUBLIC SECTOR: 107 LAW AND PRACTICE IN VIETNAM BOX ii Definition of conflict of interest in the OECD Guidelines Historically, defining the term conflict of A “potential conflict of interest” arises where interest has been the subject of many and a public official has private interests which are varying approaches. As all public officials have such that a conflict of interest would arise if the legitimate interests which arise out of their official were to become involved in relevant (i.e. capacity as private citizens, conflicts of interest conflicting) official responsibilities in the future. cannot simply be avoided or prohibited, and must be defined, identified, and managed. The Where a private interest has in fact compromised OECD Guidelines adopt a definitional approach the proper performance of a public official’s which is deliberately simple and practical to duties, that specific situation is better regarded assist effective identification and management as an instance of misconduct or abuse of office, of conflict situations, as follows: or even an instance of corruption, rather than as a conflict of interest. A “conflict of interest” involves a conflict between the public duty and private interests In this definition, “private interests” are not of a public official, in which the public official limited to financial or pecuniary interests, has private-capacity interests which could or those interests which generate a direct improperly influence the performance of their personal benefit to the public official. A conflict official duties and responsibilities. of interest may involve otherwise legitimate private-capacity activity, personal affiliations Defined in this way, conflict of interest has the and associations, and family interests, if those same meaning as “actual conflict of interest”. interests could reasonably be considered likely to A conflict-of-interest situation can thus be influence improperly the official’s performance current, or it may be found to have existed at of their duties. A special case is constituted by some time in the past. By contrast, an “apparent the matter of post-public office employment conflict of interest” can be said to exist where it for a public official: the negotiation of future appears that a public official’s private interests employment by a public official prior to leaving could improperly influence the performance public office is widely regarded as a conflict-of- of their duties but this is not in fact the case. interest situation. Source: OECD (2003), “Managing Conflict of Interest in the Public Service: OECD Guidelines and Country Experiences”. 108 ANNEXES BOX iii Definition of conflict of interest in the “Act on the Prevention of Conflict of Interest” of Croatia Article 1 (1) This Act regulates the prevention of conflict to strengthen the trust of citizens in bodies between private and public interest in the vested with public authority. exercise of public office. It also regulates the parties that are bound to proceed Article 2 according to the provisions of this Act, (1) When exercising public office, officials the obligation to submit the declaration of may not put their private interest above the assets and the content of the declaration public interest. of assets, the procedure of checking the (2) Conflict of interest arises when the private data in such declarations, the duration of interests of officials are contrary to the pub- the obligations referred to in this Act, the lic interest, and particularly in cases: election, composition and competence of - Where the private interest of an the Commission of Conflict of Interest, official affects his or her impartiality in and other issues of importance for the exercising public office, or prevention of conflict of interest. - Where there is a founded opinion that (2) The purpose of this Act is to prevent conflict the private interest of an official affects of interest in the exercise of public office, to his or her impartiality in exercising prevent private matters from influencing public office, or decision-making in exercising public office, - Where the private interest of an official to strengthen integrity, objectivity and may affect his or her impartiality in transparency in exercising public office, and exercising public office. Source: Croatia’s Act on the Prevention of Conflict of Interest (2011). MANAGING CONFLICT OF INTEREST IN THE PUBLIC SECTOR: 109 LAW AND PRACTICE IN VIETNAM BOX iv Definition of conflict of interest in Poland In Poland, a number of legal documents define sentative is connected to the employee in such a conflict-of-interest situations. way as specified above also consists a conflict-of interest situation. The Administrative Procedures Code specifies genuine and potential conflicts of interests, and Moreover, in other cases not listed above but contains provisions on the exclusion of employ- the mere probability of circumstances could ees or administrative bodies from procedures in raise doubts in the neutrality of an employee, order to avoid such conflicts. Genuine conflict of a perceived conflict-of-interest situation exists, interest occurs when: and the Code requires the exclusion of the • An official is in such legal relationship that employee involved from the procedures. the result of the case could have an effect on his/her rights and duties. Other legal documents define conflict of • The party is the official’s spouse, relative or interest in specific areas. This is the case, kin to the second degree. for example, of the Civil Service Act, which • The party is tied to the official by adoption, defines conflicts of interest related to outside guardianship or wardship. employment and business activities of civil servants, and the Public Procurement Act, In addition, such situations when an employee is which defines conflicts of interest related to a representative of one of the parties or a repre- procurement procedures. Source: OECD (2003). “Managing Conflict of Interest in the Public Service: OECD Guidelines and Country Experiences”, Annex 1. BOX v Croatia: legal provisions on receiving gifts Article 11 of Croatia’s Act on the Prevention (3) An official may keep a gift whose value is of Conflicts of Interest regulates gift receiving symbolic and if it does not exceed the value with simple and clear legal provisions on what of HRK 500 from the same giver. constitutes a gift and what gifts can be kept. (4) An official may not accept the gift referred These are the specific provisions: to in paragraph 3 of this Article if it comes (1) Within the meaning of this Act, a gift shall in the form of money, regardless of the mean money, items regardless of their amount, or in the form of a security or value, rights and services provided without precious metal. compensation, which bring an official (5) Gifts that are received as part of protocol or might bring him or her into a state of and which exceed the amount of HRK dependency or which create an obligation 500, and other gifts that the official does towards the giver. not keep when entitled to do so, shall (2) Within the meaning of this Act, usual gifts come into the ownership of the Republic between family members or relatives, and of Croatia. state and international acknowledgements, (6) The Government shall prescribe by regula- decorations and awards shall not be consid- tion the manner of dealing with gifts which ered as gifts. are not of symbolic value. Source: Croatia’s Act on the Prevention of Conflict of Interest (2011). 110 ANNEXES BOX vi Legal provisions on gift-taking in Singapore If a public official is presented with a gift, they must or if the value of it is under $50, he/she may reject it outright. If they are presented with a gift keep the gift without payment. If the Permanent from a visiting dignitary, they are to accept the gift Secretary believes that the gift is of interest to and then surrender it to the head of their depart- the government, then the gift may be displayed ment. The value of the gift will be assessed and the or used officially in the Minister’s premises. The official may pay for it if they wish to keep it. same rules apply for when gifts are exchanged during official visits. If the Minister or his/her Ministers are also required to refuse and return spouse or child receives a gift they may have it all gifts. If it is believed that returning the gift will evaluated or may have it displayed in his/her cause an offense to the donor, then the Minister premises. If the Minister wishes to reciprocate is required to turn the gift over to the Permanent with a gift, the Minister may purchase one at the Secretary of the Minister’s Ministry for disposal. Government’s expense. If the Minister wishes to purchase the gift, an evaluation of it must be performed, after which The evaluator of all gifts is the Accountant-Gen- the Minister may purchase it at its cash value, eral of Singapore. Source: Deployment for Democratic Development (DDD) global program of the Institute of Public Administration of Canada (IPAC), Conflicts of Interest and Ethics in Government. Briefing Note: Singapore”. BOX vii South Korea’s Code of Conduct for Public Officials The Code of Conduct for Public Officials of and other financial instruments by using infor- South Korea sets several behavioral standards mation he or she obtained in the course of per- for public officials in situations involving a forming his or her public duties; nor shall he or strong possibility of conflicts between public she give such information to any other person in and private interests in performing their official order to help them make such financial transac- duties. These are a few examples of the behavior- tions or investment. al standards: Restriction of receiving money and other valu- Recusation for conflicts of interest: