Dear Friends,

It is a great pleasure to present Annual Report 2001 of

Transparency International - Korea. TI-Korea is a young

organization, launched in 1999. But it succeeds to Korean

people’s struggle for democracy and social justice in last

century.

On behalf of all members, I would like to extend a warm

invitation to Seoul, Korea. In the year of 2003, Seoul will be

host to the 11th International Anti-Corruption Conference.

And it will be run in conjunction with the Global Forum III.

This combination seems to be a symbol of co-operative

approach of TI. The fight against corruption needs a

coalition among all sectors of society. I believe that you can

find some examples in such coalition building from this

annual report of TI-Korea. And all members of TI-Korea

would like to exchange ideas and best practices to curb

corruption.

I look forward to seeing you in Seoul, Korea.

With my best wishes,

Sincerely yours,

Seong-Soo Kim

Publisher,

Chairperson of

Transparency International-Korea

1. Clean Korea 21

The second Clean Korea 21 Fair will be held atKyong-Bok-Goong subway station in Seoul, Korea(12-14 Dec 2001). TI-Korea is participating in this‘Fair Preparation Committee’ with the Federationof Korean Industries (FKI), Korea EmployersFederation, Korean Chamber of Commerce andIndustry, Korea Federation of Small and MediumBusiness, Korea Foreign Trade Association,Council of Public Companies, including KoreaElectric Power Corporation (KEPCO), PresidentialCommission on Rebuilding Korea (REKO), Ministryof Government Administration and Home Affairs,Seoul Metropolitan Government (SMG) and othermunicipalities. Private, public sectors and civilsociety organizations will exhibit Heir mosteffective practices to curb corruption and to makeclean society.

The first Clean Korea 21 fair was held at thesubway path in front of Seoul City Hall (8-15 Dec2000). The intention of this fair was to promotepossible benchmarking among them. Exhibitorswere REKO, Shinsegae Company, Korea HighwayCorporation, Korea Racing Association, Ministry ofConstruction and Transportation (MOCT), NationalTax Service (NTS), Korea Customs Service (KCS),

SMG, Chon-Nam Province Government and Song-Nam municipality. Mr. Tunku Abdul Aziz (VicePresident of Transparency International), Dr.Michael Wiehen (Chairman of TI-Deutschland) Ms.Rosa Ines Ospina Robledo (General Secretary ofTI-Colombia) and other foreigners visited there assome koreans did.

2. People Ombudsperson Network

NGOs can take part in making transparent publicadministration in government and in localautonomy. Participation, cooperation and tractionalso can be the alternative paths for NGOs inprevention of corruption.

To make ‘participation infrastructure’ of civilsociety, TI-Korea is organizing ‘PeopleOmbudsperson Network in Korea (PONK)’ now. Inmunicipalities in general, most of commissionersor ombudspersons were to be appointed only bythe executives. Without the participation of NGOs,it is very hard to promote transparency throughthose committees themselves. The concept ofPONK is to prepare a kind of human resourcespool before the request of recommendations frommunicipalities and government bodies, includingpublic companies. In the end of 2001, TI-Korea willget about 500 people in that network.

Already TI-Korea nominated one (from three) civilombudsman and 2 (from five) IP ombudsmen forSMG. PPS, MOCT, municipalities and othergovernment bodies asked to recommend somepeople for committee members or for ombudsmen.

Activity Report 2001 Transparency International - Korea

4

3. Clean Business Culture Campaign

In 2000, TI-Korea had a research on businessethics system in business sector in Korea. heprivate sectors adopt the Business Ethics System.It investigated the top 30 companies to determinewhether they had a Code of Ethics (or equivalent)and to then investigate the specific contents ofany such Codes. It was reported that only 9companies of them have Code of Ethics.Furthermore the contents of their Code of Ethicswere almost not concrete but formal.

In 2001, it made a same research again. Now, 14companies of major 30 have their own Code ofEthics or Code of Conducts. It shows a meaningfulchange on business culture. But until now, thosecodes are only in drawers of businessmen’s table.Thus the national chapter of TransparencyInternational in Korea asked business sector tomake them as operating codes.

Shinsegae and Hyundai Department Store wereselected as best companies in clean businessculture. TI-Korea prepared a book that containsthe results and business ethics programs(including codes of ethics) of 7 companies asexamples.

The results was opened at the press conference ofTI-Korea on 27 Oct 2001. And the abstract of thisresearch was uploaded on TI-Korea’s website:<http://ti.or.kr/>.

4. “People’s Shinmungo”*

TI-Korea is managing the “People’s Shinmungo”at that anyone can report cases of corruption, canreceive and give advice about how to fight againstcorruption. The “People’s Shinmungo” takes three

forms - regional centers that people can visit, theinternet, and a mobile “People’s Shinmungo” inthe form of a bus which travels to various sites.

Good examples of the use of “People’s Shinmungoand their results were published as a form ofbooks and also on its own homepage:<http://smg.or.kr/>.

* Originally, “Shinmungo” was the name of thebig drum that was located in front of the royalpalace in past Korean history. If anyone who hadsuffered heavily by corruption or had been falselyaccused, she or he could hit the drum, and couldtell stories directly to the king. But in democraticage, people can pose problems and solve byitself with the help of governmental bodies.

5. Integrity Pacts

Integrity Pact (IP) is a device that was designedby Transparency International (TI) to safeguardpublic procurement, privatization, governmentlicense or concession from corruption. Adoptingthis concept in each municipality can make astrong impact onto bribery and graft in publicbusiness. In Dec 2000, TI-Korea held an international

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Activity Re

port 2001

6

seminar on TI’s Integrity Pact (IP). TI-Koreaintroduced IP and proposed to implement IP togovernment bodies, municipalities and publiccompanies. SMG adopted the IP (Jul 2000). Othermunicipalities and Public Procurement Service(PPS, Mar 2001) followed that way.

TI-Korea is stressing the point that civilparticipation is one of most important factors in IPoperating. Some municipalities and governmentbodies like to adopt no real contents of IP, butonly the shape of it.

6. Anti-Corruption Comics for Youths andAdults

In 2000, TI-Koreapublished two comicbooks (20,000 copieseach), one for youthsand the other foradults with the help ofMr. Si-baek Park, afamous KoreanCartoonist. Thisproject was sponsoredby Korean Information

Service(<http://www.allim.go.kr/> ). And otherteaching materials were prepared for teachers andstudents of school.

Some web pages of TI-Korea explain the way tocurb corruption. Furthermore, with the help of ateacher group, TI-Korea is preparing ways todevelop a school curriculum that will show theways to fight against corruption more actively andto promote anti-corruption movement.

7. Activities in Cyber Space

Since its launch in 1999, TI-Korea has managedown homepage. It can be reached at: <http://ti.or.kr/>. The contents are: introduction,announcement, public data bank, DB for closeduser group, selection of reports, search, Q&A, freebulletin board, links, guest book, site map, voteand join. Its public DB

<http://smg.or.kr/tikbbs/zboard.php?id=pds> isone of the most well known storage for corruptionrelated documents. And useful web sites areintroduced easily.

TI-Korea is operating Korean language version ofTI homepage also. Some of working papers ordocuments, including 3rd edition of TI SourceBook, were translated into Korean already. Andthose were accessible through<http://transparency.or.kr/>. It is a convenientway to introduce TI and its movement for generalpeople.

Electronic mailing is used not only for ordinarymembers but also for mailing members. E-mailsare sent to thousands addressees.

8. Anti-Corruption Atlas

Anti-corruption atlas aims to measure corruptionprevalence, to analyze and evaluate that in publicand private sector, and to shape an effective NISin Korea. Some best practices are introducedthrough the AC atlas own web sites:<http://acatlas.org/> and <http://acatlas.net/>.TI-Korea is introducing best practices to curbcorruption in each area, including OPEN system ofSMG, reformation programs of NTS, PPS, KCS, etal. And some examples of private sector aregathered for making other companies’ benchmarking enable. Furthermore, NGO’s anti-corruption activities are also explained. Suchefforts are prepared for understanding theproblems in each sector, including people’s mind,and some needed progresses to make cleansociety.

TI-Korea is seeking fruitful ways to evaluate thetransparency score of each person oneself. AndAC atlas will show the present position of eacharea in relation with corruption matters. Thosetools will provide stimula to increase transparencyboth in every sector and in mind of people ingeneral. To capture the whole system of corruption, TI-Korea holds forum and seminars, and will haveresearches with its policy committee members.General citizen can join with them through theweb boards interactively.

AC atlas will be printed on paper also in theshape of booklets, posters and manuals. Thosewill be distributed through public agencies,private companies, schools, civic groups et al. Butthose results will not be the final one but thebeginning of next progress.

9. Main Events and Fora

1) Public Hearing on the Second Phase NationalAnti-Corruption Program

TI-Korea held a public hearing on the secondphase anti-corruption program of KoreanGovernment (23-24 Oct 2000, Auditorium ofNational Assembly Library, Seoul). Topic areaswere education, municipalities, finance and publicprocurement, policy fund, social welfare anddisclosure of information.

