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« Did the SFO use U.K. press laws to muzzle reports? | Main | Venezuela state banker admits taking bribes from U.S. broker »
Tuesday
Nov192013

‘Integrity bonus’ proposed in China to curb official corruption

Before the Communist Party’s Third Plenum kicked off on November 9, the Development Research Center of the State Council, a government think tank, submitted a comprehensive reform blueprint to the central committee outlining reforms in various aspects of the state, dubbed the “383 Plan.”

A key component of the 383 Plan is the implementation of an “integrity bonus” or “honesty annuity” to curb corruption.

With the honesty annuity system, the government would deposit a proportion of the government official’s salary into a special account, which will be awarded to the official after his retirement if he has a clean career record. The system will be tested on officials in public administration as well as senior executives at state-owned enterprises and newly promoted civil servants.

Under the proposed scheme, civil servants and local governments will deposit funds into a shared “integrity fund” account. Officials can gain access to 70% of their funds every five years and get complete access upon retirement, provided they have a clean record.  Any disciplinary violations or corruption will lead to reduction of the fund.

Pilot programs testing the 383 Plan’s integrity bonus have been in place since 2002 in towns such as Gunagdong’s Jiangmen.

Similar schemes have been launched in Beijing, Hunan, Shanxi, Shandong, Jiangxi, and Zhejiang; however, none of the programs have been converted into a national policy.

The proposal and pilot programs have sparked some debate. Critics argue the integrity fund fails to curb corruption and appears to be another bonus for civil servants.

Zhu Lijia, a professor with the Chinese Academy of Governance, said the declaration of official assets should be a prerequisite for the establishment of integrity fund.

Other opponents warn the judicial and auditing authorities have to be completely independent from the government in order to properly verify whether a civil servant’s career record is clean.

Sources: China Daily, People’s Daily Online (人民网), Xinhua News

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A version of this post first appeared in the China Compliance Digest.