When a pub- ables: A public official shall not receive money, lic official should consider it difficult to perform valuables, real estate, gifts or gifts of entertain- his or her duties in a fair manner because they ment, including from a duty-related public offi- are related to his or her own private interest, the cial and from an individual who was a duty-re- public official shall consult the immediate senior lated party or a duty-related public official in official or the Code of Conduct Officer about connection with his or her current public duties. avoiding such duty. A public official shall prevent his/her spouse or lineal ascendants/descendants from receiving Restriction on the use of duty-related informa- money or other valuables that are also prohib- tion for financial transactions: A public offi- ited for public officials. The above-mentioned cial shall not involve in transactions of or make provisions do not apply to the following items: investment in marketable securities, real estate • Money or other articles provided by a lawful MANAGING CONFLICT OF INTEREST IN THE PUBLIC SECTOR: 111 LAW AND PRACTICE IN VIETNAM ground of claim such as the payment of debt; • Money or other valuables provided to a • Foods or convenience provided within the public official to facilitate the performance of scope of conventional practices; his or her duties within the limit set by the • Transportation, accommodation or foods Agency Head. uniformly provided by a sponsor to all par- • A small gift is offered according to common ticipants in an official event related to duties; practices; • Souvenirs or promotional goods distributed • A friendly society publicly offers money or to many and unspecified persons; other valuables; • Money or other valuables publicly • A superior public official offers money or provided to a public official in need who other valuables to his or her subordinates is afflicted with a disease or suffers other to promote their morale or to console, kind of disaster; encourage or reward them. Source: South Korea’s Code of Conduct for Public Officials (2008); Gae Ok Park (2007), “Korea’s Policies and Instruments to Manage Conflicts of Interest”, paper submit- ted to the 5th Regional Seminar of the ADB/OECD Anti-Corruption Initiative, Jakarta, 6-7 August 2007. BOX viii Examples of restrictions on holding government contracts General restrictions unless the civil servant has fully disclosed the Czech Republic: Public officials may not be measure of his/her interest in the contract and engaged in business or any other gainful activity senior management has given permission. (Civil in general. (Conflict of Interests Act, 2006) Servant Management Code, 2010) United States: Public officials are prohibited Croatia: The business entity in which an from participating in any matter which will official has 0.5% or more part ownership have a direct and predictable effect on their (company capital) cannot enter into a business financial interests. (Executive Order 12674, Code relation with a state authority body in which of Federal Regulations Title 5) the official exercises his or her office, nor can it be a member of a community of bidders or Specific restrictions subcontractors in this business relation. This Estonia: Civil servants may not conclude trans- applies to business entities in which a member actions with the state through his/her agency. of the official’s family has 0.5% or more part (Public Service Act, 1995) ownership, in the case where a member of the official’s family has in any way, directly United Kingdom: Departments and agencies or indirectly, acquired the part ownership must not give contracts to: any civil servant in in question or the shares from the official the department or agency; any partnership of from a period of two years prior to his or her which a civil servant in the department or agency appointment or election to public office until is a member; or any company where a civil the end of the exercise of office. (Act on the servant in the department or agency is a director, Prevention of Conflicts of Interest, 2011) Source: Public Accountability Mechanisms (PAM) database, World Bank (2012); Croatia’s Act on the Prevention of Conflicts of Interest (2011). 112 ANNEXES BOX ix Examples of restrictions on holding two conflicting positions Restriction on the Prime Minister and other at the same time a member of both Chambers Members of Government in Germany: of Parliament. The office of Deputy or Senator The Prime Minister and other Members of is incompatible with holding the office of the Government may not hold other executive President of the Republic. (Conflict of Interests positions. The Prime Minister and other Act, 2006; Constitution, 1992; Rules of Procedure Members of Government may not hold other of the Senate, 1999) policy-making positions. (Act on Federal Ministers, 1953) Restriction on members of parliament in the Slovak Republic: The discharge of the post of a Restriction on the President in Mongolia: Member of Government shall be incompatible The President shall not be Prime Minister, a with the discharge of a Member of Parliament’s member of the Parliament or a member of the mandate. (Constitution of the Slovak Republic, Government and shall not concurrently hold 1992) any other posts and pursue any occupation not relating to his duties assigned by law. If the Restriction on civil servants in Russia: Civil President holds another office or a post he/she servants cannot occupy policy-making position shall be relieved of it from the date on which he/ and policy-executing position simultaneously. she takes his/her oath. (Constitution, 1992) (Law on State Civil Service, 2004) Restriction on members of parliament in the Restriction on civil servants in Mongolia: Civil Czech Republic: Members of parliament are servants may not occupy another public office. prohibited from holding any position within (State Authority Law of Mongolia, 2002) the public administration. No person may be Source: Public Accountability Mechanisms (PAM) database, World Bank (2012). MANAGING CONFLICT OF INTEREST IN THE PUBLIC SECTOR: 113 LAW AND PRACTICE IN VIETNAM BOX x Examples of restrictions on assisting family members and other persons in obtaining employment in the public sector Restriction on civil servants in China: Where exert influence over the assignment of jobs or there is such relationship as husband and wife, contracts through public procurement. (Law on lineal descent, collateral consanguinity within the Prevention of Conflicts of Interest, 2011) three generations or close affinity between civil servants, the persons concerned shall not assume Restriction on civil servants in Poland: Civil posts immediately subordinated to the same servants must be neutral and impartial in leader in the same organ or hold posts with a discharging his/her duties: must not allow any relation of immediate superior and subordinator, suspicion on unification of private with public or engage in such work as organization, human interests and, in administrative issues, civil resource, disciplinary investigation, supervision servant must not discriminate between persons and inspection auditing and finance in the organ and must not get influenced by relationships where one party concerned holds the leading arising from family, friendship, work or post. (Civil Servant Law of China, 2005) membership. There cannot be a subordinate relationship between spouses or related persons Restriction on civil servants in Bulgaria: and civil servants. (Civil Service Code of Ethics, A person shall not be appointed as a civil 2002; Law on Civil Service, 2008) servant, where he/she is in direct hierarchical subordination of management and control to Restriction on the president, ministers and a husband or wife, relative of direct descent, members of parliament in the Slovak Republic: relative of collateral descent until the fourth The President, ministers and members of degree inclusive, or relative by marriage until the parliament may not use his/her office or powers fourth degree inclusive. (Civil Servant law, 1999) pertaining to his/her office and information acquired by the performance of his/her office Restriction on public officials in Croatia: or in relation therewith to his/her benefit, to the Officials shall not promise employment or benefit of his/her close relatives or other natural any other entitlement in exchange for any persons or legal persons. (Constitutional Act on gift or any promise of a gift. Officials shall not Protection of Public Interest, 2004) Source: Public Accountability Mechanisms (PAM) database, World Bank (2012); Civil Servants Law of China (2005). 