2) Forum on the Corruption Case in DongbangFinancial Bank and Uprooting Corruption

On the corruption case in Dongbang FinancialBank and uprooting corruption, CSO Coalition formaking anti-corruption acts held a forum (11 Dec2000, Auditorium of People’s Solidarity forParticipatory Democracy Bldg, Seoul). Rev. Geo-Sung Kim, Secretary General of TI-Korea, presenteda paper in that anti-corruption act was called asthe base of National Integrity System (NIS).3) Forum on Effective National Integrity System

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Activity Re

port 2001

TI-Korea invited some professionals from varioussectors to discuss how to make effective NIS inKorea (23 Nov 2000, Conference Hall of SejongCulture Center, Seoul).

4) Anti-Corruption Awards

TI-Korea established Anti-Corruption Awards forprivate persons, including whistle-blowers,organizations, companies and media programsthat have fought against corruption. First Awardees were 2 citizens (Ms. Jin-Hee Suhand Prof. Cheong-Kyu Park of Chungbuk Univ.), 5public servants(Mr. Suk-In Kang and Mr. Doo-AnLee, both from National Police Agency, Mr. Tae-Hyung Kim of NTS and Mr. Soon-Ho Kwon ofMOCT) and ‘PD’s Notebook, of MunhwaBroadcasting Corporation (MBC-TV). Korea Daily News company(<http://www.kdaily.com/>) had sponsored forcommon anti-corruption campaign with TI-Korea,including this awards.

10. Activities for making Anti-Corruptionrelated Acts

TI-Korea has participated in common activities formaking anti-corruption related acts with othercivic groups, including PSPD and CCEJ. PSPD wasthe first CSO that asked to legistlate anti-corruption law since 1996.

In the end of June 2001, at the 222nd extraordinarysession of the Korean National Assembly, the anti-corruption bill was passed. And anti money-laundering law was made also later. But KoreanCSO did not satisfied with those acts themselves.Those are just on the start line for Korean anti-corruption movement. TI-Korea will do its best tomake effective National Integrity Systems, inaccordance with the holistic approach of TI.

∙TI-Korea was accepted as the national chapterin South Korea at the Ottawa AGM of TI on 30 Sep2000.∙TI-Korea was registered as a legal person on 2Nov 2000. (Reg. No. 3306)

8

1. Background

Transparency International - Korea (TI-Korea) wasestablished in August 1999. This organization’sformer name was the Anti-Corruption Network inKorea (ACNK). And it was jointly founded by 27organizations to actively pursue the fight againstcorruption. Including the branches, there is nowan established network of more than 900 citizens’groups. The main groups of them had been foughtfor social justice, human rights and democracyduring past 3 decades from 60’s to 80’s. Thus thisanti-corruption movement in Korea is insuccession to Korean democratic movement.

During a couple of decades (1960-1979), so-called‘development’ or ‘industrialization’ stage, most ofKorean people thought that state and internationalinstitutions were good partners and mainconstants of corruption system with multi-nationalcooperation’s and strong countries. But now, theirroles are seen as quite different than those inearlier ages. Especially after the change ofpolitical powers in Korea, now the state andinternational institutions are well known to peopleas symbols of the reformation and anti-corruptionas NGOs are. In relation to this subject, one of thetopics, we have to discuss, is ‘SustainableReformation’. International institutions and some‘well developed’ countries have to ask themselveshow to support anti-corruption movement andhow to build ‘Sustainable Reformation’, especiallyin ‘less developed’ countries.

The problem commonly experienced by suchnetworks of cooperating organizations after acertain period of time is that they lose theirenthusiasm, leaving the secretariat as the onlyactive part. TI-Korea, however, is addressing this

problem by grouping city and provincial branchesinto regional headquarters again, therebystrengthening their activities. As a result, thereare currently 11 regional headquarters;furthermore, we are establishing sub-regionalbranches on a city/province basis.

And TI-Korea was accepted as TI’s nationalchapter in South Korea at the Ottawa AGM of TIin Sep. 2000.

2. Basic Foci of Activities

TI-Korea’s basic foci of activities for the year 2000can be summarized as popularization, everydayactivity and nation-wide effort. First, popularizationaims at overcoming the defects of past citizens’movements which limited their activities to a fewspecialists and activists. We want our movement tobe not just one which the public only hears about,but a movement in which the public activelyparticipates. Second, until now the issue ofcorruption has received attention only after aparticular large-scale corruption or bribery case hasbeen revealed; not much attention has been givento it otherwise. TI-Korea aims to overcome thetendency to regard corruption as only a periodicincident, and to instill the view that the eliminationof corruption is an everyday goal. Lastly, mostNGOs have concentrated their activities in themetropolitan area, making it difficult to efficientlyfulfill their goals. NGOs have had the furtherweakness of being overly dependant on mediacoverage. Our nationwide movement is an effort toovercome these limitations.

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Activity Re

port 2000Activity Report 2000

Transparency International - Korea

3. Activities

1) People’s Participation in Anti-CorruptionActivities

“People’s Shinmungo”*

TI-Korea manages the “People’s Shinmungo”where anyone can report cases of corruption, andreceive and give advice about how to fight againstcorruption. The “People’s Shinmungo” takes threeforms - regional centers that people can visit, theinternet, and a mobile “People’s Shinmungo” inthe form of a bus which travels to various sites.Good examples of the use of “People’s Shinmungoand their results will be published in theShinmungo web site and as a book also.

* Originally, “Shinmungo” was the name of thebig drum located in front of the royal palace in

past Korean history.If anyone who hadsuffered heavily bycorruption or hadbeen falselyaccused, hit thedrum, he or shecould tell the storydirectly to the king.

Making Year 2000 the Foundation of a

Clean Society

Last year TI-Korea proposed an anti-corruptionmovement in which citizens, government andprivate sectors could all participate. Togetherwith the Presidential Commission for RebuildingKorea Movement and other sectors, TI-Koreadeclared the first day of the new millennium asthe beginning of a new society. We arecontinuing to carry out the anti-corruption

movement in each sector, through regularmeetings between the private sector, publicsector, and civil society.

Business Ethics System

TI-Korea recommends that the private sectorsadopt the Business Ethics System. In particular,TI-Korea began at the beginning of this year toinvestigate the top 30 companies to determinewhether they had a Code of Ethics (or equivalent)and to then investigate the specific contents ofany such Codes. It was reported that only 9companies of them have Code of Ethics.Furthermore, the contents of their Code of Ethicswere almost not concrete but formal. TI-Korea isplanning to research the perception of the EthicsSystem among employees and also their actualpractices within the business activities.

Integrity Pacts

In accordance with the recommendation of TI toadopt the Integrity Pacts (IP) in publicprocurement, TI-Korea is continuously urging theimplementation of the IP. As its results, theDongjak District Office of the Seoul MetropolitanGovernment (SMG) adopted the IP for the firsttime in Korea (Mar. 2000). Furthermore the SMGitself (Jul. 2000) and Dalseo District Office of theTaeku Metropolitan Government followed TI’sguidance by accepting the IP. All HQ’s andbranches of TI-Korea are giving recommendationsfor every municipalities, acceptance of IP. PublicProcurement Service of Korean government willalso implement IP in the near future.

10

Evaluation of Candidates and Promoting

Participation in Elections

For the general election of April 13th, TI-Koreaorganized ‘the Voters Movement for Evaluation ofCandidates and Participation in the Elections’.Last year, TI-Korea contributed to the amendmentof Koran election laws by requesting thedisclosure of past criminal records of candidates.Accordingly, records providing backgroundinformation about the candidates were revealed tothe public for this election, and will be provided infuture elections as well. Taking these intoaccount, TI-Korea developed an evaluation sheetby which voters can rank candidates andconsequently choose the best candidate, thus fullyparticipating in the election. A source at theNational Election Commission expressed the viewthat this was one of the best way of activities inthe voters’ movement.

Pledge Against Corruption

Since last year, government officials, privatesector employees, and ordinary citizens can makea pledge against corruption. Citizens can publiclydeclare their intention not to engage in corruption;these kinds of pledges can also be made throughthe Internet.

Clean Korea 21

TI-Korea held an anti-corruption fair on 8 - 15December 2000. The private, public sectors and civilsociety jointly organized that fair. During the period,some of governmental bodies, public enterprises,private enterprises, economic organizations andcivil society organizations, including TI-Korea,exhibited their most effective practices for anti-corruption. The intention of this fair was to promote

possible benchmarking among them.

Anti-Corruption Awards

TI-Korea established Anti-Corruption Awards forprivate persons, including whistle-blowers,organizations, companies and media programsthat have fought against corruption.

2) Educations for Anti-Corruption

Developing Anti-Corruption Teaching

Materials

We are currently developing teaching materials,which will be differentiated into materials forordinary citizens, government officials, employeesat private businesses and elementary, middle andhigh school students. We have prepared twocomic books (for adults/children) with the help ofone famous Korean cartoonist, Mr. Si-Baek Park.

