2 November 2021 –
Although Paraguay has made important progress towards developing normative legal frameworks for the implementation of articles of Chapter II (Preventive Measures) and Chapter V (Asset Recovery) provisions of the United Nations Convention against Corruption (UNCAC), obstacles persist and there is evidence of insufficient action in the implementation of these policies, a new civil society report authored by Semillas para la Democracia finds. The CSO 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.
The Secretaría Nacional Anticorrupción (SENAC), the main anti-corruption body in Paraguay, has made concerted efforts in the prevention of corruption and is currently coordinating the development of a National Plan of Integrity and Transparency by involving all three State powers, as well as non-governmental actors such as the private sector, academia, and civil society. Nevertheless, Paraguay lacks an integral and sustainable anti-corruption policy that spans across institutions and governments.
In addition, a series of barriers persist to the effective fight against corruption in the country, such as the lack of legal independence of the Judiciary, which translates into a high level of impunity; discontinuity of policies and projects with changes in authorities; absence of regulations to manage conflicts of interest; the prevalence of clientelism and political nepotism; lack of efficient control of political financing; weak development of a culture of ethics among the population; and oversight institutions that do not have adequate computer systems for information processing.
The official UNCAC review process in Paraguay was scheduled to begin in 2020. The government has finalized its self-assessment checklist and has announced that it has yet to share it with civil society. The executive summary and hopefully also the other review documents will be available on Paraguay’s UNODC country profile page once they are finalized. Read the full civil society report in English here. The original version of the report in Spanish can be found here.
The following are some of the main findings according to topic:
Public sector employment
Notable efforts have been made by the administration to professionalize the administrative career, not only through public competitions but also through training plans and continuous training on various topics that are relevant to the efficient functioning of the administration.
Nevertheless, clientelism and nepotism continue to be the calling card for access to jobs in the public sector, especially in senior management positions, defined by Law No. 1626/00 “On Public Service” as positions of trust. Along the same lines, the high politicization of positions of top management, the constant rotation of personnel coinciding with changes in government, the persistence of the temporary hiring modality that legitimizes access to public employment in conditions of inequality and discrimination, and the formalistic implementation of performance management, which does not yield reliable and measurable information on the real performance of civil servants, are just some of the obstacles that persist and delay the effective strengthening of public employment, as a strategic condition for quality governance.
The new law on political financing from 2020 establishes specific procedures for during and after internal, general, and municipal elections, as well as specific sanctions, which constitutes an advance in legal matters of oversight of political financing. However, the enforcement of sanctions is one of the law’s main weaknesses in the oversight of political financing, since it does not allow the Superior Court of Electoral Justice to apply sanctions to those candidates who commit irregularities in the rendering of accounts. The law foresees pecuniary sanctions, i.e.; a fine or removal of the electoral subsidy in relation to the degree of compliance; however, it is the political grouping that assumes the consequences for the candidate’s non-compliance, which means that this process does not prevent the candidate from continuing in the electoral race in spite of not being transparent with their campaign expenses. More coordinated action is required from the institutions in charge.
This law was first tested at the recently held municipal elections in Paraguay on 10 October 2021, but this, unfortunately, goes beyond the scope of this report.
Codes of conduct, conflicts of interest, and asset declarations
There is insufficient regulation of key issues such as conflicts of interest and sworn asset declarations in Paraguay. Paraguay has shown progress through internal regulations; however, in the sphere of the State Agencies and Entities under the Executive Branch, there are difficulties in the effective application of Law 1626/2000 of the Civil Service, due to the unconstitutionality actions filed against it. Sworn asset declarations of public officials only became public as of 2020 through a ruling of the Constitutional Chamber of the Supreme Court of Justice (CSJ), which ordered the Comptroller General of the Republic to publish the ones submitted between the years 1998 and 2017. However, the current law remains a stumbling block that allows such statements to be published only with a court order, with which the sworn statements subsequent to the ruling, are not public to date (2018 onwards).