114 ANNEXES BOX xi The Baltic States: Restrictions on participating in decision-making processes that affect private interests Estonia of Interest, 2002; Cabinet Instruction No. 1 An official is prohibited from performing an “Principles of behavior for Civil Servants”, 2001) act or making a decision if: (1) the decision is made or the act is performed with respect to the Lithuania official or a connected person” to him or her; A person in the civil service and members of (2) the official is aware of an economic or other parliament are prohibited from participating interest of that official or a person connected to in the preparation, consideration or passing him or her, and which may have an impact on of decisions or from otherwise influencing the act or decision; (3) the official is aware of a decisions, which may give rise to a conflict of risk of corruption. (Anti-Corruption Act, 2012) interest situation. A person in the civil service and members of parliament may not use his Latvia duties, authority and name in order to influence Head(s) of state, ministers, members of other persons’ decision, which would result in parliament and civil servants are restricted from the emergence of a conflict of interest situation. voting on policy decisions related to an official’s (Law on the Adjustment of Public and Private private interests. (Law on Prevention of Conflict Interests in the Civil Service, 1997) Source: Public Accountability Mechanisms (PAM) database, World Bank (2012). MANAGING CONFLICT OF INTEREST IN THE PUBLIC SECTOR: 115 LAW AND PRACTICE IN VIETNAM BOX xii Definition of “connected person” in the Anti-Corruption Act of Estonia For the purpose of the Act, each of the following impact on the official outside his or her official is a “connected person” (to an official): position or whom the position or activities of 1. Official’s spouse, grandparent, official’s or an official outside his or her official position his or her spouse’s parent and descendant significantly and directly influence or who is of official’s parent, including official’s child subordinate to the orders issued by an official and grandchild. A parent is also deemed outside his or her official position or who acts to include and adoptive parent, parent’s in the interests or on account of an official. spouse and foster parent, and a relative in descending line is also deemed to include an A legal person is not deemed to be a connected adopted child and spouse’s child. person if the connection of the official and the 2. Legal person in which at least 1/10 of the legal person arises exclusively from the official holding or the right to acquire a holding duties of the official. The competence of repre- belongs to an official or a person connected sentation of a state or local government agency to him or her. or a legal person in public law the management 3. Legal person in which the official or any or controlling bodies thereof is deemed to be an person specified in clauses 1 or 4 of this sub- official duty for the purposes of the Act. section is a member of the management or controlling bodies for the purposes of the In- An official shall have no obligation concerning come Tax Act. the interest of connected persons arising from 4. Person who has a shared household with an this Act, if he or she does not or need not know official, and any other person whose position the connection or interest of a connected person or activities have a significant and direct specified in this section. Source: Estonia’s Anti-Corruption Act (2012), Article 7. 116 ANNEXES BOX xiii Croatia: Features of the sanction regime for violations of the conflict-of-interest provisions Titles IV and V of Croatia’s Act on the Prevention of a net monthly salary of public officials is one of Conflict of Interest (2011) regulate respectively of the specified sanctions. This type of sanction the “Commission for Conflict of Interest” and applies to the violation of the provisions of several the “Violations of the Provisions of this Act”. The clearly specified articles of the Act. The amount Titles specify the sanction regime for violations of the sanction is decided by the Commission of the conflict-of-interest provisions of the Act. and ranges from HRK 2,000 to 40,000, taking These are some features of the sanction regime into account the gravity and consequences of which are worth highlighting: the violation. The sanction may last no longer than twelve months and the amount covered by Specialized and independent body for the suspension may not exceed one half of the deciding on infringements. Among other official’s net monthly salary. competences, the Commission for Conflict of Interest is competent for instigating conflict of Fines for legal persons. There are monetary interest proceedings and rendering decisions sanctions not only for public officials but also on whether a particular action or the failure to for legal persons and individuals within legal act of an official represents an infringement of persons. Fines ranging from HRK 5,000 to the provisions of the Act. The Commission is 50,000 and from HRK 50,000 to 1,000,000 shall a standing, independent and autonomous state be imposed respectively on a public official body that reports to the Croatian Parliament. It and a legal person that violate Article 20 of is composed of the President of the Commission the Act on post-employment. Fines ranging and four members, which are elected for a term from HRK 50,000 to 500,000 and from 5,000 of office of 5 years. to 50,000 shall be imposed respectively on the legal person and the responsible individual Clearly defined violations and sanctions: The within the legal person that violate Article violations corresponding to each sanction are 16 Paragraph 3 of the Act on notification for clearly defined by referring to the violation of business relationships with state bodies, units specific articles and/or provisions. The sanctions or enterprises. include: reprimand, suspension of payment of part of a net monthly salary, public announcement Public announcement of the sanction decision. of the decision of the Commission, motion to Depending on the gravity and consequences dismiss an appointed official from public office, of the violation of the Act, the Commission and invitation to resign from exercising public for Conflict of Interest may impose the public office. Imprisonment is not contemplated as a announcement of the sanction decision. The sanction. decision shall be published in the daily press. The Commission shall determine the period and Payment suspension of part of a monthly manner of publication of the decision. The cost of salary. The suspension of the payment of part publication shall be borne by the official. Source: Own elaboration based on Croatia’s Act on the Prevention of Conflict of Interest (2011). MANAGING CONFLICT OF INTEREST IN THE PUBLIC SECTOR: 117 LAW AND PRACTICE IN VIETNAM BOX xiv China’s efforts to enforce the regulations on conflict of interest Promoting supervision to ensure the imple- power and the effective supervision over conflicts mentation of the regulations of interest in a comprehensive manner. While devoted to improving its regulatory framework on preventing conflicts of Educating in the voluntary avoidance of con- interest, China pays no less attention to the flicts of interest implementation of these laws and regulations. Integrating the requirement of preventing A series of supervisory measures are adopted conflicts of interest into anticorruption to ensure the full play of such laws and education and the cultivation of clean culture, regulations in standardizing power exertion and China seeks to enhance the sense of integrity safeguarding public interests. and self-discipline in public officials and foster throughout the society the fine tradition of On the one hand, special inspection measures are conscious avoidance of conflicts of interests. taken to ensure the implementation of the Guide- lines of Integrity and other regulations on con- Education in the conscious avoidance of flicts of interest throughout the country. Efforts conflicts of interest has been incorporated into are made to facilitate disclosure of items listed the teaching plans of the government’s schools in the Regulations on Leading Cadres’ Report of of administration at all levels, as well as other Relevant Personal Matters and the Interim Reg- organizations of cadre training, making it a ulations on Strengthening Management of State required course for leading cadres to ensure Functionaries Whose Spouses and Children Have the ready identification of the causes and Emigrated Abroad. Prevalent issues and tenden- results of and solutions to possible conflicts of cies are discovered and rectifying requirements interest. Education in the conscious avoidance are specified so that the inspected can take target- of conflicts of interest is also combined ed measures to enhance the implementation and with education in ideology, discipline, effect of the regulations. ethical values, and anticorruption laws and regulations. Different forms of education are On the other hand, China gives full play to the employed including demonstrative education supervisory system with Chinese characteristics with examples, admonishing education and composed of supervision by the National targeted on-the-job education and training so People’s Congress and the local people’s as to prompt leading carders to consciously congresses, supervision within the governments, implement related requirements of preventing and democratic supervision by the Chinese conflicts of interest. Utilizing the modern media People’s Political Consultative Conference such as radio, TV, newspaper and the internet, National Committee and local people’s political China devotes major efforts to promoting the consultative conferences, judicial supervision, social atmosphere that honors integrity and supervision by the general public and supervision disgraces corruption. By means of launching by public opinion and deepens the system of anticorruption promotions, strengthening economic accountability auditing on leading clean culture front, and initiating clean culture cadres and public officials and the accountability projects, China seeks to foster the ideological system of public officials, so as to promote the consensus and social atmosphere that applaud transparent and standard operation of public the voluntary avoidance of conflicts of interest. Source: Government of China (2012), “China’s effort to prevent conflicts of interest”, response to the Third Intersessional Meeting of the UNCAC Working Group on Prevention, held in Vienna on 27-29 August 2012. 