Fostering Anti-Corruption Teachers

Nearly 300 people from various areas of the nationwere selected and trained, and thencommissioned to provide education in fightingcorruption. At first, 90 selected people took thecourse in Seoul.

New Millennium Anti-Corruption Classes

TI-Korea organized several anti-corruption classesfocusing on the current situation, the backgroundof corruption, prevention of corruption, and anti-corruption activities. The classes, led by theabove-mentioned 270 trained people, areeducating citizens, government officials and otherpublic sector workers. And those leaders areequipping them to guard against corruption and

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Activity Re

port 2000

to be the main participants in the anti-corruptionmovement.

Providing Ways to Reform School

Curriculum

School education in Korea today does not dealadequately with the issue of corruption. TI-Koreais preparing ways to develop a school curriculumthat will tell the ways to promote anti-corruptionmovement and to fight against corruption moreactively.

Establishing the Korean Anti-Corruption

Awards

The main goal of establishing the Korean Anti-Corruption Awards is to promote consensusagainst corruption and increase activeparticipation in the anti-corruption movement.

3) Advertisement, Publication

Publication of Bimonthly “BanBuPae”*

After launching this publication last December,we are currently distributing approximately each11,000 copies of bimonthly “BanBuPae”. We havealready published 6 issues.

* “BanBuPae” is the Korean word, meaning“anti-corruption”.

Publication of Books Related to Anti-

Corruption

Apart from teaching materials for anti-corruption,TI-Korea is planning to publish many booklets andbooks. Among these is the TI Source Book thatwas translated by Mr. Chan-Gon Kim, a formerauditor of Seoul Metropolitan Government. This

Korean version of TI Source Book was published by TI-Korea, in the name of one publishing company.

Managing the Homepage of TI-Korea

Ever since its establishment, TI-Korea hasmanaged its own homepage. The anti-corruptiondatabase is of special interest to many people.This website can be reached at:http://ti.or.kr/

4) Investigation and Research on Anti-Corruption

The Policy Committee

TI-Korea’s Policy Committee, composed with 32members of scholars, researchers, managers ofprivate businesses, government officers andactivists, proposes anti-corruption policies andprepares ways to structure the national anti-corruption system.

Anti-Corruption Seminars

TI-Korea holds seminars on such issues asestablishing an anti-corruption bill, thedevelopment of an Anti-Corruption (perceptions)Index, systematic integrity in the private sector,anti-corruption systems including the IP, andother issues.

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1. Organization of The Anti-CorruptionNetwork in Korea(ACNK) and establishmentof nation-wide branches

- ACNK was founded upon the association ofcitizen’s groups throughout the country, with theparticipation of 849 organizations representingdiverse sectors of the society on August 24, 1999.It is meaningful in that it is an association amongregions and different sectors of society. Not onlywill it become the foundation of citizen’smovements to fight corruption, it will continue toserve as the anti-corruption and reform movementbased upon citizens.

- Since then several regional headquarters andregional centers have been established throughoutthe country. Currently, there are 13 branchesthroughout the country which participatesactively. There are also 4 regional centers.

∙Organization of ACNK (August 24), participationof 26 organizations

∙Chungbuk regional headquarter (September 27),participation of 12 organizations

∙Chunbuk regional headquarter (October 1),participation of 19 organizations

∙Kwangju regional headquarter (October 7),participation of 28 organizations

∙Kanglung branch (October 16), participation of16 organizations

∙Kangwon regional headquarter (November 11),participation of 23 organizations

∙Cheju regional headquarter (November 23),individual membership

∙Pusan regional headquarter (November 30),participation of 8 organizations

∙Samchuk branch (December 2), individualmembership

∙Ulsan regional headquarter (December 6),participation of 13 organizations

∙Sungnam branch (December 10), participation of8 organizations

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Activity Re

port 1999Activity Report 1999

Transparency International - KoreaThe Anti-Corruption Network in Korea

Activities & Programmes

∙Inchon regional headquarter (December 16),individual membership

∙Kyungki regional headquarter preparationmeeting (December 1), participation of 20organizations

∙Taejon regional headquarter preparationmeeting (December 6)

∙Taegu regional headquarter preparationmeeting (December 16), participation of 10organizations

2. Providing measures for fighting corruptionand raising public opinion about anti-corruption

- ACNK have participated in the formation of theanti-corruption bill, supervised symposiumssponsored by the Special Committee for Anti-corruption, which emphasized the necessity of theparticipation of private sector in the anti-corruption movement. Especially, it is raisingpublic sentiment on the obligation for integritypact to ensure integrity in the public sector andprivate businesses. Also the network has raisedthe common belief of the necessity for anti-corruption movement by holding discussions andforums.

- ACNK has also made efforts to shape itsmovement to be more effective and to makepeople more aware of our activities. To achievethis goal, we have appeared in radio and TVprograms on 22 different occasions and articlesrelated to our movement in the press amounts to124.

3. Providing doors for citizens to participatein the anti-corruption movement

- ACNK has established a direct call lineconnecting 23 nation-wide regional centersthrough which citizens can participate in ourmovement. It has prepared postcards, which willfacilitate the reception of suggestions and reportsabout corruption. There is an Internet home pageas well, which was chosen as the most popularsite by Korea Economy Daily (Dec. 14, 1999). Weare also maintaining a mailing list of over 800people to convey the immediate and importantnews to our members.

4. Petition for the amendment of the electionlaw to reveal criminal records of candidates

- ACNK had proposed the amendment of theelection law to make it obligatory to reveal thepast records of corruption and criminal offence ofthe candidates. From October5, 1999 the networkwent out into the streets to fulfill its campaignand get signatures from the citizens throughoutthe country. As a result, its bill was submitted tothe National Assembly with the signature of 4,119people on December 14. The bill was accepted bythe National Assembly. And now, all candidateshave to reveal their criminal records (tax andmilitary records also) under the new election lawthat was amended at the end of December, 1999.

5. Education on anti-corruption, rearingactive members, conducting discussions.

- ACNK had offered 3 workshops and anti-corruption activist training with the participationof 92 people. There was also an orientation for the12 participants of public employment (October 4),and 4 training sessions (October 30, November 6,

14

13, 20) for internship of 50 college students asactivists in the movement.

-As for the First Anti-Corruption School, held everyTuesday and Thursday from November 23 untilDecember 14, there was a total of 7 lectures andamong the 55 who attended, 12 who met specificqualifications were given certificates.

-An association with the Rebuilding KoreaMovement, ACNK held workshops in whichretirees can utilize their experiences andspecialties for fighting corruption (December 3,4)

-Seminars and discussions were held in Seoul,Chungju, Kwangju, Pusan, Ulsan and Inchon.

6. Providing basis for achieving coercionamong international anti-corruptionmovements

- With the initial proposal for the establishment ofACNK, there was an effort to form a nationalchapter of TI in Korea. After several

correspondences, TI sent three representatives toKorea and ACNK was selected as the nationalcontact of TI. In October, TI supported the airfareof 2 of our members to participate in the 9thInternational Anti-Corruption Conference inDurban, South Africa. ACNK is expecting to have aformal agreement in the year of 2000 with TI.Discussion, Dinner with representatives fromTransparency International (August 10-12)Participation in the Annual General Meeting,Durban, South Africa (October 8,9)Participation in the 9th International Anti-corruption Conference, Durban, South Africa(October 10-15)Preparation for the establishment of the NationalChapter of Transparency International

7. Creating a good example of cooperationbetween civil society and government for theanti-corruption movement.

- Close cooperation with the Rebuilding KoreaMovement and the Special Committee for Anti-corruption (an advisory body for the President ofKorea).

- However, the relationship is not only aboutcooperation and support. ACNK also criticizesand endure undauntedly the actions taken by thegovernment. For instance, the network tried toenlarge the scope of the anti-corruption bill toprivate business symposiums as well, and thus itis predicted that the integrity pact will be adoptedin the near future. Also in discussions dealingwith the future prospects of ACNK, manyrepresentatives of the government participatedand shared views and opinions. In this respect,ACNK concludes the network has successfullyrealized a cooperative example between the civilsociety and the government.

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port 1999

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Minutes of TI-Korea AGM

The 3rd Annual General Meeting 2001Minutes

Aug 30, 2001Francis Hall, The Anglican Cathedral in Seoul, Korea

■ PresentThere were 53 delegates present. (85 delegates were assigned for memberorganizations by the AGM preparing committee ofthe board.)

■WelcomeMr. Nam-Joo Lee, Vice-Chairperson of TI-Korea,gave welcome remarks.

■ Congratulatory addressesRev. Sang-Keun Kim, Chief Commissioner, TheNational Commission for Rebuilding KoreaMr. Sung-Nam Kim, Chairman, PresidentialCommission on Anti-Corruption

■ The Temporary SecretaryCall Rev. Hae-Yong Song to secretary

■ Acceptance of Audit ReportAuditor Mr. Seok-Jin Moon’s written audit report ,indicated 2 errors, was accepted.