Hence, there is an urgent need to unify criteria in a single regulation of general application and to advance specific normative development that allows for the identification and prevention of conflicts of interest in the performance of public services, the standardization of codes of conduct, and the strengthening of the system of presentation and analysis of sworn asset declarations, making their publication mandatory for more transparency.
Although Paraguay has developed legislation on the issue of witness protection, there are countless international recommendations to review it in order to bring it into line with the UNCAC. There are two bills on the subject, but there has been no continuity in their study or in the debate of the results of the application of the current law and possible modifications. Despite this, the selective indictment of human rights defenders and the application of administrative punitive law for disciplinary purposes persist, used systematically by politicians and even judges and other public figures to persecute and intimidate whistleblowers of public corruption. Therefore, the development of adequate mechanisms for the protection of witnesses and whistleblowers is crucial.
Public procurement and management of public finances
Paraguay has one of the most modern open public procurement systems, with the National Directorate of Public Procurement (DNCP) being one of the pioneering institutions in the implementation of active transparency. The public procurement portal provides a detailed insight into how different state institutions make purchases, with the ability to track the different stages which are classified in the portal: planning, calls for tenders, awards, contracts, and contract modifications. Despite the availability of portals and wide normative development, there is a general lack of open data, and institutional weaknesses in terms of a scarce culture of integrity and a poor internal control environment persist, according to several national and international institution reports.
A good practice has been the implementation of the “Rindiendo Cuentas” platform, implemented as a result of public-private corruption scandals in the management of emergency funds during the first months (from March 2020 onwards) of the declaration of the COVID-19 health emergency. This platform allows citizens to have greater access to all programs of the public institutions that were assigned to manage and execute the emergency resources, as well as an interactive map of investments – all in open data. Nevertheless, it should be noted that the available information, which is extremely technical, is not sufficient for citizens to be able to perform effective oversight over it.
Access to information and participation of society
Paraguay has had an access to information law since 2014. A successful practice of transparency and access to public information is that of the Supreme Court of Justice, which makes available to the public and the media a platform for monitoring emblematic cases of corruption that were selected in a participatory manner, through recommendations of the Paraguayan lawyers’ associations and after requests for information. Various initiatives implemented by SENAC, such as the active transparency panel, the COVID-19 investment map, the citizen accountability manual, and the complaints panel are examples of good practices from the administration.
However, making information comprehensible to and usable for the public is a pending task in order to empower civil society and guarantee broad access to information.
Moreover, citizen participation mechanisms promoted by the public administration are focused solely on the use of technologies, through portals and even apps, but many of them do not include an accessibility approach and do not consider the digital divide in terms of interculturality, territoriality, generational diversity and gender. Additionally, freedom of expression continues to be restricted in several cases, such as those where judicial persecution and violence are used against journalists, as well as against civil society organizations and activists who make use of the media to report corruption.
Judiciary and Prosecution Services
Political influence and nepotism continue to be the most effective means to access positions in the justice system. Furthermore, a report by Freedom House from 2020 states that local judicial authorities in Paraguay have been co-opted by groups of organized crime that are linked to money laundering and drug trafficking. In such circumstances, impartiality, which is the most important prerequisite without which justice cannot be realized, can hardly be ensured. Furthermore, prosecutors facing objective investigations are not infrequently intimidated by proceedings before the Jury of Impeachment or receive threats against their integrity, lacking the necessary security for the correct performance of their duties.
Additionally, there are several cases of selective criminalization, where criminal proceedings are promoted as a means of intimidation against social leaders, human rights defenders, and journalists who investigate acts of corruption, without due process of law. On the other hand, there are several cases of major public corruption, without diligent investigations, which increase the sense of impunity. The Global Impunity Index ranks Paraguay among the countries with very high impunity (53.15/100) and recommends that a reform of the justice system be carried out to guarantee the administration of justice, promote respect for human rights and reject any tolerance of crime.
Transparency in the Private Sector
There is a lack of regulatory development on conflicts of interest in the private sector and in relation to revolving doors.
