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350 Diagnosing Corruption in Ethiopia considered to be the highest-risk area for corruption and identifies a number of concerns, including the following: 17 • A significant amount of equipment appears to become obsolete soon after procurement. • In some cases, decisions appear to be made quickly on the basis that the matter is urgent. As a result, the procurement procedures are by passed—thus, for example, allowing sole-source purchasing instead of competitive tendering. • Some contracts are placed and then terminated shortly afterward. • In some cases, the ETC purchases new equipment when it already has the necessary equipment in the warehouse. • The ETC’s procurement procedures allow for the debarment of poorly performing suppliers, but the ETC does not appear to exercise this right. • Some prequalifications and tenders allow too much room for subjective assessment, potentially causing some suppliers to be inappropriately eliminated from the tender list. • There should be greater use of more objective tender criteria. • Some suppliers offering home country visits during a tender can improperly influence tender evaluation. • The ETC’s staff lacks capacity, which increases the corruption risk. Press reports cite three cases of alleged corruption between July 2007 and August 2008: • In July 2007, the ETC allegedly dismissed 16 high-level employees for corruption as a result of an audit report that suggested irregularities in purchases from international suppliers. The contracts in question allegedly were worth US$54 million. • In January 2008, the FEACC brought charges against a former ETC CEO and 26 former ETC executives for allegedly “procuring lowquality equipment from companies that were supposed to be rejected on the basis of procurement regulations.” The contracts in question allegedly were worth US$154 million. • In August 2008, the FEACC arrested a senior ETC manager after receiving an audio recording and transcript from an anonymous source in which the manager is allegedly recorded soliciting a bribe from an international supplier. The case is yet to be resolved.
Corruption in the Telecommunications Sector in Ethiopia: A Preliminary Overview 351 Differing Stakeholder Perceptions During the interviews and the stakeholder workshop, the views expressed tended to coalesce into three broad groups as follows: • Minority Group A. This group acknowledged weaknesses within the sector but attributed those weaknesses primarily to a lack of capacity rather than corruption. • Minority Group B. This group acknowledged serious breaches of procedure and other “dubious practices” but considered these mainly to be well-intentioned attempts to act in the best interests of Ethiopia’s telecoms sector, even if that meant having to bypass some unduly cumbersome administrative procedures. • Majority Group C. This group considered the sector to be deeply affected by corruption that goes well beyond what can reasonably be attributed to lack of capacity or genuine efforts to bypass cumbersome procedures. Box 8.1 sets out further details of each group’s perspectives. Box 8.1 Stakeholder Perceptions of Corruption in the Ethiopian Telecoms Sector In the course of interviews and workshops, a range of stakeholder perceptions were obtained about corruption in the telecoms sector, particularly in relation to the appointment of equipment suppliers. These views are summarized below. Minority View A: “Low capacity but not corruption” • Because many ETC senior managers are involved in key decisions and so many controls are in place, any corruption would need to involve too many people to be plausible. • Some contracts are placed where all procedures had been properly followed. • There is a capacity problem, evident both in a shortage of properly qualified ETC staff and in flaws in the ETC procedures. • The high technology and quickly advancing nature of telecoms equipment results in poor decisions that could be mistaken for corruption. • The high levels of changing technology create an asymmetrical relationship between ETC staff and international suppliers. (continued next page)
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DIRECTIONS IN DEVELOPMENT Public Se
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Diagnosing Corruption in Ethiopia P
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Contents Foreword Preface About the
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Contents vii Chapter 6 Construction
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Contents ix Map 3.1 Ethiopian Regio
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Contents xi 3.6 Summary of Corrupti
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Foreword The government of the Fede
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Preface Although many would argue t
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Preface xvii Goldie-Scot, Piers Cro
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xx About the Editor and Authors bil
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xxii About the Editor and Authors g
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xxiv Abbreviations GAC Governance a
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CHAPTER 1 Overview Janelle Plummer
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Overview 3 Focusing on Ethiopia, th
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Overview 5 for their knowledge of c
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Overview 7 and group discussion wit
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Overview 9 analysis, Goldie-Scot ge
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Overview 11 Chapter 8: Telecommunic
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Overview 13 might be explained by t
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Overview 15 The perceptions of corr
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Overview 17 Given the Ethiopian gov
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20 Diagnosing Corruption in Ethiopi
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44 Figure 2.4 Corruption Vulnerabil
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100 Diagnosing Corruption in Ethiop
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154 Table 4.4 Value chain area Cons
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Annex 4.1 Ethiopian RWS Borehole St
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CHAPTER 5 Justice Sector Corruption
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Justice Sector Corruption in Ethiop
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Table 5.2 Disposition of Civil and
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CHAPTER 6 Construction Sector Corru
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Construction Sector Corruption in E
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Table 6.7 Overview of Perceived Cor
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Figure 6.5 Drivers of Corruption Ri
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292 Table 7.1 Upstream Value Chain
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Corruption in the Mining Sector: Pr
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