■ Acceptance of Activity ReportActivity report, read aloud by delegate Rev. Geo-Sung Kim, was accepted.

■ Acceptance of Accounts ReportAmounts reports were accepted.

(Korean Won)

■ Amendment of By-LawAmendment proposal, requested by the AGMpreparing committee of the board, to changeorganisation’s Korean name from ‘Anti-CorruptionNetwork in Korea’ to ‘Transparency Korea’, wasreserved to the next AGM.

■ Election of Board Members

Newly elected board members for every 2years term

1) Venerable Buddhist Monk Hyo-Rim, Vice-chairperson of Korean National Monks Associationfor Buddhists Praxis, as vice-chairperson 2) Rev. Geo-Sung Kim, Secretary General of TI-Korea 3) Mr. Yoo-Bo Sung, Co-Chairperson of CivilSolidarity for Mass-media Reformation4) Mr. Hyung-Joo Kim, Chairperson of KoreanYouth Corp 5) Rev. Hae-Yong Song, Director of Korea ChristianInstitute for Social Justice and Democracy6) Mr. Young-Woo Jin, Executive director of TI-Korea’s HQ in Ulsan Metropolitan City 7) Mr. Myong-Won Suh, Chairperson of TI-Korea’sHQ in Kwangju Metropolitan City

Period Jan-Dec 2000 Jan-Jul 2001

Own 292,049,975 96,067,041

Projects 229,453,440 On-going

Sum 521,593,415 96,067,041

Existing members for next 1 year term1) Bishop Seong-Soo Kim, President ofSungKongHoe (Anglican) University in Seoul, aschairperson2) Mr. Nam-Joo Lee, Secretary General of NationalCouncil of YMCAs of Korea, as vice-chairperson3) Mr. Jae-Yoon Lee, Professor of JoongangUniversity4) Rev. Hae-Hak Lee, Chairman of Korean People’sAlliance for Social Reformation (KSR)5) Rev. Kyu-Rok Whang, President of TI-Korea’sHQ in Inchon Metropolitan City6) Mr. Young-Gil Lee, Executive director of TI-Korea’s HQ in Cheju Prov.7) Mr. Jong-Huyn Hur, Executive director of TI-Korea’s HQ in Chon-Buk Prov.8) Mr. Kyung-Pyo Hong, Chairperson of TI-Korea’sHQ in Pusan Metropolitan City9) Mrs. Jae-Hee Lee, Vice-chairperson of TI-Korea’s HQ in Chung-Buk Prov., Professor10) Rev. Yon-Chang Rhyu, Chairperson of TI-Korea’s HQ in Taegu Metropolitan City

Existing auditors for next 1 year termMr. Seok-Jin Moon, a Certified Public AccountantMr. Kwang-Woon Sonn, a Lawyer

■ Acceptance of Activity Plan (summary)1) Good Governance Center 2) Anti-Corruption Charter3) Integrity Pacts Adoption4) People Ombudsperson Network5) Anti-Corruption Class6) Anti-Corruption Ambassador7) TI East Asia regional meeting8) The 11th IACC preparationAnd other ON-GOING programs

■ Acceptance of Budget Plan(Korean Won)

■ Adoption of a Special Resolution forIntegrity Pacts Inplemeutation

■ Adoption of Minute Book

Signed by:Chairperson: Nam-Joo Lee Secretary: Hae-Yong Song

Date: 30 AUG 2001

17

Min

ute

s of TI-K

ore

a A

GM

Period Jan-Dec 2000 Jan-Jul 2001

Own 273,968,204 286,000,000

Projects 190,000,000 Tentative (250,000,000)

Sum 463,968,204 (536,000,000)

The 2nn dd Annual General Meeting 2000Minutes

Aug 30, 2000Korea Christian Building, Seoul

■ PresentThere were 47 delegates from 11 local HQ’s and 8central organizations present. (70 delegates wereassigned for 11 local HQ’s and 15 centralorganizations.)

■WelcomeBishop Seong-Soo Kim, Chairperson of ACNK

■ Congratulatory addressesRev. Sang-Keun Kim, Chief of Planning Board, TheNational Commission for Rebuilding KoreaMr. Sung-Nam Kim, Chairman, PresidentialCommission on Anti-Corruption Ms. Margit van Ham, Executive Director of TI-S(introduced by Mr. Song)

■Words of encouragementMrs. Yong-Gil Park Moon, Emeritus Chairperson ofNational Alliance for Reunification of Korea

■ The temporary chair and secretaryCall Mr. Nam-Joo Lee to the chair.Call Rev. Hae-Yong Song to secretary

■ Acceptance of audit reportAuditor Mr. Seok-Jin Moon’s written audit report ,indicated 4 errors, was accepted.

■ Acceptance of activity reportActivity report, read aloud by Sec. Gen., Rev. Geo-Sung Kim, was accepted.

■ Acceptance of accounts reportAmounts of 41,914 USD. (Without project funding /govermental - 62,301 USD)

■ Amendments of By-Law

1) Section 1 (name): The name of this nonprofitcorporation shall be: [Transparency International -Korea], herein referred to as “the Network”.(But in Korean, ACNK is also used.)

2) Section 12. (Terms): A chairperson and vice-chairpersons shall servefor consecutive terms of 2 years. And they can bereappointed.Board members shall serve for consecutive termsof 2 years. And they can be reappointed.Auditors shall serve for consecutive terms of 2years. And they can be reappointed.

3) Section 18. (Quorum for making decisions): The greater part of members might be present forthe opening of general meetingThe decision shall be made by the agreement ofthe majority of those present. In the case of a tievote, the chairman shall cast the tie-breaking vote.A member may give his or her voting right to arepresentative with written document.

4) Section 23. (Agenda): The Board of Directorsshall consult and decide the following agenda;e. Deleted (To amend the By-law).

■ Election of board members

Newly elected board members for every 2years term1) Bishop Seong-Soo Kim, President ofSungKongHoe (Anglican) University in Seoul, aschairperson

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2) Mr. Nam-Joo Lee, Secretary General of NationalCouncil of YMCAs of Korea, as vice-chairperson3) Mr. Jae-Yoon Lee, Professor of JoongangUniversity4) Rev. Hae-Hak Lee, Chairman of Korean People’sAlliance for Social Reformation (KSR)5) Rev. Kyu-Rok Whang, President of ACNK HQ inInchon City6) Mr. Young-Gil Lee, Executive director of ACNKHQ in Cheju Prov.7) Mr. Jong-Huyn Hur, Executive director of ACNKHQ in Chon-Buk Prov.8) Mr. Kyung-Pyo Hong, Chairman of ACNK HQ inPusan City9) Mrs. Jae-Hee Lee, Vice-chairperson of ACNKHQ in Chung-Buk Prov., Professor10) - Two seats are reserved for other/newmember organizations.

Existing members for next 1 year term1) Buddhist Monk Hyo Rim, Vice-chairperson ofKorean National Monks Association for BuddhistsPraxis, as vice-chairperson (newly elected for next1 year)2) Rev. Geo-Sung Kim, Secretary General of ACNK3) Mr. Jae-Duk Lee, Secretary General of CentralAssociation of Agricultural Managers in Korea4) Mr. Joo-On Kim, Secretary General of CivilSolidarity for Massmedia Reformation5) Mr. Hyung-Joo Kim, Chairperson of KoreanYouth Corp6) Rev. Hae-Yong Song, Director of Korea ChristianInstitute for Social Justice and Democracy7) Mr. Young-Woo Jin, Executive director of ACNKHQ in Ulsan City8) Mr. Yong-Jun Choi, President of Korea JuniorChamber Inc.9) Mr. Choong-Gil Han, commissioner of Hung-Sa-Dan on anti-corruption

■ Election of auditors

Newly elected board members for every 2years termMr. Seok-Jin Moon, a certified public accountantMr. Kwang-Woon Sonn, a lawyer

■ Acceptance of activity plan(Omission)

■ Acceptance of budget planAmounts of 207,438 USD. (without project funding/ governmental - 183,185 USD)

■ Approval of a resolution for TI’s nationalchapter

All delegates agreed to join with TI as a nationalchapter and also to follow principles, guidelinesand Code of Conduct of TI.

■ Adoption of code of ethicsThe meeting agreed on adoption of EthicsProgram.

■ Adoption of a special resolution for ananti-corruption law

■ Adoption of minute book

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80. In the City of Seoul, KOREA, the SeoulMetropolitan Government (SMG) in early 2000acknowledged that corrupt practices in the publicsector lead directly to faulty construction andwaste of the national budget. It also found thatmany businesses in Korea realize the fact that thechronically bribery-induced, high-cost businessstructures should be purged, but that they found itdifficult to put such ideals into practice againstthe backdrop of a generalized bribery culture andfierce competition for business. SMG also notedthe ‘international trend’ of adopting anti-corruption measures and to ensure transparencyin the business sector, and decided it would adoptthe TI Integrity Pact in several stages “in order tocreate an environment in which contractualtransparency and the reduction of corruptpractices would be assured, hand in hand withthe imposition of severe sanctions for corruptpractices”.

