/MEC_Afghanistan www.mec.af /mec.afghanistan

2018Quarterly Report

July - Sept

AFGHANISTANT O T H E P E O P L E O F

Independent Joint An�-Corrup�on Monitoring & Evalua�on Commi�ee (MEC)

Independent Joint An�-Corrup�on Monitoring & Evalua�on Commi�ee (MEC)

www.epdc.org

The Independent Joint Anti-Corruption Monitoring and Evaluation Committee (MEC) independantly monitors and evaluates national and international efforts to fight corruption in Afghanistan. It reports to the public, parliament, president, and

the international community.

1. Letter from MEC’s Chair 2. MEC’s Recent Work3. MEC’s Recent Reports a. MoMP Ministry-wide Vulnerability to Corruption Assessment b. MoPH Eighth Quarterly Monitoring Report c. MoE Second Quarterly Monitoring Report d. M&E Update4. Mission Updates and Other Engagements 5. Corruption in Afghanistan: MEC’s Assessment of the Quarter6. Introduction of MEC’s New Executive Director

INSIDE THIS

REPORT...57891012131921

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وال تأکلوا أموالکم بینکم بالباطل وتدلوا بها إلى ن أموال الناس باإلثم وأنتم ام لتأکلوا فریقا م الحک

تعلمون. ]سورة البقرة، آیة 188[And do not consume one another's wealth

by unjust means, nor offer it as bribes to the officials in order to consume part of other

people's wealth illicitly, while you know. [Surah

Al-Baqara, Verse 188[

“

”

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Dear Afghan and International Friends,From March through September 2018, it was my distinct privilege to serve as Chair of the Independent Joint Anti-Corruption Monitoring and Evaluation Committee (MEC). MEC is deeply committed to helping execute the October 2017 Afghanistan National Strategy for Combatting Corruption as an independent agent of civil society. MEC recognizes that the historic struggle to root out corruption requires sustained commitment and constant engagement of the government, citizenry and external stakeholders. MEC’s specific role in the National Strategy is to help the government adopt reforms and institute processes to prevent corruption. During the third quarter of 2018, MEC prioritized several critical internal management objectives and external anti-corruption initiatives. First, during the July 2018 Mission of the MEC Committee, the Committee and Secretariat conducted an intensive review of internal governance policies and bylaws with the goal of updating and streamlining our processes. As a result, the Committee adopted a series of reforms to the Rules of Operation to increase the accountability, efficiency and productivity of the organization in the future. Second, the MEC finalized its Ministry-wide Vulnerability to Corruption Assessment (MVCA) of the Ministry of Mines and Petroleum (MoMP), which is the first comprehensive analysis of the corruption vulnerabilities across the entire Extractive Value Chain of Afghanistan. The MVCA assessed corruption risks in MoMP’s internal operations and regulation of the extractives industry. Importantly, in the course of conducting this assessment, the MEC team encountered many bright, committed and ethical leaders and managers in the MoMP and among other industry stakeholders who are working to fight corruption. The MVCA makes several recommendations aimed precisely at helping the MoMP continue its efforts to implement practical measures to mitigate corruption risks, including reforms to licensing and contracting procedures

Letter from MEC’s Chair

Quarterly Report 2018

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intended to increase the level of honest and smart investment in this sector, which is so vital to the sustainability of the Afghan economy. Third, during the third quarter of 2018, led by the talented and innovative Secretariat management, the MEC instituted a state of the art research methodology, including a new handbook, guidelines, and tools that incorporate international best practices. The Secretariat also led the way in creating a new set of procedures for how the organization will select government ministries and sectors as subjects for assessments of vulnerability to corruption in the future. These selection criteria will be open for review and recommendations by all civil society stakeholders. Fourth, during the third quarter, MEC produced two Quarterly Follow-Up Reports that monitor how the Ministry of Public Health (MoPH) and Ministry of Education (MoE) have implemented MEC’s recommendations to increase the efficiency and transparency of delivery of services. MEC published the eighth and final follow-up report on MoPH, which covered implementation in April, May, and June 2018, and showed that the Ministry’s implementation progress in the eighth quarter had improved significantly compared to the previous period of monitoring. In particular, there was notable progress on recommendations related to systemic processes overseen by the Ministry, accountability of NGOs and INGOs

implementing health services, and external relationships of the Ministry.MEC also published the Second Monitoring Report to follow its October 2017 Ministry Vulnerability to Corruption Assessment of the Ministry of Education, covering the period from May to July 2018. The MEC found that while MOE documented certain progress in implementation of the original 113 recommendations during this period, an insufficient number have been fully implemented. Importantly, the MEC found steady progress in implementing recommendations to involve local Civil Society Organizations (CSOs) in active monitoring and oversight of teachers’ recruitment, and expand the use of electronic methods for general Ministry recruitment (in addition to the teachers’ recruitment.) Finally, I am also pleased to mention that on September 11th 2018, the MEC hired Mr. Maiwand Rohani as the new Executive Director. Mr. Rohani has exceptional experience as trusted manager of different non-profit organizations and public interest initiatives in Afghanistan. He is a well-known expert in Human Resources Development and holds a Master of Business Administration degree and an Executive MBA degree in Project Management. Thank you for your support and interest in MEC.

