The Norwegian experience

Transcription

1 The Norwegian experience Trinidad 28th September 2017 Guro Slettemark, Secretary General Transparency International Norway

2 No country is free of corruption Norwegian policeman jailed for 21 years in drugs case Reuters Staff OSLO (Reuters) - A former senior Norwegian police officer was sentenced to 21 years in prison on Monday for aiding drug smugglers and taking bribes in a case that captivated a nation accustomed to clean law enforcement.

3 Falsified drivers licenses (under investigation): Mannen skal også ha mottatt bestikkelser fra Olsen Bil AS ved at han fikk betalt kredittkortregninger på i overkant av kroner. Over flere år skal mannen i 40-årene også ha mottatt kroner fra Olsen Bil AS.

4 Norway 1800 km from north to south km2 5 mill inhabitants 16 people pr km2

5 What is working well? Examples Well functioning governence institutions (NIS Report 2012 TI Norway, The Global Competitiveness Report World Economic Forum ) High degree of transparency (access to information, open state budget etc) Responsible and transparent management of oil and gas revenues (political consensus) Also important: High level of trust

6 The Norwegian experience: Making oil revenue to benefit the people 1. Brief history and fundamental preconditions 2. Commandments for the petroleum policy 3. Production and revenues 4. Management of the sector 5. Tax-policy 6. Management of the revenues the Pension Funds

7 Brief history and fudamental issues in the Norwegian society Second world war Norway occupied Late 1950s discovery of gas in the Netherlands gives optimism in Norway 1963, Norwegian government proclaimed sovereignty over the Norwegian Continental Shelf (NCS) New regulation determined that the State owns any natural resources on the NCS, and that only the government is authorized to award licences for exploration and production.

8 1971, production started Brief history. 1972, Statoil created (100% state owned company) 1985, State` s participation reorganized 1990, Government Pension Fund established 2001, 4 per cent rule - petroleum revenues shall be gradually phased into the economy, estimated at 4 per cent a year. 2007, EITI candidate country 2011, EITI compliant

9 Important preconditions Democracy was reestablished Consensus in politics to build the country towards a welfare state Free press/media Freedom of information act (1970) Public state budget Lack of national knowledge and competences pure nationalisation was out of the question Increased awarness of the pollution threats of the sector

10 2. Commandments for the petroleum policy The standing committee on industry in the Parliament produced 10 oil commandments in These principles have subsequently been significant for the direction and shape of Norwegian petroleum policy. Examples: Oil and gas resources should benefit the society as a whole Stepwise and timely exploration and devlopement of the resources The presence of natural resources should lead to industrial developement

11 Act 29 November 1996 No. 72 relating to petroleum activities Section 1-2 Resource management Resource management of petroleum resources shall be carried out in a long-term perspective for the benefit of the Norwegian society as a whole. In this regard the resource management shall provide revenues to the country and shall contribute to ensuring welfare, employment and an improved environment, as well as to the strengthening of Norwegian trade and industry and industrial development, and at the same time take due regard to regional and local policy considerations and other activities.

12 Petroleum revenues 2009: approximately 27 % of total state revenue came form the sector 2016: Decreased to approx. 13% The state`s large share of the value is created through: - Taxation of oil and gas activities - Direct ownership in in fields and infrastructure - Charges and fees - Dividends from ownership in Statoil (67% of the shares)

13 3. Government petroleum revenues

14 Tax policy Norway has implemented a specific fiscal system designed to secure state revenues from petroleum activities. The main rationale for the system is the extraordinary returns associated with production of petroleum resources. The specific fiscal system is explained by the objective that all petroleum resources shall benefit the socitety as a whole, and that oil and gas companies are allowed to exploit a valuable and scarce resource. The ordinary tax rate is the same as for land activities, 24 per cent, whilst the special tax rate is 54 per cent.

15 One-stop-shop for information

16 6. Management of the revenues The Government Pension Fund Large petroleum revenues have resulted in substantial financial assets in the Government Pension Fund. The purpose of the Government Pension Fund is to facilitate government savings necessary to meet the rapid rise in public pension expenditures in the coming years, and to support a long-term management of petroleum revenues.

17 The Pension Fund in a nutshell The Fund functions as a tool to strengthen the budget process and builds on existing institutions. The Fund is only invested abroad in financial assets. This ensures risk diversification and good financial returns, and helps to protect the non-oil economy. There is a high degree of transparency and disclosure of information. This helps build public support for a wise management of petroleum revenues, and reduces the risk of bad governance.

18 The market value to the Government Pension Fund Global

19 The spending rule The funds capital inflow consists of ALL government petroleum revenue To support a long term management of the revenue, only 4% of the real return of the fund should be spent on the annual national budget (the spending rule)

20 Council on Ethics established by Royal Decree 19th November,2004. The role of the Council on Ethics for the Government Pension Fund Global is to provide evaluation on whether or not investment in specified companies is inconsistent with the established ethical guidelines. Norges Bank makes decisions on the exclusion of companies from the Fund's investment universe based on the Council's recommendations. Both the Bank`s decisions and the Council's recommendations are made publicly available on the Council's website.