81. The IP(Seoul) is being implemented through apublic-private partnership system between SMGand NGOs, in particular with ‘People’s Solidarityfor Participatory Democracy (PSPD), one of thelargest and most active civil organization in Korea.SMG and PSPD have entered into a jointcooperative arrangement to implement the IP. TheMayor of Seoul and many senior executives of thecity were involved in the preparations, and theMayor himself, jointly with the Secretary Generalof PSPD, launched the IP at a press conference onJuly 10, 2000.

82. The IP is being applied in 2000 to contractsoffered by City Hall and three subordinateheadquarters. A total of 62 contracts worth about

$ 105 million is involved. Beginning in 2001, the IPwill be applied also by Seoul’s 21 ward offices andCity Hall-affiliated public corporations.

83. The ‘Integrity Pact of Seoul, July 2000’ isreprinted in ANNEX D. It is a very closeadaptation of the TI-IP. Anyone wishing additionalinformation on this IP is also directed to theWebsite of the SMG www.metro.seoul.kr<http://www.metro.seoul.kr>.

84. The IP (Seoul) is a contract between the Cityand the bidders for a contract subject to tender.The IP is explained to the bidders in a ‘Letter ofSpecial Note for Bidding’. The commitment not tobribe etc. under the IP in fact is also madeindividually under oath administered by a cityofficial. The IP is mandatory. Information on thebidding is made very transparent by publicizing itin real time on the Internet (in the OPEN System -Online Procedures Enhancement for CivilApplications).

85. The Oath to fulfill the IP states that the biddershall not engage in bid-rigging, illegal price-fixingor any other fraudulent behaviour by bestowingfavors on any particular person, offer any bribe,gifts or entertainment in the process of bidding,concluding and executing the contract to aconcerned SMG official in the case of any findingsof a violation of the IP, accept the restrictions tothe qualification for bidding, termination ofcontract or other punitive measures cooperatewith the Ombudsman in monitoring activitiesprohibit, preferably in a Company Code ofConduct, any form of bribery and bid rigging andannounce that anyone reporting inside corruptionshall not be subject to any retaliation.This oath is accompanied by an oath of a seniorSMG official to the effect that no officials shall

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demand or accept any bribe, gift, entertainment orother undue benefits during the bidding processor the execution phase.

86. The IP is also valid for the execution of thecontract by the winning bidder. In case ofviolation, severe sanctions apply, includingblacklisting for up to two years and cancellation ofthe contract.

87. The IP specifically states that no punitiveactions may be taken against anyone who reportsinside corruption. Indeed, rewards (of up to 10% ofany amount retrieved or saved by the information)are offered to those reporting inside corruption.This whistleblower protection and reward featureis particularly noteworthy.

88. Among the bidders having and submitting aCompany Code of Conduct, the bidder with anoutstanding compliance program will be givenpositive points to be considered in the evaluationof qualification. SMG has listed what it considersthe major items that a Company Code of Conductshould cover.

89. For the monitoring and full implementation ofthe IP, SMG has introduced an IP OmbudsmanSystem with five Ombudsmen, it employs thewell-proven system of public hearings at threecritical stages of the process for sizeableconstruction, supply or consultants contracts (project planning, selection of contractor / supplier/ consultant and inspection results on theexecution of the contract), and it has introducedan IP Organizational Committee.

90. For all sizeable contracts, Ombudsmen review,inspect and monitor all documents until thecompletion of the works, they organize the public

hearings and they demand corrective measureswhere needed. As qualification, the Ombudsmenmust be persons with respectability, integrity andexpertise; candidates are nominated by CivilSociety (NGOs). In 2001, PSPD nominated three ofthem. And other two were nominated by TI-Korea.A term of each Ombudsman is 2 years.

91. Members of the IP Operational Committee area Vice Mayor, the Director-General of the Auditand Inspection Bureau, the Director of Audit andInspection and Ombudsmen. When necessary, theOperational Committee is expanded by Director-Generals of concerned Bureaus and civilianexperts. Among the tasks of the OperationalCommittee are the choice of project for monitoringthe IP, reporting, hearing and inspection of IPprojects, and education and public relations on theIP.

92. The OPEN System has received the InnovativeManagement Award of the President of Korea andwas presented as one of °∞best practices°± at theOECD High Level Governance Outreach Seminarin Paris. Offices of the Central Government ofKorea and several local authorities are presentlypreparing to introduce the IP system as well.

93. TI-Korea held a seminar on IP in December2000. And TI-Korea continues to co-operate withthe PSPD. A public exhibition in the Center ofSeoul was designated to maintain interest in TI ingeneral and in the Integrity Pacts. On May 14,2001, a delegation from the PSPD visited TI-Berlinto discuss the Integrity Pact and its application inSeoul so far. Although an upcoming conferencewill determine its utilization in the future, thenational government has indicated that the IPmight be used by the national procurement anddistribution agency.

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*** The IP was also implemented by other cities, provinces (municipalities) and publiccompanies, including the Korea Agricultural & Rural Infrastructure Corporation. In March2001, Public Procurement Service (PPS) of Korean Government accepted the IP. With e-bidsystem (Government Bidding Integrated Management System), the IP is a sign ofreformation in public procurement administration area. But some of them lack independentOmbudsmen or other monitoring system.

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Korea Times / September 24, 2000

[NGOs in Korea21] ACNK at Vanguard ofFight for Transparency, Integrity in Korea

Children dying at a summer camp fire caused bythe corruption of businessmen and public officials,a prime minister resigning over tax evasion, sonsof politicians suspected of dodging militaryservice called in for questioning, and high rankingofficials sacked on charges of taking bribes orinfluence peddling.

Does this series of incidents ring a bell? Corruption is so rife in Korea that people en routeto work in the morning walk by the newsstands,assiduously glancing at the newspaper headlinesfilled with corruption-related stories. Does the

“Republic of Corruption”sound befitting a countrywhich has achieved a miraculous economicdevelopment in the latter part of the 20th century?

To reverse the trend, the Anti-Corruption Networkin Korea (ACNK), acting as the Korean chapter ofTransparency International, a Berlin-based anti-corruption body, has been fighting for transparencyand integrity in Korea since August 1999.

The ACNK-released Transparency International’sannual Corruption Perception Index (CPI) rankedKorea 48th behind Taiwan and Malaysia among 90countries. The fact was revealed in a pressconference at the Korea Ecumenical Building,downtown Seoul, on Sept.14,

Korea has seen its CPI rise slightly from 3.8 out ofa possible 10 points in 1999 to 4.0 this year. In lastyear’s index, Korea ranked 50th out of 99countries in terms of transparency.

“Korea has a long way to go before breaking the

chain of corruption prevalent in every sector ofsociety,”said ACNK president Kim Seong-Soo,former leader of the Anglican Church in Korea, inthe press conference. In a statement, Kim said that it was obvious thatthe government has failed to make sufficientefforts to fight corruption to create a clean andtransparent society as Korea has ranked near thelower middle of the index for four years in a rowsince TI started issuing the index.

“Though the CPI looks at countries only based onperceived levels of corrupti n among publicofficials, many institutions and academics nowecho our long-held view that corruption distortsdevelopment and ultimately hurts the people,”the group’s secretary general Kim Geo-sung toldThe Korea Times.

The Korean anti-corruption network wasestablished in August, 1999 jointly with 27 localorganizations to pursue the fight againstcorruption. Now, 900 citizens’groups across thenation have joined the cause of the ACNK.

“Corruption has been cited as an important factorthat brought about the unprecedented economiccrisis in the country in 1997. Collusive links longdeveloped between government officials,politicians and businessmen have been blamed asthe main cause of the crisis. Though the past andpresent governments have undertaken a series ofmeasures to eradicate corruption from society,most people still believe that corruption remainsrampant in many areas, especially in thegovernment business of granting licenses andpermits,”said the student activist-turnedReverend Kim.

“Korea has been given the shameful nickname

TI - Korea in Newspaper

‘The Republic of Corruption.’The sad thing is thatthe stigma is hardly an overstatement. A total of7,420 government employees were disciplined forbribery and other wrongdoing in 1998 alone. Amore serious problem is public indifference to thischronic state of corruption. Perhaps the reason forthe lack of public indignation is that the peoplehave seen so many politicians and governmentofficials imprisoned for corruption only to bepardoned a few months later under a specialamnesty. In addition, many convicted politicianshave returned to politics, claiming to be victims ofpolitical persecution by past governments.”

To increase public participation in the crusadeagainst widespread corruption, the ACNKmanages the People’s Shinmungo, where anyonecan report cases of corruption and receive or giveadvice on how to tackle corruption.