In 2019, the following were created: the administrative registry of legal persons and structures and; a registry of beneficial owners, both with the purpose of making the regime of legal persons and structures in the country transparent, combating tax evasion, money laundering, corruption, and financing of terrorism. The enforcement authority in charge of such registries is the Ministry of Finance through the General Directorate of Persons and Legal Structures. The data of such registries is available to public authorities with competence in the prosecution of money laundering, monetary offenses, tax evasion and financing of terrorism, and banking, financial, insurance, securities and pension supervision or superintendence; however, the publication of the compliance or non-compliance status of the obliged subjects is foreseen through active transparency.
Paraguay ranks among the countries with the highest exposure to money laundering in the region (see here and here). Despite recent regulatory changes, with which the minimum standards related to the prevention of money laundering, bribery, transnational bribery, special procedures for the deprivation of benefits and profits, confiscation, etc. were largely met, the regulatory and institutional frameworks are insufficient if they are not accompanied by political will and processes of capacity building of people, institutions and key organizations for their implementation, mainly in the fiscal and judicial areas. The lack of coordination between the different links in the judicial chain and insufficient clarity about the mandate of certain public institutions result in a partial or inadequate response to the phenomenon of organized crime in Paraguay.
It is therefore necessary to continue strengthening the authorities in charge of investigating money laundering and underlying crimes. Efforts to prevent and combat this crime -which has become transnational- are fundamental and coordination and international cooperation must be strengthened.
The asset recovery policy in Paraguay is currently not aimed at repairing a problem of social damage. Without this, asset recovery becomes a mechanism for using asset forfeiture in criminal cases in isolation. Moreover, the greatest problem lies in the judicial sphere, where it is crucially necessary to promote a culture change in the operators of justice in order to give investigations of assets the same importance as investigations focused on the attribution of criminal responsibilities.
In its report, Semillas para la Democracia makes several key recommendations for priority actions to be taken to ensure the full implementation of the UNCAC in Paraguay, for example:
- Ensure the active participation of civil society in the fight against corruption, providing opportunities for civic monitoring and social auditing in a secure context.
- Take measures to reduce the bureaucratization of public services, in open and interoperable data, optimizing procedures, investing in electronic management platforms and ensuring confidential channels to measure the traceability of public services and the level of citizen satisfaction, with a human rights and gender approach that allows accessibility at all levels, including vulnerable populations.
- Criminalize the punishable act of abuse of functions in accordance with the Convention, and classify money laundering as an underlying offense.
- Make public all sworn assets declarations of obligated objects and suppliers of the State from 2018 until now, in open data.
- Approve the draft law on integrity and prevention of conflicts of interest in the performance of public functions, presented by SENAC, which incorporates the standards of the UNCAC and IACC, including the express regulation of the so-called revolving doors.
- Legislatively promote the express prohibition of cash contributions and the distribution of gifts in electoral campaigns, as well as the suspension of the party or candidate who incurs infractions related to political financing.
- Protect whistleblowers by establishing accessible and anonymous reporting mechanisms, guaranteeing genuine protection against any form of persecution or reprisal, in accordance with the highest standards provided for in the Convention and other international best practice standards.
- Approve the draft amendment to the public procurement law in accordance with the legal gaps identified by the governing body that would contribute to further transparency of the processes allowing for greater control.
- Promote prevention or compliance programs against corrupt practices in the private sector guilds and companies.
- Strengthen investigative bodies with specialized intelligence techniques and integrated management systems in the institutions and explicitly strengthen coordination mechanisms between the different state agencies with competence in the fight against corruption, laundering of money and other assets, including asset recovery processes.
- Promote bilateral and multilateral agreements to increase international cooperation in the recovery of assets for confiscation purposes.
- Strengthen access to justice by investing adequately in institutions and ensuring transparent and independent processes in the selection and appointment of judges and prosecutors, and in the establishment of transparent criteria for the assignment of cases.