How to Tackle Conflicts of Interest Within State Institutions

One of the biggest issues Iraq’s bureaucracy suffers from is conflict of interest. Conflicts of interest arise in many countries where state institutions are unable to provide unbiased services or suffer from poor administration.

A conflict of interest can be described as a situation in which the objectivity or independence of a decision-maker or an institution, when meeting a certain material or moral obligation, is compromised at the expense of their formal duties. It may also be expressed as duplicity of interests, whether actual or potential, and constitutes harm to the interests of others or to cast aspersions about them, whether they are ordinary people or public and private institutions.

There are many areas where conflict of interest might arise. However, there are a few very common areas where it occurs. Amongst the most important areas for institutions to focus on are the following:

Financial disclosure

Conflict of interest policies require employees to comply with the requirement of making financial disclosures. Basically, it means that employees have to inform the state where all their different sources of income come from. Such policies also require employees to respond to instances of conflict of interest by refraining from exercising the powers granted to them when making the decision involving the conflict of interest issue. In other words, if there is a situation where civil servants have stakes or any financial interest that might conflict with their job as government employees, and they are about to make a decision pertaining to these stakes or interests, they must inform the state.

Gifts

Institutions do, or at least should not permit their employees to accept any gift of any material value or to offer a gift themselves unless it is a symbolic or promotional, which must carry the name and logo of the party making it. They must also refuse a gift if it conflicts with their legal or administrative obligations. Some organizations decree that the prior approval of management is required before an employee can accept any form of gift. Furthermore, sample gifts received must be handed over to management.^[1]

Misuse of Information

Both public and private organizations forbid their employees from using information that is available to them by virtue of their position for the benefit of a third party, or from disclosing it to any third party; or to employ such information for their own benefit or to harm others.

Addressing and limiting conflicts of interest

From an organizational point of view, there is an urgent need to regulate the handling of conflicts of interest, including taking steps to eliminate or mitigate such conflicts. The following three-step approach can be used to achieve that:

A – Creating a clear administrative framework for conflict of interest

Key elements in managing potential conflicts of interest are to mitigate them and to employ international ethical standards for civil servants or a code of conduct that outlines how staff should behave, with the definition of conflicts of interest written in as much detail as possible. All this should lead greater awareness among staff, and to a decrease in the number of cases of conflict of interest. The code of conduct also outlines the basis for taking legal action against staff, such as the imposition of disciplinary measures if they fail to comply with these standards. The legal sanctions put in place should help address and mitigate financial conflicts of interest.^[2]

B – Identifying and reviewing conflicts of interest

Effective remedies require knowledge of the situation that may lead to a conflict of interest, and the employee disclosing these cases by informing the appropriate management of the organization in which they work. Management is only able to review these risks when cases have been submitted for consideration, such as financial disclosures by managers and employees where the organization investigates and gives its opinion on whether specific cases reflect conflict of interest or not.^[3]

C – Adopting remedial measures

Through the adoption of certain remedial measures, several ways become available to deal with conflicts of interest in a manner which best serves the interests of state institutions. The remedial measures taken vary depending on the nature and complexity of the conflict. These measures include, but are not limited to:

1. Employees stepping down from roles or reassignment of the employees.
2. Freezing of private assets.
3. Placing property under the management of an independent third party or under receivership.
4. Non-disclosure of confidential information belonging to state institutions.
5. Non-participation in special activities or with other political entities.
6. Changes in the organizational structure.^[4]

Iraq has a long way to go before it can effectively tackle corruption. Implementing stricter standards and procedures in order to tackle conflicts of interest is an important aspect of any successful anti-corruption strategy.

^[1] – Managing Conflict of Interest in the Public Sector A Toolkit: OECD Publishing, Aug 30, 2005 -p.45

^[2] – Managing Conflict of Interest in the Public Sector A Toolkit: OECD Publishing, Aug 30, 2005 -P.22.

^[3] – Ibid. p.70

^[4] – Ibid. pp. 33-34