“Originally, Shinmungo was the name of the bigdrum located in front of the royal palace duringthe Chonson Dynasty. People could talk directly tothe king and tell him how they suffered fromcorruption after hitting the drum. Now, People’sShinmungo makes people interact with each otherby visiting our regional centers, our Internethomepage or our Shinmungo bus which travelsnationwide. Amazingly, the online systemcompletely opens up and makes transparent pastpractices vulnerable to corruption. Most of thewrongdoing posted on our website are subject toimmediate investigation by the authorities,”saidthe 43-year-old secretary general.

Kim returned from Hannover, Germany on Sept. 13one day before the group’s release of the index.At the conference, he introduced the activity ofthe ACNK as a way of explaining to the membersof Transparency International (TI) the ongoing

effort to stamp out corruption in Korea. TI is a non-profit NGO solely devoted to curbingcorruption globally. The Berlin-based organizationwas established in 1993 with the aim ofstrengthening public support and understandingof anti-corruption programs through enhancedtransparency and accountability in internationalbusiness dealings and the administration of publicprocurement.

The ACNK will be formally recognized as TI’sKorean chapter in a TI general meeting to be heldin Ottawa, Canada, in late September.

“Since TI’s inception in 1993, more than 70national chapters have opened in the world. TheACNK has been acting as TI’s Korean chaptersince June. TI has been very interested in whatwe do here because though almost all of thechapters are usually run by membership, theACNK is operated in the form of of networksrooted in local organizations,”said Kim.

In late 1999, the group launched a campaign toamend Korea’s election laws, making itmandatory for election candidates to reveal pastrecords of corruption and criminal activity. Thegrass-roots campaign took the group members outon the streets to collect signatures for a petition tothe National Assembly. In December, a petitionbearing 4,119 names was presented and theAssembly passed the bill, which obligates electioncandidates to disclose their criminal records aswell as tax and military records.

“The present government declared war oncorruption, but I don’t think it has beensuccessful. The anti-corruption bill is expected topass the Assembly late this year, but the peopleare still dubious about whether it will make a

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clean sweep of deep-seated corrupt elements,”Kim said.

Because the anti-corruption bill was not approvedby the National Assembly last year, there is yet noinstitutional basis for battling corruption nor anyway to protect those who have blown the whistleon cases of corruption, Kim said.

“It is a mark of shame for the nation that thegovernment has yet to legislate such an anti-corruption law. Even though President Kim Dae-jung made a campaign pledge to push for the act,the political parties have been lagging inlegislating the bill. Corruption is a structural anddeep-rooted problem in Korea. A systemic andinstitutional effort to put Korea on a track towarda corruption-free country is in order to refurbishthe tainted image of the corruption-infestednation,”said Kim, who serves as a minister at aPresbyterian church in Kuri, Kyonggi-do.

In late August, the ACNK recommended that thenation’s 30 largest companies adopt a corporateethics code. Its advice came on the heels of IT’srelease of the Bribe Payers Index (BPI), a measureof the propensity of corporations to offer bribes tolocal officials. On the BPI list, Korea ranked 18thamong the world’s 19 leading exporting countries.

In its own survey, only eight out the 30 largestconglomerates in 1999 had corporate ethics codesthat detailed principles and guidelines for thecompanies’operation. Even in these eightcompanies, however, the newly-established codeswere discovered to be little more than a formality.

The 900 civic group-affiliated NGO plans toresearch the perception of the ethics codes amongemployees and their actual practices within

business activities.

“Ethical management is not an option, but hasbecome a prerequisite for a company’s survival.Korean enterprises are now required to establish atradition of ethical and transparent businessoperation to survive in the present age, as thereare many restrictions in international trade,foreign investment and various public contracts,”Kim said. Together with the Presidential Commission forRebuilding Korea Movement and other sectors, theACNK declared the first day of the newmillennium the “beginning of a new society,”vowing to carry out the anti-corruption movementthrough regular meetings between the privatesector, public sector and society.

The group is currently developing teachingmaterials, which will be adapted into materials forordinary citizens, government officials, employeesat private businesses and elementary, middle andhigh school students.

For anti-corruption education, 270 people will beselected and trained, and then commissioned toprovide teachings in fighting corruption. Since lastDecember, it has launched a bimonthlypublication, Banbupae, which means anti-corruption in Korean.

“The sad thing is that Korea’s spiritualmodernization has not kept up with its materialdevelopment. By Korean traditional standards, it isquite difficult to tell a bribe from an expression ofgratitude, which is common in Korean culture. Weneed to create an `anti-corruption infrastructure’which includes education as well as acomprehensive system of anti-corruption laws andorganizations,”said Kim.

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By the end of this year, the NGO will establish theKorean Anti-Corruption Awards to heighten publicawareness of and increase the public’s activeparticipation in the anti-corruption movement.

“I think it is time that we take into account thequality of development, not its quantity. This iswhy one of the main goals we are pursuing issustainable reformation or development withoutcorruption. The by-products of past illegitimategovernments, such as corruption, bribery andunfair favors, have distorted the distribution ofwealth, which should have been shared byeveryone, not concentrated in the hands of a fewselected individuals,”Kim said.

Kim continued, “In reality, corruption has becomea habitual practice. Even worse, corruption is themain source of distrust and conflict among people.It has impaired social development and people’scohesive power by permeating the notion that itwould be a loss to live honestly, abiding by thelaw,”said the former student activist wholanguished in prison for two years under the iron-fisted rule of Park Chung-hee.

The TI chapter in Korea works closely with SeoulCity Hall in its anti-corruption efforts. StartingApril 15, 1999, Seoul City has used technology inorder to foster transparency with its OPENsystem. The Online Procedures Enhancement forCivil Applications System makes available on theWeb details of administrative procedures, such asbuilding permits and inspections, making it easierto monitor the progress of an individual file and toreport irregularities.

An ordinary citizen applying for a building permit,for instance, can check from a computer who ishandling the application, when final approval is

expected and whether any complications havearisen and why.

In accordance with the recommendation by TI toadopt the Integrity Pact (IP) in the area of publicprocurement, the group continues to urge Koreangovernment institutions to implement the IP. As aresult, Tongjak-gu in Seoul adopted the IP for thefirst time in Korea. In a decision to adopt the TI-devised IntegrityPact, Seoul City Hall announced a plan to sign aspecial anti-corruption pact with privatecontractors in a stepped-up effort to eradicatecorruptive practices on July 10, 1999.

The pact is an agreement between a governmentinstitution and companies submitting bids thatbribes will neither be offered nor accepted inrelation to bids for any public contracts. TheIntegrity Pact, which was developed by Germanyin the mid-1990s, was adopted by some 10countries including Argentina, Columbia andIndonesia.

In line with this anti-corruption move, Seoul willhost the 11th International Anti-CorruptionConference, the world’s premiere global forum onfighting corruption, in 2003. The biennial forum,first held in Washington in 1983 by a number ofanti-corruption law enforcement agencies fromaround the world, is now the global forum forexchanging experiences of fighting corruption andforging joint strategies to eliminate it.

Kim emphasized, “To rid our society fromcorruption is absolutely necessary to attractforeign investment and increase our globalcompetitiveness. Corruption, individual ornational, is the surest road to downfall. It is truethat our government is trying to crack down on

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these things as soon as it discovers them, but aslong as the people themselves do not rid theirhearts of corruption, Korea will never be anythingbut a backward nation. I think institutional house-cleaning work must begin at the top with those inpower and the wealthy. `The upper waters mustbe clean for the lower waters to be clean,’as aKorean saying goes.”

The anti-corruption network welcomes donationsfrom those interested in financing the group orhelping put an end to corruptive practices inKorea. Its bank account number is 325-04-557471at Chohung Bank. You can contact the group at1588-1258. You can also get more information fromits homepage at http://ti.or.kr.

- By Sohn Suk-joo : Staff Reporter

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By Rev. Geo-Sung Kim Secretary General of TI-Korea

1. Introduction

The Anti-Corruption Network in Korea (ACNK)was launched as a network of (sectional and local)networks in 1999. But its root can be found in thedemocracy movement of Korean people in the pastfew decades. It was accepted as the nationalchapter of Transparency International (TI) in Koreain 2000. Now its English name is TransparencyInternational-Korea (TI-Korea). TI is politically non-partisan. On this point, therecan be no questions. But all chapters of TI,including TI itself, don°Øt name “names” orpublicize individual cases. Instead of exposingcases, TI is focusing on building systems thatcombat corruption at national and internationallevel. It is very popular in Korea that NGOs attacksome government bodies, includingmunicipalities. TI-Korea could not do in that way.Are there any other paths for NGOs in anti-corruption movement than criticizing,investigating and accusing cases? In so far asNGOs are concerned only about the ex post factoapproach, any other factors cannot be adopted.But NGOs can take part in making transparentpublic administration in government and in localautonomy. Participation, cooperation and tractionalso can be the alternative paths for NGOs inprevention of corruption.

2. Some Effective Ways to IncreaseTransparency in Municipalities

OPEN system of Seoul Metropolitan Government(SMG) is not a kind of panacea. It means that weneed not only OPEN system itself but also otherfactors to improve transparency in public

administration. I would like to introduce someexamples in Korean NGOs, activities with publicsector.

