Evaluation of Current Situation of Fraud and Corruption in Thailand

Prepared byDr. Sutthi Suntharanurak

Auditor , Professional LevelOffice of the Auditor General of Thailand

Outline

• Research Methodology• Contents of current situation fraud and

corruption in Thailand- International Anti-Corruption index- Summary interesting results

Research Methodology

• Qualitative Method - Review literature about corruption in Thailand since 1997- Review literature about corruption assessment

• Questionnaire survey of our research team- Descriptive analysis

Corruption in Thailand since 1997• Why we start at 1997?

- Financial Crisis in Thailand Demand for Good Governance - 1997 Constitution of Thailand The Reform of Check and Balance system

• Since 1997 many Anti Corruption Agencies (ACAs) have been established to prevent and suppress corruption and money laundering in Thailand

• The Organic Act on Counter Corruption B.E. 2542 (1999)

• Act on Offences Relating to the Submission of Bids to State Agencies B.E. 2542 (1999)

• The Anti-Money Laundering Act B.E. 2542 (1999)• The Special Investigative Cases Act B.E. 2547 (2004)• Act on Administrative measure for prevention and

suppression corruption B.E. 2551 (2008)• The Organic Act of State Audit B.E. 2542 (1999)

• Since 1997 ACAs have been anti corruption both grand and petty corruption.

• Case studies of Grand Corruption in Thailand- Corruption in public procurement of medicine and medical equipment in 1999- Corruption of Klong Dann Sewage Treatment in 2000- Corruption of Bangkok International Film Festival in 2007- Corruption in public procurement of Bangkok fire fighting trucks in 2008- Unusually rich of the Permanent Secretary of the Ministry of Transport in 2012- Unusually rich of the Permanent Secretary of the Ministry of Defense in 2013

Statistical Corruption of ACAs

ACAsNumber of

Corruption and Money Cases

Sources

OAG Thailand 349 Database of OAG(1999-2012)

NACC 1,056 Database of NACC(2000-Present)

DSI 85 DSI Annual Year Report 2011(2004-2011)

AMLO 426 AMLO Annual Performance Report 2011(1999-2011)

Corruption Perception Index of Thailandduring 5 years (2008-2012)

Year CPI Thailand Ranking

2008 3.5/10 80/180

2009 3.4/10 84/1802010 3.5/10 78/178

2011 3.4/10 80/183

2012 37/100 88/176

Global Integrity Index of ThailandCategory of Integrity

MeasureIntegrity Indicators

ScorecardInterpretation

Indicators

Civil society, Public Information and Media

71/100 Moderate

Elections 47/100 Very Weak

Government Accountability

61/100 Weak

Administration and Civil Service

64/100 Weak

Oversight and Regulation

78/100 Moderate

Anti-Corruption and Rule of Law

68/100 Weak

Overall Score 68/100 Weak

Integrity Indicators Scorecard about SAIs and Anti-Corruption

Category of Integrity Measure

Integrity Indicators Scorecard

InterpretationIndicators

Whistle-Blowing Measures

69/100 Weak

SAI 83/100 Strong

Anti-Corruption Law 89/100 Strong

ACAs 63/100 Weak

Rule of Law 71/100 Moderate

Law Enforcement 50/100 Very Weak

Process of Collecting Data

1. To translate ASOSAI questionnaires in Thai version2. To determine the number of sample which I focused on ACAs

,that is, OAG, NACC, PACC, DSI, and AMLO.3. 155 questionnaires were distributed to 4 ACAs in order to

evaluate corruption situation in Thailand. Meanwhile, I send 10 questionnaires to AMLO in order to assess money laundering

situation.4. However, this research focuses on the role of SAI. Therefore I

selected 125 respondents from OAG Thailand. These respondents are auditors and investigators who have more

experiences to explain corruption situation.

Number of Sample

125

1010

10 10OAG

NACC

PACC

DSI

AMLO

Response rate and Challenge problem• There were 115 respondents (or response rate was

70% of all respondents) who returned their questionnaires back to me. However, these answers reflected only the evaluation of corruption situation.

• In process of collecting data, the challenge problem was the collaboration problem especially other ACAs

which I got only 10 questionnaires from DSI.• Further, some respondents commented about the complexity of some questions which seems to be hard

to answer.

The Statistics of respondents

40

65

10

OAG (HQ)

OAG (RGO)

DSI

Summary interesting results

1. Approximately 77.4% viewed that the current situation of corruption in Thailand seems to be

serious and pervasive in most or all sectors.2. Interestingly, almost 70% believed that the current

situation is much higher than previously.3. Half of respondents described that the tolerance

level is moderately intolerant towards corruption.4. Meanwhile, 54.78% of respondents explained that

the strength of steps taken by Thai government against corruption is at moderate level.

5. The first type of corruption based on perception of respondents is Grand corruption which 52.17 %

perceived it is prevalence in Thailand.6. However, 57.39% still believed that the prevalence

of petty corruption is at high level. Likewise, 75.65% recognized that the pervasiveness of grand

corruption is at high level, too.7. This dataset showed that common types of corruption seems to be the abuse of position/power

(28.69%) and criminal breach of trust (29.56%)8. Interestingly, half of respondents viewed that local

government or municipalities was the most vulnerable to corruption.

9. Approximately ¾ or 75% of respondents ranked that the greatest probability of corruption occurred

in procurement contracts sector.10. For the root cause of corruption in Thailand, about

44.35% believed that it had been derived from culture, customs and habits of giving bribes to get things done. In contrast, 40% seems to agree and disagree that main cause of corruption is derived

from the patronage-client system.11. About monitoring the situation of corruption,

53.04% viewed that it was essential. Likewise, half of them thought that it was essential to prioritize complaints of corruption or fraud from the public.

12. For reporting corruption, most respondents emphasized the important role of whistle blower.

Interestingly, 64.34% believed that the whistle bowling was effective to ensure complaints of

corruption.13. For the effect of corruption, most respondents

concerned seriously about damage of corruption to the government budget, private sector, and citizen.

14. Almost 65% strongly agreed that corruption during budget formulation is primarily grand or political

corruption. Likewise, more than half strongly agreed that unchecked and excessive discretion in the

budget process tends to create opportunities for political corruption.

15. Our respondents gave their opinions about conflict of interest which is usual style of corruption in

Thailand.16. Conflict of interest (COI) is a set of circumstances

that creates a risk that professional judgment or actions regarding a primary interest will be unduly

influenced by a secondary interest. (Thompson, 1993)

17. Example of COI : Self Dealing, Post-Employment, Outside Employment, Using inside information,

Using public property for private advantage, Pork barreling, etc.

Different countries but same behavior!!

18. Further, many respondents mentioned to the policy corruption which involved to the public policy

process. They explained that the policy corruption is related to both national and local politicians. It

still involved to the budget cycle especially the budget formulation and approval budget.

Thank you for your attention

You Will Never Walk Alone !!