Letter from MEC’s Chair

Mr. Matthew MurrayChair, Independent Joint Monitoring and

Evaluation Committee of Afghanistan

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MEC’sRecent Work

Quarterly Report 2018

During the third quarter of 2018, the MEC Committee and the Secretariat have taken significant steps to strengthen institutional capacity of MEC as well as to standardize and streamline the procedures and functions of the organization. A) Internal Governance ReviewSince being founded in 2010, the MEC has created an internal governance system that is regulated by several different policies, rules, manuals, procedures and guidelines. At various stages in the MEC’s evolution, these internal governance bylaws have been reviewed, revised and updated. In July 2018, the Committee and the Secretariat initiated an effort to review all bylaws currently in operation in order to update and streamline them. During the July-August Mission, the MEC identified certain gaps and inconsistencies in the internal governance system. Base on this assessment, it revised certain chapters of the Committee’s Rules of Operation and adopted these revisions by majority vote of Committee Members. The internal reform and updating of procedures is an on-going process at the MEC. Further revision and alignment of other bylaws may benefit from a comprehensive external view. B) Research Methodologies and Procedures1. Research Methodology: Handbook. In order to standardize the MEC’s assessments of vulnerability to corruption and research activities, the organization has continued to refine its Research Handbook, moving to an index format, to cover all types of research and all relevant methodologies for data collection.2. Research Methodology: Guidelines. The following new MEC guidelines for Research Methodology are in final development: Volume 1 “Overall Guide to Research,” Volume 2 “VCA Guidelines,” Volume 3 “MVCA Guidelines,” Volume 4 “Inquiry Guidelines,” and Volume 5 “Monitoring and Evaluation Guidelines.” Each of these new Guidelines will help MEC researchers and external consultants to plan and implement MEC’s research plan. In particular, the Vulnerability to Corruption Assessment Guidelines

(“VCA Guidelines”) are the foundation from which all other MEC research protocols are developed. They provide clear guidance for the entire VCA process starting from selection of a VCA project to coordination with the relevant entities, data collection, data analysis, notation, record keeping, MEC recommendation development, report writing, and presentation of findings. 3. Research Methodology: Tools. In the current quarter, the MEC has documented its training and development activities with materials (including evaluation tools) suitable for replication across future training sessions. These have included conducting refresher trainings with materials and tools developed for conducting In-Depth Interviews, note-taking for In-Depth Interviews, facilitating Focus Group Discussions, note-taking for Focus Group Discussions, and conducting and documenting Direct Observations. Each of these is included within the Research Handbook.4. Procedure: Assessment Selection. The MEC also adopted a set of nine objective criteria for selecting public institutions as the subjects of VCAs and MVCAs. The Assessment Selection criteria will be incorporated into the VCA and MVCA Guidelines. This list of criteria raise the transparency of MEC’s conduct and will protect MEC against criticisms of bias or the use of its discretion in influencing political decision making. MEC will also engage with Civil Society Organizations to identify areas and institutions potentially vulnerable to corruption.5. Procedure: Monitoring and Evaluation Implementation of MEC Recommendations: For MEC’s monitoring activities, the Committee and the Secretariat are currently in the process of developing a comprehensive tool, which would allow a deeper analysis of the implementation of MEC’s recommendations. A prototype of the new tool has been developed. After successful trial and incorporation of any relevant revisions, the Monitoring and Evaluation Tool will be transferred to a new database to support the work plan of the Secretariat’s Monitoring and Evaluation Team.

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MEC’sRecent Reports

Ministry of Mine and Petrolium MVCA

Ministry of Mine and Petrolium MVCA

During this quarter, the MEC finalized a Ministry-wide Vulnerability to Corruption Assessment of the Ministry of Mines and Petroleum (MoMP). It completed the Second Quarterly Monitoring Report for follow-up of the implementation of recommendations in the Ministry of Education (MoE) Special Report. The MEC also finalized its Eighth Quarterly Monitoring Report on the implementation of recommendations in the Ministry of Public Health (MoPH) Special Report. MEC is currently finalizing its Vulnerability to Corruption Assessment of the Afghan Parliament and a Ministry-wide Vulnerability to Corruption Assessment of the Ministry of Interior.

Background: This report sets out the findings and recommendations of MEC’s Ministry-wide Vulnerability to Corruption Assessment of the Ministry of Mines and Petroleum (MoMP). It is an opportune time for this MVCA. The Government of Afghanistan has recently joined the Inter-Governmental Forum on Mining, Minerals, Metals and Sustainable Development (IGF); the Government has undertaken legal and regulatory reform of the mining industry; the Industry Roadmap was released early this year; and the Ministry has adopted a Reform Strategy that sets out the Ministry’s intentions to address the governance problems that have beset the agency. Given these developments, the MEC’s MVCA can contribute to and shape change under conditions that the Ministry addresses corruption vulnerabilities more effectively. The MEC’s MVCA represents the first comprehensive analysis of the corruption vulnerabilities across the entire MoMP and the

Extractive Value Chain of Afghanistan. It includes an assessment of the corruption vulnerabilities in the internal operations of the MoMP and in the Ministry’s regulation of the extractives industry. It assesses vulnerabilities in other government agencies that impact the Extractive Value Chain, including the National Environment Protection Agency and relevant sector-related functions of the Large Taxpayers’ Office. The MVCA examines corruption vulnerabilities across the extractive industry for which the MoMP and these other agencies are responsible and recommends practical measures to mitigate the risks. Research method: As a vulnerability assessment, this MVCA is focused on determining if the governance systems in the MOMP and other agencies are robust enough to prevent corrupt acts. In other words, this MVCA assesses whether the corruption controls currently in place would be sufficient to prevent corruption occurring. The assessment team asked: How likely is corruption

