Currently, strong anticorruption sentiments are present throughout Latin America, as demonstrated by the results of the 2018 elections in the region, which featured campaign slogans such as El Salvadoran President Nayib Bukele’s “There’s enough money when no one steals,” and statements like Mexican President Andrés Manuel López Obrador’s “Nothing has damaged Mexico more than corruption and impunity.” However, how can this momentum in the region be maintained? How can Latin America take the next step toward institutional reforms? There is no doubt that social apathy adds fuel to the corruption fire. To this end, how can citizens get involved in the fight against corruption?
The Transparency International Report from March 2018 shows great awareness of corruption in the Latin American public sector and highlights the creation of strict anticorruption laws, as has happened in Chile. In fact, these laws are a major area of strength in Chile, particularly with respect to issues of public contracting and political funding. Even though certain institutions still facilitate dishonest practices, Chile has been a regional leader on transparency and anticorruption matters.
This Spotlight analyzes three of the most effective measures against corruption in Chile, and then asks what the region can learn from the Chilean case.
Reforms to Public Bodies Seeking to Promote Transparency and Probity
Reforms to Public Bodies Seeking to Promote Transparency and Probity
In Chile, the enforcement of anticorruption measures began more than twenty years ago, along with efforts to strengthen democracy and expand freedom of the press. The first Probity and Transparency Law was passed in 1999. A year later, the Chilean Transparency International chapter, referred to as Transparent Chile, started operations. In November 2006, Transparent Chile was part of the Experts Commission organized by President Michelle Bachelet, and the commission’s outcomes gave rise to subsequent initiatives such as the Probity and Transparency Agenda.
These efforts increased awareness about the importance of anticorruption measures. Three years later, in 2009, the Transparency Law (also referred to as the Law on Access to Public Information) came into effect. Its main purpose is to make information concerning public agencies available to all people, promoting closeness, new spaces for participation, and accountability demands on public performance. The law also created the Council for Transparency as an entity with juridical capabilities and its own equity. Chilean advisers travelled to Mexico in order to learn best practices used by the Federal Institute of Access to Public Information (formerly IFAI, and currently INAI for its acronym in Spanish) and to build a collaborative relationship.
Any Latin American country implementing or updating its regulatory framework regarding information access may benefit from following the Chilean example of sharing with and learning from entities in other countries. This would strengthen a cooperative network for improving transparency in Latin America. Five years after the Transparency Law, in March 2014, Chile enacted a law on lobbying and advocacy processes on behalf of private interests, which was deemed a significant step toward providing the public with tools intended to make these practices more transparent. Additionally, as its wording indicates, this law represented a deep change in the relationship between the state and its citizens. It declared that public authorities or officers who are involved in lobbying or advocacy processes—the so-called passive subjects—have a duty to record and publicize: all meetings and hearings requested by lobbyists and agents for private interests intended to influence public decisions; all travel conducted while performing their functions; and all gifts received during these interactions.
By adopting a specific law on such matters,
and constructing a robust regulatory framework for controlling corruption, Chile has become a reference model.
Other Latin American countries have implemented special laws addressing lobbying activities. However, not all resemble the Chilean laws. Mexico has included various laws concerning such matters in its regulations for both houses of its congress. Colombia has added several provisions to its constitution. In both countries, the adoption of additional laws on lobbying and advocacy are still pending. By adopting a specific law on such matters, and constructing a robust regulatory framework for controlling corruption, Chile has become a reference model.
In 2015, Eduardo Engel, a scholar from the University of Chile, chaired the Presidential Advisory Council against Conflicts of Interests, Traffic of Influences, and Corruption, an initiative President Michelle Bachelet created in her second term. After delivering a report with proposals, which served as a basis for the ambitious Probity and Transparency Agenda, Engel created the Anticorruption Observatory, which focuses on monitoring the progress and quality of eighteen proposed bills and fourteen administrative measures that resulted from this legislation. The Anticorruption Observatory has shown promising results.
Chilean Antitrust Policy
Chilean Antitrust Policy
The Chilean antitrust policy has been acknowledged worldwide as one of the best in Latin America. It is close to achieving the same level as policies from countries identified as global standards for competition matters: the United States, New Zealand, and Canada.
According to Executive Director of Professional Education at Pontifical Catholic University of Chile, Claudia Halabi, the desired goal is the pursuit of economic efficiency by targeting industries with substantial market power. The National Economic Prosecution Office (FNE for its acronym in Spanish) and the Free Competition Tribunal are the supervising entities most active on this matter. The FNE includes an antitrust division in charge of investigating behaviors such as unfair competition, abuse of dominant position, and interlocking, which refers to any individual who sits on a board of directors for two or more companies. Interlocking is usually legal, except when the companies in question compete. This model of a specialized prosecuting office may be a great reference for other Latin American countries’ antitrust policies.
The final objective Chile is seeking
with their renowned antitrust policies is simply economic efficiency.
Additionally, Chile has created new positions, such as the special high-complexity prosecutor in both the offices of the attorney general and the general directorate for public works. Also, corruption among private companies has been typified, and provisions related to officer offenses in the Criminal Code have been amended. Several projects are under way that seek to establish term limits for authorities, to prevent and penalize conflicts of interests, and to address problems in the performance of public functions.
