Georgia and Corruption - Georgia Failed to Present Anything at the Conference of UNCAC States Parties

News | FIGHTING CORRUPTION | Article 27 January 2022

On December 13-17, 2021, the Ninth Conference of the Parties to the UN Convention against Corruption was held in Egypt. The Conference of the States Parties (COSP) is the main platform of the United Nations Convention against Corruption (UNCAC), which supports the implementation of the Convention and provides guidance on the development and implementation of anticorruption activities. The Conference is held every two years and makes resolutions and decisions within its mandate.


The participants of the Ninth Conference discussed issues related to the implementation of the Convention, including the prevention of corruption; National Anti-Corruption Strategies and Action Plans - their development and implementation; the effectiveness of whistleblower mechanisms; transparency of beneficial owners and mechanisms of assets declarations.


Several documents were approved at the conference on: strengthening anticorruption mechanisms in the context of the pandemic, improving cooperation between audit and anticorruption services, intensifying the implementation of the Convention against Corruption in the regions, raising awareness about the transparency of beneficial owners.


At the plenary session of the conference, senior officials of the member states spoke about the importance of fighting corruption and the reforms implemented or to be implemented for this purpose. Unfortunately, the Georgian delegation did not attend the conference and no statement was made on behalf of Georgia. Georgia's inactivity on the most global anticorruption platform is another proof that anticorruption activities are no longer a priority in the country.


All issues discussed at the UNCAC conference are relevant and important for Georgia. In particular:


Anticorruption policy in Georgia has virtually suspended – the National Anticorruption Council has not met in recent years and, consequently, is inactive. At the beginning of 2021, according to the amendment to the Law of Georgia on Conflict of Interest and Corruption in Public Institutions, the organizational support and administration of the Council should be provided by the Government Administration instead of the Ministry of Justice. The mentioned legislative change was enacted in a hurry, without any consultations and public discussions, the issue was not discussed at the meeting of the Anti-Corruption Council. One year after the amendment, the Anti-Corruption Council Secretariat has not been established within the government administration, and the Ministry of Justice no longer functions as a secretariat. To date, no national Anti-Corruption Strategy and Action Plan for 2021-2022 has been developed. Against this background, it is even more remarkable that international indexes and ratings point to the deterioration of the anticorruption environment in Georgia. In particular, according to the Business Corruption Risk Index published by Trace International at the end of 2021, Georgia's 2021 indicator has deteriorated compared to the previous year. In the last five years Georgia had the best performance in 2017, when the country ranked 25th out of 200 countries with 23 points. According to the World Justice Project, in terms of freedom from corruption in the rule of law index in 2021, Georgia moved one step behind the previous year. As for the corruption perception index by Transparency International, Georgia although being a leader in the region, moved four steps behind during the last three years. Georgia had the best result in 2013 in controlling the corruption according to the World Bank World Governance Indicators, and since then the rate has been slowly deteriorating. At the same time, at the 21st Plenary Session of the Anti-Corruption Network of the Organization for Economic Cooperation and Development (OECD / ACN), at which the Corruption Environment Assessment Report was to be approved on Georgia, the Georgian delegation made unconstructive and non-collegial statements against the authors of the report, which hinders the long-standing productive relationship with the OECD/ACN. The Georgian government refused to approve the report at the meeting and requested additional time to change the text of the document.


Improving the transparency of Beneficial Owners in Georgia is essential. According to a study conducted by IDFI, more than 65,000 transactions and 31 suspicious transactions were carried out between 2018-2020 with the involvement of legal entities registered in high risk jurisdictions and the legal entities registered in Georgia by them in the territory of Georgia that were above the threshold provided by the legislation on the prevention of illicit income legalization. Georgia lost about 4 billion USD between 2011 and 2020 due to corruption risks in public procurement. According to the World Bank, on a global scale, 70% of major corruption cases involve companies which beneficial owners' information is not publicly available. Therefore, in order to ensure the transparency and universal access of the beneficial owners, it is necessary to create a Beneficial Ownership Register and to extend the openness requirements of the beneficial owners to areas such as public procurement, state property management and mining industry.