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and what would the impact be if it occurred? When the evidence showed that corruption risk controls were weak, this increased the risk ranking established by the assessment team. In circumstances where control of corruption risks had failed or were nonexistent, the MEC assessment team looked for positive deviances – situations in the Ministry where corruption vulnerabilities have been controlled more effectively than elsewhere. Corruption vulnerabilities and risks: The MOMP MVCA focuses on high or very high risks of corruption and highlights some moderate risks, but does not analyze low risks in detail. The MVCA finds that there are areas of high risk of corruption in the MoMP and its governance of the extractives industry. At the same time, in

the course of conducting this MVCA the MEC assessment team met many bright, committed and ethical people across the MoMP and the other industry stakeholders who are working to fight corruption. The MEC’s assessment team saw real commitment to a new vision for the industry in many people, through interviews, meetings and particularly at the validation workshop conducted as part of the data analysis activities. MEC believes that the MoMP has leaders and staff personnel with the capacity, integrity and dedication to take on this challenge and shift the vicious circle caused by corruption to a virtuous one, so that the extractives industry contributes to peace and prosperity in Afghanistan.

Ministry of Mine and Petrolium MVCA

Ministry of Public Health MVCA

Background: This summary provides an overview of the original “Ministry-wide Vulnerability to Corruption Assessment (MVCA) in the Afghan Ministry of Public Health (MoPH),” released on June 4, 2016. This MVCA was undertaken by MEC at the request of the Minister of Public Health, Dr. Ferozudin Feroz. The purpose of the MVCA was to assess the extent of corruption risks in the Afghan health system, to identify where these vulnerabilities exist, and make recommendations on how to counter corruption

risks. An assessment team comprised of dedicated Afghans and international experts, knowledgeable about both the Afghan health sector and anti-corruption work, undertook this study. To conduct the assessment, 269 former MoPH officials from all ranks, health sector implementers, civil society organizations, community leaders, and patients and their families from throughout the country participated in face-to-face interviews and Focus Group Discussions. Their personal knowledge and experiences in the health system, as well as direct observations of the assessment team, formed

Overall Summary

10 Ministry of Public Health MVCA

the basis of the study. The MVCA illustrates the magnitude of the problem in the Afghan health sector. Patients and their family members experienced corruption in the context of fear, suffering, uncertainty, pain, and death. Corruption in the Afghan health sector covers a range of illegal, unethical and disturbing acts that happen within an environment of systemic failure. Most often, it is entrenched, widespread and a dominant pattern. It affects all stakeholders in the health sector. Officials and employees have often been powerless in the face of corruption, frustrated and with a strong feeling of being let down by colleagues and political leadership. Patients have to pay bribes in many wards. Doctors often use the public service to find clients and refer them to their private clinics. Finally, patients and their families feel their voices can’t be heard. The MVCA provided a powerful justification to undertake measures to restore confidence in, and credibility to, the health sector’s systems and practices, and to significantly improve health services delivery to the Afghan people. It is hoped that the Afghan people’s outpouring of anguish as revealed through the interviews will serve as a powerful motive for Ministry of Public Health officials to pursue genuine reform that will lift the health standards of the Afghan society.Scope: The topics for the assessment were determined based on the initial Statement on Corruption in the Health Sector from the MOPH, which outlined specific areas of concern, and after discussions among assessment team members, MEC colleagues, and exploratory meetings at the Ministry of Public Health. Topics focused on policies, contracts, embezzlement, nepotism, quality assurance/quality control (closely linked to

issues of fraud/falsification/fakes/forgery), human rights and discrimination, extortion, conflicts of Interest, bribery, and “other risks” of corruption.Main Findings: The main findings detailed risks of corruption related to the following: leadership and governance, conflicts of interest, influence from powerful persons, complex challenges related to policy coordination and control systems, finance, lack of transparency, contracting issues, human resource issues in recruitment and termination processes, health management information systems related to the integrity and reliability of data, health Shuras, cooperation with the AGO, weak independent oversight, usefulness of audit processes, accreditation of health organizations, and a broad range of concerns around the quality and integrity of imported pharmaceuticals.Recommendations: In total, this report made 115 specific recommendations for improvement. Follow Up: MEC’s work continued after the release of the Ministry-wide Vulnerability to Corruption Assessment (MVCA), and the follow-up of the implementation of recommendations started in November 2016. MEC actively monitored the implementation of the recommendations for the next 24 months in the form of Quarterly Monitoring Reports. The status of implementation was determined in close cooperation with the Ministry and other relevant institutions. These Quarterly reports detail both achievements and major challenges to implementation through exhaustively reviewing documents, conducting interviews and Focus Group Discussions, and making empirical observations, and included gathering information at both MoPH headquarters and from Provinces (Badakhshan, Baghlan, Balkh, Bamyan, Herat, Jowzjan, Kabul, Kandahar, Kapisa, Khost, Nangarhar, Paktika, and Samangan).