A Highly Organized Civil Society —Including Students
A Highly Organized Civil Society—Including Students
It is clear that the gradual creation of work groups, bodies, and agencies, and the debate surrounding them—as well as the creation of public policies and programs intended to shed light on previously undisclosed facts—has had an educational effect. Citizens can now assess institutions, rules, and the performance reliability of their political representatives; and they are starting to suspect that social inequality can be defeated. The fact that corruption is linked to the reduction of spaces previously reserved for civil society has also been acknowledged. In this regard, the Law for Association and Citizens’ Involvement has promoted such spaces. This regulation sets forth a framework for the right of free association, its limits, and the role of the state in supporting the creation and strengthening of these associations.
A strong civil society
can ultimately form a powerful “firewall” to defend probity.
Currently, there are 234,502 civil-society organizations (CSOS) in Chile. Within the last decade, this number has more than doubled, and has yielded 145,000 new wage-earning jobs (representing 1.7 percent of the workforce). A large portion of governmental contributions to CSOS come through grants, transfers, and contest-based funding.
It is worth noting that in May 2012, the United Nations Convention Against Corruption (UNCAC) created an anti-corruption taskforce in Chile. This taskforce unites public and private institutions, academia, civil-society organizations, and multilateral bodies to implement and spread its mandate. The UNCAC also designs strategies and actions for strengthening the fight against corruption by promoting transparency.
In August 2018, Hernan Larrain, the minister of justice, announced the creation of a web-based registry intended to provide more transparency to those organizations and facilities, through which they could disclose their actions and tighten bonds with citizens. Significant stakeholders have been added, such as the United Nations Development Programme (UNDP), the comptroller general, the Chilean Municipalities Association, the State Defense Council, the ChileCompra directorate, the attorney general’s office, and several public divisions.
In this manner, public and private entities, politicians, and scholars—with a national or local scope, and from both the central government and independent organizations—can work jointly to develop anticorruption measures and actions. Added to the civil society, they can ultimately form a powerful “firewall” to defend probity.
In the opinion of Professor Patricio Silva, corrupt acts in Chile are immediately identified, thus helping to control such unlawful acts from spreading. “Citizens’ tolerance towards corruption is very low,” he states, adding that “the civil society is highly connected…journalists are playing a significant role in these cases.”
In fact, journalists state their opinions via social networks, often independently from their respective media outlets. Therefore, they also play a leading role in the media and provide information that has not been published through traditional channels.
The high scrutiny on by these new measures—particularly from the press—has led to the discovery of condemnable behaviors. The first reaction from citizens has, inevitably, been a decrease of trust in institutions. However, students and workers from the public and private sectors, as well as from several base institutions and other fronts, have not hidden their sentiments of mistrust. They have stated their demands for greater probity in the streets, and they have increased pressure for pushing relevant public policies, laws, and regulations that they believe are being enforced too slowly. Public expressions that reject corruption serve to back the new provisions. There is no doubt that the citizens’ trust must be rebuilt, for the people’s demands will not weaken.
Conclusion: Corruption is Expensive
According to the World Bank, the annual cost of corruption and tax fraud in nonindustrial countries is approximately US$1.26 million. The United Nations has reported that if such a sum were invested in the poorest quintiles, those population segments could rise out of poverty for at least six years.
Current administrative and legal initiatives regarding corruption are delivering more and more instruments for supervision by citizens and specialized bodies, which have subsequently created a synergy with investigative journalism. Consequently, institutions that had inadequate financial management due to the inappropriate privileges they enjoyed during the dictatorship and their procedural opacity—such as the army and the uniformed police—have been investigated and are currently facing judicial processes; a former army commander in chief is now in jail, and has been prosecuted for fraud against the state. Hence, it is now clear that activities conducted in the name of national defense must remain within the scopes of their respective organizations.
Despite the progresses made, Chile must still pursue profound, structural reforms that ensure the proper functioning of internal and external control systems for armed institutions. These reforms highlight the importance of civil power and establish the role of the congress with regard to the resources needed to perform such a task.
On the other hand, post-employment rules must be set for government authorities who are leaving their roles. Also, rules must be set that address conflicts of interest and family links to those who take over such functions. This means strengthening the supervisory capacity of the comptroller general.
Effective citizen involvement in such matters has only brought progress, including in the relationship between politics and money, and in addressing challenges to probity. Furthermore, progress has been made regarding the educational sphere, the management of pensions and additional quality-of-life interests, public expenditure, neatness of public purchasing, and other areas of public concern.
Solving corruption is a challenge for democracies and their associated assets. These issues place freedom of speech and public trust in grave danger.
If all social stakeholders make use of available legal mechanisms, finding an answer to public demands for better democracy is possible. “Sometimes we have allowed the power of money to colonize the social coexistence,” said Engel. To this end, he also explains that citizens still maintain their capacity to be shocked and that no one is insensitive to corruption, adding, “if citizens don’t feel outraged, the rest is not going to happen.” Lastly, he states that media outlets play a fundamental role in this issue, and therefore must act in an independent manner, with no gag and no pressures.
About the Author
Laura Albornoz Pollmann is a nonresident senior fellow at the Atlantic Council’s Adrienne Arsht Latin American Center, former director of the National Copper Corporation of Chile (Codelco), and professor in the private law department of the University of Chile Law School. She was minister of the National Women’s Service during the first tenure of President Michelle Bachelet, and chairman of the Inter-American Commission of Women, Organization of American States in 2008 and 2009.