1) Integrity Pacts Integrity Pact (IP) is a device that was designedto safeguard public procurement, privatization,government license or concession from corruption.It is a multilateral and mutual pact againstcorruption among government office andcompanies submitting a tender for specificprojects (bidders). Moreover, NGOs are invited tomonitor the process. SMG adopted IP in Jul. 2000.Public Procurement Service (PPS) of Korea alsobegan to apply IP from Mar. 2001. SMG andseveral municipalities have IP ombudsmensystem. Adopting this concept in eachmunicipality can make a strong impact ontobribery and graft in public business.

2) People Ombudsperson Network To make ‘participation infrastructure’ of civilsociety, TI-Korea is organizing ‘PeopleOmbudsperson Network in Korea (PONK)’ now. Itwas one of the main objects in making broadnational coalition, ACNK. One of three civilombudsmen of SMG was recommended by TI-Korea. And the Mayor appointed him. And two offive IP Ombudsmen were recommended by TI-Korea, as well as three were from People’sSolidarity for Participatory Democracy. But inmunicipalities in general, most of commissionersor ombudspersons were to be appointed only bythe executives. Without the participation of NGOs,it is very hard to promote transparency throughthose committees. The concept of PONK is toprepare a kind of human resources pool before therequest of recommendations from municipalitiesand government bodies, including publiccompanies.

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3) Monitoring and Recommendations Last year in October, TI-Korea had carried out aresearch on the civil use of OPEN system in SeoulMetropolitan city.Monitoring of NGOs on public administration canbe one of the useful ways to find some problemsin it. And from the findings, government bodiesand municipalities can take helpfulrecommendations not only from professionals butalso from civil society. TI-Korea is giving specialadvices to PPS and Chunggu District Office ofSeoul.

4) Clean Korea 21 In 2000, some municipalities, government bodies,public companies and one private company madean anti-corruption fair with TI-Korea. Now, 2001Fair is being prepared. Private and public sectorsand civil society can participate in that fair.Governmental bodies, private companies,economic organizations, as well as civil societyorganizations will exhibit their most effectivepractices for corruption prevention. This exhibitionwill promote possible benchmarking among them,including municipalities.

3. Conclusion

In local autonomy, NGO’s participation is a crucial factor to increasetransparency and reliability in publicadministration. Thus municipalities should invitecivil society to monitor and watch themselves andto get recommendations or consultations. AndNGOs should organize ‘participationinfrastructure’, like People OmbudspersonNetwork of TI-Korea. But participation,cooperation and traction approach shall not beconfused or neutralized with criticism,investigation and accusation approach.Furthermore, it should be referred that we cannotreplace municipal councils or audit / inspectionbodies in government with such watchdogs, likeNGOs and media. The efforts of public servantsthemselves will be the most essential factor tocurb corruption. Civil participation can only be akind of facilitator or partner with those responsibleposts.

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Address at Annual General Meeting, Transparency International - Korea (South)

Seoul, Korea30 August 2001

In the year 2003, Seoul will be host to the 11thInternational Anti-Corruption Conference, aconference run by a civil society organisation,namely Transparency International. For the firsttime, the event will be run in conjunction with theGlobal Forum, a conference on fighting corruptionorganised by governments. Half of the agenda willbe shaped by civil society organisations, the restby governments.

Until now, these two conferences have been heldseparately, but their convergence in Seoul reflectsa key element of the approach of TransparencyInternational, which is coalition-building. At TI weneither shy away from confrontation if it isnecessary, nor condemn other civil societyorganisations for pursuing different strategies, butwe distance ourselves from the violence deployedby many anti-globalisation protesters in Seattle,Prague, Goteborg and most recently - with tragic

consequences - in Genoa. Their actions may grabthe headlines, but their message is diffuse andtheir strategy is to some extent counterproductive.Civil society organisations need to engage witheach other, and with governments and the privatesector, so that our voice is heard and takenseriously by policymakers at all levels. That is thekey to our approach at TI.

It is this co-operative approach that is essential tosuccess in tackling an issue as complex ascorruption in a global marketplace wherecorruption had become almost the norm.Businesses found themselves in a prisoner’sdilemma: those who didn’t want to bribe were ata competitive disadvantage because the back-handers paid by their competitors securedlucrative contracts. To survive, a company had tobribe.

The coalition-building approach enables the threeparties - government, the private sector and civilsociety organisations - to find areas of commoninterest where no single government or companywould otherwise be willing to unilaterally applymore responsible standards of behaviour.

Making the OECD Convention work

The OECD Anti-Bribery Convention is a strikingexample of the importance of this approach. The34 signatories to the Convention account for morethan 90 per cent of foreign direct investmentworldwide. South Korea is one of the countriesthat has ratified and implemented the Convention.The key to securing support for the OECDConvention, which came into effect in February1999, was the support of large companies. TwentyEuropean companies signed a letter we drafted to

Building Effective CoalitionsBy Peter Eigen,

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their ministers that encouraged them to sign theOECD Convention.

We managed to bring business on our side byoffering an escape route from the prisoner’sdilemma in which they found themselves. Manybusiness people do not want to bribe, but theyfound that they had to because their competitorsdid - if they did not bribe they would endangercontracts in China and Indonesia, for instance,worth billions of dollars. Under the OECDConvention, all major competitors in the worldmarket are legally bound to stop bribingsimultaneously. For instance, German or Koreancompanies can now be charged under their homecountries, laws for bribing European or Asianofficials.

It is all the more important, therefore, that eachcountry feels confident that the other signatoriesnot only introduce the appropriate legislation toimplement the Convention, but that they theneffectively enforce that legislation. A follow-upprocess is underway at the OECD to translate thisinto law and practice, and civil societyorganisations, led by TI, are providing input andmonitoring the follow-up. TI-Korea has contributedto this effort. In addition, TI is now working withthe OECD to extend the agreement to cover smallbribes paid to administrative officials - known asfacilitation payments.

In the case of Korea, TI and the OECD WorkingGroup on Bribery have reported that legislationhas been implemented in line with theConvention. However, there is much work still tobe done, as even in Korea doubts remain inborderline cases and bribery had not been made apredicate offence for money laundering. Inaddition, prosecutions have not been forthcoming

under the legislation. Any such outstandingshortfalls, in the case of Korea and elsewhere, willbe tackled under Phase Two of the monitoringprocess, which is now beginning.

At the end of 1999, TI published a survey of thepropensity to bribe of the world’s 19 leadingexporting countries. Unfortunately, out of the 19countries in the Bribe Payers Index, Korea rankssecond to last, only just ahead of China. So,irrespective of the situation domestically, Koreanbusiness still needs to adapt to the new rules ofthe game. A strong and effective enforcement ofthe OECD Convention will be necessary to aidthat process. The OECD Convention signatoriesaccount for 70 per cent of the world’s exports. IfChina and Malaysia were to follow Korea’sexample and sign up to the Convention, then itsimpact would be truly global.

Transparency International: a holistic approach

While it is of paramount importance that we buildcoalitions on a global level, the driving force of thecoalition against corruption are the nationalchapters of Transparency International, supportedby the TI Secretariat through collecting andsharing know-how and resources, gatheringknowledge and disseminating tools, in particularsupporting national chapters in the evaluation andstrengthening of National Integrity Systems.

TI takes a holistic approach to corruption,recognising that society has many tools to protectitself, to maintain its integrity. These include, forexample, criminal law but also the freedom of thepress, the disclosure of the assets and liabilities ofcandidates for government, the independence ofthe judiciary and other institutions. We have

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developed a system, which was initiallytantamount to a check-list, to allow governmentsand civil society actors to go over the strengthsand weaknesses of their own National IntegritySystems, an analytical framework, best illustratedin TI’s National Integrity Source Book. In line withthis framework, at the Global Forum II conferencein The Hague this year, we launched 18 studies,evaluating the National Integrity Systems ofcountries around the globe, including Korea. Thatprocess is now gathering momentum, and will beextended to more countries.

The National Integrity System was pioneered byTI, and the Transparency International SourceBook has been published in 20 languages,including Korean. We have used adaptationworkshops for the Source Book to invite localplayers to get together and expand and replacethe models described in the Source Book to fit thesocial, legal and economic situation in eachsociety. There have been adaptations for Senegal,Mauritius, Ecuador, Bolivia, Colombia, Hungaryand the Czech Republic. As well as providingexamples of good practice, the Source Book allowsactors to approach corruption in a holistic way byidentifying its multiple elements.

Integrity Pacts: an escape from theprisoner’s dilemma

One element of the National Integrity System thatdeserves particular attention is publicprocurement. The tool developed by TI in thisfield, the Integrity Pact, offers an escape routefrom the prisoner’s dilemma. Under an IntegrityPact, bidders competing for the supply of goodsand services provide a binding assurance thatthey have not paid any bribes in order to obtainthis contract, and an undertaking that they will

not do so in future. Pre-agreed sanctions comeinto force if this undertaking is breached. This approach has been put into practice righthere in Asia. For instance, TI Pakistan Karachichapter’s proposal to adopt an Integrity Pact forall procurement within the Karachi Water &Sewage Board has been accepted, and will nowbe implemented in all procurement by the Board.Similarly, I am delighted to see the efforts in Korea tointroduce and monitor the Integrity Pact inmunicipal procurement tenders.

