15 April 2021 –
Ecuador has made significant progress towards developing normative legal frameworks for the implementation of most articles of Chapter II (Preventive Measures), but the implementation of Chapter V (Asset Recovery) provisions of the United Nations Convention against Corruption (UNCAC) remains poor, a new civil society report authored by Fundación Ciudadanía y Desarrollo (FCD) finds. FCD produced its report, which is intended as a contribution to the UNCAC implementation review process in its second cycle, with technical and financial support from the UNCAC Coalition.
While there are several bodies in place for the prevention of corruption in Ecuador, there is a lack of coordination between them. The main body in charge of corruption prevention is the Transparency and Social Control Function, which includes the Council for Citizen Participation and Social Control (CPCCS). This council, which has undergone many changes in leadership over the past few years, partly due to allegations of corruption, has been widely called into question in recent years. Similarly, the Presidency’s Anti-Corruption Secretariat was established in 2019 but was dissolved in mid-2020 due to institutions’ allegations of interference in their work.
An independent Commission of International Experts to Fight Corruption in Ecuador (CEICCE) was formally created in May of 2019, following a decision by President Lenin Moreno, with the aim to follow up on and support Ecuadorian institutions to uncover all acts of corruption and hold those responsible to account. UNODC was tasked with setting up this Commission soon thereafter, but the Commission has yet to be established, despite the fact that the contractual deadlines for its establishment ended in late 2019.
The official UNCAC review process in Ecuador is currently at the self-assessment stage. Although FCD has invited the government to sign the UNCAC Coalition’s Transparency Pledge on several occasions, no advances have been made in this regard so far. Nevertheless, the hope remains that the government will make both the self-assessment checklist and full country report available on Ecuador’s UNODC country profile page once they are finalized.
The following are some of the main findings according to topic:
Until the beginning of 2020, regulations on political financing in Ecuador included very few provisions related to transparency, accountability and financial management of political organizations. Authorities had very limited powers to investigate and sanction conduct related to illegal financing of campaigns and political organizations. High-level corruption cases such as the so-called “Green Rice” or “Bribes 2012-2016” case, which resulted in high-level convictions, recently led to regulatory reform on political financing. These reforms seek to strengthen transparency and accountability and provide more tools to the regulatory body to fight corruption. Their effective application began during the general election process in February 2021.
Asset declarations and codes of conduct
While all public officials are obliged to present sworn asset declarations both at the beginning and end of their term of office, there is a need to broaden their scope and strengthen transparency, both in relation to the declared content and the obligated actors (including, for example, candidates running for office), on the basis of international standards that allow for the creation of effective monitoring tools. Similarly, there are regulatory and practical weaknesses in codes of conduct for public officials of all State functions, as there are no minimum standards for institutional codes or adequate monitoring of their compliance.
Significant reforms on whistleblower protection, anonymous reporting, and incentives for effective whistleblowing were approved at the end of 2020. To achieve their effective application, these regulations require inter-institutional coordination processes that limit arbitrary enforcement and guarantee security for whistleblowers.
Ecuador has made a significant qualitative leap in public procurement in recent years, adopting international standards, open procurement policies and regulating situations that limit competitiveness and transparency. However, these efforts must be made sustainable to achieve a change in the system, which has been involved in multiple scandals of grand corruption. Additionally, there is a need to update legislation aimed at reducing corruption risks.
An independent justice system is crucial to effectively tackle corruption and overcome impunity. Other State functions’ interference in the justice system, especially by the Executive (through referenda, public consultations, transition regimes and evaluation processes) and the existence of disciplinary procedures based on largely subjective grounds, have directly impacted judicial independence and rendered the justice system unstable. Both national and international organizations have expressed their concern over these developments.
Private sector transparency
There is a need to develop regulations and incentives to implement anti-bribery and compliance systems in companies. Similarly, more proactive involvement, interest and willingness of the private sector to participate in corruption prevention practices is needed.
Access to information and the participation of civil society
While Ecuador has a law on access to information which is being widely enforced, it is outdated as it does not take into consideration new technologies and does not follow international standards. Furthermore, the country’s lack of legislation on the protection of personal data is a recurrent excuse used by officials to deny access to public information and several regional governments do not have the necessary resources to implement their legal obligations on providing access to public information.
In terms of citizen participation, the so-called “empty chair”, which is a unique practice in the region, grants a representative of civil society a seat in decentralized autonomous government sessions to participate in debates and decision-making. This provides any citizen with a voice and a vote to participate in local government processes. Finally, civil society organizations are regulated by executive decree instead of legally, which poses a risk of arbitrary enforcement.
There are regulations in place for the prevention of money laundering, but their application is poor, leading to very few convictions in this area. Prompted by the upcoming Financial Action Task Force (FATF) evaluation this year, the responsible public institutions developed technical standards, protocols, and instructions aimed at achieving the effective implementation of measures in the past year. The results of these efforts will soon be available for evaluation.
Although the country has legal tools for the confiscation of assets resulting from illicit activities in place, they are insufficient and limited. In recent years, there have been some advances on this matter, such as making confiscation against legal persons viable, but the continuing dependency on the existence of an enforceable conviction is a problem when the investigated or prosecuted person is a fugitive, dies or has immunity. A bill on asset forfeiture that will enable the recovery of assets without a conviction and improve the implementation of the UNCAC is currently under discussion in the National Assembly and represents a great opportunity for Ecuador to comply with international standards on asset recovery.
In its report, Fundación Ciudadanía y Desarrollo makes several key recommendations for priority actions to be taken to ensure the full implementation of the UNCAC in Ecuador, for example:
- Co-create a national plan on the prevention of and fight against corruption, including all government institutions and non-state actors. Publish all public policies on the matter and their status of implementation in a timely and proactive manner.
- Improve the coordination of prevention policies and actions promoted by different State bodies and public institutions in order to strengthen coordination, and make efficient use of resources and generate holistic impacts.
- Develop minimum standards and a model for public codes of conduct, as well as a follow-up mechanism for compliance with the respective institutions’ obligation to implement the standards and mechanism in collaboration with non-state actors.
- Regulate conflicts of interest and ‘revolving doors’.
- Extend the obligation to submit sworn asset declarations to candidates running for elected office as a requirement for registration; expand the content of these statements based on the Model Law of the Organization of American States (OAS); and guarantee access to the information contained therein to the public, with the limited exception of personal data.
- Approve a new Organic Law on Transparency and Access to Public Information (LOTAIP) in line with inter-American model laws, international standards and relevant new technologies.
- Regulate social organizations legally, and not by executive decree, in order to guarantee their legal security.
- Guarantee the correct and effective application of the Organic Integral Penal Code (COIP)’s new articles related to anonymous whistleblowing and incentives for effective reporting. Set minimum security standards for the use and management of reporting channels.
- Adopt measures to ensure that members of High Courts and Tribunals are appointed through public merit-based and competitive examinations that fully comply with the necessary publicity and transparency, and that disciplinary processes comply with the parameters of objectivity and the full implementation of the parameters of Open Justice.
- Include legal obligations for private companies to incorporate compliance and anti-bribery programs, especially in sectors with a high risk of corruption.
- Develop regulations to regulate financial technologies, including crypto-currencies and crypto-assets.
- Promote the adoption of regulations that facilitate asset recovery and international cooperation in this area without violating citizens’ fundamental rights.
More specific recommendations are provided in Chapter VI of the report.