MoPH Eighth Quarterly Monitoring ReportMEC published its original analysis of corruption vulnerabilities in the Ministry of Public Health on June 4th, 2016, making 115 recommendations. Shortly after, the Ministry established a Working Group comprised of MOPH senior managers and external health sector stakeholders. The Working Group analyzed and scored all of MEC’s original recommendations to establish internal

MoPH priority actions. A smaller “Coordinating Group” was subsequently formed from among senior Managers within MoPH, led by Deputy Minister of MoPH Policy & Planning, to support more systematic communication between the MEC monitoring team and MoPH Focal Points. MEC’s eighth and final follow-up report covered MoPH implementation in April, May, and June

11 MoPH Eighth Quarterly Monitoring Report

2018. The Ministry’s implementation progress in the eighth quarter had improved significantly compared to the previous period of monitoring, with notable progress on recommendations related to systemic processes overseen by the Ministry, accountability of NGOs and INGOs implementing health services, and external relationships of the Minsitry. The MEC Monitoring Team itemized specific concerns about progress on implementation, or the outcome of the implementation for each recommendation.

The MEC reviewed the status of the 112 remaining recommendations (the MEC Monitoring Team recommended that three recommendations were dropped from monitoring in the Fourth Quarter):

• 87 (77%) have been fully implemented.• 21 (19%) have been partially implemented.

These are further broken down as follows:• 2 started or study underway• 9 achieved up to 25%• 10 achieved up to 50%• 4 recommendations (4%) are either pending,

or for future implementation. In 2 of these remaining cases there are substantiated reasons for delay. Notably, 3 of the 4

recommendations with ‘pending/future’ implementation status are related to human resource management.

Chart 1: Implementation Status of MEC Recommendations to the MoPH

12 Ministry of Education (MVCA)

Ministry of Education MVCA Overall Summary

Background: For an important backdrop to the MoE Second Quarterly Monitoring Report (2018), this summary provides the context of the original Ministry-wide Vulnerability to Corruption Assessment (MVCA) of the Ministry of Education (MoE), released in October 2017. This MVCA was requested in July 2016 by Dr. Asadullah Hanif Balkhi, the then Minister of Education. The MEC

MVCA was the first comprehensive evaluation of corruption vulnerabilities across the entire Ministry. MEC spoke with teachers, head teachers, school principals, school Shura members, teacher educators, MoE officials on central, Provincial and District levels, donors, other stakeholders, and with many parents and students. In total, the

13 Ministry of Education (MVCA)

MEC carried out 542 interviews and conducted 160 Focus Group Discussions in Kabul and in the nine Provinces of Badakhshan, Balkh, Faryab, Ghazni, Herat, Khost, Bamyan, Pansjhir and Nangarhar. Information was gathered at 138 school locations. What Afghan school community members have described to MEC about experience with corruption in education was devastating. It is vitally important to understand these perspectives and acknowledge the corrosive impact of corruption on the country. Using this analysis of the first hand experiences of the public will enable policymakers to take meaningful steps towards positive, effective and sustainable change in the education sector. Scope: The scope of corruption at the MoE is twofold; one, focuses on issues affecting teachers and students, and the other, focuses on issues of corruption in leadership and management in several areas. These vulnerabilities ranged from school-level issues, such as bribes to modify school certificates, through to Ministry-level issues, such as corruption in school construction and textbook distribution. One corruption vulnerability emerged as being the most serious – the widespread, country-wide appointment of teachers on the basis of influence, nepotism and bribery, not on the basis of merit. In short, teacher appointment was determined to be largely corrupted. This is the most damaging issue for the education of students in the country. Findings: Findings affecting students and teachers were identified in key areas of teacher appointments, school management, Teacher Training Colleges, the complexities of an extensive curriculum a short school year and limited time for instruction, Technical Vocational Education and Training (TVET) and adult literacy, procurement of textbooks and resources for learning, and community-based education (CBE) and private

schools. The MVCA identified vulnerabilities to corruption in leadership and management at the Ministry of Education headquarters, as well as Provincial and District levels, weaknesses in school Shura management and leadership, the Education Management Information System (EMIS), procurement, payroll and record keeping, monitoring and evaluation, and auditing. Recommendations: Based on findings from this assessment, MEC issued 66 recommendations for reforms to the sector and specifically at the Ministry of Education. These recommendations were subsequently refined into 113 more specific recommendations.Follow-up: Following the release of the MVCA in October 2017, MEC initiated active monitoring of the implementation of recommendations in February 2018. MEC will follow-up on the implementation for a period of 24 months in the form of Monitoring Reports. In the case of the Ministry of Education, MEC actively monitors the status of implementation of its recommendations, the progress on reforms, and the wider anti-corruption efforts in the education sector. MEC’s First Monitoring Report was published on June 24, 2018, with the Second Monitoring Report covering the period from May to July, 2018. MEC Monitoring Reports reports analyze progress toward milestones, as well as document major challenges to implementation. The Ministry designated an official Focal Point for each recommendation. In its active monitoring process, the MEC team has conducted individual interviews and Focus Group Discussions in Kabul and Balkh, Samangan, and Jawzjan Provinces, with the data collection process continuing in upcoming monitoring period to cover additional regions of the country.

