“Most corruption is due to lack of good governance”

OLACEFS president calls for creation of Latin American alliance to promote joint mechanisms against this challenge

Augusto Nardes in December 2013.
Augusto Nardes in December 2013.Brazilian Ministry of Environment

Augusto Nardes, the president of Tribunal de Cuentas de Brasil, the country's national audit court, keeps repeating the word "governance."

Governance is the key concept, he insists, in the fight against corruption. Preventive measures increase efficacy and transparency in government, he explains. Nardes, who also serves as president of the Organization of Latin American and Caribbean Supreme Audit Institutions (OLACEFS), reiterates this message on his visit to the United States.

After meeting with United Nations leaders in New York, he comes to Washington, D.C. to participate in an international meeting for audit courts and to present a proposal to international organizations - World Bank, Inter-American Development Bank and the Organization of American States. The plan calls for the creation of a Latin American alliance against corruption. The first step is to form a network to share information in specific sectors in order to create mechanisms for joint action. The project came out of a set of good practices that Brazil, members of the Organisation for Economic Co-operation and Development (OECD) and other countries promote.

Nardes has been the president of Brazil's national audit court since December 2012. The organization has the authority to impose fines and freeze public works if it discovers irregularities. It can also punish electoral candidates. Before Nardes became the president, he had been a member of the group for six years. After serving as a congressman for a decade, the Progressive Party appointed him to the court. Nardes will complete his term at the end of this year. He has presided over the court while also serving as president of OLACEFS where he will remain in charge until 2015.

The jurist speaks to EL PAÍS after participating in a symposium held by the Brazil Institute at the Wilson Center.

Question. How is your proposal to form a Latin American alliance to fight corruption moving forward?

Answer. Yes. It was born out of an experience we had in Brazil five years ago where each state created a supervisory network and one was also created at the national level, including all the auditing institutions. I presented this proposal last year and we are now in the process of implementing an integrated system in Latin America to share information between the various organizations responsible for auditing businesses and individuals. The objective is to create an information network that includes all the countries in OLACEFS.

Q. Corruption is a big worry for Latin Americans and the majority of them believe it has gotten worse in the last few years. What is the current state of affairs?

A. Corruption exists everywhere, not only in Latin America. There is corruption in Japan, Europe and in the United States... The big problem is lack of good governance. That is why we are working on this theory that the necessary change must be made in the way countries are governed.

Q. But, what is exactly the situation in Latin America?

A. The situation is the same as always. We are still working on improving governance and control measures. The network is an innovative idea.

Q. What concrete measures can be taken to improve governance?

A. Governance is the starting point. If there is no good governance, if there is no planning, it is easier for corruption to take root. The problem is clear. If governments don't set up long-term plans, it's easier for corruption to exist.

Q. What can each country do?

A. Show where the problems in each sector lie so that the leader can make the changes. But, of course, it's necessary to have a structure set up [for that] in each country.

Q. In that context, having a strong and independent judiciary would be a key factor, no?

A. Yes. Brazil has set an example by convicting 24 officials from the Lula administration [in reference to the Mensalão corruption case. Billions of reales were handed out to politicians and parties that supported the first administration of then President Lula da Silva between 2003 and 2005]. That is a good example. It shows that there is a significant change in Brazil.

Q. The demonstrations in Brazil last year inspired various initiatives to prevent political corruption, such as the law that punishes businesses that participate in illicit activities against the government. Do you think these changes are enough or should more be done?

A. It's a start. But, to improve all of that, we must improve planning in public administration. We are talking about preventive measures and global governance.

Q. With respect to Brazil, you have mentioned the problem that comes when the government only spends part of the approved budget. For example, in 2012 the government only spent 27 percent of the healthcare budget and 33 percent for transportation. How can this be solved?

A. By improving governance. By establishing set mechanisms, employing stable public officials, having evaluation standards, [promoting] meritocracy, and constantly evaluating workers at various points, etc. Everything is within this structure that needs to change in Brazil and elsewhere. It's easy to commit fraud if there is no control. For example, most public businesses do not have a strategic plan or internal audits. Therefore it is easier to have corruption.

Q. I see, so having more planning helps fight corruption.

A. It is fundamental. Strategy, planning, evaluation.

Q. But that depends largely on the will of each government.

A. The auditing organizations are doing their part: taking steps to show where the problems are so that the government can make decisions. [As a court] we are not only looking at legality. We are also paying attention to governance.

Q. One of the greatest challenges in fighting corruption is that it starts out small.

A. Corruption exists at every level. Wherever human beings live, there is corruption. That is why we must change some basic principles. Without a strategic plan, skilled personnel, and evaluation, it's easier to have corruption. If an institution has no internal auditing system, it cannot fight corruption.

Q. But all this planning and training costs governments money.

A. Of course. This all depends on the basic planning in each country. We are living in an era where social media is doing the auditing. If we do not do the audit, society itself will question them. There are different levels and different structures in each country. For example, there are differences between Brazil and Argentina. But, we have to try to create a progressive system.

Q. Do you feel confident or wary about the future of corruption in Latin America?

A. I feel confident while being realistic, knowing that there are problems in all government structures. We are moving forward but we are facing an enormous challenge and that is why we are working together.

Translation: Dyane Jean François