118 ANNEXES BOX xv Identification, declaration and resolution of conflict-of-interest situations in New Zealand As the organization responsible for the produc- executive of their agency (the employer). tion of the “Public Service Code of Conduct” and “the Board Appointment and Induction In relation to board members in the wider state Guidelines”, the State Services Commission is sector, Cabinet considers any declared conflicts available to advise public servants and board of interest before making any appointment to members about these matters. Because aware- a board. Should any conflict of interest arise ness and understanding are insufficient unless during the term of the appointment, the board they are reflected in behavior, the Commission would be responsible to deal with it (although has adopted a model of encouraging and facili- the board may consult the responsible minister tating an environment whereby public servants: during the matter). • support the objective of an open and equitable democratic system that encourages How a conflict of interest should be resolved participation with minimal coercion is a matter that is considered on a case-by-case • are aware of values and standards that are basis according to the particular merits. This is necessary to achieve that objective a management responsibility, there is no sepa- • are discussing, living and leading values and rate “ethics office”, but the Commission is avail- standards in their day-to-day work able to provide general advice to chief execu- tives, board members and employees. In particular, the Commission’s aim is that all those involved in public management, whether The conflict of interest must be managed appro- elected representatives or officials: (1) recognize priately with adequate measures put in place to the risks; (2) declare and manage conflicts of protect the decision-making integrity of the interest in an appropriate manner; (3) welcome organization concerned and public confidence public interest and act on allegations of in it. The general principle is that: misconduct; and (4) practice zero tolerance. • Many conflict situation may be resolved simply by transferring a duty from the Individual public servants are responsible for concerned employee to another employee avoiding and managing any conflict of interest not affected by the circumstances. that involves them personally, according with a • Alternatively, the employee may need to re- process agreed with the employer. Any breach of strict or abandon the interest or activity giv- this obligation may result in disciplinary action, ing rise to conflict of interest. which may include dismissal, as determined by • If these options are not predictable, or if they their employer. The responsibility for dealing do not enable the matter to be resolved on a with a public servant who fails to disclose or to basis that the concerned employee is able to manage appropriately a conflict of interest sits, accept, then the option of resignation from as do all management decisions, with the chief the organization may need to be considered. Source: OECD (2003). “Managing conflict of interest in the public service: OCED Guidelines and country experiences”, Part III, OECD Country Experiences. MANAGING CONFLICT OF INTEREST IN THE PUBLIC SECTOR: 119 LAW AND PRACTICE IN VIETNAM BOX xvi New Zealand’s good practice guide on procurement In New Zealand, the procedures for resolving conflicts of interest. COI situations are particularly necessary in • Complying with any relevant statutory the area of contract management. The Auditor- requirements will not necessarily be General, in his “Good Practices for Purchasing enough to ensure that decision-making by Government Departments” (updated in processes meet the more general public law 2008 in the good practice guide “Procurement requirement of fairness. Public entities must Guidance for Public Entities”), discusses also take steps to ensure that no other aspect identifying and managing conflicts of interest for of the process could be tainted by a conflict staff involved in contracting and procurement. of interest arising outside of those processes The good practice guide is used by the Auditor- regulated by statute. General’s staff, who raise any discrepancies they • Public entity staff should be aware of the identify during the audit in their letter to their potential for conflicts of interest for every departmental management. Depending on the staff member and adviser who is directly materiality of the conflict, the Auditor-General or indirectly involved in any aspect of may raise the matter with the Parliamentary the process. This includes governance, Select Committee reviewing the department. management, operational staff, and the approving authority. The good practice guide contains a list of over- • All staff involved in the procurement process riding considerations, which outline the broad should be required to declare any personal procurement policy context, and the obligations interest that may affect, or could be perceived and considerations that provide the framework to affect, their impartiality. for good procurement practice by public entities. • The public entity will then need to decide The overriding considerations contain a section what steps are necessary to manage the con- on managing conflicts of interest, which state flict, having regard to any statutory require- the following, among other points: ments. • As part of the general obligation to act fairly, • The public entity should maintain a register public entities must take care that their deci- of declarations of conflicts of interest that sion-making processes cannot be challenged records any conflicts of interest and how they on the basis of actual or potential bias and/or would be managed. Source: Controller and Auditor-General of New Zealand (2008). “Procurement guidance for public entities. Good practice guide”. OECD (2003). “Managing conflict of interest in the public service: OCED Guidelines and country experiences”, Part III, OECD Country Experiences. 120 ANNEXES BOX xvii Challenges of recusal Recusal (or withdrawal) refers to the non-partic- the public official is not able to deal with par- ipation of public officials in matters where they ticular issues, this may place significant burdens have a personal financial interest. on others who are designated to make decisions in that official’s stead. If the public official is a Recusal requirements are found in many con- Minister, there are further potential costs. Dele- flicts codes. Typically, they require an open dec- gation by an elected official to an unelected civil laration of a conflict coupled with a recusal. The servant raises problems of democratic account- recusal is often noted by some civil servant and ability. If the affected file(s) relate only to minor may be publicly disclosed. As a mechanism for matter, it is preferable if another Minister is both separating public from private interests, recusal responsible for decision-making on the affected appears quite attractive. It is meant to ensure that file(s) as well as publicly accountable for them. a public official takes no part in a decision that affects their private interests. However, there are Effective recusal regimes also require transpar- complications and costs associated with recusal. ency. Especially when it comes to collective de- cision making that is not taken in public (such An effective recusal regime requires more than as decisions of Cabinet), it may be tempting for simply that the public official not vote on the Ministers not to recuse themselves from the issue affecting their private interest or take part in decision-making process. The rationale may be the final decision. This is because there are many that if there is no recorded vote that will ever be ways and opportunities to affect a decision prior disclosed to the public, there is little incentive to to the point where it is finally made, through a disclose an actual or potential conflict of inter- vote or otherwise. It is therefore important that est. The counterpoint to this may be that in cases recusal take place at the earliest stage, prior to of collective decision making where a public of- the matter coming for actual decision. ficial is only one of many votes, there is little cost to the affected official to recuse themselves from Effective recusal regimes, “screen” affected public the decision making process. In either event, a officials from any information relating to the sub- pro-active approach to identifying actual or po- ject matter of the officials’ private interest. For in- tential conflicts of interest facilitates the recusal stance, if the public official held shares in a public process and avoids conflicts of interest. or private company, an effective recusal regime would prevent any information from coming Moreover, a recusal regime presents the issue of to the affected official and designate a respon- the tension between experience and conflicts. sible official for matters involving the company. There may be a public benefit to government It thus becomes critical under such a system to decision-making made by those with significant proactively identify real or potential conflicts of experience in the area. However, if a Minister has interest for the public official in order to establish experience in the area as a result of continued such screening mechanisms in advance. private interests such as an ongoing business, the Minister may be required to recuse himself or Such mechanisms are not without their costs. If herself from too many decisions to be effective. Source: Deployment for Democratic Development (DDD) global program of the Institute of Public Administration of Canada (IPAC), “Conflicts of Interest and Ethics in Government. Briefing Note: Separation of public and private interests”. MANAGING CONFLICT OF INTEREST IN THE PUBLIC SECTOR: 121 LAW AND PRACTICE IN VIETNAM BOX xviii China’s legal provisions on “avoidance” The Civil Servant Law of China, which came into the avoidance of a civil servant. force on 1 January 