MoE Second Quarterly Monitoring Report

In the second quarter of monitoring, while there had been documented progress, no additional recommendations out of the total 113 were determined to be fully implemented. Two further recommendations have been achieved up to

50%, making a total of 14 recommendations up to 50% achieved as of August 2018. These recommendations included involving local Civil Society Organizations (CSOs) in active monitoring and oversight of teachers’ recruitment, and

14 MoE Second Quarterly Monitoring Report

expanding the use of electronic methods for general Ministry recruitment (in addition to the teachers’ recruitment.) Eight recommendations were determined to have been achieved up to 25% (compared to five in the first moniotring period). Work was started and/or study to enable implementation had begun for 44 recommendations (compared to 38 with this status in the earlier period), while no action has been taken on six recommendations (reduced from the 11 in the in the initial monitoring period). In the second monitoring period, 25 recommendations were still classed as “pending for future implementation,” compared to 31 in the prior period. “Pending” status indicates that other steps and/or actions are necessary,

beyond the sole control of the MoE, prior to the implementation of the recommendation. In addition, during the second quarter of monitoring, the Provincial Education Departments that MEC visited reported a range of concerns including lack of textbooks, insufficient teachers and professionally qualified teachers, lack of school buildings, insecurity, student absenteeism, and illegal interference of Members of Parliament and local powerbrokers in local education affairs. MEC expects the MoE to accelerate the process of implementation MEC’s recommendations in the coming moniotring periods, alongside implementation of the Ministry’s Comprehensive Reform Plan.

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In this monitoring period, along with the active monitoring of the 3 major studies (MoPH, MoE and AGO), MEC’s M&E team has been monitoring the implementation status of its recommendations with 25 other Ministries and other Government institutions. The overall cooperation level of the Government institutions, and their commitment to implement MEC’s recommendations, has been satisfactory. Progress has been documented in several areas, including filling vacant civil service positions, performance evaluation of high-ranking bureaucrats, Tashkiel adjustments and alignments, as well as strategic planning in the Customs General Directorate. However, there are still a lot of administrative, legal and practical obstacles which makes the implementation process of MEC’s recommendations challenging. For a more rigorous monitoring and pro-active pressure, the M&E team has been actively engaging with the implementing institutions, providing comments on their claims of progress, and requesting documents and and other evidence as proof for such claims. Government institutions had good progress in the following cases during the monitoring period : 1. The Ministry of Finance has proposed a reserve in FY1397 National Budget for amnesty of 95% of tax penalties (the Tax Penalty Amnesty) based on which 95% of the outstanding tax penalties of companies from 1381 to 1396 were exempted. The reserve has been approved by the National Assembly and signed by the Presidency through the Decree No. 41, dated 25/01/2018. This was considered necessary because in the past tax penalties were very high and companies were obligated to pay 1,000 AFN per day for late filing of an Annual Income Tax Return. This led to a situation where tax penalties often exceeded the principal tax liability owed for previous years, and thousands of companies became inactive because they could not afford the tax penalties. Based on the new Rules, all companies are eligible to benefit from the Tax Amnesty when they file their tax declaration within 9 months. As a direct result of the above legal change, 2169 companies have paid their tax liabilities

and renewed their licenses. Additionally, 2226 companies have dissolved their businesses and declared insolvency. 2. The Independent Administrative Reform and Civil Service Commission (IARCSC) has been very active in implementing MEC’s recommendations and taking other reform measures beyond MEC’s recommendations. The IARCS has taken measures to provide a good working environment with incentives and encouraging rewards for its own employees and other civil servants in public institutions. a. Based on MEC’s recommendation, the IARCSC conducted a performance evaluation of 6 Directors (Grade 1 and 2 employees) of the Afghanistan National Standard Authority (ANSA) for the first time. As a result, 3 Directors who were not able to achieve the minimum score of 50 points and were discharged; subsequently their positions were re-announced.b. For better implementation of the Regulation on Scholarships and Study Abroad, the joint commission comprising IARCSC, MoFA, MoHE and MoLSAM.D holds regular sessions to allocate the scholarships on different Ministries and Provinces. An entry exam is taken from all eligible candidates and the successful candidates are introduced to the MoFA and the hosting country. The effective and transparent implementation of the mentioned Regulation resulted in reducing undue influence of different parties in the distribution process of international short- and mid-term scholarships.c. The Civil Service Appeal Board has simplified its complaint receiving procedure and enhanced its efforts to address complaints. In 1396, the Appeal Board received 8,307 complaints from which 8,073 (97%) were addressed with the decision of the Board submitted to the related institutions. Additionally, the IARCSC has signed an agreement with the Max Planck Foundation to conduct and Legal Assessment of the Appeal Board and prepare the Roadmap for Reform. An International Consultant was hired by the Max Planck Foundation

Quarterly Report 2018

Monitoring And Evaluation (M&E) Update

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to conduct a comprehensive assessment from April to July 2018.3. The General Directorate of Customs has developed its Strategic Plan 1397-1401 in coordination with the World Customs Organization. The Strategic Plan is based on the following 6 strategic objectives: 1. Institutional reform, 2. Fight against corruption and tax evasion, 3. Revenue increase, 4. Electronic systems, 5. Rule of law and 6. Trade facilitation. For the implementation of the strategic objectives, the Customs General Directorate has committed to develop implementation plans for each of its constituent Directorates. MEC will closely monitor the implementation of the Strategic Plan and report on it in the following monitoring periods.4. In order to prevent the use of faked pensioner identity documents, the Ministry of Labor, Social Affairs Martyrs and Disabled (MoLSAMD) has started listing the upcoming retirement plans of all Government institutions. As of July 2018, 40 Government institutions have shared their retirement plans and lists with MoLSAMD. Additionally, MoLSAMD has started the biometric registration of current pensioners with considerable progress in the current monitoring period. As of July 2018, 89 percent of all pensioners in Kabul and 35 percent of the pensioners in the Nangrahar, Balkh, Herat and Kandahar provinces have been biometrically registered. The process in ongoing. The biometric registration of all pensioners will help in preventing the illegal use of pension benefits by criminal networks and is intended to bring an end to the existence of “ghost” pensioners.More work is needed in the Martyrs and Disabled Deputy Ministry. When MEC conducted the VCA in this DM, the findings were shocking. The process for disabled persons to register with the Ministry and receive their disability benefits was very complicated and vulnerable to corruption. The verification of the security incident that led to the disability and the determination of the degree of disability involved several steps where bureaucrats were apparently not following a specific procedure and allegedly extracting bribes from applicants on several levels. The completion of all steps for application of disability benefits at one desk and the existence of an objective and transparent procedure for determination of disability level, as

