Centre for Governance Studies, Dhaka

Research & publications Web edition

Final Report on The Call to Action Against Corruption (CAAC)

Section 1 of 9

Executive Summary

The Center for Governance Studies (CGS) conducted a project since February 2021, titled ‘Engaging the Post-Covid-19 Era’, with the support of the Center for International Private Enterprise (CIPE) based in Private Sector in Promoting an Inclusive, Accountable and Corruption-free System of Governance in Washington, D.C.The project focused on the presence of corruption in households as well as in Small and Medium Enterprises (SMEs) to evaluate the role of the SME sector in Bangladesh in combatting corruption, the nature of corruption faced by these enterprises, the measures taken by the government and various trade bodies to combat corruption, and the sector’s grassroot entrepreneur’s suggestions on how to address corruption. The project comprised of several components: an assessment report of the SME sector with key informant interviews; two independent surveys of households and SMEs to gather their perceptions and practices of corruption at the subnational level; eight regional consultations with local entrepreneurs to discuss their experience and suggestions; a national conference representing experts, members of civil society, bankers, corruption watchdogs, politicians, and media to validate the ϐindings of the grassroot entrepreneurs’ perceptions; two networking events bringing together entrepreneurs; a national summit to adopt a call for action; and the development and dissemination of a network directory of SMEs.This followed standardized research methods and techniques for selecting the sample, collecting data, and analyzing & interpreting output measures. The participants of this long, inclusive, bottom-up process have underscored the need for establishing a national-level platform for SMEs to combat corruption that affects the SME sector and is detrimental to the interests of the entrepreneurs. The assessment of the state of the corruption and SMEs, participants’ perceptions and experiences, stakeholders’ opinions, and experts’ views have reafϐirmed that corruption in Bangladesh is pervasive and systemic, and that corrupt practices impact the SME sector signiϐicantly. Stakeholders of the SME sector acknowledged that corruption has both supply and demand sides, and that a comprehensive effort to combat corrupt practices must include both aspects. Therefore, the SME sector must improve internal good governance while society and the government must curb demand through various measures. Current policies and the legal and excessive bureaucratic structure have created a corrupt environment where bribery and other malpractices thrive, according to the SME entrepreneurs. They emphasized that the absence of effective anti-corruption regulation and selective implementation puts businesses that do not partake in illicit activities into a competitive disadvantage vis-à-vis those who collude with a corrupt set of government ofϐicials.Through surveys, regional meetings, a national conference, and networking events, project participants suggested a variety of recommendations to the government, to the private sector enterprises in the SME sector, to the non-government agencies, to the national trade bodies, and to the service providers. A summary of the recommendations are listed below:

To The Government

  • Establish an admin unit and conduct media campaigns to raise awareness of citizens’ rights, the Anti-Corruption Act, and ethical standards. Use formal/informal channels to raise awareness against all types of corruption. Introduce educational elements to instill ethical standards and conduct large-scale campaigns to inform people about hidden corruption and ways to combat it.
  • Ensure accountability within government agencies and require them to inform the public about their accountability mechanisms and activities every six months. Investigate all reported corruption cases, enforce punitive measures, and empower a separate unit within each agency to conduct inquiries and forward complaints to the Anti-Corruption Commission (ACC). Appoint independent Ombudsmen at each government ofϐice to monitor and enforce laws and address the culture of impunity among perpetrators of corruption with lawful measures, regardless of their social or political stature.
  • Create an atmosphere for citizens to report corruption without fear, empower the ACC to act independently, and establish a unit within the ACC to receive public information and communicate actions taken within 90 days. Facilitate SME reporting and protect SMEs under the Public-interest Information Disclosure Act (Provide Protection), 2011 (popularly referred as the Whistle-blower Protection Act). Reform laws and reporting mechanisms, implement the Act, provide autonomy to the ACC, and establish accountability and transparency in the public sector.
  • Streamline license and certiϐicate processes with reduced points of contact and increased use of technology. Develop a one-stop solution for trade licenses and increase automation to prevent unlawful collusion or extortion.
  • Provide incentives and reduce regulations for small ϐirms. Develop and implement a comprehensive SME policy with support mechanisms. Reform VAT and income tax policies to address issues faced by the SME sector.

To the Private Sector Enterprises

  • Establish internal reporting systems to identify and address corruption during interactions with the public. Create a transparent system for informing the public about actions taken to address concerns, and publish annual reports. Adopt codes of conduct and ethics, and monitor compliance. Create accountability mechanisms and awareness campaigns for reporting corruption in the public and private sectors.
  • Establish a private-sector coalition to promote business integrity and address corruption issues. Develop independent platforms and networks to highlight sector-speciϐic concerns. Create networks of companies adhering to best practices and assist all SMEs victimized by corruption.
  • Ensure chambers and associations commit to anti-corruption, hold the government accountable, and take measures to combat corruption. Develop internal governance mechanisms and share best practices with entrepreneurs in the sector.

To the Non-Governmental Agencies

  • Design and implement campaigns on the existing laws and regulations and on mechanisms for reporting complaints about corruption in public and private sectors.
  • Complement the government’s efforts to raise awareness about the rights against corruption under the existing laws. To this end, insist that each ministry and agency make their efforts public.
  • Cooperate with the government to identify the inadequacies in the existing laws regarding corruption. Review the existing laws and recommend necessary amendments, new laws, and mechanisms for addressing the weaknesses of the existing laws.
  • Gather, document, and inform the public of the nature and scope of corruption in both the public and private sector, and offer remedies for the situation through public campaigns and regular reports via media.

To the Trade Bodies

  • Develop speciϐic plans and programs to address the concerns of the SME sector and mechanisms to create a supportive environment.
  • Develop plans to address the issues related to governance, corruption, and inclusive policymaking.
  • Create a transparent mechanism for reporting corruption and actions against corruption.
  • Develop and implement a strict code of ethics in various sectors, including the SME sector, and incentivize adherence to this code.

To Service Providers

  • Develop mechanisms to understand the needs of SMEs by engaging in robust dialogue, establishing feedback system to hone in on the needs of SMEs
  • Establish a commitment to work with the SME sector to change the lack of conϐidence in the SME sector by ensuring that due services are provided to them without any hinderences.