2006, provides for avoidance related to a public official’s taking posts, The organ shall, pursuant to the application of a performance of duties, and regional avoidance. civil servant himself or any interested party, de- The Interim Provisions on the Avoidance of cide whether the civil servant shall make avoid- Civil Servants, issued in 2011, further provides ance after making examination or may make a for the procedures and supervisory methods of direct decision on avoidance without the civil avoidance in the above-mentioned areas. These servant filing an application. are the specific articles on avoidance in the Law on Civil Servant: Article 72 Where there is any different provision on the Article 70 avoidance of a civil servant by law, the provision When a civil servant performs his duties, un- shall prevail. der any of the following circumstances, he shall make avoidance: (1) Where any of his personal Paragraph 1 of Article 68 (referred in Article interests is involved; (2) Where any of the inter- 70) ests of his relatives as described in paragraph 1 Where there is such relationship as husband of Article 68 of the present Law is involved; or and wife, lineal descent, collateral consanguinity (3) Any other circumstance that may have any within three generations or close affinity impact on the impartiality of duty performance. between civil servants, the persons concerned shall not assume posts immediately subordinate Article 71 to the same leader in the same organ or hold Where there is any circumstance under which a posts with an relation of immediate superior civil servant shall make avoidance, he shall apply and subordinator, or engage in such work as for avoidance by himself. Any interested party organization, human resource, disciplinary may have the rights to apply for avoidance of the investigation, supervision and inspection civil servant concerned. Other people may re- auditing and finance in the organ where one port to the organ the circumstances concerning party concerned holds the leading post. Source: China’s Civil Servant Law (2006); Government of China (2012), “China’s effort to prevent conflicts of interest”, response to the Third Intersessional Meeting of the UNCAC Working Group on Prevention, held in Vienna on 27-29 August 2012. 122 ANNEXES BOX xix Estonia’s procedural restrictions Article 11 of Estonia’s Anti-Corruption Act, on • If necessity and in the case of acts which can- “procedural restrictions”, mentions that an offi- not be postponed, upon threat of major dam- cial is prohibited from performing an act or age. making a decision if: (1) the decision is made • If replacement of the official is impossible or the act is performed with respect to the offi- due to lack of persons who comply with the cial or a connected person” to him or her; (2) the requirements set for the substitute. A notice official is aware of an economic or other interest shall be immediately and be permanently of that official or a person connected to him or published on the website of the agency per- her, and which may have an impact on the act forming public duties concerning non-appli- or decision; (3) the official is aware of a risk of cation of the restrictions. corruption. • In the case of acts or decisions by which an agency performing public duties ensures In the above-mentioned cases, the official is the organization of its work, except for prohibited from assigning the task of perform- service related decisions. A notice shall be ing the act or making the decision to his or her immediately and be permanently published subordinates. Instead, the official shall imme- on the website of the agency performing diately inform his or her immediate superior public duties concerning non-application of or the person or body who has the right to ap- the restrictions. point the official. The latter shall perform the act or make the decision or assign the task to Finally, Article 11 stipulates that the agency per- another official. forming official duties shall ensure upon orga- nization of its work that officials would not be Article 11 of the Act lists eight exceptions to required to make a decision or perform an act the above-mentioned procedural restrictions. with respect to such official or a person con- These are some of them: nected to him or her. If the agency fails to com- • Adoption of legislative acts, including the ply with this requirement, this shall not release adoption of the state budget and local gov- officials from the obligations to comply with the ernments. restrictions. Source: Estonia’s Anti-Corruption Act (2012). MANAGING CONFLICT OF INTEREST IN THE PUBLIC SECTOR: 123 LAW AND PRACTICE IN VIETNAM BOX xx Croatia: Legal provisions on divestment of company shares The Act on the Prevention of Conflict of Inter- meaning of Article 4, paragraph 5 of this est of Croatia provides a good example of legal Act. provisions requiring the divestment of company (3) If the company referred to in paragraph 1 shares hold by public officials, in order to avoid of this Article, through a public tender or conflicts of interest. These are the main provi- in any other way, establishes a business sions: relation with state authority bodies or with units of local or regional self-government Article 16 or with companies in which the Republic of (1) An official who owns 0.5% or more of Croatia or a unit of local self-government shares, or has such an ownership stake has a controlling interest, it shall be obliged (company capital) while exercising pub- to notify the Commission of such business lic office shall transfer his management event. rights on the basis of shares in the capital (4) For the time while his or her management of the company to another person, with rights in companies are transferred to the exception of the persons referred to another person or special body, the official in Article 4, paragraph 5 of this Act, or may not give information, instruction, to a special body. This person or special order or in any other way connection body (commissioner) shall act with re- with his person or body and thus affect gard to exercising the membership rights the exercise of the rights and the meeting and shares in the company on his, or, or of obligations arising from membership its own behalf, and on account of the of- rights in these companies. The official has ficial. the right to be informed once a year of the (2) A commissioner shall be deemed to be state of the companies in which he or she a person connected to the official in the has part of ownership. Source: Croatia’s Act on the Prevention of Conflicts of Interest (2011). 124 ANNEXES BOX xxi Challenges of divestment Avoidance requires public officials to take However, when the assets transferred into the affirmative steps to avoid conflicts of interest, trust consist of an active business, the trust may most often through the divesting of certain be less effective in preventing conflicts of inter- assets by their sale or by the transfer to a blind est because the public official will still be able to trust. The concept of a blind trust is that a public identify his or her private interest, despite not official transfers all assets into a trust which is playing an active role in the operation of the managed by a trustee and the public official plays business. In the case of very large holdings, the no part in the management of the business or perceived protections against the conflicts of in- investments under the trust. There are a number terest may be somewhat illusory. of advantages and challenges to the blind trust process. On the structure of a trust, its efficacy will be limited it if is not truly blind – that is if the The efficacy of the trust is a function of a number public official is able to see into the trust or of factors, some of which involve the character worse to interfere in its operation. The identity of the trust and others its structure. First, the of the trustee is critical. Ideally, the trustee trust works best with passive investments like would be an unrelated, arm’s length third party. securities, bonds, commodities etc., because This is more easily accomplished in passive they are not unique and easily fungible. These investments than in active ones that involve the types of assets can easily be sold and bought running of a business. For active investments, such that the public official may not know the this may be unrealistic and undesirable. Often it contents of the trust. In this sense the trust will make sense in such cases for the trustee to remains blind because the public official does be a person who is intimately familiar with the not know its contents. running of the business. Source: Deployment for Democratic Development (DDD) global program of the Institute of Public Administration of Canada (IPAC), “Conflicts of Interest and Ethics in Government. Briefing Note: Separation of public and private interests”. MANAGING CONFLICT OF INTEREST IN THE PUBLIC SECTOR: 125 LAW AND PRACTICE IN VIETNAM BOX xxii Institutional responsibilities for advising on conflict-of-interest situations in Croatia Article 6 of Croatia’s Act on the Prevention of or her private affairs in order to prevent fore- Conflicts of Interest stipulates the following: seeable conflict of interest. If such conflict of (1) If there is doubt about whether certain interest occurs, the official shall be obliged conduct complies with the principles of to resolve in such a manner as to protect the public office, officials shall request an public interest. In the case of doubt about opinion from the Commission for Conflict possible conflict of interest, the official shall of Interest (hereinafter: the Commission). be obliged to do everything necessary to (2) The Commission shall, within 15 days at separate private from public interest. the latest of receiving the request, provide a reasoned opinion on the official’s request. Article 28 of the Act stipulates that the Com- (3) During the procedure to assess whether mission shall be a standing, independent and conflict of interest exists, the nature of tasks autonomous state body, and that any form of in- that the official performs will be especially fluence on the work of the Commission which taken into account. could threaten its autonomy and independence (4) After election or appointment to public of- in making decisions within its remit shall be fice, an official shall be obliged to arrange his prohibited. Source: Croatia’s Act on the Prevention of Conflicts of Interest (2011). 