We noted yesterday some of the causes of judicial corruption -- underpaid and overworked judges, complex and slow court procedures, and anti-corruption enforcement monopolized by a single agency. Unfortunately, all those symptoms show up in Azerbaijan's judicial system.
A Living Wage? Judges' salaries are low even after a big recent pay raise. According to Transparency International's 2007 country report, local judges make the annual equivalent of $11,635 -- compared to $23,800 in Estonia. As for their workload, there are only about 4 judges per 100,000 people. That's the lowest number in the region. Germany, by the way, has more than five times as many judges per capita.
No Show, No Problem. Predictably, court litigation is extremely time-consuming. "This is especially ruinous for private companies," TI said, "which usually prefer to drop a case or 'negotiate' with the judge. Parties in litigation have many opportunities to drag out a case because the legislation prevents a court from proceeding to a decision if the other party does not appear in court. There is no punishment for the defaulting party. On average about 5 per cent of businesses use courts in Azerbaijan, compared with 30 per cent in Europe and Central Asia."
Going Once, Going Twice . . . Judges -- who owe their positions to the executive branch, as does the general prosecutor -- can decide whether or not to hear a case without giving any explanation. And in rendering judgments, they aren't bound by precedent or statutory law. Fuad Mustafayev, deputy chairman of the opposition Popular Front Party, told TI that judges in Azerbaijan decide cases in two ways: for political reasons or, in a judicial equivalent to the construction "tender," they rule in favor of the highest bidder. Lawyers complain that they've been turned into "brokers" rather than legal advocates. The Ministry of Justice evaluates judges’ performances annually. "None has been fired for corrupt practices, however, though such cases are numerous . . . ," TI said.
Enforce This. Bailiffs aren't part of the judicial system, but fall under the executive branch. TI said they "lack the power, skills, resources and initiative to enforce decisions. . . . Failure to enforce court decisions further undermines trust in the justice system."
Recognizing Risk. Since its independence from the Soviet Union in 1991, oil-rich Azerbaijan has been popular with foreign investors. They've committed some $60 billion to long-term oilfield development there. But the country of eight million demonstrates again that where the rule of law is under attack, corruption flourishes. That's why companies trying to maintain an effective FCPA compliance program will want to mark Azerbaijan -- and other countries showing the same symptoms -- with a big red flag.
View Transparency International's 2007 Global Judicial Corruption Report here.