recommended by MEC, have not been achieved yet . The level of disability is determined by a Joint Committee, chaired by MoPH, without a clear definition of disability and transparent criteria for the level of disability. The MoPH, with the support of Disability and Rehabilitation experts, has drafted the Disability Certification Guidelines in 2017 with a clear definition of the disability and its different forms (e.g. visual impairment, hearing and speech impairment, physical impairment, etc.) However, the mentioned Guideline has not yet been officially endorsed by the MoPH and the Joint Review Committee.5. The Afghanistan Fuel and Liquid Gas Enterprise (AFLGE), as a State-owned company (under the MoCI) has been regulating the importation and distribution of fuel and liquid gas in Afghanistan. The AFLGE was charging 1.78 % of the total value of the imported fuel and liquid gas for 10 services that AFLGE was supposed to provide. However, in reality, most of these services were not provided and none of the services was actually demanded by the fuel importing companies – but the services were charged anyway. MEC has made several recommendations regarding the efficiency of AFLGE in its 2016 VCA, including its very existence being contradictory to the Constitutional principles of market economy. Based on the new Hydrocarbons Law, as enacted on 22.09.1396, the Afghanistan Gas and Fuel Regulation Authority was created. In August 2018, the President merged the AFLGE with newly created Afghanistan Gas and Fuel Regulation Authority through a Decree and transferred the financial and human resource Tashkiel of the AFLGE to the new Afghanistan Gas and Fuel Regulation Authority.This has abolished the Constitutional non-conformity of the AFLGE. MEC will closely monitor the reform efforts that been initiated in AFLGE.6. The Finding of MEC VCA of the Revenue Collection of Municipalities in 2016 determined that the Municipality Law has several flows which result in duplication and overlap of authorities between Municipalities and other institutions. The previous Law was originally enacted during the King Zaher Shah reign and amended several times by subsequent regimes, with the last amendment by the Taliban regime in order to align

Monitoring And Evaluation (M&E) Update

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the Municipality Law with the Sharia Law. Several Provisions of the Law were suspended through Presidential Decrees and Cabinet Resolutions. Therefore, the Law was determined not to be suitable to the current requirements. MEC therefore recommended the enactment of a new Municipality Law and the amendment of the Urban Services Law which should be aligned and

avoid overlap of mandates. The new Municipality Law that was drafted by IDLG, in cooperation with Kabul Municipality, has now been approved in principle by the Cabinet and is anticipated to be enacted soon. The new Law regulates the structure of Municipalities, their mandate, core functions, and the use of their revenue. It also defines the role of IDLG. The coordination of Municipalities with other institutions and the private sector is enshrined in a separate Chapter. MEC will closely follow up the legislative process and the implementation of this Law in the upcoming reporting periods.The above examples provide a rough picture of the M&E team’s follow ups on the implementation status of MEC’s recommendations. The team has

also reviewed the entire stock of recommendations for accuracy and completeness, and as a result, 8 recommendations that were determined to be outdated were archived. The implementation Status of the M&E Tool Recommendations is shown in the below chart:

Of the 486 recommendations issued before 2016, 246 (51%) have been completely implemented (22 of them in the reporting period) and 97 (20%) have been partially implemented. Nine Recommendations (2%) are not implemented at all, and 134 recommendations (27%) have been archived.The origin and overall status of all MEC’s recommendations are illustrated in the charts below:

Monitoring And Evaluation (M&E) Update

18 Monitoring And Evaluation (M&E) Update

MEC has issued 951 recommendations since its establishment. 486 Recommendations (51%) have been issued before 2016 based on the research and VCAs MEC had conducted in different institutions. The 3 MVCAs MEC has conducted in the Ministry of Public Health, the Attorney

General’s Office, and the Ministry of Education during 2016 and 2017 have 115, 51 and 113 recommendations respectively. Additionally, MEC has issued 121 recommendations after reviewing the Anti-Corruption Plans (ACPs) of 11 Ministries since 2016. Our Vulnerability to Corruption Assessment of the State-owned

electricity company, Da Afghanistan Breshna Sherkat, which was completed in December 2017, has 65 recommendations.The overall status of implementation of all MEC’s recommendations is shown in the chart below:

In accordance with the M&E Methodology that the MEC recently updated and refined, it will follow up the implementation status of its recommendations and report on the progress, or lack of progress in the implementation of its recommendations. We hope that the implementing institutions will continue to provide the required information and documents.