126 ANNEXES BOX xxiii Institutional responsibilities for advising on conflict-of-interest situations related to post-employment in France and Spain France from the Court of Auditors, from the courts as The movement of public servants to the private well as from the Inspector General’s Office and sector is a highly regulated practice in France as specialized public servants. The Commission it is subject to judiciary, regulatory and legislative reports to the Prime Minister, which indicates checks and controls. Following the Law on the its importance to the government. Prevention of Corruption, approved in January 1993, three ethics commissions have been set Spain up, one for each segment of the public service: i) The Act on Conflict of Interest of Spain, ap- the central government service; ii) the territorial proved in May 2006, introduced the following authorities; iii) the public hospital sector. administrative process to prepare approval de- cisions related to the post-public employment It became obligatory for officials to consult conflict-of-interest cases of high-ranking offi- these commissions before moving to the cials, including ministers and secretaries of state: private sector for any reason. After almost 15 First, former high-ranking officials should years’ experience, based on the Public Service inform the Office of Conflict of Interest before Modernization Law of February 2007, the undertaking any future employment activity. Decree of 1 June 2007 created a single Ethics The Office of Conflict of Interest will analyze Commission with the aim of centralizing these the situation and consider whether the activity three committees and reinforcing transparency. violates the law. The Office of Conflict of Interest The Ethics Commission handles all individual will communicate its opinion to the interested cases related to post-public employment and the party. The interested party is allowed to reply and accumulation of activities. provide further information for consideration. Finally, the Office of Conflict of Interest will The Commission is headed by a member of the make an approval decision and communicate it Council of State and is composed of members to the former high-ranking official. Source: OECD (2010), Post-public Employment: Good Practices for Preventing Conflicts of Interest. MANAGING CONFLICT OF INTEREST IN THE PUBLIC SECTOR: 127 LAW AND PRACTICE IN VIETNAM BOX xxiv Institutional responsibilities for advising on conflict-of-interest situations in the United States and United Kingdom United States The Permanent Secretary determines the The Designated Agency Ethics Official for the handling of interests of ministers. Ministers agency where the official works, in conjunction must record in writing what action has been with the Office of Government Ethics, are taken, and provide the Permanent Secretary and responsible for providing guidance to civil the independent adviser on Ministers’ interests servants and ministers on conflict-of-interest with a copy of that record. Upon appointment, cases. The Office of Government Ethics is Ministers must provide their Permanent responsible for providing guidance to the Head Secretary with a written list of interests which of State. (Ethics in Government Act, 1978) may create a conflict, including those of the Minister’s spouse or partner and close family. The Select Committee on Ethics of the Senate (Ministerial Code, 2007) and the Committee on Standards of Official Conduct of the House of Representatives are The Committee on Standards and Privileges responsible for providing guidance to Members considers matters relating to the conduct of of Congress. (Ethics in Government Act, 1978) the Members of Parliament (MPs). MPs are required to register any pecuniary interest or United Kingdom other material benefit that a Member receives Senior management of the civil servant where a which might reasonably be thought by others conflict of interest arises is responsible for con- to influence his or her actions, speeches or sultation, along with the independent Advisory votes in Parliament, or actions taken in his or Committee on Business Appointments. Civil her capacity as a MP. (Code of Conduct and servants must declare their personal interests to Guide to the Rules relating to the Conduct of senior management when a conflict of interest Members, 1996) arises. (Civil Service Management Code, 2010) Source: Public Accountability Mechanisms (PAM) database, World Bank (2012). 128 ANNEXES Annex 4. COI issues and specific recommendations COI ISSUE KEY FINDINGS POSSIBLE SOLUTIONS (from survey, focus group discussions, (based on key findings and and legal review) international experiences) COI incidence • The vast majority of enterprises and • Promote COI manage- and effects the majority of public officials perceive ment. that COI cases happen usually, often • Place a special attention or sometimes. on implementation at • A significant share of public officials subnational level. have observed COI cases. • Evaluate results of COI • At provincial level, a higher percentage management, e.g. via of public officials have observed COI conducting another COI cases than at central level, and the rate survey in the future. of implementation of COI measures is • Disseminate the content lower. and the result of COI • A large majority of public officials management as an effort say that the consequences of conflicts to build up trust of of interest include decisions to the citizens and enterprises. detriment of the public interest, and a decline in trust in government. Awareness and • A low share of public officials, enter- • Introduce concept of COI understanding of prises and citizens understand the and its interpretations regulations correct meaning of COI. into the existing legal • For enterprises, a better understand- framework. ing of the meaning of COI is correlat- • Clearly define COI cir- ed with fewer offers of gifts. cumstances and respon- • The majority of public officials think sibilities for solving COI the implementation is influenced by cases. the fact that regulations are not clear • Increase awareness of and specific, and are hard to follow. public servants and the • While training for new staff is imple- public by different mea- mented, periodic training on conduct sures, including training and ethics is often not implemented or and communication to inadequately implemented. disseminate COI man- agement solutions. Monitoring and • A large majority of public officials • Set up a mechanism to oversight system think that the implementation is in- deal with COI cases, fluenced by the lack of strict handling especially to hold top MANAGING CONFLICT OF INTEREST IN THE PUBLIC SECTOR: 129 LAW AND PRACTICE IN VIETNAM COI ISSUE KEY FINDINGS POSSIBLE SOLUTIONS (from survey, focus group discussions, (based on key findings and and legal review) international experiences) of cases of violations, and an ineffec- management account- tive inspection and supervision of the able. implementation. • Proactively oversee and • A significant share of public officials find out violations, and have observed COI cases, including effectively utilize avail- cases violating the current regulations. able information sources. • Reasons for (public officials) not being • Allow individuals and willing to report COI cases include organizations to report the involvement of the authority in the and provide information case, and lack of trust in the handling on COI cases, and set up of the case by the authority. mechanisms to guarantee • There is no single/main enforcement confidentiality and to body for COI or ethics, and limited protect whist-blowers. mechanisms to investigate COIs based • Well define violating on disclosed information. behaviors and corres­ • The system to settle denunciations ponding sanctions and/ is not fully independent and denun­ or penalties. ciations on COIs are not explicitly • Specify penalties and/or allowed. sanctions for enterprises, who violate COI regula- tions, e.g. offering second job for on-service public servants or hiring retired ones. • Set public disclosure of penalties to violators as compulsory requirement. Individual • The legal framework does not specify • Specify in legal regulations responsibility for the individual responsibility of public responsibilities of indivi­ identifying and officials to identify and resolve COI dual public servants for resolving COI situations. identifying and dealing situations • Making decisions that affect private with any COI case interests take place usually, often or possibly emerged during sometimes in different public man- and after receiving new agement areas, according to most duties and under taking public officials and enterprises. assigned duties in public • A large majority of public officials agencies. think that the implementation of COI • Legalize reporting on 130 ANNEXES COI ISSUE KEY FINDINGS POSSIBLE SOLUTIONS (from survey, focus group discussions, (based on key findings and and legal review) international experiences) regulations is influenced by the fact COI cases as a personal that leaders are not