Programmes of National Chapters

We are very proud of the activities of TI-Korea. Itnow plays a role in the work of the Ombudsman’soffice and had a significant input into 1999’s Anti-Corruption Bill. In addition, the national chapter isalso at the forefront in the age of the internet. As amember of the supervisory body of the OPEN(Online Procedures Enhancement for civilapplications) system - a system acclaimed aroundthe world - the national chapter is monitoringprocurement and online applications submitted bycitizens to the Seoul Metropolitan Government.There are training courses for teachers on shapingthe school curriculum and call centres for citizenswho need to raise a corruption-related problem.

The work of our national chapters is a source ofstrength and encouragement to us throughout theanti-corruption movement. In South America,earlier this year the Sao Paulo municipality andthe World Bank Institute reached an agreementwith Transparencia Brasil to launch an anti-corruption programme in the city administration.Meanwhile, many chapters are pooling their ideasand their resources to become even more effective.In this way, they are leading the way in re-

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building fences between the former constituentparts of Yugoslavia. On 21 March this year, ourchapters in formation in Bosnia and Herzegovina,Croatia and Serbia, together with TI’s nationalcontact in Slovenia, adopted the Initiative onPublic Procurement in South-Eastern Europe. Theinitiative focuses on public procurement in aregional context and aims at mutualharmonisation among the participating countries,ultimately bringing procurement in line with bestpractices in the European Union. Only last week,TI Bosnia and Herzegovina presented acourageous report on corruption and the lack ofaccountability among the internationalcommunity.

Another example where TI’s national chapters arelearning from each other is in the field of politicalaccountability. Just as in Latin America therehave been Visible Candidates campaigns, TI-Korea organised the Voters, Movement forEvaluation of Candidates and Participation inElections, disclosing to the electorate backgroundinformation on candidates. Earlier this month, ourchapter in Germany injected into important stateelections a process of party monitoring that wasinspired by the Korean example.

At the international level, TI has also beenworking hard on the issue of party politicalfunding. A meeting at La Pietra, Florence, Italy inOctober last year, led to a set of keyrecommendations, including the call for the OECDto ensure that bribe payments to foreign politicalparties and officials are prohibited, but alsorecommendations for greater transparency indisclosure requirements for political parties andcorporations. South Korea was one of fivecountries featured in case studies on politicalparty bribery submitted at La Pietra.

A coalition of mutual learning

The strength of the TI movement is exactly thiscommunity of mutual learning and support. It is ademocratic movement, which will be much inevidence at the AGM in Prague in October. Thatmeeting will provide us with an opportunity to re-assert this successful feature of TI. We willpropose some minor modifications, such aschanges in accreditation procedures, changes thatbecome necessary as the movement matures. Wewill also attempt to graduate to a moresustainable funding system, whereby donorscommit themselves to making a longer-termcontribution to funding our efforts.

Prague will offer an opportunity to discuss withthe membership at large our vision for the future,while the 10th International Anti-CorruptionConference will provide us with a forum for awider exchange of ideas and experiences withother partners in the fight against corruption, notleast other civil society organisations. The 11thIACC in Seoul in 2003 will present us with achance to look even more closely at the experienceof anti-corruption initiatives in Korea by TI-Koreaand others.

TI has succeeded in putting transparency, goodgovernance and the fight against corruption at thecentre of the agenda of the world community.Everybody - from James Wolfensohn to Kofi Ananto President Kim Dae-Jung - is now talking aboutthe devastating impact of corruption ondevelopment and the need to tackle the problem.We have to ensure that this level of awareness tothe devastating effects of corruption does not fadeaway from public attention in the midst of themany pressing issues facing humanity today.Tackling corruption is indispensable if sustainable

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solutions are to be found to global issues such aspoverty, inadequate health care provision anddecent housing and education for all. TI willcontinue to fight to keep the spotlight of theglobal community on corruption and its appallingconsequences.

TI has to focus on tasks that other players cannotcredibly handle. Corruption is a clear example ofan issue that governments and the private sectorcannot tackle effectively alone. While governmentlacks the global reach, business is driven by theneed to turn a profit. In this context, civil societyand its organisation and institutions have to beinvited to become equal partners alongsidegovernments and the private sector in order toform a ‘magic triangle’. As it is happening inKorea, civil society may be invited to fulfill thisrole, but it must also work itself into this position.In that sense, TI will continue to be a trail-blazer,not only in striving to create a world free ofcorruption, but also in demonstrating howconstructive and how helpful civil societyorganisations can be in shaping better governancein a globalised economy, in building a world inwhich the poor and the weak have a fair chance toparticipate in a more prosperous world, one wheredemocracy is a vibrant tool for callinggovernments to account - and where everyone hasa full say, wherever they are born.

By Mr. Chongsu KimDirector of Policy Department,

TI-Korea

For a long time in Korea the corruption problemwere regarded as a deviation from the lack ofpublic officer’s personal ethical consciousnessand morality. It led to the emphasis on exposureof irregularities and punishment, but after theintensive control same types of corruption wererepeated.

With the passage of time, at last in 1998 theefforts to build national anti-corruption systemwere taken. In 2000 there were also effort tochange the atmosphere of corruption andsystem, while grand corruption scandals such ashigh-ranking officials’ pressure for loan, andsome venture companies, illegal funds raisingand embezzlement attracted considerable publicattention.

However it is obvious the effort to build anational anti-corruption system is forming a mainstream in anti-corruption movement. Especiallyin 2000 the Korean the NGOs coalescedthemselves into the Citizens’ Coalition for CleanParliament Election to solve the corruption of thepolitics considered one of the most seriousproblem of Korea by Korean people. It initiatedthe nationwide campaign for ‘defeating thecorrupt candidates and rejecting nominees forthem’, in January 2000. This campaign wasbacked far and wide by Korean who thinks thecorruption in politics must be ‘uprooted’. 59candidates from 86(68.8%) ‘nominated’ by theCitizens’ Coalition for Clean Parliament Electionas corrupt were defeated in the election. Thoughit was criticized in the point that the campaignas negative one(contra, not pro) was negative

Current Situation ofAnti-CorruptionMovement in Korea

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enough to overcome the disillusionment andindifference of people with and towards politics,but it is of great importance that the corruptpoliticians can be ‘punished’ by citizens.

The government recognizing the need of nationalcorruption control strategy is going ahead sinceAugust 2000 with the ‘Comprehensive Plan toPrevent Corruption’(CPPC). The Office of thePrime Minister is taking the lead in this Plan.CPPC bases on 3 principles. First, it underlinesprevention rather than ex post facto punishment.Second, it takes comprehensive and systematicapproach to solve the corruption problem. Third,to win the accountability of citizen it try to findthe policies which is applicable to In the secondstage in 2000 this plan shows establishment ofpreventive measures against corruption and it’simplementation in seven areas, education,corruption in local level, budget, procurement,financing small-medium industries, subsidy forfacilities related to social-welfare and free accessto administrative information.

Regarding preparation and improvement of lawsystem for prevention of corruption, thegovernment’s and opposition’s parties, and NGOsbrought Anti-Corruption Law and Preventive Lawof Money Laundry in parliament. Despite its longprocess of debate it was not easy because ofpolitical interests conflict to reach a agreement,but the establishment of anti-corruption law isirreparable.

Further with the Seoul cities, introduction ofIntegrity Pacts in July 2000, many localgovernments and public enterprises areintroducing it and Public Procurement Service(PPS) is preparing for its introduction. Thoughthere are some points to be complemented, for

example extension of citizen’s participation andits control over the process, of contract’simplementation are continually enlarged.

Since 1999 some institutions and NGOs began topublicize corruption indices that are significant tofind the cause and provide the solution ofcorruption by showing its extend and trend. Forthe first time in Korea, TI Korea publicized a resultof research in August 2000 whether thecompanies ranked in the highest top 30 in regardto sales size have Code of Conduct(businessethics). The findings revealed only 8 of this 30companies have Code of Conduct. This researchraised widely the need to establish Code ofConduct and educate employees by it and to setup secretariat for Code of Conduct in thecompany. After the publication of TI Korea’sresearch the number of companies having Code ofConduct is increasing.

And TI Korea held a semi-expo for ‘Clean Korea21- 1st Forum for making clean society’. In thisforum government’s bodies, companies and NGOsdisplayed their model cases and systems to (have)prevent corruption through which each sector canpromote benchmarking as a tool to create moreeffective anti-corruption system. This forum alsopresented a new model for ‘Anti-CorruptionGovernance’ in which the government, company,and NGO actively take part.

(Apr. 2001)