19 Quarterly Report 2018

Mission Updates

In July-August 2018, MEC held its 28th Committee Mission in Kabul. During the Mission, the MEC Committee continued to engage with a number of Afghan and international stakeholders to determine the current status of anti-corruption efforts and to share views about the way forward. During the 28th Mission, the Committee had the opportunity to meet with H.E. Chief Executive Dr. Abdullah Abdullah, and to present MEC’s current and future work. In the meeting, the

Committee shared the latest updates about MEC’s assessments of the Ministry of Mines and Petroleum (MoMP), the Ministry of Interior (MoI), the Ministry of Foreign Affairs (MoFA), the Afghan Parliament, and the Law and Order Trust Fund for Afghanistan program. CEO Abdullah emphasized the Government’s cooperation in implementing MEC’s recommendations.To discuss current and future MEC projects, the Committee had individual meetings with

the Ministers of Interior, Mines and Petroleum, Foreign Affairs, and the CEO of the Afghanistan Breshna Sherkat (DABS). The MEC Committee members also had useful exchanges with the international community as they held individual meetings with a number of ambassadors and had the opportunity to present the status of the MoMP, MoFA, MoI, ANA and LOTFA assessments to them.To foster better communication and cooperation

among the major anti-corruption organizations, MEC also met with the Executive Director of Integrity Watch Afghanistan and discussed possible areas of cooperation.Another important aspect of the Committee’s work is to reach out to senior Government officials, civil society activists, and other key stakeholders in the fight against corruption. To this end, MEC held a High-Level Anti-Corruption Forum that brought together a diverse group of senior-level individuals

20 Mission Updates

to share perspectives and experiences on anti-corruption initiatives in Afghanistan.

Other EngagementsAs part of MEC’s outreach program, it had useful engagements with students, Civil Society Organizations and the media in Kabul and a number of Provinces.

Three university sessions were organized in Kabul, Laghman and Balkh where, in addition to MEC’s introduction, the assessments on Attorney

General’s Office (AGO) and the MoE were the main topics of discussion. Several meetings were also held with officials of private and public universities in these Provinces.In addition, MEC organized a one-day workshop for civil society members from Logar province to update them about the implementation status of MEC’s recommendation in education, public

health and justice sectors, as well as train them on how to play an effective role in combating corruption on a local level.

21 Quarterly Report 2018

PositiveDuring this reporting quarter, a special tribunal convened to hear the case of the former Minister of Communication and Information Technologies Abdul Razaq Wahidi, who has been accused of corruption. He has been accused of abusing his authority and embezzling revenue collected from the ten percent tax charged on mobile phone users. This marked the first session of the newly established special tribunal to tackle cases against current and former Government ministers accused of corruption. According to MEC’s information, seven additional cases of former Ministers have been prepared by the AGO and are submitted to the relevant courts. Holding an ex-Minister accountable created hope among the people, but no information was provided to the public about the status of the case after the first appearance of the Minister in the court. While the outcome of the only former Minister to appear before court has not been settled yet, the future of the case is not certain.The Anti-Corruption Justice Center (ACJS) has continued to handle corruption cases of various Government institutions during this reporting period. In this quarter, the ACJC sentenced at least six Ministry of Interior (MoI) high ranking officials to different jail terms of up to 11 years over abuse of authority, embezzlement and fraud. In addition, the ACJC fined four individuals over charges of money-laundering and seized around $300,000 from them. On the other hand, ACJC’s primary and secondary courts have been hearing cases of petty corruption, which are not covered by their jurisdiction. While MEC views the ACJC as an effective tool to fight corruption in various sectors of government, it is still concerned about factors that appear to be preventing the ACJC from undertaking larger cases. MEC recommends more transparency in the selection of corruption cases and a strict adherence to the ACJC’s jurisdiction regarding high-level corruption cases.

During a two-day anti-corruption conference of the Ulema organized by the AGO in Kabul, the vital role of religious scholars in eradicating administrative corruption was highlighted and the President asked the Ulema to mobilize the people against corruption. This was an important step in making the combat against corruption a part of the national discussion. The MEC believes that unless the Government works together with mosques, schools and media towards implementation of the National Anti-Corruption Strategy, success in the fight against corruption will be difficult to attain.In August, the Provincial Transport Directorate in Herat reported that revenue from land transport in the western Province has increased by 40 percent as the Directorate generated 61 million Afghanis in revenue during the last two months compared to 44 million Afghanis during the same period last year. This has been possible due to the anti-corruption efforts and recruitment of professionals on the basis of merit in the applicants’ section. Meanwhile, the customs revenue of Nangarhar has also increased by 25 percent in three months following a crackdown on corruption, encouragement of traders, and transparency in the customs affairs. However, the MEC believes that the efforts so far have not been enough and that more efforts are needed to eradicate corruption in the Provinces.In September, the Cabinet of the Government of Islamic Republic of Afghanistan approved the draft Anti-Corruption Law, which requires the establishment of a new Independent Anti-Corruption Commission and regulates the duties and responsibilities of all other anti-corruption bodies. The Law was subsequently endorsed through Presidential Decree 327 of 14.06.1397. According to the new Law, the Independent Anti-Corruption Commission will be established within 12 months and all other anti-corruption agencies in Government will be merged with the new Commission. The MEC will closely follow the legal and institutional changes in the anti-