exemplary. responsibility in order to deal with such circum- stances. • Develop a guideline attached with concrete practical examples to guide public servant in identifying similar cir­ cumstance. • Enhance public servants’ awareness on this respon­ sibility. Special attention should be placed on awareness raising for top management of organizations, agencies and units, in which a need for becoming flagship is addressed. • Define penalties for non- reporting public servants. Procedures for • The legal framework does not stipu- • Include in the legal resolving COI late the procedures for resolving COI framework procedure situations situations declared by public officials. for resolving COI cases. • Making decisions that affect private Either specific procedure interests take place usually, often (including such or sometimes in different public measures as dismissal, management areas, according to most transfer, divestment, and public officials and enterprises. resignation) or general principles for case-by- case application should be defined. Institutional re- • The legal framework does not specify • Specify in the legal sponsibilities for which organization and/or individuals frame­work who (either advising on COI are responsible for advising public organizations and/ situations officials when they encounter COI or individuals) being MANAGING CONFLICT OF INTEREST IN THE PUBLIC SECTOR: 131 LAW AND PRACTICE IN VIETNAM COI ISSUE KEY FINDINGS POSSIBLE SOLUTIONS (from survey, focus group discussions, (based on key findings and and legal review) international experiences) situations. responsible for guiding • Making decisions that affect private or making decision on interests take place usually, often COI cases encountered or sometimes in different public by public servants. management areas, according to most public officials and enterprises. • A large majority of public officials think that having no focal point for advising on COI situations has a mod- erate or considerable influence on the implementation of regulations. Have Gift- • Giving and receiving gifts in kind • Mandate refusal with gift taking and giving and/or cash take place often, usually offerings. Cases for ex- or sometimes in different public ception should be clearly management areas, according to the defined. vast majority of public officials and • More clearly define the enterprises. cases of “receiving and • About a third of public officials have keeping the gifts” and of observed cases in which officials “receiving and submit- receive money or gifts to settle more ting the gifts”. favorably the case of the giver. • Mandate prohibition of • Gifts are mainly given to facilitate the gift receipt applied to rel- work of the giver. atives of public servants. • Offered gifts are generally accepted, • Stipulate effective and and in most cases, their value is above transparent penalties for the allowed amount. violators, e.g. sanction- • Gift recipients rarely report the receipt ing a public servant who of gifts. receive and keep the gift • In some cases, gifts are given to rela- otherwise must refuse. tives. • Define solutions for the • A key problem of the gift-taking regu- cases when public ser- lations is the ambiguity of some of the vants are unable to deter- criteria for the rejection, acceptance mine nature of the gifts. and handover of gifts. • Define responsibility of • The regulations on gift-taking apply to organizations in instruct- all public servants, but do not apply to ing declarants and pro- any of their family members. cedure for dealing with • The information on gifts received specific cases, including 132 ANNEXES COI ISSUE KEY FINDINGS POSSIBLE SOLUTIONS (from survey, focus group discussions, (based on key findings and and legal review) international experiences) is just required to be internally • gift refusal and/or sub- disclosed. mission. • Guarantee penalty-free treatments with gift declarants and submitters if they comply with de- fined regulations. • Strengthen perception and accountability of public servants in the gift giving and taking cir- cumstances. Ownership of in- • Having investment and shared inter- • Set prohibitions and /or come and assets est in a business takes place usually, limitations for public ser- often or sometime, according to a vants in contributing cap- large majority of public officials and ital funding in businesses. enterprises. A threshold for capital • About a third of public officials have contribution and/or share observed cases of public officials “have allowable to hold by pub- backyard businesses”. lic servants in businesses • There is a COI restriction on estab- must be set. lishing private enterprises and other • Set income and asset dis- types of companies, applicable to all closure as compulsory re- public officials. The majority of public sponsibility of public ser- officials say that this prohibition is vants, especially who hold implemented. high positions and power • There is also a COI restriction on con- in the state apparatus and tributing capital to enterprises, but in high-risk sectors. only applicable to heads and deputy • Mandate disclosure of heads of agency, and their spouses. non-salary income in the The majority of public officials say income and asset dec- that this prohibition is implemented. laration sheets of public • Declarations of income and assets servants, including source by public officials are mandatory, and amount of income. and according to the vast majority of • Use information in the public officials, they are implemented. declaration sheets as a ba- However, the information in the sis for investigating and declarations is not linked to whether the detecting COI cases, e.g. MANAGING CONFLICT OF INTEREST IN THE PUBLIC SECTOR: 133 LAW AND PRACTICE IN VIETNAM COI ISSUE KEY FINDINGS POSSIBLE SOLUTIONS (from survey, focus group discussions, (based on key findings and and legal review) international experiences) income and assets conflict with the to check and verify facts public duties of the official. Moreover, in the declaration sheets the declarations are disclosed in a in a proactive and random limited manner, and there are limited manner. mechanisms to investigate COIs based • Adopt new measures to on the disclosed information. prevent COI relating to income/asset ownership, including (i) to hold pub- lic servants accountable for identifying and dis- closing their income/as- set upon being appointed to a position in public agencies, and foreseeing potential risks of COI regarding their incomes and/or assets; (ii) clarify- ing responsibility of orga- nizations to guide declar- ants; and (iii) specifying procedures to deal with COI cases, e.g. divest- ment from a certain asset. • Allow outsiders (individ- uals and organizations) to report or provide in- formation on COIs. Use of informa- • Taking advantage of information from • • Introduce in An- tion from work work position to buy/sell real estate ti-corruption Law clear position or stocks takes place usually, often or provisions on rent seeking sometimes in procurement manage- behavior from exploring ment, project licensing and service information arisen in pub- delivery, according to a large majority lic affairs (e.g. real estate, of public officials and the vast majori- land transactions or stock ty of enterprises. exchange). • Enterprises perceive a higher frequen- • Have provisions on public cy of this type of COI case than public servants’ reporting obliga- officials. tions and provide process 134 ANNEXES COI ISSUE KEY FINDINGS POSSIBLE SOLUTIONS (from survey, focus group discussions, (based on key findings and and legal review) international experiences) • About one fourth of public officials and instruction for deal- have observed cases in which officials ing with violations, in- buy/ sell real estate or stocks thanks to cluding taking back ben- their advantageous position at work. efits gained due to using • The Law on Anti-Corruption has information in duty taking a general restriction on the use of for personal interests. internal information for self-seeking • Strengthen public access interests, but this restriction does not to information, so that explicitly mention real estate, land or everyone (not only pub- stocks. lic servants) has access to • Declarations of assets (e.g. real publicized information. estate, stocks) by public officials are mandatory, and according to the vast majority of public officials, they are implemented. However, the information in the declarations is not linked to whether the assets conflict with the public duties of the official. Moreover, the declarations are not publicly disclosed, and there are limited mechanisms to investigate COIs based on the disclosed information. Simultaneous po- • While members of Government and • Introduce oversight sitions or roles members of People’s Committees are strengthening mecha- prohibited from concurrently being nisms in Constitution members of the Standing Commit- and relevant legal docu- tee of the National Assembly or the ments to prevent mem- Standing Bodies of People’s Councils, bers of the Cabinet, they are not restricted from holding National Assembly and other positions such as being deputies People’s Councils from of the National Assembly and local exposing to COI cir- People’s Councils. cumstances due to dual • For members of National Assembly, holding positions in the civil servants and public employees, legislative and executive there is no restriction on simultane- bodies. ously holding a policy-making posi- • Have provisions to de- tion and a policy-executing position. lineate clearly oversight MANAGING CONFLICT OF INTEREST IN THE PUBLIC SECTOR: 135 LAW AND PRACTICE IN VIETNAM COI ISSUE KEY FINDINGS POSSIBLE SOLUTIONS (from survey, focus group discussions, (based on key findings and and legal