21 Ethical guidelines in brief The Fund must avoid investments that constitute an unacceptable risk of contributing to serious breeches of its norms. The task of the Council on Ethics is to supervise the portfolio with a view to detecting whether companies should be excluded from the Fund s investment universe and giving Norges Bank advice in this respect. If the Bank follows the Council s recommendation, it will sell its shares or obligations in a given company.

22 Ethical guidelines exclusion of companies Practices that may lead to exclusion include serious or systematic human rights violations, severe environmental damage, gross corruption, serious violations of the rights of individuals in situations of war or conflict, other particularly serious violations of fundamental ethical norms.

23 What is a National Integrity System Assessment? National Integrity System Assessments (NIS) Holistic evaluation of country s main governance institutions in terms of their capacity, transparency, accountability and integrity and their interactions with each other.

24 NIS Reports A holistic, systemic view of governance Focus on corruption prevention system (both in law and in practice) Produced by in-country experts Complements TI s global indices Provides evidence-based policy recommendations

25 National Integrity Study (NIS) The research exercise focuses on an evaluation of the key public institutions and non-state actors in a country s governance system with regard to (1) their overall capacity, (2), their internal governance systems and procedures, and (3) their role in the overall integrity system. The NIS assessment approach is targeted towards country-level civil society organisations, which work in the field of anti-corruption and good governance. It can be a relevant tool in a variety of contexts and for a wide range of purposes.

26 NIS key public institutions (pillars)

27 WATCHDOG AGENCIES A Dysfunctional NIS N A T I O N A L I N T E G R I T Y QUALITY OF LIFE LEGISLATURE EXECUTIVE JUDICIARY AUDITOR GENERAL OMBUDSMAN PUBLIC SERVICE MEDIA CIVIL PRIVATE INTERNATION P U B L I C A W A R E N E S S S O C I E T Y S V A L U E S

28 How are the institutions examined? The NIS methodology assesses the thirteen (twelve for Norway) institutions along three dimensions; 1. Capacity 2. Governence 3. Role Each dimension comprises a set of indicator questions answered qualitatively (text) and quanitatively (score) Please note: there are many ways to assess whether an institution can be said to be robust, efficient and characterized by integrity

29 REPORT: NORWAY `S INTEGRITY SYSTEM NOT QUITE PERFECT? Launched in June 2012

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31 Conclusions A well functioning integrity system, but The overall assessment is that Norway s integrity systems function well. All pillars achieve a total score of 82 or higher, which has to be considered as very good. All in all Norway is considered to have a robust system of well-funded institutions that can carry out their work and act independently and autonomously. Furthermore, none of the assessed sectors can be said to be exposed to a lot of unwarranted pressure from outside actors.

32 Well functioning, but.. The study identifies both strengths and weaknesses of the Norwegian Integrity System. On this basis, Transparency International Norway (TI-N) presented some recommendations that could help strengthen the Norwegian Integrity System. It is our task to ensure that these recommendations are followed up. Nine recommendations..

33 Recommendations one example Rules on conflicts of interest and a lobby register for the parliamentary representatives

34 How? Work together 1. Joint actions/ad-hoc groups (time limited) 2. Strategic partnerships (longer term cooperation) Different roles but same goal «Islands of integrity»

35 1. Joint actions: Lobbying for transparency in lobbying TI Norway, Norwegian Press Association, Association of Norwegian Editor and Norwegian Communication Association (NCA) Fresh debate on revolving doors in connection to the parliament election 2013 A private member s bill on lobby register from the Liberal Party The debate gave us a window opportunity First meeting in action group: January 8 th 2014

36 The quartet in action January 27th

37 So far not a success-story work with/in progress?

38 2. Strategic partnership TI Norway and the Norwegian Association of Local and Regional Authorities (KS) (2010) Different roles but the same goal Municipalities free of corruption Started up with a handful of municipalities in a network Some funding from the Ministry of Local Government and Modernization ( ) = Competences, logistics, financial support and a project rooted at the municipal level

39 The work Networks of 40 municipalities, covering 40% of the population Work-shops with learning, training, home-work and experience-sharing (no taboos!) Focusing on prevention and good practices Participants: Head of administration and key staff personnel Outcome: Handbook in anti-corruption Protect Your Municipality!

40 Result: Success J «Public sector is based on trust. We can only remain this level of trust if we in the Norwegian society focus on our attitudes and behaviour, transparency and acess to information, and good control mechanisms where needed.» (Jan Tore Sanner The Minister of Local Government and Modernisation)