Corruption in Afghanistan: MEC’s Assessment of the News this

Quarter

22 Corruption in Afghanistan: MEC’s Assessment of the News this Quarter

corruption landscape of the country and will provide its expertise as required. The MEC also hopes that the new Commission can be a truly independent anti-corruption commission without political interference in its internal affairs.The Cabinet also approved the country’s first Whistle Blower Protection Law (WBPL) during this reporting period. The WBPL was endorsed through Presidential Decree 316 of 14.06.2018. MEC drafted this Law in 2013 and has been fighting for its legislative processing ever since. The MEC also has provided comments and feedback throughout the entire legislative process and pushed for its approval. The new Law aims to encourage and protect people reporting corruption cases in good faith and on reasonable grounds. For implementation of the new Law, a Unit will be established in all Governmental institutions to collect anti-corruption reports. A Central Report Coordination Unit will be established in the envisaged Anti-Corruption Commission which will coordinate, compile and address all corruption reports. MEC sees the endorsement of the WBPL as an important step in nationalizing the combat against corruption and will closely monitor the implementation process.In this quarter, the Government announced that in six months, the Asset Registration and Verification Office (ARVO) has collected more than 14,000 Asset Registration Forms of high-ranking Government officials. MEC recognizes that asset registration of high-level officials is one of the key steps in ensuring transparency, however, a proper system to publicly disclose information about the assets, and an appropriate monitoring mechanism to oversee the functions and effectiveness of the ARVO, is not in place so far.Finally, the Directorate of Sport and Physical Training together with the Cycling Federation in the northwestern Faryab Province organized a cycling race to promote an anti-corruption drive through spreading awareness.NegativeAn investigation by Tolonews in July found that Government institutions involved in the importation process of fuel and liquid gas lack the necessary information to ensure standards are

maintained. The Government is also reportedly losing over 60 percent of the revenue through the so-called petroleum tax exemption practices because of corruption in the importation process. The required quality control measures and monitoring systems in the oil and gas sector have not yet been established, despite repeated calls for such systems. MEC once again calls for the implementation of its recommendations to address vulnerabilities to corruption in the fuel and liquid gas importation process, originally published in September 2016.In August, Payk Investigative Journalism Center reported that over 34 million Afghanis from the salaries of MoI employees are embezzled on monthly basis through several bank accounts in the name of one person and tens of other “ghost” accounts in Kabul Bank. These findings were officially shared with MoI, the Central Bank of Afghanistan, the AGO, and the Shareholders and Monitoring Committee of the Kabul Bank last year. Instead of criminal prosecutions, however, eight of the Kabul Bank Internal Audit employees were just terminated or transferred.In the meantime, it was reported in this quarter that due to political deals and weak performance of the judiciary institutions, the National Unity Government has failed to properly collect the debts of Kabul Bank. The latest update by MEC indicated that only $63.6 million has been recovered since 2014 ($32.7 million in cash and $30.9 million in repayment agreements). The MEC report highlighted overall that the “Incentive Procedure” that was developed by the Kabul Bank Settlement Commission, and was endorsed by the Cabinet in February 2015 to accelerate the recovery process has had only a small effect.

23

Introduction of MEC’s New Executive Director

Maiwand Rohani

Quarterly Report 2018

We are pleased to announce that on September 11th 2018, Mr. Maiwand Rohani joined MEC as the new Executive Director. He is a Human Resources Development Specialist, holding a Master of Business Administration degree and an additional Executive MBA degree in Project Management. He is a Certified PRINCE 2 (Projects in Controlled Environment) project manager, Certified Corporate Governance Trainer and Certified Business Edge Master Trainer by the International Financial Corporates of the World Bank Group. He has over 14 years of progressive work experience with national and international NGOs, international donors (UNDP, DFID, USAID, World Bank-funded projects, DANIDA, ADB) and the Government of Afghanistan, and has been part of multimillion-dollar projects in the development sector.

In his most recent role as Operations Director for Family Health International, Mr. Rohani led the operations of USAID-funded national program on Nutrition, Hygiene and Sanitation and Sustainable Livelihood. He closely managed the human resource, administration, procurement, logistic, grants, and contracts teams, focusing on mentoring those teams and building their capacities. In his work as the Operations Director, he ensured that the program was compliant with USAID’s and the Afghan Government’s rules.

He also served as the Head of Mission for CARE International in Afghanistan in the capacity of Assistant Country Director where he provided leadership and direction, and took responsibility for all the Country Office support processes and functions (administration, HR, procurement, IT and logistics, and sub-award management).

During his assignment at the ChildFund International, as the Country Program Director, he implemented the education project for nomadic populations in

Northeastern Provinces, which provided education to 2500 children. He also has implemented education projects in Eastern Provinces that enabled 2000 children to access primary education. Moreover, he designed and implemented the Early Childhood Development project in Eastern Provinces of Afghanistan that successfully targeted at least 500 families.

As an individual consultant, he implemented humanitarian aid projects in the southern part of Afghanistan, which aimed at providing 5000 returnee families with access to potable water and sanitation facilities. In addition, he designed and implemented a livelihood program in Eastern and Northeastern Provinces of Afghanistan that targeted 3500 youth.

Mr. Rohani was appointed as the Executive Director for the Afghanistan Institute of Banking and Finance during 2011-2014 where he developed a five-year strategy for the Institute, made the Institute sustainable within three years, and attracted donor funding. Additionally, he designed and implemented the first Afghan Women Internship Program that resulted in placement of 300 women in the Afghan financial sector and provided career development support to more than 2500 women around Afghanistan.

During 2008-2011, Mr. Rohani worked as Project Manager for UNDP Afghanistan, where he implemented the Comprehensive Disaster Management and National Disaster Management Projects at national and sub-national levels. Additionally, he designed and implemented the Community Based Disaster Risk Management project for the first time in Afghanistan and contributed to development of the National Disaster Management Plan, Provincial Disaster Management Plans, National Emergency Fund Guideline, and National Rapid Assessment Tools.