review) international experiences) • There are not any legal provisions re- function from policy im- stricting public servants from simul- plementation function. taneously playing a policy-executing • Allow individuals and role and an oversight role. organizations to request • Some pieces of legislation of man- agencies in charge of de- date to play an oversight role to cer- nunciation resettlement tain public servants that already have to replace handling offi- a policy-executing role e.g. Law on cials when there is evi- Complaints, Law on Denunciations. dence of his biases and/or lack of neutrality in duty taking. Recruitment and • Making decisions favoring relatives, • Stipulate regulations to promotion take place usually, often or sometimes control and eliminate in personnel recruitment and appoint- chances for recruiting ment, according to a large majority of and/or appointing rela- public officials. tives. • About one third of public officials have • Have provisions on COI observed cases in which the compe- management in duty ar- tent authority appoints, promotes and rangement among public recruit relatives. servants to avoid favora- • Most citizens and firms believe con- bility toward relatives. nections are the most important fac- • Mandate as public ser- tor in recruitment and promotion, vants’ obligations involved whereas public officials believe it is in candidate selection to capacity and performance. report to authorized agen- • The current COI restrictions have a cies and/or person the limited coverage of public officials and participation of their rela- relatives, while connected persons to tives in the selection. the public official are not covered. • Provide guideline for • The current COI restrictions do dealing with COI circum- notcapture the possibility that the stances in recruitment, arrangement of employment is appointment and duty ar- delegated from one public servant to rangement. another public servant (either in the • Mandate public disclo- sameagency or in a different one). sure on the results of the • Based on the FGDs, there are cases recruitment, appointment in which the arrangement of employ- and duty arrangement ment is delegated from high-ranking process as well as violation 136 ANNEXES COI ISSUE KEY FINDINGS POSSIBLE SOLUTIONS (from survey, focus group discussions, (based on key findings and and legal review) international experiences) officials and heads of agency/depart- handling process. ments to the public officials in charge • Ensure transparency and of recruitment. accountability in recruit- • The results of recruitment are required ment, appointment and to be publicly disclosed, and there is a duty arrangement process. high level of implementation of this measure. • The result s of promotion are just re- quired to be internally notified. There are no transparency requirements of the decision-making processes in recruitment and promotion. Procurement • Making decisions favoring relatives, • Stipulate regulations to management and having investment/interests in control and eliminate project licensing a business, and abusing internal chances for contract information, take place place usually, awarding and project li- often or sometimes in procurement censing to relatives and and project licensing, according to a connected persons, in- large majority of public officials and cluding sub-contractors. enterprises. • Clearly define obliga- • About one third of public officials tions of public servants have observed cases in which the involved in bidding and competent authority facilitates rela- project licensing to report tives to receive contracts or projects. to authorized agencies • Enterprises perceive a higher frequen- and/or persons on partic- cy of COI cases in procurement man- ipation of their relatives, agement and project licensing than connected persons or public officials. their affiliates as contrac- • A large majority of public officials tors or investment own- agree that procurement is transparent ers in the bidding and/or and objective, whereas only about one project licensing process. third of enterprises agree with that. • Clearly define obligations • The restrictions on procurement stip- of contractors, investment ulated in the Law on Anti-Corruption owners and affiliates of have a limited coverage of public of- the authorized persons to ficials and relatives, while connected report any connections to persons to the public official are not public servants, who are covered at all. in charge of procurement MANAGING CONFLICT OF INTEREST IN THE PUBLIC SECTOR: 137 LAW AND PRACTICE IN VIETNAM COI ISSUE KEY FINDINGS POSSIBLE SOLUTIONS (from survey, focus group discussions, (based on key findings and and legal review) international experiences) • The Law on Bidding addresses some management or project of the coverage gaps of the Law on An- licensing. ti-Corruption, but it does not explicit- • Provide guideline to deal ly cover the connected persons to the with COI cases in pro- public official and the relationship of curement management public officials with the sub-contrac- and project licensing. tors of the bidders. • Ensure transparency and • The results of bidding activities are accountability in making required to be publicly disclosed, but decisions on procure- there are insufficient requirements of ment and project licens- transparency of decision-making pro- ing. cesses in bidding activities. • Mandate public disclo­ sure on the results of bidding and project licensing process and regulation on handling COI violation in these activities. Outside • About a third of public officials have • Adopt new measures to employment observed cases of public officials “hav- prevent COI-exposed ing backyard businesses”. extra jobs, including: (i) • There are comprehensive COI restric- defining public servants’ tions on outside employment and pri- obligation to foresee and vate firm work applicable to all public report potential COI risks officials. involved in extra jobs; (ii) • The majority of public officials say specifying responsibility that the prohibition to establish, man- of organizations to guide age or run private enterprises is imple- declarants; and (iii) set- mented. ting procedure to deal • The information on outside employ- with COI circumstances ment of public officials is not mandat- in this context. ed to be disclosed, neither internally • Mandate reporting on nor externally. public servants’ extra • Outside employment of public em- job taking (either paid ployees in the health sector is believed or unpaid) and making to have little/medium effects on objec- such information public, tivity and impartiality. at least for top managers • Dual practice by public employees in in both legislative and 138 ANNEXES COI ISSUE KEY FINDINGS POSSIBLE SOLUTIONS (from survey, focus group discussions, (based on key findings and and legal review) international experiences) the health sector is restricted, but only executive agencies. in some broadly defined cases, and • Develop further regula- upon approval by state hospital direc- tions on extra job tak- tors. ing for public employees working in education and health care sectors. Tak- ing extra jobs may be al- lowable, but exceptional cases and preconditions for extra job taking must be well placed. Post- • There are detailed regulations restrict- • Conduct studies to employment ing post-employment of public offi- investigate drivers causing cials i.e. employment after the ending weak enforcement of of the job in the public sector. restrictions on post- • Just about half of officials agree that resignation job taking the COI restriction on post-employ- and to revise those ment is implemented (i.e. not working restrictions accordingly, in the field where they had previous- e.g. deregulating in case ly managed for a certain period after of unclear evidence of resignation). It is the most weakly im- COI exposure. plemented measure among the eight • Mandate online disclo- surveyed measures. sure on previous jobs • The information on previous employ performed by public ser- ment of public officials (i.e. name vants in order to support of entities where the official was pre- inspectorates, citizens viously employed) is not mandated and enterprises in their to be disclosed, neither internally nor detection and investiga- externally. tion of COI circumstanc- es. • Specify penalties to enterprises who offer post-resignation jobs for public servants. • Adopt new measures to prevent COI exposure in post-resignation job taking, including: (i) MANAGING CONFLICT OF INTEREST IN THE PUBLIC SECTOR: 139 LAW AND PRACTICE IN VIETNAM COI ISSUE KEY FINDINGS POSSIBLE SOLUTIONS (from survey, focus group discussions, (based on key findings and and legal review) international experiences) defining public servants’ obligation to foresee and report potential COI risks relating to post- resignation job taking; (ii) specifying responsibility of organizations to guide declarants; and (iii) setting up procedure to deal with emerged COI circumstance in this context. VIETNAM LAWYERS ASSOCIATION Hong Duc Publishing House - Add: 65 Trang Thi street, Hoan Kiem District, Ha Noi - Email: nhaxuatbanhongduc@yahoo.com - Tel: 04.3 9260024 – Fax: 04.3 9260031 Publishing responsible: BUI VIET BAC, Director Content responsible: Dr. KHUAT DUY KIM HAI Editor: NGUYEN PHUONG MAI Cover and Layout: Hong Duc Publishing House Associate partner THE WORLD BANK IN VIETNAM Add: 63 Ly Thai To, Ha Noi, Vietnam Print 200 copies, size 20.5cm x 26.5cm At SAVINA Add: 22B Hai Ba Trung, Hanoi, Vietnam Publishing permit: 1178/QĐ-NXBHĐ Publishing registration plan: 1715-2016/CXBIPH/05-31HĐ ISBN: 978-604-948-262-5 Completed and archived in 2016 The World Bank in Vietnam 63 Ly Thai To, Ha Noi Tel. (84-4) 3934 6600, Fax (84-4) 3935 0752 Website: www.worldbank.org.vn NOT FOR SALE