Georgia does not have a comprehensive mining industry policy framework and is not a member of the Extractive Industries Transparency Initiative. EITI is an international transparency standard that offers knowledge, experience and expertise to any country willing to make its extractive industries open and accountable. EITI standards ensure that activities in the mining sector are transparent, adhering to accountability principles and involving stakeholders, which can increase the efficiency of the mining sector as a whole. It should be noted that the social, economic, and environmental impacts of the mining industry often vary by gender - women are more vulnerable to the negative impacts of mining activities and have less influence over the management of these processes. The practice in the world, including in Georgia, shows  that the benefits of the mining industry are unequally distributed among men and women. In many cases, men have more access to benefits related to employment and income, while women suffer more because of deteriorating social and natural environments. On the other hand, the involvement of women in mining industry projects is minimal and, consequently, the benefits they receive from this sector are very small. In response to the existing challenges, active cooperation with relevant international initiatives and introduction of international standards at the national level are necessary; as well as existence of appropriate policies at the central level; raising local community awareness; and etc.


Access to public information is alsosubject to improvement in Georgia. To this end, a draft Freedom of Information Act prepared years ago has not yet been adopted and no oversight mechanism has been set up. Although this commitment was taken over from the Ministry of Justice by the government administration about a year ago, no progress has been made in this direction. At the same time, it should be noted that since 2013, the Georgian government has not taken significant steps to improve the standard of proactive disclosure of information. According to IDFI’s study, as of September 2021, 13 out of 123 public institutions did not have their own websites at all; 13 public institutions did not have a public information section on the website or did not publish any information in that section; In 2021, the average compliance rate of proactive accessibility of public information was 56%, which is 15% lower than the same figure in 2014; By 2021, only six public institutions had fully published information in accordance with legal requirements.


Monitoring carried out by IDFI during the pandemic revealed that there are still significant gaps in public procurement that need to be addressed to ensure targeted and rational spending of public finances.Studies published by IDFI discuss in detail the political affiliations of supplier organizations; Unnecessary simplified procurements, which increase corruption risks, as simplified procurement contracts are still accepted by ruling party donors and in some cases companies of incumbent officials. IDFI was indicating in its studies that it was necessary to conduct coronavirus-related procurements through e-tendering and to minimize simplified procurements. Although the number of simplified procurements was drastically reduced between June and November 2021, challenges remain. In particular, a large proportion of simplified contracts concluded as a matter of urgency are based on the disruption of consolidated or electronic tenders, or shortcomings in their planning and market research.

Asset declaration monitoring  mechanismneeds to beimproved and the practice of publishing declarations in open format should be introduced. According to a World Bank report, current asset monitoring systems should additionally address money laundering and new forms of corruption and make it possible to identify beneficial owners. In Georgia, the verification of declarations is still limited to technical supervision and it is not used to identify potential corruption cases. According to the monitoring carried out by TI-Georgia, there were virtually no cases when the Bureau uncovered such irregularities as signs of corruption, conflict of interests or activities incompatible with office, illicit enrichment and/or unexplained wealth, violation of restrictions after leaving office (revolving door), and other similar violations. In Georgia, persons whose positions are vulnerable to conflict of interest / corruption are exempt from the obligation to file an asset declaration. For example, GRECO in its fourth round report and OECD-ACN in its third round report indicated that such a shortcoming is the fact that the obligation to file a declaration does not apply to all prosecutors. It should be noted that a number of suspicious circumstances identified by NGOs within the study of the declarations are left without response.


Important steps needs to be taken in the country to improve whistleblower protection standards and practice, as the whistleblowing institution is one of the most important components of ethics and good faith standards enforcement in practice and plays a major role in the fight against corruption. IDFI’s study proves that the effectiveness of the whistleblowing mechanism is hampered by both an inadequate legal framework and an insufficient will to implement the norms in practice, leading to distrust of the mechanism. Within the legal framework, it should be noted that the Georgian legislation on whistleblowing does not cover the private sector and the so-called Law enforcement agencies; Does not allow unconditional public disclosure even in exceptional cases; Does not indicate the obligation of public agencies to establish an internal disclosure mechanism and to develop a clear procedure, etc. As for the challenges identified in practice, the analysis of public data and the results of the survey of public servants indicate that public institutions do not record or incompletely record disclosure statements and / or do not release information related to them; Public servants' awareness of internal disclosure mechanisms is low; Public servants have a sense of insecurity and mistrust and believe that the management of public institutions is forgiving towards ethical violations committed by high-ranking employees and in case of disclosure, they might create a problem for the whistleblower.


As we see, in Georgia most of the mechanisms, which are essential to succeed in the fight against corruption are not working properly and need to be improved. Therefore, IDFI calls on the government to intensify Anti-Corruption activities and implement appropriate reforms to address the shortcomings in all of the above-mentioned areas. In this process, active cooperation with international partners, as well as local civil society and stakeholders iss essential.




This material has been financed by the Swedish International Development Cooperation Agency, Sida. Responsibility for the content rests entirely with the creator. Sida does not necessarily share the expressed views and interpretations.

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